Exhibit 10.5
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the "Agreement") is made and
entered into as of May 1, 2001 by and among UNICOMP, INC., a
Colorado corporation ("UniComp"), ARCCOM MANAGEMENT SYSTEMS, INC.
d/b/a Unibol, Inc., a Georgia corporation and a wholly-owned
subsidiary of UniComp ("AMS"), UNICOMP COMPUTING GROUP LTD.
(formerly known as ICS COMPUTING GROUP, LIMITED), a United
Kingdom limited company and a wholly-owned subsidiary of UniComp
("UCG"), XXXXXXX X. XXXXX, an individual resident of Georgia
("Xxxxx"), XXXXXX XXXXXXX, an individual resident of California
("Xxxxxxx"), CALIFORNIA SOFTWARE CORPORATION, a Nevada
corporation ("CSC"), and UNIBOL, LTD, a United Kingdom limited
company and a wholly-owned subsidiary of CSC ("UL").
RECITALS
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WHEREAS, UniComp and CSC had contemplated entering into a
merger (the "Merger") and the Merger was not completed and will
not be completed;
WHEREAS, in anticipation of the Merger, UniComp, UCG, and
CSC entered into that certain Stock Purchase Agreement dated
November 8, 2000, as amended on November 10, 2000 (the "Purchase
Agreement"), under the terms of which CSC purchased all of the
issued and outstanding stock of UL (the stock referred to as the
"UL Shares" and the purchase of the UL Shares referred to as the
"UL Acquisition") and asserted that it purchased Unibol Inc.;
WHEREAS, subsequent to the UL Acquisition, a dispute arose
between UniComp and CSC related to the Purchase Agreement and
litigation was instituted;
WHEREAS, the parties desire to resolve all of the previous,
current and future issues related to the Merger, the Stock
Purchase Agreement, and the UL Acquisition, and desire to enter
into a bilateral dismissal and termination of all litigation
related thereto, all under the terms and conditions of this
Agreement;
NOW, THEREFORE, for and in consideration of good and
valuable consideration, the receipt, adequacy and sufficiency of
which is hereby acknowledged, and the promises and mutual
covenants and agreements contained herein, the parties hereto,
intending to be legally bound hereby, do hereby agree as follows:
ARTICLE 1
SETTLEMENT TERMS AND CONDITIONS
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1.1 Resignation of Xxxxx and Relinquishing of Voting
Rights. On the Closing Date (as defined in Section 2.1 hereof),
Xxxxx and any and all other UniComp designees shall immediately
resign their position(s) on the Board of UL and their voting
rights shall be terminated. UniComp, Hafer, Singhal, and UCG
acknowledge, agree, represent, and warrant for themselves and any
and all UniComp-related entities that all of their respective
right, title and interest in and to the UL Shares was sold,
assigned and transferred to CSC under the Purchase Agreement on
November 8, 2000, free and clear of all liens and encumbrances of
any kind or description. The current secretary of UL shall
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register all shares of stock in the name of CSC or its designee
immediately after execution of this Agreement. As of the
Closing, CSC shall have no further obligations under the Stock
Purchase Agreement.
1.2 Distribution Agreement. The parties agree that any and
all existing agreements of any kind between UL and AMS will be
terminated upon execution at the Closing by AMS and CSC of the
Distribution Agreement attached hereto as Schedule A and thereby
made an integral part hereof. Prior to the Closing, AMS will
change its name to UniComp Solutions, Inc. (or a similar name)
and as of the Closing will cease doing business as or using the
name of Unibol Inc. or any similar name. The new company will be
provided with license keys for its customers from UL and will
return to California Software any and all copies of the licensing
software currently in its possession.
1.3 Termination of Debt Claims. At the Closing, UniComp
and all related individuals and entities will terminate and
release from any and all debt claims, secured and unsecured,
against UL, including, but not limited to, approximately
$2,400,000.00 in intercompany obligations. At the Closing, CSC
and UL and all related individuals and entities will terminate
and release from any and all debt claims, secured and unsecured,
against UniComp and its Affiliates, including, but not limited
to, any intercompany obligations and other amounts due from UI,
UniComp, and any UniComp Affiliates, and any amounts receivable
still outstanding on the books of UL from Mapics.
1.4 Settlement of Litigation. Upon execution of this
Agreement, the parties will take whatever action is necessary to
suspend all litigation activities and postpone until after July
1, 2001, any and all hearings and deadlines for submission of
materials related to said litigation and hearings. At the
Closing, the parties will (i) exchange fully executed dismissals
with prejudice of any existing and or future claims or suits
related to the Merger, the Stock Purchase Agreement, the UL
Acquisition, and related transactions and any other disputes
among the parties, including, but not limited to, the action
brought against UniComp, Xxxxx and Xxxxxxx on behalf of CSC and
the action brought on behalf of UniComp, AMS and UCG against CSC,
and (ii) execute indemnifications and mutual releases of all
claims other than those related to this Agreement in the form
attached hereto as Schedule B and thereby made an integral part
hereof (the "Releases"), which Releases shall be a condition of
this Agreement. UniComp represents that no other debts or
obligations of UL existed as of the close of business on January
26, 2001, other than those specifically disclosed to CSC. The
Releases shall include (i) indemnification of UniComp by CSC for
the UL Debts (as defined herein) and any third party claims
related to acts of CSC, and (ii) indemnification of CSC by
UniComp for any third party claims related to acts of UniComp.
(see 2.6)
1.5 Accounts Receivable. As of the Closing, UniComp shall
transfer control to CSC of all UL bank accounts in the United
Kingdom, Ireland, Northern Ireland, Isle of Xxxx and elsewhere
(the "UL Accounts"). Within five business days after execution
of this Agreement, UniComp will provide CSC with the following
items for transactions occurring during the period from November
8, 2000 through the date of this Agreement (i) copies of bank
statements for all UL Accounts into which wire transfers or other
remittances from UL customers were deposited, detailing each
customer name, the amount and the date the deposit was made,
including collections made from the Atlanta office, if any (the
"Deposits"), and (ii) copies of cancelled checks or other
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evidence for any and all amounts paid to or on behalf of or
transferred to UL (the "UL Transfers"). Prior to the Closing,
UniComp and CSC must agree in writing as to the total of all
Deposits and the total of all UL Transfers. At the Closing,
UniComp shall pay to CSC the excess, if any, of the total of all
Deposits minus the total of all UL Transfers.
1.6 UL Debts. Prior to the Closing, UniComp and CSC shall
work together to prepare a list of all debts of UL. After the
Closing, (i) CSC shall resolve the debts incurred by and on
behalf of UL (the "UL Debts"), and (ii) CSC shall provide UniComp
with evidence that the UL Debts are resolved from time to time
and shall indemnify UniComp as described in Section 1.4 hereof.
Notwithstanding anything to the contrary contained in this
Agreement or any other document, the parties acknowledge and
agree that the following items will be included in the UL Debts:
(i) the credit, loan, and overdraft facility with the Bank of
Ireland represented by Account Number 00000000 in the approximate
amount of 400,000.00 pounds Sterling, (ii) the IDB loan to UL in
the approximate amount of 80,000.00 pounds Sterling, and (iii)
past due contributions and reimbursements of approximately
27,000.00 pounds Sterling related to the pension plan (the
"Pension Plan"). The parties agree to cooperate in resolving the
situation related to the Pension Plan and the transfer or refund
of any unapplied funds.
1.7 Assignment. At the Closing, UniComp will assign any
and all interest to CSC of trademarks, copyrights, or trade names
related to Unibol, including, but not limited to, "Unibol",
"Unibol Inc.", "Unibol 36", and "Unibol 400."
1.8 Cooperation. Each party hereto shall use its best
efforts to cause the transactions contemplated by this Agreement
to be consummated, and without limiting the generality of the
foregoing, to obtain all consents and authorizations of
government agencies and third parties and to make all filings
with and give all notices to government agencies and third
parties which may be necessary or reasonably required in order to
consummate the transactions contemplated by this Agreement. Upon
execution of this Agreement, CSC immediately will allow UniComp
and its auditors access to the books and records of UL so that
(i) the audit of UniComp may be completed and (ii) UniComp may
complete its obligations under this Agreement.
ARTICLE 2
MISCELLANEOUS PROVISIONS
------------------------
2.1 The Closing. Contingent upon the terms and conditions
contained herein, the Closing shall occur on May 15, 2001 or at
such other time as agreed to UniComp and California Software, but
not later than June 1, 2001.
2.2 Public Announcements. CSC and the UniComp shall consult
with each other prior to issuing any statement or communication to
the public or the press related to this Agreement and any such
statements or communications must be approved in writing by both
CSC and UniComp prior to their issuance. CSC and UniComp agree
that, except as required by law or by any securities exchange and
except as the other party shall authorize in writing or as
provided under this Agreement, neither of them shall or shall
cause their respective officers, directors, employees, Affiliates
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and advisors to, disclose any matter or matters relating to this
Agreement to any Person not an officer, director, employee,
Affiliate or advisor of such party.
2.3 Amendment; Waiver. Neither this Agreement, nor any of
the terms or provisions hereof, may be amended, modified,
supplemented or waived, except by a written instrument signed by
the parties hereto (or, in the case of a waiver, by the party
granting such waiver). No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall
such waiver constitute a continuing waiver. No failure of any
party hereto to insist upon strict compliance by any other party
with any obligation, covenant, agreement or condition contained
in this Agreement shall operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any
party hereto, such consent shall be given in a manner consistent
with the requirements for a waiver of compliance as set forth in
this section.
2.4 Fees and Expenses. Except as otherwise provided in this
Agreement, each of the parties hereto shall bear and pay its own
costs and expenses incurred in connection with the origin,
preparation, negotiation, execution and delivery of this
Agreement and the agreements, instruments, documents and
transactions referred to in or contemplated by this Agreement
(whether or not such transactions are consummated) or incurred in
any of the litigation referred to in the recitals to this
Agreement including, without limitation, any fees, expenses or
commissions of any of its advisors, attorneys, agents, finders or
brokers.
2.5 Notices.
(a) All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing
(including telefax, telegraphic, telex or cable communication)
and mailed, telefaxed, telegraphed, telexed, cabled or delivered:
If to UniComp, to:
UNICOMP, INC.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
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If to AMS, to:
ARCCOM MANAGEMENT SYSTEMS, INC.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
If to UCG, to:
UCG COMPUTING GROUP LTD
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
If to CSC, to
CALIFORNIA SOFTWARE CORPORATION
0000 XxXxxx Xxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Chief Executive
Officer
with a copy to:
Xxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
If to UL, to
UNIBOL LTD
0000 XxXxxx Xxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Chief Executive
Officer
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with a copy to:
Xxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
If to Xxxxx:
Xxxxxxx X. Xxxxx
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
If to Xxxxxxx:
Xxxxxx Xxxxxxx
Blue Stone Capital
00 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
(b) All notices and other communications required or
permitted under this Agreement which are addressed as provided
in this section (i) if delivered personally against proper
receipt or by confirmed telefax shall be effective upon delivery
and (ii) if delivered (A) by certified or registered mail with
postage prepaid, (B) by Federal Express or similar courier
service with courier fees paid by the sender or (C) by telegraph
or cable, shall be effective two (2) business days following the
date when mailed, couriered, telegraphed or cabled, as the case
may be. Any party may from time to time change its address for
the purpose of notices to that party by a similar notice specifying
a new address, but no such change shall be deemed to have been
given until it is actually received by the party sought to be
charged with its contents.
(c) Assignment.This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned by the
parties hereto without the prior written consent of the other
parties; provided, however, that CSC may assign its rights and
obligations under this Agreement to any of its Affiliates or
any entity who by merger, consolidation, purchase or sale
subsequently becomes an Affiliate without the prior consent
of UniComp. Any assignment which contravenes this section
shall be void ab initio.
2.6 Governing Law; Consent to Jurisdiction and Venue. This
Agreement and the legal relations between the parties hereto
shall be governed by and construed in accordance with the
internal laws of the State of California, without giving effect
to the conflicts of laws principles thereof. Any dispute
concerning this Agreement or the transactions contemplated hereby
shall be heard and decided in the Federal or state courts of
Orange County, California. Any failure of the parties to
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complete the transactions contemplated to be completed at or
prior to the Closing (but after execution of this Agreement)
shall be resolved by the Court in the Superior Court of
California for the County of Orange, entitled, California
Software Corporation, v. Unicomp, Inc., etc., et al, case no.
00CC14544.
2.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which taken together shall constitute one and the same
instrument.
2.8 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not constitute a part
hereof or define, limit or otherwise affect the meaning of any of
the terms or provisions hereof.
2.9 Entire Agreement. This Agreement (which defined term
includes the Schedules and Exhibits to this Agreement) embodies
the entire agreement and understanding among the parties hereto
with respect to the subject matter of this Agreement and
supersedes all prior agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, between
the parties with respect thereto. There are no agreements,
covenants, undertakings, representations or warranties with
respect to the subject matter of this Agreement other than those
expressly set forth or referred to herein.
2.10 Severability. Each term and provision of this Agreement
constitutes a separate and distinct undertaking, covenant, term
and/or provision hereof. In the event that any term or provision
of this Agreement shall be determined to be unenforceable,
invalid or illegal in any respect, such unenforceability,
invalidity or illegality shall not affect any other term or
provision of this Agreement, but this Agreement shall be
construed as if such unenforceable, invalid or illegal term or
provision had never been contained herein. Moreover, if any term
or provision of this Agreement shall for any reason be held to be
excessively broad as to time, duration, activity or subject, it
shall be construed, by limiting and reducing it, so as to be
enforceable to the extent permitted under applicable law as it
shall then exist.
2.11 No Third Party Beneficiaries. Nothing in this Agreement is
intended, nor shall anything in this Agreement be construed, to
confer any rights, legal or equitable, in any Person or entity
(other than the parties hereto and their respective heirs,
distributees, beneficiaries, executors, successors and assigns),
including, without limitation, any employee of UniComp or any
beneficiary of such employee.
2.12 Miscellaneous. The persons executing this Agreement on
behalf of the parties hereto are duly authorized to execute,
acknowledge and deliver this Agreement.
2.13 Definitions. When used in this Agreement, (i) "Person"
shall mean any individual, partnership, corporation, association,
business trust, joint venture, governmental entity or other
entity of any nature, and (ii) "Affiliate" or "Affiliates" shall
mean, with respect to any Person, any other Person that controls,
is controlled by, or is under common control with, such Person.
2.14 Acknowledgement. The parties agree and acknowledge that (i)
no representation or warranty is made concerning the tax treatment
of the transactions contemplated pursuant to this
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Agreement, foreign or domestic and (ii) the parties hereto have
been advised to seek their own independent tax (domestic and
foreign), financial, and ERISA (and related employment and
employee benefits), advice and counsel with respect to the
transactions contemplated hereby. The foregoing shall not,
however, diminish, alter or otherwise modify any of the
representations and warranties set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
UNICOMP, INC.
By:/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx, Chief Executive
Officer
ARCCOM MANAGEMENT SYSTEMS, INC.
By:/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx, President
UNICOMP COMPUTING GROUP LTD
By:/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx, Chairman
CALIFORNIA SOFTWARE CORPORATION
By:/s/ Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx, Chief Executive
Officer
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxx Xxxxxxx
-----------------------------------
Xxxxxx Xxxxxxx
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