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Exhibit 10.1
SETTLEMENT AGREEMENT
This Settlement Agreement ("this Agreement") is made and entered into
as of December 2, 1999, between and among Xxxxxx Xxxxxx, individually and as
Trustee of The Xxxxxx Family Trust; Xxxx Xxxxxx, individually and as Trustee of
Gargoyle Productions, Ltd. Retirement Trust; Futura Investments, Inc., a
California corporation, on behalf of itself and as successor in interest to
Forest Lake Associates; Xxxxxx Xxxxxxx, individually and as administrator of
Futura Investments, Inc. Defined Benefits Pension Plan; and Rescor, Inc., a
California corporation (collectively, "Plaintiffs"), and Xxxx Xxxxxx Direct,
Inc., a Delaware corporation ("GPD") and Gran Prix Marketing, Inc.
(collectively, "Defendants"), with reference to the following facts:
A. On or about July 7, 1998, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxx, and
Xxxx Xxxxxx (collectively, "Investors") entered into a
Settlement Agreement with Golf One Industries, Inc. ("Golf
One"), X. X. Xxxxxxxxx and Xxxx X. Xxxxx. On or about August
10, 1998, the parties entered into a First Amendment to
Settlement Agreement. On or about November 10, 1998, the
parties entered into a Second Amendment to Settlement
Agreement. The Settlement Agreement, as amended by the First
and Second Amendments, is hereinafter referred to as the
"Original Settlement Agreement."
B. Plaintiffs were the beneficiaries of the Original Settlement
Agreement. Plaintiffs contend that they did not receive what
they were entitled to pursuant to the Original Settlement
Agreement. On or about, May 11, 1999, Plaintiffs filed a
complaint (the "Complaint") in the Los Angeles Superior Court
Case No. BC210133 (the "Lawsuit"). On or about July 29, 1999,
the Court granted Plaintiffs' motion to appoint a receiver
("Receiver").
C. On or about August 18, 1999, Plaintiffs and Defendants entered
into an agreement (the "August Settlement Agreement") to
resolve all of the claims set forth in the Complaint. Certain
payments were made to Plaintiffs pursuant to the August
Settlement Agreement. Plaintiffs contend that Defendants are
in default under the August Settlement Agreement.
D. Plaintiffs are the holders of 90,000 Class B warrants (the
"Class B Warrants"). The Class B Warrants are convertible into
shares of restricted common stock of GPD upon the payment of
$.20 per share.
E. The parties now desire to enter into an agreement whereby all
claims of Plaintiffs set forth in the Complaint or pursuant to
the August Settlement Agreement will be resolved, all on the
terms and conditions set forth below.
With reference to and reliance upon the foregoing facts, THE PARTIES
HEREBY AGREE AS FOLLOWS:
1. Delivery of Stock. On or before December 15, 1999 or as soon
thereafter as the transfer agent can comply with the
requirements of this Section 1, GPD shall issue to Plaintiffs
100,000 shares of its restricted common stock (the "New
Shares"). The New Shares shall be issued in exchange for the
Class B Warrants and as
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additional consideration to Plaintiffs for the agreements
contained herein. The New Shares shall not be issued until the
Class B Warrants are surrendered to GPD (which surrender has
been completed by the Plaintiffs and is acknowledged by GPD)
and until Plaintiffs have delivered to GPD written notice
setting forth how the New Shares are to be allocated among the
Plaintiffs (which delivery of notice has been completed by the
Plaintiffs and is acknowledged by GPD).
2. Payment to Plaintiffs. Defendants agree to pay to Plaintiffs
the sum of $205,954.16 in full settlement of all claims
against GPD including without limitations the claims set forth
in the Complaint or under the August Settlement Agreement.
Prior to the date hereof, GPD made a payment of $25,000 to
Plaintiffs. After such payment, the unpaid balance is
$180,954.16. The parties agree to reduce such sum by $18,000,
which $18,000 shall be applied as the payment owing to convert
the Class B Warrants into the New Shares pursuant to Section 1
above. The remaining balance of $162,954.16 shall be paid in
20 equal installments of $8,000 each, on the 15th day of each
month, commencing December 15, 1999, and continuing until July
15, 2001, with the remaining sum of $2,954.16 due on August
15, 2001. Each check shall be made payable to Xxxxxx Xxxxxxx.
In the event GPD concludes a public or private debt or equity
financing with net proceeds to GPD in excess of $2.5 million,
GPD will retire any then outstanding balance of such
$162,954.16. Any check due on a weekend or a holiday shall be
due on the next business day.
3. Dismissal of Receiver and Entry of Stipulation Judgment.
Plaintiffs agree that they will not take any further action to
cause a Receiver to be appointed for GPD and, if one has been
appointed, will take all necessary action to cause the
Receiver to be dismissed and will take all necessary action
for the authorization of the appointment of a Receiver to be
dismissed. In the event GPD fails to make any of the payments
specified in Section 2 by the due date specified therein,
Defendants agree that a judgment may be entered against them
in the aggregate amount of all unpaid payments specified in
Section 2 in full satisfaction of all claims set forth in the
Complaint. Defendants agree to execute a Stipulation for
Judgment for such purpose, which Stipulation shall be held by
counsel for Plaintiffs pending such payments. It is agreed
that such Stipulation may be filed with the court at any time
after the due date if any of said payments have not been made,
and that the aggregate amount of the unpaid payments specified
in Section 2 shall be the amount set forth in the Stipulation,
provided that such Stipulation shall not be filed unless
Defendants and their counsel have been furnished with written
notice of any such default and the specified default remains
uncured for five (5) days after receipt of such notice. If
payment in full of the sums specified in Section 2 has been
made prior to filing the Stipulation with the court, the
Stipulation shall be marked void and returned to counsel for
Defendants and the Lawsuit shall be dismissed with prejudice.
Evidence of such dismissal (including the Plaintiff's lodging
of an appropriate Request for Dismissal with Prejudice
consistent with this Agreement) shall be promptly provided to
counsel for Defendants.
4. Mutual General and Special Releases.
A. Except for the obligations created hereunder, each of
the Plaintiffs hereby, for himself and his or itself
and its successors and assigns, forever
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releases, relieves and discharges each of the
Defendants and his or its agents, representatives,
consultants, employees, officers, directors,
shareholders, partners, predecessors, subsidiaries,
related entities and affiliates, attorneys,
successors and assigns including GPD's current and
former directors, officers, consultants, and
attorneys from any and all claims, demands, actions,
cause or causes of action, suits, debts, sums of
money, controversies, damages, obligations, and
liabilities of every kind and nature, whether known
or unknown, suspected or unsuspected, vested or
contingent, and whether or not concealed or hidden,
in law, equity or otherwise, that have existed or may
have existed, or that do exist as of the date this
Agreement is entered into as set forth above,
including without limitation any claim set forth or
which could have been set forth in the Complaint and
any and all security interests, liens, or other
encumbrances held by any of the Defendants against
GPD and/or any of its subsidiaries or their
respective assets.
B. Except for the obligations created hereunder, each of
the Defendants hereby, for himself and his or itself
and its successors and assigns, forever releases,
relieves and discharges each of the Plaintiffs and
his or its agents, representatives, consultants,
employees, officers, directors, shareholders,
partners, predecessors, subsidiaries, related
entities and affiliates, attorneys, successors and
assigns, from any and all claims, demands, actions,
cause or causes of action, suits, debts, sums of
money, controversies, damages, obligations, and
liabilities of every kind and nature, whether known
or unknown, suspected or unsuspected, vested or
contingent, and whether or not concealed or hidden,
in law, equity or otherwise, that have existed or may
have existed, or that do exist as of the date this
Agreement is entered into as set forth above,
including without limitation any claim set forth or
which could have been set forth in the Complaint.
C. Each party hereto acknowledges and agrees that the
facts in respect to which this release is given may
turn out to be other than or different than expected,
and expressly, knowingly and voluntarily waives any
and all benefits and rights granted pursuant to
Section 1542 or the Civil Code of the State of
California with which section it is familiar and
which section reads as follows:
"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."
D. Each party hereto understands and realizes that there
may exist at this time claims herein released, the
nature of which has not yet been discovered. It is
expressly understood and agreed that the possibility
that such a claim exists has been explicitly taken
into account in determining the considerations to be
given for this release and that a portion of that
consideration, having been bargained for in full
knowledge of the
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possibility of such unknown claims, was given in
exchange for this release.
E. Each party hereto represents and warrants that no
claim or right that is released or dismissed under
this Agreement has been transferred, hypothecated,
assigned or given away by that party prior to the
date of this Agreement.
5. Covenant Not to Xxx. Without limiting in any way the releases
set forth above, and subject to the performance of the terms,
conditions, obligations and promises herein contained, each
party hereto hereby covenants and warrants that it will not
xxx or otherwise commence or prosecute, or cause to be
commenced or prosecuted, any action or proceeding, civil,
criminal, administrative, or otherwise, related in any way to
any matter released by this Agreement.
6. Disputed Claims. It is expressly understood and agreed that
this Agreement is being made solely for the purpose of
avoiding the expense and inconvenience of litigation and that
it is not to be construed as an admission on the part of any
party hereto of any unlawful, wrongful or improper conduct or
of any liability to any other party, all of which is expressly
denied.
7. Further Acts. The parties agree to cooperate in the
implementation of the terms of this Settlement Agreement and
to execute such documents as may reasonably be necessary to
carry out same within three (3) days of receipt of a written
request therefor including without limitation the execution
and delivery of UCC termination statements attached hereto to
be signed by Plaintiffs and any other UCC termination
statements consistent with this Agreement and prepared and
submitted by GPD to the Defendants.
8. Representations of the Parties. Each of the parties
represents, warrants and agrees as follows:
a. Such party has received independent legal advice from
attorneys of its choice with respect to the
advisability of making this settlement and entering
into this Agreement. Prior to the execution of this
Agreement the attorneys for each party reviewed this
Agreement at length and had an opportunity to make
any desired changes.
b. Such party has made such investigation of the facts
pertaining to this Agreement, and of all other
matters related hereto, as such party deems
necessary.
c. This Agreement has been carefully read by, the
contents hereof are known and understood by, and it
is signed voluntarily by, each person executing this
Agreement.
d. Each party executing this Agreement on behalf of a
party warrants and represents that his is fully
authorized to do so and that his signature on this
Agreement shall bind said party to the terms and
provisions of this Agreement.
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e. This Agreement is intended to be final and binding
and to be effective as a full and final accord and
satisfaction of any and all disputes between the
parties. Each party is relying upon the finality of
this Agreement as a material factor inducing said
party's decision to settle said dispute.
f. None of the claims settled hereby have been
transferred or assigned to a third party.
9. General Provisions.
A. Binding Upon Successors. All the terms of this
Agreement shall be binding upon, inure to the benefit
of and be enforceable by the successors, assigns and
heirs of the parties hereto.
B. Integration Clause. This Agreement constitutes the
whole and only existing and binding agreement between
the parties hereto concerning the releases granted
between and among them and supersedes all prior
understandings on that subject, whether written or
oral. Other than the representations and warranties
expressly stated as such in this Agreement, there are
no warranties, promises or representations of any
kind, express or implied, upon which any party has
relied in entering into this Agreement.
C. Amendments. This Agreement may be modified or amended
only by writing signed by the party to be charged.
D. Counterparts. This Agreement may be executed in
counterparts.
E. Counsel. Each party has been represented by counsel
in the negotiation and execution of this Agreement,
and shall be responsible for its costs and attorney's
fees incurred in connection with this Agreement and
its preparation.
F. Headings. The headings in this Agreement are for the
convenience of the reader only and are not to be
considered in any construction of this Agreement.
G. Preparation of Agreement. This Agreement was prepared
as a result of discussions between the parties hereto
and shall be interpreted fairly and in accordance
with its plain meaning and not construed as if
prepared exclusively or primarily on behalf of or by
either of the parties hereto.
H. Gender and Number. As used in this Agreement,
masculine, feminine or neuter gender and the singular
or plural number shall each be deemed to include the
other wherever and whenever the context or
construction so dictates.
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IN WITNESS WHEREOF, the parties hereto have executed this Settlement
Agreement as of the date set for above.
"XXXX XXXXXX DIRECT, INC." "GRAN PRIX MARKETING, INC."
By: By:
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Xxxx Xxxxxxxx, Executive Xxxx Xxxxxxxx, Executive
Vice President Vice President
"XXXXXX" "TREBEK"
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Xxxxxx Xxxxxx, Individually and as Xxxx Xxxxxx, Individually and as
Trustee of The Xxxxxx Family Trust Trustee of Gargoyle Productions, Ltd.
Retirement Trust
"XXXXXXX" "FUTURA INVESTMENTS, INC."
By:
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Xxxxxx Xxxxxxx, Individually and on Xxxxxx Xxxxxxx, President
Behalf of Futura Investments, Inc.,
Defined Benefits Pension Plan
"RESCOR, INC."
By:
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Xxxxxx Xxxxxxx, President
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