MASTER SETTLEMENT AGREEMENT
AND
MUTUAL RELEASE
----------
This Master Settlement Agreement and Mutual Release (this "Agreement")
is entered into this 25th day of September 2000 by and between The Network
Connection, Inc., a Georgia corporation ("TNCi"), and Carnival Corporation, a
Panamanian corporation ("Carnival").
WHEREAS, TNCi and Carnival have had an ongoing business relationship for
the past approximately two years, which has been governed by the Turnkey
Agreement dated September 14, 1998 (the "Initial Agreement");
WHEREAS, various issues have arisen out of that business relationship that
have resulted in TNCi and Carnival engaging in certain negotiations regarding
the continuation of their business relationship;
WHEREAS, both the Company and Carnival desire to continue their business
relationship and towards that end have agreed (i) to terminate the Initial
Agreement; (ii) to enter into this Master Settlement Agreement and Mutual
Release regarding their business relationship prior to the date hereof, the
Initial Agreement and termination thereof (this "Agreement"); ; and (iii) that
the Company shall issue the Note to Carnival;
WHEREAS, TNCi and Carnival now wish to settle any and all disputed claims
relating to their business relationship prior to the date hereof, the Initial
Agreement and the termination thereof (collectively, the "Disputed Claims"),
without an admission of liability against each other; and
WHEREAS, capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Convertible Note Subscription Agreement or
Convertible Note issued in connection therewith, each of even date herewith.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, intending to be legally bound
hereby, the parties hereto agree as follows:
1. NON-ADMISSION OF LIABILITY. This Agreement represents a
compromise of disputed claims. No act carried out by either party pursuant to
this Agreement, including, without limitation, issuance of the Note by TNCi to
Carnival, is to be construed as an admission of liability or wrongdoing by
either party hereto. Any liability or wrongdoing is specifically denied by each
party.
1A. TERMINATION OF INITIAL AGREEMENT. TNCi and Carnival hereby
agree that the Initial Agreement shall be terminated and of no further force or
effect as of the execution and delivery hereof.
2. COVENANTS.
(a) ENTRY INTO NEW AGREEMENT. TNCi and Carnival hereby agree
that they shall negotiate in good faith and use their best efforts to achieve
within the 60-day period following the date hereof the objective of entering
into a new agreement to govern a business relationship between the parties after
the execution and delivery hereof (the "New Agreement"). In connection with the
execution and delivery of this Agreement , TNCi shall retain ownership of any
and all equipment (other than wiring and switching equipment installed for
networking purposes which Carnival purchased and has paid in full pursuant to
the original Agreement) installed on any Carnival ship in connection with TNCi's
provision of its systems and services to Carnival under the Initial Agreement.
Unless used in connection with systems and services to be provided under any New
Agreement, TNCi shall remove any of such equipment from any Carnival ship, at
its sole expense.
(b) ISSUANCE OF NOTE. TNCi shall issue the Note to Carnival,
pursuant to a Convertible Note Subscription Agreement. The Convertible Note
Subscription Agreement and Note shall be in substantially the form attached
hereto as Exhibit "A" (the Note is attached to the Convertible Note Subscription
Agreement as Exhibit "A" thereto).
(c) CARNIVAL OBLIGATIONS. Carnival represents that Carnival
is responsible for payment to ABB Marine for wiring of ship and for payment to
TNCi of $48,673.02, which represents the full and complete payment for TNCi's
share of net profits pursuant to Schedule A of the Initial Agreement , and
Carnival covenants that it shall make such payments.
3. CLOSING. Closing of the transactions set forth in paragraph 2
above shall take place at Carnival's offices in Miami, or such other place as
the parties mutually agree, at 10:00 a.m. Eastern Standard Time on September 25,
2000, or at such other time as the parties mutually agree (the "Closing Date").
The Closing may also take place, if so desired and mutually agreed by the
parties, by facsimile signature on the Closing Date with hard copies to be
delivered by overnight courier immediately thereafter.
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4. CONDITIONS TO CLOSING. It shall be a condition to the
effectiveness of this Agreement that each of the Convertible Note Subscription
Agreement and Note (collectively, the "Transaction Documents") shall be executed
and delivered together with the execution and delivery of this Agreement.
Neither this Agreement nor any of the Transaction Documents shall be of force or
effect until such time as all three of such documents have been executed and
delivered.
5. MUTUAL RELEASE. TNCi and Carnival do hereby mutually remise,
release and forever discharge each other, their directors, officers, employees,
shareholders, affiliates, agents, predecessors, successors, if any, and each of
them, from any and all manner of claims, causes of action, actions, suits,
debts, dues, accounts, bonds, covenants, contracts, agreements and demands of
every nature, on account of any grounds whatsoever, in law or in equity,
asserted or unasserted, known or unknown, arising directly or indirectly as a
result of, in connection with or relating to the Disputed Claims, by reason of
any cause, matter or thing whatsoever, from the beginning of the world to the
date of these presents. The foregoing releases shall not apply to any claim
arising from a breach of this Agreement.
6. SEVERABILITY. In the event that any provision or portion of
this Agreement shall be determined by a Court to be invalid, illegal or
unenforceable, the remaining provisions or portions of this Agreement shall
continue in full force and effect, unless such severability would thwart the
purpose of this Agreement.
7. INTEGRATION. Except for the Transaction Documents, this
Agreement represents the only agreement between the parties in regard to the
settlement of the Disputed Claims, and any amendment or modification hereof must
be in writing and signed by the parties hereto. This Agreement is binding upon
the parties, their successors and assigns.
8. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Florida. The federal and state court courts in
Philadelphia, Pennsylvania and Miami, Florida shall have exclusive jurisdiction
over this instrument and the enforcement hereof.
9. CONFIDENTIALITY. The negotiations, covenants, terms and
substance of this Agreement are confidential. No party shall publicize, disclose
or communicate in any manner, directly or indirectly, the negotiations,
covenants, terms or substance of this Agreement to any person or entity, other
than their directors, officers, employees, shareholders, affiliates, agents and
successors, if any, on a need-to-know basis, and provided that any of such
persons to whom such disclosure is made is informed of the confidential nature
of such information and instructed to maintain such confidentiality.
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10. NO WAIVER. The waiver by any party hereto of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach.
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, effective as of the date first above written.
THE NETWORK CONNECTION, INC.
By:
-----------------------------------------
Name:
Title:
CARNIVAL CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Sr. Vice President Operations
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EXHIBIT A
CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT
Convertible Note Subscription Agreement, dated as of September 25, 2000
(this "Agreement"), by and between The Network Connection, Inc., a Georgia
corporation (the "Company"), and Carnival Corporation, a Panamanian corporation
(the "Subscriber").
WHEREAS, this Agreement is entered into as a condition to the effectiveness
of, and pursuant to, a Master Settlement Agreement and Mutual Release (the
"Master Agreement") of even date herewith; and
WHEREAS, capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Master Agreement or Convertible Note issued in
connection herewith.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Company and the Subscriber,
intending to be legally bound, hereby agree as follows:
1. PURCHASE OF UNITS. At the Closing, the Company will issue to the Subscriber
a convertible note (the "Note") in the principal amount of $550,000 in the
form attached as Exhibit "A" hereto that shall be convertible at any time
and from time to time at the option of the Subscriber into that number of
shares of common stock of the Company ("Common Stock") equal to the
dividend obtained by dividing the outstanding principal amount of the Note
that the Subscriber then desires to convert by the product of (A) the
average of the closing prices per share of Common Stock as reported by
Nasdaq for each of the five consecutive trading days ending on the day
prior to the date on which the conversion is to take place and (B) 0.8.
Subscriber may not convert less than $100,000 of outstanding principal
balance in connection with any conversion. The mechanics of effectuating a
conversion are set forth in the Note. The Note and the shares issuable on
any conversion thereof are hereinafter sometimes referred to collectively
as the "Securities."
2. SUBSCRIBER'S REPRESENTATIONS. Subscriber represents and warrants to the
Company as follows:
(a) Subscriber is acquiring the Securities solely for investment, solely
for its own account and not with a view to or for the resale or
distribution thereof. Subscriber is acquiring the Securities in the
ordinary course of its business and does not have any agreement or
understanding, directly or indirectly, with any person or entity to
distribute any of such securities.
(b) Subscriber understands that it may sell or otherwise transfer the
Securities only if such transaction is duly registered under the
Securities Act of 1933, as amended (the "Securities Act"), or
otherwise only if Subscriber shall have received and delivered to
Company the favorable opinion of counsel to Subscriber (which such
opinion must be reasonably acceptable to Company as to its form,
substance and the giver thereof) to the effect that such sale or other
transfer may be made in the absence of registration under the
Securities Act and registration or qualification in every applicable
state.
(c) Subscriber is an "accredited investor" as such term is defined in Rule
501 of Regulation D of the Securities Act.
(d) Subscriber has the full right, power and authority to enter into this
Agreement and will at all times have the full power and authority to
perform its obligations under this Agreement. This Agreement has been
duly authorized, executed and delivered by the Subscriber. This
Agreement constitutes the Subscriber's valid and binding obligation,
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, moratorium or other laws affecting creditors'
rights generally, or equitable principles, whether applied in a
proceeding in equity or law.
3. This Agreement may not be changed, terminated or otherwise modified, except
by written agreement of the parties. This Agreement shall not be assignable
by either party without the express prior written consent of the other,
and, subject to this restriction, shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement constitutes the entire agreement and understanding
of the parties hereto with respect to the subject matter hereof and
supersedes all prior or contemporaneous agreements, understandings,
inducements or conditions, oral or written, express or implied, except for
the Master Agreement. This Agreement shall be governed by the internal laws
of the State of Florida. The federal and state court courts in
Philadelphia, Pennsylvania and Miami, Florida shall have exclusive
jurisdiction over this instrument and the enforcement hereof. This
Agreement may be executed in any number of counterparts, each of which as
so executed and delivered shall be an original and all of which together
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Convertible
Note Subscription Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
THE NETWORK CONNECTION, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxx
Title: President and
Chief Operating Officer
CARNIVAL CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Sr. Vice President Operations
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EXHIBIT A
CONVERTIBLE NOTE
