SETTLEMENT AGREEMENT
EXHIBIT
10.1
This
Settlement Agreement (the “Agreement”) is entered into effective as of May 10,
2006, by and among FastFunds Financial Corporation, Inc., a Nevada corporation
(“FastFunds”), and Equitex, Inc. (“Equitex”), on the one hand; and the following
holders of certain notes: MBC Global, LLC, an Illinois limited liability company
(“MBC”), Corporate Capital, Inc. a Minnesota corporation, Xxxxxxx Companies, a
Colorado corporation, Xxxxx Investments, Inc., an Illinois corporation, Xxxx
X.
Xxxxx, Xxxxx Xxxxx, Xxxxx X. Xxxxx, as Trustee of the Xxxxx X. Xxxxx June 1992
Non-Exempt Trust, European American Perinvest Group Bermuda., a British Virgin
Island corporation, Xxxxx Xxxxxxx, Xxxx Xxxx Xxxxxx, Xxxxx X. Xxxxxx, Xxxxxx
Xxxxxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxxx (collectively referred to as the “Note
Holders”) on the other hand; with respect to the settlement of all claims
between the foregoing parties to this Agreement, including those relating to
certain Convertible Promissory Notes dated April 14, 2004, made by FastFunds
to
the Note Holders (as listed in Exhibit 1 attached, the “Notes”), and other
related matters. FastFunds and the Note Holders may be collectively referred
to
in this Agreement as the “parties” and individually as a “party.”
In
consideration of the payments, promises, mutual covenants and releases provided
for in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, FastFunds and the
Note
Holders, intending to be legally bound, hereby agree as follows:
1. Securities.
At a
date mutually agreed upon by the parties, which shall be on or before the later
of ten business days following receipt by Equitex of one or more counterpart
originals of this Agreement signed by all of the Note Holder parties or May
15,
2006, Equitex shall issue and deliver to the Note Holders an aggregate of
180,000 shares of common stock of Equitex, to be divided pro rata with the
number of shares for each Note Holder being set forth in Exhibit 1 attached
to
this Agreement. All shares of Equitex common stock to be issued shall be duly
authorized, fully paid and non-assessable and free of restrictions of any kind,
other than restrictions noted by (i) a legend stating that the shares
represented by the certificates are subject to the terms and conditions of
that
certain Stock Sale and Lock Up Agreement dated May 10, 2006, a copy of which
is
available from the issuing corporation upon written request, and (ii) a standard
Securities Act restrictive
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legend
(until removal thereof pursuant to a legal opinion of Equitex’s securities
counsel which will be delivered within one (1) business day of the effective
date of the Registration Statement). Prior to any securities being delivered,
each of the Note Holders shall deliver the original Notes to an escrow agent
mutually acceptable to all of the parties. The Notes shall be returned to
FastFunds for cancellation following the share of Equitex being issued and
delivered to the Note Holders. The Note Holders shall also be required to
execute and deliver a Shareholder Lockup Agreement in the form attached as
Exhibit 2 prior to delivery of the shares.
2. Price
Protection.
Upon
receipt by each Note Holder of the certificates contemplated by this Agreement,
and the subsequent release from escrow and sale of the shares by each Note
Holder, if the dollar amount received by such Note Holder from sales of common
stock at the conclusion of the dates set forth in the STOCK SALE AND LOCK UP
AGREEMENT is less than an average sales price of $4.00 per share, Equitex shall
deliver to each Note Holder, within fifteen (15) business days of receipt of
notice to such effect, such difference in cash or additional shares of common
stock (valued
at a per share conversion rate equal to the median closing price of Equitex
common stock for the thirty (30) days preceding the date of such
notice),
at
Equitex’s option. The Note Holder shall provide the activity in such account to
verify sales amounts and prices. During the period of time any of the shares
are
in escrow, but prior to their release, EQTX shall have a right to purchase
some
or all of the shares of any Note Holder in escrow at a price equal to the
greater of the average Closing Price of the shares for the previous five(5)
trading days or $4.00. Upon release of the shares from the Escrow Agent, this
right shall expire, and the Note Holders may sell such shares in the market
with
the full price protection offered by this paragraph 2. The full price protection
offered by this paragraph 2 shall only apply only to the shares released from
escrow only if such shares are sold by the Note Holder within thirty (30) days
of release of the shares from the Escrow Agent. Payment by EQTX for those shares
purchased by EQTX shall be made within three (3) business days of EQTX’s
purchasing of said shares.
3. Settlement
and Release.
In
consideration of the forgoing securities, each of the Note Holders, and their
officers, directors, employees, agents, attorneys, stockholders, parent
corporations, subsidiaries, affiliates (as defined in rules under the Securities
Act of 1933), representatives,
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successors
and assigns, and the heirs, executors, successors and assigns thereof (the
“Note
Holder Affiliates”) hereby forever completely
and unconditionally release, acquit and discharge FastFunds and Equitex and
their officers, directors, employees, agents, attorneys, stock-holders, parent
corporations, subsidiaries, affiliates (as defined in rules under the Securities
Act of 1933), representatives, successors and assigns, and the heirs, successors
and assigns thereof (collectively, the “Company Affiliates”) from any and all
past, present or future claims, demands, liabilities, actions, causes of action,
debts, losses, counterclaims, set-offs, liabilities, damages or suits of every
kind or nature which the Note Holders or the Note Holder Affiliates now have
or
may hereafter accrue against FastFunds, Equitex or the Company Affiliates,
whether known or unknown, asserted or unasserted, absolute or contingent,
accrued or not accrued, including but not limited to those arising out of,
based
upon, or in any way related to the (a) the Notes; (b) any obligations to make
any payments, or any other monetary of non-monetary obligation or performance
of
any sort arising under Notes or any other documents or agreements allegedly
entered into in connection with the Notes; (c) any alleged duty purportedly
existing or arising between the parties; (d) any alleged obligation to make
payment of any interest, late fees or other charges; (e) any alleged negligence,
lack of due care, gross negligence, or alleged intentional, willful or wanton
misconduct resulting in any alleged loss; (f) any lost profits, loss of business
opportunities, lost investment returns, lost investment opportunities or other
business losses; (g) any alleged conspiracy or purportedly tortious conduct,
misapplication of proceeds, or alleged act or omission purportedly resulting
in
injury; (h) any alleged fraud, concealment, misrepresentation, negligent
misrepresentation, failure to make disclosure, or allegedly misleading or
inaccurate statements purported to have been made to by FastFunds or the Company
Affiliates; (i) alleged infliction of emotional distress, pain, suffering or
other similar injury; (j) any alleged costs, expenses, fees, charges, attorneys
fees or expenses, expert witness fees or expenses, or third party costs, fees,
expenses or charges, purportedly incurred; and (k) any other claims, demands,
actions, causes of action or suits which the Note Holders or the Note Holder
Affiliates asserted, attempted to assert or could have asserted against
FastFunds, Equitex or the Company Affiliates (all of which are hereinafter
referred to as the "Released Note Holder Claims") up to and including the date
hereof; provided,
however,
that
the obligations of FastFunds and Equitex to perform this Agreement are
specifically excluded from the foregoing release.
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4. Settlement
and Release.
FastFunds and the Company Affiliates hereby forever completely and
unconditionally release, acquit and discharge the Note Holders and the Note
Holder Affiliates from any and all past, present or future claims, demands,
liabilities, actions, causes of action, debts, losses, counterclaims, set-offs,
liabilities, damages or suits of every kind or nature which FastFunds or Company
Affiliates now have or may hereafter accrue against Note Holders or the Note
Holder Affiliates, whether known or unknown, asserted or unasserted, absolute
or
contingent, accrued or not accrued, including but not limited to those arising
out of, based upon, or in any way related to the (a) the Notes; (b) any
obligations to make any payments, or any other monetary of non-monetary
obligation or performance of any sort arising under Notes or any other documents
or agreements allegedly entered into in connection with the Notes; (c) any
alleged duty purportedly existing or arising between the parties; (d) any
alleged obligation to make payment of any interest, late fees or other charges;
(e) any alleged negligence, lack of due care, gross negligence, or alleged
intentional, willful or wanton misconduct resulting in any alleged loss; (f)
any
lost profits, loss of business opportunities, lost investment returns, lost
investment opportunities or other business losses; (g) any alleged conspiracy
or
purportedly tortious conduct, misapplication of proceeds, or alleged act or
omission purportedly resulting in injury; (h) any alleged fraud, concealment,
misrepresentation, negligent misrepresentation, failure to make disclosure,
or
allegedly misleading or inaccurate statements purported to have been made to
by
Note Holders or the Note Holder Affiliates; (i) alleged infliction of emotional
distress, pain, suffering or other similar injury; (j) any alleged costs,
expenses, fees, charges, attorneys fees or expenses, expert witness fees or
expenses, or third party costs, fees, expenses or charges, purportedly incurred;
and (k) any other claims, demands, actions, causes of action or suits which
FastFunds or the Company Affiliates asserted, attempted to assert or could
have
asserted against the Note Holders or the Note Holder Affiliates (all of which
are hereinafter referred to as the "Released Company Claims") up to and
including the date hereof; provided,
however,
that
the obligations of the Note Holders to perform this Agreement are specifically
excluded from the foregoing release. The Released Note Holder Claims and the
Released Company Claims may hereafter be referred to together as the “Released
Claims.”
5. Confidentiality.
Except
as required by law, rule, regulation, subpoena of a court, or order of a court,
or to
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enforce
this Agreement, the parties agree on their own behalf and on behalf of their
respective attorneys, agents, successors and assigns that neither the Parties
nor the attorneys, agents, successors or assigns of the parties, will disclose
to any other person or entity: (1) the contents or substance of this Agreement,
(2) any of the facts or matters in controversy or dispute in connection with
the
Case or the Released Claims, or (3) any communications prior to the date of
this
Agreement between the Parties with respect to the Released Claims, or this
Agreement (the "Confidential Matters"). In the event that any of the parties,
or
any attorney, agent, successor or assign of any of the parties receives a
subpoena or order requesting or requiring that any of the Confidential Matters
be disclosed, or any of the parties, or any attorney, agent, successor or assign
of any of the parties, decides to disclose any of the Confidential Matters
for
any reason other than required disclosure of publicly traded companies under
the
securities laws and regulations, the person or entity receiving the subpoena
or
order, or deciding to disclose the Confidential Matters, shall promptly notify
the parties to this Agreement prior to disclosure, of that subpoena or order,
or
intent to disclose the Confidential Matters. A party may, without violating
this
paragraph, inform anyone that "All matters and disputes between the parties
have
been settled pursuant to agreement," or words of similar meaning and substance.
A party may disclose this Agreement to that party’s attorneys or accountants,
provided that the attorneys or accountants agree to keep the matter confidential
pursuant to the terms of this section as if they were a party to this
Agreement.
6. Representations
and Warranties.
Each
party to this Agreement represents and warrants to the others that: (a) it
has
full power and authority to enter into this Agreement and perform all of its
obligations under this Agreement, has duly executed and delivered this
Agreement, and this Agreement is legally binding on it and is enforceable in
accordance with its terms; (b) the execution, delivery and performance of the
transactions contemplated herein do not conflict with or violate, or result
in a
breach of or constitute a default under, any contract or agreement to which
it
is a party or by which it is bound; and (c) no consent or approval from any
person, firm or entity, or any governmental authority or court, is required
in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated by this Agreement. Each of the parties
represents and warrants that it has not filed for or been the subject of any
bankruptcy or insolvency proceeding or receivership since the Released
Claims
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arose,
that it is competent and authorized to enter into and perform this Agreement,
and will be bound by the terms of this Agreement. Each party to this Agreement
represents and warrants that the party has relied upon the party’s own judgment
and the judgment of the party’s own respective legal counsel regarding the every
aspect of this Agreement, and that no statements or representations (expressed
or implied) were made by any other party or any other party's agents, employees,
officers, directors or legal representatives that have influenced or induced
the
party to execute this Agreement. Each party has prior to the negotiation,
drafting and execution of this Agreement obtained for itself of sufficient
relevant information to intelligently exercise the party’s independent judgment
regarding this Agreement. Each of the parties assumes the risk of any mistake
of
fact or any fact which may be unknown to them relating to this Agreement or
the
Released Claims. By executing this Agreement and granting the releases in this
Agreement, it is the full intent of each of the parties to this Agreement to
release the opposing parties respectively from unknown or unforeseen losses,
costs, expenses, liabilities, claims, injuries, damages and consequences thereof
which may or will result from the Released Claims prior to or after the date
of
the execution of this Agreement arising out of facts that occurred prior to
the
date of this Agreement, regardless of when the damages were incurred.
7. Warranty
of Ownership.
The
Note Holders represent and warrant that they are the sole lawful owners of
all
of the Notes and Released Note Holder Claims free of all liens and interests,
and that they have not transferred, encumbered or assigned any interest in
any
of the Released Claims to any person or entity. The Note Holders agree to
indemnify and hold FastFunds, Equitex and the Company Affiliates harmless from
any claims, demands, actions, causes of action or suits brought against
FastFunds, Equitex or the Company Affiliates by any person or entity claiming
any interest in any of the Notes or Released Note Holder Claims.
8. Accord
and Satisfaction.
The
covenants, promises and agreements contained in this Agreement are made pursuant
to a settlement between the parties to this Agreement, represent a compromise
of
disputed claims, and are not an admission of liability by any of the parties
to
this Agreement. This Agreement is in full accord and satisfaction of all
disputed claims between the parties to this Agreement.
9. Notices.
All
notices permitted, provided for, necessary or convenient in connection with
this
Agreement shall
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be
effective (a) when the confirmation is electronically recorded after being
sent
by telecopier to the telecopier numbers for the parties set forth in Exhibit
1
attached, or (b) the next business day after being sent for overnight delivery,
proper charges pre-paid, by a reputable overnight delivery service or U.S.
Express Mail to the notice address of the parties set forth in Exhibit 1
attached, or (c) upon the seventh business day after being mailed certified
or
registered mail, return receipt requested, proper postage prepaid to the notice
address of the parties set forth in Exhibit 1 attached (or to any subsequent
Notice Address for which the other parties have been given notice as provided
for herein).
10. Exception
From Release. Notwithstanding
any other provision contained in this Agreement to the contrary, the parties
hereto acknowledge and agree that this Agreement and the provisions contained
herein do not purport to release or affect any of the rights, interests or
claims of Xxxx X. Xxxxx, Anglo Irish BK (Suisse) S.A, Xxxxx Xxxxxxx or Xxxxx
X.
Xxxxx June 1992 Non-Exempt Trust pursuant to the issuance of certain 9.5%
Convertible Notes issued by FastFunds to such parties on December 10, 2004;
December 22, 2004; December 3, 2004 and November 24, 2004
respectively.
11. General
Provisions.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective heirs, successors and assigns. This Agreement may be
executed in any number of counterparts, all of which will be considered one
and
the same agreement. The signatures to this Agreement may be delivered by
facsimile or other means of electronic transmission (and signatures so delivered
shall be valid and binding to the same extent as original signature). All of
the
parties, with the assistance of their counsel, have participated in the drafting
and negotiation of this Agreement, and the Agreement shall be construed as
if it
were prepared by all of the parties to this Agreement, without regard to who
originally drafted or proposed any section or term of the Agreement. This
Agreement reflects the entire understanding between the parties to this
Agreement, and fully supersedes and replaces any and all alleged or actual
prior
agreements or understandings between the parties to this Agreement. No
statements, promises or inducements by any of the parties or any agent of any
of
the parties to this Agreement shall be valid or binding unless they are
contained in this Agreement. No modification or amendment to this Agreement
shall be valid or binding unless that modification or amendment is set forth
in
a subsequent written document
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executed
by each of the parties to be bound by the amendment or modification. This
Agreement shall be construed in accordance with the laws of the State of
Colorado. If any provision of this Agreement or the application of that
provision to any party or circumstances shall be held invalid, the remainder
of
the Agreement, or the application of that provision to the party or
circumstances other than those to which it is held invalid, shall not be
affected by that determination. In view of the purposes of this Agreement,
it is
agreed that the remedy at law for failure of any party to perform would be
inadequate and that the injured party or parties, at its or his option, shall
have the right to compel the specific performance of this Agreement in a court
of competent jurisdiction, to the extent permitted by applicable law and not
expressly prohibited by this Agreement. The prevailing party in any proceeding
shall be entitled to recover its reasonable attorneys’ fees and costs of
collection to enforce any provision of this Agreement. All of the
representations and warranties in this Agreement shall survive the execution
and
delivery and performance of obligations pursuant to this Agreement.
In
Witness Whereof,
the
parties have executed this Settlement Agreement to be effective as of the date
first written above.
FASTFUNDS
FINANCIAL CORPORATION:
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By:
/S/ XXXXXXX X. XXXXXXX
Its: PRESIDENT
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EQUITEX,
INC.
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By:
/S/ XXXXX XXXX
Its: PRESIDENT
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NOTEHOLDERS: |
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MBC
GLOBAL, LLC:
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By: /s/
XXX XXXX XXXXXX
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Its: COO
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CORPORATE
CAPITAL, INC.:
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By: /S/
XXXX XXXXXX
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Its:
PRESIDENT
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XXXXXXX
COMPANIES:
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By: /S/
XXXXXXXX X. XXXXXXXXX
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Its: PRINCIPAL
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XXXXX
INVESTMENTS, INC.:
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By: /S/
XXXX X. XXXXX
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Its:
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XXXX
X. XXXXX
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/S/
XXXX X. XXXXX
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XXXXX
XXXXX
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/S/
XXXXX XXXXX
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XXXXX
X. XXXXX JUNE 1992 NON-EXEMPT TRUST:
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By: /S/
XXXXX X. XXXXX
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Its
Trustee
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EUROPEAN
AMERICAN PERINVEST GROUP BERMUDA
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By: /S/
XXXXXXXX X. XXXXXXXXX
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Its: SHAREHOLDER
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XXXXX
XXXXXXX
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/S/
XXXXX XXXXXXX
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XXX
XXXX XXXXXX
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/S/
XXX XXXX XXXXXX
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XXXXX
X. XXXXXX
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/S/
XXXXX X. XXXXXX
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XXXXXX
XXXXXXXX
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/S/
XXXXXX XXXXXXXX
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XXXX
XXXXXX
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/S/
XXXX XXXXXX
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XXXXXX
XXXXXX
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/S/
XXXXXX XXXXXX
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