SETTLEMENT AGREEMENT AND MUTUAL RELEASE
Exhibit 10.11
This Settlement Agreement
and Mutual Release (“Settlement Agreement”) is entered into as of
the date of the last signature below (the “Effective Date”), by and between VISaer, Inc., n/k/a
Newvisco, Inc. (“VISaer”); VISaer (UK) Ltd. (“VISaer (UK)”); and Intelligent Systems Corporation
(“ISC”), on the one hand, and IBS Technics, Inc. (“IBS”) and IBS Software Services Americas, Inc.
(“IBS Parent”), on the other hand. All of the foregoing entities collectively shall be referred to
as the “Parties”.
WHEREAS, VISaer, VISaer (UK), ISC, IBS, and IBS Parent entered into that certain Asset
Purchase Agreement dated April 4, 2008 (the “APA”).
WHEREAS,
on or about April 15, 2010, IBS served VISaer, VISaer (UK), and ISC with a “Claim
Notice — Seeking Indemnification” asserting certain claims against VISaer, VISaer (UK) and ISC
(“IBS’s Claims”).
WHEREAS,
on June 21, 2010, VISaer and VISaer (UK) served IBS and IBS Parent with a demand
letter seeking payment of past due Earnout Compensation under the APA.
WHEREAS,
on or about September 8, 2010, VISaer filed a Demand for Arbitration against IBS and
IBS Parent with the American Arbitration Association, which was given file number 30 117 J 00640 10
(the “Arbitration”), asserting certain claims against IBS and IBS Parent (“VISaer’s Claims”).
WHEREAS,
on or about October 11, 2010, IBS and IBS Parent served a counterclaim against VISaer
and a Demand for Arbitration against VISaer (UK) and ISC (“IBS’s Counterclaims”). (VISaer’s Claims
and IBS’s Claims and Counterclaims shall be collectively referred to herein as the “Parties’
Claims”).
WHEREAS, the Parties desire fully and finally to settle the Arbitration, the Parties’ Claims,
and all other claims or disputes, whether known or unknown, that have been made or could have been
made by or on behalf of VISaer, VISaer (UK), ISC, IBS, and/or IBS Parent relating to conduct or
events occurring prior to the Effective Date.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and restrictions
contained herein, the receipt and sufficiency of which are hereby acknowledged, the Parties,
intending to be bound, hereby enter into this Settlement Agreement and agree as follows:
1. Payment to ISC. IBS agrees to pay to ISC the sum of Six Hundred Thousand Dollars
and no/100 cents ($600,000.00) by wire transfer on or before
February 21, 2011. IBS further agrees
to pay to ISC the sum of Two Hundred Fifty Thousand Dollars and no/100 cents ($250,000.00) by wire
transfer on or before January 21, 2012. IBS also agrees to pay to ISC the sum of Two Hundred Fifty
Thousand Dollars and no/100 cents ($250,000.00) by wire transfer on
or before January 21, 2013.
These payments will
satisfy IBS’s obligation to pay Earnout Compensation pursuant to Section 4.3 of the APA.
2. Guaranty
of IBS’s Payments by IBS Parent. IBS Parent hereby absolutely and
unconditionally guarantees all payments to be made by IBS to ISC pursuant to Paragraph 1 above. The
Parties acknowledge and agree that the foregoing Guaranty from IBS Parent constitutes a material
term of this Settlement Agreement in the absence of which VISaer, VISaer (UK), and ISC would not
enter into this Settlement Agreement.
3. Dismissal
of the Arbitration. VISaer, VISaer (UK), ISC, IBS, and IBS Parent agree to
take all reasonable steps necessary to effectuate a dismissal of all claims, counterclaims, and
third-party claims that have been or could have been raised in the Arbitration within thirty (30)
days of the Effective Date.
4. Release
of Claims by VISaer, VISaer (UK), and ISC. VISaer, VISaer (UK), and ISC, on
behalf of themselves and their respective predecessors, successors, directors, officers, agents,
employees, shareholders, members, managers, and attorneys and their respective parent, subsidiary,
and affiliated corporations, companies, and partnerships hereby
knowingly and voluntarily covenant
not to xxx and fully, finally, and forever remise, release, acquit,
and discharge IBS and IBS
Parent and their respective predecessors, successors, directors, officers, agents, employees,
shareholders, members, managers, and attorneys and their respective parent, subsidiary, and
affiliated corporations, companies, and partnerships of and from any and all actions, causes of
action, claims, demands, damages, costs, and expenses of any nature, whether known or unknown and
whether or not asserted in the Arbitration, from the beginning of time to the Effective Date of
this Settlement Agreement (the “Claims Released by VISaer”), including, without limitation, any
actions, causes of action, claims, demands, damages, costs, and expenses of any nature arising out
of or in any way relating to the APA and/or any of the facts from which the Arbitration arises,
provided however that the Parties retain the right to protect and enforce the continuing rights
described in Paragraph 18 of this Settlement Agreement consistent with the provisions of the APA.
The Claims Released by VISaer include but are not limited to claims and rights under federal,
state, local, statutory, or common law, claims and rights under the laws of contract and tort, and
any and all claims for attorneys’ fees and expenses of litigation.
5. No
Transfer of Claims by VISaer, VISaer (UK), and ISC. VISaer, VISaer (UK), and ISC
represent and warrant that they have not assigned, transferred, or purported to assign or transfer
to any person, firm, corporation, association, or entity whatsoever any of the Claims Released by
VISaer. VISaer, VISaer (UK), and ISC agree to indemnify and hold IBS and IBS Parent harmless
against, without any limitation, any and all rights, claims, warranties, demands, debts,
obligations, liabilities, costs, court or arbitration costs, expenses (including attorney’s fees),
causes of action, and judgments based on or arising out of any such assignment or transfer.
- 2 -
6. Release
of Claims by IBS and IBS Parent. IBS and IBS Parent, on behalf of themselves
and their respective predecessors, successors, directors, officers, agents, employees,
shareholders, members, managers, and attorneys and their respective parent,
subsidiary, and affiliated corporations, companies, and partnerships hereby knowingly and
voluntarily covenant not to xxx and fully, finally, and forever remise, release, acquit, and
discharge VISaer, VISaer (UK), and ISC and their respective predecessors, successors, directors,
officers, agents, employees, shareholders, members, managers, and attorneys and their respective
parent, subsidiary, and affiliated corporations, companies, and partnerships of and from any and
all actions, causes of action, claims, demands, damages, costs, and expenses of any nature, whether
known or unknown and whether or not asserted in the Arbitration, from the beginning of time to the
Effective Date of this Settlement Agreement (the “Claims Released by IBS”), including, without
limitation, any actions, causes of action, claims, demands, damages, costs, and expenses of any
nature arising out of or in any way relating to the APA and/or any of the facts from which the
Arbitration arises, provided however that the Parties retain the right to protect and enforce the
continuing rights described in Paragraph 18 of this Settlement Agreement consistent with the
provisions of the APA. The Claims Released by IBS include but are not limited to claims and rights
under federal, state, local, statutory, or common law, claims and rights under the laws of contract
and tort, and any and all claims for attorneys’ fees and expenses of litigation.
7. No
Transfer of Claims by IBS and IBS Parent. IBS and IBS Parent represent and warrant
that they have not assigned, transferred, or purported to assign or transfer to any person, firm,
corporation, association, or entity whatsoever any of the Claims Released by IBS. IBS and IBS
Parent agree to indemnify and hold VISaer, VISaer (UK), and ISC harmless against, without any
limitation, any and all rights, claims, warranties, demands, debts, obligations, liabilities,
costs, court or arbitration costs, expenses (including attorney’s fees), causes of action, and
judgments based on or arising out of any such assignment or transfer.
8. Confidentiality. The Parties agree to keep the terms and amount of this Settlement
Agreement completely confidential, except to the extent required by law (including a court order)
or authorized in writing by the other Parties. The Parties will not hereafter disclose any
information concerning this Settlement Agreement to anyone other than their officers, directors,
employees, and shareholders who have a need to know. The Parties acknowledge that as a publicly
traded entity, ISC may have obligations pursuant to Securities and Exchange Commission regulations
or other law to disclose pertinent terms of this Settlement Agreement in a Form 10-K, in a Form
8-K, or through other means, and the Parties agree that any such disclosure is permitted by this
Settlement Agreement.
9. Non-Disparagement.
The Parties agree that they will not do or say anything which: (1)
criticizes or disparages any of the other Parties or their employees, management, policies, or
practices; (2) disrupts or impairs another Party’s normal, ongoing business operations; or (3)
xxxxx another Party’s reputation with its employees, customers, or the public.
10. Non-Admission.
This Settlement Agreement does not constitute an admission by any of the
Parties of any wrongdoing, negligence, or violation of law, statute, or regulation.
- 3 -
11. No
Prevailing Party. None of the Parties shall be considered a prevailing party for any
purpose.
12. Entire
Agreement. This Settlement Agreement contains the entire agreement and
understanding between and among the Parties with respect to any and all disputes or claims that
have been or could have been raised by any Party against any other Party as of the Effective Date
of this Settlement Agreement. This Settlement Agreement shall not be changed unless in writing and
signed by all Parties.
13. Severability.
The invalidity or unenforceability of any provision of this Settlement
Agreement shall not affect or impair any other provisions, which shall remain in full force and
effect.
14. Authority. The Parties represent and warrant that each of them has the authority and
the proper approval to execute this Settlement Agreement. This Settlement Agreement shall be
binding upon and inure to the benefit of the Parties and their respective heirs, executors,
administrators, assigns, successors, beneficiaries, employees, and agents.
15. Knowledgeable
Decision and Drafting. In the negotiation, drafting and execution of this
Settlement Agreement, the Parties have been represented by counsel of their own choice, and each
party does hereby affirm that it has read and understands the terms of this Agreement, and executes
the same as its own free and voluntary act. This Agreement was negotiated and drafted with full
participation of both Parties and their respective counsel. In the event it is determined that any
ambiguity exists in this Agreement, any such ambiguity shall not be resolved or otherwise construed
against any particular party, but rather shall be resolved by a fair reading of the intent of the
Parties as established herein.
16. Counterparts. This Settlement Agreement may be executed in any number of counterparts,
and all of such counterparts taken together shall be deemed to constitute one and the same
instrument.
17. Choice
of Law; Binding Arbitration. This Settlement Agreement shall be governed
by and construed in accordance with the laws of the State of Georgia. The Parties shall
refer any disputes arising between them which relate to this Settlement Agreement to binding
arbitration to be conducted before the American Arbitration Association. The venue of
arbitration shall be Atlanta, State of Georgia.
18. Continuing Rights and Obligations. Notwithstanding any provision of this Settlement
Agreement, the rights and obligations described in
Sections 6.1.7, 6.1.19(a), 6.1.19(c),
6.1.19(e), 11.1, and 11.2 of the APA shall continue in full force and effect and shall not be
impaired. IBS represents and warrants that it is unaware of any claims as of the Effective Date
against VISaer, VISaer (UK), and/or ISC pursuant to any of the foregoing Sections of the APA.
Nothing in this Settlement Agreement shall affect the obligations of IBS to fulfill the Assumed
Liabilities, as defined in Section 1.3 of the APA, which obligations remain in full force and
effect and shall not be impaired.
- 4 -
IN WITNESS WHEREOF, the Parties have caused this Settlement Agreement to be executed and delivered
by their duly authorized officers as of the date last written below.
| VISaer, Inc. | VISaer (UK) Ltd. | |||||
By:
|
/s/ J. Xxxxxx Xxxxxxx | By: | /s/ J. Xxxxxx Xxxxxxx | |||
| Title: CEO | Title: Authorized Signatory | |||||
| Date: 1/25/2011 | Date: 1/25/2011 | |||||
| Intelligent Systems Corporation | IBS Technics, Inc. | |||||
By:
|
/s/ J. Xxxxxx Xxxxxxx | By: | /s/ Xxxxx Xxxxx | |||
| Title: CEO | Title: President | |||||
| Date: 1/25/2011 | Date: 01/25/2011 | |||||
| IBS Software Services Americas, Inc. | ||||||
By:
|
/s/ Xxxxx Xxxxx | |||||
| Title: Authorized Signatory | ||||||
| Date: 01/25/2011 | ||||||
- 5 -
