ex10_1.htm


    
      

    

    Exhibit
10.1


    


    SETTLEMENT AGREEMENT AND
MUTUAL RELEASE

    


    


    This
Settlement Agreement and Mutual Release of All Claims (the “Agreement”) is made
and entered into this 26th day of February, 2010, by the following parties (the
“Parties”):

     

    The
“Releasors”: MedCom USA, Inc. (“MedCom”); Card Activation Technologies, Inc.
(“Card”); AND

     

    The
“Releasees”:  William P. Williams, Eva Williams, Wilcom, Inc., W.P.W.
Aircraft, LLC, Williams Family Trust, and American Nortel Communications,
Inc.

     

    RECITALS

    


    A.     MedCom
and Card filed a Complaint in the United States District Court, District of
Arizona, Cause No. 2:09-cv-00298, which sought damages, injunctive relief, and
other relief against certain Releasees (the "Complaint" or
"Lawsuit").  Later in 2009, with an interest in resolving any claims
between them outside of court, the parties to the Lawsuit agreed to enter into a
Tolling Agreement and to dismiss the Lawsuit without prejudice
..  Thereafter, the Tolling Agreement was executed, and, on August 25,
2009, the Lawsuit was dismissed without prejudice pursuant to
stipulation.

     

    B.     The
Parties to this Agreement desire to settle and discharge all claims which are or
might have been the subject of the Lawsuit, all claims related thereto, and any
other claims or disputes between them.

     

    C.     The
Parties acknowledge that this Agreement is without any acknowledgement of fault
by any party.  It is agreed that the resolution set forth in this
document reflects a disposition of disputed claims.  The Parties agree
that the promises made within this agreement, including the payment of any
amounts, will not constitute an admission of liability.

     

    


    AGREEMENT

    


    WHEREAS,
the Parties acknowledge the risks and expenses of further litigation and have
now reached an agreement for the settlement and mutual release of all such
claims on the Terms and Conditions described below, herein.

     

    NOW,
THEREFORE, in consideration of the mutual promises and covenants contained in
this Agreement, it is mutually agreed as follows:


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              1.

            	
              Mutual
      Release and Discharge.

            


    

    


    1.1.      In
consideration of the payments, covenants, consideration, and Terms and
Conditions set forth herein this Agreement, the sufficiency of which is hereby
acknowledged, Releasors and each of them, for themselves and their successors
and assigns, and any and all others claiming through them or on their behalf,
hereby completely release, acquit and forever discharge Releasees and each of
them of and from any and all claims, demands, obligations, actions, causes of
action, rights, damages, costs, losses of services, expenses and compensation of
any nature whatsoever, whether based in tort, contract, or other theories of
recovery, and whether for compensatory or punitive damages or for declaratory or
injunctive relief, whether known or unknown, past or present or suspected or
unsuspected, which were raised or might have been raised in connection with the
Litigation or in any way relate to or arise out of the facts or circumstances
alleged within the pleadings of the litigation, or which relate to or arise out
of the corporate operations and governance of MedCom and Card.  This
Agreement shall be fully binding and a complete settlement between Releasors and
Releasees of all claims by Releasors.

     

    1.2.      In
consideration of the payments, covenants, consideration, and Terms and
Conditions set forth herein this Agreement, the sufficiency of which is hereby
acknowledged, Releasees and each of them, for themselves and their successors
and assigns, and any and all others claiming through them or on their behalf,
hereby completely release, acquit and forever discharge Releasors and each of
them of and from any and all claims, demands, obligations, actions, causes of
action, rights, damages, costs, losses of services, expenses and compensation of
any nature whatsoever, whether based in tort, contract, or other theories of
recovery, and whether for compensatory or punitive damages or for declaratory or
injunctive relief, whether known or unknown, past or present or suspected or
unsuspected, including, but not limited to, any and all claims which were raised
or might have been raised in connection with the Litigation or in any way relate
to or arise out of the facts or circumstances alleged within the pleadings of
the Litigation, or which relate to or arise out of the corporate operations
and/or governance of MedCom and/or Card, or arise out of or relate to William
Williams' employment with MedCom or Card, or which arise out of or relate to any
debts, contracts, obligations, business dealings or relationships between MedCom
and/or Card on the one hand and Releasees or any of them on the other
hand.  This Agreement shall be fully binding and a complete settlement
between Releasees and Releasors of all claims by Releasees.

     

    
      	
               
      

            	
              2.

            	
              Terms
      and Conditions.

            


    

    


    2.1.      Return of Shares of MedCom
and Card by Releasees.  Within three(3) days of the execution
of this Agreement by all Parties, Releasees will transfer all shares of Card and
MedCom owned or controlled, directly or indirectly, by one or more of them to
MedCom or Card.  With respect to shares of MedCom and Card owned by
American Nortel Communications, Inc. ("Nortel"), which is controlled by Releasee
William P. Williams, Releasees will take all steps necessary to transfer MedCom
and Card shares owned by Nortel to MedCom or Card in an amount equal to the
cumulative percentage of outstanding shares of Nortel owned by Releasees other
than Nortel multiplied by the total number of MedCom and Card shares owned by
Nortel.  For example, if Releasees other than Nortel, own a combined
total of 75 percent of the outstanding shares of Nortel, Releasees will cause
the transfer to MedCom or 75 percent of the MedCom shares owned by Nortel and
will cause the transfer to Card of 75 percent of the Card shares owned by
Nortel.  Upon request of MedCom or Card, Releasees will provide such
information as is necessary to evidence their percentage ownership of Nortel and
Nortel's ownership of shares of MedCom and Card.  With respect to all
shares to be transferred pursuant to this Agreement, MedCom shares will be
transferred to MedCom and Card shares will be transferred to
Card.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    2.2.      Cooperation by William P.
Williams.  William P. Williams will cooperate with MedCom and
Card, to the extent reasonable, in providing documents and information
concerning MedCom and Card that are requested by MedCom or Card and by providing
other reasonable services requested by the Board of Directors or President of
MedCom or Card..

    


    2.3.      Non-Solicitation
Agreement.  Releasees hereby enter into a non-solicitation
agreement as follows:

    


    2.3.1.    Non-Solicitation
of Employees:  During the “Restricted Term” (as defined herein)
Releasees, and each of them, will not, either directly or indirectly, solicit
for employment, hire, or cause or assist others to solicit for employment or
hire any person who, as of the date of the execution of this Agreement was
employed by MedCom and/or Card.

    


    2.3.2.    Non-Solicitation
of Customers:  During the “Restricted Term” (as defined herein) each
Releasee will not, either directly or indirectly, have any contact with any
customer of MedCom or Card for the purpose of providing services (including, but
not limited to, calling upon, meeting with, or communicating with the customer;
providing any information, advice, support or knowledge regarding the customer;
or providing “Confidential Information” (as defined herein) for himself/herself,
or as an employee, agent, independent contractor, or in any other business
relationship.  The term “Customer” is understood to be defined broadly
to include (among others and without limitation) any individual, entity, or
association who currently pays, has paid, or is under a promise, obligation,
agreement, or contract to pay MedCom and/or Card for products, programs, or
services.

    


    2.3.3.    “Confidential
Information” means all information (whether acquired prior or subsequent to the
date hereof) identified as proprietary, business, confidential, or secret, or
which, from the circumstances, in good faith and good conscience, ought to be
treated as proprietary, confidential, or secret including, but not limited to,
information relating to research; product plans; products; services; software;
developments; inventions; processes; formulas; technology; designs; drawings;
engineering; hardware configuration information; marketing, finances;
advertising, pricing information and strategies; market studies; staffing and
pay information and policies, including bonus and incentive pay structures;
franchise or distribution agreements and arrangements; price lists; computer
programs and software; customer lists and customers; and any other information
concerning MedCom's or Card's business or operations or any of its customers,
employees, shareholders, investors and business associates.


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    2.3.4.    “Restricted
Period.  The Restricted Period for purposes of this provision shall be
one (1) year from the date of the execution of this Agreement.

    


    2.4.      Representations and
Warranties by Releasees.  Releasees represent and warrant as
follows:

    


    Releasees
own or control shares of MedCom and Card in the following totals, which will be
transferred to MedCom or Card as stated above:

    


    WilCom,
Inc. owns 3,018,333 shares of MedCom and 7,233,333 shares of Card.

    


    Williams
Family Trust owns 2,586,500 shares of  MedCom and 2,586,500 shares of
Card.

    


    William
P. Williams owns 50,000 shares of MedCom and 10,000 shares of Card.

    


    Eva
Williams owns 200,000 shares of MedCom and 200,000 shares of Card.

    


    Nortel
owns 20,801,169 shares of MedCom and 20,172,044 shares of
Card.  Releasees other than Nortel own a cumulative total of 70
percent of Nortel's outstanding shares, and thus Releasees will cause the
transfer of 70 percent of the shares of MedCom owned by Nortel (14,560,818
shares) and 70 percent of the shares of Card owned by Nortel (14,120,431 shares)
to MedCom or Card.

    


    
      	
               
      

            	
              3.

            	
              Additional Representations,
      Warranties, and Conditions.

            


    

    


    3.1.      General
Release.  The parties hereby acknowledge and agree that the
Releases set forth above are general releases and expressly waive and assume the
risk of any and all claims which exist as of this date, but of which the Parties
do not know or suspect to exist, whether through ignorance, oversight, error,
negligence, gross negligence or otherwise, and which, if known, would materially
affect any Party’s decision to enter into this Agreement, except as provided in
Section 2.6 above.

    


    3.2.      Duty of
Cooperation.  Each Party agrees to cooperate fully and to
execute and/or authorize its counsel to execute all such further documents as
shall be necessary or helpful to carry out the provisions of this Agreement, and
to take all additional actions which may be necessary or appropriate to give
full force and effect to the terms and intent of this Agreement, including
(among others and without limitation) the filing, submission, and/or delivery of
documents to any court, governing body or bank.


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    3.3.      Entire Agreement and
Successors in Interest.  This Agreement contains the entire,
single, integrated Agreement between Releasors and Releasees with regard to the
matters set forth herein and shall be binding upon and inure to the benefit of
the executors, administrators, affiliates, representatives, heirs, successors,
and assigns of each.  The parties to this Agreement acknowledge and
agree that no promise, inducement, agreement, or other representation has been
offered, made, or relied upon except as set forth in this
Agreement.  This Agreement supersedes and prior agreements, written or
oral, regarding the subject hereof.

    


    3.4.      Representation of
Comprehension of Document.  By entering into this Agreement,
the Parties represent that they have relied upon the legal advice of their
attorneys, who are the attorneys of their own choice, and that the terms of this
Agreement have been completely read by them and explained to them by their
attorneys, and that those terms are fully understood and voluntarily accepted by
all Parties.

    


    3.5.      Governing
Law.  This Agreement shall be construed, governed, and
interpreted in accordance with and pursuant to the laws of the State of
Arizona.

    


    3.6.      Effectiveness.  This
Agreement shall become effective following its execution by the
Parties.  This Agreement may be executed in counterparts and the
executed signature pages may be exchanged by facsimile or
electronically.  Each counterpart shall be deemed an original and all
taken together shall constitute one and the same instrument.  If
executed in counterparts, the counterpart signature pages may all be attached to
one document, which shall constitute the original signed document.

    


    3.7.     
Authority to
Execute.  The Parties hereby warrant that there are no other
persons or entities from whom releases should be obtained for any of the rights,
claims, liens, demands, and/or causes of action that they are releasing
herein.  Each Party represents and warrants that it owns all rights,
title, and interest to any and all claims, causes of action, demands, and
indebtedness under this Agreement.

    


    3.8.      Construction.  Nothing
in this Agreement is intended to be, or should be construed as, an admission by
any of the Parties of liability, error, omissions, wrongdoing, misconduct,
breach of duty, or violation of law.

    


    3.9.      Drafting
Party.  It is the intent of the Parties hereto that no part of
this Agreement be construed for or against any of the Parties and that any
statute or rule of construction stating or inferring that ambiguities are to be
resolved against the drafting party(ies) shall not be employed in the
interpretation of this Agreement.  The Parties further represent and
state that each Party and/or its counsel participated in the drafting of this
Agreement and has been given a full and fair opportunity to review the Agreement
before execution.


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    3.10.    Capacity to Execute
Agreement. Each Party hereby
represents and warrants, by and through its authorized representative,
undersigned, that it has the legal capacity and right and authority to enter
into this Agreement and to receive the settlement amount specified above; that
no other person or entity has or has had any interest in the claims, rights,
causes of action, and/or demands released herein; and that it has not sold,
assigned, transferred, conveyed, or otherwise disposed of any of the claims,
rights, causes of actions, and/or demands referred to and/or released herein
this Agreement.  Each Party understands and agrees that this Agreement
shall be binding upon themselves or itself and their past, present, and future
predecessors, successors, subsidiaries, and affiliated companies,
representatives, agents, attorneys, agencies, departments, entities, and/or
assignees.

    


    3.11.    Enforceability. If any provision of this
Agreement is found to be unenforceable and/or is stricken, the remaining
provisions hereof shall, nevertheless, be carried into effect.

    


    3.12.    Rule
408.  If this Agreement does not become effective for any
reason, it shall be deemed negotiation for settlement purposes only and will not
be admissible in evidence or usable for any purpose whatsoever.

    


    3.13.    Warranty.  Each
party hereby warrants and represents that he or it has not transferred,
conveyed, pledged, assigned or made any other disposition of the claimed rights,
interest, demands, actions, or causes of action, obligations, or any other
matter covered by this Agreement.

    


    3.14.    Defense to Future
Suits.  This Agreement may be pleaded as a full and complete
defense to any action, suit or other proceeding which may be instituted,
prosecuted or attempted for, upon, or in respect of any of the claims released
hereby.  The parties agree that any such proceeding would cause
irreparable injury to the party against whom it is brought and that any court of
competent jurisdiction may enter an injunction restraining prosecution
thereof.

     

    3.15.    Amendments.  Any
amendment to this Agreement shall be void unless made in writing and signed by
all parties or their representatives.

     

    3.16.    Standstill.  Each
of the Releasees jointly and severally agrees that during the period commencing
on the date hereof and ending on February 28, 2020, without the prior written
consent of the Board of MedCom or Card, respectively, specifically expressed in
a written resolution adopted by a majority vote of the entire Board of MedCom or
Card, as applicable, he, she or it will not, and will cause each of his, her or
its Affiliates, Associates, officers, agents and other Persons acting on his,
her or its behalf not to:


    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     

    (i)
engage, or in any way participate, directly or indirectly, in any “solicitation”
(as such term is defined in Rule 14a-1(l) promulgated by the SEC under the
Exchange Act) of proxies or consents (whether or not relating to the election or
removal of directors) relating to MedCom or Card; seek to advise, encourage or
influence any Person with respect to the voting of any Voting Securities of
MedCom or Card; initiate, propose or otherwise “solicit” (as such term is
defined in Rule 14a-1(l) promulgated by the SEC under the Exchange Act)
stockholders of MedCom or Card for the approval of stockholder proposals whether
made pursuant to Rule 14a-8 or Rule 14a-4 under the Exchange Act or otherwise;
induce or attempt to induce any other Person to initiate any such stockholder
proposal; or otherwise communicate with the  stockholders of MedCom or
Card or others pursuant to Rule 14a-1(l)(2)(iv) under the Exchange
Act;

     

    (ii)
form, join or in any way participate in any “group” (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to any Voting Securities of
MedCom or Card;

     

    (iii)
deposit any Voting Securities of MedCom or Card in any voting trust or subject
any Voting Securities of MedCom or Card to any arrangement or agreement with
respect to the voting of any Voting Securities of MedCom or Card, except as
expressly set forth in this Agreement;

     

    (iv)
otherwise act, alone or in concert with others, to control or seek to control or
influence or seek to influence the management, the Board or policies of MedCom
or Card;

     

    (v) make
any proposal (including publicly disclose or discuss any proposal) or enter into
any discussion regarding any of the foregoing, or make any proposal, statement
or inquiry, or disclose any intention, plan or arrangement (whether written or
oral) inconsistent with the foregoing, or make or disclose any request to amend,
waive or terminate any provision of this Agreement;

     

    (vi) have
any discussions or communications, or enter into any arrangements, understanding
or agreements (whether written or oral) with, or advise, finance, assist or
encourage, any other Person in connection with any of the foregoing, or make any
investment in or enter into any arrangement with, any other Person that engages,
or offers or proposes to engage, in any of the foregoing; or

     

    (vii)
take or cause or induce others to take any action inconsistent with any of the
foregoing.

     

    3.17     Certain
Definitions.  As used in Section 3.16 of this Agreement, (a)
the term “Person” shall mean any individual, partnership, corporation, group,
syndicate, trust, government or agency, or any other organization, entity or
enterprise; (b) the terms “Affiliates” and “Associates” shall have the meanings
set forth in Rule 12b-2 under the Exchange Act and shall include Persons who
become Affiliates or Associates of any Person subsequent to the date hereof; and
(c) the term “Voting Securities” shall mean any securities of MedCom or Card
entitled, or which may be entitled, to vote (whether or not entitled to vote
generally in the election of directors), or securities convertible into or
exercisable or exchangeable for such securities, whether or not subject to
passage of time or other contingencies.


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    WITNESS OUR HANDS on this 26th
day of February, 2010.

    


    


    
      	 
      	
                /s/
      William P Williams

            
	 
      	
              William
      P. Williams

            


    

    


    


    
      	
              STATE
      OF ARIZONA

            	
              )

            


    

    
      	
               
      

            	
              )
      ss.

            


    

    
      	
              County
      of Maricopa

            	
              )

            


    

    


    


    On this
____ day of _______________, 20010, personally appeared WILLIAM P. WILLIAMS known to
me to be the person whose name is subscribed on the foregoing Agreement, and
acknowledged to me that he read and understood the same and he executed the same
for the purpose and consideration and in the capacities therein
expressed.

     

    
      	 
      	 
      
	 
      	
              Notary
      Public

            


    

    


    My
Commission Expires:

    ____________________


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    WITNESS OUR HANDS on this 26th
day of February, 2010.

    


    


    
      	 
      	
                /s/
      Eva Williams

            
	 
      	
              Eva
      Williams

            


    

    


    


    
      	
              STATE
      OF _______

            	
              )

            


    

    
      	
               
      

            	
              )
      ss.

            


    

    
      	
              County
      of ________

            	
              )

            


    

    


    


    On this
____ day of _______________, 2010, personally appeared EVA WILLIAMS known to me to be
the person whose name is subscribed on the foregoing Agreement, and acknowledged
to me that he read and understood the same and he executed the same for the
purpose and consideration and in the capacities therein expressed.

     

    
      	 
      	 
      
	 
      	
              Notary
      Public

            


    

    


    My
Commission Expires:

    ____________________


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    WITNESS OUR HANDS on this 26th
day of February, 2010.

    


    


    
      	 
      	
              Wilcom,
      Inc.,

            
	 
      	 
      
	 
      	 
      
	 
      	
                /s/
      William P Williams

            
	 
      	
              By
      William P. Williams,

            
	 
      	 
      
	 
      	
              {insert
      title}

            


    

    


    


    
      	
              STATE
      OF ARIZONA

            	
              )

            


    

    
      	
               
      

            	
              )
      ss.

            


    

    
      	
              County
      of Maricopa

            	
              )

            


    

    


    


    On this
____ day of _______________, 2010, personally appeared WILLIAM P. WILLIAMS known to
me to be the person whose name is subscribed on the foregoing Agreement, and
acknowledged to me that he read and understood the same and he executed the same
for the purpose and consideration and in the capacities therein
expressed.

     

    
      	 
      	 
      
	 
      	
              Notary
      Public

            


    

    


    My
Commission Expires:

    ____________________


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    WITNESS OUR HANDS on this 26th
day of February, 2010.

    


    


    
      	 
      	
              W.P.W.
      Aircraft, LLC,

            
	 
      	 
      
	 
      	 
      
	 
      	
                /s/
      William P Williams

            
	 
      	
              By
      William P. Williams,

            
	 
      	 
      
	 
      	
              {insert
      title}

            


    

    


    


    
      	
              STATE
      OF ARIZONA

            	
              )

            


    

    
      	
               
      

            	
              )
      ss.

            


    

    
      	
              County
      of Maricopa

            	
              )

            


    

    


    


    On this
____ day of _______________, 2010, personally appeared WILLIAM P. WILLIAMS known to
me to be the person whose name is subscribed on the foregoing Agreement, and
acknowledged to me that he read and understood the same and he executed the same
for the purpose and consideration and in the capacities therein
expressed.

     

    
      	 
      	 
      
	 
      	
              Notary
      Public

            


    

    


    My
Commission Expires:

    ____________________


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    WITNESS OUR HANDS on this 26th
day of February, 2010.

    


    


    
      	 
      	
              American
      Nortel Communications, Inc.,

            
	 
      	 
      
	 
      	 
      
	 
      	
                /s/
      William P Williams

            
	 
      	
              By
      William P. Williams,

            
	 
      	 
      
	 
      	
              {insert
      title}

            


    

    


    


    
      	
              STATE
      OF ARIZONA

            	
              )

            


    

    
      	
               
      

            	
              )
      ss.

            


    

    
      	
              County
      of Maricopa

            	
              )

            


    

    


    


    On this
____ day of _______________, 2010, personally appeared WILLIAM P. WILLIAMS known to
me to be the person whose name is subscribed on the foregoing Agreement, and
acknowledged to me that he read and understood the same and he executed the same
for the purpose and consideration and in the capacities therein
expressed.

     

    
      	 
      	 
      
	 
      	
              Notary
      Public

            


    

    


    My
Commission Expires:

    ____________________


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    WITNESS OUR HANDS on this 26th
day ofFebruary, 2010.

    


    


    
      	 
      	
              Williams
      Family Trust,

            
	 
      	 
      
	 
      	 
      
	 
      	
                /s/
      William P Williams

            
	 
      	
              By
      William P. Williams,

            
	 
      	 
      
	 
      	
              Trustee

            


    

    


    


    
      	
              STATE
      OF ARIZONA

            	
              )

            


    

    
      	
               
      

            	
              )
      ss.

            


    

    
      	
              County
      of Maricopa

            	
              )

            


    

    


    


    On this
____ day of _______________, 2010, personally appeared WILLIAM P. WILLIAMS known to
me to be the person whose name is subscribed on the foregoing Agreement, and
acknowledged to me that he read and understood the same and he executed the same
for the purpose and consideration and in the capacities therein
expressed.

     

    
      	 
      	 
      
	 
      	
              Notary
      Public

            


    

    


    My
Commission Expires:

    ____________________


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    WITNESS OUR HANDS on this 26th
day of February, 2010.

    


    


    
      	 
      	
              MedCom
      USA, Inc. &

            
	 
      	
              Card
      Activation Technologies, Inc.

            
	 
      	 
      
	 
      	
                /s/
      Robert Kite

            
	 
      	
              By
      Robert Kite, Sole Director and Chairman of the Board of Directors of
      MedCom USA, Inc. & Sole Director and Chairman of the Board of Card
      Activation Technologies, Inc.

            


    

    


    


    
      	
              STATE
      OF ARIZONA

            	
              )

            


    

    
      	
               
      

            	
              )
      ss.

            


    

    
      	
              County
      of Maricopa

            	
              )

            


    

    


    


    On this
____ day of _______________, 2010, personally appeared ROBERT KITE known to me to be
the person whose name is subscribed on the foregoing Agreement, and acknowledged
to me that he read and understood the same and he executed the same for the
purpose and consideration and in the capacities therein expressed.

     

    
      	 
      	 
      
	 
      	
              Notary
      Public

            


    

    


    My
Commission Expires:

    ____________________

    


     

    14