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EXHIBIT 10.23
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release ("Agreement") is entered into on
May 16, 2001, among PentaStar Communications, Inc., a Delaware corporation
("PentaStar"), PentaStar Acquisition Corp. I, a Delaware corporation formerly
known as OC Mergerco 1, Inc. (the "Acquiror"), Xxxxxxx X. Xxxxx ("Xx. Xxxxx")
and Xxxxx Xxxxx, who is Xx. Xxxxx' wife ("Xxx. Xxxxx"). (Xx. Xxxxx and Xxx.
Xxxxx are also referred to individually and collectively, as "Xxxxx").
PentaStar, the Acquiror, Xx. Xxxxx and Xxx. Xxxxx may also be referred to
individually, as a "Party" and collectively, as the "Parties.")
1. Recitals. This Agreement is entered into with reference to the
following facts:
(a) BACE Investments, LLC ("BACE"), Black Diamond Capital, LLC
("Black Diamond"), Xxxxxx X. Xxxxxxx ("Xxxxxxx") and Xx. Xxxxx are the founders
and original shareholders of PentaStar. Xxxxx owns 219,100 shares (the "Xxxxx
Founder Shares") of PentaStar's common stock, $.0001 par value ("PentaStar
Common Stock"), which were acquired by Xx. Xxxxx in connection with the founding
of PentaStar.
(b) PentaStar, the Acquiror and Xx. Xxxxx are party to an
Agreement and Plan of Merger dated as of August 13, 1999, as amended by letter
agreement (the "October 26, 1999 Merger Agreement Amendment") dated October 20,
1999 (as so amended, the "Merger Agreement"), pursuant to which DMA Ventures,
Inc. ("Access") (which was wholly-owned by Xx. Xxxxx) was merged into the
Acquiror (the "Merger").
(c) Pursuant to the Merger Agreement,
(i) PentaStar issued to Xx. Xxxxx 205,000 shares (the
"Xxxxx Acquisition Shares") of PentaStar Common Stock as consideration for the
Merger;
(ii) PentaStar and Xx. Xxxxx entered into an
Employment and Noncompetition Agreement dated as of August 13, 1999, a copy of
which is attached hereto as Exhibit A (the "Employment Agreement"); and
(iii) PentaStar, the Acquiror and Xx. Xxxxx entered
into a Principal Stockholder's Escrow and Contingent Stock Agreement dated as of
October 26, 1999, as amended by the Amended and Restated Principal Stockholder's
Escrow and Contingent Stock Agreement executed January 12, 2000 but effective as
of October 26, 1999 (the "Contingent Stock Agreement"), pursuant to which Xx.
Xxxxx deposited with PentaStar 68,265 shares (the "Contingent Shares") from the
Xxxxx Acquisition Shares.
(d) PentaStar and/or the Acquiror are also party to the
following agreements with Xx. Xxxxx, Xxx. Xxxxx or their affiliates:
(i) Business Lease dated April 10, 1996 among Xxxx
and Xxxxx Xxxxx and DMA Ventures, Inc., as amended by First Amendment to Lease
dated August 13, 1999 among the same parties (the "Lease Agreement") (the
Acquiror is now a party to the Lease Agreement as a result of the Merger);
(ii) Letter agreement dated September 19, 2000 among
Xx. Xxxxx, PentaStar and the Acquiror setting forth certain transfer
restrictions on all shares of PentaStar Common Stock owned by Xxxxx (the "Stock
Restriction Letter Agreement");
(iii) Letter agreement dated September 19, 2000 among
Xx. Xxxxx, Xxxxx X. Xxxxx, Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxxx X.
Xxxxx, Xxxxxxxx X. Xxxxxx, PentaStar and the Acquiror regarding restricted stock
grants made by Xx. Xxxxx (the "Restricted Stock Grant Letter Agreement");
(iv) Stock Purchase Agreement dated as of March 31,
1999, as amended by Addendum thereto dated as of March 31, 1999, among PentaStar
(f/k/a Optimal Communications, Inc.) and Xx. Xxxxx (the "Stock Purchase
Agreement");
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(v) Memorandums/letter agreements dated June 22, 2000
and September 6, 2000 between Xx. Xxxxx and PentaStar regarding Xx. Xxxxx'
position as National Director of Business Development and related compensation
matters, copies of which are attached hereto as Exhibit B (collectively, the
"Memorandum Agreements"); and
(vi) Sub-Agent Agreement dated March 5, 2001 between
PentaStar and LLV Enterprises, Inc. (the "Sub-Agent Agreement").
(e) Certain disputes have arisen among the Parties concerning
various matters. The Parties, by this Agreement, desire to settle, adjust, and
compromise the matters released herein forever.
2. Settlement Transactions. In consideration of the mutual covenants
and releases reflected in this Agreement, the Parties agree as follows:
(a) Concurrently with the execution of this Agreement, Xxxxx
shall transfer and deliver to PentaStar 80,000 of the Xxxxx Acquisition Shares,
along with stock powers duly executed in blank. The shares to be so transferred
shall be shares which are not Contingent Shares. The Parties acknowledge and
agree that, following such transfer, Xx. Xxxxx owns a total of 344,100 shares of
PentaStar Common Stock, of which 219,100 are Xxxxx Founder Shares and 125,000
are Xxxxx Acquisition Shares. Of the 125,000 Xxxxx Acquisition Shares, 68,265
shares are the Contingent Shares and shall remain subject to the Contingent
Stock Agreement.
(b) The Stock Restriction Letter Agreement is hereby
terminated. However, Xxxxx agrees with PentaStar as follows with respect to (1)
the 275,835 shares (the "Subject Shares") which consists of the 344,100 shares
of PentaStar Common Stock owned by Xx. Xxxxx, less the 68,265 Contingent Shares,
and (2) the Contingent Shares:
(i) Except as otherwise provided in clauses (ii),
(iii), (iv) or (v) below, until a PentaStar Liquidity Event (as defined below)
Xxxxx shall not, and shall not attempt, agree or contract to, transfer, sell,
assign, exchange, transfer, pledge, hypothecate, encumber, grant any option with
respect to, grant any security interest in, or otherwise dispose (each of the
foregoing, including any attempt, agreement or contract with respect thereto, is
referred to as a "Transfer") of any of the Subject Shares or any interest
therein (which shall expressly include (A) any stock dividends issues by
PentaStar and attributable to the Subject Shares and (B) any shares of capital
stock of PentaStar issued or issuable as a result of stock splits or stock
dividends). Moreover, PentaStar shall not recognize any attempted Transfer which
does not comply with this Section 2(b). "PentaStar Liquidity Event" means the
sale of all or substantially all of the assets or outstanding shares of
PentaStar, whether by way of merger, acquisition or other method (except a
merger or consolidation immediately after which the persons who were
shareholders of PentaStar before the transaction own a majority of the
outstanding equity securities of the surviving or resulting entity).
(ii) Provided that the Subject Shares remain subject
to the terms of this Section 2(b) following any Transfer authorized in this
clause (ii), Xxxxx may Transfer Subject Shares (A) by gift to family members,
not more remote than first cousins, (B) pursuant to the laws of descent and
distribution or by court order, (C) to trusts, limited partnerships or other
estate planning entities of which Xx. Xxxxx is the beneficiary for estate
planning purposes or (D) to any charitable organization that qualifies for
receipt of charitable contributions under Section 170(c) of the Internal Revenue
Code of 1986, as amended; provided in the case of each of (A) through (D) the
recipient of such Subject Shares agrees in writing (in form and substance
satisfactory to PentaStar) to be bound by the provisions of this Section 2(b)
with respect to such Subject Shares and such writing is delivered to PentaStar
prior to such Transfer;
(iii) Commencing with the calendar month of May 2001
and continuing each calendar month thereafter, Xx. Xxxxx (but not any transferee
of Xx. Xxxxx) may, subject to compliance by Xx. Xxxxx with all applicable
securities and other laws, sell only through Xxxxxxxxx Securities, Inc.
("Xxxxxxxxx") (A) up to 1,250 Xxxxx Acquisition Shares (but none of which may be
Contingent Shares) during each of the calendar months of May, June, July and
August 2001 and (B) up to 1,000 Xxxxx Acquisition Shares (but none of which may
be
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Contingent Shares) during each calendar month after August 2001, in each and
every case pursuant and subject to and in compliance with Rule 144 promulgated
under the Securities Act of 1933 ("Rule 144"), provided, however, that Xx.
Xxxxx' right to sell in any month shall be conditioned upon him coordinating his
sales efforts in each month with Xxxxxxxxx so that such sales will have no, or
as little as possible, negative impact on the market and market price for
PentaStar Common Stock and, provided further, that if Xx. Xxxxx sells less than
the permitted 1,250 or 1,000 Xxxxx Acquisition Shares, as the case may be, in
any calendar month, he may not sell more than the permitted 1,250 or 1,000 Xxxxx
Acquisition Shares, as the case may be, in any subsequent month;
(iv) In addition to the shares permitted to be sold
pursuant to clause (iii) above, Xx. Xxxxx (but not any transferee of Xx. Xxxxx)
may, subject to compliance by Xx. Xxxxx with all applicable securities and other
laws, work with Xxxxxxxxx to sell (subject to the provisio to this Section
2(b)(iv)) through Xxxxxxxxx up to an additional 20,000 Xxxxx Acquisition Shares
(but none of which may be Contingent Shares) by December 31, 2001 pursuant to
Rule 144 or other exemptions from the registration requirements of applicable
securities laws which may then be available, as established by opinion of
counsel to PentaStar, which opinion is reasonably satisfactory to PentaStar,
provided, however, that no sale pursuant to this Section 2(b)(iv) may be made
unless and until PentaStar has given its prior written consent (signed by
PentaStar's Chief Executive Officer) to Xx. Xxxxx for any such proposed sale
(and PentaStar covenants that by December 31, 2001 it shall have given such
consent or consents for the sale or sales, in the aggregate, of such 20,000
shares, but PentaStar does not guarantee any particular price or market
conditions for any particular sale and shall have no liability to Xx. Xxxxx or
otherwise for failing to consent to any particular proposed sale);
(v) If any of BACE, Black Diamond or Xxxxxxx sells to
an unaffiliated third party any shares of PentaStar Common Stock owned by any of
them (each such sale being a "Founder Sale"), then Xx. Xxxxx (but not any
transferee of Xx. Xxxxx) may, subject to compliance by Xx. Xxxxx with all
applicable securities and other laws, sell only through Xxxxxxxxx pursuant to
Rule 144 or other exemptions from the registration requirements of applicable
securities laws which may then be available, as established by opinion of
counsel to PentaStar, which opinion is reasonably satisfactory to PentaStar, a
number of Subject Shares determined by multiplying (A) the number of Subject
Shares owned by Xx. Xxxxx at the time of the Founder Sale by (B) a fraction, the
numerator of which is the number of shares of PentaStar Common Stock sold in the
Founder Sale, and the denominator of which is the aggregate number of shares of
PentaStar Common Stock owned by BACE, Black Diamond, Xxxxxxx and their
respective affiliates immediately prior to such Founder Sale.
(vi) During the term of the lock-up set forth in this
Section 2(b), Xxxxx will continue to have all voting and other rights to which
he is entitled by ownership of the Subject Shares. In the event Xxxxx Transfers
any of the Subject Shares in violation of this Section 2(b), PentaStar shall
have the right to recover and retain (at Xx. Xxxxx' expense) such Subject Shares
and, in any event, any profits realized will inure to and be recoverable (at Xx.
Xxxxx' expense) by PentaStar;
(vii) Xxxxx shall not Transfer any Contingent Shares
(A) except as set forth in the Contingent Stock Agreement and (B) except for the
27,500 shares which are the subject of restricted stock awards made by Xx. Xxxxx
pursuant to the Restricted Stock Grant Letter Agreement, which shares may only
be Transferred in accordance with the Restricted Stock Grant Letter Agreement.
One of the recipients of a restricted stock award for 7,000 shares has
terminated his employment with the Acquiror, and the Parties acknowledge and
agree that such 7,000 shares shall continue to be available for restricted stock
awards by Xx. Xxxxx if requested by PentaStar;
(viii) The restrictions on Transfer (and permitted
Transfers) set forth in this Section 2(b) supersede in their entirety those set
forth in the Stock Restriction Letter Agreement, the Stock Purchase Agreement or
Section 5.10 of the Merger Agreement;
(ix) Concurrently with the execution of this
Agreement, Xx. Xxxxx shall deliver to PentaStar all stock certificates
representing Xxxxx Founder Shares or Xxxxx Acquisition Shares so that legends
reflecting the restrictions on Transfer set forth in this Section 2(b) can be
placed on such stock certificates; and
(x) Xx. Xxxxx shall timely file with the Securities
and Exchange Commission (and deliver copies to PentaStar) any forms, reports or
schedules required to be filed by him pursuant to Sections 13 or 16
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(and related rules and regulations), as applicable, of the Securities Exchange
Act of 1934, as amended, to reflect the change in his ownership resulting from
the operation of Section 2(a) above and any such forms, reports or schedules
required in connection with any subsequent Transfers of PentaStar Common Stock
required to be reported thereunder.
(c) (i) PentaStar and/or the Acquiror are defendants in the
Xxxxxxx.xxx v. PentaStar Communications, Inc. lawsuit filed in the U.S. District
Court for the State of Colorado (the "Lawsuit"). Pursuant to the Merger
Agreement, Xx. Xxxxx is required to indemnify and hold harmless PentaStar and
the Acquiror from all Adverse Consequences (as defined in the Merger Agreement)
resulting from, arising out of, relating to or caused by the Lawsuit or the
underlying claims and liabilities (the Lawsuit and such claims and liabilities
are referred to as the "Xxxxxxx.xxx Liabilities"). Qwest Communications and
PentaStar have entered into the letter agreement dated April 26, 2001, a copy of
which is attached hereto as Exhibit C (the "Qwest Letter Agreement"). In
connection with the Lawsuit,
(A) PentaStar and/or the Acquiror have
incurred $42,222.74 of legal fees and expenses through April 27, 2001, for which
they are entitled pursuant to the Merger Agreement to be 100% indemnified by Xx.
Xxxxx. However, pursuant to the Qwest Letter Agreement, Qwest will pay to
PentaStar $31,667.05 (representing 75% of $42,222.74). As a result, Xx. Xxxxx'
indemnification obligation with respect to such $42,222.74 shall be $10,555.69,
(B) Xx. Xxxxx consents to the Qwest Letter
Agreement and the matters set forth therein and agrees that he shall continue to
be responsible to PentaStar and the Acquiror for 100% of all legal fees and
expenses ("Non-Qwest Covered Legal Fees and Expenses") and, subject to
subsection (C) below, all judgment amounts or settlement amounts ("the
"Non-Qwest Covered Judgment/Settlement Amounts") relating to the Lawsuit or to
any new or revised claim not set forth in the complaint as of April 27, 2001 for
which PentaStar does not receive indemnification or reimbursement from Qwest
pursuant to the Qwest Letter Agreement, and
(C) PentaStar and/or the Acquiror shall be
responsible for 75%, and Xx. Xxxxx shall be responsible for 25%, of any
Non-Qwest Covered Judgment/Settlement Amounts. PentaStar and the Acquiror have
(and now Qwest will), with the agreement of Xx. Xxxxx, assumed the control of
the defense or settlement of, the Lawsuit, in accordance with Section 7.3 of the
Merger Agreement and PentaStar and the Acquiror shall, subject to the above
provisions of this Section 2(c), be entitled to the benefits of Section 7,
including, without limitation, Section 7.3(d).
(ii) The first $10,000 of proceeds received by
Xx. Xxxxx in respect of any sale made in any month by Xx. Xxxxx of PentaStar
Common Stock pursuant to Section 2(b)(ii) shall be immediately delivered to
PentaStar to reimburse PentaStar for amounts for which Xx. Xxxxx is responsible
pursuant to Section 2(c)(i) and/or to pay the amount set forth in Section
2(d)(iv), to the extent Xx. Xxxxx has not previously paid PentaStar in cash for
such amounts; provided, however, that the failure of any shares to be sold shall
not relieve Xx. Xxxxx of his obligation to indemnify and hold harmless PentaStar
and the Acquiror from all amounts for which Xx. Xxxxx is responsible pursuant to
Section 2(c)(i), which shall be reimbursed by Xx. Xxxxx to PentaStar monthly as
incurred.
(d) (i) The amount of the "August/September Receivables" (as
defined in the Merger Agreement) collected by the Acquiror but not yet delivered
to Xx. Xxxxx is finally agreed to be $30,000. For all purposes of the Merger
Agreement, and as a result thereof, PentaStar owes $30,000 cash to Xx. Xxxxx
pursuant to Section 2 of the October 26, 1999 Merger Agreement Amendment.
(ii) Xx. Xxxxx desires to purchase from the Acquiror,
and the Acquiror desires to sell to Xx. Xxxxx, for $12,000 cash the Lexus
automobile which Xx. Xxxxx drove while employed by the Acquiror. Upon execution
of this Agreement, the Acquiror shall deliver title to the Lexus to Xx. Xxxxx.
Xx. Xxxxx shall be responsible for all sales and other taxes and fees relating
to the sale of the Lexus to him.
(iii) Xx. Xxxxx currently owes PentaStar $10,555.69
pursuant to Section 2(c)(i).
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(iv) As a result of the netting of the amounts set
forth in clauses (i), (ii) and (iii) above, PentaStar owes Xx. Xxxxx $7,444.31
in respect thereof. Such amount shall be paid to Xx. Xxxxx in cash upon
PentaStar's receipt from Qwest of the $31,667.05 reimbursement pursuant to the
Qwest Letter Agreement.
(e) The Sub-Agent Agreement shall survive the execution of
this Agreement and shall thereafter continue in accordance with its terms;
provided, however, that: (i) Xx. Xxxxx, Xxx. Xxxxx and any of their present or
future affiliates (including, without limitation, LLV Enterprises, Inc.) shall
place all orders for communications services through PentaStar pursuant to the
Sub-Agent Agreement; (ii) notwithstanding anything to the contrary set forth in
the first sentence of Section 3(h) of the Sub-Agent Agreement, (A) PentaStar
shall not have any right to terminate the Sub-Agent Agreement (1) except by
written notice ("Termination Notice") to LLV Enterprises, Inc. upon (x) breach
by Xxxxx of this Agreement (including, without limitation, clause (i) above),
the Merger Agreement, the Employment Agreement (as amended pursuant to Section
2(f) below), the Contingent Stock Agreement, the Lease Agreement or the
Restricted Stock Grant Letter Agreement or (y) breach of the Sub-Agent Agreement
by LLV Enterprises, Inc. (which Termination Notice shall reasonably identify the
breach, provided that the Termination Notice and the termination set forth
therein shall be of no force or effect if Xxxxx or LLV Enterprises, Inc., as the
case may be, remedies such breach within five days of receipt of the Termination
Notice (and for this purpose, Section 9.6 of the Merger Agreement shall govern
the giving and receipt of the Termination Notice)), and (2) except in any event
the Sub-Agent Agreement shall terminate immediately upon the occurrence of a
Valuation Event under and as defined in the Contingent Stock Agreement.
(f) Upon execution of this Agreement, (i) Sections 1.3, 1.4,
1.6, 1.7, 2.1 through 2.6, 3.5 (with respect to the period after the date of
execution of this Agreement), and 4.12 of the Employment Agreement shall be of
no further force or effect, (ii) Sections 1.1, 1.2, 1.5, 1.8, 1.9, 3.1 through
3.4 and 4.1 through 4.11 of the Employment Agreement shall remain in full force
and effect, (iii) the Noncompete Period shall, in accordance with the existing
provisions of Section 3.1(a) of the Employment Agreement, end at the close of
business in Denver, Colorado on October 29, 2002, and (iv) Section 3.1 of the
Employment Agreement shall not be deemed to restrict Xx. Xxxxx or any of his
Affiliates (as defined in the Employment Agreement) from engaging in the
business of (x) selling telephone hardware or LAN/WAN hardware or (y) consulting
with respect to the use of telephone hardware or LAN/WAN hardware or
communications services so long as the persons to whom Xx. Xxxxx sells pursuant
to clause (x) or consults with pursuant to clause (y) place all orders for
communications network services through PentaStar.
(g) PentaStar shall provide to Xx. Xxxxx such unaudited
monthly financial statements with respect to the Acquiror as PentaStar prepares
in the ordinary course of business; provided, however, that PentaStar's
obligation pursuant to this Section 2(d) shall end upon a PentaStar Liquidity
Event.
3. Releases. In consideration of the terms and conditions of this
Agreement:
(a) Xx. Xxxxx and Xxx. Xxxxx each fully and forever releases
and discharges each of PentaStar and the Acquiror and each of their respective
past, present and future predecessors, successors, parent corporations,
subsidiaries, shareholders, officers, directors, agents (including, without
limitation, BACE Industries, LLC, BACE Investments, LLC, Black Diamond Capital,
LLC and BIBD, LLC and their respective owners, members and agents),
representatives, assigns, insurers and attorneys (individually, a "PNTA
Releasee" and collectively, the "PNTA Releasees") from any and all actions,
causes of action, claims, suits, debts, liabilities, damages, obligations,
promises, acts, omissions, agreements, judgments, demands, defenses (including
without limitation, recoupment and setoff), costs and expenses (including
attorneys' fees) of every kind or nature whatsoever, whether in law or in
equity, whether known or unknown, suspected or unsuspected, which Xx. Xxxxx or
Xxx. Xxxxx, or any person acting on behalf of either of them, may now have, may
have had, or may claim at any future time to have, based in whole or in part
upon any act or omission occurring or arising from the beginning of time to the
date of this Agreement (or any consequence, effect or result arising from any
such act or omission, regardless of whether such consequence, effect or result
arises before or after the date of this Agreement) or upon any document or
agreement between or among any of Xx. Xxxxx or Xxx. Xxxxx or their affiliates,
on the one hand, and any PNTA Releasee, on the other hand, except that the
obligations of PentaStar and/or the Acquiror under, and only under, (i) this
Agreement, (ii) the Contingent Stock Agreement, (iii) the Lease Agreement and
(iv) the Sub-
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Agent Agreement shall continue in accordance with the respective terms thereof
and no release is given with respect thereto; and
(b) Each of PentaStar and the Acquiror fully and forever
releases and discharges each of Xx. Xxxxx and Xxx. Xxxxx and each of their
respective past, present and future predecessors, successors, parent
corporations, subsidiaries, shareholders, officers, directors, agents,
representatives, assigns, insurers and attorneys (individually, a "Xxxxx
Releasee" and collectively, the "Xxxxx Releasees") from any and all actions,
causes of action, claims, suits, debts, liabilities, damages, obligations,
promises, acts, omissions, agreements, judgments, demands, defenses (including
without limitation, recoupment and setoff), costs and expenses (including
attorneys' fees) of every kind or nature whatsoever, whether in law or in
equity, whether known or unknown, suspected or unsuspected, which PentaStar or
the Acquiror or any person acting on behalf of PentaStar or the Acquiror, may
now have, may have had, or may claim at any future time to have, based in whole
or in part upon any act or omission occurring or arising from the beginning of
time to the date of this Agreement (or any consequence, effect or result arising
from any such act or omission, regardless of whether such consequence, effect or
result arises before or after the date of this Agreement) or upon any document
or agreement between or among any of PentaStar or the Acquiror, on the one hand,
and any Xxxxx Releasee, on the other hand, except that the obligations of Xx.
Xxxxx, Xxx. Xxxxx or LLV Enterprises, Inc., as the case may be, under (i) this
Agreement, (ii) the Merger Agreement, (iii) the Employment Agreement as amended
by Section 2(f) of this Agreement, (iv) the Contingent Stock Agreement, (v) the
Lease Agreement, (iv) the Stock Grant Letter Agreement and (vi) the Sub-Agent
Agreement shall continue in accordance with the respective terms thereof and no
release is given with respect thereto, provided, however, that Xx. Xxxxx shall
have no obligation after the date hereof with respect to Sections 3.1(a) or
3.1(b)(ii) through 3.1(u) of the Merger Agreement (but neither PentaStar nor the
Acquiror is releasing Xx. Xxxxx from any covenant or agreement set forth in the
Merger Agreement).
4. Covenant Not to Xxx. Each of Xx. Xxxxx and Xxx. Xxxxx expressly
covenants and agrees with each PNTA Releasee, and each of PentaStar and the
Acquiror expressly covenants and agrees with each Xxxxx Releasee, never to
institute any claim, action, suit, arbitration or proceeding against any such
Releasee, directly or indirectly, regarding or relating to the matters released
through this Agreement, and further covenants that this Agreement is a bar to
any such claim, action, suit, arbitration or proceeding.
5. Denial of Liability. It is understood and agreed by the Parties to
this Agreement that this settlement is not to be construed as an admission of
liability on the part of any Releasee and that the Releasees expressly deny any
liability or wrongdoing.
6. Representations and Warranties. The Parties hereto represent and
warrant to each other and agree with each other, as follows:
(a) Each of the Parties hereto has received independent legal
advice from attorneys of such Party's own choice with respect to the
advisability of making the settlement and releases provided for in this
Agreement, and with respect to the advisability of executing this Agreement.
Prior to the execution of this Agreement, each Party's attorneys reviewed this
Agreement at length, made all desired changes, and signed this Agreement to
indicate that said attorneys approved this Agreement as to form.
(b) Each Party and such Party's attorneys have made various
statements and representations to the other Party and his attorneys during
negotiations leading to this Agreement. Nevertheless, each Party specifically
does not rely upon any statement, representation, legal opinion, or promise of
the other Party or his counsel in executing this Agreement or in making the
settlement provided for herein, except as expressly stated in this Agreement.
(c) There have been no other agreements or understandings
between the Parties related to the settlement provided for herein, except as
stated in this Agreement.
(d) Each Party, together with such Party's attorneys, has made
such investigation of the facts and the law pertaining to this settlement and
this Agreement, and of all the matters pertaining thereto, as such Party
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deems necessary. Each Party forever waives all rights to assert that this
Agreement was the result of a mistake in law or in fact.
(e) Each Party forever waives all rights to assert that any or
all of the legal theories or factual assumptions used or relied upon in the
negotiations leading to this Agreement were for any reason inaccurate or
inappropriate.
(f) This Agreement has been carefully read by, the contents
hereof are known and understood by, and it is freely signed by, each person
executing this Agreement.
(g) Each Party represents and covenants that such Party is the
sole and lawful owner of all right, title and interest in and to every claim and
other matter which such Party releases through this Agreement, and that such
Party has not assigned or transferred, or purported to assign or transfer to any
person or entity any claims or other matters released through this Agreement.
The Releasors acknowledge that, as a result of this Agreement, no Releasor will
have any claims or rights against any Releasee with respect to the matters
released herein. Each Releasor shall indemnify, defend and hold harmless each
Releasee from and against any claims based upon or arising in connection with
any such prior, or attempted future, assignment, transfer, lien, and/or right.
(h) Each Party represents that such Party has not filed any
complaints, charges, causes of action, demands for arbitration, or other claims
in any jurisdiction against the other Party. Each Party further represents that
such Party will not file any further complaints, charges, causes of action,
demands for arbitration, or claims concerning any matter which is released
through this Agreement.
7. Construction. The language used in this Agreement is language chosen
by the Parties to express their mutual intent, and no rule of strict
construction shall be applied against any Party hereto. The Parties hereby
acknowledge and agree that they have been represented by counsel in the
negotiation and drafting of this Agreement and, accordingly, this Agreement
shall be deemed to have been prepared jointly by the Parties, and shall not be
construed against any Party as the drafter.
8. Successors and Assigns. This Agreement shall inure to the benefit
of, and shall be binding upon, the successors and assigns of the Parties hereto,
and each of them. This Agreement is intended to release and inure to the benefit
of each Releasee. Except as expressly provided herein, this Agreement is not for
the benefit of any person not a Party hereto or specifically identified as a
beneficiary herein, and is not otherwise intended to constitute a third party
beneficiary contract.
9. Subsequent Attorneys' Fees. In the event that any action, suit, or
other proceeding is instituted to enforce, remedy, prevent, or obtain relief
from a breach of this Agreement, the prevailing party shall recover all of such
party's costs and reasonable attorneys' fees incurred in each and every such
action, suit or other proceeding, including any and all appeals or petitions
therefrom, as such costs and reasonable attorneys' fees are determined pursuant
to applicable law by the judge or other individual presiding over such
proceeding.
10. Integration. This Agreement constitutes a single integrated written
contract expressing the entire agreement of the Parties hereto relative to the
subject matter hereof. All prior discussions and negotiations are superseded by
this Agreement. This Agreement may not be amended except through a writing
signed by all of the Parties.
11. Severability. In the event that any provision of this Agreement
should be held to be void, voidable, or unenforceable, the remaining portions
hereof shall remain in full force and effect.
12. Survival of Warranties and Representation. The warranties and
representations of this Agreement are deemed to survive the date of execution
hereof.
13. Headings Not Part of Agreement. The headings contained in this
Agreement are for convenience only, do not constitute part of this Agreement,
and shall not limit, affect the interpretation of, or otherwise affect in any
way the provisions of this Agreement.
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14. Governing Law. This Agreement shall be governed under the laws of
the State of Colorado without giving effect to any choice or conflict of law
provision or rule (whether of the State of Colorado or any other jurisdiction
that would cause the application of the laws of any jurisdiction other than the
State of Colorado.
15. Counterparts. This Agreement may be executed in counterparts. This
Agreement shall be deemed to be executed on the last date any such counterpart
is executed.
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IN WITNESS WHEREOF, this Agreement has been executed on the dates below written,
to be effective on the last such date.
EACH OF THE PARTIES TO THIS AGREEMENT CERTIFIES THAT HE HAS CAREFULLY
REVIEWED THIS AGREEMENT WITH THE ASSISTANCE OF COUNSEL AND IS EXECUTING THIS
AGREEMENT VOLUNTARILY AND WITH A FULL UNDERSTANDING OF ITS PROVISIONS.
PENTASTAR:
PENTASTAR COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
By: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
ACQUIROR:
PENTASTAR ACQUISITION CORP. I
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
By: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
XXXXX:
/s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxx Xxxxx
--------------------------------------------
Xxxxx Xxxxx
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Approved as to form by the Parties'
respective attorneys as follows:
XXXXXXX & XXXXXX L.L.C.
By: /s/ B. Xxxxx Xxxxxxx
----------------------------------------
B. Xxxxx Xxxxxxx
Attorneys for PentaStar and the Acquiror
CLANAHAN, TANNER, XXXXXXX & XXXXXXXX, P.C.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx
Attorneys for Xxxxx
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