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EXHIBIT 10.113
SETTLEMENT AGREEMENT AND RELEASE
This SETTLEMENT AGREEMENT AND RELEASE ("AGREEMENT") is entered into as of
December 27, 1996, among Xxxxx Xxxxxxx, an individual, Xxxxx Xxxxxxx, an
individual, and MIDCOM Communications Inc., a Washington corporation (the
"COMPANY"). Xxxxx Xxxxxxx and Xxxxx Xxxxxxx are sometimes collectively referred
to herein as the "WIEGANDS."
RECITALS
A. The Company, the Wiegands and ADNET Telemanagement, Inc., a California
corporation ("ADNET"), previously entered into the Agreement and Plan of
Reorganization dated as of December 29, 1995 (the "MERGER AGREEMENT"), which
provided for the merger of ADNET into the Company, with the Company as the
surviving corporation (the "MERGER"), and which included certain representations
and warranties by the Company. The Merger was effected on December 29, 1995 by
the filing of Articles of Merger and a Plan of Merger with the Secretary of
State of the States of Washington and California.
B. Immediately prior to completion of the Merger, the Wiegands were the
sole shareholders of ADNET. In accordance with the terms of the Merger
Agreement, the Wiegands received a total of 453,250 shares of the Company's
common stock (the "MERGER SHARES") in exchange for all of the outstanding shares
of capital stock of ADNET. The Merger Shares were issued by the Company without
registration under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), in reliance on certain exemptions from the registration requirements
under the Securities Act. This reliance was based, in part, on the
representations of the Wiegands made in the Representation Letter dated December
29, 1995 (the "REPRESENTATION LETTER"). The Company and the Wiegands also
entered into the Registration Rights Agreement dated as of December 29, 1995
(the "REGISTRATION RIGHTS AGREEMENT"), which requires the Company to register
the Merger Shares under the Securities Act on certain terms and conditions set
forth therein.
C. Of the Merger Shares owned by the Wiegands following the Merger, 45,325
shares (the "HOLDBACK SHARES") were subject to the Holdback Agreement dated as
of December 29, 1995 (the "HOLDBACK AGREEMENT"), entered into among the Company
and the Wiegands, which provided that the Holdback Shares were to be held in
escrow as security in the event representations and warranties made by the
Wiegands in the Merger Agreement were breached. An Escrow Agreement dated as of
December 29, 1995 (the "ESCROW AGREEMENT") was entered into among the Company,
the Wiegands and First Trust of Washington as escrow agent, pursuant to which
the Holdback Shares were held in escrow in accordance with the terms of the
Holdback Agreement.
D. The Company and Xxxxx Xxxxxxx entered into an Employment Agreement
dated as of December 29, 1995 (the "EMPLOYMENT AGREEMENT"), under which the
Company and Xxxxx Xxxxxxx agreed to certain terms regarding Xxxxx Xxxxxxx'x
employment by the Company following the Merger. In addition, Xxxxx Xxxxxxx,
Xxxxx Xxxxxxx and the Company entered into Non-Competition Agreements dated as
of December 29, 1995 (the "NONCOMPETITION AGREEMENTS"), concerning use of
confidential information and prohibition of certain competitive activities.
E. The Wiegands filed an action against the Company and Mr. Xxxxx Xxx (a
former director and Chief Executive Officer of the Company) on August 1, 1996,
in the Superior Court of the State of California for the County of Orange, Case
No. 767169 (the "ACTION"). In the Action, the Wiegands made certain allegations
and brought certain causes of action against the Company for intentional
misrepresentation, fraud/intentional concealment of facts, negligent
misrepresentation, breach of contract, breach of the implied covenant of good
faith and fair dealing and violation of California securities laws, all of which
allegations and causes of action related to the Merger and the transactions
completed in connection therewith.
F. The Company disputes any and all liability to the Wiegands as alleged
in the Action. On August 8, 1996, the Wiegands and the Company entered into a
Stand-Still Agreement (the "STANDSTILL AGREEMENT"), pursuant to which the
Wiegands agreed to dismiss the Action without prejudice in consideration for
certain promises and agreements of the Company set forth therein.
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G. Xxxxx Xxxxxxx'x employment with the Company has terminated; however,
the parties have not agreed upon the date of the termination or upon whether the
termination was by the Company or Xxxxx Xxxxxxx.
H. The Company and Xxxxx Xxxxxxx entered into a Consulting Agreement dated
as of November 25, 1996 (the "CONSULTING AGREEMENT"). As consideration for
entering into this Agreement and the Consulting Agreement, the Company granted
to Xxxxx Xxxxxxx a stock option (the "STOCK OPTION") to purchase up to 150,000
shares of the Company's common stock (the "OPTION SHARES"), pursuant to the
terms and conditions set forth in the Stock Option Agreement dated as of
November 25, 1996 (the "STOCK OPTION AGREEMENT"), between the Company and Xxxxx
Xxxxxxx.
I. Contemporaneously with the execution of this Agreement, the parties
will enter into amendments to the Noncompetition Agreements and the Merger
Agreement.
J. On the terms and conditions contained herein, the Wiegands and the
Company, and each of them, seek a resolution of certain claims, controversies,
and disputes between the Wiegands and the Company as described herein.
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AGREEMENT
NOW, THEREFORE, in consideration of the promises and agreements herein
contained, and for such other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged (including, without limitation, the
grant of the Stock Option), the parties agree as follows:
SECTION 1. CONFIRMATION OF TERMINATION OF EMPLOYMENT. Xxxxx Xxxxxxx'x
employment with the Company shall be deemed to have terminated for all purposes
effective as of October 1, 1996.
SECTION 2. OBLIGATIONS OF COMPANY.
(a) Severance Payment. Subject to the terms and conditions contained
in this Agreement, the Company shall pay to Xxxxx Xxxxxxx an aggregate
amount equal to $420,181.10 ("SEVERANCE PAYMENT"), such payment to be
reduced by any taxes required to be withheld and remitted to applicable
federal, state or local tax authorities. The Severance Payment to be paid
by the Company in accordance with this Section 2(a) is in consideration of,
among other things, all unpaid salary, bonus, accrued vacation and
noncompete payments and reimbursement of all legal and other expenses
allegedly owing by the Company to Xxxxx Xxxxxxx pursuant to the Employment
Agreement, Xxxxx Xxxxxxx'x Noncompete Agreement and any other verbal or
written agreement or understanding between the parties relating to Xxxxx
Xxxxxxx'x employment or the termination thereof. The Severance Payment
shall be payable by check representing good and currently available funds
and delivered to Xxxxx Xxxxxxx on January 2, 1997 at the address and in the
manner set forth in Section 15(c).
(b) Additional Agreements. The Company shall enter into the Amendment
to the Xxxxxxx Noncompetition Agreements attached hereto as Exhibit 2.1 and
the Amendment to the Merger Agreement attached hereto as Exhibit 2.2.
SECTION 3. OBLIGATIONS OF WIEGANDS. The Wiegands or Xxxxx Xxxxxxx as
applicable shall enter into the Amendment to the Xxxxxxx Noncompetition
Agreements attached hereto as Exhibit 2.1 and the Amendment to the Merger
Agreement attached hereto as Exhibit 2.2.
SECTION 4. REPRESENTATIONS OF COMPANY -- CAPACITY AND NO ASSIGNMENT OF
CLAIMS. The Company represents and warrants that: (i) the Company has corporate
power and corporate authority to enter into and perform this Agreement; (ii)
this Agreement has been duly authorized by all necessary corporate action on the
part of the Company; and (iii) the Company has not sold, assigned, transferred,
conveyed or otherwise disposed of, and will not sell, assign, transfer, convey
or otherwise dispose of, any of the Claims against the Wiegands set forth in
Section 7(a).
SECTION 5. REPRESENTATIONS OF WIEGANDS -- CAPACITY AND NO ASSIGNMENT OF
CLAIMS. Each of the Wiegands jointly and severally represents and warrants
that: (i) no other Person has or has had any interest in the Claims set forth in
Section 6(a); (ii) each of the Wiegands has the sole right and exclusive
authority to execute this Agreement and release the Claims against the Company
specified in Section 6(a); and (iii) each of the Wiegands has not sold,
assigned, transferred, conveyed or otherwise disposed of, and will not sell,
assign, transfer, convey or otherwise dispose of, any of the Claims against the
Company set forth in Section 6(a).
SECTION 6. RELEASE BY WIEGANDS.
(a) Release of Company and Company Affiliates. Effective as of the
date of the first Release Event (as defined in Section 8(a)) and subject to
receipt by Xxxxx Xxxxxxx of the Severance Payment pursuant to Section
2(a)and to the terms and conditions set forth in Section 9, Xxxxx Xxxxxxx
and Xxxxx Xxxxxxx do hereby release, waive, acquit and forever discharge
the Company and each and every past, present and future employee, agent,
representative, partner, officer (including but not limited to Xxxxx Xxx),
director, shareholder, administrator, subsidiary, affiliate, successor and
assign of the Company (collectively, "COMPANY AFFILIATES"), and each of
them, from and against any and all claims, rights, demands, actions,
obligations, liabilities, and causes of action, whether asserted or
unasserted, known or unknown, of any and every kind, nature, and character
whatsoever, relating to or arising out of any and all acts or omissions
occurring on or prior to the date of this Agreement (collectively,
"CLAIMS"), which Xxxxx Xxxxxxx or Xxxxx Xxxxxxx may now have, or has ever
had against the Company or any Company
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Affiliate, relating to or arising out of the Merger, the Merger Agreement,
the Employment Agreement, Xxxxx Xxxxxxx'x employment by the Company, the
termination of that employment, the Non-Competition Agreements, the
Holdback Agreement, the Escrow Agreement, the Action and the negotiation or
execution of this Agreement.
(b) Covenant Not to Xxx. Xxxxx Xxxxxxx and Xxxxx Xxxxxxx, and each of
them, jointly and severally covenant and agree that each of them will not
bring, commence, institute, maintain, prosecute or voluntarily aid in the
prosecution of any action or proceeding or otherwise prosecute or xxx,
jointly or severally, the Company or any Company Affiliate (including but
not limited to Xxxxx Xxx), either affirmatively or by way of
cross-complaint, defense or counterclaim, or in any other manner, relating
to the Claims released or to be released in Section 6(a); provided,
however, that in the event a Release Event does not occur on or before
December 30, 1999, Xxxxx Xxxxxxx and Xxxxx Xxxxxxx, or any of them, may
file and commence any action against the Company and/or any Company
Affiliate and the covenant not to xxx set forth in this Section 6(b) shall
be null and void and of no further force or effect so long as the Wiegands
or any of them file such action after December 30, 1999 and on or before
March 31, 2000. In the event a Release Event does not occur on or before
December 30, 1999, and Xxxxx Xxxxxxx or Xxxxx Xxxxxxx do not file an action
against the Company after December 30, 1999 and on or before March 31,
2000, the covenant not to xxx set forth in this Section 6(b) shall remain
in full force and effect from April 1, 2000 and thereafter. Notwithstanding
anything else in this Agreement to the contrary, if the Company fails to
pay Xxxxx Xxxxxxx the Xxxxxxxxx Payment by January 9, 1997 or otherwise
breaches this Agreement in any material respect, or if on or prior to
December 30, 1999, the Company files a plan of reorganization or a plan of
liquidation under Chapter 11 or Chapter 7 of the federal Bankruptcy Code or
voluntary or involuntary dissolution or liquidation proceedings are
commenced by or against the Company or the Company makes a general
assignment for the benefit of creditors or institutes or consents to a
proceeding for appointment of a receiver or custodian or similar officer,
the covenant not to xxx set forth in this Section 6(b) shall be null and
void and of no further force or effect.
SECTION 7. RELEASE BY COMPANY.
(a) Release of Wiegands and Xxxxxxx Affiliates. Effective as of the
date of the first Release Event to occur and subject to the terms and
conditions set forth in Section 9, the Company does hereby release, waive,
acquit and forever discharge Xxxxx Xxxxxxx and Xxxxx Xxxxxxx and each and
every past, present and future agent, representative, partner, heir,
executor, administrator, successor and assign of Xxxxx Xxxxxxx and Xxxxx
Xxxxxxx (collectively, the "XXXXXXX AFFILIATES"), and each of them, from
and against any and all Claims which the Company may now have, or has ever
had against Xxxxx Xxxxxxx or Xxxxx Xxxxxxx or any Xxxxxxx Affiliate,
relating to or arising out of the Merger, the Merger Agreement, the
Employment Agreement, Xxxxx Xxxxxxx'x employment by the Company, the
termination of that employment, the Non-Competition Agreements, the
Holdback Agreement, the Escrow Agreement, the Action and the negotiation or
execution of this Agreement.
(b) Covenant Not to Xxx. The Company covenants and agrees that the
Company will not bring, commence, institute, maintain, prosecute or
voluntarily aid in the prosecution of any action or proceeding or otherwise
prosecute or xxx, jointly or severally, Xxxxx Xxxxxxx or Xxxxx Xxxxxxx
and/or any Xxxxxxx Affiliate, either affirmatively or by way of
cross-complaint, defense or counterclaim, or in any other manner, relating
to the Claims released or to be released in Section 7(a); provided,
however, that in the event Xxxxx Xxxxxxx or Xxxxx Xxxxxxx files an action
in accordance with Section 6(b) or in violation of this Agreement, the
covenant not to xxx set forth in this Section 7(b) shall be null and void
and of no further force or effect.
SECTION 8. CONDITIONS TO RELEASE.
(a) Release Events. Subject to Section 9 of this Agreement, the
releases of Claims set forth in Section 6(a) and Section 7(a) of this
Agreement shall be effective only as of the date of the first of the
following events to occur (each a "Release Event"):
(i) March 31, 2000; or
(ii) the date of issuance of any Option Shares by the Company to
Xxxxx Xxxxxxx pursuant to any exercise of the Stock Option; or
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(iii) on or before December 30, 1999, the Company's common stock
sustains an average closing sale price for a period of 20 consecutive
trading days of at least $20.50 per share (such twentieth day referred
to below as the "TRADING PRICE TRIGGER DATE"), as long as during the
entire period of 90 calendar days ending on the Trading Price Trigger
Date, (a) Xxxxx Xxxxxxx were able, if he had chosen, to exercise the
Stock Option in full and (b) all of the Option Shares were free of any
restriction on transfer imposed by the Company and (c) all of the Option
Shares were freely saleable by Xxxxx Xxxxxxx on the Nasdaq Stock Market
(or such other national securities exchange as is the primary exchange
upon which the Company's shares are traded) pursuant to an effective
registration statement on Form S-8 or any other form permissible under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), or
pursuant to Rule 144 under the Securities Act, provided, however, that
the requirement under Rule 144 to effect sales of securities through
brokers' transactions or directly with a market maker and file a notice
on Form 144 shall not be deemed to be a restriction on the sale of the
Option Shares (for purposes of this Agreement, the average closing sale
price of shares of the Company's common stock for a period of 20
consecutive trading days shall be calculated by (x) adding together the
closing sale price of the Company's common stock for each day in such
period as reported by the Nasdaq Stock Market in its Summary Activity
report, an example of which is attached hereto as Exhibit 8.1 (the
"Nasdaq Report"), and (y) dividing such sum by the number of days in
such period. The Nasdaq Report is prepared on a monthly basis and two
such reports shall be used in calculating the average closing sale price
if the 20 consecutive days elapse over a two-month period); or
(iv) on or before December 30, 1999, a "change of control" of the
Company occurs, if in connection with that change in control Xxxxx
Xxxxxxx receives, or has a right to immediately exercise his Stock
Option so that Xxxxx Xxxxxxx may receive in respect of each Option Share
issued or issuable upon exercise of the Stock Option, cash and/or
securities having a total value of at least $20.50 per share, which
securities are free of any restriction on transfer imposed by the issuer
and freely saleable by Xxxxx Xxxxxxx on the Nasdaq Stock Market (or such
other national securities exchange as is the primary exchange upon which
such securities are traded) pursuant to an effective registration
statement under the Securities Act or pursuant to Rule 144 under the
Securities Act, provided, however, that the requirement under Rule 144
to effect sales of securities through brokers' transactions or directly
with a market maker and file a notice on Form 144 shall not be deemed to
be a restriction on the sale of such securities (for purposes of this
Agreement, the phrase "CHANGE OF CONTROL" of the Company means: (x) the
date that shares are accepted for purchase pursuant to a tender or
exchange offer for the Company's common stock by any Person (other than
the Company, any subsidiary of the Company, any employee benefit plan of
the Company or of any subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to
the terms of any such employee benefit plan (a "Company Person")),
unless the offeror, upon consummation thereof, would be the beneficial
owner of less than thirty percent (30%) of the shares of the Company's
common stock then outstanding; or (y) the date that any person, entity
or group (other than a Company Person or an underwriter or underwriting
syndicate that has acquired the Company's securities solely in
connection with a public offering thereof) becomes the beneficial owner
of fifty (50%) or more of the Company's outstanding shares of common
stock or fifty (50%) or more of the voting power represented by all
outstanding shares of the Company's capital stock; or (z) the date of
completion of any merger, consolidation, reorganization or other
transaction providing for the conversion or exchange of more than fifty
percent (50%) of the outstanding shares of the Company's common stock
into securities of any Person, or cash, or property, or a combination of
any of the foregoing or any sale or other disposition by the Company of
all or substantially all of the Company's assets).
(b) Right of Offer. Prior to the first Release Event, Xxxxx Xxxxxxx
shall not sell on the open market more than 37,500 shares of the Company's
common stock in any period of five consecutive trading days (the "WEEKLY
LIMIT") unless he has delivered to the Company, not later than 5:00 pm on
the first trading day of a five-day trading period to which the Weekly
Limit is applicable, a notice (the "WARNING NOTICE") of his intent to sell
shares in excess of the Weekly Limit (the "EXCESS SHARES"). If
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the Company notifies Xxxxx Xxxxxxx not later than 5:00 pm on the first
trading day after its receipt of the Warning Notice that it elects to
exercise its rights under this Section 8(b), then Xxxxx Xxxxxxx shall not
sell any Excess Shares unless he has first notified the Company by 3:00 pm
on the trading day immediately preceding the first trading day upon which
Xxxxx Xxxxxxx intends to sell any Excess Shares (the "SALE NOTICE"), and
the Company has not offered to purchase all of the Excess Shares by 9:00 am
on the next trading day following the date of the Sale Notice (a "COMPANY
OFFER"). If the Company offers to purchase the Excess Shares by such time,
then Xxxxx Xxxxxxx may accept or reject the Company Offer in his discretion
at any time during the applicable fivetrading-day period. If he rejects (or
does not respond to) the Company Offer, he may not sell any Excess Shares
without repeating the procedure set forth in this Section 8(b) with respect
to a subsequent five-trading-day period. If he accepts the Company Offer,
the Company shall purchase the Excess Shares to which the Warning Notice
applied at a price per share equal to the average of the high and low sales
prices price per share of the Company's common stock on the trading day on
which he delivers his acceptance notice to the Company (the "ACCEPTANCE
DAY"). Any purchase of Excess Shares by the Company under this Section 8(b)
shall be consummated on the third trading day after the Acceptance Day by
the Company's delivery to Xxxxx Xxxxxxx of a cashier's check or wire
transfer for the full purchase price for the Excess Shares against delivery
by Xxxxx Xxxxxxx of certificates representing the Excess Shares, duly
endorsed for transfer to the Company. All times set forth in this Section
8(b) are California time. Notices under this Section 8(b) shall be
delivered in accordance with Section 15(c); provided, however, that any
such notice may be oral if followed by written confirmation (including by
telecopy) delivered within one trading day.
SECTION 9. EXCEPTIONS TO RELEASES AND COVENANTS NOT TO
XXX. Notwithstanding any other term or provision of this Agreement to the
contrary:
(a) the Wiegands do not release the Company or any Company Affiliate,
and the Company does not release the Wiegands or any Xxxxxxx Affiliate,
from any obligation required to be performed after the date of this
Agreement under any executory contracts;
(b) in the event that a Company Affiliate files an action, then the
release set forth in Section 6(a) and the covenant not to xxx set forth in
Section 6(b) shall be null and void and of no further force and effect with
respect to, and only with respect to, such Company Affiliate;
(c) in the event that a Xxxxxxx Affiliate files an action, then the
release set forth in Section 7(a) and the covenant not to xxx set forth in
Section 7(b) shall be null and void and of no further force and effect with
respect to, and only with respect to, such Xxxxxxx Affiliate; and
(d) prior to a Release Event, nothing in this Agreement shall be
construed to mean that any party has released any claim, whether known or
unknown, any party may have had or have against any other party, named or
unnamed, and each of them. Each party expressly reserves any and all rights
to bring such claims as permitted by this Agreement.
SECTION 10. TERMINATION OF STOCK OPTION. In the event Xxxxx Xxxxxxx or
Xxxxx Xxxxxxx or any person acting on their behalf file suit against the Company
or any Company Affiliate in accordance with Section 6(b) or in violation of this
Agreement, the Stock Option shall immediately terminate and be of no further
force or effect.
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SECTION 11. WAIVER OF UNKNOWN CLAIMS. The Wiegands and the Company
understand and agree that this Agreement provides for a full and final release
covering all known and unknown and unanticipated injuries, debts, claims or
damages to each party which have arisen, or may have arisen, or may arise in the
future in connection with any matters, acts, omissions or dealings released in
Section 6 and Section 7 of this Agreement, including but not limited to matters,
acts, omissions or dealings which are unknown as of the date of this Agreement
but become known prior to or after the occurrence of a Release Event. As to
these matters released above, the Wiegands, and each of them, and the Company
hereby expressly waive and relinquish any and all of their respective rights or
benefits which each party may now have, or in the future may have against the
other party under the terms of Section 1542 of the California Civil Code and any
similar law of any state or territory of the United States. California Civil
Code Section 1542 provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
SECTION 12. NO ADMISSION OF LIABILITY. Neither the execution and delivery
of this Agreement, nor any performance of any act in connection therewith, shall
be construed to be an admission by the parties hereto that one party at any time
performed or failed to perform any of that party's respective duties or
obligations, which performance or failure to perform was or is in violation of
the other party's legal rights, or which performance or failure to perform gives
rise to any valid claim for damages or any other relief whatsoever; it being the
intention of the parties hereto that the releases and waivers provided in this
Agreement are solely in furtherance of a compromise of disputed claims between
the Wiegands and the Company.
SECTION 13. WAIVER OF CERTAIN RIGHTS UNDER REGISTRATION RIGHTS
AGREEMENT. Pursuant to Section 2 of the Registration Rights Agreement, the
Company hereby notifies the Wiegands that, on October 18, 1996, the Company
filed with the Securities and Exchange Commission (the "Commission") a
Registration Statement on Form S-1 (the "Registration Statement") for the
purpose of registering the public offer and sale of the Company's 8 1/4%
Convertible Subordinated Notes due 2003 and shares of the Company's common stock
issued or issuable upon conversion thereof. On November 25, 1996, the Company
filed with the Commission a Registration Statement on Form S-1 (the "Second
Registration Statement") for the purpose of registering certain shares of its
common stock. Notice of the filing of the Second Registration Statement, which
included the Registrable Securities (as defined in the Registration Rights
Agreement) held by the Wiegands, was sent to the Wiegands on November 25, 1996.
The Wiegands, acting jointly and severally, hereby waive any notice or other
rights either may have under Section 2 of the Registration Rights Agreement with
respect to the filing of the Registration Statement.
SECTION 14. PRESERVATION OF CLAIMS.
(a) Tolling Agreement. All time deadlines for the filing by any
party hereto of any action relating to any Claims released or to be
released pursuant to Section 6(a) or Section 7(a) shall be tolled from the
date of the filing of the Action, August 1, 1996 until March 31, 2000 (the
"TOLLING PERIOD"). MIDCOM and the Company Affiliates and Xxxxx and Xxxxx
Xxxxxxx and the Xxxxxxx Affiliates shall be estopped to plead and shall not
assert any defenses based on a claim that any causes of action relating to
the Claims released or to be released pursuant to Section 6(a) or Section
7(a) that may be pled by any other party hereto are time-barred by virtue
of lapse of time during the Tolling Period.
(b) Preservation of Evidence. All parties hereto shall take
reasonable steps to ensure that all evidence in their respective
possession, custody or control that is relevant to the subject matter of
the Action will be preserved until the first Release Event or during the
pendency of any subsequent litigation relating to the Claims subject to the
release set forth in Section 6(a) or Section 7(a). In particular, the
parties hereto agree that each of them shall not destroy, alter or make
inaccessible any documents or other tangible evidence relevant to the
subject matter of the Action.
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SECTION 15. MISCELLANEOUS.
(a) Introduction into Evidence. This Agreement may not be offered,
introduced or received into evidence for any purpose except in an action to
enforce or interpret the terms hereof.
(b) Successors. This Agreement shall inure to the benefit of and be
enforceable by and against the successors-in-interest of the Company and by
the personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees of the Wiegands and
each of them.
(c) Notices. All notices, demands and requests required by this
Agreement shall be in writing and shall be presumed to have been giving for
all purposes (i) upon personal delivery, (ii) one day after being sent,
when sent by professional overnight courier service from and to locations
within the continental United States, or (iii) five days after posting
when sent by registered or certified mail return receipt requested,
addressed to the party receiving such notices or payment as follows:
If to Company: MIDCOM Communications Inc.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
Attention: Xxxx Xxxxx, Esq.
General Counsel
With copy to: Heller, Ehrman, White & XxXxxxxxx
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
If to Wiegands: Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
00000 Xxxxx Xxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
With a copy to: Xxxxxx, Xxxx & Xxxxxxxx, LLP
0 Xxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Any party hereto may from time to time by notice in writing served upon the
other party hereto as provided herein, designate a different mailing
address or a different person to which such notices or demands are
thereafter to be addressed or delivered.
(d) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Washington (without regard to
the conflicts of law provisions thereof) which are applicable to the
construction and enforcement of contracts between parties resident in the
State of Washington which are entered into and fully performed in the State
of Washington.
(e) Amendment; Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in a writing signed by the Wiegands and on behalf of
the Company by its Chief Executive Officer or such other officer as may be
specifically designated by their respective Board of Directors. No omission
or delay by any party in exercising any right, power or privilege hereunder
shall impair the exercise of any such right, power or privilege or be
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construed to be a waiver hereof or of any default or to be an acquiescence
therein, and any single or partial exercise of any such right, power or
privilege shall not preclude other or further exercises thereof or the
exercise of any other right, power or privilege. No wavier shall be valid
unless in writing and signed by the party to be charged, and then only to
the extent therein specified.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
(g) Costs and Attorneys' Fees. If any party takes steps for the
purpose of enforcing or preventing the breach of any provision of this
Agreement, including, but not limited to, instituting any action or other
proceeding to enforce any provision hereof, then the prevailing party in
such an action or proceeding shall
be entitled to reimbursement from the non-prevailing party for all
reasonable costs and expenses incurred thereby, including, but not limited
to, reasonable attorneys' fees.
(h) Headings. Paragraph headings or captions contained in this
Agreement are used for reference only and shall not be deemed to govern,
limit, or extend the terms of this Agreement.
(i) Entire Agreement. All agreements, covenants, representations and
warranties, express or implied, oral or written, of the parties hereto
concerning the subject matter hereof are contained in this Agreement. No
other agreements, covenants, representations or warranties, express or
implied, oral or written, have been made by any party to any other party
concerning the subject matter of this Agreement.
(j) Independent Advice of Counsel. Each party hereto has read and
understands all of the terms and provisions of this Agreement, and has
discussed it with his or its own independently selected counsel. The
parties acknowledge and agree that in executing this Agreement they relied
solely upon their own respective judgement, belief and knowledge, and the
advice and recommendations of their own respective counsel, concerning the
nature, extent and duration of their respective rights and claims, and that
they have not been influenced to any extent whatsoever in executing this
Agreement by any representations or statements not expressly contained or
referred to in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
MIDCOM COMMUNICATIONS INC.,
a Washington corporation
By: /s/ XXXX X. XXXXX
------------------------------------
Vice President and General Counsel
for
XXXXXXX X. XXXXXXX
President and Chief Executive
Officer
/s/ XXXXX XXXXXXX /s/ XXXXX XXXXXXX
------------------------------------------- -------------------------------------------
Xxxxx Xxxxxxx Xxxxx Xxxxxxx
9
10
EXHIBIT 2.1 TO SETTLEMENT AGREEMENT
AMENDMENTS TO NON-COMPETITION AGREEMENTS
OF
XXXXX XXXXXXX AND XXXX XXXXXXX
[Filed as Exhibit 10.117 to Amendment No. 1
to the Company's Registration Statement on
Form S-1 (file no. 333-14427)]
1
11
EXHIBIT 2.2 TO SETTLEMENT AGREEMENT
AMENDMENT TO AGREEMENT
AND
PLAN OF REORGANIZATION
[Filed as Exhibit 10.116 to Amendment No. 1
to the Company's Registration Statement on
Form S-1 (file no. 333-14427)]
1
