Document:

SETTLEMENT AGREEMENT AND

Exhibit 10.1

 

SETTLEMENT AGREEMENT AND

FULL AND FINAL MUTUAL GENERAL RELEASE

 

 

Definitions

 

                                                For purposes of

this Settlement Agreement and Full and Final Mutual General Release:

 

                                                “Agreement”

refers to this Settlement Agreement and Full and Final Mutual General Release.

 

                                                “Affiliates”

refers to an entity’s past and present parents, subsidiaries and affiliates and

each of their respective past and present officers, directors, shareholders,

partners, agents, employees, attorneys and legal representatives, and each of

their respective permitted successors and assigns

 

                                                “ATSI

Delaware” refers to ATSI Communications, Inc., a Delaware

corporation.

 

                                                “ATSI

Entities” refers to ATSI Delaware and its Affiliates except for

GlobalSCAPE.

 

                                                “GlobalSCAPE”

refers to GlobalSCAPE, Inc.

 

                                                “Claims”

refers to and includes all claims, rights, obligations, demands, debts,

liabilities, controversies, and causes of action, of any and every character,

whether known or unknown, asserted or unasserted, liquidated or unliquidated,

accrued or unaccrued, mature or not yet mature, at law or in equity, whether in

contract, in tort, under state or federal statute or rule or otherwise, or

under any other theory, of any nature whatsoever, arising at any time from the

beginning of time through and including the Effective Date related to the

InterCompany Balance.

 

                                                “Effective

Date” shall mean June 11, 2002

 

                                                “InterCompany

Balance” means the balance of amounts and other obligations due

between the ATSI Entities and GlobalSCAPE as of the Effective Date in respect

of the Loans, GlobalSCAPE provided Services, ATSI Entity provided Services, and

any and all other matters.

 

                                                “Loans”

refers collectively to any and all amounts and obligations due under or in

respect of all of the following:

 

(i)                                     Note from ATSI

Delaware to GlobalSCAPE dated April 27, 2001 in the original principal amount

of $200,000:

 

1

 

(ii)                                  Security

Agreement between TeleSpan, Inc. and GlobalSCAPE, Inc. dated April 27, 2001

securing April 27, 2001 Note from ATSI Delaware;

 

(iii)                               Note from ATSI

Delaware dated November 15, 2001 in the original principal amount of $100,000;

 

(iv)                              Security

Agreement between TeleSpan, Inc. and GlobalSCAPE, Inc. dated November 15, 2001

securing November 15, 2001 Note from ATSI Delaware;

 

(v)                                 Note from ATSI

Delaware dated December 12, 2001 in the original principal amount of $40,000;

 

(vi)                              Security

Agreement between TeleSpan, Inc. and GlobalSCAPE, Inc. dated December 12, 2001

securing December 12, 2001 Note from ATSI Delaware;

 

(vii)                           Note from ATSI

Delaware dated February 15, 2002 in the original principal amount of $50,000;

 

(viii)                        Security

Agreement between TeleSpan, Inc. and GlobalSCAPE, Inc. dated February 15, 2002

securing February 15, 2002 Note from ATSI Delaware; and

 

(ix)                                cash transfer

from GlobalSCAPE to ATSI Delaware in the amount of $150,000 on May 23, 2002.

 

                                                “NTFC Release”

NTFC  Capital

Corporation’s release of GlobalSCAPE from that Loan and Security Agreement

between NTFC Capital Corporation, certain ATSI Entities and GlobalSCAPE dated

July 31, 1999 and that Promissory Note in the original principal amount of

$2,000,000.00 between NTFC Capital Corporation, certain ATSI Entities and

GlobalSCAPE dated August 26, 1999  in the form attached as Exhibit A

to this Agreement.

 

                                                “Services”

refers to any and all services of any kind provided by the ATSI Entities to

GlobalSCAPE or from GlobalSCAPE to the ATSI Entities, including, but not

limited to (i) organizational services and capitalization, (ii) payroll and

personnel administration services, (iii) 

the inclusion of GlobalSCAPE on an ATSI Entity tax return, (iv) the

inclusion of GlobalSCAPE on ATSI Entity insurance policies and other

arrangements, (iv)  investor relations

services, (iv) web consulting, (v) network consulting, (v) legal, accounting,

and financial services, (vii) providing surety on financial obligations; and

(vi) liquidity services, such as short term cash transfers.

 

                                                “Services

Agreement” refers to the Services Agreement in the form attached to

this Agreement as Exhibit B to be executed by ATSI Delaware and

GlobalSCAPE 

 

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contemporaneously with the execution of this

Agreement, which provides, in part, for prepaid services from the ATSI Entities

to GlobalSCAPE in the amount of $50,000.00.

 

                                                “Stock

Purchase Agreement” refers to that Stock Purchase Agreement between

Brown and Mann—GlobalSCAPE Joint Venture and ATSI Communications, Inc. to be

executed contemporaneously with this Agreement.

 

                                                The foregoing

terms have the foregoing meanings in this Agreement, whether or not

capitalized, and whether used in the singular or plural tense.

 

Recitals

 

Whereas, GlobalSCAPE

was formed as a wholly-owned subsidiary of an ATSI Entity in 1996; and

 

Whereas, the ATSI

Entities and GlobalSCAPE have performed various Services for each other since

GlobalSCAPE’s organization; and

 

Whereas, GlobalSCAPE

has made the Loans; and

 

Whereas, the ATSI

Entities and GlobalSCAPE have agreed on a definitive dollar balance for the

Intercompany Balance due from the ATSI Entities to GlobalSCAPE and wish to

settle that balance; and

 

Whereas, ATSI Delaware

and GlobalSCAPE wish to execute a written Services Agreement that will govern

the provision of Services between GlobalSCAPE and the ATSI Entities beginning

on the Effective Date and going forward; and

 

Whereas, the ATSI

Entities and GlobalSCAPE have agreed to cancel the InterCompany Balance in

consideration for ATSI Delaware obtaining the NTFC Release and each party’s

execution of this Agreement and the Services Agreement, and ATSI’s execution of

the Stock Purchase Agreement; and

 

Whereas, the parties

have agreed to fully and finally compromise and settle any and all Claims ever

existing between them;

 

                                                Therefore, as

material consideration and inducement to the execution of this Agreement, and

in consideration of the mutual promises set forth herein, the execution by each

party of the Services Agreement, the delivery of the NTFC Release, and ATSI’s

execution of the Stock Purchase Agreement, GlobalSCAPE and ATSI Delaware, on

its behalf and on behalf of each ATSI Entity, hereby contracts, covenant and

agree as follows:

 

3

 

Agreements and Releases

 

1.  InterCompany

Balance.  GlobalSCAPE

and each ATSI Entity agree that the dollar value of the InterCompany Balance as

of the Effective Date is $612,303.51 on the books and records of GlobalSCAPE as

of the Effective Date.  Upon delivery of

the NTFC Release, the execution of this Agreement and the Services Agreement,

ATSI’s execution of the Stock Purchase Agreement, and ATSI’s delivery of cash

to GlobalSCAPE in the amount of $200,000.00, the Intercompany Balance will be

cancelled and amounts due between the parties going forward will be only those

amounts arising under the Services Agreement and any other written agreement

executed by the parties after the Effective Date.  ATSI covenants and agrees to promptly resolve any past benefit

payments due related to the parties’ joint employee benefit plans.

 

2.  Release of

GlobalSCAPE by ATSI.  Contingent

upon delivery of the NTFC Release, the execution of this Agreement and the

Services Agreement, ATSI’s execution of the Stock Purchase Agreement, and

ATSI’s delivery of cash to GlobalSCAPE in the amount of $200,000.00, each ATSI

Entity hereby unconditionally and irrevocably releases, remises, acquits,

forever discharges and covenants not to sue GlobalSCAPE or its Affiliates for

any and all Claims.

 

3.  Release of ATSI by

GlobalSCAPE.  Contingent

upon delivery of the NTFC Release, the execution of this Agreement and the

Services Agreement, ATSI’s execution of the Stock Purchase Agreement, and

ATSI’s delivery of cash to GlobalSCAPE in the amount of $200,000.00,

GlobalSCAPE hereby unconditionally and irrevocably releases, remises, acquits,

forever discharges and covenants not to sue any of the ATSI Entities for any

and all Claims.

 

4.  Authority and

Ownership of Claims.  Each party

represents, covenants and warrants that it has the full authority and capacity

to make this Agreement and to grant the releases set forth herein, that it is

the sole owner of any and all Claims ever possessed by it against any other

party or its Affiliates, and that no portion of any Claims that it ever may

have possessed against the other or its Affiliates has been sold, assigned,

transferred, pledged, or hypothecated to any third party.

 

5.  Full and Final

Settlement.  The

parties understand and agree that the performances specified in this Agreement

are in full settlement, satisfaction and compensation for all Claims that they

may have against each other or their Affiliates and that they will not receive

any further sums, money or consideration therefore.

 

6.  Successors and

Assigns.  This Agreement shall be

binding upon and inure to the benefit of each of the parties hereto and their

respective successors and assigns.

 

7.  Amendment.  This Agreement may not be amended or

otherwise changed except by an agreement in writing signed by each of the

parties hereto.

 

4

 

8.  Severability.  If any provision of this Agreement is or may

be held by a court of competent jurisdiction to be invalid, void or

unenforceable, the remaining provisions shall nonetheless survive and continue

in full force and effect without being impaired or invalidated in any way.

 

9.  Counterparts.  This Agreement may be executed in several

counterparts, each of which shall be an original and each of which shall

constitute but one and the same instrument.

 

10.  Complete

Agreement.  The parties

each acknowledge that this Agreement constitutes the full, final and complete

settlement of the differences and supersedes all other written or oral

exchanges, arrangements, or negotiations between them concerning the subject

matter of this Agreement, and further acknowledge that there are no

representations, agreements, arrangements, or understandings, oral or written,

concerning the subject matter of this Agreement that are not fully expressed

herein.

 

11.  Performance.  This Agreement is entered into and

performable in Bexar County, Texas, U.S.A.

 

12.  Headings and

Construction.  Headings

in this Agreement are for the convenience of the parties and are not to be used

in construing the Agreement.  This

Agreement shall not be construed or interpreted against either party, either by

having drafted this Agreement or otherwise, but shall be construed and

interpreted as to give the fullest effect to the releases set forth herein.

 

13.  Each

party expressly represents and warrants to the other that he/it has carefully

read this Agreement, understand it contents, and signs this Agreement as

his/its own free act.

 

                In Witness

Whereof, the parties have caused this Agreement to be executed to be

effective on the later of the dates set forth below.

 

 

 

	

  GlobalSCAPE, Inc.

  
	

   

  
	

  By:

  	

  /s/ Tim Nicolaou

  
	

  Tim Nicolaou

  
	

  Chief Executive Officer

  
	

  Date:

  	

  6/11/02

  

 

 

5

 

	

  ATSI Entities

  
	

   

  
	

  By:

  	

  ATSI Communications, Inc., a Delaware corporation,

  
	

   

  	

   

  
	

  By:

  	

  /s/ Stephen M. Wagner

  	 

	

   

  	

  Stephen M. Wagner

  	 

	

   

  	

  President and Chief

  Operating Officer

  	 

	

   

  	

  Date:

  	

  June 11, 2202

  	 

				

 

 

Exhibit A                NTFC

Release

Exhibit B                Services

Agreement

 

6SERVICES AGREEMENT

Exhibit

10.2

 

SERVICES AGREEMENT

 

This Services Agreement

(this “Agreement”)

is made between GlobalSCAPE, Inc., a Delaware corporation (“GS)”

and ATSI Communications Inc., a Delaware corporation (“ATSI”), effective this 11 day

of June, 2002 (the “Effective Date”).

 

1.                                      Prepaid Services.  During the Initial Term of this Agreement

ATSI shall provide the following services for GS consistent with past

practices  (the “Prepaid Services”):

 

                                                a.  investor relations;

 

                                                b.  payroll and benefits administration;

 

c.  accounting support, including use of shared accounting platform;

 

d.  casualty and liability insurance procurement, including

solicitation, negotiation and administration, and premium payments;

 

e.  directors and officers insurance procurement, including solicitation,

negotiation, administration, and premium payments through March 11, 2003, and

beyond if cost beneficial;

 

f.  401(k) administration and contributions.

 

2.                                      Other Services.  From time to time at GS’ request, ATSI may,

but is not required to, perform services in addition to the Prepaid Services,

and from time to time at ATSI’s request GS may, but is not required to, perform

services for ATSI  (“Requested

Services”).  ATSI and GS will

establish written specifications, time frames for completion, compensation and

other issues for each item of Requested Services under this Agreement in the

form attached as Exhibit A and each such written specification shall

become an addendum to this Agreement.

 

3.                                      Fees and Expenses.   The parties agree that the value of the

Prepaid Services is $5,500 per month, but that GS shall owe ATSI no amounts as

fees in relation to the Prepaid Services for the Initial Term.  GS expenses paid by ATSI to third parties,

such as 401(k) contributions in respect of GS employees and GS’ portion of any

insurance premiums, shall be reimbursed by GS in the amount actually paid

without mark-up upon receipt of ATSI’s invoice.  Fees and expenses for Requested Services shall be as stated in

each addendum to this Agreement and shall be invoiced as provided in the

relevant addendum.  Fees and expenses

are overdue thirty days following the due date stated in the relevant

addendum.  Overdue amounts shall bear

interest at five percent (5%) per annum.

 

 

5.  Term and

Termination.

 

(a)                                  This initial term

of this Agreement begins on the Effective Date and ends on March 11, 2003 (the

“Initial

Term”).  The Agreement shall

automatically renew at the expiration of the Initial Term for successive thirty

(30) day terms until terminated by either party on ten days advance written

notice.

 

(b)                                 GS may

terminate this Agreement at any time in its sole discretion, provided, however,

that the Agreement will remain in effect for the remaining term of any written

addendum executed pursuant to this Agreement as provided in Section 2.  GS acknowledges that if it terminates the

Agreement prior to the expiration of the Initial Term other than for Default,

as defined below, no amounts shall be due GS in relation to Prepaid Services

not performed after the effective date of termination.  ATSI may terminate this Agreement at any

time in its sole discretion on ten (10) days’ advance notice, provided,

however, that if ATSI terminates the Agreement other than for Default prior to

the expiration of the Initial Term, it shall pay GS a lump sum of $5500.00

times the number of partial and full calendar months remaining until the

expiration of the Initial Term; and, provided, that the Agreement will remain

in effect for the remaining term of any written addendum executed pursuant to this

Agreement as provided in Section 2.

 

(c)                                  A party shall

be in “Default” if that party fails to perform its material obligations under

this Agreement and fails to cure the breach within fourteen (14) days of a

written notice describing the breach in reasonable detail, or (ii) that party

admits insolvency, makes an assignment for the benefit of its creditors, files

for bankruptcy or similar protection, is unable to pay debts as they become

due, has a trustee or receiver appointed over all or a substantial portion of

its assets, or enters into an agreement for the extension or readjustment of

all or substantially all of its obligations. 

Termination shall be effective as of the date stated in a written notice

delivered by the terminating party. 

Upon termination, each party shall return the other party’s Confidential

Information.

 

4.                                      Limitation of Damages.      NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY

INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE LOSS OR DAMAGE OF ANY

KIND, OR FOR DAMAGES THAT COULD HAVE BEEN AVOIDED BY THE USE OF REASONABLE

DILIGENCE, ARISING IN CONNECTION WITH THIS AGREEMENT.  The parties agree that the aggregate damages

of the parties in connection with any claims or causes of action arising under

or in connection with this Agreement will be limited as follows:

 

(a)                                  for ATSI’s

failure to perform the Prepaid Services: $50,000.00.

 

                                                (b)                                 All other

damages:  amounts due and unpaid

pursuant to this Agreement.

 

5.                                      Confidentiality.  The following information is “Confidential

Information”: (a) any information related to a party’s assets,

liabilities, financial results, business strategies, plans or operations, (b)

proprietary information, technology or know-how of either party; and (c) either

party’s customers, vendors, contractors, suppliers and personnel; but excluding

any information which is or becomes generally available to the public other

than through breach of this Agreement, or violation of law or other

agreement.  Each 

 

2

 

party agrees not to disclose the other’s

Confidential Information to any third party except to its agents and

representatives who need to know the information to represent or advise it with

respect to the subject matter of this Agreement, or to use the Confidential

Information for any purpose other than its performance of this Agreement;

provided, however, that a party will not be liable for disclosure of the other

party’s Confidential Information if it is required by law or regulation to be

disclosed, and the disclosing party gives advance written notice of the

disclosure to the other party at the earliest possible time and limits the

disclosure to fewest number of people practicable.  Each party agrees to use at least a reasonable degree of care to

protect the other party’s Confidential Information.

 

6.                                      Notices.   Notices under this Agreement must be in

writing and may be given (i) by hand deliver or (ii) by facsimile followed by a

copy delivered by 1st Class U.S. Mail to the following address, or

other address provided by three days’ advance notice given in accordance with

this section:

 

	

  ATSI:

  	

   

  	

  ATSI Communications, Inc.

  
	

   

  	

   

  	

  6000 Northwest Parkway,

  Suite 110

  
	

   

  	

   

  	

  San Antonio, Texas 78249

  
	

   

  	

   

  	

  (210) 547-1001 facsimile

  
	

   

  	

   

  	

  Attention:  Chief Executive Officer

  
	

   

  	

   

  	

   

  
	

  GS:

  	

   

  	

  GlobalSCAPE, Inc.

  
	

   

  	

   

  	

  6000 Northwest Parkway,

  Suite 101

  
	

   

  	

   

  	

  San Antonio, Texas  78249

  
	

   

  	

   

  	

  (210) 690-8824 facsimile

  
	

   

  	

   

  	

  Attention:  Chief Executive Officer

  

 

Notices will be deemed given, delivered and

effective as of the time of actual delivery if delivered by hand or the time

shown on the confirmation sheet generated by the sending facsimile machine.

 

7.                                      Miscellaneous.

 

(a)                                  This Agreement

constitutes the final and complete agreement of the parties with respect to its

subject matter, and supercedes any prior agreements, discussions or

understandings, written or oral.

 

(b)                                  This Agreement

may be modified only by a written document that refers specifically to this

Agreement and is signed by both parties.

 

(c)                                  A party’s

failure or delay in enforcing any provision of this Agreement will not be

deemed a waiver of that party’s rights with respect to that provision or any

other provision of this Agreement.  A

party’s waiver of any of its rights under this Agreement is not a waiver of any

of its other 

 

3

 

                                                rights with

respect to a prior, contemporaneous or future occurrence, whether similar in

nature or not.

 

(d)                                  This Agreement

may be executed in counterparts, which together will be deemed an original.

 

(e)                                  This Agreement

shall be binding upon and inure to the benefit of the successors and assigns of

the parties hereto.  Neither party may

assign this Agreement without the prior written consent of the other, which

shall not be unreasonably withheld.

 

(f)                                    If any

provision of this Agreement is determined by a court of competent jurisdiction

to be invalid or unenforceable, such determination shall not affect the

validity or enforceability of any other part or provision of this Agreement,

unless such invalidity shall have deprived a party of substantially all of the

consideration such party was to receive hereunder.

 

(g)                                 The terms of

this Agreement that by their nature are intended to survive the termination of

this Agreement (such as confidentiality, payment) will survive the termination

of this Agreement.

 

SIGNATURES APPEAR ON FOLLOWING

PAGE

 

4

 

                                                IN WITNESS

WHEREOF, the parties have executed this Agreement as of the date first written

above.

 

 

	

  ATSI COMMUNICATIONS, INC.

  	

  GLOBALSCAPE, INC.

  
	

   

  	

   

  
	

  By: 

  	

  /s/ Stephen M. Wagner

  	

   

  	

  By:

  	

  /s/ Tim Nicolaou

  	

   

  
	

   

  	

  Stephen M. Wagner

  	

   

  	

  Tim Nicolaou

  
	

   

  	

  President and

  	

   

  	

  Chief Executive Officer

  
	

   

  	

  Chief Operating Officer

  	

   

  
						

 

5

 

Exhibit A

Form of Addendum

 

 

Services to be performed under that Services Agreement

between GlobalSCAPE, Inc. and GlobalSCAPE, Inc. dated effective June 11, 2002.

 

 

Party Performing Services:

 

 

Services:

 

 

 

 

 

Completion Time:

 

 

 

Fees:

 

 

 

Expenses:

 

 

Due Date for Fees and Expenses:

 

 

 

 

	

  ATSI COMMUNICATIONS, INC.

  	

  GLOBALSCAPE, INC.

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  	

  Name:

  	

   

  	 

	

   

  	

  Title:

  	

   

  	

   

  	

  Title:

  	

   

  	 

								

 

6

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