EXHIBIT 3
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SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release ("Agreement") is made between Xxxxxxx
Xxx ("Xxx") Xxx Telecommunications, Inc., ("FTI"), and InDigiNet, Inc.
("InDigiNet"), together the "Parties."
RECITALS
WHEREAS, the parties have entered into a Stock Purchase Agreement dated
January 1, 2002 and have entered into additional agreements associated with the
Stock Purchase Agreement, including but not limited to, a Note, Security
Agreement and Extension and Amendment Agreement dated May 3, 2002 (collectively,
"the Documents").
WHEREAS, a dispute has arisen with regard to various alleged defaults under
the Documents and with regard to the ownership of FTI (the "Dispute"). The
parties desire to settle the Dispute and any claims they may have against each
other at this time, including but not limited to those claims arising out of the
Documents.
NOW THEREFORE, in consideration of the mutual promises and undertakings
contained herein, the Parties to this Agreement agree as follows:
TERMS
1. STOCK, NOTE AND EQUIPMENT. At the time of execution of this Agreement,
InDigiNet shall endorse to Fox any and all shares of FTI currently held by, or
in the name of, InDigiNet effective June 30, 2002. At the time of execution of
this Agreement, Fox shall (i) endorse to InDigiNet any and all shares of
InDigiNet currently held by Fox effective June 30, 2002 and (ii) return the
original Note (as defined in the Documents) marked "canceled" to InDigiNet. The
Parties agree that Fox shall be considered to have been the owner of one hundred
percent (100%) of the issued and outstanding shares of FTI commencing as of the
close of business June 30, 2002 and that InDigiNet may rightfully report FTI
financial information for the period of time from January 1, 2002 through June
30, 2002. At the time of execution of this Agreement, the Parties shall return
to each other any and all equipment belonging to any other Party, including,
without limitation, the IP Office demonstration equipment belonging to InDigiNet
and currently in Fox's possession.
2. GENERAL RELEASES. (a) Except for the enforcement of this Agreement,
InDigiNet does hereby irrevocably, unconditionally and generally release Fox and
FTI, acquit and forever discharge, to the fullest extent permitted by law, Fox
and FTI's respective owners, stockholders, predecessors, successors, assigns,
agents, directors, members, officers, employees, former employees,
representatives, attorneys, affiliates, successors (and agents, directors,
officers, employees, representatives, and attorneys of such affiliates), and all
persons acting by, through, under or in concert with Fox and FTI, or any of
them, from all grievances, charges, complaints, claims, damages, actions, causes
of action, suits, rights demands, costs, losses, debts and expenses (including
attorneys fees, statutory penalties and costs incurred) of any nature
whatsoever, known or unknown ("Claim" or "Claims") which InDigiNet has, owns or
holds, or claims to own or hold, or at anytime heretofore owned or held, or
claimed to own or hold from the beginning of time to the date of this Agreement.
(b) Except for the enforcement of this Agreement, and subject to the
qualifications of paragraph 3 below, Fox and FTI do hereby irrevocably,
unconditionally and generally release InDigiNet, acquit and forever discharge,
to the fullest extent permitted by law, InDigiNet and InDigiNet's respective
owners, stockholders, predecessors, successors, assigns, agents, directors,
members, officers, employees, former employees, representatives, attorneys,
affiliates, successors (and agents, directors, officers, employees,
representatives, and attorneys of such affiliates), and all persons acting by,
through, under or in concert with InDigiNet, or any of them, from all
grievances, charges, complaints, claims, damages, actions, causes of action,
suits, rights demands, costs, losses, debts and expenses (including attorneys
fees, statutory penalties and costs incurred) of any nature whatsoever, known or
unknown ("Claim" or "Claims") which Fox and FTI owns or holds, or claim to own
or hold, or at anytime heretofore owned or held, or claimed to own or hold from
the beginning of time to the date of this Agreement.
3. TERMINATION OF DOCUMENTS AND OUTSTANDING DEBTS OF FTI. None of the
Parties shall have any further obligation or liability to any other Party under
any term or condition contained in any of the Documents and each of the
Documents shall be terminated and of no further force or effect as of June 30,
2002. In addition, InDigiNet shall have no liability of any kind or nature with
regard to any debts or liabilities of FTI or Fox, whether shown on FTI's balance
sheet or otherwise, provided that InDigiNet shall remain liable for any debts
that InDigiNet caused FTI to incur during InDigiNet's ownership of FTI through
the date of this Agreement that Fox or FTI were not aware of as of the date of
this Agreement.
4. COVENANT NOT TO XXX. The Parties covenant that they will not initiate
any lawsuit or proceeding or otherwise assert any claim, claim for arbitration,
action, cause of action, demand, right, or controversy of any kind which has
herein been released.
5. FINANCIAL REPORTING AND ACCOUNTING INFORMATION PAYMENT. Fox agrees that
he will cooperate fully with any audit or review of FTI's financial information
required by InDigiNet for purposes of preparing InDigiNet's public periodic
reports. Fox further agrees that he will certify the accuracy of FTI's financial
information to InDigiNet. InDigiNet, Fox and FTI do hereby agree that InDigiNet
will pay reasonable fees and expenses for any additional compilation of FTI's
financial information, as kept in the books and records of FTI, prior to June
30, 2002 that may be required for InDigiNet to prepare its year-end financial
reports and information as required by the SEC. Fees for Fox's time subsequent
to the date of this Agreement shall be $125/hour, to be paid upon Fox's or FTI's
delivery of the requested information to InDigiNet.
6. INDEMNIFICATION. (a) InDigiNet agrees to indemnify, defend and save and
hold harmless Fox and FTI from and against any costs, expenses, damages,
liabilities, loses or deficiencies, including, without limitation, reasonable
attorneys' fees and other costs or expenses incident to any suit, action or
proceeding suffered or incurred by Fox or FTI arising out of or resulting from
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financial disclosures made by InDigiNet during the period of time that InDigiNet
was the owner of FTI or any alleged wrongdoing or damages caused by InDigiNet
during the period of time that InDigiNet was the owner of FTI, unless such cost,
expense, damage, liability, loss or deficiency is caused by, or arises from, any
false, misleading or incorrect information provided to InDigiNet by Fox, FTI or
FTI's employees, agents or representatives.
(b) FTI and Fox agree to indemnify, defend and save and hold harmless
InDigiNet from and against any costs, expenses, damages, liabilities, loses or
deficiencies, including, without limitation, reasonable attorneys' fees and
other costs or expenses incident to any suit, action or proceeding suffered or
incurred by InDigiNet arising out of or resulting from (i) any claims relating
to any debts or liabilities of FTI or Fox, except any debts that InDigiNet
caused FTI to incur during InDigiNet's ownership of FTI through the date of this
Agreement that Fox or FTI were not aware of as of the date of this Agreement and
(ii) any claims by employees of FTI for wages, benefits or other
employee-related matters.
7. WARRANTIES. The Parties warrant and represent as follows:
a. They have read this Agreement, and agree to the conditions and
obligations set forth in it;
b. They have had a reasonable time to consider the terms of this
Agreement and are voluntarily executing this Agreement after having had full
opportunity to consult with legal counsel and without being pressured or
influenced by any statement or representation, express or implied, of any person
acting on behalf of the other Party including the officers, agents and attorneys
for the other Party.
c. The undersigned representative has full and complete legal capacity
to enter into this Settlement Agreement.
d. They have had a full and fair opportunity to investigate the facts
underlying their claims and enter into this Agreement acknowledging that there
may be facts of which they are not aware; but they nonetheless enter this
Agreement with the intent of resolving this dispute and providing a full and
final release as set forth herein.
8. NO ADMISSION OF LIABILITY. The Parties agree that nothing contained
herein, and no action taken by any party hereto with regard to the Agreement,
shall be construed as an admission by any party of liability for any purpose
whatsoever.
9. ENTIRE AGREEMENT. This Agreement constitutes the complete understanding
between the Parties; no other promises or agreements shall be binding unless
signed by these Parties. This Agreement cannot be altered, amended, or modified
in any respect, except by a writing duly executed by the Party against whom the
alteration, amendment, or modification is charged.
10. CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with Colorado law and the Parties agree to submit any dispute arising
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out of this Agreement to a court of competent jurisdiction in Colorado,
exclusive of any other jurisdiction. In the event that any Party is required to
file a lawsuit either to enforce the terms of this Agreement or to remedy any
action taken in violation of this Agreement, the prevailing party in such action
shall be awarded its attorneys' fees and costs.
11. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which counterpart, when so executed and delivered, shall be deemed an original,
and, taken together, shall constitute one and the same instrument. Facsimile
copies of signatures shall be accepted as binding upon the Parties.
12. SEVERABILITY. In the event that any court or enforcement authority
determines that any provision of this Agreement is unenforceable, the provision
at issue shall be enforced to the maximum extent permitted by law, and all other
provisions shall remain in full force and effect.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates
written below.
INDIGINET, INC. FOX TELECOMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx Xxx
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Title: President Title: President
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Date: August 19, 2002 Date: August 19, 2002
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/s/ Xxxxxxx Xxx
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Xxxxxxx Xxx
Date: August 19, 2002
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