EXHIBIT 10.28
COMPROMISE SETTLEMENT AGREEMENT
AND MUTUAL RELEASE
This Compromise Settlement Agreement and Mutual Release ("Settlement
Agreement") is made this 28th day of July, 1998 by and among Electronic
Transmission Corporation ("ETC") L. Xxxx Xxxxxx ("Xxxxxx"), Sterling National
Corporation ("Sterling"), and Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx,
Xxxx Xxxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx, and Xxxxx Xxxxxxx (in their respective
individual capacities, and as members or former members of the Board of
Directors of ETC, the "Directors").
WHEREAS, ETC, Sterling, Harvard, and the Directors are involved in a
number of disputes and/or may have a number of claims against one or more
parties hereto, including but not limited to, the appraisal and valuation of
assets of Sterling National contributed to ETC by Xxxxxx in 1996, the
termination of, and the compensation for, Xxxxxx'x employment with ETC, and
the reimbursement of advances made or claimed to be made by Xxxxxx to ETC
(collectively, the "Dispute"); and
WHEREAS, on or about May 17, 1997, Xxxxx Xxxxxxx ("Xxxxxxx") and Xxxxxxx
Xxxxxxx, filed Cause No. 9802181C in the 00xx Xxxxxxxx Xxxxxxxx Xxxxx, Xxxxxx
Xxxxxx, Xxxxx, styled Xxxxx Xxxxxxx and Xxxxxxx Xxxxxxx v. L. Xxxx Xxxxxx and
Sterling National Corporation (the "Xxxxxxx Lawsuit"), alleging claims
against Xxxxxx and Sterling and seeking damages, attorneys' fees and
interest; and
WHEREAS, ETC, Sterling, Havard and the Directors desire to make a full
and final settlement of all claims of such parties related to the Dispute and
the Xxxxxxx Lawsuit;
NOW, THEREFORE, in consideration of the promises and covenants set forth
herein, ETC, Sterling, Havard, and the Directors agree as follows:
1. It is expressly understood and agreed by the parties hereto that
the execution of this Settlement Agreement an/or any payment of money,
delivery of property, or release given or requested herein is not an
admission of liability by any party, but is simply a compromise in settlement
of disputed claims for the purpose of buying peace and avoiding litigation.
2. Xxxxxx and Sterling shall transfer to ETC on the date hereof all of
their respective right, title and interest in 462,500 shares of common stock
in ETC (after giving effect to the one-for four (1:4) reverse stock split
effected by ETC on or about July 1, 1998) (the "Stock"), free and clear of
all liens and encumbrances, together with certificates evidencing ownership
of the stock and fully executed stock powers of authorizing such transfer.
3. On the date hereof, Sterling shall assign and transfer all of its
rights and obligations as Trustee under the Voting Trust Agreement entered
between Sterling National Corporation, as Trustee and Xxx X. Xxxx, Xxxxxx
Xxxx, Xxx Xxxxxx, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxxxxxxx, Xxxxxx Xxxxxxxx,
Xxxx X. Xxxxx, Xxx X. XxXxxxxxx, and Xxxxxx X. Xxxxxx, as Beneficiaries,
effective January 26, 1996 (the "Voting Trust") to ETC, and ETC shall become
the new Trustee of the Voting Trust. Sterling, Havard, and Xxxxxx shall
execute any and all
COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL RELEASE -- PAGE 1
documentation necessary to effectuate transfer of Sterling's rights and
obligations as Trustee of the Voting Trust to ETC. Sterling, Havard, and
Xxxxxx shall further cooperate and assist in obtaining the signatures of the
Beneficiaries on any and all documentation necessary to effectuate transfer
of Sterling's rights and obligations as Trustee of the Voting Trust to ETC.
The parties hereto acknowledge and agree that nothing contained in this
Section 3 shall affect how any ETC common stock held of record by Xxxxxx or
Sterling is voted.
4. In consideration of the foregoing and the promises stated herein,
Xxxxxx, his heirs, successors and assigns, and Sterling, its predecessors,
successors and affiliates, hereby release, acquit and forever discharge ETC,
each of the Directors, their respective agents, servants, employees,
representatives, officers, directors, attorneys, predecessors, heirs,
successors, assigns, affiliates and all other persons, natural or corporate,
in privity with any of them, from any and all claims or causes of action of
any kind, whatsoever, which Xxxxxx or Sterling has or might have, known or
unknown, now existing or that might accrue hereinafter, asserted or
unasserted, arising from, relating to or resulting from facts in existence or
alleged to have been in existence on or prior to the effective date of this
Agreement including, without limitation, (a) claims asserted or that could
have been asserted in the Xxxxxxx Lawsuit, and/or (b) claims in any way
related to the Dispute. The Directors and ETC also agree not to directly or
indirectly assist any third party in pursuing any claims against Xxxxxx or
Sterling, unless required by law. The Directors and ETC also represent and
warrant that, except for the Xxxxxxx Lawsuit, they have not previously
assisted any third party in pursuing claims against Xxxxxx or Sterling. The
foregoing shall not constitute a release of any claims or causes of action
for any party's default under the terms of this Settlement Agreement and
shall not impair or prevent enforcement of any right, remedy, or obligation
set forth in this Settlement Agreement. Nothing contained in this Section 4
is intended to in any way limit the indemnification rights set forth in ETC's
Certificate of Incorporation or Bylaws or available under the General
Corporation Law of Delaware that Xxxxxx may have as a result of having served
as a director and officer of ETC. Except as expressly provided above, it is
the intent of the parties that the foregoing constitute a general release of
claims.
5. In consideration of the foregoing and the promises stated herein,
ETC, its predecessors, successors, and affiliates hereby release, acquit and
forever discharge Xxxxxx and the Directors, their heirs, successors and
assigns, and Sterling, its agents, servants, employees, representatives,
officers, directors, attorneys, predecessors, successors, assigns, affiliates
and all other persons, natural or corporate, in privity with any of them,
from any and all claims or causes of action of any kind whatsoever, which ETC
has or might have, known or unknown, now existing or that might accrue
hereinafter, asserted or unasserted, arising from, relating to or resulting
from, facts in existence or alleged to have been in existence on or prior to
the effective date of this Agreement, including, without limitation, claims
in any way related to the Dispute or the Xxxxxxx Lawsuit, provided, however,
that nothing contained in this Agreement shall release, acquit or discharge
Xxxxxx from his obligations, duties, covenants and agreements set forth in
Sections 8 and 9 of that certain Amended and Restated Employment and
Settlement Agreement dated effective as of December 17, 1997, by and between
ETC and Xxxxxx. The foregoing shall not constitute a release of any claims or
causes of action for any party's default under the terms of this Settlement
Agreement and shall not impair or prevent enforcement of any right, remedy,
COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL RELEASE -- PAGE 2
or obligation set forth in this Settlement Agreement. Except as expressly
provided above, it is the intent of the parties that the forgoing constitute
a general release of claims.
6. In consideration of the foregoing and the promises stated herein,
each of the Directors, his heirs, successors and assigns hereby release,
acquit, and forever discharge Xxxxxx, his heirs, successors and assigns, ETC,
Sterling, and their respective agents, servants, employees, representatives,
officers, directors, attorneys, predecessors, successors, assigns, affiliates
and all other persons, natural or corporate, in privity with any of them,
from any and all claims or causes of action of any kind, whatsoever, which
the Directors have or might have, known or unknown, now existing or that
might accrue hereinafter, asserted or unasserted, arising from, relating to
or resulting from facts in existence or alleged to have been in existence on
or prior to the effective date of this Agreement, including, without
limitation, (a) claims asserted or that could have been asserted in the
Xxxxxxx Lawsuit, and/or (b) claims in any way related to the Dispute. The
foregoing shall not constitute a release of any claims or causes of action
for any party's default under the terms of this Settlement Agreement and
shall not impair or prevent enforcement of any right, remedy, or obligation
set forth in this Settlement Agreement. Nothing contained in this Section 6
is intended to in any way limit the indemnification rights set forth in ETC's
Certificate of Incorporation or Bylaws or available under the General
Corporation Law of Delaware that the Directors may have as a result of having
served as a director and officer of ETC. Except as expressly provided above,
it is the intent of the parties that the foregoing constitute a general
release of claims.
7. In consideration of the foregoing, ETC shall not treat the
engagement by Xxxxxx in the sale of Systems and/or services on behalf of
Electronic Data Systems for the workers' compensation market as a violation
of paragraph 8 of that certain Amended and Restated Employment and Settlement
Agreement dated December 17, 1997, by and between ETC and Xxxxxx.
8. Contemporaneously with the full execution of this Settlement
Agreement, Xxxxxxx shall file a motion to dismiss with prejudice his claims
against Xxxxxx and Sterling in the Xxxxxxx Lawsuit. It is further understood
and agreed by Xxxxxxx, Xxxxxx and Sterling that all costs of court in the
Xxxxxxx Lawsuit will be borne by the party incurring them. Further, Xxxxxxx
shall not appeal the Court's Order of Dismissal by a motion for new trial,
writ of error, xxxx of review or otherwise.
9. Each party hereto agrees not to commit any act or make daily
statement that is, or could reasonably be interpreted as, detrimental to the
business, reputation, or good will of any other party hereto that such party
has released pursuant to Section 4, 5 or 6 above.
10. The parties hereto represent that they are the owners of the
respective claims being released herein and that they have not transferred,
assigned or otherwise encumbered said claims or any part thereof.
11. The parties hereto will refrain from communicating with others,
subject to the provisions set forth below, about the terms of this Settlement
Agreement, any offers of settlement, whether written or oral, and/or other
negotiations for settlement leading up to the
COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL RELEASE -- PAGE 3
Settlement Agreement and will further refrain, in any manner or method, from
discussing, publishing or disseminating any information or documentation
concerning the contents of the Settlement Agreement. The parties hereto may
disclose the existence of a settlement among the parties and of this
Settlement Agreement, but shall maintain the terms of this Settlement
Agreement as confidential and shall not divulge same to any third party,
except as may be required to be disclosed to existing or prospective lenders,
as may be required by law, regulation or existing agreement (including for
this purpose disclosures recommended by counsel in filings with the
Securities and Exchange Commission) or as may be required to be disclosed on
a confidential basis to attorneys or any court.
12. It is expressly understood by the parties hereto that this
Settlement Agreement shall be binding upon and inure to the benefit of the
respective parties, their legal representatives, successors and assigns.
13. It is understood and agreed by the parties hereto that this
Settlement Agreement contains the entire agreement between the parties hereto
and supersedes any and all prior arrangements, agreements, or understandings
between the parties relating to the subject matter hereof.
14. This Settlement Agreement may be amended only by a written
instrument signed by all the parties hereto.
15. The parties herein warrant and represent to all other parties to
this Settlement Agreement (a) that they were represented by Attorneys in
connection with the execution of this Settlement Agreement, (b) that they
have read and understand all aspects of this Settlement Agreement and all of
its effects, and (c) that they have executed this Settlement Agreement as a
free and voluntary act of their own free will without any threat, force,
fraud, duress, or coercion of any kind.
16. This Settlement Agreement, and the rights and obligations of the
parties hereto, shall be governed by and construed and enforced in accordance
with the laws of the State of Texas. The parties hereto further agree that
exclusive venue and jurisdiction of any and all lawsuits brought on or in
connection with this Settlement Agreement shall be in Dallas County, Texas.
All parties to this Settlement Agreement agree to submit to personal
jurisdiction before a court in Dallas County Texas in any lawsuit brought on
or in connection with this Settlement Agreement.
17. This Settlement Agreement may be executed by the parties hereto in
multiple counterparts, all of which, taken together, shall constitute one and
the same Settlement Agreement. Facsimile signatures shall be effective.
18. The formation and enforceability of this Settlement Agreement are
conditioned upon the signature of each and every party hereto before notary
publics.
19. Each of the parties hereto hereby covenants and agrees that it will
not directly or indirectly, alone or with others, bring, commence, institute,
maintain, prosecute or voluntarily aid
COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL RELEASE -- PAGE 4
in any action, at law or in equity, or any other proceeding against the other
parties hereto, either affirmatively or by way of cross-complaint, defense,
counterclaim or by any other means with respect to the claims released
pursuant to this Settlement Agreement.
20. The parties hereto agree that this Settlement Agreement may be
pleaded as full and complete defense to, and may be used as a basis for
injunction against any action, suit or other proceeding that may be
instituted, prosecuted or attempted in breach of this Settlement Agreement.
21. The effective date of this Settlement Agreement is the last date of
the Acknowledgments signed below.
IN WITNESS WHEREOF, the parties have executed this Settlement Agreement
as of the date of their respective acknowledgments below.
ELECTRONIC TRANSMISSION
CORPORATION
By: /s/ Xxxxx Xxxxxx
-----------------------------
Xxxxx Xxxxxx, President
STERLING NATIONAL CORPORATION
By: /s/ L. Xxxx Xxxxxx
-----------------------------
L. Xxxx Xxxxxx, President
/s/ L. Xxxx Xxxxxx
-----------------------------
L. Xxxx Xxxxxx
/s/ Xxxxx Xxxxxx
-----------------------------
Xxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxxx
-----------------------------
Xxxxxxx Xxxxxxxx
COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL RELEASE -- PAGE 5
/s/ Xxxx Xxxxxxx
-----------------------------
Xxxx Xxxxxxx
/s/ Xxxx Xxxxxx
-----------------------------
Xxxx Xxxxxx
/s/ Xxx Xxxxxx
-----------------------------
Xxx Xxxxxx
/s/ Xxxxx Xxxxxxx
-----------------------------
Xxxxx Xxxxxxx
COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL RELEASE -- PAGE 6
