EXHIBIT 10.14
SETTLEMENT AGREEMENT AND GENERAL RELEASE
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THIS SETTLEMENT AGREEMENT AND RELEASE (hereinafter referred to as "the
Agreement") is made and entered into as of June 24, 1999 by and among
XxxxxXxxxxx.xxx Corporation ("Orbit") f/k/a DIVOT GOLF CORPORTION, ("Divot")
f/k/a Brassie Golf Corporation, a Delaware corporation, and XXXXXX X. XXXXXXX
("Xxxxxxx") an individual resident of the State of Florida and an Officer of
Divot Golf Corporation, all of whom collectively shall hereinafter be referred
to as the "Xxxxxxx."
R E C I T A L S:
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A. WHEREAS, Xxxxxxx was an Officer and majority shareholder of Divot
Development, Divot Partners Ltd., and Divot Corporation;
B. WHEREAS, Divot Development, Divot Partners Ltd., and Divot Corporation
were acquired by Brassie Golf Corporation in or about October 1996,
pursuant to an acquisition Agreement with the Board of Directors of
Brassie Golf Corporation for consideration of Five Hundred Thousand
Dollars ($500,000.00) plus the issuance of Five Million (5,000,000)
shares of common stock and Five Million (5,000,000) options of Brassie
Golf Corporation's treasury stock to Xxxxxxx, with an additional
Fifteen Million shares (15,000,000) to be issued and distributed among
the remaining shareholders of Divot Development, Divot Partners Ltd.,
and Divot Corporation;
C. WHEREAS for additional consideration, Xxxxxxx became employed by Divot
as Divot's Chairman and Chief Executive Officer, pursuant to that
certain Employment Agreement dated September 3, 1997 (the "Employment
Agreement"), a copy of which is attached hereto as Exhibit "A" and by
this reference incorporated herein;
D. WHEREAS, Xxxxxxx and Divot also entered into various other agreements,
including, but not limited to, that certain Indemnity Agreement dated
August 1, 1997 (the "Indemnity Agreement"), which required Divot to
hold harmless and indemnify Xxxxxxx from and against any and all claims
brought against Xxxxxxx that result from Xxxxxxx'x position as an
officer and director of Divot f/k/a Brassie Golf Corporation. A copy of
the Indemnity Agreement is attached hereto as Exhibit "B" and by this
reference incorporated herein;
E. WHEREAS, the Board failed and refused to approve and undertake the
Share Issuance, which failure resulted in various legal actions filed
against Xxxxxxx in the Federal District Court for the Middle District
of Florida and the Southern District of New York (the "Civil Actions").
The Civil Actions were filed as a direct result of the failure of the
Board to undertake the Share issuance.
F. WHEREAS, the Board also failed and refused to indemnify Xxxxxxx against
the Civil Actions as required by the Indemnity Agreement, which failure
resulted in a
substantial monetary loss by Xxxxxxx in the defense of the Civil
Actions. In addition, Xxxxxxx suffered real and substantial damage to
his personal character as a result of the filing of the Civil Actions,
and has thus contemplated the filing of various tort actions against
Divot, including (but not limited) an action sounding in defamation.
G. WHEREAS, Divot has agreed to issue to Xxxxxxx, and Xxxxxxx has agreed
to accept, 27,333,333 shares of Divot common stock in settlement of
each of his claims specifically for his claims sounding in defamation,
together with Two Hundred Fifty Thousand Dollars ($250,000.00) in cash.
This agreement provides for full and complete satisfaction of all
debts, obligations, and existing and potential claims and causes of
action Xxxxxxx may have against Divot as a result of the Civil Actions
and any breach by the Board of the Employment Agreement, the Indemnity
Agreement, and any other agreement between Xxxxxxx and Divot;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in consideration of the mutual covenants and
agreements contained herein, the Parties hereby agree as follows:
A G R E E M E N T S:
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1. COVENANTS OF DIVOT: In full and complete satisfaction of any and all
existing and potential debts, obligations, claims, and causes of
action, including, but not limited to, those arising under any breach
on the part of the Board under the Employment Agreement, the Indemnity
Agreement, and any other agreement between Xxxxxxx and Divot, Divot
does hereby agree to the following:
(A) CASH PAYMENT: Within ninety (90) days following the execution of
this Agreement, Divot shall pay to Xxxxxxx the sum of $250,000.00
(the "Cash Payment").
(B) ISSUANCE OF SHARES TO XXXXXXX: Immediately upon the execution
hereof, Divot shall issue to Xxxxxxx 27,333,333 fully paid and
non-assessable shares (the "Shares") of its Common Stock, .001 par
value, which shares shall be dated as of June 30,1998 evidenced by
a Divot standard stock certificate issued in the name of Xxxxxxx.
As to all the Shares, Xxxxxxx shall be granted all the rights and
privileges afforded to other stockholders of Divot. Additionally
Xxxxxxx'x shares shall be granted demand registration rights and
piggy back registration rights.
(C) ISSUANCE OF SHARES TO THE J.R.XXXXXXX TRUST: Immediately upon the
execution hereof, Divot shall issue to Xxxxxxx the Twenty Seven
Million Three Hundred and Thirty Three Thousand shares
(27,333,333) said shares shall be fully paid and non-assessable
shares (also, the "Shares") of its Common Stock, .001 par value,
which shares shall be evidenced by a Divot standard stock
certificate issued in the name of the Xxxxxx X. Xxxxxxx As to
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all the Shares shall be granted with all the rights and privileges
afforded to other stockholders of Divot. Additionally the shares
shall issued will provide for demand registration rights and piggy
back registration rights.
(D) DEFAULT PROVISION In the event the company defaults on said
payable and Xxxxxxx and the company are unable to arrive at a
mutually agreed upon extension Xxxxxxx may elect a conversion to
preferred stock at a basis of seventy five percent (75%) of market
based on a ten day trailing average.
(E) NO DILUTION OR IMPAIRMENT: xxxxxxxxxxx.xxx Corporation f/k/a Divot
Golf Corporation hereby agrees that it shall not, by amendment of
its Certificate of Incorporation or through any reorganization,
transfer of capital stock or assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of
any of the terms of this Agreement, but will at all times in good
faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in
order to protect the rights of Xxxxxxx against dilution or other
impairment of the Shares issued hereunder.
(F) ANTI-DILUTION PROVISION The effects of anti-dilution pursuant to
the terms and conditions as contained herein provide that the
company shall be entitled to issue additional shares of its
capital stock in connection with mergers and acquisitions and
financing in the ordinary course of business; provided, however,
that in case the Company shall, at any time after the date hereof,
reorganize, recapitalize, issue or sell any shares of Common Stock
or issue warrants, options or other securities convertible into,
or exercisable or exchangeable for, shares of Common Stock
("Convertible Securities") for a consideration, or in the case of
the issuance of Convertible Securities, an exercise price or
conversion price per share less than the Fair Market Value or the
Exercise Price in effect immediately prior to the issuance or sale
of such securities, then forthwith upon such issuance or sale, the
Exercise Price shall be reduced to the price determined by
dividing (I) an amount equal to the sum of (a) the number of
shares of Common Stock outstanding (after giving effect to the
conversion or exercise of all Convertible Securities) immediately
prior to such issuance or sale multiplied by the then existing
Exercise Price and (b) the aggregate amount of the consideration,
if any, received by the Company upon such issuance or sale by (ii)
the total number of shares of Common Stock outstanding (after
giving effect to the conversion or exercise of all Convertible
Securities) immediately after such issuance or sale. In no event
shall the Exercise Price be adjusted pursuant to this computation.
In the event of a stock split, stock divided, or other
recapitalization pursuant to which the number of outstanding
shares of capital stock of the Company shall increase,
the number of shares covered by any unexercised portion of this
Option and the related Exercise Price per share shall be adjusted
proportionately. In the event of a combination or other
recapitalization pursuant to which the number of outstanding
shares of capital stock of the Company shall be reduced, the
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number of shares covered by any unexercised portion of this Option
and the related Exercise Price per share shall not be subject to
adjustment and shall remain as in effect prior to such combination
or recapitalization.
(G) RIGHT OF LIEN Executive shall be issued a UCC 1 which shall be
recorded by the company in the amount of Two Hundred Fifty
Thousand Dollars ($250,000.00) (collectively, the "Payment") for
the purpose of security in the event of default under the
provisions of this agreement. Upon payment in full of all shares
and money Xxxxxxx shall release said lien.
(H) EXCEPT AS PROVIDED IN ARTICLE XI, this Agreement shall there upon
be of no further force or effect. Any amounts due from Company
pursuant above and not paid to Xxxxxxx as and when due shall
accrue interest at the prime rate of interest as established from
time to time by Chase Manhattan Bank of New York.
(I) RELEASE: Upon execution of this Agreement, Divot, including its
successors, officers, administrators, attorneys, agents, and
assigns, and anyone else acting by or through Divot, hereby
releases and forever discharges Xxxxxxx, and all his heirs,
beneficiaries, settlors, trustees, and personal representatives,
and anyone else claiming under or through Xxxxxxx, from and
against any and all claims, charges, complaints, demands, actions
or causes of action of any kind in any federal, state, or other
court, arbitral forum, or federal, state, or other administrative
agency, whether known or not now known, which Divot may have
against Xxxxxxx in connection with or arising from the Civil
Actions, the Employment Agreement, the Indemnity Agreement, and
any other agreement between Divot and Xxxxxxx.
(J) FUTURE DAMAGES: Inasmuch as the injuries, damages, and losses
resulting from the matters described herein may not be fully known
and may be more numerous or more serious than it is now understood
or expected, Divot agrees, as a further consideration of this
Agreement, that this Release applies to any and all injuries,
damages, and losses resulting from the Civil Actions, the
Employment Agreement, the Indemnity Agreement, and any other
agreement between Divot and Xxxxxxx, even though now
unanticipated, unexpected, and unknown.
(K) REPRESENTATIONS: Divot represents that no additional claims are
contemplated against any other party potentially liable for the
losses, damages, and injuries for which this Release is given. In
the event any additional claim is made which directly or
indirectly results in additional liability exposure to Xxxxxxx for
the losses, injuries, and damages for which this Release is given,
Divot covenants and agrees to indemnify and save Xxxxxxx harmless
from all such claims and demands, including reasonable attorney's
fees and all other expenses necessarily incurred.
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2. COVENANTS OF XXXXXXX: By execution hereof, Xxxxxxx does hereby agree to
accept the Cash Payment, the Shares, as set forth above in full and
complete satisfaction of all potential claims against Divot which
Xxxxxxx may have that arise from the Civil Actions, and any breach by
Divot of the Employment Agreement, the Indemnity Agreement, or any
other agreement between Divot and Xxxxxxx. Xxxxxxx further agrees to
the following:
(A) RELEASE: Upon execution of this Agreement, Xxxxxxx, and all his
heirs, beneficiaries, settlors, trustees, and personal
representatives, and anyone else claiming under or through Xxxxxxx
does hereby release and forever discharge Divot, including its
successors, officers, administrators, attorneys, agents, and
assigns, and anyone else acting by or through Divot, from and
against any and all claims, charges, complaints, demands, actions
or causes of action of any kind in any federal, state, or other
court, arbitral forum, or federal, state, or other administrative
agency, whether known or not now known, which Xxxxxxx may have
against Divot in connection with or arising from the Civil
Actions, the Employment Agreement, the Indemnity Agreement, and
any other agreement between Divot and Xxxxxxx.
(B) FUTURE DAMAGES: Inasmuch as the injuries, damages, and losses
resulting from the matters described herein may not be fully known
and may be more numerous or more serious than it is now understood
or expected, Xxxxxxx agrees, as a further consideration of this
Agreement, that this Release applies to any and all injuries,
damages, and losses resulting from the Civil Actions, the
Employment Agreement, the Indemnity Agreement, and any other
agreement between Divot and Xxxxxxx, even though now
unanticipated, unexpected, and unknown.
(C) REPRESENTATIONS: Xxxxxxx represents that no additional claims are
contemplated against any other party potentially liable for the
losses, damages, and injuries for which this Release is given. In
the event any additional claim is made which directly or
indirectly results in additional liability exposure to Divot for
the losses, injuries, and damages for which this Release is given,
Xxxxxxx does covenant and agree to indemnify and save Divot
harmless from all such claims and demands, including reasonable
attorney's fees and all other expenses necessarily incurred.
3. COVENANTS COMMON TO BOTH PARTIES:
(A) NO ADMISSION OF LIABILITY: The parties agree that nothing
contained in this Agreement shall constitute or be treated as an
admission of liability or wrongdoing by any party or its heirs,
executors, administrators, attorneys, successors, agents, or
assigns.
(B) CONFIDENTIALITY: Neither the parties to this Agreement nor their
attorneys shall disclose or publicize, either to the media, the
courts, or any other third
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party, informally or in any way, the terms of the settlement set
forth herein, unless required by this Agreement or otherwise by
law.
(C) DISCLAIMER: Each party has: (i) carefully read this Settlement
Agreement and Release, together with the exhibits attached hereto;
(ii) has discussed its legal effects with their respective
attorneys; (iii) fully understands the contents hereof; and (iv)
executes the same of their own free will and accord without
duress, coercion, or undue influence. Each party agrees that this
Agreement shall be binding upon their respective successors,
heirs, personal representatives, and assigns.
4. ENTIRE AGREEMENT: This Agreement contains the entire agreement among
the parties relating to the subject matter of this Agreement,
supersedes any and all oral or written understandings or agreements
relating to its subject matter, and may not be altered or amended
except by an instrument in writing signed by the party or parties to be
charged.
5. BINDING AGREEMENT: This Agreement shall be binding upon and inure to
the benefit of each of the parties hereto and their respective heirs,
executors, administrators, successors, and assigns. It shall be
construed and enforced in accordance with the laws of the State of New
York and the State of Florida and Delaware.
6. NOTICES: Any notices required by this Agreement shall be sent to the
Party's address as follows:
IF TO DIVOT:
Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 00-X
Xxx Xxxx, XX 00000
IF TO XXXXXXX:
Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 00-X
Xxx Xxxx, XX 00000
7. COUNTERPARTS: This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
8. TITLES AND CAPTIONS: All article and section titles or captions in this
Agreement are for convenience only. They shall not be deemed a part of
this Agreement, and in no way define, limit, extend, or describe the
scope or intent of any of its provisions. The recital clauses set forth
in this Agreement are hereby incorporated into and are made a part of
this Agreement
9. AMENDMENTS: No supplement, modification, or amendment of any term,
provision, or condition of this Agreement shall be binding or
enforceable unless
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executed in writing by the party against whom enforcement is sought as
to such supplementary or modified or amended term or condition.
10. ENTIRE AGREEMENT AND WAIVER: This Agreement constitutes the entire
agreement between the parties hereto, and supersedes all prior and
contemporaneous agreements, arrangements, negotiations, and
understandings between the parties hereto relating to the subject
matter hereof. There are no other understandings, statements, promises
or inducements, oral or otherwise, contrary to the terms of this
Agreement. No representations, warranties, covenants, or conditions,
express or implied, whether by statute or otherwise, other than as set
forth herein have been made by any party hereto. No waiver of any term,
provision, or condition of this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or
shall constitute, a waiver of any other provision hereof, whether or
not similar, nor shall any such waiver constitute a continuing waiver,
and no waiver shall be binding unless executed by the party making such
waiver.
11. FURTHER DOCUMENTS: Each party hereto further agrees to execute such
documents and take such other steps as may be necessary to accomplish
the purposes herein.
IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as
of the date first set forth above.
DIVOT GOLF CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX XXXXXX X. XXXXXXX
Title: Chairman & CEO
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