Exhibit 27.0
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE (the ~ is made as of this 26'
day June, 2002 between Xxxxx X Xxxxxxx, Xxxxx X. Xxxxxxx, as an individual and
as Co--Trustee of The Bentley Family Trust C; XxxxXxx Xxxxxxx, as an individual
and as Co-Trustee of The Bentley Family 1995 Trust, the Bentley Family Limited
Partnership, and Access Holdings Limited Partnership (collectively, the
"Bentleys") and Xxx Xxxxxxxxx (the Bentleys and Xxx Xxxxxxxxx are sometimes
collectively referred to as the "Plaintiffs") on the one hand, and Accesspoint
Corporation, a Nevada Corporation, Processing Source International, Inc., a
California corporation (collectively, the "Company" and/or "Accesspoint"}, Net
Integrated Systems, Ltd ("NIS, Intellitech Web Solutions, Inc., Xxxxxxx X
Xxxxxx, Xxxxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxx, and Xxxxxx Xxxxx (collectively,
the `Defendants' on the other hand, all of whom any hereafter be referred to as
"Party" & the "Parties.")
A. There is now pending in the Superior Court of the State of California,
County of Orange, the following matters:
2 That certain lawsuit cited Xxxxx X. Xxxxxxx v. Xxxxxxx X Xxxxxx, and
numbered 02CC04690 in the files of that Court concerning shareholder derivative
claims for Breach of Contract, Breach of Fiduciary Duty; Misappropriation of
Trade Secrets Pursuant to Civil Code Section 3426,; Recovery of Personal
Property Pursuant to Civil Code Section 3426,; Opposition of a Constructive
Trust & an Unfair Competition and Conversion, Unfair Business Practices and
Usurpation of Corporate Opportunity -- Defendants
2 That certain lawsuit entitled Xxxxx X. Xxxxxxx as Trustee of The Bentley
Family Trust v. Accesspoint Corporation. et al and numbered 02CC06709 in the
files of that Court concerning claims fix Breach of Contract, Common Control,
and Dereliction against Defendant Accesspoint Corporation,
3 That certain lawsuit entitled XxxxXxx Xxxxxxx, as Trustee of The Bentley
Family 1995 Trust v. Accesspoint Corporation. et al. and numbered X0XX00000 in
the files of that Court concerning claims for Breach of Contract, Common
Control, and Declaration against Defendant Accesspoint Corporation, and
4 That certain lawsuit entitled The Bentley Family Limited Partnership v.
Accesspoint Corporation et. al. and numbered 02CC06710 in the files of that
Court concerning claims for Breach of Contract, Common Control, and Declaratory
Relief against Defendant Accesspoint Corporation. The above actions are
hereafter collectively re1ated to as the Actions.
B. The Parties desire to fully and finally resolve and settle any and all
differences and claims between them, and only as to them, relating to or arising
out of the Actions.
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and in consideration of the mutual promises, covenants
and conditions herein contained, the Panics agree as follows:
1. For so long as the Company or MS has an~ outstanding, uncompleted or
unperformed obligations under this Agreement to the Bentley Trusts, the Bentley
Partnership, Access Holdings Limited Partnership. the Bentleys, or Xxx
Xxxxxxxxx, Xxxxx X. Xxxxxxx or his designate. shall be given Director's
inspection rights pursuant to California Corporations Code Section 1602 whether
or not he or his designate is a member of Accesspoint's Board of Directors.
2. NIS shall provide documentation supporting the infusion of its finds to
Accesspoint, either from any account, including, without limitation, the Ameropa
Limited Account or by payment to a vendor or creditor of Accesspoint. Moreover,
NIS shall provide to the Bentleys documentation of all future infusions or of
any distributions of assets outside the normal course of business be delivered
to Plaintiff's counsel within 7 business days of such infusion or distribution
for so long as its other obligations under this Agreement remain unperformed.
3. All The Company-incurred debt on any credit cards on which Xxxxx X.
Xxxxxxx, Xxxx Xxx Xxxxxxx, and Xxx Xxxxxxxxx have any personal liability shall
be immediately paid in full) by Accesspoint (with the understanding that the
Company shall have no obligation to pay for any personal usage or obligations
for other than Company business purpose). Within 10 business days from the
execution of this Settlement Agreement, Accesspoint will review its records and
notify the Bentleys/Djokovich in writing of any disputed amount or any amounts
on which Accesspoint declines payment Xxxx Xxx Xxxxxx shall provide reasonable
support and cooperation as necessary to assist in the review of credit card
charges.
4. If the Company has not duly executed an offer in compromise by December
1, 2002. Plaintiffs have the right, at their sole discretion and in addition to
all other forms of remedies, to rescind this Agreement.
5. On or before March 1,2003, Plaintiff Xxxxx X. Xxxxxxx shall be
reimbursed for the attorneys' fees he has incurred in prosecuting the
shareholder derivative action in the total amount of $60,000 in the event that
Accesspoint's publicly quoted stock price fails to exceed a certain
formula-created dollar per share value for any 10 consecutive day period prior
to March 1, 2003. The Plaintiffs further acknowledge that by entering into the
Settlement and agreeing to pay said attorneys' fees, the defendants do not
admit, and indeed the defendants deny all charges of wrongdoing and the payment
is solely for the purpose of resolving disputes and ending the expenses
associated with litigation.
6. In the event that any of the terms of this Agreement are materially
breached by either Party, the other Party can enforce the terms of this
Agreement pursuant to Code of Civil Procedure Section 664.6 as to the defaulting
party. Additionally, in such an event, MS shall forego and waive any Eight,
entitlement or claim to any golden parachute, early termination fee, or fee for
voluntary termination pursuant to any provision or agreement including, without
limitation, the $1 million voluntary termination fee contained in paragraph
10(ii) of that certain Management Agreement dated December 14, 2001 between the
Company and NIS.
7. Without limiting anything herein, Accesspoint shall indemnify and hold
harmless Xxxxx X. Xxxxxxx, Xxx Xxxxxxxxx and Xxxxxx Xxxxxxxxx for any third
party claims, audits, suits, actions or litigation arising out of his, her or
their relationship with Accesspoint or his, her or their positions as officers
or directors of Accesspoint including, without limitation, that certain action
presently pending in the Superior Court of the State of California for the
County of Los Angeles entitled Xxxxxx X Xxxxxxxxxx, Processing Source
International Inc. and Xxx X. Xxxxxxxxx et al. and numbered BC272769 in the
files of that court. Xxxxx X. Xxxxxxx and Xxx Xxxxxxxxx shall provide reasonable
support and cooperation as requested to assist in the defense of any such
claims, audits, suits, actions or litigation.
8. On each of July 1,2003, October 1,2003, January 1,2004, and April
1,2004, MS shall cause to be returned and delivered (I) to Access Holdings
Limited Partnership 190,000 Accesspoint shares of stock and (2) to Xxx Xxxxxxxxx
100,000 Accesspoint shares of stock flee and released from and as referenced in
any collateralization of and any proxies in connection with that certain
Revolving Line of Credit Secured Promissory Note and Irrevocable Proxy, each
dated December 14, 2001 by and between Accesspoint and MIS.
9. On each of July 1,2004, October 1,2004, January 1,2005, and April
1,2005, NIS shall cause to be returned and delivered (I) to Access Holdings
Limited Partnership 285,000 Accesspoint shares of stock and (2) to Xxx Xxxxxxxxx
150,000 Accesspoint shares of stock free and released from and as referenced in
any collateralization of and any proxies connection with that certain Revolving
Line of Credit Secured Promissory Note and Irrevocable Proxy, each dated
December 14, 2001 by and between Accesspoint and NIS
10. Upon any necessary Court approval of this Agreement and contemporaneous
with the execution of this Agreement, Plaintiffs shall deliver to Defendant, do
Hardy X. Xxxxxx, Esq, 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, executed dismissals with prejudice of the Complaints in each
of the above Actions. The dismissals of the Actions with prejudice will be held
in nut and will not be filed unless awl until the currently outstanding tax
liabilities are satisfied and receipt of confirmation from Xxxx X. Xxxxx,
counsel for Plaintiffs. In the meantime and subject to Plaintiff's remedies
pursuant to Paragraph 6 above the Actions will be stayed and not prosecuted.
11. Xxx Xxxxxxxxx shall forthwith resign as Director of Accesspoint
effective immediately and shall reduce his personal holdings in Accesspoint to 1
million shares of common stock. Xxx Xxxxxxxxx shall immediately transfer into
the escrow established pursuant to Paragraph 12.d., approximately 2.5 million
shares of common stock and his options for the purchase of some 2 million shares
of common stock. The transfer of the said shares and options shall be made to
NIS, and shall occur simultaneous with the payment of all tax trust fund
liabilities or the execution by Accesspoint of an Offer in Compromise with the
taxing authorities. To the extent permitted by law, Accesspoint shall lift the
stock legends on the Accesspoint shares held by the Bentley entities
(Accesspoint Holdings Limited Partnership), Xxx Xxxxxxxxx, and certain family
members and fiends (who are identified and the number of shares held by each
within 10 business days of the execution of the Agreement by all Parties) within
15 business days of delivery of written request.
12. The Bentley; their related entities, Torn Djokovich, and NIS, agree to
further negotiate in good faith to develop a formula limiting the volume of
Accesspoint shares that any of them may sell into the public market on any given
day or in any given period so that any adverse effect on the market price of the
shares will be minimized or eliminated. Additionally, the remaining shares held
by the Bentleys, their related entities, Access Holdings Limited Partnership and
Xxx Xxxxxxxxx would be entitled to piggy-back registration rights on a
pass-through basis with NIS' shares or any related affiliates or Parties.
13. Subject to appropriate verification by the Company, there is presently
due and owing to the Bentley Trusts and Partnership approximately $500,000 plus
accrued interest on the various Promissory Notes, representing funds actually
paid and loaned by them to Accesspoint. The Bentleys shall reschedule the
payment of that debt to an initial payment of $l00,000 on March 1,2003, with the
balance to be paid in equal quarterly installments of principal and accrued
interest, the first such payment of which would commence on June 1, 2003,
pursuant to the following terms.
NIS shall and hereby does assume liability under the
various Promissory Notes and agrees to pay such notes
as here scheduled. Accesspoint shall have the option
to forgive or not forgive this indebtedness as it
deems in the best interests of the corporation.
b. NIS' payment on the various Promissory Notes shall
take priority to the payment of any other NIS debt
and, except for any monthly management fees, no
Company obligations shall be paid to NIS until the
various Promissory Notes are paid in Full, except to
the extent that monies are paid by the Company to NIS
for the sole purpose of making payments on the Notes.
c. The various Promissory Notes shall be secured and
fully collateralized by the 2.5 million shares of
common stock to be transferred by Xxx Xxxxxxxxx as
provided herein.
d. The said 2.5 million shares certificates shall be
held by a mutually agreeable escrow agent, which
shall be opened within 10 days from the execution of
the offer in compromise pursuant to a written escrow
instruction agreement mutually acceptable to the
parties until the various Promissory Notes are paid
in full.
In the event the various Promissory Notes are not timely paid in full, the
Bentleys shall become the immediate owners of all rights and interests to that
number of the Accesspoint escrowed shares the quoted market value of an average
calculated over the 10 days preceding notice of default such that the net
deliverable value of which collectively equals the total amounts due under the
Promissory Notes, and the Bentleys may then hold, sell or otherwise dispose of
said shares as they desire. In the event that the Company falls to timely pay
any sum owed on the various Promissory Notes as rescheduled herein, the
Bentley's may, in their sole discretion, accelerate the due dates of all
payments on the various Promissory Notes such that any remaining unpaid
principal, accrued interest and other sums owed on the various Promissory Notes
arc immediately due and payable.
14. No Release Regarding Lease Liabilities. Nothing in this Agreement shall
Release the Company from any liability with respect to Accesspoint leases and
the guarantees on those leases by the Bentleys or Xxx Xxxxxxxxx, nor limit the
Bentleys or Xxx Xxxxxxxxx from seeking indemnification or pursuing the Company
for payment for the leases, any indebtedness in connection with equipment leases
or any other obligation which the Bentleys or Xxx Xxxxxxxxx have personally
guaranteed on behalf of the Company.
15. Representation of Authority; Implementation. Each Party hereto
represents and warrants that its attorneys are authorized and directed to
perform the acts necessary to effect this settlement. In addition, each Party
agrees to execute any and all additional documents necessary to effectuate the
terms of this Agreement. If the Parties cannot agree on the terms of any
documents or formula necessary to effectuate the terms of this Agreement, the
Parties agree to submit such a dispute for arbitration before JAMS Endispute or
other mutually agreeable arbitration association as ADR entity or person to
arbitrate the terms of such documents or formula. The Parties agree that any
decision by the arbitrator shall be the binding language of such documents or
determination of such formula. The Parties shall bear the cost of the
arbitration equally
16. Motion to Approve Settlement The Parties understand that this Agreement
may be subject to Court approval. If the Court falls to approve the terms of
this Agreement, this Agreement is void and cannot be enforced, and any and all
consideration delivered or paid to the other Party shall be returned and each
Party placed in the same position as before this Agreement was entered into
insofar as is possible, which shall be a condition of any rescission.
17. Mutual Release. Except for the rights and obligations of the Parties
arising from this Agreement, the Parties hereby, for themselves, their employees
agents partners, representatives, successors and assigns, discharge and release
one another, their past and present employees, agents, executors,
administrators, trustees, heirs, attorneys, partners, insurers, representatives,
assigns, predecessors, successors and related entities, from any and all claims,
damages, actions, judgments, obligations, attorneys fees, indemnities,
subrogation, duties, demands, controversies and liabilities of every nature at
law or in equity, liquidated, or unliquidated, known or unknown, matured or
immature, foreseeable or unforeseeable, which they had or have arising out of
the Actions.
18 Waiver of Unknown Claims. It is understood and agreed that the Parties
releases set forth hereinabove extend to all claims of every kind, nature and
description whatsoever, known or unknown, suspected or unsuspected and any and
all tights under the provisions of Section 1542 of the Civil Code of California
or under any comparable statute of any other jurisdiction. The Parties expressly
acknowledge that they are familiar with and expressly waive and relinquish every
right or benefit they have or may have under the provisions of Section 1542 of
the Civil Code of California that reads 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 16s settlement with the debtor."
19. Entire Agreement. This Agreement contains the sole, complete and entire
agreement and understanding of the Parties concerning the matters contained
herein and may not be altered, modifi4 or changed in any manner except by a
writing duly executed by the Parties. No Party is relying on any representations
other than those expressly set forth herein No conditions precedent to the
effectiveness of this Agreement exists, other than as expressly provided for
herein. There are no oral or written collateral agreements. All prior
discussions and negotiations have been and are merged, integrated into and
superseded by this Agreement.
20. Waiver. The delay or failure of a Party to exercise any right, power or
privilege hereunder, or failure to strictly enforce any breach or default shall
not constitute a waiver with respect thereto; and no waiver of any such right
power, privilege breach or default on any one occasion shall constitute a waiver
thereof on subsequent occasion unless dear and express notice thereof in writing
is provided.
21. Attorneys' Fees Upon Breach If any action at law or inequity or any
motion is brought to enforce this Agreement or to collect any unpaid amounts,
the prevailing or collecting Party shall be entitled to .11 of its costs in
bringing, prosecuting, and/or collecting on said action(s) or motion or
judgment, including its reasonable attorneys' fees.
22. Applicable Law. This Agreement shall be construed according to the laws
of the State of California in effect as of the date of execution.
23. Advice of Counsel. The Parties represent that prior to the execution of
this Agreement they bad the opportunity to se& the benefit of independent legal
counsel own selection regarding the stance of this Agreement.
"DEFENDANTS"
ACCESSPOINT CORPORATION, A NEVADA CORPORATION
By:
Name:
NET INTEGRATED SYSTEMS, LTD.
By
Its:
PROCESSING SOURCE INTERNATIONAL. INC., A
CALIFORNIA CORPORATION
By:
INTELLITECH WEB SOLUTIONS, INC.
By
APPROVED AS TO FORM:
LAW OFFICES OF HARDY L XXXXXX By
Attorney for Net Integrated Systems, Attorney for Accesspoint Corporation.
a Nevada corporation. Processing Source International, Inc, a California
corporation, Intellitech Web Solutions, Inc., Xxxxxx X. Xxxxx, and Xxxxxx
Xxxxx
24. Costs. The Parties to this Agreement agree to bear their own costs and
attorneys' fees in connection with the Actions.
25. No Liability. This Agreement is executed by the Parties hereto for the
sole purpose of settling the matters involved in the dispute, and it is
expressly understood and agreed, as a condition hereof, that this Agreement
should not constitute nor be construed to be an admission of the truth or
correctness of any claim asserted.
26. Representation of Authority. Each individual executing this Agreement
on behalf of any Party expressly represents and warrants that he/she has
authority to execute and thereby bind the Party on behalf of which he/she
executes this Agreement to the turns of this Agreement and agrees to indemnify
and hold harmless each of the party from any claim that such authority did not
cost.
27. Headings. The headings included in this Agreement are for convenience
only and do not limit, alter, or affect the matters contained in this Agreement
or the paragraphs they encaption.
23. Counterparts. This Agreement may be executed in one or more
counterparts, all of which together constitute one single document.
29 Telefacsimile Signatures. This Agreement and any documents relating to
it may be executed and transmitted to any other party by telefacsimile, which
telefacsimile shall be deemed to be, and utilized in all respects as, an
original, wet-inked document.
Date of Execution. The Parties execute this Agreement as of the date first
Xxxxx X Xxxxxxx
