GENERAL RELEASE AND SETTLEMENT AGREEMENT
This General Release and Settlement
Agreement (the “Agreement”) is made between Xfone, Inc., (“Xfone”) on the one
hand, and the selling shareholders of NTS Communications, Inc. (the “Selling
Shareholders”), on the other hand, on this 28th day
of December 2009 (collectively, the “Parties”).
WHEREAS, pursuant to a Stock
Purchase Agreement dated August 22, 2007, as amended, (the “SPA”)
Xfone, Inc. (“Xfone”) agreed to purchase certain stock of NTS Communications,
Inc. (the “Company”) owned by the Selling Shareholders identified in the SPA
(“the Transaction”); and
WHEREAS, the Selling
Shareholders’ interests in the Transaction are represented by Xxxxx Xxxxxxxx,
Xxxxxx Xxxxxx and Xxxxx Xxxxxxxxx (“Sellers Representatives”); and
WHEREAS, the purchase price
established in the SPA provided for the price to be initially based on certain
assumptions and estimates which would be adjusted following the Closing pursuant
to the terms of the SPA; and
WHEREAS, the Parties have been
in disagreement over the final adjustment to the purchase price and the
arbitration process described in the SPA; and
WHEREAS, Xfone and Sellers
Representatives desire to resolve all issues related to the calculation and
determination of the final Purchase Price as provided in Article II of the SPA,
including all issues which have been the subject of the proposed arbitration
(hereinafter referred to as the “Disputed Issues”) by compromise and settlement
and without resorting to potentially costly arbitration
proceedings.
NOW THEREFORE, Xfone and the
Selling Shareholders have agreed as follows:
1. As
consideration for this settlement, Xfone will pay the Selling Shareholders a
total of Three Hundred Ten Thousand Dollars ($310,000.00) (the “Settlement
Funds”). The Settlement Funds shall be paid by wire transfer in two
equal installments of One Hundred Fifty-Five Thousand Dollars ($155,000.00), to
the trust account of Sellers Representatives’ legal counsel, XXXXXX XXXXX
XXXXXXX XXXXX & XXXXX LLP (“XXXXXX XXXXX”), for the benefit of, and
distribution to, the Selling Shareholders. The Settlement Funds shall
be received in XXXXXX PERRY’s trust account not later than the date set for
payment as specified herein. The first installment shall be paid no
later than ten business days after Xfone and Sellers Representatives have each
delivered a fully-executed counterpart original of this agreement to the other
side. The Second Installment shall be paid no later than January 15,
2010. After Xfone tenders the payments described herein, Sellers
Representatives acknowledge that Xfone shall have no responsibility or liability
with respect to the handling or distribution of the Settlement Funds to the
Selling Shareholders. After Xfone tenders the payment described
herein, the Selling Shareholders acknowledge that the Selling Shareholders have
received in full the total Purchase Price as provided in the SPA, except for any
funds which the Selling Shareholders may be entitled to receive from the
Escrowed Funds in accordance with the SPA.
2. As
consideration for this settlement, the Selling Shareholders, their heirs,
executors, administrators, agents, beneficiaries, successors and assigns,
officers, directors, affiliates, employees, representatives, attorneys and
insurers including those of affiliated companies, forever release and discharge
Xfone, including each of Xfone’s, subsidiaries, directors, officers, affiliates,
employees, agents, representatives, attorneys, successors and assigns, and
insurers, and their respective past and present officers, directors, employees,
agents, and attorneys, of and from any and all manner of action and actions,
causes and causes of action, claims, controversies, contracts, torts, debts,
damages or demands whatsoever, in law or in equity, that they have had, now
have, or may in the future have, arising out of or related to the Disputed
Issues.
3. As
consideration for this settlement, Xfone, including each of Xfone’s directors,
officers, affiliates, employees, agents, representatives, attorneys, successors
and assigns, and insurers, and their respective past and present officers,
directors, employees, agents, and attorneys forever releases and discharges the
Selling Shareholders, their heirs, executors, administrators, agents,
beneficiaries, successors and assigns, officers, and directors, including those
of affiliated companies, of and from any and all manner of action and actions,
causes and causes of action, claims, controversies, contracts, torts, debts,
damages or demands whatsoever, in law or in equity, that they have had, now
have, or may in the future have, arising out of or related to the Disputed
Issues.
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4. It
is expressly agreed and understood that this Agreement is not, and shall not be
construed as, an admission of liability on the part of any party but shall be a
settlement of doubtful and disputed claims.
5. It
is the intention of the Parties that this instrument shall be deemed effective
as a full and final accordance, satisfaction and release with respect to the
Disputed Issues.
Each of
the parties will withdraw their demand for arbitration and dismiss with
prejudice all actions related to the Disputed Issues.
6. The
release and settlement agreement set forth herein are material provisions of
this Agreement and are not mere recitals. This Agreement constitutes
the entire agreement between the Parties and supersedes any prior
understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they relate in any way to the calculation and
determination of the final Purchase Price as provided in Article II of the SPA,
provided this Agreement does not affect any rights of indemnification the
parties may otherwise have under the SPA with respect to any other
matters.
7. Each
party shall bear its own costs and expenses incurred in this matter, including
but not limited to attorney fees and one half of the costs of any fees submitted
by the accounting firm which was to arbitrate this matter.
8. The
Parties respectively represent and certify that they secured independent legal
advice and consultation in connection with this Agreement and any rights they
may be relinquishing hereby, and that they have not relied upon any
representations or statements made by any other party or by any other party’s
counsel or representatives in executing this Agreement, other than as stated
herein expressly.
9. Each
of the signatories hereto represents that he or she has the authority to enter
into this Agreement on behalf of each person or entity on whose behalf he or she
has executed this Agreement.
10. Except
as specifically provided herein, this Agreement shall not confer any rights or
remedies upon any person other than the Parties and their respective successors
and permitted assigns.
11. This
Agreement shall be binding upon and shall inure to the benefit of the Parties
named herein and their respective successors and permitted
assigns. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties hereto.
12. No
amendment of any provisions of this Agreement shall be valid unless the same
shall be in writing and signed by all of the Parties hereto. No
waiver by any Party of any provision of this Agreement or any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be valid unless the same shall be in writing and
signed by the Party making such waiver nor shall such waiver be deemed to extend
to any prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such default, misrepresentation, or breach of warranty or
covenant.
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13. If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws, such provision shall be fully severable, and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
14. The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. The Parties intend that each representation,
warranty, and covenant contained herein shall have independent
significance.
15. This Agreement may
be executed in multiple counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same
instrument. Facsimile signatures shall be given the same effect as
original signatures.
16. This
Agreement shall be construed in accordance with and governed by the internal law
of the State of Mississippi (without reference to its rules as to conflicts of
law).
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of Page Intentionally Left Blank]
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AGREED AND ACCEPTED on this
28th day
of December 2009:
XFONE,
INC.
By: /s/ Xxx
Xxxxxxxxx
Printed
Name: XXX
XXXXXXXXX
Title: President and
CEO
SELLERS
REPRESENTATIVES, on behalf
of
the Selling Shareholders of NTS Communications, Inc.
By: /s/ Xxxxx
Xxxxxxxx
Xxxxx Xxxxxxxx
/s/ Xxxxxx
Xxxxxx
Xxxxxx
Xxxxxx
/s/ Xxxxx
Xxxxxxxxx
Xxxxx
Xxxxxxxxx
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