Exhibit 10.26
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release ("Agreement") is entered into on
September 24, 2001, among PentaStar Communications, Inc., a Delaware corporation
("PentaStar"), PentaStar Acquisition Corp. VI, a Delaware corporation (the
"Acquiror") (PentaStar and the Acquiror are also individually, a "PNTA Releasor"
and collectively, the "PNTA Releasors"), Xxxxxxxxx Xxxxxx-Xxxxxxxx ("Xxxxxxxx"),
Xxxx X. Xxxxxxx ("Topping"), Xxxxxx X. Xxxxxx and Xxxxxxxxxxx X. Xxxxxxxx
(individually, a "Shareholder" and collectively, the "Shareholders"), and
Xxxxxxx Xxxxxxxx, Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxxxxx (individually, a
"Spouse" and collectively, the "Spouses") (the Shareholders and the Spouses are
individually, a "Resources Releasor" and collectively, the "Resources
Releasors"). The PNTA Releasors and the Resources Releasors 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) PentaStar, the Acquiror and the Shareholders are
party to an Agreement and Plan of Merger dated March 31, 2000 (the "Merger
Agreement"). The Acquiror and Xxxxxxxx, and the Acquiror and Topping,
respectively, are party to Employment and Noncompetition Agreements dated March
31, 2000 (the "Employment Agreements").
(b) The Parties wish to set forth their agreements and
releases concerning the matters set forth below.
1. Related Actions. Concurrently with the execution and delivery
of this Agreement, (a) PentaStar, the Acquiror and the Shareholders are entering
into an Amendment to Agreement and Plan of Merger (the "Merger Agreement
Amendment"), which provides, among other things, for a new earn-out arrangement,
and (b) the Acquiror and Xxxxxxxx, and the Acquiror and Topping, respectively,
are entering into an Amendment to Employment and Noncompetition Agreement
(collectively, the "Employment Agreement Amendments"). The execution and
delivery of the Merger Agreement Amendment and the Employment Agreement
Amendments are conditions to the execution and delivery of this Agreement by the
Parties.
2. Agreements and Releases. In consideration of the terms and
conditions of this Agreement and of the applicable parties executing and
delivering the Merger Agreement Amendment and the Employment Agreement
Amendments (capitalized terms used but not defined in this Agreement have the
meanings given them in the Merger Agreement):
(a) the Parties acknowledge and agree that (i) total
EBITA for Earn-Out Period One and for Earn-Out Period Two under the Merger
Agreement was less than $400,000 and that the total EBITA was such that all of
the EBITA Escrow is forfeited by the Shareholders and is to be returned to
PentaStar; and (ii) no Earn-Out Amount under the Merger Agreement was earned by
GoldTop or is payable by PentaStar;
(b) each of the Resources Releasors 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,
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 any Resources Releasor, or any
person acting on behalf of any Resources Releasor, may now have, may have had,
or may claim at any future time to have, based in whole or in part upon (i) the
Acquiror's performance being such as resulted in the EBITA Escrow being
forfeited and/or no Earn-Out Amount being earned or payable (individually, a
"Released Matter" and collectively, the "Released Matters"), or (ii) any
conduct, decision, act or omission from the beginning of time until the last
date on which a Resources Releasor executes this Agreement which results or
resulted from, arises or arose out of, relates or related to or is or has been
caused by any Released Matter. The Merger Agreement (as amended by the Amendment
to Merger Agreement), the Employment Agreements (as amended by the Amendments to
Employment and Noncompetition Agreements), the Noncompetition Agreement and the
Other Seller Agreements remain in full force and effect; and
(c) each of the PNTA Releasors fully and forever releases
and discharges each of the Shareholders and the Spouses 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 "Resources
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 any PNTA
Releasor, or any person acting on behalf of any PNTA Releasor, may now have, may
have had, or may claim at any future time to have, based in whole or in part
upon (i) any Released Matter, or (ii) any conduct, decision, act or omission
from the beginning of time until the last date on which a PNTA Releasor executes
this Agreement which results or resulted from, arises or arose out of, relates
or related to or is or has been caused by any Released Matter; provided,
however, that such release does not cover any other Liability under Section 7 of
the Merger Agreement as a result of the breach by any Shareholder of any
representation, warranty or covenant of such Shareholder in the Merger Agreement
(as set forth in the last sentence of Section 2.1(k)(iii) of the Merger
Agreement), in the Noncompetition Agreement or in the Employment Agreements. The
Merger Agreement (as amended by the Amendment to Merger Agreement), the
Employment Agreements (as amended by the Amendments to Employment and
Noncompetition Agreements), the Noncompetition Agreement and the Other Seller
Agreements remain in full force and effect.
3. Covenant Not to Xxx. Each Resources Releasor expressly
covenants and agrees with each PNTA Releasee, and each PNTA Releasor covenants
and agrees with each Resources 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.
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4. 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 Resources Releasee or PNTA Releasee
and that the Resources Releasees and PNTA Releasees expressly deny any liability
or wrongdoing.
5. 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
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 Resources Releasors and the PNTA Releasors acknowledge that,
as a result of this Agreement, no such Releasor will have any claims or rights
against any PNTA Releasee or Resources Releasee, as the case may be, with
respect to the matters released herein. Each Resources Releasor and PNTA
Releasor shall indemnify, defend and hold harmless each such Releasee from and
against any claims
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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.
6. Waiver Under Section 1542 of California Civil Code. Each
Resources Releasor expressly waives any and all rights under Section 1542 of the
Civil Code of the State of California, which provides 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 his settlement with the debtor."
Each Resources Releasor expressly and completely waives and releases any right
or benefit which such Resources Releasor has or may have under said Section 1542
of the Civil Code of the State of California pertaining to the matters released
herein. In connection with such waiver and relinquishment, each Resources
Releasor acknowledges that such Resources Releasor is aware that such Resources
Releasor may hereafter discover claims presently unknown or unsuspected, or
facts in addition to or different from those which such Resources Releasor now
knows or believes to be true, with respect to the matters released herein.
Nevertheless, it is the intention of each Resources Releasor, through this
Agreement, and with the advice of counsel, fully, finally and forever to settle
and release all Released Matters, and all claims relative thereto, which do now
exist, may exist, or heretofore have existed between and among any Resources
Releasor and any PNTA Releasee. In furtherance of such intention, the releases
herein given shall be and remain in effect as full and complete releases of such
matters notwithstanding the discovery or existence of any such additional or
different claims or facts relative thereto.
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 Resources Releasee or PNTA Releasee, as the case may be. 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.
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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.
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
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By: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
ACQUIROR:
PENTASTAR ACQUISITION CORP. VI
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
By: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
SHAREHOLDERS:
/s/ Xxxxxxxxx Xxxxxx-Xxxxxxxx
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Xxxxxxxxx Xxxxxx-Xxxxxxxx
/s/ Xxxx X. Xxxxxxx
----------------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxxxxxxx X. Xxxxxxxx
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SPOUSES:
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxxxx
----------------------------------------
Xxxx X. Xxxxxxxx
Approved as to form by the parties'
attorneys as follows:
XXXXXXX & XXXXXX L.L.C.
By: /s/ B. Xxxxx Xxxxxxx
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B. Xxxxx Xxxxxxx
Attorneys for PentaStar and the Acquiror
XXXXXXXXXX MIX, LLP
By: /s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx
Attorney for the Resources Releasors
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