Free Statement - District Court of Arizona - Arizona

Exnieir 5
i , DATE
Michele E. Balmer, CCR No. 50489
• I I
www.visitall<.com
communication with vision
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Monday, November 29, 1999 ( , » · t 7* (
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susan cole -’ ( F > ,, C _ S J/Ci Cf
- 2930 North 15th Drive . .', ' I. )/`4ji‘ L. ‘
Phoenix, AZ 85015 t _ , ri /g_/‘ "" kw? _
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Dear Susan, . ·?..;__
As a fellow Series A Stockholder and in my capacity as the member of the Company’s Board of Directors -
elected as the representative of the Series A Stockholders, 1 am writing to advise you that the Company has
discovered that the "Term Sheet for Stock Purchase” that may have been fumished to you in connection
with your investment in the Company’s Series A Preferred Stock contained an error. ln particular, the
n '1`errn Sheet did not disclose the existence of Founder’s Warrants issued to Peter Thimmesch, the
Company’s Chief Executive Officer, and to Michael O’Donne1l, theCompany’s President, to purchase an
aggregate of 7,650,000 shares of the Company’s Common Stock at an exercise price of $0.1375 per share.
The Founder‘s Warrants, however, were disclosed to the Series B and C subscribers, including the Series A
Stockholders who were eligible to participatein those subsequent tinancings.
1 am sending this letter to you for two reasons. First, as your representative on the Board of Directors, 1
believe (as does the Company) that you should be notified of the.error in the Term Sheet in order to permit
you to make your own decision regarding what, if any, actions to take now that the error and its .
consequences have been disclosed to you. Second, the existence of this error (with the possible claims
against the Company that could result) is preventing the Company from consummating agreements with _
. strategic partners and obtaining additional capital. Securing a release of such claims hom the Series A
' . Stockholders, such as yourself would eliminate this problem. lf that cannot be accomplished, the
Company would have to pursue other less palatable altematives, such as seeking a release of the Founder’s
Warrants, which would have a substantial financial impact on Peter Thimmesch and Michael O’Donncll
and reduce their ability to control the Company’s future direction. Any such efforts may or may not be
. successful. _ `
l believe very strongly in the Company, and l believe that the Company has made great strides since you
. - _ made your initial investment in the Series A Preferred Stock, primarily due to the extraordinary efforts and
capabilities of the recipients ofthe Founder’s Warrants. However, the error in the Term Sheet is an
impediment to the Company’s continued progress. For that reason, 1 have enclosed a Release of Claims
Agreement that will resolve this matter and removethis impediment to the Company’s continued progress. t
You should consider consulting with counsel ofyour own choosing in determining what course of action to ‘
take. However, l hope that, after considering this matter carefully and consulting with your counsel, you
will do what I have already done--that is execute the enclosed agreement and retum it to the Company in
the enclosed envelope. ln addition, in the interest of resolving this matter as soon as possible, please send a
copy of thc executed agreement to Manda Turley via facsimile at (602) 850-3377. Overcoming this
obstacle now is absolutely critical to the Company. So please respond immediately, but in no event later
, than December 9, 1999.
lf you have any questions or would like to discuss this matter further, please call me at (602) 850-3168.
Thank you. '
Best Regards,
r~ L .
Allan Kaplan _ _ _
visitallccom
r'nlu Susan hrrrndcrr Wrrrruzrls A
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RELEASE OF CLAIMS
This RELEASE OF ALL CLAIMS ("Agreement") is intended by the parties as a
release of all claims, known and tmknown, past and present, of the undersigned (the
"Stockholder" and, together with other Series A stockholders, the "Stockholders") on
behalf of the Stockholder and Stockholder’s predecessors, successors, assigns, heirs,
executors, administrators, and beneficiaries against visitalkcom, Inc., an Arizona
j corporation ("visitalk”), for any and all_ claims arising out of the matters described below
(the "Claims").
‘ ` ` RECITALS
` A. Stockholder _was an investor in visitalk’s offering of Series A Preferred
Stock (the "Shares") in 1998.
1 B. Stockholder may have been given a document entitled "Term Sheet for
. Stock Purchase? (the "Term Sheet") in connection with its investment in the Shares.
C. The Term Sheet contained an error. In particular, the Term Sheet did not ·
disclose the fact that Founder’s Warrants to acquire an aggregate of 7,650,000 shares at
an exercise price of $0. l 375 per share had been issued to Peter Thimmesch, visitalk’s
Chief Executive Officer and to Michael O’Donnell, visitalk’s President. However, the
existence ofthe Founder’s Warrants was disclosed to subscribers in visitalk’s subsequent
rounds of financing, including to those Series A Stockholders who were eligible to
participate in those rounds.
` D. The existence of the Founder’s Warrants had the effect at the time of the
Series A offering of reducing, on a fiilly-diluted basis, the percentage of stock held by the
Stockholders (inthe aggregate) from 28.3% to l4.9%. _ —
E. The Stockholders may have claims against visitalk and others relating to
this error, including, but not limited to, claims for breach of fiduciary duty and/or for
violations of federal and state securities laws. »
F. The existence of the possibility of Claims is hampering visitalk’s ability to
consummate agreements with strategic partners and to raise additional capital.
G. Securing a release of such Claims from the Stockholders would eliminate
the problems referred to in the preceding paragraph. If that cannot be accomplished,
visitalk would have to pursue other less palatable alternatives, such as seeking a release
of the Founder’s Warrants, which would have a substantial financial impact on Peter
Thimmesch and Michael O'Donnell (whose extraordinary efforts and capabilities have
Calc. Suran F ounders Warrants A greemenl ‘
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been primarily responsible for visitalk’s initial success) and reduce their ability to control Q
visitalk’s future direction. Any such efforts may or may not be successful,
_ H. This Agreement shall not be construed as an admission of liability by
visitalk. The recitals included in this Agreement are made solely to resolve the Claims.
· I. Stockholder has agreed to discharge all current Claims against visitalk on
l the terms and conditions set forth herein.
` - AGREEMENT
Q 1. General Release and Discharge A
Stockholder, in consideration of the Recitals herein, for Stockholder and for . _
S _ Stockholder’s agents (actual, apparent, ostensible, or otherwise), beneficiaries, assigns,
_' heirs, executors, and successors in interest, does completely release and forever discharge ‘
‘ visitalk, and visitalk’s past, present and future agents (actual, apparent, ostensible or
, _ otherwise), representatives, employees, officers, directors, predecessors, successors in
. _ interest, and assigns who are or may be liable, directly or indirectly, of and from any and
A all past and present claims and potential claims of any and all nature whatsoever, whether
- based on a tort, intentional act, contract or other theory of recovery, which Stockholder
now has on account of, or in any way arising out ot; or which are the subject of the
% Claims, including any and all KNOWN OR UNKNOWN claims, vested or contingent, in
law or equity, for economic or personal injuries to Stockholder, which have resulted or -
may result from the acts or omissions described in the Recitals to this Agreement.
2. Contractual Nature of Release and Express Denial of Liability
The consideration for this Agreement stated herein is contractual and not a mere ` l l
recital. All agreements and understandings between the parties are embodied and
expressed herein. Neither this Agreement nor any part hereof shall be construed or used
` as an admission of liability by visitalk, its successors, heirs, executors, officers, directors,
employees, administrators, indemnitors, sureties or assigns. Liability is expressly denied. _
3. Capacity to Execute Release and Agreement
Stockholder represents and warrants that no other person or entity has any interest
in the claims, demands, obligations, or potential causes of action referred to in this
Agreement, and that Stockholder has the sole-right and exclusive authority to execute this
_ Agreement and enter into the stipulations contained herein; and that Stockholder has not
sold, assigned, transferred, conveyed or otherwise disposed of any of the claims, _
demands, obligations, or other causes of action referred to in this Agreement.
4. Governing Law _
Cole. Susan Founders Hkrrrunrs Agreement
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This Agreement shall be construed and interpreted in accordance with the laws of
the State of Arizona, excluding its conflicts of laws principles.
, A 5. Additional Documents
‘ The parties agree to cooperate fully and execute any and all supplementary
_ documents and to take all additional actions which may be necessary or appropriate to
_ I A give full force and effect to the basic terms and intent of this Agreement.
. . 6. Entire Agreement and Successors in Interest
This Agreement contains the entire agreement between the parties herein and
V shall be binding upon and inure for the benefit of the executors, officers, directors, _
{ employees, administrators, personal representatives, heirs, successors, and assigns of
; each.
I ‘ 7. Effectiveness _
This Agreement shall become effective immediately following execution by the
last signatory hereto. ‘
lN Wl'I` NESS WHEREOF, the parties have caused this Agreement to be executed
A by their duly authorized representative as of the date so set forth below. .
. ` VlSITALK.CO , lNC.
Date: November 29, l999 By: _ _ _
lts: President
3 Date: / . · Susan Cole /7
. I rr o 2
' nature
(Please sign exactly as your name
appears on the stock certificate. All
joint owners must sign. Corporate
officers, Trustees, Executors,
Attorneys, etc. should give full title.)
Cole. S`u.rm1 Fbunders Warrant: Agreement A
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