Exhibit 10.1
RESCISSION AND SETTLEMENT AGREEMENT
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This Rescission and Settlement Agreement (this "Agreement") is made and
entered into as of January 6, 2006, by and between Network Installation Corp, a
Nevada corporation ("NIC") and XXXXXX XXXXXX, an individual, and XXXXXX XXXXX
XXXXXX, an individual, (collectively, the "RIVERAS") and Spectrum Communications
Cabling Services, Inc., Inc., a California corporation ("SPECTRUM").
NIC, XXXXXX XXXXXX and the RIVERAS may be referred to herein individually as a
"party" and together as the "parties."
RECITALS
Prior to November 1, 2005, the XXXXXX XXXXXX was the record owners and
holder of 10,200 shares of common stock of SPECTRUM and XXXXXX XXXXX XXXXXX was
the record owners and holder of 9,800 shares of common stock of SPECTRUM. The
RIVERAS' aggregate of 20,000 -----shares of common stock of SPECTRUM represent
one-hundred percent (100%) of the issued and outstanding common stock of
Spectrum (the "Spectrum Shares");
On November 1, 2005, NIC, SPECTRUM, and the RIVERAS entered into that certain
Stock for Stock Agreement (the "Plan of Reorganization"), pursuant to which NIC
agreed to exchange an aggregate of 18,567,639 shares of its common stock (the
"NIC Shares") for the Spectrum Shares. The Plan of Reorganization is attached
hereto as Exhibit A;
On November 1, 2005, NIC made that certain Promissory Note (the "Note")
whereby NIC promised to pay the RIVERAS the sum of one million five hundred
thousand dollars ($1,500,000) and interest thereon pursuant to the terms and
conditions of the Note. The Note evidences NIC's indebtedness pursuant to the
terms and conditions of the Plan or Reorganization. The Note is attached hereto
as Exhibit B;
On November 1, 2005, NIC and XXXXXX XXXXXX entered into that certain Employment
Agreement (the "Employment Agreement"), pursuant to which NIC employed XXXXXX
XXXXXX to render certain services to NIC as NIC's Senior Vice-President of
Strategy pursuant to the terms and conditions of the Employment Agreement. The
Employment Agreement is attached hereto as Exhibit C;
The closing of the transaction contemplated by the Plan of Reorganization was
scheduled to be held at Spectrum's offices on or about November 1, 2005, at 5:00
pm PST or such other place, date and time as the parties thereto may have
otherwise agreed. As of January 3, 2006 the RIVERAS received the stock
certificates representing the NIC shares. As of the date of this Agreement,
however, NIC has not received the stock certificates representing the Spectrum
shares;
The Board of Directors of NIC has determined that it is in the best interests of
NIC and its stockholders to rescind the Plan of Reorganization, the Note, and
the Employment Agreement (collectively the "Reorganization Agreements");
The Board of Directors of SPECTRUM has determined that it is in the best
interests of SPECTRUM and its stockholders to rescind the Plan of
Reorganization.
The RIVERAS desire to rescind the Plan of Reorganization and the Note and XXXXXX
XXXXXX desires to rescind and the Employment Agreement;
NOW THEREFORE, in consideration of the foregoing Recitals and promises
(which are incorporated herein by this reference) and the mutual covenants set
forth below and other good and valuable consideration, the parties agree as
follows:
AGREEMENTS
ARTICLE 1: RESCISSION & RELEASE
1.1 Settlement. The parties intend for this Agreement and the related
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transactions to constitute a full and final resolution and settlement of any
dispute that has arisen between NIC, on the one hand, and the RIVERAS, XXXXXX
XXXXXX, and/or SPECTRUM, on the other hand, or that may arise from or otherwise
relate to the Reorganization Agreements or any of them. Further, this Agreement
is being entered into for settlement purposes pursuant to California Evidence
Code 1152, Federal Rules of Evidence Rule 408, and any similar statute or rule
in any applicable jurisdiction.
1.2 Rescission of Agreements and Non-Delivery of Shares. The parties hereby
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rescind the Reorganization Agreements and each of them, and such Reorganization
Agreements shall be of no further force or effect as between the parties and
such Electing Investor. Each of the parties hereby agrees that there shall be no
further obligation to deliver or exchange their respective stock certificates as
contemplated in the Plan of Reorganization or any of the other Reorganization
Agreements and the RIVERAS agree to surrender the stock certificates
representing the NIC shares to NIC upon execution of this Agreement.
1.3 Mutual Release. Except for and subject only to the other provisions of
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this Agreement, for and in consideration of the mutual covenants set forth
herein, each party shall, and each hereby does on behalf of itself and its
officers, directors, employees, agents, successors, assigns, control persons,
members, managers, partners, attorneys and any other subsidiary or affiliate
entities (each, a "Releasor," collectively, the "Releasors"), release and
forever discharge the remaining parties and their officers, directors,
employees, agents, successors, assigns, control persons, members, managers,
partners, attorneys, and any other subsidiaries or affiliate entities (each, a
"Releasee," collectively, the "Releasees") from any and all claims, accusations,
demands, liabilities, damages, obligations, responsibilities, suits, actions and
causes of action, whether liquidated or unliquidated, fixed or contingent, known
or unknown, direct or derivative, or otherwise, arising prior to the execution
of this Agreement or otherwise arising out of, resulting from, or relating to,
directly or indirectly, the Reorganization Agreements or the transactions
contemplated therein (collectively, the "Released Claims").
1.4 Civil Code Section 1542 Waiver. With respect to the Released Claims, it
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is further understood and agreed that notwithstanding California CC 1542,
which presently provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR,"
the release by each party contained herein extends to all claims of every nature
and kind whatsoever, known and unknown. Each party hereby waives any and all
rights that it may have under Section 1542 as it presently reads or as it shall
hereinafter be amended. In connection with this waiver, each party acknowledges
that it is aware that it may hereafter discover claims presently unknown or
unsuspected or facts in addition to or different from those it now knows or
believes to be true with respect to the Released Claims. Nevertheless, it
intends through this Agreement to release fully, finally, and forever, in the
manner described herein, all Released Claims. Accordingly, the release contained
herein shall remain in effect as a full and complete release of the Released
Claims in accordance with its terms notwithstanding the discovery or existence
of any such additional facts or different claims relating thereto.
1.5 Assertion of Agreement as Bar to Proceedings. This Agreement may be
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asserted by any of the Releasees as a defense and complete bar to any action,
claim, cross claim, cause of action, arbitration or other proceeding that may be
brought, or could have been brought, instituted or taken by, against, or
involving any of the Releasors, or anyone acting or purporting to act on behalf
of any of the Releasors with respect to any Released Claim.
1.6 No Admission of Liability. This Agreement is entered into solely for the
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purpose of compromise and settlement and may not be construed as an admission of
liability, wrongdoing or responsibility on the part of any party, at any time or
for any purpose whatsoever. In entering into this Agreement, none of the
parties concedes the sufficiency or validity of any claims, counterclaims, or
defenses that have been asserted or could be asserted by any of them.
ARTICLE 2: CONFIDENTIALITY & NONDISCLOSURE
2.1 Confidential Information. The parties hereby acknowledge they have had
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access to each others technical and/or business information, data, designs,
concepts, ideas, products, processes, methods, techniques, specifications,
formulas, compositions, samples, know-how, trade secrets, and improvements of a
confidential or proprietary nature, whether in tangible form or not
("Confidential Information"). All Confidential Information shall remain the
exclusive property of its original owner. Each party agrees to take all
reasonable measures necessary to protect the confidential nature of Confidential
Information it may posses, including returning any tangible Confidential
Information it currently possesses.
2.2 Except to the extent required by law, the parties will not make, and
will each direct its representatives not to make, directly or indirectly, any
public comment, statement, or communication with respect to, or to disclose or
permit the disclosure of the existence of this transaction or the non-public
facts, circumstances, discussions, and/or negotiations relied upon by the
parties in executing this Agreement.
ARTICLE 3: INDEMNIFICATION
3.1 Xxxxxx Indemnitees. In consideration of the XXXXXX XXXXX XXXXXX'x,
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XXXXXX XXXXXX'x, and SPECTRUM's execution and delivery of the this Agreement, in
addition to all of NIC's other obligations under this Agreement, NIC shall
defend, protect, indemnify and hold harmless the XXXXXX XXXXX XXXXXX, XXXXXX
XXXXXX, and SPECTRUM and all of their subsidiaries, shareholders, officers,
directors, employees, agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the "Xxxxxx Indemnitees") from and against any
and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Xxxxxx Indemnified Liabilities"), incurred by any
Indemnitee as a result of, or arising out of, or relating to (i) any
misrepresentation or breach of any representation or warranty made by NIC in
this Agreement or any other certificate, instrument or document contemplated
hereby or thereby, including but not limited to the Reorganization Agreements
(ii) any breach of any covenant, agreement or obligation of NIC contained in
this Agreement or any other certificate, instrument or document contemplated
hereby or thereby, including but not limited to the Reorganization Agreements
(iii) any cause of action, suit or claim brought or made against such Indemnitee
by a third party and arising out of or resulting from the execution, delivery,
performance or enforcement of this Agreement or any other certificate,
instrument or document contemplated hereby or thereby, including but not limited
to the Reorganization Agreements, except insofar as any such misrepresentation,
breach or any untrue statement, alleged untrue statement, omission or alleged
omission is made in reliance upon and in conformity with written information
furnished to the XXXXXX XXXXX XXXXXX, XXXXXX XXXXXX, and/or SPECTRUM by NIC. To
the extent that the foregoing undertaking by NIC may be unenforceable for any
reason, NIC shall make the maximum contribution to the payment and satisfaction
of XXXXXX XXXXX XXXXXX'x, XXXXXX XXXXXX'x, and/or SPECTRUM's Indemnified
Liabilities which is permissible under applicable law. The indemnity provisions
contained herein shall be in addition to any cause of action or similar rights
XXXXXX XXXXX XXXXXX, XXXXXX XXXXXX, and/or SPECTRUM may have, and any
liabilities XXXXXX XXXXX XXXXXX, XXXXXX XXXXXX, and/or SPECTRUM may be subject
to.
3.2 NIC Indemnitees. In consideration of NIC's execution and delivery of
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the this Agreement and in addition to all of XXXXXX XXXXX XXXXXX'x, XXXXXX
XXXXXX'x, and/or SPECTRUM's other obligations under this Agreement, XXXXXX XXXXX
XXXXXX, XXXXXX XXXXXX, and SPECTRUM shall defend, protect, indemnify and hold
harmless NIC and all of its subsidiaries, shareholders, officers, directors and
employees and any of the foregoing person's agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "NIC
Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such NIC Indemnitee is a party
to the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "NIC Indemnified
Liabilities"), incurred by any NIC Indemnitee as a result of, or arising out of,
or relating to (i) any misrepresentation or breach of any representation or
warranty made by XXXXXX XXXXX XXXXXX, XXXXXX XXXXXX, and/or SPECTRUM in the
Agreement or any other certificate, instrument or document contemplated hereby
or thereby, including but not limited to the Reorganization Agreements (ii) any
breach of any covenant, agreement or obligation of the RIVERAS and/or XXXXXX
XXXXXX contained in the Agreement or any other certificate, instrument or
document contemplated hereby or thereby, including but not limited to the
Reorganization Agreements (iii) any cause of action, suit or claim brought or
made against such NIC Indemnitee by a third party and arising out of or
resulting from the execution, delivery, performance or enforcement of the
Agreement or any other certificate, instrument or document contemplated hereby
or thereby, including but not limited to the Reorganization Agreements, except
insofar as any such misrepresentation, breach or any untrue statement, alleged
untrue statement, omission or alleged omission is made in reliance upon and in
conformity with written information furnished to NIC by XXXXXX XXXXX XXXXXX,
XXXXXX XXXXXX, and/or SPECTRUM. To the extent that the foregoing undertaking by
the RIVERAS and/or XXXXXX XXXXXX may be unenforceable for any reason, the XXXXXX
XXXXX XXXXXX, XXXXXX XXXXXX, and SPECTRUM A shall make the maximum contribution
to the payment and satisfaction of each of NIC Indemnified Liabilities which is
permissible under applicable law. The indemnity provisions contained herein
shall be in addition to any cause of action or similar rights NIC may have, and
any liabilities NIC may be subject to.
3.3 Indemnification Procedure. Any party entitled to indemnification under
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this Section (an "Indemnified Party") will give written notice to the party to
be charged with indemnification (the "Indemnifying Party") of any matters giving
rise to a claim for indemnification; provided, that the failure of any
Indemnified Party hereunder to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations under this Section except to the
extent that the Indemnifying Party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
Indemnified Party in respect of which indemnification is sought hereunder, the
Indemnifying Party shall be entitled to participate in and, unless in the
reasonable judgment of counsel to the Indemnified Party a conflict of interest
between it and the Indemnifying Party may exist with respect to such action,
proceeding or claim, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. In the event that the Indemnifying Party
advises an Indemnified Party that it will contest such a claim for
indemnification hereunder, or fails, within thirty (30) days of receipt of any
indemnification notice to notify, in writing, such person of its election to
defend, settle or compromise, at its sole cost and expense, any action,
proceeding or claim (or discontinues its defense at any time after it commences
such defense), then the Indemnified Party may, at its option, defend, settle or
otherwise compromise or pay such action or claim. In any event, unless and until
the Indemnifying Party elects in writing to assume and does so assume the
defense of any such claim, proceeding or action, the Indemnified Party's costs
and expenses arising out of the defense, settlement or compromise of any such
action, claim or proceeding shall be losses subject to indemnification
hereunder. The Indemnified Party shall cooperate fully with the Indemnifying
Party in connection with any settlement negotiations or defense of any such
action or claim by the Indemnifying Party and shall furnish to the Indemnifying
Party all information reasonably available to the Indemnified Party which
relates to such action or claim. The Indemnifying Party shall keep the
Indemnified Party fully apprised at all times as to the status of the defense or
any settlement negotiations with respect thereto. If the Indemnifying Party
elects to defend any such action or claim, then the Indemnified Party shall be
entitled to participate in such defense with counsel of its choice at its sole
cost and expense. The Indemnifying Party shall not be liable for any settlement
of any action, claim or proceeding affected without its prior written consent.
Notwithstanding anything in this Section to the contrary, the Indemnifying Party
shall not, without the Indemnified Party's prior written consent, settle or
compromise any claim or consent to entry of any judgment in respect thereof
which imposes any future obligation on the indemnified party or which does not
include, as an unconditional term thereof, the giving by the claimant or the
plaintiff to the indemnified party of a release from all liability in respect of
such claim. The indemnification required by this Section shall be made by
periodic payments of the amount thereof during the course of investigation or
defense, as and when bills are received or expense, loss, damage or liability is
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party so long as the Indemnified Party irrevocably agrees to refund
such moneys if it is ultimately determined by a court of competent jurisdiction
that such party was not entitled to indemnification. The indemnity agreements
contained herein shall be in addition to (a) any cause of action or similar
rights of the Indemnified Party against the Indemnifying Party or others, and
(b) any liabilities the Indemnifying Party may be subject to.
ARTICLE 4: REPRESENTATIONS AND WARRANTIES
4.1 Arm's Length Negotiations. This Agreement is being entered into in good
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faith by the parties and was negotiated through arm's length bargaining. Each
party has received independent legal advice from its attorneys with respect to
the advisability of making the settlement provided for in this Agreement. Each
party to this Agreement has made such independent investigation of the facts
pertaining to this Agreement, and of all matters pertaining to it, as it deems
necessary.
4.2 Exclusive Reliance. No party (nor any officer, agent, partner,
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employee, representative, or attorney for any party), has made any statement or
representation to any other party regarding any fact relied upon in entering
into this Agreement, except as set forth herein, and each party does not rely
upon any statement, representation or promise of any other party (or any
officer, agent, partner, employee, representative, or attorney of or for any
party), in executing this Agreement, or in making the settlement provided for
herein, except as set forth herein.
4.3 Capacity to Enter Agreement. Each party, or its responsible officers,
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has read this Agreement and understands the contents hereof, and any individual
executing this Agreement is legally competent to execute this agreement, and any
person executing this Agreement in a representative capacity of any of the
parties is authorized and empowered to do so and thereby has the authority to
bind the party on whose behalf this Agreement is signed.
4.4 No Prior Assignment of Rights. Each party to the Agreement is the sole
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owner of the Released Claims being released by it hereby and such party has not
assigned or otherwise transferred, voluntarily or involuntarily, any such
Released Claims.
4.5 Additional Documents. The parties will execute all such further and
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additional documents as shall be reasonably necessary to carry out the
provisions of this Agreement.
ARTICLE 5: GENERAL PROVISIONS
5.1 Entire Agreement. This Agreement, together with the Exhibits attached
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hereto, constitutes the entire agreement between the parties and may not be
modified except by a writing signed by both parties. This Agreement is intended
by the parties as a complete and exclusive statement of the terms of their
agreement. All prior and contemporaneous discussions and negotiations have been
integrated into and superseded by this Agreement.
5.2 No Agency Relationship. No agency, partnership, or similar relationship
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exists between the parties and no such relationship is created by this
Agreement. Neither party has any authority to assume or to create any obligation
or responsibility, express or implied, on behalf of or in the name of the other
party or to bind the other party in any manner and neither party shall represent
to any third party that such authority exists.
5.3 Receipt of Agreement. Each party hereby acknowledges receipt of a
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signed copy of this Agreement.
5.4 ApplicableLaw and Jurisdiction. This Agreement and all transactions
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contemplated hereby, shall be governed by, construed and enforced in accordance
with the laws of the State of California. The parties herein waive trial by jury
and agree to submit to the personal jurisdiction and venue of a court of subject
matter jurisdiction located in Orange County, State of California. In the event
that litigation results from or arises out of this Agreement or the performance
thereof, the parties agree to reimburse the prevailing party's reasonable
attorney's fees, court costs, and all other expenses, whether or not taxable by
the court as costs, in addition to any other relief to which, the prevailing
party may be entitled.
5.5 Notices. All notices, requests, demands and other communications, which
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are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given if delivered or mailed, first class mail,
postage prepaid:
To RIVERAs: Spectrum Communications Cabling Services, Inc.
ATT/Xxxxxx Xxxxxx, President
000 X. Xxxxxxx Xxx.
Xxxxxx, XX 00000
Tel: 000.000.0000
Fax: 000.000.0000
To NIC: Network Installation Corp.
ATT/Xxxxxxx X. Xxxxxxx, CEO
00000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Tel: 000.000.0000
Fax: 000.000.0000
5.6 Section Headings. The headings in this Agreement are inserted for
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convenience only and shall not constitute a part hereof.
5.7 Severability of Provisions. Each provision contained in this Agreement
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is declared to constitute a separate and distinct covenant and provision and to
be severable from all other separate, distinct covenants and provisions. If any
provision of this Agreement is or becomes invalid, illegal, or unenforceable in
any jurisdiction, such provision shall be deemed amended without materially
altering the intention of the parties, it shall be stricken and the remainder of
this Agreement shall remain in full force and effect.
5.8 Waiver of Breach. No waiver of a breach of any provision of this
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Agreement shall be deemed to be, or shall constitute, a waiver of a breach of
any other provision of this Agreement, whether or not similar, nor shall such
waiver constitute a continuing waiver of such breach unless otherwise expressly
provided in such waiver.
5.9 Execution. This Agreement may be executed in one or more counterparts,
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each of which when taken together shall constitute one and the same instrument.
This Agreement may be delivered by personal delivery or Facsimile transmission.
WHEREFORE, by signing below, the parties have executed this Rescission and
Settlement Agreement as of the date first written above
XXXXXX XXXXXX XXXXXX XXXXX XXXXXX
/s/ Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxx Xxxxxx
NETWORK INSTALLATION CORP.
/s/ Xxxxxxx X. Xxxxxxx
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By: Xxxxxxx X. Xxxxxxx, President & CEO
SPECTRUM COMMUNICATIONS CABLING SERVICES, INC.
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