1
EXHIBIT 8.1
TERMINATION AND MUTUAL RELEASE AGREEMENT
THIS AGREEMENT is entered into and dated as of August 4, 1998, by and
among Compressent Corporation, a Florida corporation ("Compressent"), Call Now,
Inc., a Florida corporation ("Call Now"), and Xxxxxxx Xxxxx, an individual
residing in the State of Florida ("Xxxxx").
RECITALS
A. Call Now, an early stage venture capital investor in Compressent,
owns shares of the common stock of Compressent and has warrants or options for
the purchase of additional shares of the common stock of Compressent.
B. Except as set forth in Compressent's shareholder list maintained by
the stock transfer agent, Xxxxx owns no shares of the common or preferred stock
of Compressent and has no warrants or options for the purchase of shares of the
common or preferred stock of Compressent.
X. Xxxxx is now a member of the Board of Directors of Compressent.
D. On or about February 3, 1998, Compressent secured a $10,000,000.00
line of credit from Call Now in return for payment of a commitment fee of
$400,000 within thirty days of the first draw ("Line of Credit Agreement"). In
connection with the Line of Credit Agreement, Call Now received a stock purchase
warrant for 500,000 shares of Compressent common stock.
E. On or about February 3, 1998, Compressent entered into a Preferred
Stock and Warrant Purchase Agreement with Call Now whereby Compressent agreed to
sell 56,000 shares of its redeemable convertible Series A Preferred Stock
("Preferred Stock") and a warrant to purchase up to 500,000 shares of
Compressent common stock to Call Now ("Preferred Stock Agreement").
F. The purchase price for the Preferred Stock and warrant under the
Preferred Stock Agreement paid by Call Now was $3,500,000.00 and was paid in the
form of Retama Park Racetrack Project Special Facilities Series A Revenue Bonds
with a face value of $3,500,000.00 ("Retama Bonds").
G. On March 10, 1998, Compressent entered into a loan agreement with
Xxxx, Xxxxxxx & Xxxx, Inc., a New Jersey corporation ("HSH") to borrow
$2,000,000.00 principal at 10% per annum ("HSH Loan"). The loan was secured by
the Retama Bonds. In connection with the HSH Loan, Compressent and HSH entered
into a "Financial Advisory Agreement" whereby Compressent agreed to pay to HSH
warrants for 100,000 shares of Compressent common stock immediately exercisable
by HSH for $6.25 per share in exchange for financial advice.
H. On May 20, 1998, Compressent and Call Now entered into an agreement
which rescinded the February 3, 1998, Preferred Stock Agreement. Pursuant to
this rescission agreement, Call Now agreed to return to Compressent all issued
shares of Preferred Stock and the
1
2
stock purchase warrant. Compressent, in turn, agreed to return or cause to be
returned the Retama Bonds to Call Now. Call Now agreed to assume all obligations
of Compressent under the terms of the HSH Loan, including the Financial Advisory
Agreements between Compressent and HSH made in connection with the HSH Loan.
Finally, Compressent agreed to issue 1,333,333 shares of its common stock to
Call Now.
I. On May 20, 1998, Compressent and Call Now entered into an agreement
which terminated the February 3, 1998, Line of Credit Agreement, canceled the
associated stock purchase warrant issued to Call Now, and released Compressent
from any commitment fee and all other payments due Call Now in connection with
that Line of Credit Agreement.
J. Compressent believes it has claims against either one or both of
Call Now and Xxxxx arising from the actions of each of Call Now and Xxxxx. Call
Now and Xxxxx believe they have claims against Compressent.
K. The parties desire to modify their existing relationship as set
forth below to resolve all disputes between them and to allow Compressent to
pursue additional financing.
THEREFORE, in consideration of the mutual promises and other
consideration stated in this Agreement, the parties agree as follows:
1. TERMINATED UNDERTAKINGS. Except for this Agreement, and any other
agreement attached hereto or referred to herein as an exhibit to this
Agreement, the parties hereby terminate all written and oral
agreements, representations and undertakings between, on the one hand,
either one or both of Call Now and Xxxxx, and on the other hand,
Compressent to the extent not already rescinded, terminated or
canceled, including, without limitation, the following "Terminated
Agreements":
a) The February 3, 1998, Line of Credit agreement by and between Call
Now and Compressent and its connected stock purchase warrant for the
purchase of 500,000 shares of common stock of Compressent
Corporation,
b) The February 3, 1998, Preferred Stock Agreement for the purchase of
56,000 shares of Compressent Convertible Preferred Stock and its
connected stock purchase warrant for purchase 500,000 shares of
Compressent common stock in return for Retama Bonds with a face
value of $3,500,000.00.
2. RETURN OF PREFERRED STOCK. Call Now hereby confirms that it does not
own, possess, or control any Compressent Preferred Stock and all such
Compressent Preferred Stock to be issued to Call Now pursuant to the
February 3, 1998 Preferred Stock Agreement was never issued and
delivered to Call Now.
3. NO PREVIOUS ASSIGNMENT. Except as set forth in paragraph 5(e) below
with respect to HSH, Call Now and Xxxxx, jointly and severally, hereby
represent and warrant that no agreement, representation or undertaking
between Call Now or Xxxxx and Compressent, including any agreement
referred to in this Agreement, has been transferred, assigned,
2
3
pledged or encumbered in any way whatsoever, directly or indirectly, by
absolute or partial conveyance, option, warrant or otherwise.
4. MUTUAL RELEASE. Except for the rights and obligations of the parties
under this Agreement and all other agreements incorporated herein by
reference and not terminated under paragraph 1 above,
a) Compressent hereby forever releases, remises, acquits and
discharges Call Now and Xxxxx, and
b) Call Now and Xxxxx hereby jointly and severally release, remise,
acquit and discharge Compressent,
of and from any and all obligations, liens, claims, demands, damages,
liabilities, suits, actions and causes of action of whatsoever kind, nature or
description, present and future, now known or hereafter discovered, whether
arising in law or equity, upon contract, tort or warranty, or under state or
federal law or laws or under common law, or otherwise, which the respective
releasor has had, now has, or hereafter may have, or claim to have, against any
one or more of the respective releases for or by reason of any act, omission,
matter, cause, or thing whatsoever, from the beginning of time to the date of
this Agreement, whether the lien, claim, demand, damage, liability, suit, action
or cause of action is known or unknown and whether the same may hereafter arise,
develop, be discovered, accrue or mature, relating to, but not limited to the
following:
c) any one or more of the Terminated Agreements or any breach or
nonperformance thereof by any party thereto,
d) conduct of Xxxxx in any way related to his duties as an officer or
director of Compressent, except for such conduct which violates any
applicable federal, state or local law, rule or regulation which is
expressly not released under this Agreement,
e) any and all other liens, claims, demands, damages, liabilities,
suits, actions and causes of action arising from any act or omission
or from any undertaking terminated in paragraph I above or any
breach thereof,
f) any and all obligations of Call Now or Xxxxx to contribute capital
or to make advances to or for the benefit of Compressent,
g) any and all obligations of Compressent to contribute capital or to
make advances to or for the benefit of Call Now or Xxxxx, and
h) any loans, advances, goods or services or other thing of value
whatsoever of any kind provided by the releasor to or for the
benefit of any release relating in any way to Compressent.
3
4
5. CALL NOW AND XXXXX -- ADDITIONAL OBLIGATIONS. Call Now and Xxxxx, as
the case may be, agree to the following:
a) Upon the arranging for the issuance of the Compressent shares
pursuant to paragraph 6(b) below, Xxxxx will immediately submit his
resignation as a member of the Board of Directors to Compressent via
facsimile and certified mail in form and substance similar to the
resignation attached hereto as Exhibit A and incorporated herein by
this reference;
b) Call Now hereby assumes and agrees to pay and perform and further
confirms and ratifies its assumption of all of Compressent's
obligations under the terms of the HSH Loan, including any Financial
Advisory Agreements between Compressent and HSH. Call Now will
continue to cause Compressent to be removed as maker or obligor
under the terms of the HSH Loan and related loan documents;
c) [Omitted]
d) Call Now and Xxxxx will each assign to Xxxxxx & Xxxx, pllc, in trust
for Compressent all of Call Now's voting rights arising from its
ownership or control of any and all shares of Compressent common or
preferred stock, for a two year period commencing on the date of
this Agreement, pursuant to a Voting Rights Assignment Agreement the
terms and conditions of which will be mutually agreed upon; and
e) Call Now will surrender for cancellation or cause to be surrendered
for cancellation to Compressent all shares and warrants of
Compressent stock previously held or possessed by HSH or
International Trading Group, Inc. as described in Exhibit 8.15 of
the Call Now Form 10-KSB dated December 31, 1997 filed with the
Securities and Exchange Commission in July 1998.
6. OBLIGATIONS OF COMPRESSENT - ADDITIONAL OBLIGATIONS. Compressent agrees
to the following:
a) Compressent hereby confirms and ratifies its transfer of all right,
title and interest of Compressent in and to the Retama Bonds to Call
Now;
b) Compressent will instruct the transfer agent to arrange for the
issue of 500,000 shares of Compressent common stock to Call Now
within five (5) days of the execution of this Agreement by Xxxxx and
Call Now in consideration of Xxxxx'x release in paragraph 4 above.
Such shares will be registered for sale in the first registration
statement under the Securities Act of 1933 and blue sky laws of
Compressent which includes shares being sold by any shareholder of
Compressent after May 1, 1999;
4
5
c) Compressent agrees to take such actions as are reasonably requested
by Call Now to complete the transfer of the Retama Bonds to Call
Now;
d) Compressent will maintain Xxxxx'x director's and officer's insurance
coverage by Compressent relating to Xxxxx'x service to Compressent
as a director to the fullest extent permitted by Compressent's
existing articles and by-laws under Florida law (and incorporated
herein by this reference) and subject to approval by Compressent's
insurers. In addition, Compressent agrees not to modify EX POST its
by-laws as they relate to the indemnification of Xxxxx as a then
present or former director or officer of Compressent; and
e) Compressent will pay Call Now Inc. ten percent (10%) commission on
net amounts received by Compressent from AmTote pursuant to any
agreement between Compressent and AmTote arising out of AmTote
providing services to OTB for off track betting video technology,
within thirty (30) days of Compressent's receipt of such funds;
f) Within five days after the execution of this Agreement, to extent
permitted by law, Compressent will instruct its transfer agent to
remove the restrictive legend on all Compressent shares owned by
Xxxxx or Call Now in excess of two years.
7. REPRESENTATIONS AND WARRANTS OF CALL NOW. In addition to the
representations and warranties set forth elsewhere herein, Call Now
hereby makes the following representations and warranties to
Compressent;
a) SHARES OWNED DIRECTLY AND INDIRECTLY. Except for those shares of
Compressent common and preferred stock now held of record in its
name with the stock transfer agent, Call Now has no common or
preferred shares of Compressent and has no options, warrants or
rights regarding any common or preferred shares of Compressent.
b) CORPORATE EXISTENCE AND POWER. Call Now is a corporation duly
incorporated, validly existing, and in good standing under the laws
of the State of Florida and has full corporate power and authority
to transact business in the corporate form in that state and to
enter into this Agreement and carry out the transactions provided
for herein. The execution and delivery of this Agreement does not
and the consummation of the transactions contemplated herein will
not violate any provision of its Articles of Incorporation or
Bylaws, or any provision of or result in accelerating of any
obligation under any mortgage, lien, lease, agreement, instrument,
order, arbitration award, judgment, or decree to which it is a
party, or by which it is bound, and will not violate any other
restriction of any kind or character to which it is subject.
c) BOARD OF DIRECTORS APPROVAL. Call Now's Board of Directors has duly
approved this Agreement and has authorized the execution and
delivery of this Agreement
5
6
and all related agreements, documents and instruments.
d) DISCLOSURE. No representation or warranty by Call Now contained in
this Agreement, and nothing contained in any instrument or
certificate furnished or to be furnished by it or any of its
representatives pursuant to this Agreement or in connection with the
transactions contemplated hereby, contains or will contain any
untrue or misleading statement of fact.
e) BROKERS AND FINDERS. Call Now has not employed any investment
banker, broker or finder, or incurred any liability for any
brokerage fees, commissions or finders fees in connection with the
transactions contemplated by this Agreement.
8. REPRESENTATIONS AND WARRANTIES OF COMPRESSENT. In addition to
representations and warranties set forth elsewhere herein, Compressent
makes the following representations and warranties to Call Now and
Xxxxx:
a) CORPORATE EXISTENCE AND POWER. Compressent is a corporation duly
incorporated, validly existing, and in good standing under the laws
of the State of Florida and has full corporate power and authority
to transact business in the corporate form in that state and to
enter into this Agreement and carry out the transactions provided
for herein. The execution and delivery of this Agreement does not
and the consummation of the transactions contemplated herein will
not violate any provision of its Articles of Incorporation or
Bylaws, or any provision of or result in the acceleration of any
obligation under any mortgage, lien, lease, agreement, instrument,
order, arbitration award, judgment, or decree to which it is a
party, or by which it is bound, and will not violate any other
restriction of any kind or character to which it is subject.
b) BOARD OF DIRECTORS APPROVAL. Compressent's Board of Directors has
duly approved this Agreement and has authorized the execution and
delivery of this Agreement and all related agreements, documents and
instruments.
c) DISCLOSURE. No representation or warranty by Compressent contained
in this Agreement, and nothing contained in any instrument or
certificate furnished or to be furnished by it or any of its
representatives pursuant to this Agreement or in connection with the
transactions contemplated hereby, contains or will contain any
untrue or misleading statement of fact.
d) BROKERS AND FINDERS. Compressent has not employed any investment
banker, broker or finder, or incurred any liability for any
brokerage fees, commissions or finders fees in connection with the
transactions contemplated by this Agreement.
9. REPRESENTATIONS AND WARRANTIES OF XXXXX. In addition to representations
and warranties set forth elsewhere herein, Xxxxx makes the following
representations and warranties to Compressent:
6
7
a) SHARES OWNED DIRECTLY AND INDIRECTLY. Except as set forth on Recital
B, Xxxxx has no common or preferred shares of Compressent and has no
options, warrants or rights regarding any common or preferred shares
of Compressent.
b) POWER AND AUTHORITY. Xxxxx has full power and authority to enter
into this Agreement and to carry out the transactions provided for
herein. The execution and delivery of this Agreement does not, and
the consummation of the transaction contemplated herein will not,
violate any provision of or result in accelerating any obligation
under any mortgage, lien, lease, agreement, instrument, order,
arbitration award, judgment, or decree to which he is a party, or by
which he is bound, and will not violate any other restriction of any
kind or character to which he is subject.
c) DISCLOSURE. No representation or warranty by Xxxxx contained in this
Agreement, and nothing contained in any instrument or certificate
furnished or to be furnished by him or any of his representatives
pursuant to this Agreement or in connection with the transactions
contemplated hereby, contains or will contain any untrue or
misleading statement of fact.
d) BROKERS AND FINDERS. Xxxxx has not employed any investment banker,
broker or finder, or incurred any liability for any brokerage fees,
commissions or finders fees in connection with the transactions
contemplated by this Agreement.
10. ACCESS AND INFORMATION/RELIANCE. Compressent, Call Now and Xxxxx and
their respective accountants, legal counsel, and other representatives
and agents have each had full access and opportunity to examine and
investigate all properties, assets, liabilities, books, contracts,
commitments, undertakings and records of each other. Neither Xxxxx nor
any officer of Compressent or Call Now will be deemed to have knowledge
of any information or fact in any of the above-described items unless
that officer had actual knowledge thereof on the date of this
Agreement. No party hereto is relying on any agreement, statement,
representation or warranty of any other party or any other person or
entity in entering into this Agreement and the transactions
contemplated hereby other than those set forth in this Agreement
(including exhibits, addenda, agreements, instruments, certificates and
other writings delivered pursuant hereto or in connection herewith).
11. INTENT. The undersigned agree that the Mutual Release set forth in
paragraph 4 above and the giving of consideration therefor does not
constitute an admission of liability by any one or more of the
releases, and is given in full settlement and compromise of doubtful
and disputed claims, present and future, known and unknown and is also
intended to release any and all future injury and damage including
effects or consequences thereof, not now known but which may later
develop or be discovered, and all causes of action therefor, and a part
of the consideration is given and received by each respective releasee
and releasor in satisfaction of unknown liens, claims, injury and
damage.
12. BOUND AND REMITTED PERSONS. The foregoing Mutual Release set forth in
paragraph 4 above extends to and releases and binds and inures to the
benefit of each respective
7
8
releasee and releasor, as the case may be, and in the case of corporations, all
its shareholders, directors, officers, employees, underwriters, lenders,
beneficiaries, attorneys, agents, assigns, successors, subsidiaries, affiliated
and connected corporations, companies and entities, and in the case of persons,
all their marital communities, heirs, executors, administrators, personal
representatives, underwriters, beneficiaries, attorneys, agents, and assigns.
13. MISCELLANEOUS.
a) CHOICE OF LAW. This Agreement is made with reference to and is
intended to be construed in accordance with the laws of the State of
California without reference to its conflict of law provisions. The
parties agree that the exclusive jurisdiction and venue of any suit
will be in U.S. District Court in San Jose, California or San
Francisco, California, unless the federal court declines
jurisdiction in which such jurisdiction will be the state court in
San Jose, California.
b) WAIVER AND MODIFICATION. The failure of any party hereto to require
strict performance of any provision hereof will not in any manner
limit the right of that party at a later time to enforce the same.
No waiver by any party of the breach of any term or covenant
contained in this Agreement will be deemed to be a release or limit
any liability resulting from the breach. No waiver of any nature,
whether by conduct, course of dealing, or otherwise, in any one or
more instances will be deemed to be or construed as a continuing
waiver of any such condition or breach or as a waiver of any other
condition or of any other breach of any other term or covenant of
this Agreement.
c) SUCCESSORS IN INTEREST. This Agreement is and will be binding upon
and is and will inure to the benefit of the successors and assigns
of the parties. No party hereto may assign any of its rights or
obligations under this Agreement without the prior written consent
of all of Compressent, Call Now and Xxxxx, except to a successor to
at least 80% of the business and assets of the assignor in which
case both assignor and assignee will be and remain jointly and
severally liable to pay and perform all indebtedness, liabilities
and obligations of the assignor under this Agreement.
d) ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof
and supersedes all prior negotiations and agreements. There are no
representations, warranties, understandings, or agreements other
than those expressly set forth herein. Time is expressly declared to
be of the essence of this Agreement.
e) EXHIBITS. Exhibits, schedules and addenda attached to this Agreement
and any other agreements, documents, instruments and certificates
delivered in connection with this Agreement are expressly made a
part of this Agreement as fully as though completely set forth in
it. All references to this Agreement either in the Agreement itself
or in any of such writings will be deemed to refer to and include
this
8
9
Agreement and all such exhibits, schedules, addenda, agreements,
documents, instruments and certificates. Any breach of or default under
any provision of any such writings will, for all purposes, constitute a
breach or default under this Agreement and all other such writings.
f) EXECUTION BY COUNTERPART. This Agreement may be executed separately or
independently in any number of counterparts, each and all of which
together will be deemed to have been executed simultaneously and for
all purposes to be one agreement.
g) CAPTIONS. The respective captions of the sections and paragraphs hereof
are inserted for convenience of reference only and will not be deemed
to modify or otherwise affect in any respect any of the provisions
hereof.
h) DISPUTE RESOLUTION EXPENSES. The prevailing party in any action,
proceeding or lawsuit arising out of the enforcement of any term or
condition of this Agreement will be entitled to an award of attorneys'
fees, costs and expenses.
EXECUTED as of the date first above written.
COMPRESSENT CORPORATION CALL NOW, INC.
By: /s/ illegible By: /s/ illegible
------------------- -------------------
Its: Chairman Its:
------------------- -------------------
/s/ Xxxxxxx Xxxxx
---------------------------
Xxxxxxx Xxxxx, Individually
9
10
EXHIBIT A
RESIGNATION OF XXXXXXX XXXXX
10
11
August 4, 1998
To: The Shareholders and the Board of Directors of Compressent Corporation.
From: Xxxxxxx Xxxxx.
I hereby resign as a director of Compressent Corporation effective immediately.
/s/ Xxxxxxx Xxxxx
-----------------------
Xxxxxxx Xxxxx
11
12
CALL NOW, INC.
00000 Xxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000-0000
September 14, 1998
Xxxxxx X. Xxxxxxx, President
Compressent Corporation
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Dear Xx. Xxxxxxx:
As you are aware, pursuant to our Termination and Mutual Release Agreement dated
August 4, 1998, Call Now, Inc. was to receive 500,000 shares of Compressent
Corporation common stock and 10% of the Amtote transaction. It has come to our
attention that Compressent Corporation is failing and refusing to deliver such
shares and complete said transaction.
For failure of consideration and breach by Compressent Corporation, the
foregoing agreement is considered null and void. Xxxxxxx X. Xxxxx will retain
his position on the Board of Directors.
Pursuant to the May 20, 1998 agreement, demand is hereby made for delivery of
1,333,333 shares of Compressent common stock to Call Now, Inc. pursuant to the
terms thereof.
Yours very truly,
CALL NOW, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Chairman
cc: Xxxxxx & Hull
