SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF CLAIMS (this
"AGREEMENT") is dated as of April 16, 2007, and is made and entered into by
STRATEGIC GAMING INVESTMENTS, INC., a Delaware corporation ("SGI"), and XXXXXX
X. XXXX, an individual ("XXXX"). For purposes of this Agreement, SGI and Xxxx
may be referred to in this Agreement individually as a "PARTY," and
collectively as the "PARTIES."
RECITALS
X. Xxxx, the principal shareholder of Neolink Wireless
Content, Inc., a Nevada corporation ("NEOLINK"), together with all other
shareholders of Neolink, entered into that certain Merger and Share
Exchange Agreement with SGI dated January 5, 2007 (the "MERGER
AGREEMENT"), pursuant to which, among other things, all of Neolink's
shareholders exchanged their shares of Neolink common stock for a
certain number of shares of SGI common stock, resulting in SGI becoming
the sole shareholder of Neolink. For purposes of this Agreement, the
SGI shares that were received by the shareholders of Neolink pursuant to
the Merger Agreement shall be collectively referred to in this Agreement
as the "EXCHANGED SGI SHARES."
B. As a material part of the transactions contemplated by the
Merger Agreement, SGI caused Neolink to employ Xxxx as its President and
Chief Executive Officer pursuant to the terms of that certain Employment
Agreement dated January 5, 2007 (the "EMPLOYMENT AGREEMENT"). In
consideration of Xxxx'x services in this regard, Neolink agreed to cause
SGI to issue to Xxxx an additional 120,000 shares of SGI common stock
over the term of the Employment Agreement (collectively, the
"CONSIDERATION SGI SHARES"). To date, none of the Consideration SGI
Shares have been issued to Xxxx.
C. A dispute has arisen between the Parties regarding some or
all of the foregoing matters. Without making any concessions or
admissions regarding the merits of any claims that either Party may have
against the other, in the interest of avoiding the time, expense and
uncertainty associated with the on-going dispute between the Parties,
the Parties have agreed to settle the dispute upon certain terms and to
release each other from any and all claims that either Party may have
against the other in connection with the foregoing matters and all other
prior dealings between the Parties.
D. The Parties are entering into this Agreement in order to
memorialize the terms of settlement of their dispute and to release each
other from any and all claims that may now exist or that may arise in
the future in connection with the foregoing matters and all other prior
dealings between the Parties, as further set forth below.
Accordingly, the Parties hereby agree as follows:
1. ACKNOWLEDGMENT OF RECITALS. The Parties hereby acknowledge the
truthfulness and accuracy of, and hereby ratify, the recitals set forth
above, each of which is hereby incorporated into this Agreement by
reference.
2. TERMS OF SETTLEMENT. The Parties expressly acknowledge and agree
to the terms of settlement as set forth in this Section 2, each of which
shall occur or take effect, as applicable, promptly upon execution and
delivery of this Agreement.
2.1.PURCHASE OF NEOLINK SHARES.
2.1.1.SGI hereby sells, transfers and assigns to Xxxx, and Xxxx hereby
purchases and acquires from SGI, all of the issued and outstanding
shares of Neolink common stock (collectively, the "NEOLINK SHARES"),
for the purchase price set forth below and otherwise on the
applicable terms and subject to the applicable conditions set forth
in this Agreement. The purchase price for the Neolink Shares shall
be Fifteen Thousand Dollars ($15,000.00), which Xxxx shall pay to
SGI in immediately available funds promptly upon execution and
delivery of this Agreement and SGI's delivery to Xxxx of all
certificates representing the Neolink Shares, duly endorsed in
blank.
2.1.2.SGI represents and warrants to Xxxx that the Neolink Shares are
free and clear from any security interest, lien, pledge,
encumbrance, claim, charge, right, option, warrant or restriction of
any kind, nature or description, and that no option, right or other
agreement or commitment exists with respect to any of the Neolink
Shares.
2.2.RELINQUISHMENT OF CERTAIN EXCHANGED SGI SHARES.
2.2.1.Xxxx shall relinquish, endorse over and otherwise transfer and
assign to SGI 100,000 of the Exchanged SGI Shares, and Xxxx shall
cause Xxxx Xxxxx, a former Neolink shareholder ("XXXXX"), to
relinquish, endorse over and otherwise transfer and assign to SGI an
additional 100,000 of the Exchanged SGI Shares. To that end, Xxxx
shall deliver to Wolf, Rifkin, Xxxxxxx and Xxxxxxxx, LLP (the
"FIRM") SGI Share Certificate No. 1063, evidencing 600,000 shares of
SGI common stock, and Xxxx shall cause Xxxxx to deliver to the Firm
SGI Share Certificate No. ____ evidencing 200,000 shares of SGI
common stock. The Firm shall hold such SGI Share Certificates in
trust until such time as all of the following have occurred: (a)
SGI has caused its stock transfer agent to issue to Xxxx a new SGI
Share Certificate evidencing 500,000 shares of SGI common stock, (b)
SGI has caused its stock transfer agent to issue to Xxxxx a new SGI
Share Certificate evidencing 100,000 shares of SGI common stock, and
(c) the newly-issued SGI Share Certificates have been delivered to
the Firm. Upon the Firm's receipt of the foregoing, the Firm shall
deliver to SGI those SGI Share Certificates being held in trust.
SGI acknowledges that, upon consummation of the transactions
contemplated by this Agreement, each of the Exchanged SGI Shares not
being relinquished, endorsed over and otherwise transferred and
assigned to SGI pursuant to this Section 2.2.1 (including those
being issued to Xxxx and Xxxxx hereby) shall remain the sole and
exclusive property of the former Neolink shareholder who or which
owns the same.
2.2.2.Xxxx represents and warrants to SGI that those Exchanged SGI
Shares being relinquished, endorsed over and otherwise transferred
and assigned to SGI hereby are free and clear from any security
interest, lien, pledge, encumbrance, claim, charge, right, option,
warrant or restriction of any kind, nature or description, and that
no option, right or other agreement or commitment exists with
respect to any of such Exchanged SGI Shares.
2.3.TERMINATION OF EMPLOYMENT AGREEMENT; WAIVER OF RIGHTS IN CONSIDERATION
SGI SHARES. The Parties hereby terminate the Employment Agreement in
its entirety effective as of the date of this Agreement. In connection
therewith, and except as otherwise set forth in this Agreement, neither
Party shall owe any further duty or obligation, and neither Party shall
be entitled to any further right, privilege or benefit, arising under or
in connection with the Employment Agreement. Without limiting the
generality of the foregoing, Xxxx hereby expressly waives any and all
right, title, claim and interest that he may now have or hereafter
acquire in or to the Consideration SGI Shares, and any portion thereof.
2.4.LIABILITIES AND OBLIGATIONS.
2.4.1.Except as set forth in Section 2.4.2 below, Neolink shall remain
responsible for all debts and liabilities incurred by it in the
course of its business and operations, including those debts and
liabilities incurred during SGI's ownership of the Neolink Shares,
and SGI shall have no obligations or responsibilities with respect
to any of the same. Neolink shall indemnify, defend, protect and
hold harmless SGI from any and all Claims and Liabilities (as
defined below) that arise in connection with or that relate to any
of the debts and liabilities referenced in this Section 2.4.1.
2.4.2.Notwithstanding the foregoing, SGI shall be obligated to fulfill
all of Neolink's office rent and T-1 line obligations owing to
Anthem Village Executive Suites incurred through April 30, 2007, for
the office located at 0000 Xxxxxx Xxxxxxx Xxxxx, Xxxxx X-00,
Xxxxxxxxx, Xxxxxx 00000 (the "PREMISES"). SGI shall indemnify,
defend, protect and hold harmless Neolink and Xxxx from any and all
Claims and Liabilities that arise in connection with or that relate
to any of the obligations referenced in this Section 2.4.2.
2.5.VACATE THE PREMISES. Xxxx shall have until April 30, 2007 to vacate the
Premises and to remove all of Xxxx'x and Neolink's materials, items and
belongings from the Premises. Any of such materials, items or
belongings remaining in or about the Premises after April 30, 2007 shall
be deemed abandoned, and SGI shall dispose of the same in any manner it
deems appropriate.
2.6.REMOVAL OF BRAND REFERENCES. Xxxx shall cause Neolink to remove from
all media any reference to Neolink's current affiliations with Anheuser-
Xxxxx Companies, Inc. ("BUDWEISER") and Hooters of America, Inc.
("HOOTERS"), including removing all brand name references and logo
designations. Notwithstanding the foregoing, nothing in this Section
2.6 shall prohibit Neolink from hereafter establishing new affiliations
with Budweiser or Hooters, or both, and referencing the same in any form
of media that Neolink desires in its sole and absolute discretion.
2.7.PROGRAM RIGHTS. Neolink shall remain the sole and exclusive owner of
all right, title and interest, including all DVD distribution rights, in
and to the program tentatively entitled "How to Beat the Odds in Las
Vegas" (working title) (the "PROGRAM"), free from any claim or right
therein or thereto by SGI, subject only to the right of Hooters to
receive a 10% share of net profits (after recoupment of direct expenses)
resulting from the distribution of certain versions of the Program.
3. REPRESENTATIONS AND WARRANTIES BY SGI. SGI hereby represents and
warrants to Xxxx as set forth in this Section 3.
3.1.POWER AND AUTHORITY. SGI has all requisite power, authority and
capacity to enter into this Agreement, and all corporate actions
required to be taken by SGI to authorize the execution, delivery and
performance of this Agreement and all transactions contemplated by this
Agreement have been duly and properly taken. Upon SGI's execution and
delivery of this Agreement, this Agreement will become a valid and
binding obligation of SGI, enforceable against SGI in accordance with
its terms.
3.2.ABSENCE OF CHANGES. Since the date of SGI's acquisition of the Neolink
Shares, SGI has not caused, undertaken or become aware of the occurrence
of any of the following:
3.2.1.any event, occurrence or condition that, either alone or in
combination with other events, occurrences or conditions, is
materially adverse to Neolink's business, operations, financial
performance, properties, assets or prospects;
3.2.2.the sale or issuance of any shares of capital stock or any other
securities of Neolink;
3.2.3.the pledge or hypothecation of any Neolink asset, or the
subjecting of any Neolink asset to any encumbrance, charge, claim,
condition, equitable interest, lien, license, lease, covenant,
option, pledge, security interest, right of first refusal or
restriction of any kind;
3.2.4.the incurrence or assumption by Neolink, or the subjecting of
Neolink to, any debt, obligation, duty or liability outside the
ordinary course of business;
3.2.5.any transaction or other action involving Neolink outside of the
ordinary course of business;
3.2.6.any agreement involving Neolink regarding any merger or
consolidation of or by Neolink with any other entity or any
acquisition of all or any part of the stock, equity interest or the
business or assets of any other person, firm, association,
corporation or business organization; or
3.2.7.any transfer or grant by Neolink of any rights in any trademark
(whether registered or unregistered), trademark application, trade
name, fictitious business name, service xxxx (whether registered or
unregistered), service xxxx application, copyright (whether
registered or unregistered), copyright application, trade secret,
technology, customer list, proprietary right or other intellectual
property right or intangible asset.
3.3.PROCEEDINGS. To the knowledge of SGI, there is no claim, legal
proceeding, action, suit, investigation or other proceeding pending or
threatened against Neolink that (A) could adversely affect Neolink's
business or any of the assets owned or used by Neolink, or (B)
challenges, or that may have the effect of preventing, delaying, making
illegal or otherwise interfering with, any of the transactions
contemplated by this Agreement. No event has occurred, and no claim,
dispute or other condition or circumstance exists, that likely would
directly or indirectly give rise to or serve as a basis for the
commencement of any of the foregoing.
4. REPRESENTATIONS AND WARRANTIES BY XXXX. Xxxx hereby represents
and warrants to SGI that Xxxx has all requisite power, authority and
capacity to enter into this Agreement, and all actions required to be
taken by Xxxx to authorize the execution, delivery and performance of
this Agreement and all transactions contemplated by this Agreement have
been duly and properly taken. Upon Xxxx'x execution and delivery of
this Agreement, this Agreement will become a valid and binding
obligation of Xxxx, enforceable against Xxxx in accordance with its
terms.
5. MUTUAL RELEASE OF CLAIMS.
5.1.RELEASE BY SGI. SGI, on behalf of itself and each of its affiliated
persons and entities, and each of their respective spouses, heirs,
beneficiaries, shareholders, members, directors, officers, managers,
employees, contractors, partners, joint venturers, attorneys, agents,
representatives, successors and assigns, hereby forever releases and
discharges Xxxx, each of his affiliated persons and entities and each of
their respective spouses, heirs, beneficiaries, shareholders, members,
directors, officers, managers, employees, contractors, partners, joint
venturers, attorneys, agents, representatives, successors and assigns,
and any person or entity acting by, though, under or in concert with any
of them, from and against, and forever waive, forfeit and relinquish,
each and every claim, action, demand, right, lien, covenant, agreement,
contract, representation, warranty, indemnity, obligation, debt, cause
of action, liability, lawsuit, litigation, loss, damage (including
consequential damages and penalties), fee, cost and expense (including
costs and expenses of counsel), indebtedness, order and cause of action,
of every and whatever type, kind, nature, description or character,
whether sounding in law, equity, contract, tort, statute or otherwise,
and whether or not presently or later known, unknown, existing,
asserted, suspected, unsuspected, liquidated, unliquidated, fixed,
contingent, matured, unmatured, anticipated or unanticipated (each, a
"CLAIM AND LIABILITY," and collectively, "CLAIMS AND LIABILITIES")
arising out of, based on, relating to or in any way connected with the
Merger Agreement, the Employment Agreement, the Exchanged SGI Shares,
the Neolink Shares or otherwise with any of the prior dealings between
the Parties.
5.2.RELEASE BY XXXX. Xxxx, on behalf of himself and each of his affiliated
persons and entities, and each of their respective spouses, heirs,
beneficiaries, shareholders, members, directors, officers, managers,
employees, contractors, partners, joint venturers, attorneys, agents,
representatives, successors and assigns, hereby forever releases and
discharges SGI, each of its affiliated persons and entities, and each of
their respective spouses, heirs, beneficiaries, shareholders, members,
directors, officers, managers, employees, contractors, partners, joint
venturers, attorneys, agents, representatives, successors and assigns,
and any person or entity acting by, though, under or in concert with any
of them, from and against, and forever waives, forfeits and
relinquishes, each and every Claim and Liability arising out of, based
on, relating to or in any way connected with the Merger Agreement, the
Employment Agreement, the Exchanged SGI Shares, the Neolink Shares or
otherwise with any of the prior dealings between the Parties.
5.3.CIVIL CODE SECTION 1542. The Parties intend for this Section 5 to serve
as a general release, and each Party recognizes that such Party may have
Claims and Liabilities of which such Party is totally unaware and
unsuspecting, but that which such Party is nevertheless releasing and
giving up by executing this Agreement and providing the general release
set forth above. In furtherance of such understanding and intention,
each Party acknowledges that such Party is familiar with the provisions
of California Civil Code Section 1542, and the corresponding provisions
of any code, statute or law of any other state having jurisdiction over
such Party, and such Party waives all such provisions and applications,
including those of California Civil Code Section 1542, which provides as
follows:
Section 1542. (Extent of General
Release.) A general release does
not extend to claims which the
creditor does not know or suspect
to exist in his or her favor at the
time of executing the release,
which if known by him or her must
have materially affected his or her
settlement with the debtor.
5.4.ASSUMPTION OF RISK. EACH OF THE PARTIES TO THIS AGREEMENT HAS BEEN
ADVISED BY SUCH PARTY'S LEGAL COUNSEL AS TO THE EFFECT OF THE RELEASE
BEING PROVIDED HEREUNDER AND UNDERSTANDS THAT THE FACTS WITH RESPECT TO
WHICH SUCH RELEASE IS GIVEN MAY BE DIFFERENT FROM THE FACTS NOW KNOWN OR
BELIEVED BY SUCH PARTY TO BE TRUE. EACH OF THE PARTIES ACCEPTS AND
ASSUMES THE RISK THAT SUCH FACTS MAY TURN OUT TO BE DIFFERENT.
NEVERTHELESS, EACH PARTY AGREES THAT THE RELEASE SUCH PARTY HAS PROVIDED
UNDER THIS SECTION 5 SHALL REMAIN IN ALL RESPECTS EFFECTIVE AND SHALL
NOT BE SUBJECT TO TERMINATION OR RESCISSION IN THE EVENT SUCH FACTS TURN
OUT TO BE DIFFERENT.
5.5.SURVIVAL OF THIS RELEASE. Each of the Parties acknowledges and agrees
that nothing contained in this Section 5 shall release or discharge such
Party from such Party's representations, warranties, covenants and
agreements set forth in, and from such Party's rights, duties and
obligations assumed under, this Agreement.
6. FORBEARANCE FROM LITIGATION. Each Party shall forever refrain and
forebear from commencing, instituting or prosecuting any lawsuit, action
or other proceeding against the other Party based on, arising out of or
in any way connected with any Claim and Liability that is released or
discharged under this Agreement.
7. NO ASSIGNMENT OF CLAIMS. Each Party represents and warrants to
the other Party that such Party has not assigned any of the Claims and
Liabilities released or discharged under this Agreement, and each Party
shall indemnify, defend, protect and hold harmless the other Party from
and against any and all Claims and Liabilities that such other Party
shall suffer or incur as a result of or arising in connection with any
breach of the foregoing representation and warranty.
8. ARM'S LENGTH. This Agreement has been negotiated at arm's length
between persons knowledgeable in the matters dealt with herein. In
addition, each Party has been represented by independent legal counsel
of such Party's own choice. Accordingly, any rule of law or any other
statute, legal decision or common law principle of similar effect that
would require interpretation of any uncertainty or ambiguity in this
Agreement against the Party that drafted it, is of no application and is
hereby expressly waived. This Agreement shall be construed and
interpreted according to the ordinary meaning of the words used so as to
fairly accomplish the purposes and intentions of the Parties and this
Agreement.
9. VOLUNTARY. Each Party warrants, represents and agrees that, in
executing this Agreement, such Party (A) does so with knowledge of any
and all rights that such Party may have with respect to the provisions
of this Agreement, (B) has carefully read and considered this Agreement
and fully understands its contents and the significance of its contents,
(C) is entering into this Agreement of such Party's own informed and
free will, based upon such Party's own judgment and without any coercion
or fear of retaliation, and (D) has obtained independent legal advice
with respect to this Agreement.
10. NO DISPARAGEMENT. Neither Party shall make or publish, or allow
or cause any other person or entity to make or publish, any untrue,
derogatory or disparaging statements about the other Party to any third
party pertaining to any personal or business matters that previously
transpired between the Parties.
11. CONFIDENTIALITY. Each Party agrees that neither such Party nor
any person or entity that is an employee, agent or representative of, or
otherwise affiliated with, such Party shall reveal, disclose or
otherwise make known to any person or entity, other than as the Parties
may mutually agree in writing, the existence, or any of the terms or
conditions, of this Agreement; provided, however, it is expressly
understood and agreed to by Xxxx that SGI will be required to file a
current report on Form 8-K with the Securities and Exchange Commission
within four (4) business days of the execution of this Agreement
detailing the terms hereof.
12. MISCELLANEOUS.
12.1. ENTIRE AGREEMENT. This Agreement and all exhibits hereto
constitute the only and entire agreement between the Parties with
respect to the subject matter hereof, and there are no promises, repre-
sentations or other agreements or understandings between the Parties
with respect to the subject matter hereof other than those set forth
herein. The obligations set forth in this Agreement are unconditional.
12.2. GOVERNING LAW; CONSENT TO JURISDICTION. California law, without
regard to conflict or choice of law principles, shall govern the
construction and interpretation of this Agreement. The Parties agree
that all actions or proceedings arising directly or indirectly from this
Agreement shall be litigated in courts having a situs within Las Vegas,
Nevada, and hereby consent to the jurisdiction of any local, state or
federal court in which such an action is commenced that is located in
Xxxxx County, Nevada and agree not to disturb such choice of forum or
waive the personal service of any and all process upon them.
12.3. ATTORNEYS' FEES. If an action (including arbitration) is brought
to interpret or enforce any of the terms of this Agreement, or because
of a Party's breach of any provision of this Agreement, the losing Party
shall pay the prevailing Party's attorneys' fees, costs and expenses,
court costs and other costs of action incurred in connection with the
prosecution or defense of such action, whether or not the action is
prosecuted to a final judgment. In addition to the foregoing award of
attorneys' fees, the prevailing Party shall be entitled to its
attorneys' fees incurred in any post-judgment proceeding to enforce any
judgment in connection with this Agreement.
12.4. MODIFICATION, WAIVER OR TERMINATION. Except as otherwise
expressly provided in this Agreement, no modification, waiver or
termination of this Agreement, or any part hereof, shall be effective
unless made in writing and signed by the Party or Parties sought to be
bound thereby. No failure to pursue or elect any remedy shall
constitute a waiver of any default under or breach of any provision of
this Agreement, nor shall any waiver of any such default or breach be
deemed to be a waiver of any other subsequent default or breach.
12.5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and together
which shall constitute one and the same instrument.
12.6. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefits of the parties hereto and their respective legal
representatives, executors, administrators, successors and assigns.
12.7. CONSTRUCTION. Whenever used in this Agreement, the terms
"including," "include," "includes" and the like are not intended as
terms of limitation, and, hence, shall be deemed to be followed by
"without limitation."
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
"SGI"
STRATEGIC GAMING INVESTMENTS, INC.
By: /s/Xxxxxxxx X. Xxxxxxxxx
-----------------------
Xxxxxxxx X. Xxxxxxxxx,
President & Chief Executive Officer
"XXXX"
/s/ Xxxxxx. X. Xxxx
--------------------
XXXXXX X. XXXX
