SETTLEMENT AND RELEASE AGREEMENT
Exhibit 10.29
SETTLEMENT AND RELEASE AGREEMENT
This SETTLEMENT AND RELEASE AGREEMENT (hereinafter, the “Release”) is made and entered into as
of March 4, 2009 by and between T3 Motion, Inc., a Delaware corporation (the “Company”) on the one
hand, and Sooner Cap, Xxxxxx Xxx, and Maddog Executive Services, an affiliate of Xxxxxx Xxx,
(collectively “Sooner Cap”) on the other hand. The Company and Sooner Cap may be collectively or
singularly referred to hereafter as the “Parties” or the “Party.”
RECITALS
A. WHEREAS, on December 27, 2007, the Parties entered into that certain agreement for the
payment of funds and securities to Sooner Cap in connection with certain financing transactions
related to the Company that arose during the period December 12, 2007 and December 31, 2008 (the
“Agreement”).
B. WHEREAS, a dispute has arisen between the Parties over certain obligations under the
Agreement.
C. WHEREAS, the Parties make no admission of liability or wrongdoing and are entering into
this Agreement for the sole purpose of resolving this matter, avoiding the time and expense
incident to protracted litigation, and obtaining peace.
NOW, THEREFORE, in consideration of the mutual covenants and promises in this Agreement, and
for other further good and valuable consideration, including without limitation the mutual
avoidance of further costs, inconvenience, and uncertainties relating to litigation, the Parties
agree as follows.
AGREEMENT
1. Recitals. The Recitals set forth above are an integral part of this Release, and
shall be used in any interpretation of this Release.
2. Settlement Obligations.
2.1 Stock Issuance. The Company shall issue to Sooner Cap a total of 931,034
restricted and unregistered shares of the Company’s common stock (the “Settlement Shares”). The
Company shall use its best efforts to issue and have delivered to Sooner Cap a certificate
representing the Settlement Shares as soon as practicable after the execution of this Release.
2.2 Rule 144. At Sooner Cap’s cost, upon delivery of reasonable certificates
customary for Rule 144 opinions to Company counsel and delivery of the certificate representing the
Settlement Shares to the Company’s transfer agent (“Transfer Agent”), the Company shall cause its
counsel to issue a legal opinion to the Transfer Agent required to effect the removal of any legend
regarding federal securities act compliance promptly after receipt of a written notice
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from Sooner Cap requesting legend removal after (i) any sale of such Settlement Shares pursuant to
Rule 144 or (ii) such Settlement Shares are eligible for sale under Rule 144 without the
requirement for the Company to be in compliance with the current public information required under
Rule 144 as to such Settlement Shares and without volume or manner-of-sale restrictions.
The Company agrees that following such time that a legend is no longer required, it will
promptly following the delivery by a Sooner Cap to the Company or the Transfer Agent of a
certificate representing Settlement Shares, as applicable, issued with a restrictive legend,
deliver or cause to be delivered to such Sooner Cap a certificate representing such shares that is
free from all restrictive and other legends. The Company may not make any notation on its records
or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in
this Section 2. Certificates for Settlement Shares subject to legend removal hereunder shall be
transmitted by the Transfer Agent to Sooner Cap by crediting the account of the Sooner Cap’s prime
broker with the Depository Trust Company System as directed by such Sooner Cap.
3. Termination of Agreement.
3.1 Termination of Company’s Obligation to Make Cash Payments. As of December 31,
2008, the Company owed Sooner Cap an aggregate $251,993.00, net of expenses, pursuant to the terms
of the Agreement (“Cash Payment”). As of the date of this Release, the Company’s obligation to pay
to Sooner Cap the Cash Payment is terminated.
3.2 Termination of Company’s Obligation to Issue Warrants. By the terms of the
Agreement, in lieu of the Company making the Cash Payment to Sooner Cap, warrants to purchase up to
5% of the Company’s equity (“5% Warrants”) were to be issued by the Company to Sooner Cap upon
Sooner Cap meeting certain target objectives. As of the date of this Release, the Company’s
obligation to issue the 5% Warrants is terminated.
3.3 Termination. The Parties acknowledge and agree that the Agreement terminated as
of December 31, 2008 anything in the Agreement to the contrary notwithstanding.
4. Release. Effective upon execution of this Release, Sooner Cap, for themselves and
their respective assigns, heirs, executors, administrators, and representatives, hereby fully
releases, remises, acquits, forever discharges, and indemnifies the Company and its respective
affiliates and successors, together with all of their respective representatives, consultants,
attorneys, fiduciaries, and assigns from any and all claims, demands, actions, losses, and expenses
of any kind or nature arising out of any and all causes of action, agreements, claims, demands,
actions, damages, judgments, debts, covenants, executions, liabilities, obligations, losses, and
expenses of any kind or nature arising out of any acts, omissions, liabilities, transactions,
transfers, happenings, violations, promises, facts, or circumstances arising out of, related to or
described in the Agreement, or underlying related transactions.
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5. Section 1542 Waiver. Sooner Cap acknowledges and affirms that it is familiar with
Section 1542 of the California Civil Code, which provides that:
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.
Sooner Cap knowingly and voluntarily waives the provisions of Section 1542 of the California
Civil Code and acknowledges and agrees that this waiver is an essential and material term of this
Release, and that without such waiver, this Release would not have been entered into. Sooner Cap
further acknowledges the significance and consequence of the release and the specific waiver of
Section 1542 of the California Civil Code.
6. Representations and Warranties by Sooner Cap for Settlement Shares and 5% Warrants.
6.1 Sooner Cap understands and acknowledges that the Settlement Shares have not been
registered with the Securities and Exchange Commission under Section 5 of the of the Securities Act
of 1933, as amended (the “Act”), or registered or qualified with any applicable state or
territorial securities regulatory agency in reliance upon one or more exemptions afforded from
registration or qualification.
6.2 Sooner Cap understands and acknowledges that the Settlement Shares are deemed to be
“restricted” under the Act, and may be re-sold only pursuant to exemptions provided by the Act or
pursuant to an effective registration statement. Sooner Cap understands and acknowledges that the
Company is required to place a restrictive legend on the certificate stating that the Settlement
Shares have not been registered under the Act.
7. Authority. The Parties represent and warrant that the undersigned individuals have
the authority to act on behalf of the signing party and have the authority to bind that party, and
all that may claim through it, to the terms and conditions of this Release.
8. Representation. The Parties represent and warrant that they have had an
opportunity to consult with an attorney, and have carefully read and understand the scope and
effect of the provisions of this Release. No Party has relied upon any representations or
statements made by any other party, which are not specifically set forth in this Release.
9. No Right to Rescission. The Parties represent and warrant that they have conducted
all necessary investigations and have consulted with counsel and are not relying on any
representations, except those contained in this Release, and the parties assume the risk of any
untruths regarding any matters upon which they have relied and forever waive any rights to rescind
this Release and the sole remedy for the parties is to enforce the terms of this Release.
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10. Severability. In the event that any provision hereof becomes declared by a court
of competent jurisdiction to be illegal, unenforceable or void, this Release shall continue in full
force and effect without said illegal provision.
11. Entire Agreement. This Release represents the entire agreement and understanding
between the parties, and represents the complete, final and exclusive embodiment of their agreement
concerning the matters set forth in the Recitals. Further, this Release shall supersede and
replace any and all prior and contemporaneous agreements, representations, and understandings
regarding the subject of this Release. Notwithstanding the provisions of California Evidence Code
Section 1152, this Release is admissible for purposes of enforcement.
12. Governing Law. This Release shall be governed by the laws of the State of
California. By signing this Release, the parties hereby agree and submit to the jurisdiction of
the courts in California, and that venue of any suit or action shall be in the downtown branch of
the courts of Los Angeles County, California.
13. Counterparts: This Release may be executed in counterparts and each counterpart
shall have the same force and effect as an original and constitute an effective, binding agreement
on the part of each of the undersigned. This Release may be transmitted by facsimile or otherwise.
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IN WITNESS WHEREOF, the Parties have executed this Release as of the date first set forth
above.
COMPANY: |
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Its: Chief Executive Officer |
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SOONER CAP: |
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Sooner Cap |
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Its: |
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Maddog Executive Services |
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Its: |
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