EXHIBIT 2.6
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS
This Settlement Agreement and Mutual Release of Claims ("RELEASE"),
executed to be effective as of February 20, 2002, is made and entered into by
and among POINT TO POINT NETWORK SERVICES, INC., a Delaware corporation ("PTP"),
and NEXTGEN COMMUNICATIONS CORPORATION, a Delaware corporation formerly known as
U S Industrial Services, Inc., and parent corporation of PTP ("NEXTGEN"), on the
one side, and W. XXXXXXX XXXXXXXX, an individual resident of the Commonwealth of
Massachusetts ("XXXXXXXX"), on the other side, on the date this Release is fully
executed by all parties as set out below (the "EXECUTION DATE").
I. OPERATIVE FACTS
A. On June 29, 2001, the Board of Directors of PTP hired Xxxxxxxx as
the President of PTP, and on the same date Xxxxxxxx and PTP entered into an
Executive Employment Agreement (the "EMPLOYMENT AGREEMENT");
B. On June 29, 2001, PTP executed a Term Note for the benefit of
Xxxxxxxx, in the original principal amount of $339,870.29 (the "TERM NOTE");
C. On June 29, 2001, PTP, Xxxxxxxx and Nextgen entered into a
Reorganization Agreement and Plan of Merger (the "MERGER AGREEMENT"), and an
Escrow Agreement (the "ESCROW AGREEMENT"), Voting Agreement (the "VOTING
AGREEMENT"), and Registration Rights Agreement (the "REGISTRATION RIGHTS
AGREEMENT") in connection therewith.
X. Xxxxxxxx'x employment relationship with PTP has been terminated, and
disputes have arisen among Xxxxxxxx, PTP and Nextgen concerning their respective
rights and obligations under the Employment Agreement, the Term Note, and the
Merger Agreement;
E. In exchange for the consideration exchanged below, the receipt and
sufficiency of which are hereby acknowledged, PTP and Nextgen, on the one side,
and Xxxxxxxx on the other side, agree and covenant as follows:
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 1
II. TERMS OF SETTLEMENT
1. RELEASES BY PTP AND NEXTGEN. In consideration for the transfer from
Xxxxxxxx of the Transferred Shares (defined below) set forth in Section 4(a)
herein and Xxxxxxxx'x release of PTP and Nextgen set forth in Section 2 herein,
PTP and Nextgen, together with any person or entity claiming through either of
PTP or Nextgen, hereby release, acquit, and forever discharge Xxxxxxxx, and his
heirs, assigns, devisees, legatees, executors, attorneys, and representatives
(such persons and entities being hereinafter referred to as a "XXXXXXXX RELEASED
PARTY"), from any and all debts, claims, obligations (excluding Xxxxxxxx'x
obligations under Section 6.2 of the Merger Agreement and Articles 5 and 6 of
the Employment Agreement), liabilities, demands, damages, actions, or causes of
every nature and kind whatsoever, monetary or otherwise, whether known or
unknown, in law or in equity, now existing or arising in the future, for, in
connection with, attributable to, or arising out of any action, omission,
occurrence, event, or dealings, directly or indirectly, with, between, or among
the parties hereto and/or any Xxxxxxxx Released Party prior to the date of this
Agreement. In addition, PTP and Nextgen agree to indemnify and hold harmless the
Xxxxxxxx Released Parties from and against any and all losses, claims, demands,
expenses (including attorneys' fees) or liabilities of whatever nature or kind
(collectively, "LIABILITIES") suffered or incurred by the Xxxxxxxx Released
Parties arising out of any lawsuit or other action threatened or instituted by
the stockholders of Nextgen against any Xxxxxxxx Released Party in connection
with Nextgen's acquisition, operation or ownership of PTP, all to the maximum
extent permitted by law.
2. RELEASES BY XXXXXXXX. In consideration for the payment from the
Company of the Xxxxxxxx Payments (defined below) set forth in Section 4(c)
herein and PTP's and Nextgen's release of Xxxxxxxx set forth in Section 1
herein, Xxxxxxxx, together with any person or entity claiming through Xxxxxxxx,
hereby releases, acquits, and forever discharges PTP and Nextgen and any
predecessors or successors in interest thereof, and their officers, directors,
stockholders, employees, agents, attorneys, and representatives (such persons
and entities being hereinafter referred to as a "PTP RELEASED PARTY"), from
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 2
any and all debts, claims, obligations (excluding Nextgen's obligation to
register the Retained Shares, pursuant to the Registration Rights Agreement),
liabilities, demands, damages, actions, or causes of every nature and kind
whatsoever, monetary or otherwise, whether known or unknown, in law or in
equity, now existing or arising in the future, for, in connection with,
attributable to, or arising out of any action, omission, occurrence, event, or
dealings, directly or indirectly, with, between, or among the parties hereto
and/or any PTP Released Party prior to the date of this Agreement.
3. COVENANT NOT TO XXX. Each party, by executing this Agreement, hereby
covenants that he or it will not bring any action or proceeding, or cause any
entity owned, affiliated, or controlled by him or it to bring any action or
proceeding, or assist in the prosecution of any action or proceeding by any
person purporting to claim through him or it in any court or tribunal seeking
any kind of relief, either monetary or equitable, with respect to any claim
released herein.
4. PAYMENT AND CONSIDERATION. The parties further agree as follows:
(a) On the Closing Date, Xxxxxxxx shall transfer to
Nextgen 1,800,000 shares (the "TRANSFERRED SHARES")
of common stock, $.001 par value per share, of
Nextgen ("COMMON STOCK"), presently owned by
Xxxxxxxx.
(b) On the Closing Date, Xxxxxxxx shall execute the
Repurchase Option Agreement attached hereto as
Exhibit A (the "REPURCHASE OPTION AGREEMENT"),
including the Assignment Separate from Certificate
included therewith (the "ASSIGNMENT"), wherein
Xxxxxxxx grants to Nextgen an option to repurchase
the 200,000 shares of Common Stock he owns (after
transferring the Transferred Shares to Nextgen) (the
"RETAINED SHARES"). On the Closing Date, Nextgen
shall deliver to Xxxxxxxx a stock certificate for the
Retained Shares, with only the legend required by the
Repurchase Option Agreement.
(c) On the Closing Date, PTP shall pay to Xxxxxxxx the
following amounts (collectively, the "XXXXXXXX
PAYMENTS"): (i) $100,000.00 cash as severance, net of
$49,842.67 withheld for taxes; (ii) Payment in full
of the Term Note in cash, including all interest
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 3
accrued thereon (which is agreed to be $353,004.58);
and (iii) $3,993.58 cash as reimbursement for certain
expenses incurred by Xxxxxxxx in connection with his
employment with PTP. For purposes of this Release,
"cash" shall mean immediately available funds held in
the Xxxxxxx & Xxxxxxx client funds account.
5. TERMINATION OF EMPLOYMENT; VEHICLE LEASE; OTHER GUARANTEED
OBLIGATIONS. The parties further agree as follows:
(a) Xxxxxxxx'x employment with PTP terminated effective
November 1, 2001 (the "TERMINATION DATE"). Xxxxxxxx
has no further employment duties or responsibilities
to PTP or Nextgen after the Termination Date.
Xxxxxxxx, PTP and Nextgen agree that for all future
purposes Xxxxxxxx, PTP and Nextgen will characterize
Xxxxxxxx'x termination of employment as a voluntary
resignation.
(b) On or before the Closing Date, PTP shall obtain for
Xxxxxxxx a complete release of Xxxxxxxx'x obligations
(the "RELEASE") under the lease agreement for the
2000 Toyota Landcruiser under which Xxxxxxxx is
obligated (the "LEASE").
(c) PTP and Nextgen agree that, in the event that
following the Closing (defined below) there are any
obligations of PTP that are guaranteed by Xxxxxxxx,
PTP and/or Nextgen shall, on a timely basis, fully
perform such obligations, and indemnify and hold
harmless Xxxxxxxx from and against any and all
Liabilities relating to his guarantee of such
obligations.
6. CLOSING. The closing of the transactions contemplated by this
Release (the "CLOSING") shall take place on such date and at such time and place
as the parties may agree. If the Closing does not occur on or before March 15,
2002, this Release shall be null and void. The date on which the Closing occurs
is referred to herein as the "CLOSING DATE". At the Closing, (a) Xxxxxxxx shall
deliver or cause to be delivered to Nextgen (i) a stock certificate representing
the Transferred Shares, together with an executed stock power, (ii) the original
copy of the Term Note, marked "Cancelled" and "Paid In Full", which shall be
held in escrow at Closing by Xxxxxxx & Xxxxxxx, and delivered to Fish &
Xxxxxxxxxx P.C. on the day
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 4
following the Closing Date, and (iii) the executed Repurchase Option Agreement,
including the executed Assignment, which Fish & Xxxxxxxxxx P.C. shall hold in
escrow during the term of the Repurchase Option Agreement, and (b) PTP and
Nextgen shall deliver or cause to be delivered to Xxxxxxxx (i) the Xxxxxxxx
Payments, (ii) a stock certificate representing the Retained Shares, (iii)
evidence reasonably acceptable to Xxxxxxxx that he no longer has any obligations
under the Lease, and (iv) an acknowledgment in a form reasonably acceptable to
Xxxxxxxx stating that Xxxxxxxx'x activities as a manufacturer's representative
do not breach Xxxxxxxx'x obligations under the Merger Agreement or Employment
Agreement. The parties intend not to conduct a "physical" Closing, and agree
that Xxxxxxxx shall deliver directly to Fish & Xxxxxxxxxx P.C. all documents,
instruments and other deliveries required on his part for the Closing (except
for the cancelled Term Note, which Xxxxxxxx shall deliver to Xxxxxxx & Xxxxxxx
at Closing, and Xxxxxxx & Xxxxxxx shall deliver to Fish & Xxxxxxxxxx P.C. on the
day following the Closing Date), and PTP and Nextgen shall deliver directly to
Xxxxxxx & Xxxxxxx the Xxxxxxxx Payments, and all documents, instruments and
other deliveries required on their part for the Closing. Fish & Xxxxxxxxxx P.C.
and Xxxxxxx & Xxxxxxx will hold all such deliveries in escrow pending the
receipt of all deliveries required for the Closing, whereupon, at the written
and joint direction of Xxxxxxxx, PTP and Nextgen, Fish & Xxxxxxxxxx P.C. and
Xxxxxxx & Xxxxxxx will release such deliveries and the Closing will occur.
7. PTP'S AND NEXTGEN'S WARRANTY OF RIGHT TO SETTLE. PTP and Nextgen
expressly warrant to Xxxxxxxx that no claims, demands, causes of action,
liabilities, debts, costs, liens, obligations, responsibilities, covenants,
agreements, expenses, interest, controversies, damages, losses, or other rights
of PTP and/or Nextgen that are mentioned in this Release have been assigned,
conveyed, or in any manner whatsoever transferred to any other person or entity
and that PTP and/or Nextgen are the sole owners and holders of such claims,
demands, causes of action, liabilities, debts, costs, liens, obligations,
responsibilities, covenants, agreements, expenses, interest, controversies,
damages, losses or other rights of PTP and/or Nextgen.
8. XXXXXXXX'X WARRANTY OF RIGHT TO SETTLE. Xxxxxxxx expressly warrants
to PTP and Nextgen that no claims, demands, causes of action, liabilities,
debts, costs, liens, obligations,
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 5
responsibilities, covenants, agreements, expenses, interest, controversies,
damages, losses, or other rights of Xxxxxxxx that are mentioned in this Release
have been assigned, conveyed, or in any manner whatsoever transferred to any
other person or entity and that Xxxxxxxx is the sole owner and holder of such
claims, demands, causes of action, liabilities, debts, costs, liens,
obligations, responsibilities, covenants, agreements, expenses, interest,
controversies, damages, losses or other rights of Xxxxxxxx.
9. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF XXXXXXXX. In order to
induce PTP and Nextgen to enter into this Release, Xxxxxxxx hereby further
represents and warrants to PTP and Nextgen as follows:
(a) Xxxxxxxx has full power and authority to enter into
and perform this Release and each other agreement,
instrument and document required to be executed by
Xxxxxxxx in connection herewith. This Release has
been duly and validly executed and delivered by
Xxxxxxxx and constitutes a valid and binding
obligation of Xxxxxxxx enforceable against Xxxxxxxx
in accordance with its terms, except as the same may
be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the
enforcement of creditors' rights generally and the
application of general principles of equity.
(b) Xxxxxxxx is the true and lawful record and beneficial
owner of the Transferred Shares, and except as
contemplated by the Merger Agreement and the
documents executed in connection therewith, the
Transferred Shares are free and clear of any liens,
restrictions, security interests, claims, rights of
another, or encumbrances; none of the Transferred
Shares is subject to any outstanding options,
warrants, calls, or similar rights of any other
person to acquire the same; none of the Transferred
Shares is subject to any restrictions on transfer
thereof; and Xxxxxxxx has the full power and
authority to convey, and will convey to Nextgen
and/or PTP, as the case may be, good and marketable
title to the Transferred Shares, free and clear of
any liens, restrictions, security interests, claims,
rights of another, or encumbrances.
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 6
(c) The execution, delivery and performance of this
Release by Xxxxxxxx will not (i) violate any federal,
state, county or local law, rule or regulation
applicable to Xxxxxxxx or his properties, (ii)
violate or conflict with, or permit the cancellation
of, any agreement to which Xxxxxxxx is a party, or by
which Xxxxxxxx or his properties is bound, or result
in the creation of any lien, security interest,
charge or encumbrance upon any of such properties, or
(iii) permit the acceleration of the maturity of any
indebtedness of, or indebtedness secured by the
property of, Xxxxxxxx. No action, consent or approval
of, or filing with, any governmental authority is
required in connection with the execution, delivery
or performance by Xxxxxxxx of this Release (or any
agreement or other document executed in connection
herewith by Xxxxxxxx).
10. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF PTP AND NEXTGEN. In
order to induce Xxxxxxxx to enter into this Release, each of PTP and Nextgen
hereby further represent and warrant to Xxxxxxxx as follows:
(a) Such party has full power and authority to enter into
and perform this Release and each other agreement,
instrument and document required to be executed by
such party in connection herewith. This Release has
been duly and validly executed and delivered by such
party and constitutes a valid and binding obligation
of such party enforceable against such party in
accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the
enforcement of creditors' rights generally and the
application of general principles of equity.
(b) The execution, delivery and performance of this
Release by such party will not (i) violate any
federal, state, county or local law, rule or
regulation applicable to such party or its
properties, (ii) violate or conflict with, or permit
the cancellation of, any agreement to which such
party is a party, or by which such party or its
properties is bound, or result in the creation of any
lien, security interest, charge or encumbrance
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 7
upon any of such properties, or (iii) permit the
acceleration of the maturity of any indebtedness of,
or indebtedness secured by the property of, such
party. No action, consent or approval of, or filing
with, any governmental authority is required in
connection with the execution, delivery or
performance by such party of this Release (or any
agreement or other document executed in connection
herewith by such party).
11. NO ADVERSE INTERFERENCE FROM SETTLEMENT. This Release shall not be
construed as an admission of liability, which liability is expressly denied by
all parties.
12. PARTIES HAVE REVIEWED AND UNDERSTAND RELEASE. The parties to this
Release agree that they have carefully reviewed this Release; that they
understand its terms; that they sought legal advice with respect to this
Release; that they have relied wholly upon their own judgment and knowledge and
have not been influenced to any extent whatsoever in executing this Release by
any representations or statements made by the other side or anyone acting on
behalf of the other side; that the parties have made no promises or
representations to the other side which are not contained herein; that the
aforesaid consideration is contractual and not a mere recital; that all
agreements and understandings between the parties are embodied and expressed
herein; that the "operative facts" clauses contained herein are hereby made a
part of this Release; that this Release states the entire agreement of the
parties hereto and supersedes all prior and contemporaneous negotiations and
agreements, oral or written, relating to the subject matter of this Release, and
all prior and contemporaneous negotiations and agreements relating to the
subject matter of this Release are deemed incorporated into this Release or are
deemed to have been abandoned if not so incorporated herein; that this Release
may be amended only by a written agreement signed by the parties hereto and a
breach of this Release may be waived only by a written waiver signed by the
party granting the waiver; that the waiver of any breach of this Release shall
not operate nor be construed as a waiver of any other similar or prior or
subsequent breach of this Release; and that neither this Release nor any part
hereof shall be construed or used as an admission of liability by any party to
this Release.
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 8
13. SEVERABILITY. Should any part, term, or provision of this Release
be declared or be determined by any court to be illegal or invalid, the validity
of the remaining parts, terms or provisions shall not be affected thereby, and
any part, term or provision, if finally declared or determined by any court to
be illegal or invalid, shall be deemed not to be a part of this Release, and
there shall be added automatically as part of this Release a provision as
similar in its terms to such illegal or invalid part, term or provision as may
be possible and be legal, valid and enforceable.
14. APPLICABLE LAW; JURISDICTION AND VENUE. The validity, effect, and
performance of this Release and the obligations and rights of the parties
hereunder shall be determined, interpreted, resolved, and governed by reference
to the laws of the State of Delaware. Further, all parties agree to submit to
the personal jurisdiction of a court having proper subject-matter jurisdiction
that sits in New Castle County, Delaware for resolution of any and all disputes
that may arise between the parties related to this Release.
15. MULTIPLE ORIGINALS. This Release will be executed in duplicate
originals.
16. HEADINGS. The headings contained in this Release are for
convenience only and are not intended to vary or supplement the terms of the
section that follows the heading. The headings are not to be given any weight if
an issue arises regarding the interpretation of this Release.
17. PARTIES IN INTEREST. This Release shall inure to the benefit of and
shall be binding upon the undersigned parties and their respective heirs,
executors, administrators, trustees, successors, and assigns.
18. ATTORNEYS' FEES. Any party to this Release bringing suit to enforce
any right or obligation hereunder shall be entitled to its reasonable and
necessary attorney's fees, costs and expenses incurred in so doing, should that
party prevail.
19. MUTUAL EFFORTS. The parties hereby agree that this Release was
drafted through the mutual efforts of both parties.
20. WARRANTY OF AUTHORITY. Each signatory of this Release hereby
represents and warrants that he has been duly authorized to execute this Release
by the party(ies) for which he purports to act.
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 9
21. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Regardless
of any investigation at any time made by or on behalf of any party hereto or of
any information any party may have in respect thereof, all covenants,
agreements, representations and warranties made hereunder or pursuant hereto or
in connection with the transactions contemplated hereby shall survive the
Closing Date.
22. FURTHER ASSURANCES. At, and from time to time after, the Execution
Date, at the request of any party, but without further consideration, each other
party shall execute and deliver such other documents and instruments and take
such other action as the requesting party may reasonably request in order more
effectively to consummate the transactions contemplated hereby.
23. COOPERATION WITH SALE OF STOCK. Nextgen acknowledges that,
beginning on June 30, 2002, there will be no contractual restrictions (other
than as described in the legends on the back of the stock certificate
representing such shares) on Xxxxxxxx'x sale of the Retained Shares and that
Xxxxxxxx will be permitted to sell the Retained Shares in accordance with the
requirements of federal and state securities laws. Nextgen agrees to fully
cooperate with Xxxxxxxx with respect to the transfer of the Retained Shares by
Xxxxxxxx at such time as such transfer is legally permissible under Rule 144, as
promulgated under the Securities Act of 1933, as amended, or any successor
provision. Without limiting the generality of the foregoing, at such time as
such transfer is legally permissible under Rule 144, upon the written request of
Xxxxxxxx, Nextgen agrees to direct Nextgen's counsel to issue an opinion letter
to Xxxxxxxx in order to facilitate the removal of the restrictive legend from
the Retained Shares and the transfer of the Retained Shares, in accordance with
Rule 144.
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SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 10
To evidence its agreement to the terms of this Release, Point To Point
Network Services, Inc. has executed this Release as of the date first set forth
above.
POINT TO POINT NETWORK SERVICES, INC.
By:
---------------------------------------
Xxxxx X. Xxxxxxxx
Chief Executive Officer
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 11
To evidence its agreement to the terms of this Release, Nextgen
Communications Corporation has executed this Release as of the date first set
forth above.
NEXTGEN COMMUNICATIONS CORPORATION
By:
---------------------------------------
Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 12
To evidence his agreement to the terms of this Release, W. Xxxxxxx
Xxxxxxxx has executed this Release.
-----------------------------------
W. Xxxxxxx Xxxxxxxx
Date:
----------------------------------
COMMONWEALTH OF MASSACHUSETTS )
)
COUNTY OF __________ )
BEFORE ME, the undersigned authority, on this day personally appeared
W. Xxxxxxx Xxxxxxxx, known to me to be the person whose name is subscribed to
the foregoing instrument, and acknowledged to me that he executed the same for
the purposes and consideration therein expressed and in the capacity expressed.
SUBSCRIBED AND SWORN TO BEFORE ME this ___ day of _______, 2002 to
certify which witness my hand and official seal.
-----------------------------------------
Notary Public in and for the Commonwealth
of Massachusetts
My Commission Expires: Notary's Printed Name:
----------------------- -----------------------------------------
SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS - PAGE 13
