EXHIBIT 10.18
SETTLEMENT AGREEMENT
SETTLEMENT AGREEMENT, dated the 19th day of September, 2004
("Agreement"), by and between MedStrong International Corporation, a Delaware
corporation, with offices at 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxxx 06901("MedStrong"), and Xxxxx X. Xxxxxx/Cargril Acceptance
Corporation, of 000 Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxx Xxxxxxx, XX 00000
("Xxxxxx/Cargril"), MedStrong and Xxxxxx/Cargril are sometimes referred to
herein as the "Parties", or individually as a "Party".
WHEREAS, MedStrong and Xxxxxx are parties to an Employment Agreement,
dated December 15, 2000 (the "Employment Agreement"); and
WHEREAS, MedStrong has licensed MedStrong's Patient Data Quickly
("PDQ") software rights on an exclusive basis to Xxxxxx and Cargril, pursuant to
a License Agreement, made as of April 1, 2004 (the "License Agreement"); and
WHEREAS, MedStrong and Xxxxxx have agreed that Xxxxxx desires to resign
his employment ("Employment") as President, Chief Executive Officer and Acting
Chief Financial Officer of MedStrong; and
WHEREAS, the parties wish to provide for settlement of the obligations
of each respective Party to the other Party pursuant to the terms of this
Agreement; and
WHEREAS, each of the Parties could attempt to assert claims against the
other party; and
WHEREAS, the Parties desire to resolve all potential disputes with this
Settlement Agreement.
NOW, THEREFORE, in consideration of the agreements and covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, it is agreed by and between the parties as
follows:
1. Settlement of Obligation. The Parties shall make full settlement
of Xxxxxx'x Employment as follows:
A. Effective Date. The official date of termination of
Xxxxxx'x employment shall be the date the Board fully
accepts the Settlement Agreement.
B. Termination of Employment Agreement. The Employment
Agreement shall be terminated on the date the Board
fully accepts the Settlement Agreement, and MedStrong
shall have no further obligations, past, present or
future, to Xxxxxx thereunder (including without
limitation, bonuses, stock options, medical or life
insurance, and expenses).
C. Resignation as Officer and Director. Xxxxxx hereby
resigns, effective the date first set forth above, as
a member of the Board of Directors of MedStrong and
from all offices held by Xxxxxx as an officer of
MedStrong.
D. Amendment of License Agreement. The parties shall execute
the amendment to the License Agreement in the form attached
hereto as Exhibit A.
E. MedStrong reaffirms that this agreement excludes the
Resolution of MedStrong wherein it was unanimously agreed on
September 29, 2003 by the Board of Directors that MedStrong
indemnified Xxxxxx against certain creditors of MedStrong
where he guaranteed payment, i.e. Metro Properties and
Capital One corporate credit card. The general release by
Xxxxxx herein does not extend to these matters.
2. Settlement Subject to MedStrong Board of Directors Approval.
This Agreement shall be subject to the approval of MedStrong's Board of
Directors.
3. Representations and Warranties of Xxxxxx.
X. Xxxxxx has delivered all necessary financial information or
records to MedStrong's independent accountants and has delivered all other
corporate records in his possession or under his control to MedStrong.
X. Xxxxxx understands that Xxxxxxx Xxxxx and Xxxxxxx &
Xxxxxxxx, P.C. are acting as counsel for MedStrong with respect to the drafting
and negotiation of this Agreement and confirms that he is represented by
independent counsel with respect to this Agreement.
4. Release by Xxxxxx. In consideration for settlement of the
termination of Xxxxxx'x Employment as provided hereinabove and the agreements of
MedStrong made as provided herein, Xxxxxx, as releasor, remises, releases and
forever discharges MedStrong, its respective subsidiaries, officers, directors,
agents, representatives, counsel, successors and assigns, jointly and severally,
from any and all debts, demands, actions, causes of action, suits, damages,
claims and liabilities based on matters relating to Xxxxxx'x Employment or any
other matter of whatever kind or nature, known or unknown, suspected or
unsuspected, accrued or unaccrued, whether in law, equity or otherwise, and
whether under contract, warranty, tort or otherwise, which Xxxxxx ever had, now
has or may have, claim or assert from the beginning of the world to the date of
this Settlement Agreement, excepting 1. Settlement of Obligation, item E and the
obligations of MedStrong under this Settlement Agreement.
5. Release by MedStrong. In consideration of the agreements of Xxxxxx
made as provided herein, MedStrong, as releasor, remises, releases and forever
discharges Xxxxxx, his respective, agents, representatives, heirs, successors
and assigns, jointly and severally, from any and all debts, demands, actions,
causes of action, suits, damages, claims and liabilities based on matters
relating to Xxxxxx'x Employment or any other matter of whatever kind or nature,
known or unknown, suspected or unsuspected, accrued or unaccrued, whether in
law, equity or otherwise, and whether under contract, warranty, tort or
otherwise, which MedStrong ever had, now has or may have, claim or assert from
the beginning of the world to the date of this Settlement Agreement, excepting
for the obligations of Xxxxxx under this Settlement Agreement.
6. Confidential Treatment. Except as required by law or applicable
regulation, this Settlement Agreement, and the terms hereof, shall be maintained
in confidence by the parties and shall not be disclosed to any third party.
Neither MedStrong nor Xxxxxx shall discuss this Settlement Agreement or any of
the transactions leading up to this Settlement Agreement with any other person,
other than their respective counsel.
7. No Disparagement. Following the execution of this Agreement,
Xxxxxx shall not disparage MedStrong, or any of its individual officers,
directors, consultants, counsel or independent accountants. MedStrong shall not
disparage Xxxxxx and shall disclose to third parties, when asked, that Xxxxxx
resigned on terms acceptable to both Xxxxxx and MedStrong.
8. Agreement Represents Compromise. This Settlement Agreement
represents a compromise of disputed claims and is not to be deemed or construed
to be an admission of liability or of the truth of any fact on the part of any
party. By this Settlement Agreement, the parties intend merely to avoid the
potential for protracted dispute.
9. Governing Law and Venue. This Settlement Agreement shall
be construed under the laws of the State of Connecticut pertaining to contracts
made and to be performed in Connecticut, without giving effect to its choice of
law provisions. The Parties hereto hereby consent to venue in any state or
federal court within the State of Connecticut having jurisdiction over the City
of Stamford for all purposes in connection with this Agreement.
10. Entire Agreement. This Settlement Agreement embodies the entire
agreement of the parties on the subject matter hereof and supersedes and
replaces all prior agreements between the parties regarding these matters. It
may not be changed or modified orally, but only by a writing signed by each of
the parties to be bound by such changes or modification.
11. Counterparts. This Settlement Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same instrument.
12. Attorney's Fees. In any litigation arising out of this Agreement,
the prevailing party shall be entitled to reimbursement of reasonable attorney's
and costs associated with such litigation through all levels of appeals.
IN WITNESS WHEREOF, the parties have set their hands and seals to this
Settlement Agreement which is effective as of the day and year first above
written.
MEDSTRONG INTERNATIONAL CORPORATION
By: /s/ Xxxx San Antonio
--------------------------
(Signature)
Name: Xxxx San Xxxxxxx
Title: Chairman of the Board
XXXXX X. XXXXX
CARGRIL ACCEPTANCE CORPORATION
By: /s/ Xxxxx X. Xxxxxx
---------------------------
(Signature)
Name: Xxxxx X. Xxxxxx
Title: President
EXHIBIT A
AMENDMENT NO. 1 TO LICENSE AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment") TO LICENSE AGREEMENT dated April 1, 2004
(the "License Agreement") is entered into as of September 1, 2004 (the
"Effective Date") by and between MedStrong International Corporation, having an
address at 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000 ("MedStrong") and
Xxxxx X. Xxxxxx, having an address at 000 Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx
Xxxxx Xxxxxxx, XX 00000 ("Xxxxxx/Cargril"). Capitalized terms used but not
defined herein shall have the respective meanings ascribed to them in the
License Agreement.
RECITALS
WHEREAS, the MedStrong and Xxxxxx entered into the License Agreement for the
exclusive license of the Software Rights;
WHEREAS, the License Agreement requires a Minimum Royalty Payment, in addition
to continuing royalties.
WHEREAS, MedStrong and Xxxxxx desire to amend the License Agreement to extend
these dates for the payments under the License Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual
promises herein contained, the parties hereby agree as follows:
AMENDMENT TO LICENSE AGREEMENT
1.1 Amendment of Section 3.2(a). Section 3.2(a) of the License Agreement
shall be amended to eliminate any requirement for Xxxxxx to make the
Minimum Royalty Payment and to read in its entirety as set forth below:
"(a) Royalty Amount. Licensee shall pay to MedStrong, on a monthly
basis, royalties equal to Thirty-Five (35%) Percent of the
Gross Net Margin of Licensed Products and Services for
revenues from Road America/Warrantech and American Doctors
Network, with no right of offset for any client cancellations,
overpayments or other moneys due one party or the other.
MISCELLANEOUS PROVISIONS
2.1 Effect of Amendment. Except as amended and set forth above, the License
Agreement shall continue in full force and effect.
2.2 Governing Law. This Amendment shall be governed, construed and interpreted
in accordance with the laws of the State of Connecticut, without giving
effect to principles of conflicts of law.
2.3 Counterparts. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument.
2.4 Entire Agreement. This Amendment, together with the License Agreement,
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof or thereof, and any and all other written or oral
agreements existing among the parties hereto are expressly canceled.
IN WITNESS WHEREOF, both MedStrong and Xxxxxx/Cargril Acceptance
Corporation have executed this Amendment, in duplicate originals, by their
respective and duly authorized officers on the day and year first written above.
Xxxxx X. Xxxxxx: MedStrong International Corporation
Cargril Acceptance Corporation
By: ---------------------------------- By: ------------------------------
(Signature) (Signature)
Name: Xxxxx X. Xxxxxx Name: Xxxx San Antonio
Title: President Title: Chairman of the Board
