SETTLEMENT AGREEMENT
This
Settlement Agreement (“AGREEMENT”) is entered into by and between Xxxxx X.
Xxxxxxxxx (“XXXXXXXXX”), on the one hand, and World Am, Inc., a Nevada
corporation (“WORLD AM”); BOTH of the above shall be collectively referred to
herein as the “PARTIES.”
RECITALS
WHEREAS,
ALEXANDER was employed by WORLD AM;
WHEREAS,
ALEXANDER filed a lawsuit pending in the United States District Court for the
District of Colorado, Case No. 06-cv-02163-RPM-CBS, entitled XXXXXXXXX
x. WORLD AM, INC. (the
“Lawsuit”) seeking damages in connection with ALEXANDER’s employment and
termination;
WHEREAS,
WORLD
AM denies the validity of ALEXANDER’s claims and denies that it is subject to
any liability whatsoever; and
WHEREAS,
both
PARTIES wish to settle their differences without resort to further litigation;
and
WHEREAS,
WORLD
AM is willing to provide ALEXANDER with certain considerations described below,
provided that ALEXANDER dismisses his suit and releases WORLD AM from any claims
ALEXANDER has made or might make arising out of or in any way related to his
employment and agrees to comply with the other promises and considerations
set
forth in this AGREEMENT.
NOW
THEREFORE, in
consideration of the mutual covenants and promises contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the PARTIES, the PARTIES agree to be legally bound by the
following terms and conditions, which constitute full settlement of any and
all
disputes between them:
|
1.
|
Recitals:
The PARTIES acknowledge that the “WHEREAS” clauses preceding paragraph 1
are true and correct, and are incorporated herein as material parts
to
this AGREEMENT.
|
|
2.
|
Definitions:
For purposes of this AGREEMENT only, the term “WORLD AM” shall be deemed
to include the following:
|
|
▪
|
Any
officer or director
|
|
3.
|
Settlement
Sum:
As
consideration for signing this AGREEMENT and compliance with the
promises
made herein, WORLD AM agrees to pay to ALEXANDER the sum of One Hundred
Fifty Thousand and No/100 Dollars ($150,000.00) (the “Settlement Sum”) to
be paid as follows:
|
A. Six
(6) convertible notes issued on [Dates] to Xxxxx X. Xxxxxxxxx. Each note will
have at least a six (6) month holding period with a stated conversion date.
Beginning with the conversion date on the first convertible note, the conversion
date for each subsequent note will be the date exactly one month after the
conversion date of the preceding note. On each conversion date, the note shall
convert into a determined number of shares of restricted WORLD AM stock where
the number of shares determined shall be equal to the market value of $16,667.00
dollars. Market value shall be determined by averaging the high and low prices
for WORLD AM free trading stock on the day preceding the conversion date. When
each note converts into restricted stock, Xxxxx X. Xxxxxxxxx may decide at
any
time, pursuant to the requirements of Section 3(C) and 3(D) of this AGREEMENT,
to remove the restrictions from his stock making it unrestricted and freely
tradable.
B. Six
(6) convertible notes issued on [Dates] to Xxxxx X. Xxxx. Each note will have
at
least a six month holding period with a stated conversion date. Beginning with
the conversion date of the first convertible note, the conversion date for
each
subsequent note will be the date exactly one month after the conversion date
on
the preceding note. On each stated conversion date, the note shall convert
into
a determined number of shares of restricted WORLD AM stock where the number
of
shares determined shall be equal to the market value of $8,333.00 dollars on
the
date of conversion. Market value shall be determined by averaging the high
and
low prices for WORLD AM free trading stock on the day preceding the conversion
date. When each note converts into restricted stock, Xxxxx X. Xxxx xxx decide
at
any time, pursuant to the requirements of Section 3(C) and 3(D) of this
AGREEMENT, when to remove the restrictions from his stock making it unrestricted
and freely tradable.
C. Xxxxx
X. Xxxx and Xxxxx X. Xxxxxxxxx understand the provisions of Rule 144 promulgated
under the Securities Act govern the resale of restricted securities. Assuming
Xxxxx X. Xxxx and Xxxxx X. Xxxxxxxxx have complied with Rule 144 in their sale
of restricted stock as generally set forth in Section 3(D) of this AGREEMENT,
and the other requirements, if any, for resale under Rule 144 are met, when
Xxxxx X. Xxxx and Xxxxx X. Xxxxxxxxx decide to sell their stock or remove the
restrictions from their stock to make it unrestricted and freely tradable,
WORLD
AM shall request that its securities counsel, and its transfer agent, as
applicable, shall provide the necessary services at WORLD AM’s expense in order
to facilitate their sale of stock under Rule 144 or to otherwise make such
restricted stock freely tradable.
2
D. Restrictions
on Transfer.
1. Xxxxx
X. Xxxx and Xxxxx X. Xxxxxxxxx agree not to make any disposition of all or
any
portion of their stock unless and until:
(a) There
is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with such
registration statement; or
(b) (i)
The dispositions of the stock are being made pursuant to Rule 144 of the
Securities Act (ii) the holder seeking disposition (Xxxxx X. Xxxx or Xxxxx
X.
Xxxxxxxxx) shall have notified WORLD AM of the proposed disposition and shall
have furnished WORLD AM with a statement of the circumstances surrounding the
proposed disposition, and (iii) if necessary WORLD AM will obtain an opinion
from its securities counsel that such disposition will not require registration
of such shares under the Securities Act.
2. Each
certificate representing shares of stock shall (unless otherwise permitted
by
the provisions of the Agreement) be stamped or otherwise imprinted with a legend
substantially similar to the following (in addition to any legend required
under
applicable state securities laws):
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933 (THE “ACT”)
AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY
HAS
RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL
THAT
SUCH REGISTRATION IS NOT REQUIRED.
E. WORLD
AM covenants and agrees to comply with their applicable reporting requirements
of the Security Exchange Act of 1934, as amended, pursuant to Rule 144(c)(1).
If
WORLD AM fails to meet such requirements, and as a result, Xxxxx X. Xxxx and
Xxxxx X. Xxxxxxxxx are unable to sell their stock under Rule 144 at a time
they
desire upon request, WORLD AM shall promptly pay in cash the principal amount
of
the applicable convertible note’s stated conversion date, respectively $8,333.00
dollars for each note held by Xxxxx X. Xxxx and $16,667.00 dollars for each
note
held by Xxxxx X. Xxxxxxxxx.
|
4.
|
Consideration: ALEXANDER
understands and agrees that he would not receive the monies and/or
benefits specified in paragraph 3, above, but for his execution of
this
AGREEMENT and the fulfillment of the promises contained
herein.
|
|
5.
|
General
Release of Claims:
|
A. In
exchange for, and in consideration of, the payments, benefits, and other
commitments described above, ALEXANDER agrees to dismiss with prejudice his
Lawsuit filed against WORLD AM (and any other claims or assertions of liability
that may exist), and WORLD AM agrees to dismiss with prejudice its counterclaims
against ALEXANDER. In addition, ALEXANDER, for himself and for each of
his heirs,
executors, administrators, and assigns, hereby fully releases, acquits, and
forever discharges WORLD AM and each of its predecessors, successors and
assigns, parent corporations, subsidiary corporations, affiliated corporations,
and the officers, directors, shareholders, partners, employees, attorneys and
agents, past and present, of each of the aforesaid entities (“Related Persons”)
of and from any and all claims, liabilities, causes of action, demands to any
rights, damages, costs, attorneys’ fees, expenses, and compensation whatsoever,
of whatever kind or nature, in law, equity, or otherwise, whether known or
unknown, vested or contingent, suspected, or unsuspected, that ALEXANDER may
now
have, has ever had, or hereafter may have relating directly or indirectly to
the
allegations in the Lawsuit, including, but not limited to, ALEXANDER’s
employment with WORLD AM or the termination of his employment with WORLD AM.
3
B. I
acknowledge that I am knowingly and voluntarily waiving and releasing any rights
I may have under the federal Age Discrimination in Employment Act of 1967,
as
amended (“ADEA”). I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (i) my waiver and release do not apply
to any rights or claims that may arise after the execution date of this
AGREEMENT; (ii) I have been advised hereby that I have the right to consult
with
an attorney prior to executing this AGREEMENT; (iii) I have twenty-one (21)
days
to consider this AGREEMENT (although I may choose to voluntarily execute this
AGREEMENT earlier); (iv) I have seven (7) days following the execution of this
AGREEMENT by the Parties to revoke the AGREEMENT; and (v) this AGREEMENT will
not be effective until the date upon which the revocation period has expired,
which will be the eighth day after this AGREEMENT is executed by me, provided
that WORLD AM has also executed this Agreement by that date (“Effective
Date”).
C. Similarly,
WORLD AM, for itself and its successors and assigns, parent corporations,
subsidiary corporations, affiliated corporations, and the officers, directors,
shareholders, partners, employees, attorneys and agents, past and present
thereof, hereby fully releases, acquits, and forever discharges ALEXANDER and
his heirs, executors, administrators, and assigns, of and from any and all
claims, liabilities, causes of action, demands to any rights, damages, costs,
attorneys’ fees, expenses, and compensation whatsoever, of whatever kind or
nature, in law, equity, or otherwise, whether known or unknown, vested or
contingent, suspected, or unsuspected, that WORLD AM may now have, has ever
had,
or hereafter may have relating directly or indirectly to the allegations in
the
Lawsuit, including, but not limited to, ALEXANDER’s employment with WORLD AM or
the termination of his employment with WORLD AM.
|
6.
|
Tax
Indemnification:
ALEXANDER currently has a tax lien filed against him by the IRS associated
with employment withholding taxes by WORLD AM, incurred while ALEXANDER
was WORLD AM’S CEO. WORLD AM agrees to indemnify ALEXANDER for these tax
amounts which includes penalties and interest.
.
|
4
|
7.
|
Affirmations:
ALEXANDER represents and affirms that, other than his Lawsuit referenced
herein, he has no suits, claims, charges, complaints or demands of
any
kind whatsoever currently pending against WORLD AM with any local,
state,
or federal court or any governmental, administrative, investigative,
civil
rights or other agency or board.
|
|
8.
|
No
Assignment:
The PARTIES represent and warrant that no person other than the
signatories hereto had or has any interest in the matters referred
to in
this AGREEMENT, that the PARTIES have the sole right and exclusive
authority to execute this AGREEMENT, and that the PARTIES have not
sold,
assigned, transferred, conveyed, or otherwise disposed of any claim,
demand or legal right that is the subject of this
AGREEMENT.
|
|
9.
|
Governing
Law and Jurisdiction:
This AGREEMENT shall be governed and conformed in accordance with
the laws
of the state of Colorado without regard to its conflict of laws provision.
In the event ALEXANDER or
WORLD AM breaches any provision of this AGREEMENT, ALEXANDER and
WORLD AM
affirm that either may institute an action to specifically enforce
any
term or terms of this AGREEMENT.
|
|
10.
|
No
Admission of Liability:
The PARTIES agree that neither this AGREEMENT nor the furnishing
of the
consideration for this AGREEMENT shall be deemed or construed at
anytime
for any purpose as an admission by WORLD AM of any liability or unlawful
conduct of any kind.
|
|
11.
|
Headings:
The headings of the provisions herein are intended for convenient
reference only, and the same shall not be, nor be deemed to be,
interpretative of the contents of such
provision.
|
|
12.
|
Modification
of Agreement:
This AGREEMENT may not be amended, revoked, changed, or modified
in any
way, except in writing executed by all PARTIES. .
|
|
13.
|
Interpretation:
The language of all parts of this AGREEMENT shall in all cases be
construed as a whole, according to its fair meaning, and not strictly
for
or against any of the PARTIES. This AGREEMENT has been negotiated
by and
between attorneys for the PARTIES and shall not be construed against
the
“drafter” of the AGREEMENT. If any portion or provision of this AGREEMENT
(including, without implication of limitation, any portion or provision
of
any section of this AGREEMENT) is determined to be illegal, invalid,
or
unenforceable by any court of competent jurisdiction and cannot be
modified to be legal, valid, or enforceable, the remainder of this
AGREEMENT shall not be affected by such determination and shall be
valid
and enforceable to the fullest extent permitted by law, and said
illegal,
invalid, or unenforceable portion or provision shall be deemed not
to be a
part of this AGREEMENT.
|
5
|
14.
|
Binding
Nature of Agreement:
This AGREEMENT shall be binding upon each of the PARTIES and upon
their
respective heirs, administrators, representatives, executors, successors,
and assigns, and shall inure to the benefit of each party and to
their
respective heirs, administrators, representatives, executors, successors,
and assigns.
|
|
15.
|
Entire
Agreement:
This AGREEMENT sets forth the entire AGREEMENT between the parties
hereto,
and fully supersedes any prior obligation of WORLD AM to ALEXANDER.
ALEXANDER acknowledges
that he has
not relied on any representations, promises, or agreements of any
kind
made to him in connection with his decision to accept this AGREEMENT,
except for those set forth in this
AGREEMENT.
|
|
16.
|
Notice
Requirements:
Each notice (“Notice”) provided for under this AGREEMENT, must comply with
the requirements as set forth in this paragraph. Each Notice shall
be in
writing and sent by facsimile or depositing it with a nationally
recognized overnight courier service that obtains receipts (such
as
Federal Express or UPS Next Day Air), addressed to the appropriate
party
(and marked to a particular individual’s attention, if so indicated) as
hereinafter provided. Each Notice shall be effective upon being so
telecopied or deposited, but the time period in which a response
to any
notice must be given or any action taken with respect thereto shall
commence to run from the date of receipt of the Notice by the addressee
thereof, as evidenced by the return receipt. Rejection or other refusal
by
the addressee to accept or the inability to deliver because of a
changed
address of which no Notice was given shall be deemed to be the receipt
of
the Notice sent. Any party shall have the right from time to time
to
change the address or individual’s attention to which notices to it shall
be sent by giving to the other party at least ten (10) days prior
Notice
thereof. The PARTIES’ addresses for providing Notices hereunder shall be
as follows:
|
WORLD
AM
c/o
Xxxxxx Xxxxx,
0000
Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000
949.955.5355
cc:
Xxxxxx X. Xxxxx, Esquire
Xxxxxxxxx
Traurig LLP
0000
Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
000.000.0000
FAX:
000-000-0000
XXXXX
X.
XXXXXXXXX
c/o
Xxxxx X. Xxxx, Esquire
Xxxxxx
& Xxxx, PC
0000
XXX Xxxxxxx, Xxxxx 000
Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
000.000.0000
FAX:
000-000-0000
6
|
17.
|
Selective
Enforcement:
The PARTIES agree that the failure of any party to enforce or exercise
any
right, condition, term, or provision of this AGREEMENT shall not
be
construed as or deemed a relinquishment or waiver thereof, and the
same
shall continue in full force and
effect.
|
|
18.
|
Voluntariness.
THE
PARTIES REPRESENT AND AGREE THAT EACH IS VOLUNTARILY ENTERING INTO
THIS
AGREEMENT. PLEASE READ THIS SETTLEMENT AGREEMENT CAREFULLY. THIS
AGREEMENT
AND GENERAL RELEASE OF ALL CLAIMS INCLUDES A RELEASE OF ALL KNOWN
AND
UNKNOWN CLAIMS.
|
7
ACCEPTED
AND AGREED:
|
|
|
|
|
XXXXX
X. XXXXXXXXX
|
Date
|
STATE
OF
COLORADO )
)
ss
COUNTY
OF
__________ )
BEFORE
ME, the undersigned authority on this _____ day of _______, 2008, personally
appeared XXXXX X. XXXXXXXXX, known to me to be the person whose name is
subscribed to the foregoing instrument and signed in my presence and swore
upon
oath this AGREEMENT was executed for the purposes and consideration therein
expressed.
SUBSCRIBED
AND SWORN TO BEFORE ME on this _____ day of _________, 2008, to certify which
witness my hand and seal of office.
__________________________________________
NOTARY
PUBLIC - STATE OF COLORADO
__________________________________________
(Printed
Name of Notary)
My
Commission Expires:
____________________
8
FOR
THE PURPOSES OF SECTION 3 ONLY, ACCEPTED AND AGREED:
BEFORE
ME, the undersigned authority on this _____ day of _______, 2008, personally
appeared XXXXX X. XXXX, known to me to be the person whose name is subscribed
to
the foregoing instrument and signed in my presence and swore upon oath this
AGREEMENT was executed for the purposes and consideration therein
expressed.
SUBSCRIBED
AND SWORN TO BEFORE ME on this _____ day of _________, 2008, to certify which
witness my hand and seal of office.
__________________________________________
NOTARY
PUBLIC - STATE OF COLORADO
__________________________________________
(Printed
Name of Notary)
My
Commission Expires:
____________________
9
ACCEPTED
AND AGREED:
By:
_________________________
Its:
_________________________
Dated:
______________________, 2008
APPROVED
AS TO FORM:
By:
_________________________
Xxxxxx
X.
Xxxxx, Esq.
XXXXXXXXX
XXXXXXX, LLP
0000
00xx
Xxxxxx,
Xxxxx 0000
Xxxxxx,
XX 00000
303.572.6500
Attorneys
for Defendant World Am, Inc.
10
