SETTLEMENT AGREEMENT
This SETTLEMENT AGREEMENT ("Agreement") made and entered into this 4th
day of March 1999 by and between INTERNATIONAL LOTTERY, INC., now known as
INTERLOTT TECHNOLOGIES, INC., a Delaware corporation ("Interlott") and LOTTERY
ENTERPRISES, INC., now known as ON-POINT TECHNOLOGY SYSTEMS, INC., a Nevada
corporation ("LEI").
WITNESSETH:
WHEREAS, in or about February, 1995 Interlott and LEI began to discuss a
potential merger of the two companies ("the Negotiations"); and
WHEREAS , on March 23, 1995 Interlott and LEI signed an Agreement in
Principle (the "Agreement in Principle") that described their understanding with
respect to the potential merger; and
WHEREAS, following the execution of the Agreement in Principle, Interlott
and LEI conducted further negotiations and discussions, and exchanged documents
and other information regarding their business, operations, results of
operations, financial condition, assets, liabilities and prospects (the "Due
Diligence Process"); and
WHEREAS, Interlott and LEI never agreed upon the final terms of the
merger, no merger transaction was ever consummated and the parties disagree
over who was responsible for the failure to complete a merger transaction (the
"Termination of Discussions"); and
WHEREAS, Interlott filed an action styled International Lottery, Inc,. v.
Lottery Enterprises Inc., Civil Action No. C-1-96-205 in the United States
District Court for the Southern District of Ohio (the "Action") in which
Interlott and LEI asserted claims against each other relating to the Agreement
in Principle, the Due Diligence Process and the Termination of Discussion, and
LEI asserted counterclaims against Interlott relating to and allegedly arising
from Interlott's competition against LEI (the "Competition Claims"); and
WHEREAS, the parties wish to fully and finally settle and compromise their
disputes and avoid the costs and expenses that will be incurred in the Action,
upon the terms and conditions set forth herein.
NOW, THEREFORE, Interlott and LEI agree as follows:
(1) Settlement Payment. LEI shall pay Interlott the sum of Six
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Hundred Twenty-Five Thousand Dollars ($625,000) in immediately available funds,
in full and final settlement of all claims which were asserted in the Action.
The amount provided for herein shall be paid on or before March 15, 1999, unless
LEI and Interlott otherwise agree in writing to an alternate date, each
reserving absolute discretion whether to agree to such an alternate date.
(2) Mutual Releases. Interlott, for and on behalf of its
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current and former employees, agents, directors, officers, shareholders,
consultants, advisors, predecessors, successors, parents, subsidiaries,
affiliates, assigns, attorneys, accountants, and insurers in exchange for its
receipt of the payment described in paragraph 1 and the release made by LEI as
described herein, and LEI, for and on behalf of its current and former
employees, agents, directors, officers, shareholders, consultants, advisors,
predecessors, successors, parents, subsidiaries, affiliates, assigns, attorneys,
accountants, and insurers, in consideration of the releases made by Interlott as
described herein, do hereby release and forever discharge each other and their
respective employees, agents, directors, officers, shareholders, consultants,
advisors, predecessors, successors, parents, subsidiaries, affiliates, assigns,
attorneys, accountants and insurers from all claims which were asserted in the
Action and from any and all debts, claims, demands, damages, losses,
liabilities, rights, actions, causes of action, expenses, contracts, judgments,
awards and suits of any kind whatsoever, both known and unknown, fixed and
contingent, liquidated and unliquidated as of the date hereof which either party
has asserted or could have asserted against the other arising from or relating
to the Negotiations, the Agreement in Principle, the Due Diligence Process, the
Termination of Discussions and/or the Competition Claims (herein the "Claims")
provided, however, that nothing contained herein shall release, discharge,
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impair or modify in any manner whatsoever the respective rights and obligations
of the parties under this Agreement; and provided, further, that nothing
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contained herein shall release, discharge, impair, or modify in any manner
whatsoever any claims which LEI has asserted, could assert or may assert against
the Commonwealth of Pennsylvania based on the acts or actions of the
Commonwealth.
The parties hereto, jointly and severally, further represent and warrant
to each other that they have not heretofore assigned or transferred to any
person, firm, corporation or other legal entity any Claim herein released and
discharged. By execution of this Agreement, the parties hereto further agree to
indemnify and hold the other parties harmless from any and all Claims and
reasonable attorneys' fees that may be incurred as a result of any breach or
non-performance of this Agreement or as a result of the assertion of any claim
herein released.
(3) Confidentiality. The terms and provisions of this
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Agreement are expressly agreed to be confidential and no party to his Agreement
shall disclose or communicate in any manner the settlement terms provided for in
this Agreement, without the prior consent of the other party hereto, except to
the extent such disclosure may be required by applicable law, Judicial or
administrative process, or in response to the inquiry of any governmental or
quasi-governmental entity or agency thereof and only then to the extent
necessary. LEI and Interlott further agree that they will not make any
competitive use of the terms of the settlement provided for herein except to
indicate that the action was resolved by agreement of the parties on
satisfactory terms.
(4) Governing Law Forum. This Agreement shall be construed under
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the laws of the State of Ohio and all legal proceedings instituted in connection
with the performance of this Agreement shall be brought in the United States
District Court for the Southern District of Ohio, Western Division. LEI further
agrees that the Court will continue to have jurisdiction over it in the Action
until LEI fully has performed its obligations under paragraph 1.
(5) Entire Agreement. All parties hereto declare and represent
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that no promises, inducements or agreements not expressly stated in this
Agreement have been made. This Agreement constitutes the entire agreement
between them with respect to the subject matter hereof and any and all prior
discussions, negotiations, commitments and understandings relating hereto are
superseded and merged herein. The terms and provision of this Agreement shall
not be changed, amended, waived, modified or terminated in any respect
whatsoever except by written instrument executed by all parties hereto.
(6) No Admission. The parties stipulate and agree that the
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settlement provided for herein is not and shall not be construed to be evidence
of or any admission by any of the parties hereto concerning the validity or
invalidity of any of the claims asserted by any of the parties. The parties
have entered into this Agreement in an effort to compromise disputed claims and
to avoid the cost and expense of protracted, complex litigation. Nothing
contained herein shall constitute an admission of any liability whatsoever, nor
shall the payment provided herein be so construed.
(7) Counterparts. This Agreement may be executed in one or
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more counterparts, each of which shall constitute a separate original agreement
and all of which, taken together, shall constitute one agreement, binding all
parties hereto, notwithstanding the fact that not all parties have signed the
same counterpart.
(8) Within three business days after Interlott has received full
payment of the amount LEI is required to pay under paragraph (1) above and each
party has delivered to the other a fully-executed original of this Settlement
Agreement, the parties will file in the Action a stipulation that the Complaint,
the Counterclaim, and all claims in the Action have been dismissed with
prejudice.
IN WITNESS WHEREOF, the parties hereto have set their hands and
caused this Agreement to be executed as of the date and year
first above written.
INTERNATIONAL LOTTERY, INC. n/k/a
INTERLOTT TECHNOLOGIES, INC.
By:/s/ Xxxxx X. Xxxxxxx
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ITS: President
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LOTTERY ENTERPRISES, INC. n/k/a
ON-POINT TECHNOLOGY SYSTEMS, INC.
BY:/s/ Xxxxx X. Xxxxxxx
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ITS: Sr. Vice President
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