SETTLEMENT AGREEMENT
This Stipulation of Settlement (hereinafter, the "Agreement") is
made and entered into by and between Internet Commerce Corporation, a Delaware
corporation, formerly known as Infosafe Systems, Inc. ("ICC"), Xxxxxx X. Xxxxxx,
individually ("Medici"), and Xx. Xxxxxx X. Xxxxx, individually ("Xxxxx")
(collectively, the "Parties"), to resolve Infosafe Systems Inc. v. Xxxxxx X.
Xxxxx, AAA #13-160-00500-97 and Xxxxxx X. Xxxxx v. Xxxxxx X. Xxxxxx, pending
before the U.S. District Court for the Southern District of New York, Case No,
98-CV-2243 (SWK) (together, the "Actions").
WHEREAS, the Parties are each desirous of finally, conclusively and
forever resolving the Actions (the "Settlement");
AND WHEREAS, the Parties, each acting on its own behalf, as the case
may be, have approved the settlement terms described below:
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the Parties agree as follows:
1. ICC will deliver to Xxxxx:
(a) $60,000 upon the closing, after satisfaction of all
necessary regulatory and stockholder approvals, of ICC's
private placement of its Series A Preferred Stock
pursuant to Regulation D under the Securities Act of
1933 (the "Private Placement"). It is currently
contemplated that such closing will occur by March 8,
1999; and
(b) 22,000 shares of Class A Common Stock of ICC to be
registered for resale on a selling security holder
"shelf" registration statement (the "Resale Registration
Statement") to be filed with the Securities and Exchange
Commission after the closing of the Private Placement.
It is agreed that such 22,000 shares of Class A Common
Stock will be issued on the date of execution of this
Agreement, but will be issued by ICC to Xxxxx after the
effective date of the Resale Registration Statement as
securities eligible for resale pursuant thereto. Xxxxx
agrees that he will not, without ICC's prior written
consent (which may be granted or withheld in ICC's sole
discretion) sell or transfer such 22,000 shares of Class
A Common Stock until the expiration of the ninety-day
period following the effective date of the Resale
Registration Statement. If the Resale Registration
Statement is not deemed effective on or before June 30,
1999, then the Agreement is null and void at the option
of Xxxxx. If Xxxxx exercises such option, the $60,000
paid pursuant to paragraph 1(a), plus interest at the
rate of 9% per annum from the date of payment, shall be
an offset against any
amount owed by ICC arising from the arbitral award in
Infosafe Systems, Inc. v. Xxxxxx X. Xxxxx, AAA No.
13-160-00500-97.
2. The Parties will execute mutual General Releases, which
General Releases shall be held in escrow by Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP,
pending delivery of the funds and stock referred to in paragraph 1 of this
Agreement.
3. The Parties will execute a Stipulation of Dismissal of the
case captioned Xxxxxx X. Xxxxx v. Xxxxxx X. Xxxxxx, United States District
Court, Southern District of New York, Case No. 98-CV-2243 (SWK), which
Stipulation of Dismissal shall be held in escrow by Xxxxxxxx Xxxxxxxx Xxxxx &
Xxxxx LLP pending delivery of the funds and stock referred to in paragraph 1 of
this Agreement.
4. Confidentiality. This Agreement and the terms and
conditions of the Settlement of the disputes among the Parties shall remain
strictly CONFIDENTIAL. Each party agrees that neither they nor their agents will
disclose any information concerning this Agreement and related discussions to
any third party at any time, except with respect to ICC, such of its management
staff and administrative employees having a need to know; and with respect to
ICC, their respective attorneys and tax advisors (all the foregoing having first
been informed of these requirements having agreed to be bound by them) or if
compelled to do so by rule or regulation or under subpoena or other judicial
process; Xxxxx and Medici agree that they will not reveal or discuss the terms
and conditions of this Agreement to anyone except their spouse or children,
accountant or financial advisor, attorney and any tax or regulatory authorities
which may require such disclosure.
5. Non-Disparagement. The Parties agree that they will not
directly or indirectly make any statement to any person or entity that could be
interpreted by a reasonable person as tending to disparage the professional
reputation of ICC, Medici or Xxxxx or any entity related to ICC, or the personal
or professional reputation of ICC's respective officers, employees or agents.
This provision is not intended to restrict competition of either party against
the other, but is merely intended to govern the manner of any competition
between them.
6. Non-Admission. With regard to the action pending before the
U.S. District Court for the Southern District of New York, Xxxxxx X. Xxxxx v.
Xxxxxx X. Xxxxxx, Case No. 98-CV-2243 (SWK), neither the negotiation,
undertaking, agreement to provide, nor the actual provision of the consideration
set forth in this Agreement, nor the drafting or execution of this document
shall in any way be construed as an acknowledgment or an admission by either
party of any liability to the other or any other individual or entity, or an
acknowledgment or admission of any wrongdoing whatsoever under federal, state or
local law. Both parties specifically deny any such liability or wrongdoing.
7. Waiver and Reinstatement. Xxxxx hereby waives any rights he
may have to reinstatement and agrees and promises that he will never apply for
or seek employment with ICC at any time. ICC and its successors shall have the
option of waiving it/their rights under this Paragraph.
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8. Entire Agreement. This Agreement constitutes the complete
understanding between the parties concerning all matters as between Xxxxx and
Xxxxxx and Xxxxx and ICC and supersedes any prior employment agreement Xxxxx may
have had with ICC, the provisions of any ICC personnel documents, handbooks or
policies and any prior customs or practices of ICC.
9. Governing Law Successors and Assigns. This Agreement shall
be governed and construed in accordance with the laws of New York and shall be
binding upon the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the Parties executed this Agreement on the
date set forth below.
INTERNET COMMERCE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Its: Chairman & CEO
---------------------------------
/s/ XXXXXX X. XXXXXX
--------------------------------- -----------------------------
Attest: XXXXXX X. XXXXXX
/s/ XX. XXXXXX X. XXXXX
--------------------------------- -----------------------------
Attest: XX. XXXXXX X. XXXXX
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