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EXHIBIT 6.7
PRIVILEGED AND CONFIDENTIAL
MUTUAL RELEASE, WAIVER AND SETTLEMENT AGREEMENT
THIS Mutual Release, Waiver and Settlement Agreement (the "Agreement")
is entered into by and between MegaWorld, Inc., a Delaware corporation
("MegaWorld"), Fairway Beech Corporation, a New Jersey Corporation ("Fairway"),
ITM Group, Inc., a New Jersey Corporation ("ITM"), 0-000 XXX, Inc., a __________
corporation ("0-000 XXX"), ITS Telephony, Inc., a Nevada corporation ("ITS"),
Xxxx Xxxxx, an individual residing in New Jersey, ("Simon") Xxxxxx Xxxxxxxxx, an
individual residing in New Jersey, ("Xxxxxxxxx"), and Xxxx Xxxxx, an individual
residing in New Jersey, ("Terpe") (collectively, the "Parties"), who together
make the following recitations and agreements:
R E C I T A L S
WHEREAS, 0-000 XXX and Fairway entered into a Joint Venture Agreement
dated December 18, 1997, as amended (this Joint Venture Agreement and all
amendments thereto shall be referred to herein collectively as the "1-900
Agreement") pursuant to which Fairway would assist 0-000 XXX in developing
"Direct Dial-One Plus" and telephony via the use of the Internet and other
telephony services; and
WHEREAS, MegaWorld, Terpe, Xxxxxxxxx and Xxxxx entered into an
Agreement on June 4, 1998, together with any amendments related thereto, if any
(the "Revenue Agreement") establishing revenue targets for the 1-900 Agreement;
and
WHEREAS, MegaWorld, Fairway and ITM entered into a Joint Venture
Agreement dated July 10, 1998, as amended (this Joint Venture Agreement and all
amendments thereto shall be referred to herein collectively as the "Joint
Venture Agreement") pursuant to which Fairway and ITM would assist MegaWorld in
developing the "Direct Dial-One Plus" and telephony via the use of the Internet
and other telephony services; and
WHEREAS, ITS was the corporation through which the activities of the
Joint Venture Agreement would be conducted; and
WHEREAS, in connection with the Joint Venture Agreement, the Revenue
Agreement and the 1-900 Agreement (collectively, together with any and all
related agreements or amendments thereto, whether written or verbal, the "ITS
Agreements"), Terpe, Xxxxxxxxx and Xxxxx each received 550,000 shares of Common
Stock of MegaWorld (the "Shares") in addition to which Terpe received other
compensation and expense reimbursement (Simon and Xxxxxxxxx received none); and
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WHEREAS, the Parties desire to cancel and terminate the ITS Agreements
and release all Parties from their obligations under the ITS Agreements and any
and all agreements, whether written or verbal, related thereto.
NOW, THEREFORE, in consideration of the premises, representations,
promises and covenants set forth herein, the sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT
1. All obligations of the Parties, if any, arising under the ITS
Agreements are hereby satisfied, discharged, canceled and terminated in all
respects.
2. Terpe, Xxxxxxxxx and Xxxxx shall retain their respective Shares;
provided, that in consideration of this Agreement, each of Terpe, Berkowitz, and
Simon (collectively, the "Terpe Shareholder Group") agree (the "Lockup
Agreements") that they shall not for a period of 24 months after execution of
this Agreement, directly or indirectly, offer to sell, assign, pledge, issue,
distribute, sell, contract to sell, grant any option or enter into any contract
for the sale of, or otherwise voluntarily transfer or dispose of, or announce
any offer, sale, grant of any option to purchase or other transfer or
disposition or, any of their respective Shares; except when a person(s) or
entity (entities) with whom the Terpe, Xxxxxxxxx and Xxxxx wishes to assign,
pledge, issue and or distribute stock to signs an Agreement, acceptable to
MegaWorld agreeing to abide by the terms of this "Lockup Agreement". This
agreement must be approved by MegaWorld prior to consummation of the
transaction, and provided further, that beginning six (6) months after the date
of this Agreement, MegaWorld shall, upon written request of any one of the Terpe
Shareholder Group, release from their respective Lockup Agreement for sale by
such shareholder up to 15,000 Shares per fiscal quarter. In addition beginning
with the execution of this Agreement, Terpe shall be permitted to sell 15,000
shares per month (45000 shares per quarter) for six months for a total of 90,000
shares and Xxxxxxxxx shall be permitted to sell 5000 shares per month (15000 per
quarter) for six months for a total of 30000 shares. For each quarter, Terpe
and/or Xxxxxxxxx can accumulate the shares and may pledge or assign them should
they not to sell them. Further, Terpe will immediately receive upon executing
this Agreement, an additional 40,000 shares as compensation for all delinquent
salary and expenses owed to him by MegaWorld, Inc. Any and all remaining Shares
subject to the respective Lockup Agreements shall be released for sale by the
Terpe Shareholder Group two (2) years after the date of this Agreement. Each of
the Terpe Shareholder Group understand and acknowledge that the Shares have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold unless they are registered under the
Securities Act and any applicable state securities laws or an exemption from
such registration is available and that nothing herein constitutes a
representation that the Shares may be eligible for an exemption, under Rule 144
of the Securities Act or otherwise, from such registration at any time.
3. MegaWorld and ITS shall retain and Terpe, Xxxxxxxxx and Xxxxx hereby
waive and relinquish any and all claims to (i) any and all rights to the name
"ITS Telephony, Inc." and any and
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all derivations thereof and names deceptively similar thereto; (ii) any and all
technology developed, acquired, modified or otherwise utilized by any of the
Parties in connection with the ITS Agreements; (iii) any and all patents,
trademarks, trade names, trade secrets, methods of doing business, know-how and
other proprietary technology or information and other intellectual or intangible
property associated with the Joint Venture formed pursuant to the Joint Venture
Agreement; and (iv) any and all real and personal property held by ITS.
4. Each of the Terpe Shareholder Group together with their respective
heirs, executors, administrators, officers, directors, successors and assigns
and ITM and Fairway, together with their present and former officers, directors,
shareholders, agents, employees, representatives, insurers and affiliates (the
"Group"), voluntarily and knowingly do hereby RELEASE, DISCHARGE and ACQUIT
MegaWorld and ITS together with their present and former officers, directors,
shareholders, agents, employees, representatives, insurers and affiliates (the
"MegaWorld Parties") from:
i. all cash or non-cash payments, all compensation and
all reimbursements currently due or to be due in the
future, whether pursuant to the ITS Agreements or any
other agreement, whether written or verbal;
ii. all claims, demands and causes of action, known or
unknown, of any kind or character, joint or several,
either liquidated, unliquidated, or contingent,
howsoever arising, whether founded in tort, contract
or otherwise for any and all inquiries, harm,
damages, penalties, costs, losses, expenses,
attorneys' fees, liability and other detriments, if
any, which the Group had or presently has as of the
date of this Agreement; and
iii. all claims, demands and causes of action arising from
the relationship between the Group, on the one hand,
and the MegaWorld Parties, on the other hand, which
the Group presently has or which may hereinafter
arise against the MegaWorld Parties as a result of
the acts or omissions of any person or entity prior
to the date hereof, including but not limited to
claims and causes of action relating to liability
which may arise as a result of any determination or
allegation that the business of the Parties prior to
the date hereof was conducted through an association,
partnership, agency or other relationship of the
parties which may result in the actions of one party
incurring derivative liability on another.
5. The Group hereby relinquishes, renounces and otherwise waives any
interest in or claim to and agrees that none of them, or any person,
organization or entity which they control or which is under common control with
them, or any of them, will conduct any business under the name of "ITS
Telephony, Inc." or any name deceptively similar thereto. The Parties agree that
the name "ITM Group, Inc." is not deceptively similar to the name "ITS
Telephony, Inc."
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6. In consideration of the covenants and agreements herein contained
the MegaWorld Parties RELEASE, DISCHARGE and ACQUIT the Group from:
i. all claims, demands and causes of action, known or
unknown, of any kind or character, either liquidated,
unliquidated, or contingent, howsoever arising,
whether founded in tort, contract or otherwise for
any and all inquiries, harm, damages, penalties,
costs, losses, expenses, attorneys' fees, liability
and other detriments, if any, which the MegaWorld
Parties had or presently have as of the date of this
Agreement; and
ii. all claims and causes of action arising from the
relationship between the MegaWorld Parties on the one
hand, and the Group, on the other hand, which any of
the MegaWorld Parties has or which may hereinafter
arise against any of the Group as a result of the
acts or omissions of any person or entity prior to
the date hereof, including but not limited to claims
and causes of action relating to liability which may
arise as a result of any determination or allegation
that the business of the parties prior to the date
hereof was conducted through an association,
partnership, agency or other relationship of the
parties which may result in the actions of one party
incurring derivative liability on another.
7. The parties hereto covenant and agree not to disclose, or authorize
their agents or attorneys to disclose, orally or in writing, to anyone any facts
or opinions referring or relating to the events culminating in this Agreement,
or the terms and conditions of this Agreement, except that such facts and
opinions may be disclosed only to (a) the professional tax or legal advisers of
the parties hereto where such disclosure is necessary to obtain tax or legal
advice, (b) in response to requirements of any state or federal regulatory
authority or agency or self-regulatory authority or agency operating pursuant to
state or federal authority, and (c) when compelled by order of a court of the
United States of America or any State thereof. Notwithstanding the above
restrictions on disclosure as stated above, any party hereto may disclose upon
inquiry by a third party the following:
"A dispute arose between MegaWorld and Terpe, Xxxxxxxxx and Xxxxx and
other parties affiliated therewith regarding their business interests
and objectives therein and the parties amicably settled their disputes
and exchanged mutual releases;" or words of similar import.
8. The parties hereto agree that the purpose of this Agreement is to
settle disputed claims. Nothing in this Agreement shall be construed as an
admission of liability of any kind; all such liability being expressly denied.
9. The parties hereto further declare and represent that no promise,
inducement or agreement not expressed herein has been made to any of them and
that this Agreement contains the
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entire agreement between the parties hereto, and that the terms of this
Agreement are contractual and not mere recitals.
10. By execution of this Agreement, the parties hereto acknowledge that
each has read it, that each understands it, and that each has freely entered
into it for the purposes and consideration herein expressed.
IN WITNESS WHEREOF, the foregoing Mutual Release, Waiver and Settlement
Agreement has been executed on this 27th day of November, 1999.
MEGAWORLD, INC. ITS TELEPHONY, INC.
/s/ Xxxxxxx X. XxXxxxx /s/ Xxxxxxx X. XxXxxxx
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By: Xxxxxxx X. XxXxxxx By: Xxxxxxx X. XxXxxxx
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Its: President Its:
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FAIRWAY BEECH CORPORATION
/s/ Xxxx X. Xxxxx
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By: Xxxx X. Xxxxx
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Its: President
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ITM GROUP, INC.
/s/ Xxxx Xxxxx
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By: Xxxx Xxxxx
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Its: President
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/s/ Xxxx Xxxxx
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XXXX XXXXX
/s/ Xxxxxx Xxxxxxxxx
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XXXXXX XXXXXXXXX
/s/ Xxxx Xxxxx
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XXXX XXXXX
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