SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 16, 1999
Consolidated Technology Group Ltd.
(Exact name of Registrant as Specified in its Charter)
New York 0-4186 13-1948169
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
160 Broadway, New York, New York 10038
(Address of Principal Executive Office)
Registrant's telephone number, including area code: (212) 233-4500.
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Item 5. Other Events.
On February 16, 1999, Consolidated Technology Group Ltd. ("COTG")
consummated a settlement agreement dated as of January 7, 1999, as amended (the
"Settlement Agreement"), by and between COTG and Lewis S. Schiller, the former
Chief Executive Officer and Chairman of the Board of COTG. The Settlement
Agreement provided for, among other things, payment of the sum of $350,000 to
and on behalf of Mr. Schiller in settlement of certain claims and disputes
between Mr. Schiller and COTG, as well as the termination of a consulting
agreement between COTG and Mr. Schiller.
On February 25, 1999, the Registrant and its wholly-owned subsidiary,
SIS Capital Corp. ("SISC") entered into an agreement with Trans Global Services,
Inc. ("Trans Global"), pursuant to which SISC is to transfer to Trans Global
1,150,000 shares (the "Transferred Shares") of the Trans Global common stock
which are owned by SISC in satisfaction of (i) the Registrant's obligations to
pay the redemption price of $2,100,000 payable with respect to its Series G 2%
Cumulative Redeemable Preferred Stock owned by Trans Global together with
accrued dividends of approximately $140,000 and (ii) the Registrant's obligation
to pay Trans Global $325,952 (the "Consolidated Payable') in respect of advances
made by Trans Global to certain of the Registrant's subsidiaries. The agreement
also gives the Registrant the right to retain the Transferred Shares if it pays
Trans Global the redemption price of $2,100,000 together with the accrued
dividends and the Consolidated Payable by April 9, 1999. The Transferred Shares
and the Series G Preferred Stock will be held in escrow pending the election by
the Registrant to make such payment.
SISC is presently Trans Global's largest stockholder, owning 1,529,994
shares of Trans Global's common stock, or approximately 40.1% of Trans Global's
common stock. If the Transferred Shares are transferred to Trans Global, SISC
will own 379,994 shares, or approximately 14.2% of Trans Global's common stock,
and SISC will have certain registration rights with respect to such shares. If
the Transferred Shares are transferred to Trans Global, the financial statements
of Trans Global will no longer be consolidated with those of the Registrant.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Agreement dated February 25, 1999, among Trans Global
Services, Inc., the Registrant, and SIS Capital Corp.
99.2 Agreement made as of January 7, 1999 by and between
Consolidated Technology Group Ltd. and Lewis S. Schiller.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONSOLIDATED TECHNOLOGY GROUP LTD.
By: /s/ Seymour Richter
--------------------------
Seymour Richter, President
Date: February 26, 1999
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Exhibit 99.1
AGREEMENT
AGREEMENT dated this 25th day of February, 1999, by and among Trans Global
Services, Inc., a Delaware corporation with offices at 1393 Veterans Memorial
Highway, Hauppauge, New York 11788 ("Trans Global"), Consolidated Technology
Group Ltd., a New York corporation with offices at 160 Broadway, New York, New
York 10038 ("Consolidated"), and SIS Capital Corp., a Delaware corporation with
offices at 160 Broadway, New York, New York 10038 ("SISC").
W I T N E S S E T H:
WHEREAS, Trans Global is the sole record and beneficial owner of 1,000 shares of
the Series G 2% Cumulative Redeemable Preferred Stock, par value $1.00 per share
("Series G Preferred Stock"), of Consolidated; and WHEREAS, pursuant to
Consolidated's certificate of incorporation, Trans Global, as the sole holder of
the shares of Series G Preferred Stock, has the right to require Consolidated to
redeem the shares of Series G Preferred Stock owned by Trans Global for a
redemption price of $2,100 per share, or an aggregate of $2,100,000 (the
"Redemption Price"); and
WHEREAS, the Series G Preferred Stock provides for the payment by Consolidated
of cash dividends thereon (the "Accrued Dividends"), which dividends amounted to
$140,000 at January 31, 1999; and
WHEREAS, as of the date of this Agreement, Consolidated is indebted to Trans
Global in the aggregate amount of $325,952, including indebtedness arising from
advances made by Trans Global to subsidiaries of Consolidated at the request of
Consolidated (the "COTG Payable"), but excluding any obligation Consolidated has
with respect to its guarantee of certain obligations of Consolidated's
majority-owned subsidiary, Arc Networks, Inc., a Delaware corporation ("Arc"),
to Trans Global; and
WHEREAS, SISC is a wholly-owned subsidiary of Consolidated; and
WHEREAS, SISC owns an aggregate of 1,529,994 shares (the "SISC Shares") of Trans
Global's common stock, par value $.01 per share ("TGSI Common Stock"); and
WHEREAS, pursuant to Consolidated's guarantee to Trans Global dated September
18, 1998 (the "Arc Guarantee"), Consolidated has guaranteed Arc's 10%
installment promissory note due August 31, 2003 in the principal amount of
$1,216,673 (the "Arc Note"), which is payable to Trans Global; and
WHEREAS, it is in the best interest of Trans Global, Consolidated and SISC to
provide, inter alia, (a) for the satisfaction of all of Consolidated's
obligations to Trans Global with respect to the Series G Preferred Stock and the
COTG Payable by the transfer by SISC to Trans Global of certain of the shares of
TGSI Common Stock owned by SISC, (b) for the release of Consolidated's
obligations pursuant to the Arc Guarantee under certain conditions, and (c) for
the restatement or confirmation of other matters involving Trans Global and
Consolidated, all on and subject to the terms and conditions set forth in this
Agreement;
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Exhibit 99.1
WHEREFORE, the parties do hereby agree as follows.
() Consolidated and SISC agree that, in consideration of the transfer by Trans
Global to Consolidated of the Series G Preferred Stock for cancellation and in
full satisfaction of all rights of Trans Global and all obligations of
Consolidated under or otherwise arising in connection with the Series G
Preferred Stock, including all of Consolidated's obligations for the payment of
the Redemption Price and the Accrued Dividends thereon and the cancellation and
full satisfaction of the COTG Payable, SISC will transfer, and COTG will cause
SISC to transfer, to Trans Global on and in the manner hereinafter provided,
1,150,000 shares of the SISC Shares (the "Transferred Shares").
() Trans Global agrees that, in consideration of either (i) the transfer by SISC
of the Transferred Shares to Trans Global as provided in this Agreement, on and
as of the Closing Date, as hereinafter defined, or (ii) the payment by
Consolidated of the Redemption Payment as defined in and paid pursuant to
Paragraph 2 of this Agreement, Trans Global unconditionally waives and
terminates any right it has or may have, and unconditionally releases
Consolidated and SISC from any obligations they have or may have with respect
to, (x) the Series G Preferred Stock, including, without limitation, all rights
and obligations with respect to the Redemption Price and Accrued Dividends, and
(y) the COTG Payable, in both such instances regardless of whether the Accrued
Dividends or the indebtedness underlying the COTG Payable accrued or arose prior
to or after the date of this Agreement.
() The certificates for the Transferred Shares and the Series G Preferred Stock
shall be delivered by SISC and Trans Global, respectively, to the Escrow Agent,
as hereinafter defined, to be held by the Escrow Agent as hereinafter provided,
and, unless the Redemption Payment is made as provided in Paragraph 2 of this
Agreement, the Transferred Shares shall be delivered by the Escrow Agent to
Trans Global, and the Series G Preferred Stock shall be delivered by the Escrow
Agent to SISC.
() The transfer of the Transferred Shares to Trans Global in satisfaction of the
obligations of Consolidated to Trans Global as set forth in Paragraphs 1(a) and
(b) of this Agreement is referred to in this Agreement as the "Exchange."
Notwithstanding the provisions of Paragraph 1 of this Agreement, Consolidated
shall have the right, but not the obligation, in its sole discretion, to pay to
Trans Global, at or prior to 5:30 P.M., Eastern Standard Time on April 9, 1999
(the "Transfer Date"), by wire transfer, an amount equal to the sum of (a) the
$2,100,000 Redemption Price, (b) the Accrued Dividends to the date of such
payment and (c) the COTG Payable, in which event the Transferred Shares shall be
delivered to SISC by the Escrow Agent. The payment pursuant to this Paragraph 2
is referred to in this Agreement as the "Redemption Payment."
The date on which the Escrow Agent delivers the certificate for the Transferred
Shares to either Trans Global or to SISC and the certificate for the Series G
Preferred Stock to Consolidated pursuant to Paragraph 1 or 2 of this Agreement
is referred to in this Agreement as the "Closing Date." The parties to this
Agreement shall instruct the Escrow Agent as to the delivery of the Transferred
Shares and the Series G Preferred Stock as provided in this Agreement.
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Exhibit 99.1
In order to implement the transfers contemplated by this Agreement,
contemporaneously with the execution of this Agreement:
() Trans Global, Consolidated and SISC will enter into an escrow agreement (the
"Escrow Agreement") with Esanu Katsky Korins & Siger, LLP, as escrow agent (the
"Escrow Agent"), in substantially the form of Exhibit A to this Agreement.
() Contemporaneously with the execution of this Agreement:
() SISC shall deliver to the Escrow Agent a certificate for the Transferred
Shares accompanied by a stock power duly executed by SISC with signature
medallion guaranteed.
() Trans Global shall deliver to the Escrow Agent the stock certificate for the
Series G Preferred Stock owned by it.
() Consolidated and SISC will deliver to Trans Global certified copies of
resolutions of their respective boards of directors approving the execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement, and Trans Global will deliver to Consolidated a certified
copy of resolutions of its board of directors approving the execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement.
() On the first business day following the Transfer Date or, if the Redemption
Payment shall have been made on or prior to the Transfer Date, the first
business day following the date that the Redemption Payment shall have been
made:
() If the Redemption Payment shall not have been made by Consolidated on or
prior to the Transfer Date, the parties shall instruct the Escrow Agent in
writing to deliver the Transferred Shares, with stock power attached, to Trans
Global.
() If the Redemption Payment shall have been made by Consolidated on or prior to
the Transfer Date, the parties shall instruct the Escrow Agent in writing to
return the Transferred Shares, with stock power attached, to SISC.
() Regardless of whether the Redemption Payment shall have been made, the
certificate for the Series G Preferred Stock shall be transferred to COTG at the
same time as the Transferred Shares are delivered either to Trans Global or SISC
and the parties shall so instruct the Escrow Agent in writing; provided,
however, that if, for any reason, the Transferred Shares are not delivered
either to Trans Global pursuant to Paragraph 5(a)(i) of this Agreement or to
SISC pursuant to Paragraph 5(a(ii) of this Agreement, no delivery of the Series
G Preferred Stock shall be made until such date as the Transferred Shares are
delivered to either Trans Global or SISC, and no delivery of the Transferred
Shares shall be made until such date as the Series G Preferred Stock is
delivered to Consolidated, and no party shall issue contrary instructions to the
Escrow Agent with respect to the foregoing matters.
Consolidated and SISC jointly and severally represent and warrant to Trans
Global that:
() Each of Consolidated and SISC is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation.
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Exhibit 99.1
() The Transferred Shares are, and on the Closing Date will be, owned by SISC,
subject to no Claims, as hereinafter defined. "Claims" shall mean any security
interests, liens, pledges, claims, charges, escrows, encumbrances, options,
rights of first refusal, interests of third parties, mortgages, indentures or
other agreements, arrangements, contracts, commitments, understandings or
obligations, whether written or oral, whether or not relating in any way to
credit or the borrowing of money, and whether or not voluntarily incurred except
to the extent that any of the foregoing may be created by this Agreement.
() Consolidated and SISC have full power and authority to enter into this
Agreement and to carry out the transactions provided for in this Agreement, and
this Agreement constitutes, and the Escrow Agreement, when executed and
delivered by Consolidated and SISC, will constitute, the legal, valid and
binding obligations of Consolidated and SISC, enforceable in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, or similar laws from time to time in effect
which affect creditors' rights generally, and by legal and equitable limitations
on the enforceability of specific remedies, and that no representation is made
as to the enforceability of the indemnification provisions contained in
Paragraph 11 of this Agreement. All necessary corporate action required to be
taken by Consolidated and SISC for the consummation of the transactions
contemplated by this Agreement has been duly and validly taken.
() No consent, approval or agreement of any person, party, court, governmental
authority or entity is required to be obtained by Consolidated or SISC in
connection with the execution and performance by Consolidated or SISC of this
Agreement or the Escrow Agreement.
() The Series G Preferred Stock is duly and validly authorized and issued, fully
paid and non-assessable and subject to no rights or claims of Consolidated or
any third party claiming by, through or on behalf of Consolidated.
Trans Global represents and warrants to Consolidated and SISC that:
() Trans Global is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
() The Series G Preferred Stock is, and on the Closing Date will be, owned by
Trans Global, subject to no Claims.
() Trans Global has full power and authority to enter into this Agreement and to
carry out the transactions provided for in this Agreement, and this Agreement
constitutes, and the Escrow Agreement, when executed and delivered by Trans
Global, will constitute, the legal, valid and binding obligations of Trans
Global, enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
or similar laws from time to time in effect which affect creditors' rights
generally, and by legal and equitable limitations on the enforceability of
specific remedies, and that no representation is made as to the enforceability
of the indemnification provisions contained in Paragraph 11 of this Agreement.
All necessary corporate action required to be taken by Trans Global for the
consummation of the transactions contemplated by this Agreement has been duly
and validly taken.
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Exhibit 99.1
() No consent, approval or agreement of any person, party, court, governmental
authority or entity is required to be obtained by Trans Global in connection
with the execution and performance by Trans Global of this Agreement or the
Escrow Agreement.
() The SISC Shares are duly and validly authorized and issued, fully paid and
non-assessable and subject to no rights or claims of Trans Global or any third
party claiming by, through or on behalf of Trans Global.
() As of the date of this Agreement, Trans Global meets the eligibility
requirements for a secondary offering by SISC of the Remaining Shares, as
hereinafter defined, on a Form S-3 registration statement
Each of Trans Global and Consolidated confirms to the other that: () A certain
management services agreement (the "Trinity Agreement"), dated January 1, 1995,
as amended to date, between Trans Global and The Trinity Group, Inc.
("Trinity"), a former subsidiary of Consolidated, which agreement was assigned
by Trinity to Consolidated on or prior to April 30, 1998, was terminated by the
parties on and as of April 30, 1998.
() Neither party has any rights or obligations under or otherwise pursuant to
the Trinity Agreement, whether arising prior or subsequent to April 30, 1998.
() All obligations under the Trinity Agreement relating to the period ending
April 30, 1998 have been satisfied in full.
Consolidated has advised Trans Global that it has entered into a settlement
agreement dated as of January 7, 1999, as amended (the "Settlement Agreement"),
with Lewis S. Schiller ("Schiller"), pursuant to which, inter alia, Trans Global
and the Schiller Affiliates, as defined in the Settlement Agreement, are to
exchange general releases. In connection with the execution by Consolidated of
an agreement dated March 30, 1998 (the "Prior Schiller Agreement") between
Consolidated, Schiller, Grazyna B. Wnuk ("Wnuk"), E. Gerald Kay ("Kay") and
Norman J. Hoskin ("Hoskin"), and pursuant to resolutions adopted by Trans
Global's board of directors in April 1998, Consolidated agreed to the exchange
of general releases among Consolidated, Trans Global and other entities which
were affiliated by Consolidated, on the one hand, and Schiller, Wnuk, Kay and
Hoskin, on the other hand. Schiller, Wnuk and Kay have previously executed and
delivered their general releases pursuant to the Prior Schiller Agreement.
Consolidated has requested that Trans Global ratify and confirm the general
releases previously delivered by it to Schiller, Wnuk and Kay under the Prior
Schiller Agreement upon receipt of general releases in favor of Trans Global
issued by such persons. Accordingly, Trans Global shall execute two general
releases contemporaneously with the execution of this Agreement. One of such
releases will be in favor of Schiller, Wnuk and Kay, and the second will be in
favor of the Schiller Affiliates. Such executed releases shall be delivered,
upon execution of this Agreement, to counsel for Trans Global, for delivery to
counsel for Consolidated upon, and subject only to, receipt of releases executed
by Schiller, Wnuk and Kay and by the Schiller Affiliates in favor of Trans
Global. The releases to be executed by Trans Global shall be in substantially
the forms attached as Exhibits B and C to this Agreement, and the releases to be
delivered to Trans Global shall be in substantially the forms attached as
Exhibits D and E to this Agreement.
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Exhibit 99.1
Trans Global will release Consolidated from its obligations under the Arc
Guarantee and terminate Consolidated's obligations thereunder if Consolidated
provides Trans Global with a replacement guarantor whose credit is acceptable to
Trans Global. The terms of any replacement guarantee shall be the same as those
of Consolidated's guarantee or as may otherwise be acceptable to Trans Global.
() At any time during the period commencing on the later of (i) the date on
which Trans Global files its Form 10-K for the year ended December 31, 1998 (the
"Filing Date") or (ii) the date on which the Transferred Shares are delivered to
Trans Global by the Escrow Agent (the "Delivery Date"), and ending on the
Registration Termination Date, as hereinafter defined, Trans Global shall advise
SISC or any Permitted Transferee, as hereinafter defined (SISC and a Permitted
Transferee being referred to herein as the "holder"), by written notice at least
two (2) weeks prior to the filing of any registration statement (other than a
registration statement on a Form S-8 or S-4 or any subsequent form relating to
employee benefit plans and mergers or acquisitions) under the Securities Act of
1933, as amended (the "Securities Act"), covering securities of Trans Global and
will, upon the request of the holder, include in any such registration statement
such information as may be required to permit a public offering of any or all of
the 379,994 shares of TGSI Common Stock owned by SISC after giving effect to the
transfer of the Transferred Shares (the "Remaining Shares"); provided, however,
that Trans Global shall not be required to include any Remaining Shares in a
registration statement relating solely to an offering by Trans Global of
securities for its own account if the managing underwriter requests in writing
that Trans Global exclude the Remaining Shares, provided that all other proposed
selling stockholders, if any, are treated in the same manner as the holder. In
the event that the managing underwriter shall permit the inclusion in any such
registration statement of a limited number of shares of TGSI Common Stock for
sale by selling stockholders, to the extent that the managing underwriter
permits any such shares to be included in the registration statement, Trans
Global shall include Remaining Shares and shares to be sold by all persons
exercising piggyback or similar registration rights, on a proportional basis,
based on the number of shares of TGSI Common Stock which each such person
proposes to include in the registration statement. If requested by the managing
underwriter in writing, the holder will agree not to sell any of the Remaining
Shares included in such registration statement without the consent of such
managing underwriter during such period following the effective date of the
registration statement, as the managing underwriter may request (the "holdoff
period"), and Trans Global shall not be required to include Remaining Shares in
such registration statement unless the holder agrees to such hold off.
Notwithstanding the foregoing, in no event shall the holder be required to agree
to a holdoff period longer than any other selling stockholder whose shares are
included in such registration statement or any other registration statement
being filed at or about the same time as such registration statement pursuant to
piggy-back or similar registration rights. Trans Global shall keep such
registration statement current for a period of one (1) year from the effective
date of such registration statement (or such longer period as Trans Global is
keeping the registration statement current for other selling stockholders) or
until the Remaining Shares included in the registration statement shall have
been sold, whichever first occurs, or, if the underwriter or managing
underwriting agrees to the inclusion of the Remaining Shares in the registration
statement only on the condition that the holder agrees to refrain from selling
Remaining Shares pursuant to the registration statement for the holdoff period,
one (1) year from the conclusion of the holdoff period.
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Exhibit 99.1
It shall be a condition to Trans Global's obligation to include any of the
holder's Remaining Shares in a registration statement pursuant to this Paragraph
11(a) or to file a registration statement pursuant to Paragraph 11(b) of this
Agreement that the holder provide Trans Global in writing with such information
as Trans Global may reasonably request concerning the holder and the holder's
proposed plan of distribution and any other information requested by the
Securities and Exchange Commission (the "Commission"), the National Association
of Securities Dealers, Inc., NASD Regulation, Inc., any stock exchange or market
on which the TGSI Common Stock is traded and any state securities commission.
Trans Global shall advise the holder in writing of the extent to which a
managing underwriter will permit the inclusion of shares of TGSI Common Stock in
a registration statement and shall provide the holder with a copy of any
requests by the managing underwriter relating to the inclusion of any Remaining
Shares in a registration statement.
() If (i) Trans Global is eligible to register the Remaining Shares on a Form
S-3 registration statement and (ii) the holder shall give notice to Trans Global
at any time during the period commencing on the later of the Filing Date or the
Delivery Date and ending on the Registration Termination Date, that the holder
contemplates the sale of all or any portion of the Remaining Shares under such
circumstances that a public distribution (within the meaning of the Securities
Act) of such Remaining Shares will be involved, then Trans Global shall, within
sixty (60) days after receipt of such notice (or, if such notice is given during
the first sixty (60) days of a fiscal year, within thirty (30) days after the
filing by Trans Global of its Form 10-K Annual Report for such fiscal year),
file a registration statement on Form S-3 pursuant to the Securities Act, to the
end that the Remaining Shares may be sold publicly under the Securities Act, and
Trans Global will use its commercially reasonable efforts to cause such
registration statement to become effective. Trans Global shall use its
commercially reasonable efforts to keep such registration statement current and
effective for a period of one (1) year. The holder shall be entitled to only one
(1) demand registration right pursuant to this Paragraph 11(b), except that, in
the event that such registration statement is filed and is either withdrawn or
does not become effective (other than upon the written request of the holder),
then the holder shall not be deemed to have exercised his or its demand
registration right.
() The following provisions shall also be applicable to this Paragraph 11:
() As used in this Paragraph 11, the following terms shall have the meanings set
forth below:
() "Registration Termination Date" shall mean the date (the "Rule 144 Date") on
which SISC or its Permitted Transferee may sell such of the Remaining Shares as
it then owns pursuant to Paragraph (k) of Rule 144 ("Rule 144") of the
Commission pursuant to the Securities Act; provided, however, that if SISC or
its Permitted Transferee shall have acquired additional shares of TGSI Common
Stock subsequent to the date of this Agreement, the Registration Termination
Date shall be the earlier of the Rule 144 Date or the date on which SISC or its
Permitted Transferee holds less than ten percent (10.0%) of the outstanding
shares of TGSI Common Stock.
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Exhibit 99.1
() "Permitted Transferee" shall mean the person or entity (I) to whom or to
which SISC shall have transferred, in a transaction exempt from the registration
requirements of the Securities Act, all of the Remaining Shares then owned by
SISC and (II) who shall have agreed in writing to be subject to the provisions
of Paragraph 12 of this Agreement; provided, that no transferee to whom
Remaining Shares are transferred at a time when SISC is no longer an affiliate,
as defined in Rule 144, shall be deemed to be a Permitted Transferee.
() Notwithstanding the provisions of Paragraphs 11(a) and (b) of this Agreement,
Trans Global's obligations to file a registration statement and its obligations
to keep a registration statement current and effective shall be suspended for an
Excusable Reason, as hereinafter defined. If an Excusable Reason shall occur,
Trans Global shall give the holder prompt notice thereof, and, if the Remaining
Shares are subject to an effective registration statement, the holder shall
refrain from thereafter making sales pursuant to the registration statement
until the cessation of the Excusable Reason.
() An "Excusable Reason" shall mean the occurrence of negotiations with respect
to a material agreement prior to the either the announcement of the execution of
the agreement or the termination of the negotiations with respect to such
proposed agreement and other similar material corporate events to which Trans
Global is a party or expects to be a party if, in the reasonable judgment of
Trans Global, on advice of counsel, disclosure of the negotiations or other
event would be required to be included in a registration statement filed
pursuant to the Securities Act or filed with the Commission in a filing which
would be incorporated by reference in such a registration statement and such
disclosure would be adverse to the best interests of Trans Global provided that
Trans Global is continuing to treat such negotiations as confidential and
provided further that the period during which Trans Global is precluded from
filing the registration statement (or suspended the use of an effective
registration statement) as a result thereof has not exceeded 60 days and
provided further that Trans Global shall not be permitted to avoid filing a
registration statement (or to suspend the use of an effective registration
statement) for an Excusable Reason more than twice in any one-year period. In
the event that the use of a registration statement is suspended for an Excusable
Reason, the period during which the registration statement shall be kept current
and effective shall be extended for the number of days that the use of the
registration statement is suspended for an Excusable Reason; provided, that
Trans Global shall not be required to keep the registration statement current
and effective subsequent to the Registration Termination Date. Trans Global
shall advise the holder in writing of the occurrence and termination of an
Excusable Reason. Trans Global shall not be in violation of this Paragraph 11 if
such delays exceed those provided for in this Paragraph 11(c)(ii)(B) and are
caused by action or inaction by the Commission, the National Association of
Securities Dealers, Inc., NASD Regulation, Inc., any stock exchange or market or
any state securities commission.
() Trans Global shall bear the entire cost and expense of any registration of
securities pursuant to Paragraphs 11(a) and (b) of this Agreement. Any holder
whose Remaining Shares are included in any registration statement pursuant to
this Paragraph 11 shall, however, bear the fees of his or its own counsel and
accountants and any transfer taxes or underwriting discounts or commissions and
other incidental costs applicable to the Remaining Shares sold by him or it
pursuant thereto.
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Exhibit 99.1
() Following the effective date of a registration statement which includes
Remaining Shares pursuant to Paragraph 11(a) or (b) of this Agreement, Trans
Global shall, upon the request of the holder, forthwith supply the holder with
such number of prospectuses meeting the requirements of the Securities Act as
shall be reasonably requested by the holder to permit the holder to make a
public distribution of all the registered Remaining Shares from time to time
offered or sold by the holder, provided that the holder shall from time to time
furnish Trans Global with such appropriate information (relating to the
intentions of the holder) in connection therewith as Trans Global shall request
in writing as provided in said Paragraphs 11(a) and (b). Trans Global shall also
use its best efforts to qualify the registered shares for sale in such states as
the shares being sold by Trans Global and other selling stockholders, if any,
are otherwise being registered or qualified and, in up to five other states as
the holder shall reasonably request; provided, however, that Trans Global shall
not for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not, but for the
requirements of this Paragraph 11(c)(iv), be obligated to be so qualified, to
subject itself to taxation in such jurisdiction or to consent to general service
of process in any such jurisdiction.
() Trans Global shall prepare and file with the Commission such amendments and
supplements to such registration statement and any prospectus used pursuant this
Paragraph 11 as may be necessary to keep such registration statement current and
effective, subject to the provisions of Paragraph 11(c)(ii) of this Agreement,
during the period when the holder may sell Remaining Shares pursuant to the
registration statement. Trans Global will notify the holder at such time as, for
any reason, the prospectus relating to the sale of the Remaining Shares is no
longer current and effective, and the holder shall not sell any Remaining Shares
pursuant to such registration statement until such time as the holder is advised
by Trans Global that the registration statement is current and effective. In the
event that the use of a registration statement is suspended pursuant to this
Paragraph 11(c)(v), the period during which the registration statement shall be
kept effective shall be extended for the number of days that the use of the
registration statement is suspended for such reason. In no event shall Trans
Global be required to keep any registration statement which includes the
Remaining Shares current and effective subsequent to the Registration
Termination Date.
() Trans Global shall indemnify and hold harmless the holder, its officers and
directors and each underwriter, within the meaning of the Securities Act, who
may purchase from or sell any Remaining Shares for the holder and each person
who controls the holder and such underwriter within the meaning of the
Securities Act, from and against any and all losses, claims, damages and
liabilities (collectively, "Losses") caused by any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
under the Securities Act or any prospectus included therein required to be filed
or furnished by reason of this Paragraph 11 or any application or other filing
under any state securities law or by any omission or alleged omissions to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, to which the holder or any such underwriter
or control person or other indemnified party may become subject under the
Securities Act, the Securities Exchange Act of 1934, as amended, or other
Federal or state law, rule or regulation, at common law or otherwise, except
insofar as such Losses are caused by any such untrue statement or alleged untrue
statement or omission or alleged omission which is based upon information
furnished or required to be furnished to Trans Global by the holder or any such
9
<PAGE>
Exhibit 99.1
underwriter or other indemnified party expressly for use therein, which
indemnification shall include each person, if any, who controls any such
underwriter within the meaning of the Securities Act; provided, however, that
the holder and such underwriter shall at the same time indemnify Trans Global,
its officers and directors, each underwriter and each person, if any, who
controls Trans Global or such underwriter within the meaning of the Securities
Act and each other person whose securities are being offered or sold pursuant to
such registration statement (the "other holders") and each person who controls
the other holders within the meaning of the Securities Act, from and against any
and all Losses caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or any prospectus filed or
furnished by reason of this Paragraph 11 or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, insofar as such Losses
are caused by any untrue statement or alleged untrue statement or omission based
upon information furnished to Trans Global in writing by the holder or such
underwriter expressly for use therein; provided, however, that the holder's
liability to Trans Global and such underwriter or other indemnified party
pursuant to this Paragraph 11(c)(vi) shall not exceed the gross sales price of
all Remaining Shares sold by the holder pursuant to such registration statement.
() If any action or claim shall be brought or asserted by a person or entity
entitled to indemnification pursuant to Paragraph 11(c)(vi) of this Agreement
(an "indemnified party") against Trans Global or any underwriter engaged by
Trans Global or any person controlling Trans Global or such underwriter within
the meaning of the Securities Act or against the holder or any underwriter
engaged by the holder or any person controlling the holder or such underwriter,
within the meaning of the Securities Act in respect of which indemnity may be
sought pursuant to Paragraph 11(c)(vi) of this Agreement (an "indemnifying
party"), the indemnified party shall promptly notify the indemnifying party in
writing of the basis for the claim of indemnification and provide the
indemnifying party with a copy of all legal papers or other notices or
communications served on it in connection therewith, and the indemnifying party
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all legal and other
expenses in connection therewith. The failure of the indemnified party to notify
the indemnifying party as provided in this Paragraph 11(c)(vii) will not relieve
the indemnifying party of any liability for indemnification which it may have to
the indemnified party pursuant to Paragraph 11(c)(vi) of this Agreement unless
the failure to so notify the indemnifying party materially prejudices the rights
of the indemnifying party. The indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the
indemnified party unless (A) the employment thereof has been specifically
authorized by the indemnifying party in writing and the indemnifying party shall
have agreed in writing to pay such fees and expenses, or (B) the indemnifying
party has failed, either (I) with reasonable promptness, to assume the defense
and employ counsel as provided in this Paragraph 11(c)(vii), or (II) to appoint
counsel to act or otherwise respond to any claim or action prior to the date a
response is due, after giving effect to any extensions obtained by or on behalf
of the indemnifying party, or (C) the named parties to any such action
(including any impleaded parties) include both an indemnified party and an
indemnifying party, and in the judgment of the counsel for the indemnifying
party, it is advisable for the indemnified party or controlling person to be
10
<PAGE>
Exhibit 99.1
represented by separate counsel (in which case the indemnifying party shall not
have the right to assume the defense of such action on behalf of the indemnified
party or such controlling person, it being understood, however, that the
indemnifying party shall, in connection with any one such action or separate but
substantially similar or related actions arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys at any time in each jurisdiction for all
indemnified parties (whether pursuant to this Agreement or any other agreements
granting registration rights), which firm shall be designated in writing by all
the indemnified parties). The indemnifying party shall not be liable for any
settlement of any such action effected by an indemnified party without the
written consent of the indemnifying party (which shall not be withheld
unreasonably in light of all factors of importance to such indemnified party),
but if settled with such written consent, or if there be a final judgment or
decree for the plaintiff in any such action by a court of competent jurisdiction
and the time to appeal shall have expired or the last appeal shall have been
denied, the indemnifying party agrees to indemnify and hold harmless the
indemnified party from and against any Loss by reason of such settlement or
judgment.
() The making of any request for prospectuses hereunder shall not impose on the
holder any obligation to sell any Remaining Shares.
() Trans Global's obligations pursuant to this Paragraph 11 shall be applicable
to SISC, shall not be available to any transferees except for the Permitted
Transferee without the prior approval of Trans Global, and, in the event that
SISC shall sell any Remaining Shares other than to a Permitted Transferee, shall
continue, as and to the extent set forth in this Paragraph 11, with respect to
any Remaining Shares SISC continues to hold. Nothing in this Paragraph 11(c)(ix)
shall give the holder any right to transfer any Remaining Shares except in
compliance with all applicable Federal and state securities laws.
() In the event that Consolidated makes the Redemption Payment and, as a result
thereof, the Transferred Shares are delivered to SISC by the Escrow Agent, Trans
Global's obligations pursuant to this Paragraph 11 shall terminate on and as of
the date of such delivery.
In connection with any public offering by Trans Global of its securities for its
own account, regardless of whether Remaining Shares are included in the
registration statement relating to such offering or have otherwise been
registered pursuant to Paragraph 11 of this Agreement, Consolidated and SISC
will agree not to publicly sell (which term includes a short sale or a sale
against the box), assign or transfer any shares of TGSI Common Stock then owned
by them for the same period as is agreed to by all of Trans Global's executive
officers and directors; provided, however, that this Paragraph 12 shall not
apply in the event that Consolidated makes the Redemption Payment.
() This Agreement, including the Exhibits, which constitute integral parts of
this Agreement, constitutes the entire agreement of the parties with respect to
the subject matter thereof, superseding and terminating any and all prior or
contemporaneous oral and prior written agreements, understandings or letters of
intent between or among the parties with respect to the subject matter of this
Agreement. No part of this Agreement may be modified or amended, nor may any
11
<PAGE>
Exhibit 99.1
right be waived, except by a written instrument which expressly refers to this
Agreement, states that it is a modification or amendment of this Agreement or a
waiver under this Agreement and is signed by the parties to this Agreement, or,
in the case of waiver, by the party granting the waiver. No course of conduct or
dealing or trade usage or custom and no course of performance shall be relied on
or referred to by any party to contradict, explain or supplement any provision
of this Agreement, it being acknowledged by the parties to this Agreement that
this Agreement is intended to be, and is, the complete and exclusive statement
of the agreement with respect to its subject matter. Any waiver shall be limited
to the express terms thereof and shall not be construed as a waiver of any other
provisions or the same provisions at any other time or under any other
circumstances.
() If any section, term or provision of this Agreement shall to any extent be
held or determined to be invalid or unenforceable, the remaining sections, terms
and provisions shall nevertheless continue in full force and effect.
() All notices and other communications required or permitted by this Agreement
shall be in writing signed by the party giving such notice, and delivered
personally or sent by overnight courier, mail or messenger against receipt
thereof or sent by registered or certified mail, return receipt requested, or by
facsimile transmission or similar means of communication if receipt is confirmed
or if transmission of such notice is confirmed by mail as provided in this
Paragraph 13(c). Notices shall be deemed to have been received on the date of
personal delivery or telecopy or, if sent by certified or registered mail,
return receipt requested, shall be deemed to be delivered on the fifth (5th)
business day after the date of mailing. Notices shall be sent to the parties at
their respective addresses set forth at the beginning of this Agreement to the
attention of the person executing this Agreement on behalf of such party or by
telecopier, to Trans Global at (516) 724-0039, or to Consolidated or SISC at
(212) 233-5023. A copy of any notice shall be sent in like manner, with respect
to Trans Global, to Esanu Katsky Korins & Siger, LLP, 605 Third Avenue, New
York, New York 10158, telecopier (212) 953-6899, Attention of Asher S. Levitsky
P.C., and, with respect to Consolidated or SISC, to Robert L. Blessey, Esq., 51
Lyon Ridge Road, Katonah, NY 10536, telecopier (914) 232-0647. Any party may, by
like notice, change the address, person or telecopier number to which notice
shall be sent.
() This Agreement shall be governed and construed in accordance with the laws of
the State of New York applicable to agreements executed and to be performed
wholly within such State, without regard to any principles of conflicts of law.
Each of the parties hereby (i) irrevocably consents and agrees that any legal or
equitable action or proceeding arising under or in connection with this
Agreement shall be brought in the Federal or state courts located in the County
of New York or Suffolk in the State of New York, (ii) by execution and delivery
of this Agreement, irrevocably submits to and accepts the jurisdiction of said
courts, (iii) waives any defense that such court is not a convenient forum, and
(iv) consents to any service of process made in the manner set forth in
Paragraph 13(c) of this Agreement (other than by telecopier), in addition to any
other method of service permitted by law. In any action brought pursuant to this
12
<PAGE>
Exhibit 99.1
Agreement based on an alleged breach of this Agreement, the prevailing party
shall be entitled to reimbursement of all costs incurred by it in connection
therewith to the extent, if at all, awarded or allowed by the court or other
tribunal in which the action or proceeding has been commenced; provided,
however, that nothing in this Paragraph 13(d) shall be construed to affect in
any manner the provisions of Paragraph 11(c)(vii) of this Agreement.
() Each of the parties to this Agreement shall be responsible and liable for its
own expenses incurred in connection with the preparation of this Agreement and
the consummation of the transactions contemplated by this Agreement and related
expenses, except as expressly provided in this Agreement.
() Each party to this Agreement is relying on his or its own tax advisors as to
the tax consequences of this Agreement and the transactions contemplated by this
Agreement, and no party is making any representations or warranties of any kind
as to such tax consequences to any other party.
() Neither party shall make a public announcement concerning this Agreement
without the consent of the other parties. Consolidated and Trans Global each
understands that they are required to disclose this Agreement on a Form 8-K.
() This Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns; provided, however, that,
except as expressly provided in this Agreement, neither party may assign this
Agreement or any of its rights under this Agreement without the prior written
consent of the other party.
() Each party to this Agreement agrees, without cost or expense to any other
party, to deliver or cause to be delivered such other documents and instruments
and to take such other action as may be reasonably requested by any other party
to this Agreement in order to carry out more fully the provisions of, and to
consummate the transaction contemplated by, this Agreement.
() This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. [Signatures on Next Page]
13
<PAGE>
Exhibit 99.1
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
TRANS GLOBAL SERVICES, INC.
By:-------------------------------------
Joseph G. Sicinski, President and CEO
CONSOLIDATED TECHNOLOGY GROUP LTD.
By:----------------------------------
Seymour Richter, President and CEO
SISC CAPITAL CORP.
14
<PAGE>
Exhibit 99.1
Exhibit A
February , 1999
Esanu Katsky Korins & Siger, LLP
605 Third Avenue
New York, New York 10158
Attention of Asher S. Levitsky P.C.
Re: Escrow Agreement
Gentlemen:
Pursuant to an agreement (the "Agreement") dated the date of this Escrow
Agreement, between Trans Global Services, Inc., a Delaware corporation ("Trans
Global"), Consolidated Technology Group Ltd., a New York corporation
("Consolidated") and SIS Capital Corp., a Delaware corporation ("SISC"), SISC is
transferring 1,150,000 shares (the "Transferred Shares") of Trans Global's
common stock, par value $.01 per share ("Common Stock") to Trans Global in
exchange, inter alia, for the cancellation of 1,000 shares of Consolidated's
Series G 2% Cumulative Redeemable Preferred Stock, par value $1.00 per share
("Series G Preferred Stock"), which are owned by Trans Global. Trans Global,
Consolidated and SISC are referred to collectively as the "parties" and each as
a "party."
() Contemporaneously with the execution of this Escrow Agreement, (a) SISC has
delivered to Esanu Katsky Korins & Siger, LLP (the "Escrow Agent") certificates
for the Transferred Shares, issued in SISC's name, and accompanied by an
executed stock power with signature medallion guaranteed, and (b) Trans Global
has delivered to the Escrow Agent a certificate for the Series G Preferred Stock
issued in Trans Global's name. The Escrow Agent hereby acknowledges receipt of
the Securities. The Escrow Agent agrees to hold the certificates for the
Transferred Shares and the Series G Preferred Stock (collectively, the
"Securities") as escrow agent hereunder, on and subject to the terms of this
Escrow Agreement.
() Upon receipt by the Escrow Agent of any written instructions (the
"Instructions") from and signed by either Trans Global, Consolidated or SISC as
to the disposition of the Securities, the Escrow Agent shall, within seven (7)
business days after the Escrow Agent's receipt of the Instructions, send a copy
of the Instructions ("Notice of Instructions") to the other parties. If the
Escrow Agent does not receive any conflicting Instructions from either of the
other parties prior to 5:30 P.M., New York City time, on the tenth (10th)
business day following the date such Notice of Instructions is given, the Escrow
Agent shall deliver the Securities in accordance with the Instructions. If the
Instructions are signed by Trans Global, Consolidated and SISC, the Escrow Agent
shall deliver the Securities in the manner provided in such Instructions.
Notwithstanding the foregoing, no Instructions shall provide for the delivery of
the Securities to any person other than Trans Global, Consolidated or SISC.
15
<PAGE>
Exhibit 99.1
() In the event that the Escrow Agent shall receive conflicting Instructions
from the parties as to the delivery of the Securities or in the event that the
Escrow Agent shall be uncertain as to its obligations with respect to the
Securities, the Escrow Agent shall have no obligation other than to retain
possession of the Securities until the Escrow Agent shall have received joint
written instructions from Trans Global, Consolidated and SISC as to the
disposition of the Securities or an order from a court of competent jurisdiction
final beyond right of review. In addition, the Escrow Agent may, on notice to
the parties, deposit the Securities into court, there to abide a decision of the
court. In this connection, Trans Global, Consolidated and SISC consent to the
exclusive jurisdiction of the Federal and state courts located in the City,
County and State of New York.
() In the event that the Escrow Agent shall not receive the Instructions
provided for in Paragraph 2 of this Escrow Agreement by April 30, 1999, the
Escrow Agent may, on notice to the parties, deposit the Securities into a
Federal or state court located in the City, County and State of New York, there
to abide a decision of the court.
() This Escrow Agreement shall terminate upon a distribution of the Securities
pursuant to Paragraph 2 or 3 of this Escrow Agreement or a deposit of the
Securities into court pursuant to Paragraph 3 or 4 of this Escrow Agreement or
upon the agreement of all of the parties hereto.
() Trans Global, Consolidated and SISC agree jointly and severally to indemnify,
defend and hold the Escrow Agent harmless from and against any loss, damage,
tax, liability and expense that may be incurred by the Escrow Agent arising out
of or in connection with the Escrow Agent's acceptance of its appointment as
Escrow Agent hereunder, including the legal costs and expenses of defending
itself against any claim or liability in connection with the Escrow Agent's
performance hereunder.
() It is agreed that the Escrow Agent's duties and obligations are only such as
are herein specifically provided and no other; that the Escrow Agent shall have
no liability under, or duty to inquire into, the terms and provisions of any
agreement between the parties, including the Agreement; that such duties are
purely ministerial in nature, and that the Escrow Agent shall not incur any
liability whatsoever so long as the Escrow Agent shall have acted in good faith,
except for its willful misconduct or gross negligence. The Escrow Agent may
consult with counsel of its choice, including its partners and employees and
attorneys who serve as counsel to the Escrow Agent, and shall not be liable for
any action taken, suffered or omitted by the Escrow Agent in accordance with the
advice of such counsel. The Escrow Agent shall not be bound by any modification,
amendment, termination, cancellation, rescission or supersession of this Escrow
Agreement unless the same shall be in writing and signed by Trans Global,
Consolidated and SISC and, if the Escrow Agent's duties as Escrow Agent
hereunder are affected thereby, the Escrow Agent. In the event that the Escrow
Agent shall be uncertain as to its duties or rights under this Escrow Agreement
or shall receive instructions, claims or demands from the parties which, in the
Escrow Agent's opinion, are in conflict with each other or with any of the
provisions of this Escrow Agreement, the Escrow Agent shall refrain from taking
any action other than to keep safely all Securities held by it until the Escrow
Agent shall be directed otherwise in writing by Trans Global, Consolidated and
SISC or by a final judgment of a court of competent jurisdiction. The Escrow
16
<PAGE>
Exhibit 99.1
Agent shall have no liability for following the Instructions herein contained or
expressly provided for or written Instructions given pursuant to this Escrow
Agreement. The Escrow Agent shall have no responsibility for the genuineness or
validity of any document or other item deposited with or delivered to the Escrow
Agent and shall have no liability for acting in accordance with any written
instructions or certificates given to the Escrow Agent hereunder and believed by
the Escrow Agent to be signed by the proper person. The Escrow Agent shall not
be required to institute legal proceedings of any kind and shall not be required
to defend any legal proceedings which may be instituted against the Escrow Agent
in respect of this Escrow Agreement unless requested to do so and jointly and
severally indemnified by the parties to this Escrow Agreement to the Escrow
Agent's satisfaction against the cost and expense of such defense.
() Consolidated and Trans Global shall each pay fifty percent (50%) of the
Escrow Agent's fees in connection with the administration of this Escrow
Agreement, which shall not exceed two thousand dollars ($2,000) unless (a) there
is a dispute among the parties or (b) there is any legal proceeding involving
the Securities or otherwise relating to this Escrow Agreement, including, but
not limited to, an interpleader proceeding pursuant to Paragraph 3 or 4 of this
Escrow Agreement.
() The Escrow Agent may at any time resign hereunder by giving written notice of
its resignation to the parties, at their addresses set forth below, at least
twenty (20) business days prior to the date specified for such resignation to
take effect. If the Escrow Agent shall resign, and upon the effective date of
the resignation of the Escrow Agent, all property then held by the Escrow Agent
pursuant to this Escrow Agreement shall be delivered by the Escrow Agent to such
person as may be designated in writing by the joint Instructions of Trans
Global, Consolidated and SISC, whereupon all such Escrow Agent's obligations
hereunder shall cease and terminate. If no such person shall have been
designated by such date, all of the Escrow Agent's obligations hereunder shall,
nevertheless, cease and terminate. The Escrow Agent's sole responsibility
thereafter shall be to keep safely all property then held by the Escrow Agent
and to deliver the same to a person jointly designated by Trans Global,
Consolidated and SISC.
() Any notice, request, demand and other communication hereunder ("Notice")
shall be in writing and shall be deemed to have been duly given if delivered by
hand, overnight courier or messenger service, against a signed receipt or
acknowledgment of receipt, or sent by registered or certified mail, return
receipt requested, or telecopier or similar means of communication if receipt is
acknowledged or if the communication is confirmed by mail as provided in this
Paragraph 9, addressed to Trans Global at 1393 Veterans Memorial Highway,
Hauppauge, New York 11788, telecopier (516) 724-0039, Attention of Mr. Joseph G.
Sicinski, President and CEO, or to Consolidated or SISC at 160 Broadway, New
York, New York 10038, telecopier (212) 233-5023, Attention of Mr. Seymour
Richter, President and CEO, and to Esanu Katsky Korins & Siger, LLP at 605 Third
Avenue, Suite 1600, New York, NY 10158, telecopier (212) 953-6899, attention of
Asher S. Levitsky P.C. A copy of any Notice to Trans Global shall be sent to
Asher S. Levitsky P.C. at the foregoing address and telecopier number and a copy
of any notice to Consolidated or SISC shall be sent to Robert L. Blessey, Esq.,
51 Lyon Ridge Road, Katonah, NY 10536, telecopier (914) 232-0647. Any party may,
by like notice, change the person, address or telecopier number to which Notice
should be sent. Notice shall be deemed given when personally delivered as
aforesaid, or, if mailed as aforesaid, on the fifth business day after the
mailing thereof or on the day actually received, if earlier, except for a notice
17
<PAGE>
Exhibit 99.1
of a change of address which shall be effective and deemed to have been given
only upon receipt. Notice by telecopier shall be deemed given when received.
() This Agreement shall be governed by the laws of the State of New York
applicable to agreements executed and to be performed wholly within such State.
() Each party acknowledges that Esanu Katsky Korins & Siger, LLP is also acting
as counsel for Trans Global in connection with the Agreement, that such firm has
acted as counsel for Consolidated, SISC and their subsidiaries in matters not
related to the Agreement, and that such firm shall have the right to represent
Trans Global in any action relating to or arising out of the Agreement.
Very truly yours,
TRANS GLOBAL SERVICES, INC.
By:-------------------------------------
Joseph G. Sicinski, President and CEO
CONSOLIDATED TECHNOLOGY GROUP LTD.
By:----------------------------------
Seymour Richter, President and CEO
SIS CAPITAL CORP.
By:----------------------------------
Seymour Richter, President and CEO
AGREED TO AND ACCEPTED:
ESANU KATSKY KORINS & SIGER, LLP
By:----------------------------
[Name, Title]
18
<PAGE>
Exhibit 99.1
Exhibit B
Form of Release from Trans Global to Schiller
GENERAL RELEASE
Consolidated Technology Group Ltd., a New York corporation ("Consolidated"), SIS
Capital Corporation, a Delaware corporation ("SISC"), Netsmart Technologies,
Inc., Trans Global Services, Inc. and Arc Networks, Inc., on their own behalf
and on behalf of their respective subsidiaries, as Releasors, hereby and forever
discharge Lewis S. Schiller, Grazyna B. Wnuk and E. Gerald Kay and their
respective heirs, executors, administrators, successors, assigns and counsel, as
Releasees, from any and all Claims, as hereinafter defined, actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extent, executions, claims, and
demands whatsoever, in law, admiralty or equity, which they, and their heirs,
executors, administrators, successors and assigns may ever have had or may then
have for, upon, or by reason of any matter, cause or thing whatsoever from the
beginning of the world to the date of this release, except, with respect to
Releasee, those obligations specifically undertaken by Releasee pursuant to the
Applicable Agreements.
As used in this Release, the term "Claims" shall mean any claim of any kind,
whether known or unknown, liquidated or contingent, which any Releasor or any
person claiming through any releasor has or may have against any Releasee.
As used in this Release, the Applicable Agreements shall mean the following
agreements and undertakings:
. Agreement dated as of March 30, 1998, by and among Consolidated, SISC and
Lewis S. Schiller.
. Agreement dated as of March 30, 1998, by and among Consolidated, SISC,
Schiller, Grazyna B. Wnuk, E. Gerald Kay and Norman J. Hoskin.
. Agreement dated as of March 30, 1998, by and among CTG, SISC and Grazyna
B. Wnuk.
. Agreement dated as of March 30, 1998, by and among CTG, SISC, E. Gerald
Kay and Norman J. Hoskin.
. Settlement Agreement dated as of January 7, 1999, between Consolidated
and Schiller, as amended.
This Release may not be changed orally.
This release shall be governed by the laws of the State of New York applicable
to contracts made and fully to be performed solely within such State.
[Signatures on Next Page]
19
<PAGE>
Exhibit 99.1
IN WITNESS WHEREOF, the Releasors have executed this Release this ____
day of February, 1999.
CONSOLIDATED TECHNOLOGY GROUP LTD.
By:----------------------------------
Seymour Richter, President and CEO
SIS CAPITAL CORP.
By:----------------------------------
Seymour Richter, President and CEO
NETSMART TECHNOLOGIES, INC.
By:----------------------------------
James L. Conway, President and CEO
TRANS GLOBAL SERVICES, INC.
By:-------------------------------------
Joseph G. Sicinski, President and CEO
ARC NETWORKS, INC.
By:-----------------------------------
Peter Parrinello, President and CEO
20
<PAGE>
Exhibit 99.1
ACKNOWLEDGMENTS
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On February , 1999, before me personally came Seymour Richter, to me known, who,
being duly sworn, did depose and state that he resides at 27 Briarcliff Drive,
Monsey, New York 10952, that he is the duly elected president and chief
executive officer of each of Consolidated Technology Group Ltd. and SIS Capital
Corp., with due authority to execute the foregoing Release on the behalf of each
corporation, the corporations which are described in and which executed the
Release, and that he signed his name thereto by order of the Board of Directors
of each of said corporations and that the above instrument constitutes the act
and deed of such corporations, and duly acknowledged to me that he thus executed
the same.
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF )
On February , 1999, before me personally came James L. Conway, to me known, who,
being duly sworn, did depose and state that he resides at 951 Roxbury Drive,
Westbury, New York 11590, that he is the duly elected president and chief
executive officer of Netsmart Technologies, Inc., with due authority to execute
the foregoing Release on the behalf of such corporation, the corporation which
is described in and which executed the Release, and that he signed his name
thereto by order of the Board of Directors of said corporation and that the
above instrument constitutes the act and deed of such corporation, and duly
acknowledged to me that he thus executed the same.
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF )
On February , 1999, before me personally came Joseph G. Sicinski, to me known,
who, being duly sworn, did depose and state that he resides at 38 Woodhollow
Road, Great River, New York 11739, that he is the duly elected president and
chief executive officer of Trans Global Services, Inc. with due authority to
execute the foregoing Release on the behalf of such corporation, the corporation
which is described in and which executed the Release, and that he signed his
name thereto by order of the Board of Directors of said corporation and that the
above instrument constitutes the act and deed of such corporation, and duly
acknowledged to me that he thus executed the same.
Notary Public
21
<PAGE>
Exhibit 99.1
STATE OF NEW YORK )
: ss.:
COUNTY OF )
On February , 1999, before me personally came Peter Parrinello, to me known,
who, being duly sworn, did depose and state that he resides at 9 Paul Court,
Tappan, NY 10983, that he is the duly elected president and chief executive
officer of Arc Networks, Inc., with due authority to execute the foregoing
Release on the behalf of such corporation, the corporation which is described in
and which executed the Release, and that he signed his name thereto by order of
the Board of Directors of said corporation and that the above instrument
constitutes the act and deed of such corporation, and duly acknowledged to me
that he thus executed the same.
Notary Public
22
<PAGE>
Exhibit 99.1
Exhibit C
Form of Release from Trans Global to Affiliates of Schiller
R E L E A S E
Reference is made to that certain Settlement Agreement dated January __, 1999,
by and between CONSOLIDATED TECHNOLOGY GROUP LTD. and LEWIS S. SCHILLER (the
"Settlement Agreement"), the terms of which are incorporated herein by reference
thereto. Any capitalized terms which are used but not defined herein shall have
the meanings ascribed to them in the Settlement Agreement.
For One Dollar ($1.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, SIS CAPITAL CORP., ARC
NETWORKS, INC., TRANS GLOBAL SERVICES, INC., NETSMART TECHNOLOGIES, INC.,
INTERNATIONAL MAGNETIC IMAGING LIQUIDATION CORP., THE REPRESENTATIVE, and all
subsidiaries and parents thereof, and all "control persons" as defined by the
applicable provisions of the Federal securities laws, and all entities owned,
controlled by, or under common control with any of them, and their respective
officers, directors, shareholders, principals, employees, counsel, agents and
consultants (hereinafter collectively, the "COTG Affiliate Releasors"), do
hereby unconditionally and irrevocably release and discharge Carol Schiller,
Blake Schiller, Douglas Schiller, Linda Schiller, Michael Schiller, DLB, Inc.,
Grace Wnuk, Sequential Electronics, Inc., S-Tech, Inc., FMX Corporation, SES
Holdings, Inc., Spectech, Inc., The Trinity Group, Inc. and Universal
International, Inc., and all entities owned, controlled by, or under common
control with any of them and their respective officers, directors, shareholders,
principals, employees, counsel, agents, consultants, heirs, administrators,
executors, personal representatives, successors and assigns (hereinafter
collectively referred to as the "Schiller Affiliate Releasees"), from any and
all actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, obligations, contracts,
controversies, agreements, promises, variances, trespasses, damages,
liabilities, judgments, executions, claims and demands whatsoever, in law,
admiralty or equity (whether known or unknown and whether liquidated or
unliquidated), whether asserted individually, derivatively, or in any other
capacity, which the COTG Affiliate Releasors, or any of them, ever had, now have
or hereafter can, shall or may have against the Schiller Affiliate Releasees
for, by reason of, in any way based upon, arising out of, related to, or
connected with, directly or indirectly, any matter, cause, thing, transaction,
act, or omission whatsoever from the beginning of the world to and including the
date hereof, except for any claims or rights which any of the COTG Affiliate
Releasors may have against any of the Schiller Affiliate Releasees arising out
of or based upon (a) any of the matters which are described in clauses (i)
through (iv) of Section 8.2 of the Settlement Agreement, and (b) all matters
pertaining to claims by FMX Corporation and/or Michael Schiller against
Consolidated Technology Group Ltd., or any subsidiary thereof, for certain
amounts alleged due to Michael Schiller with respect to his compensation for the
1997 calendar year, it being expressly understood and acknowledged by the COTG
Affiliate Releasors that neither of the matters referred to in clauses (a) and
(b) above shall constitute, or be deemed to constitute, an admission of any
liability or obligation by or on behalf of any of the Schiller Affiliate
Releasees with respect thereto, any such liabilities or obligations being hereby
expressly denied by each of the Schiller Affiliate Releasees.
No provision of this Release may be amended, modified or waived except by a
written instrument executed by the COTG Affiliate Releasors and the Schiller
Affiliate Releasees.
23
<PAGE>
Exhibit 99.1
If any term or provision of this Release is held to be illegal or invalid, such
illegality or invalidity shall not affect the remaining terms or provisions
hereof, and each term and provision of this Release shall be enforced to the
fullest extent permitted by law.
This Release shall be binding upon each of the COTG Affiliate Releasors and
their successors and assigns, heirs, executors and personal representatives and
inure to the benefit of the Schiller Affiliate Releasees and their respective
successors and assigns.
This Release may be signed in any number of counterparts, and by any of the COTG
Affiliate Releasors or the Representative in separate counterparts, each of
which, when so executed, shall be deemed to be a binding original and all of
which, when taken together, shall constitute one and the same Release.
This Release shall be governed by and construed in accordance with the laws of
the State of New York with respect to contracts made and to be fully performed
within such state, without regard to the conflicts of laws principles thereof.
Each of the COTG Affiliate Releasors and the Representative hereby represents
and warrants to the Schiller Affiliate Releasees that this Release has been duly
authorized by all required action of the COTG Affiliate Releasors and the
Representative.
24
<PAGE>
Exhibit 99.1
IN WITNESS WHEREOF, each of the undersigned has executed this Release as of the
___ day of January, 1999.
WITNESS: SIS CAPITAL CORP.
____________________ By:_______________________________
Seymour Richter
President and Chief Executive Officer
___________________
Print Name
WITNESS: ARC NETWORKS, INC.
____________________ By:_______________________________
Peter Parrinello, President
____________________
Print Name
WITNESS: TRANS GLOBAL SERVICES, INC.
____________________ By:_______________________________
Joseph Sicinski, President
____________________
Print Name
WITNESS: INTERNATIONAL MAGNETIC IMAGING LIQUIDATION CORP.
____________________ By:_______________________________
Seymour Richter
President and Chief Executive Officer
____________________
Print Name
WITNESS: NETSMART TECHNOLOGIES, INC.
____________________ By:_______________________________
____________________ __________________________________
Print Name Print Name and Title
WITNESS: EDWARD D. BRIGHT, solely in his capacity as the Representative
____________________ __________________________________
Edward D. Bright, Representative
____________________
Print Name
25
<PAGE>
Exhibit 99.1
Exhibit D
Form of Release from Schiller to Trans Global
GENERAL RELEASE
Lewis S. Schiller, Grazyna Wnuk and E. Gerald Kay, as Releasors, hereby and
forever discharge Consolidated Technology Group Ltd., a New York corporation
("Consolidated"), SIS Capital Corporation, a Delaware corporation ("SISC"),
Netsmart Technologies, Inc., Trans Global Services, Inc., Arc Networks, Inc., on
their own behalf and on behalf of their respective subsidiaries, and their
respective officers and directors (acting in such capacities), counsel and their
respective heirs, executors, administrators, successors and assigns, as
Releasees, from any and all Claims, as hereinafter defined, actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extent, executions, claims, and
demands whatsoever, in law, admiralty or equity, which they, and their heirs,
executors, administrators, successors and assigns may ever have had or may then
have for, upon, or by reason of any matter, cause or thing whatsoever from the
beginning of the world to the date of this release, except, with respect to any
Releasee, those obligations specifically undertaken by such Releasee pursuant to
the Applicable
Agreements.
As used in this Release, the term "Claims" shall mean any claim of any kind,
whether known or unknown, liquidated or contingent, which any Releasor or any
person claiming through any Releasor has or may have against any Releasee.
As used in this Release, the Applicable Agreements shall mean the following
agreements:
. Agreement dated as of March 30, 1998, by and among Consolidated,
SISC and Lewis S. Schiller.
. Agreement dated as of March 30, 1998, by and among Consolidated,
SISC, Lewis S. Schiller, Grazyna B. Wnuk, E. Gerald Kay and Norman J.
Hoskin.
. Agreement dated as of March 30, 1998, by and among CTG, SISC and
Grazyna B. Wnuk.
. Agreement dated as of March 30, 1998, by and among CTG, SISC, E.
Gerald Kay and Norman J. Hoskin.
. Settlement Agreement dated as of January 7, 1999, between
Consolidated and Schiller, as amended.
This release may not be changed orally.
This release shall be governed by the laws of the State of New York
applicable to contracts made and fully to be performed solely within such State.
IN WITNESS WHEREOF, the Releasors have executed this Release this ______ day of
February, 1998.
-----------------
Lewis S. Schiller
---------------
Grazyna B. Wnuk
-------------
E. Gerald Kay
26
<PAGE>
Exhibit 99.1
ACKNOWLEDGMENT
STATE OF )
: ss.:
COUNTY OF )
On , 1999, before me personally came Lewis S. Schiller, to me known, and
known to me to be the individual described in, and who executed the foregoing
instrument, and duly acknowledged to me that he thus executed the same.
Notary Public
STATE OF )
: ss.:
COUNTY OF )
On , 1999, before me personally came Grazyna B. Wnuk, to me known, and
known to me to be the individual described in, and who executed the foregoing
instrument, and duly acknowledged to me that he thus executed the same.
Notary Public
STATE OF )
: ss.:
COUNTY OF )
On , 1999, before me personally came E. Gerald Kay, to me known, and
known to me to be the individual described in, and who executed the foregoing
instrument, and duly acknowledged to me that he thus executed the same.
Notary Public
27
<PAGE>
Exhibit E
Form of Release from Schiller's Affiliates to Trans Global
R E L E A S E
Reference is made to that certain Settlement Agreement dated January __,
1999, by and between CONSOLIDATED TECHNOLOGY GROUP LTD. and LEWIS S. SCHILLER
(the "Settlement Agreement"), the terms of which are incorporated herein by
reference thereto. Any capitalized terms which are used but not defined herein
shall have the meanings ascribed to them in the Settlement Agreement.
For One Dollar ($1.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, CAROL SCHILLER, BLAKE
SCHILLER, DOUGLAS SCHILLER, LINDA SCHILLER, MICHAEL SCHILLER, DLB, INC., GRACE
WNUK, SEQUENTIAL ELECTRONICS, INC., S-TECH, INC., FMX CORPORATION, SES HOLDINGS,
INC., SPECTECH, INC., THE TRINITY GROUP, INC. and UNIVERSAL INTERNATIONAL, INC.,
for themselves and all other entities owned, controlled by, or under common
control with any of them and their respective officers, directors, shareholders,
principals, employees, agents, consultants, heirs, administrators, executors,
personal representatives, successors and assigns (hereinafter collectively
referred to as the "Schiller Affiliate Releasors"), do hereby unconditionally
and irrevocably release and discharge Consolidated Technology Group Ltd., SIS
Capital Corp., Arc Networks, Inc., Trans Global Services, Inc., Netsmart
Technologies, Inc., International Magnetic Imaging Liquidation Corp., the
Representative and all subsidiaries and parents thereof, and all "control
persons" as defined by the applicable provisions of the Federal securities laws,
and all entities owned, controlled by, or under common control with any of them,
and their respective officers, directors, shareholders, principals, employees,
counsel, agents (including any investment banker or market maker) and
consultants (hereinafter collectively, the "COTG Releasees"), from any and all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, obligations, contracts,
controversies, agreements, promises, variances, trespasses, damages,
liabilities, judgments, executions, claims and demands whatsoever, in law,
admiralty or equity (whether known or unknown and whether liquidated or
unliquidated), whether asserted individually, derivatively, or in any other
capacity, which the Schiller Affiliate Releasors, or any of them, ever had, now
have or hereafter can, shall or may have against the COTG Releasees for, by
reason of, in any way based upon, arising out of, related to, or connected with,
directly or indirectly, any matter, cause, thing, transaction, act, or omission
whatsoever from the beginning of the world to and including the date hereof,
except for (a) any of the matters which are described in clauses (i) through (v)
of Section 8.1 of the Settlement Agreement, (b) any claims with respect to the
ownership of any and all shares of common stock and warrants to purchase shares
of common stock of the COTG Releasees owned by any of the individual Schiller
Affiliate Releasors, (c) any claims for indemnification which Wnuk may have
against COTG pursuant to the applicable provisions of the Related Agreements,
and (d) claims by FMX Corporation and/or Michael Schiller against Consolidated
Technology Group Ltd. for certain amounts alleged due to Michael Schiller with
respect to his compensation from FMX Corporation for the 1997 calendar year, it
being expressly understood and acknowledged by the Schiller Affiliate Releasors
that none of the matters referred to in clauses (a) through (d) above shall
constitute, or be deemed to constitute, an admission of any liability or
obligation by or on behalf of any of the COTG Releasees with respect thereto,
any such liabilities or obligations being hereby expressly denied by each of the
COTG Releasees.
No provision of this Release may be amended, modified or waived except by a
written instrument executed by the Schiller Affiliate Releasors and the COTG
Releasees.
If any term or provision of this Release is held to be illegal or invalid,
such illegality or invalidity shall not affect the remaining terms or provisions
hereof, and each term and provision of this Release shall be enforced to the
fullest extent permitted by law.
This Release shall be binding upon each of the Schiller Affiliate Releasors
and their successors and assigns, heirs, executors, administrators and personal
representatives and inure to the benefit of the COTG Releasees and their
respective successors and assigns.
This Release may be signed in any number of counterparts, and by any of the
Schiller Affiliate Releasors in separate counterparts, each of which, when so
executed, shall be deemed to be a binding original and all of which, when taken
together, shall constitute one and the same Release.
This Release shall be governed by and construed in accordance with the laws
of the State of New York with respect to contracts made and to be fully
performed within such state, without regard to the conflicts of laws principles
thereof.
Each of the Schiller Affiliate Releasors hereby represents and warrants to
the COTG Releasees that this Release has been duly authorized by all required
action of the Schiller Affiliate Releasors.
28
<PAGE>
Exhibit 99.1
IN WITNESS WHEREOF, each of the Schiller Affiliate Releasors has executed this
Release as of the ___ day of January, 1999.
WITNESS:
____________________ __________________________________
Carol Schiller
____________________
Print Name
WITNESS:
____________________ __________________________________
Blake Schiller
____________________
Print Name
WITNESS:
____________________ __________________________________
Douglas Schiller
____________________
Print Name
WITNESS:
____________________ __________________________________
Linda Schiller
____________________
Print Name
WITNESS:
____________________ __________________________________
Michael Schiller
____________________
Print Name
WITNESS: DLB, Inc.
____________________ By:_______________________________
____________________ __________________________________
Print Name Print Name and Title
29
<PAGE>
Exhibit 99.1
WITNESS:
____________________ __________________________________
Grace Wnuk
____________________
Print Name
WITNESS: SEQUENTIAL ELECTRONICS, INC.
____________________ By:_______________________________
____________________ __________________________________
Print Name Print Name and Title
WITNESS: S-TECH, INC.
____________________ By:_______________________________
____________________ __________________________________
Print Name Print Name and Title
WITNESS: FMX CORPORATION
____________________ By:_______________________________
____________________ __________________________________
Print Name Print Name and Title
WITNESS: SES HOLDINGS, INC.
____________________ By:_______________________________
____________________ __________________________________
Print Name Print Name and Title
WITNESS: SPECTECH, INC.
____________________ By:_______________________________
____________________ __________________________________
Print Name Print Name and Title
WITNESS: THE TRINITY GROUP, INC.
____________________ By:_______________________________
____________________ __________________________________
Print Name Print Name and Title
WITNESS: UNIVERSAL INTERNATIONAL, INC.
____________________ By:_______________________________
____________________ __________________________________
Print Name Print Name and Title
30
<PAGE>
Exhibit 99.2
SETTLEMENT AGREEMENT
AGREEMENT made as of the 7th day of January, 1999 by and
between CONSOLIDATED TECHNOLOGY GROUP LTD., a New York corporation with offices
at 160 Broadway, New York, N.Y. 10038 ("COTG") and LEWIS S. SCHILLER, an
individual with an address c/o Harry Winderman, Esq., 200 East Palmetto Road,
Suite 200, Boca Raton, Florida 33432 ("Schiller").
W I T N E S S E T H :
WHEREAS, COTG, Schiller and SIS Capital Corporation, a wholly owned
subsidiary of COTG ("SISC"), entered into an agreement dated March 30, 1998 (the
"Schiller Agreement"); and
WHEREAS, COTG, Schiller, SISC, Norman J. Hoskin ("Hoskin"), Grazyna B.
Wnuk ("Wnuk") and E. Gerald Kay ("Kay") entered into a separate agreement dated
March 30, 1998 (the "Omnibus Agreement") and COTG, SISC and Hoskin, Wnuk and Kay
entered into certain other related agreements dated March 30, 1998 (the "Related
Agreements"), (the Schiller Agreement, the Omnibus Agreement and the Related
Agreements hereinafter collectively referred to as the "Prior Schiller
Agreements"); and
WHEREAS, pursuant to the Prior Schiller Agreements, COTG agreed to
assume certain obligations to or with respect to Schiller thereunder, including,
without limitation, the payment to Schiller of Three Hundred Thousand ($300,000)
Dollars for consulting services to be rendered by Schiller, the provision of
certain office space to Schiller and the indemnification of Schiller against
certain claims by third parties; and
WHEREAS, pursuant to the Prior Schiller Agreements, Schiller caused The
Trinity Group, Inc. ("Trinity") to assign certain management services agreements
to COTG pursuant to an assignment dated April 2, 1998 from Trinity to COTG (the
"Trinity Assignment"); and
WHEREAS, the Prior Schiller Agreements provided for the exchange of
General Releases among Schiller, Wnuk, Kay and Hoskin, on the one hand, and COTG
and certain of its affiliates, on the other hand; and
WHEREAS, subsequent to the execution of the Prior Schiller Agreements,
COTG and Schiller have asserted various claims against each other arising under
and in connection with a variety
1
<PAGE>
Exhibit 99.2
of matters, including Schiller's claims with respect to certain actions of COTG
and COTG's breach of the Prior Schiller Agreements; and
WHEREAS, in order to avoid costly and protracted litigation between the
parties with respect to any and all pending claims and disputes between them and
to terminate and cancel certain agreements and obligations between the parties
including, without limitation, Schiller's claims for indemnification with
respect to certain payments made or obligations incurred by Schiller to third
parties prior to the date hereof for which Schiller claims such right of
indemnification (except to the extent provided herein), COTG and Schiller have
agreed to enter into this Settlement Agreement (the "Agreement") to resolve all
of the foregoing, all on and subject to the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned do hereby agree as follows:
1. Settlement Payment.
1.1. Upon the execution hereof, COTG will pay to Schiller or
his designee, by wire transfers to a bank account designated by Schiller, an
aggregate of Three Hundred Thirty-Two Thousand Five Hundred ($332,500) Dollars
(the "Settlement Payment"), in full settlement of all claims that Schiller and
any and all of the Schiller Affiliates (hereinafter defined) have, or may have,
against COTG and the COTG Affiliates (hereinafter defined), whether pursuant to
the Prior Schiller Agreements or otherwise arising either before,
contemporaneously with, or after the execution of the Prior Schiller Agreements
(except as otherwise provided herein), and in further consideration of the
termination and cancellation of certain obligations of COTG to Schiller as
hereinafter provided.
1.2. The Settlement Payment shall be allocated as follows:
(a) One Hundred Ninety Nine Thousand Five
Hundred ($199,500) Dollars in full payment of all sums now or hereafter due by
COTG pursuant to that certain consulting agreement referred to in Paragraph E1
of the Schiller Agreement, which agreement is hereby terminated and canceled in
all respects.
(b) Fifty Eight Thousand ($58,000) Dollars
representing reimbursement to Schiller for legal fees previously
2
<PAGE>
Exhibit 99.2
paid by Schiller to the law firm of Spector & Feldman, P.C. for services
performed by such firm on behalf of COTG prior to April 2, 1998, for services
performed in connection with a certain escrow agreement required by COTG in
connection with the Prior Schiller Agreements and for services performed by such
firm subsequent to April 2, 1998 in connection with the enforcement of the Prior
Schiller Agreements.
(c) Fifty Five Thousand ($55,000) Dollars
representing reimbursement to Schiller for sums paid in connection with that
certain matter entitled "Sheldon Golub and Howard Golub vs. Lewis Schiller" (the
"Golub Action") pursuant to the indemnification provisions of the Schiller
Agreement.
(d) Twenty Thousand ($20,000) Dollars
representing reimbursement to Schiller for sums paid by him to third parties who
or which loaned such amount to Snackles, Inc., a corporation which is or was a
wholly owned subsidiary of COTG.
1.3. COTG will effect the Settlement Payment by separate wire
transfers to Schiller or his designee as provided in Section 1.1 hereof for each
of the amounts allocated in Sections 1.2(a) through (d) above.
1.4. For purposes hereof, the following terms shall have the
meanings ascribed to them as set forth below:
(a) "Schiller Affiliates" shall mean Carol
Schiller, Blake Schiller, Douglas Schiller, Linda Schiller, Michael Schiller,
DLB, Inc., Grace Wnuk, Sequential Electronics, Inc., S-Tech, Inc., FMX
Corporation, SES Holdings, Inc., Spectech, Inc., Universal International, Inc.
("Universal"), and Trinity and the respective subsidiaries of the corporate
Schiller
Affiliates.
(b) "COTG Affiliates" shall mean SIS Capital
Corp., Trans Global Services, Inc. ("Trans Global"), Arc
Networks, Inc. ("Arc"), Netsmart Technologies, Inc. ("Netsmart"),
International Magnetic Imaging Liquidation Corp., and their
respective subsidiaries.
2. Representations and Warranties of Schiller. In order to induce COTG
to enter into this Agreement and consummate the transactions provided for herein
and contemplated hereby, Schiller represents and warrants to COTG as follows:
2.1. Schiller has all requisite power and authority necessary
for, and has taken all action required with respect to, the authorization,
execution, delivery and performance of this Agreement and the consummation of
the
3
<PAGE>
Exhibit 99.2
transactions contemplated hereby, and this Agreement, when executed and
delivered by Schiller, will constitute the valid and legally binding obligation
of Schiller, enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium, or other laws
affecting generally the enforcement of creditors' rights and by general
principles of equity.
2.2. Schiller is not in violation or default of any judgment,
order, writ, decree, instrument, mortgage, document or other agreement to which
he is a party or by which he is bound (the "Schiller Documents") or, to the best
of his knowledge, of any Federal, state, or local law, rule or regulation
applicable to him, the violation of which would materially adversely affect the
transactions contemplated by this Agreement. The authorization, execution,
delivery and performance of this Agreement by Schiller and the consummation of
the transactions contemplated hereby by him will not result in any violation of
or be in conflict with or constitute, with or without the passage of time or
giving of notice, either a default under any of the Schiller Documents or an
event which will create rights of acceleration, termination, cancellation,
default or loss of rights thereunder, or result in the creation of any lien,
claim, charge or encumbrance upon any property of Schiller.
2.3. Schiller is not insolvent and neither the execution of
this Agreement nor the performance by Schiller of the terms of this Agreement
will render him insolvent.
2.4. There is no claim, action, suit, proceeding or
investigation pending or, to the best knowledge of Schiller, threatened against
him which in any way might materially adversely affect the transactions
contemplated by this Agreement. Schiller is not a party or subject to the
provisions of any order, writ, injunction, judgment, or decree of any court or
Federal, state, local or other governmental agency, authority or regulatory body
which in any way might materially adversely affect the transactions contemplated
by this Agreement. There is no claim, action, suit, proceeding or investigation
by Schiller currently pending or which he intends to initiate which in any way
might materially adversely affect the transactions contemplated by this
Agreement.
2.5. To the best of Schiller's knowledge, as of the date
hereof, there is no event, matter or occurrence which will give rise to a claim
by Schiller for indemnification against COTG except for those matters set forth
on Exhibit A hereto, it being acknowledged by Schiller that none of the matters
listed on Exhibit A shall constitute, or be deemed to constitute, any admission
of any obligation of COTG to provide indemnification to Schiller with respect
thereto (other than as to items 10, 11, 12,
4
<PAGE>
Exhibit 99.2
13, 14 and 15 thereof, to the extent permitted by applicable New York law).
2.6. Neither COTG nor any COTG Affiliate (i) is or was named
as a defendant, whether by name or as a "John Doe" defendant, in the Golub
Action, (ii) is subject to any claim by any third party for the return,
repayment or refund of any funds loaned to or invested in Snackles, Inc., (iii)
has any obligation to Schiller or any Schiller Affiliate except only the
obligations to Schiller or any Schiller Affiliate as and to the extent set forth
in this Agreement or the Prior Schiller Agreements, or (iv) has guaranteed or
otherwise become indirectly or contingently liable for any obligations of any
kind of or to Schiller or any Schiller Affiliate, except for any obligations of
COTG expressly provided for in this Agreement or the Prior Schiller Agreements.
2.7. To the best of Schiller's knowledge and belief, all
issuances by COTG of its securities during the period when Schiller was an
officer and director of COTG were made in compliance with all applicable
securities laws.
2.8. Since February 1, 1998, neither Schiller nor any Schiller
Affiliate received from Trinity any fees or other compensation, however
described, and to the best of Schiller's knowledge, all management service fees
received by Trinity from February 1, 1998 to April 3, 1998, were utilized by
COTG in the operation of its business.
2.9. On or about August 1, 1998, Universal entered into a
lease with the owner of 160 Broadway, New York, New York for the office space
currently occupied by it and terminated its sublease with COTG for such space as
of such date.
2.10. In July 1998, Televend, Inc. ("Televend") was liquidated
and, by virtue thereof, has no legal existence.
2.11. None of the representations or warranties of Schiller
contained in this Section 2 is false or misleading in any material respect or
omits to state a fact necessary to make the statements herein not misleading in
any material respect. All of such representations and warranties are true and
correct on the date hereof and will survive the execution and delivery of this
Agreement. Except for the representations and warranties of COTG in Section 3
hereof, there have been no other representations or warranties made by or on
behalf of COTG to Schiller with respect to the matters covered by this Agreement
upon which Schiller has relied in connection with the negotiation, execution and
delivery of this Agreement or with respect to the transactions contemplated
hereby.
5
<PAGE>
Exhibit 99.2
3. Representations and Warranties of COTG. In order to induce Schiller
to enter into this Agreement and consummate the transactions provided for herein
and contemplated hereby, COTG represents and warrants to Schiller as follows:
3.1. COTG has all requisite power and authority necessary for,
and has taken all required corporate action with respect to, the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby and this Agreement, when executed and
delivered by COTG will constitute a valid and legally binding obligation of
COTG, enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium, or other laws
affecting generally the enforcement of creditors' rights and by general
principles of equity.
3.2. COTG is not in violation or default of any provision of
its Certificate of Incorporation or By-Laws or, in any material respect, any
judgment, order, writ, decree, instrument, mortgage, document or other agreement
to which it is a party or by which it is bound (the "COTG Documents"), except
that COTG has not conducted an annual meeting of its shareholders since 1993.
The authorization, execution, delivery and performance of this Agreement by COTG
and the consummation of the transactions contemplated hereby by COTG will not
result in any violation or be in conflict with or constitute, with or without
the passage of time or giving of notice, either a default under any of the COTG
Documents or an event which will create rights of acceleration, termination,
cancellation, default or loss of rights thereunder or result in the creation of
any lien, claim, charge or encumbrance upon any property of COTG.
3.3. There is no claim, action, suit, proceeding or
investigation pending or, to the best knowledge of COTG, threatened against COTG
which in any way might materially adversely affect the transactions contemplated
by this Agreement. COTG is not a party or subject to the provisions of any
order, writ, injunction, judgment, or decree of any court or Federal, state,
local or other governmental agency, authority or regulatory body which in any
way might materially adversely affect the transactions contemplated by this
Agreement. There is no claim, action, suit, proceeding or investigation by COTG
currently pending or which COTG intends to initiate which in any way might
materially adversely affect the transactions contemplated by this Agreement.
3.4. None of the representations or warranties of COTG
contained in this Section 3 is false or misleading in any material respect or
omits to state a fact necessary to make the statements herein not misleading in
any material respect. All of
6
<PAGE>
Exhibit 99.2
the foregoing representations and warranties of COTG are true and correct on the
date hereof and will survive the execution and delivery of this Agreement.
Except for the representations and warranties of Schiller in Section 2 hereof,
there have been no other representations or warranties made to COTG by or on
behalf of Schiller with respect to the matters covered by this Agreement upon
which COTG has relied in connection with the negotiation, execution and delivery
of this Agreement or with respect to the transactions contemplated hereby.
4. Treatment of Certain Provisions of the Prior Schiller Agreements.
4.1. COTG and Schiller hereby agree that, in consideration of
Schiller's cooperation and assistance in connection with the claims of certain
holders of certain of COTG's promissory notes, a certain letter agreement dated
March 31, 1998 from Schiller to COTG regarding COTG's 15% promissory notes in
the aggregate principal amount of One Hundred Fifty Three Thousand ($153,000)
Dollars is hereby terminated and canceled in all respects, without any further
obligations of Schiller thereunder.
4.2. Notwithstanding any provision of this Agreement to the
contrary, the Trinity Assignment shall remain in full force and effect except
that, notwithstanding any term or provision thereof to the contrary, neither
Schiller nor Trinity has any obligation to return or refund to COTG any fees or
other payments that may have been paid to Trinity with respect to any months
subsequent to March 1998.
5. Covenants of the Parties.
5.1. Schiller hereby agrees, in consideration of the
Settlement Payment:
(a) To execute, on presentation, all unsigned
agreements or consents or minutes of meetings which accurately reflect the
actions of COTG's Board of Directors with respect to meetings or actions of such
Board at the time Schiller was a director thereof.
(b) To comply with the restrictive covenant,
non-disclosure and non-disparagement covenants contained in Paragraph F6 of the
Schiller Agreement and Paragraph D of the Omnibus Agreement (it being expressly
agreed that any claims by COTG and the COTG Affiliates for any breach of the
aforementioned non-disparagement covenant by Schiller or the Schiller Affiliates
prior to the date hereof are being released pursuant to Section 8.2 hereof,
except as otherwise provided therein with respect to the rights of Netsmart and
its officers and directors as to
7
<PAGE>
Exhibit 99.2
potential future claims of Schiller as described in Section
8.1(iv)).
(c) To generally provide reasonable assistance
and cooperation to COTG and its counsel in connection with all present and
future claims and all pending and future legal actions or proceedings to which
COTG or the COTG Affiliates are now, or may in the future be, a party, including
those matters listed on Exhibit A hereto and, upon the request of COTG, to
execute a statement or affidavit (a "Litigation Statement") as to the facts
known to Schiller in connection with any of such claims, actions or proceedings.
Such cooperation will include being prepared for and giving testimony at
depositions, hearings, and trials in connection with such claims, actions and
proceedings. Notwithstanding the foregoing, Schiller shall be entitled to
reasonable advance notice with respect to COTG's requests for such assistance
and cooperation, Schiller's aforementioned covenant shall be subject to
Schiller's availability and Schiller shall not be required to incur any costs or
expenses in connection therewith.
(d) To obtain and deliver to COTG,
simultaneously with the execution and delivery of this Agreement, an agreement
from Jay J. Miller to release COTG and the COTG Affiliates from any and all
claims, liabilities and obligations, in form and substance satisfactory to COTG.
(e) To obtain and deliver to COTG,
simultaneously with the execution and delivery of this Agreement, general
releases executed by each of the Schiller Affiliates, which releases shall be in
substantially the form annexed hereto as Exhibit B.
(f) To use his best efforts to assist COTG in
obtaining from Norman Hoskin any documents which Hoskin agreed to execute but
have not yet been delivered pursuant to the Omnibus Agreement.
5.2. COTG hereby agrees:
(a) To comply with the non-disparagement
covenant contained in Paragraph D of the Omnibus Agreement (it being expressly
agreed that any claims by Schiller and the Schiller Affiliates for any breach of
such non-disparagement covenant by COTG or the COTG Affiliates prior to the date
hereof are being released pursuant to Section 8.1 hereof, except as otherwise
provided in clause (iv) thereof.
(b) To obtain and deliver to Schiller,
simultaneously with the execution and delivery of this Agreement,
general releases executed by each of the COTG Affiliates and
8
<PAGE>
Exhibit 99.2
Edward D. Bright, in his capacity as the Representative, as defined in and
otherwise provided in the Prior Schiller Agreements (the "Representative"),
which releases shall be in substantially the form annexed hereto as Exhibit C.
(c) To have its counsel use its best efforts to
contact Fairfield Leasing Co., Inc. and Banco Auto Leasing Corp.
for the purpose of satisfying the existing judgments against
COTG, Sequential Information Systems and/or Schiller identified
on Exhibit D hereto, COTG to indemnify Schiller against any
damage or loss in connection with such judgments.
(d) Subject to the consent of Moore Stephens,
P.C. (for which COTG shall have no responsibility or liability, if denied) not
to deny or refuse permission to Schiller to obtain access to all work papers and
trial balances of the Transferred Subsidiaries for calendar 1997 which are in
the possession of such firm, all at Schiller's sole expense.
(e) Without cost to Schiller, to prepare for
signature by Schiller (or any other officer of Televend who acted in such
capacity during the relevant periods) all required state franchise tax returns
and pay all unpaid state franchise taxes (inclusive of all interest and
penalties thereon) of the Transferred Subsidiaries for all periods through
December 31, 1997 and to provide Schiller with copies of all available internal
quarterly and year-end consolidating financial statements for the 1995, 1996 and
1997 calendar years. Notwithstanding the foregoing, COTG's aforementioned
obligation for any such franchise taxes (including interest and penalties
thereon) shall not exceed the amount due therefor after the date such franchise
tax returns are delivered to Schiller, together with the required payments
thereunder.
(f) Notwithstanding the July 1998 dissolution of
Televend, in the event that either the State of New York and/or the Federal
Government takes any action to collect any unpaid sales, excise or payroll taxes
relating to the operations of Televend prior to April 3, 1998, Schiller will (i)
provide copies to COTG of all notices and other documents received by him or
Televend in connection therewith upon his receipt thereof, and (ii) allow COTG,
on behalf of Televend, to contest the same, cooperate fully with COTG in
connection therewith, and not settle, compromise or take any other action in
connection with such matters (including the execution of any documents relating
thereto), without COTG's written consent. In consideration of Schiller complying
with clauses (i) and (ii) above, COTG will indemnify Schiller and all officers,
directors and other "responsible persons" of Televend who shall be held
personally liable for such amounts, up to a maximum of $65,000 for such taxes
(plus all interest and penalties thereon).
9
<PAGE>
Exhibit 99.2
6. Schiller Guaranties. COTG hereby confirms that Schiller is no longer
a guarantor of the obligations of Netsmart and Arc (or its subsidiary, A.R.C.
Networks, Inc.) to any bank, commercial lender, or other financial institution
and, accordingly, Schiller has no further obligations as a guarantor with
respect thereto.
7. Transfer of Subsidiaries. COTG and Schiller hereby confirm that:
(a) The sale of the Transferred Subsidiaries, as
defined in and otherwise provided for in Paragraph C of the Schiller Agreement,
was effectuated by a transfer of all of the capital stock of such entities owned
by COTG and, as a result thereof, Schiller and/or his designees then owned
and/or acquired the sole record and beneficial equity interest in the
Transferred Subsidiaries.
(b) The equity interests in the Transferred
Subsidiaries were represented by book entries and no stock certificates were
issued prior to the aforementioned transfer by COTG of the equity interests in
the Transferred Subsidiaries owned by it to Schiller and/or his designees.
(c) All indebtedness between the Transferred
Subsidiaries, on the one hand, and COTG and the COTG Affiliates, on the other
hand, was canceled in all respects as of January 1, 1998.
(d) On the date hereof, COTG will pay Moore
Stephens, P.C. Seven Thousand Five Hundred ($7,500) Dollars for fees incurred in
connection with the preparation of trial balances and certain interim financial
statements for the Transferred Subsidiaries for periods through December 31,
1997.
(e) All indebtedness of COTG to Universal for
sums heretofore loaned to COTG by Universal, and all sums owed by Universal to
COTG for rent and utilities due in connection with certain office space
subleased to Universal through July 31, 1998, are hereby canceled and waived.
(f) All indebtedness (including accrued interest
thereon), if any, of Fingermatrix, Inc. to COTG and the COTG
Affiliates has been previously canceled by COTG.
8. Releases.
8.1. Schiller does hereby unconditionally and irrevocably
release and discharge each of COTG, the COTG Affiliates, any "control person" as
defined by the applicable provisions of the Federal securities laws, the
Representative,
10
<PAGE>
Exhibit 99.2
and their respective officers, directors, shareholders, employees, counsel,
agents (including any investment banker or market maker), heirs, executors,
administrators, personal representatives, successors and assigns and all
entities owned or controlled, directly or indirectly, by any of them)
(hereinafter collectively referred to as the "COTG Releasees"), from any and all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, obligations, rights of
indemnification, whether contractual, statutory, pursuant to any provision of
any certificate of incorporation or by-laws, or otherwise (except as expressly
provided below in this Section 8.1 and in Section 9 of this Agreement),
controversies, agreements, promises, variances, trespasses, damages,
liabilities, judgments, executions, claims and demands whatsoever, in law,
admiralty or equity (whether known or unknown and whether liquidated or
unliquidated), whether asserted individually, derivatively, or in any other
capacity, which Schiller ever had, now has or hereafter can, shall or may have
against any of the COTG Releasees for, by reason of, in any way based upon,
arising out of, related to, or connected with, directly or indirectly, any
matter, cause, thing, transaction, act, or omission whatsoever from the
beginning of the world to the date of this Agreement, except for (i) any
representations, warranties, covenants or obligations of the COTG Releasees
under or pursuant to this Agreement or as expressly provided under the Prior
Schiller Agreements (only to the extent that any such covenants or obligations
in the Prior Schiller Agreements have not been terminated or superseded by this
Agreement), (ii) any claims for indemnification and/or subrogation which
Schiller may have against COTG or Netsmart or Arc pursuant to Paragraphs B1, B6
and E2 of the Schiller Agreement and C5 of the Omnibus Agreement, but only for
or with respect to payments made by or on behalf of Schiller or obligations
incurred by Schiller after the date hereof, (iii) the ownership of any and all
shares of common stock of Arc and any and all warrants to purchase shares of
common stock of Trans Global and Netsmart owned by Schiller, (iv) any claims
Schiller may have against Netsmart or any officer or director thereof with
respect to the provisions of Paragraph 13(d) of that certain agreement dated as
of June 30, 1998 between Netsmart, Granite Technologies, Inc., Storm Morgan and
Leonard Luttinger, and (v) any claims against any COTG Releasee which cannot be
released under applicable law, it being expressly understood and acknowledged by
Schiller that none of the matters referred to in clauses (i) through (v) above
shall constitute, or be deemed to constitute, an admission of any liability or
obligation by or on behalf of any of the COTG Releasees with respect thereto,
any such liabilities or obligations being hereby expressly denied by each of the
COTG Releasees.
8.2. COTG does hereby unconditionally and irrevocably
release and discharge Schiller and the Schiller Affiliates and
11
<PAGE>
Exhibit 99.2
their respective officers, directors, shareholders, employees, counsel, agents,
heirs, executors, administrators, legal representatives, successors and assigns,
and all entities owned or controlled, directly or indirectly, by any of them
(hereinafter collectively referred to as the "Schiller Releasees"), from any and
all actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, obligations, contracts,
controversies, agreements, promises, variances, trespasses, damages,
liabilities, judgments, executions, claims and demands whatsoever, in law,
admiralty or equity (whether known or unknown and whether liquidated or
unliquidated), whether asserted individually, derivatively, or in any other
capacity, which COTG ever had, now has or hereafter can, shall or may have
against any of the Schiller Releasees for, by reason of, in any way based upon,
arising out of, related to, or connected with, directly or indirectly, any
matter, cause, thing, transaction, act, or omission whatsoever from the
beginning of the world to the date of this Agreement, except for (i) any
representations, warranties, covenants or obligations of any of the Schiller
Releasees under or pursuant to this Agreement or as expressly provided under the
Prior Schiller Agreements (only to the extent that any such covenants or
obligations in the Prior Schiller Agreements have not been terminated or
superseded by this Agreement), (ii) any claims against any of the Schiller
Releasees arising from any matter for which Schiller seeks indemnification or
subrogation under this Agreement or the Prior Schiller Agreements, (iii) any
claims of a character for which indemnification may not be given by a
corporation to its officers and/or directors pursuant to the applicable
provisions of the Federal or state securities laws or pursuant to the applicable
provisions of the corporate law in the State in which such corporation is
incorporated, and (iv) any claims against any of the Schiller Releasees which
cannot be released under applicable law, it being expressly understood and
acknowledged by COTG that none of the matters referred to in clauses (i) through
(iv) above shall constitute, or be deemed to constitute, an admission of any
liability or obligation by or on behalf of any of the Schiller Releasees with
respect thereto, any such liabilities or obligations being hereby expressly
denied by each of the Schiller Releasees and, provided further, that in the
event that Schiller makes any claim against Netsmart or its officers or
directors of the type referred to in Section 8.1(iv) of this Agreement, neither
this Agreement nor the release issued by Netsmart pursuant to Section 5.2(b) of
this Agreement shall act as a bar or restriction or otherwise affect, in any
manner, the right or ability of Netsmart, or any such officer or director, to
raise or assert against Schiller any affirmative defenses, claims or
counterclaims which it or they may have against Schiller in connection only with
the aforementioned claims by Schiller or to obtain a judgment against Schiller
as a result thereof.
12
<PAGE>
Exhibit 99.2
9. Schiller Indemnification. Notwithstanding any provision of this
Agreement to the contrary (excepting Schiller's representations and warranties
in Sections 2.5 and 2.6 hereof and the applicable portions of the releases
between Schiller and COTG in Section 8 hereof), it is understood and agreed upon
by COTG and Schiller that:
9.1. COTG hereby confirms that Schiller's entitlement to the
indemnification rights referred to in and otherwise provided by Paragraphs B1,
B6 and E2 of the Schiller Agreement and C5 of the Omnibus Agreement shall not be
modified, limited or terminated in any respect by the provisions of this
Agreement and shall survive the execution and delivery of this Agreement and
continue in full force and effect from and after the date hereof in accordance
with the terms thereof (except as otherwise provided herein), including, without
limitation, Schiller's right to indemnification with respect to the matters
referred to in Section 6 of this Agreement, except that in the event that
Schiller testifies, either in a deposition, interrogatory or in court, in a
manner which clearly and materially conflicts with his Litigation Statement, or
any of his representations and warranties in this Agreement, or refuses to
provide assistance or cooperation to COTG in accordance with the provisions of
Section 5.1(c) hereof, all rights of indemnification with respect to such matter
will be terminated.
9.2. Without in any way limiting the rights of Schiller and
the obligations of COTG with respect to Schiller's right to seek indemnification
as provided in Paragraphs B1, B6 and E2 of the Schiller Agreement and C5 of the
Omnibus Agreement and solely to the extent that any of the following provisions
of this Section 9.2 are not inconsistent with Schiller's aforementioned
indemnification rights, in the event that Schiller seeks indemnification
thereunder:
(a) Schiller shall provide COTG with prompt
written notice of any claim, suit or proceeding (the "Actions") against him or
threatened against him which Schiller believes will or may be subject to
indemnification thereunder and permit COTG, at any time, at its sole cost and
expense through counsel selected by it, to answer, defend, take over, settle or
otherwise act on any of such Actions. Schiller shall give COTG all reasonable
information and assistance to enable COTG to defend, take over, settle or
otherwise act on and with respect to any such Actions. In the event that
Schiller settles any of such Actions without the prior written consent of COTG,
or otherwise takes any action after submitting to COTG a claim for
indemnification hereunder which materially prejudices or otherwise materially
interferes with COTG's defense thereof, COTG shall not have any obligation to
indemnify Schiller with respect thereto. Schiller shall have the right to employ
his own counsel
13
<PAGE>
Exhibit 99.2
in connection with any of such Actions in which COTG assumes the defense
thereof, except that the fees and expenses of such counsel shall be borne by
Schiller unless the employment of such counsel and the payment of such fees and
expenses shall have been specifically authorized by COTG, in writing, in
connection with the defense thereof.
(b) Any fees, costs or expenses to be incurred
by Schiller in defending any action or proceeding as to which Schiller may be
entitled to claim indemnification pursuant to the applicable provisions of the
Prior Schiller Agreements, shall be advanced to Schiller by COTG or paid by COTG
in advance of the final disposition of such action or proceeding solely upon and
subject to the following: (i) a determination by the Board of Directors of COTG
that Schiller is entitled to indemnification pursuant to such provisions of the
Prior Schiller Agreements, which determination shall be made as promptly as
practical after COTG's receipt of a request for indemnification from Schiller
(it being acknowledged that COTG has previously determined that Schiller is
entitled to indemnification thereunder in connection with those actions set
forth on Exhibit E, but only to the extent provided for in this Agreement as to
the Golub Action), (ii) COTG's decision not to undertake the defense of any such
action with counsel of its choosing, (iii) COTG's regular supervision and
monitoring of the defense of any such action with Schiller's counsel, (iv) the
reasonableness of the legal fees and disbursements incurred by Schiller's
counsel therein, and (v) the receipt by COTG of an undertaking by or on behalf
of Schiller to repay all of such amounts as, and to the extent required by
Paragraph (a) of Section 725 of the New York Business Corporation Law, in form
and substance as approved by COTG.
9.3. COTG will pay to Steven H. Rosen, Esq. ("Rosen") Ten
Thousand ($10,000) Dollars upon the execution of this Agreement for all legal
services rendered and disbursements incurred by Rosen in connection with the
Golub Action and otherwise on behalf of Schiller in connection with the
enforcement of the Prior Schiller Agreements through the date hereof. In
addition, COTG will pay to Rosen, when due, all legal fees and disbursements
incurred by Rosen for services rendered to COTG through October 31, 1998 and for
legal services rendered to Schiller through October 29, 1998 pursuant to the
statements of services rendered by Rosen, copies of which are attached hereto as
Exhibit F.
9.4. COTG will continue to be responsible to pay Rosen
directly, or indemnify Schiller, with respect to the reasonable legal fees and
disbursements of Rosen in connection with those actions which are set forth as
items 1 through 4 on Exhibit E hereto with respect to periods on and after
October 29, 1998, but only if (i) Rosen submits bills for such legal services to
COTG
14
<PAGE>
Exhibit 99.2
within thirty (30) days after the end of each month, (ii) Schiller causes Rosen
to allow COTG and its counsel to regularly monitor and participate in the
defense of such actions, and (iii) Schiller permits COTG, at any time at the
request of COTG, to assume the representation and/or defense of any or all of
such actions with counsel of its choosing (in which event Schiller may continue
to utilize the legal services of Rosen on his behalf, but solely at his
expense).
9.5. COTG will have no further indemnification
responsibilities or obligations to Schiller for any amounts paid or payable in
connection with the Golub Action from and after the date hereof or for the legal
fees and disbursements of Rosen with respect to the Golub Action on and after
the date hereof, without COTG's prior written approval. In the event that COTG
does not approve a request by Schiller for indemnification in the Golub Action
with respect to periods on and after the date hereof, Schiller may file a claim
for such indemnification with the American Arbitration Association in New York
City for the purpose of deciding the issue of Schiller's rights to
indemnification in connection therewith, the party prevailing in any such
arbitration to be entitled to reimbursement of all costs and attorneys' fees
incurred in connection therewith. The decision of the arbitration panel in such
action shall be conclusive and binding upon the parties.
10. Miscellaneous.
10.1. This Agreement constitutes the sole and entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, representations, warranties, statements,
promises, arrangements and understandings, whether oral or written, express or
implied, among the parties hereto with respect to the subject matter hereof and
may not be changed or modified except by an instrument in writing signed by the
party or parties to be bound thereby. This Agreement has been subject to the
mutual consultation, negotiation and agreement of the parties hereto and shall
not be construed for or against any party hereto on the basis of such party
having drafted this Agreement. Notwithstanding any provision of this Agreement
to the contrary, the Prior Schiller Agreements shall remain in full force and
effect and shall be unaffected by this Agreement, except to the extent that the
provisions of this Agreement modify the provisions of the Prior Schiller
Agreements. In the event that there is any inconsistency between the terms of
this Agreement and the terms of the Prior Schiller Agreements, the terms of this
Agreement shall govern and be controlling.
10.2. All notices, consents, requests, demands and other
communications required or permitted to be given under this
15
<PAGE>
Exhibit 99.2
Agreement (the "Notices"), shall be in writing and delivered personally or by a
nationally recognized overnight courier service, receipt acknowledged, or mailed
by registered or certified mail, postage prepaid, return receipt requested,
addressed to the parties hereto as follows (or to such other address as any of
the parties hereto shall specify by notice given in accordance with this
provision):
(a) If to COTG:
Consolidated Technology Group Ltd.
160 Broadway
New York, New York 10038
Attn.: Seymour Richter, President
and
Consolidated Technology Group Ltd.
2424 North Federal Highway, Suite 110
Boca Raton, Florida 33431
Attn.: George W. Mahoney, Chief Financial Officer
with a copy to:
Robert L. Blessey, Esq.
51 Lyon Ridge Road
Katonah, New York 10536
(b) If to Schiller:
Lewis S. Schiller
c/o Harry Winderman, Esq.
200 East Palmetto Road, Suite 200
Boca Raton, Florida 33432
with a copy to:
Steven H. Rosen, Esq.
630 Third Avenue
New York, New York 10017
All such Notices shall be deemed given when personally delivered as aforesaid,
or, if mailed as aforesaid, on the third business day after the mailing thereof
or on the day actually received, if earlier, except for a notice of a change of
address which shall be effective and deemed to have been given only upon
receipt.
10.3. Neither Schiller nor COTG may assign this Agreement or
its or their respective rights, benefits or obligations hereunder without the
written consent of the other parties hereto, except that no such consent shall
be required in
16
<PAGE>
Exhibit 99.2
connection with any merger or consolidation by COTG with or into any other
entity or with respect to any sale by COTG of all or any significant portion of
its business and assets.
10.4. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors, heirs, personal
representatives, administrators, executors and permitted assigns. Nothing
contained in this Agreement is intended to confer upon any person or entity,
other than the parties hereto, or their respective successors, heirs, personal
representatives, administrators, executors or permitted assigns, any rights,
benefits, obligations, remedies or liabilities under or by reason of this
Agreement.
10.5. No waiver of any provision of this Agreement or of any
breach thereof shall be effective unless in writing and signed by the party to
be bound thereby. The waiver by any party hereto of a breach of any provision of
this Agreement, or of any representation, warranty, obligation or covenant in
this Agreement by any other party hereto, shall not be construed as a waiver of
any subsequent breach of the same or of any other provision, representation,
warranty, obligation or covenant of such other party, unless the instrument of
waiver expressly so provides.
10.6. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York with respect to contracts made
and to be fully performed therein without regard to the conflicts of laws
principles thereof. The parties hereto hereby agree that, except as otherwise
provided in Section 9.5 hereof, any suit or proceeding arising under or as a
result of this Agreement or the consummation of the transactions contemplated
hereby, shall be brought solely in a Federal or state court located in the City,
County, and State of New York. By their execution hereof, the parties hereto
irrevocably consent and submit to the in personam jurisdiction of the Federal
and state courts located in the City, County and State of New York and agree
that any process in any suit or proceeding commenced in such courts under this
Agreement may be served upon them personally or by certified or registered mail,
return receipt requested, or by a nationally recognized overnight courier
service which provides evidence of delivery, with the same force and effect as
if personally served upon them in such County and State. The parties hereto each
waive any claim that any such jurisdiction is not a convenient forum for any
such suit or proceeding and any defense of lack of in personam jurisdiction with
respect thereto.
10.7. The parties hereto hereby agree that, at any time and
from time to time after the date hereof and through and after the date of
execution hereof, upon the reasonable request of and at no cost to the party to
which any such request is made,
17
<PAGE>
Exhibit 99.2
they shall do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, such further acts, deeds, assignments, transfers,
conveyances, and assurances as may be reasonably required to more effectively
consummate this Agreement or the Prior Schiller Agreements, and the transactions
contemplated thereby or to confirm or otherwise effectuate the provisions of
this Agreement or the Prior Schiller Agreements.
10.8. Each party hereto represents and warrants to the other
that he or it has been represented by independent counsel of his or its own
choosing in connection with the negotiation, execution, delivery and
consummation of this Agreement, Schiller hereby acknowledging and confirming to
COTG that (i) he has been represented by Rosen in connection with the
negotiation and execution of this Agreement and all matters pertaining to this
Agreement, and (ii) Rosen has represented and is representing COTG and one or
more of the COTG Affiliates as to matters not relating to this Agreement, that
his retention of Rosen as his counsel in connection with this Agreement has been
made solely by Schiller without any requirement or suggestion of COTG and, in
the event that there is any conflict of interest within the meaning of the Code
of Professional Responsibility with respect to Rosen's representation of him,
Schiller hereby waives such conflict. COTG also hereby waives any such conflict
of interest with respect to Rosen's representation of Schiller in connection
with this Agreement. This Agreement represents the joint product and effort of
each of the parties hereto after fully informed and vigorous arms-length
discussion and negotiation, and no presumption may be drawn against any party
hereto as the putative drafter of this Agreement. Except as expressly provided
in this Agreement, each of the parties hereto shall bear all of their respective
costs and expenses incurred in connection with the negotiation, preparation,
execution, consummation, performance and/or enforcement of this Agreement,
including, without limitation, the fees and disbursements of their respective
counsel, financial advisors and accountants. Notwithstanding the foregoing, and
except as otherwise provided in Section 9.5 hereof, in the event of any action
or proceeding instituted by any party hereto to enforce the provisions of this
Agreement, the Court may, in its discretion, award the party prevailing therein
reimbursement by the other party of the reasonable legal costs and expenses
incurred by such prevailing party in connection therewith.
10.9. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which when
taken together, shall constitute one and the same instrument.
10.10. The Section headings used in this Agreement have been
used for convenience of reference only and are not to be considered in
construing or interpreting this Agreement.
10.11. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such
18
<PAGE>
Exhibit 99.2
provision(s) shall be excluded from this Agreement and the balance of this
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the day and year first above written.
WITNESS: CONSOLIDATED TECHNOLOGY GROUP LTD.
____________________ By:________________________________
Seymour Richter, President and
____________________ Chief Executive Officer
Print Name
WITNESS:
- -------------------- -----------------------------------
Lewis S. Schiller
- --------------------
Print Name
AGREED TO SOLELY WITH RESPECT TO
ANY MODIFICATIONS TO THE PROVISIONS
OF THE PRIOR SCHILLER AGREEMENTS
WHICH REQUIRE THE CONSENT OF THE
REPRESENTATIVE
WITNESS:
- -------------------- -----------------------------------
Edward D. Bright
____________________ Representative
Print Name
19
<PAGE>
Exhibit 99.2
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On __________, 1999, before me personally came SEYMOUR RICHTER, to me
known, and known to me to be, and who, by me duly sworn, did depose and say that
deponent is, the President and Chief Executive Officer of CONSOLIDATED
TECHNOLOGY GROUP LTD., the corporation described in and which executed the
foregoing Settlement Agreement and that deponent acknowledged to me that his
signature was affixed to the Settlement Agreement by order of the board of
directors of such corporation.
-------------------------
Notary Public
STATE OF ___________)
:ss.:
COUNTY OF __________)
On __________, 1999, before me personally came LEWIS S. SCHILLER, to me
known, and known to me to be, the individual described in and who executed the
foregoing Settlement Agreement and duly acknowledged to me that he executed the
same.
-------------------------
Notary Public
STATE OF NEW YORK )
:ss.:
COUNTY OF __________)
On __________, 1999, before me personally came EDWARD D. BRIGHT, to me
known, and known to me to be, the individual described in and who executed the
foregoing Settlement Agreement and duly acknowledged to me that he executed the
same.
-------------------------
Notary Public
20
<PAGE>
Exhibit 99.2
EXHIBITS
Exhibit Description Section
A Matters that may give rise to claims 2.5
for indemnification
B Form of Schiller Affiliates Release 5.1(f)
C Form of COTG Affiliates and Representative
Release 5.2(b)
D Judgments 5.2(c)
E Schedule of Legal Actions 9.2(b)
F Statements of Legal Services Rendered
by Steven Rosen 9.3
21
<PAGE>
Exhibit 99.2
EXHIBIT A
MATTERS THAT MAY GIVE RISE TO CLAIMS FOR INDEMNIFICATION
Claims
1. Future potential claim of E. Gerald Kay for alleged unpaid outside
directors' fees from COTG and certain of its subsidiaries.
2. Claims for unpaid taxes (including penalties and interest thereon) of
any or all of the Transferred Subsidiaries (as defined in the Schiller
Agreement) for periods prior to December 31, 1997.
3. Claims of American Stock Transfer Co. for alleged unpaid fees due from
Consolidated Technology Group Ltd.
4. Future potential claim of Norman Hoskin for alleged unpaid consulting
fees from COTG.
5. Future potential claims of James Conway with respect to breach of
employment agreements with Netsmart Technologies, Inc. and/or S-Tech,
Inc.
6. Claims of Vero International, S.r.L. against Consolidated Technology
Group Ltd. and its subsidiaries for funds allegedly advanced by Vero to
Consolidated and/or 3-D Technology, Inc. or its subsidiary or
affiliated companies.
7. Future potential claim of Vanguard Limited or Herman Finesod and/or
their affiliates against Consolidated Technology Group Ltd. and/or its
subsidiaries for compensation claimed to be due in connection with,
among other things, the acquisition of International Magnetic Imaging,
Inc. in 1994.
8. Future potential claims for unpaid sales and excise taxes of Televend,
Inc.
9. Future potential claims of Ronald Stanford ("Stanford") for breach of
that certain Employment Agreement dated March 15, 1996 between Stanford
and 3-D Technology, Inc.
Actions or Proceedings
10. Sheldon Golub and Howard Golub vs. Lewis Schiller.
11. Naval Kapoor and Dirk Esselens vs. SIS Capital Corp., et al.
22
<PAGE>
Exhibit 99.2
12. Bridge Ventures, Inc., et al vs. Consolidated Technology Group Ltd., et
al.
13. 5 Boro Beverage Distributors vs. Consolidated Technology
Group Ltd.
14. One Card Health Systems Corporation vs. Leonard M. Luttinger, et al.
15. R. Feldstein vs. Consolidated Technology Group Ltd.
23
<PAGE>
Exhibit 99.2
EXHIBIT B
R E L E A S E
Reference is made to that certain Settlement Agreement dated January
__, 1999, by and between CONSOLIDATED TECHNOLOGY GROUP LTD. and LEWIS S.
SCHILLER (the "Settlement Agreement"), the terms of which are incorporated
herein by reference thereto. Any capitalized terms which are used but not
defined herein shall have the meanings ascribed to them in the Settlement
Agreement.
For One Dollar ($1.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, CAROL SCHILLER, BLAKE
SCHILLER, DOUGLAS SCHILLER, LINDA SCHILLER, MICHAEL SCHILLER, DLB, INC., GRACE
WNUK, SEQUENTIAL ELECTRONICS, INC., S-TECH, INC., FMX CORPORATION, SES HOLDINGS,
INC., SPECTECH, INC., THE TRINITY GROUP, INC. and UNIVERSAL INTERNATIONAL, INC.,
for themselves and all other entities owned, controlled by, or under common
control with any of them and their respective officers, directors, shareholders,
principals, employees, agents, consultants, heirs, administrators, executors,
personal representatives, successors and assigns (hereinafter collectively
referred to as the "Schiller Affiliate Releasors"), do hereby unconditionally
and irrevocably release and discharge Consolidated Technology Group Ltd., SIS
Capital Corp., Arc Networks, Inc., Trans Global Services, Inc., Netsmart
Technologies, Inc., International Magnetic Imaging Liquidation Corp., the
Representative and all subsidiaries and parents thereof, and all "control
persons" as defined by the applicable provisions of the Federal securities laws,
and all entities owned, controlled by, or under common control with any of them,
and their respective officers, directors, shareholders, principals, employees,
counsel, agents (including any investment banker or market maker) and
consultants (hereinafter collectively, the "COTG Releasees"), from any and all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, obligations, contracts,
controversies, agreements, promises, variances, trespasses, damages,
liabilities, judgments, executions, claims and demands whatsoever, in law,
admiralty or equity (whether known or unknown and whether liquidated or
unliquidated), whether asserted individually, derivatively, or in any other
capacity, which the Schiller Affiliate Releasors, or any of them, ever had, now
have or hereafter can, shall or may have against the COTG Releasees for, by
reason of, in any way based upon, arising out of, related to, or connected with,
directly or indirectly, any matter, cause, thing, transaction, act, or omission
whatsoever from the beginning of the world to and including the date hereof,
except for (a) any of the matters which are described in clauses (i) through (v)
of Section 8.1 of the Settlement Agreement, (b) any claims with respect to the
24
<PAGE>
Exhibit 99.2
ownership of any and all shares of common stock and warrants to purchase shares
of common stock of the COTG Releasees owned by any of the individual Schiller
Affiliate Releasors, (c) any claims for indemnification which Wnuk may have
against COTG pursuant to the applicable provisions of the Related Agreements,
and (d) claims by FMX Corporation and/or Michael Schiller against Consolidated
Technology Group Ltd. for certain amounts alleged due to Michael Schiller with
respect to his compensation from FMX Corporation for the 1997 calendar year, it
being expressly understood and acknowledged by the Schiller Affiliate Releasors
that none of the matters referred to in clauses (a) through (d) above shall
constitute, or be deemed to constitute, an admission of any liability or
obligation by or on behalf of any of the COTG Releasees with respect thereto,
any such liabilities or obligations being hereby expressly denied by each of the
COTG Releasees.
No provision of this Release may be amended, modified or waived except
by a written instrument executed by the Schiller Affiliate Releasors and the
COTG Releasees.
If any term or provision of this Release is held to be illegal or
invalid, such illegality or invalidity shall not affect the remaining terms or
provisions hereof, and each term and provision of this Release shall be enforced
to the fullest extent permitted by law.
This Release shall be binding upon each of the Schiller Affiliate
Releasors and their successors and assigns, heirs, executors, administrators and
personal representatives and inure to the benefit of the COTG Releasees and
their respective successors and assigns.
This Release may be signed in any number of counterparts, and by any of
the Schiller Affiliate Releasors in separate counterparts, each of which, when
so executed, shall be deemed to be a binding original and all of which, when
taken together, shall constitute one and the same Release.
This Release shall be governed by and construed in accordance with the
laws of the State of New York with respect to contracts made and to be fully
performed within such state, without regard to the conflicts of laws principles
thereof.
Each of the Schiller Affiliate Releasors hereby represents and warrants
to the COTG Releasees that this Release has been duly authorized by all required
action of the Schiller Affiliate Releasors.
25
<PAGE>
Exhibit 99.2
IN WITNESS WHEREOF, each of the Schiller Affiliate Releasors has
executed this Release as of the ___ day of January, 1999.
WITNESS:
- -------------------- ----------------------------------
Carol Schiller
- --------------------
Print Name
WITNESS:
- -------------------- ----------------------------------
Blake Schiller
- --------------------
Print Name
WITNESS:
- -------------------- ----------------------------------
Douglas Schiller
- --------------------
Print Name
WITNESS:
- -------------------- ----------------------------------
Linda Schiller
- --------------------
Print Name
WITNESS:
- -------------------- ----------------------------------
Michael Schiller
- --------------------
Print Name
WITNESS: DLB, Inc.
____________________ By:_______________________________
- -------------------- ----------------------------------
Print Name Print Name and Title
26
<PAGE>
Exhibit 99.2
WITNESS:
- -------------------- ----------------------------------
Grace Wnuk
- --------------------
Print Name
WITNESS: SEQUENTIAL ELECTRONICS, INC.
____________________ By:_______________________________
- -------------------- ----------------------------------
Print Name Print Name and Title
WITNESS: S-TECH, INC.
____________________ By:_______________________________
- -------------------- ----------------------------------
Print Name Print Name and Title
WITNESS: FMX CORPORATION
____________________ By:_______________________________
- -------------------- ----------------------------------
Print Name Print Name and Title
WITNESS: SES HOLDINGS, INC.
____________________ By:_______________________________
- -------------------- ----------------------------------
Print Name Print Name and Title
WITNESS: SPECTECH, INC.
____________________ By:_______________________________
- -------------------- ----------------------------------
Print Name Print Name and Title
27
<PAGE>
Exhibit 99.2
WITNESS: THE TRINITY GROUP, INC.
____________________ By:_______________________________
- -------------------- ----------------------------------
Print Name Print Name and Title
WITNESS: UNIVERSAL INTERNATIONAL, INC.
____________________ By:_______________________________
- -------------------- ----------------------------------
Print Name Print Name and Title
28
<PAGE>
Exhibit 99.2
EXHIBIT C
R E L E A S E
Reference is made to that certain Settlement Agreement dated January
__, 1999, by and between CONSOLIDATED TECHNOLOGY GROUP LTD. and LEWIS S.
SCHILLER (the "Settlement Agreement"), the terms of which are incorporated
herein by reference thereto. Any capitalized terms which are used but not
defined herein shall have the meanings ascribed to them in the Settlement
Agreement.
For One Dollar ($1.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, SIS CAPITAL CORP., ARC
NETWORKS, INC., TRANS GLOBAL SERVICES, INC., NETSMART TECHNOLOGIES, INC.,
INTERNATIONAL MAGNETIC IMAGING LIQUIDATION CORP., THE REPRESENTATIVE, and all
subsidiaries and parents thereof, and all "control persons" as defined by the
applicable provisions of the Federal securities laws, and all entities owned,
controlled by, or under common control with any of them, and their respective
officers, directors, shareholders, principals, employees, counsel, agents and
consultants (hereinafter collectively, the "COTG Affiliate Releasors"), do
hereby unconditionally and irrevocably release and discharge Carol Schiller,
Blake Schiller, Douglas Schiller, Linda Schiller, Michael Schiller, DLB, Inc.,
Grace Wnuk, Sequential Electronics, Inc., S-Tech, Inc., FMX Corporation, SES
Holdings, Inc., Spectech, Inc., The Trinity Group, Inc. and Universal
International, Inc., and all entities owned, controlled by, or under common
control with any of them and their respective officers, directors, shareholders,
principals, employees, counsel, agents, consultants, heirs, administrators,
executors, personal representatives, successors and assigns (hereinafter
collectively referred to as the "Schiller Affiliate Releasees"), from any and
all actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, obligations, contracts,
controversies, agreements, promises, variances, trespasses, damages,
liabilities, judgments, executions, claims and demands whatsoever, in law,
admiralty or equity (whether known or unknown and whether liquidated or
unliquidated), whether asserted individually, derivatively, or in any other
capacity, which the COTG Affiliate Releasors, or any of them, ever had, now have
or hereafter can, shall or may have against the Schiller Affiliate Releasees
for, by reason of, in any way based upon, arising out of, related to, or
connected with, directly or indirectly, any matter, cause, thing, transaction,
act, or omission whatsoever from the beginning of the world to and including the
date hereof, except for any claims or rights which any of the COTG Affiliate
Releasors may have
29
<PAGE>
Exhibit 99.2
against any of the Schiller Affiliate Releasees arising out of or based upon (a)
any of the matters which are described in clauses (i) through (iv) of Section
8.2 of the Settlement Agreement, and (b) all matters pertaining to claims by FMX
Corporation and/or Michael Schiller against Consolidated Technology Group Ltd.,
or any subsidiary thereof, for certain amounts alleged due to Michael Schiller
with respect to his compensation for the 1997 calendar year, it being expressly
understood and acknowledged by the COTG Affiliate Releasors that neither of the
matters referred to in clauses (a) and (b) above shall constitute, or be deemed
to constitute, an admission of any liability or obligation by or on behalf of
any of the Schiller Affiliate Releasees with respect thereto, any such
liabilities or obligations being hereby expressly denied by each of the Schiller
Affiliate Releasees.
No provision of this Release may be amended, modified or waived except
by a written instrument executed by the COTG Affiliate Releasors and the
Schiller Affiliate Releasees.
If any term or provision of this Release is held to be illegal or
invalid, such illegality or invalidity shall not affect the remaining terms or
provisions hereof, and each term and provision of this Release shall be enforced
to the fullest extent permitted by law.
This Release shall be binding upon each of the COTG Affiliate Releasors
and their successors and assigns, heirs, executors and personal representatives
and inure to the benefit of the Schiller Affiliate Releasees and their
respective successors and assigns.
This Release may be signed in any number of counterparts, and by any of
the COTG Affiliate Releasors or the Representative in separate counterparts,
each of which, when so executed, shall be deemed to be a binding original and
all of which, when taken together, shall constitute one and the same Release.
This Release shall be governed by and construed in accordance with the
laws of the State of New York with respect to contracts made and to be fully
performed within such state, without regard to the conflicts of laws principles
thereof.
Each of the COTG Affiliate Releasors and the Representative hereby
represents and warrants to the Schiller Affiliate Releasees that this Release
has been duly authorized by all required action of the COTG Affiliate Releasors
and the Representative.
30
<PAGE>
Exhibit 99.2
IN WITNESS WHEREOF, each of the undersigned has executed this Release
as of the ___ day of January, 1999.
WITNESS: SIS CAPITAL CORP.
____________________ By:_______________________________
Seymour Richter
President and Chief Executive
____________________ Officer
Print Name
WITNESS: ARC NETWORKS, INC.
____________________ By:_______________________________
Peter Parrinello, President
- --------------------
Print Name
WITNESS: TRANS GLOBAL SERVICES, INC.
____________________ By:_______________________________
Joseph Sicinski, President
- --------------------
Print Name
WITNESS: INTERNATIONAL MAGNETIC IMAGING
LIQUIDATION CORP.
____________________ By:_______________________________
Seymour Richter
President and Chief Executive
____________________ Officer
Print Name
WITNESS: NETSMART TECHNOLOGIES, INC.
____________________ By:_______________________________
- -------------------- ----------------------------------
Print Name Print Name and Title
31
<PAGE>
Exhibit 99.2
WITNESS: EDWARD D. BRIGHT, solely in his
capacity as the Representative
- -------------------- ----------------------------------
Edward D. Bright, Representative
- --------------------
Print Name
32
<PAGE>
Exhibit 99.2
EXHIBIT D
JUDGMENTS
Banco Auto Leasing Corp., Judgment Creditor
Lewis S. Schiller, Judgment Debtor
Judgment filed in Nassau County on or about February 16, 1990 in the amount of
$6,840.
Fairfield Leasing Co., Inc., Judgment Creditor
Sequential Information Systems, Judgment Debtor
Judgment filed in Westchester County on or about June 27, 1989
(Index No. 00143489).
Amount believed to be $28,656.
33
<PAGE>
Exhibit 99.2
EXHIBIT E
SCHEDULE OF LEGAL ACTIONS
1. Bridge Ventures, Inc., et al vs. Consolidated Technology
Group Ltd., et al.
2. Naval Kapoor and Dirk Esselens vs. SIS Capital Corp.
3. Five Boro Beverage Distributors vs. Consolidated Technology
Group Ltd.
4. One Card Health Systems Corporation vs. Leonard N.
Luttinger, et al
5. Sheldon Golub and Howard Golub vs. Lewis S. Schiller.
34
<PAGE>
Exhibit 99.2
EXHIBIT F
STATEMENTS OF LEGAL SERVICES RENDERED BY S. ROSEN
35
