SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the “Agreement”) is
effective as of September 30, 2008 (the “Effective Date”) by
and between AudioStocks, Inc. (the “Company”) and Xxxx X.
Xxxxx, an individual (collectively the “Employee”). The
Company and Employee may be individually referred to herein as a “Party” and
collectively as the “Parties.”
RECITALS
WHEREAS,
as of the Effective Date, the Employee has provided certain services related to
his employment agreement with the Company and is currently owed a total of
$104,010 relating to such services (the “Services”);
WHEREAS,
the Employee and the Company desire to settle and finalize $94,010 of the
compensation currently owed to the Employee in connection with the Services
provided to the Company as of the Effective Date, with the additional $10,000
remaining on the Company’s financial books and records;
WHEREAS,
the Parties wish to enter into this Agreement and fully settle and forever
resolve any and all past, present and future claims the Employee may have
against the Company as described herein;
NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and for good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed as follows:
AGREEMENT
1. Release of
Claims. The Employee hereby agrees to fully settle
and forever resolve any and all past, present and future claims the Employee may
have against the Company for claims arising from and/or relating directly or
indirectly to the payment of $94,010 in compensation currently owed in
connection with and relating to the Services (hereinafter collectively referred
to as “Claims”).
2. Compensation. As
compensation for the Services and the release of the Claims, the Company shall
issue the Employee 1,750,309 shares of the Company’s common stock (the “Settlement Shares”).
The Settlement Shares shall represent the complete and final settlement of the
total compensation the Employee has claimed as due and payable in connection
with Claims.
3. Waiver of Section
1542. In signing this Agreement, the
Employee has been advised of, understands and knowingly waives his rights under
California Civil Code Section 1542 which provides 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.
4. No Further
Claims. The Employee covenants and agrees
never to commence against the Company, any legal action or proceeding based in
whole or in part upon the Services, Claims, demands, allegations, and/or
injuries released in this Agreement.
5. No
Admission. This Agreement shall not be considered
as an admission of liability by either Party and by entering into this
Agreement, neither Party has admitted the validity of any Claims herein
released.
6. Compliance with Securities
Laws. The Employee understands that the Settlement
Shares it is receiving hereunder are characterized as “restricted securities”
under the federal securities laws and that under such laws and applicable
regulations such securities may be resold without registration under the United
States Securities Act of 1933, as amended only in certain limited circumstances.
It understood that the certificates evidencing the Settlement Shares issued
hereunder will bear a legend in substantially the below form:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR A LEGAL OPINION THAT SUCH REGISTRATION IS
NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.”
In
addition, the Employee hereby represents and warrants that they are an
“accredited investor” as such term is defined in the Securities Act of 1933 and
Securities and Exchange Act of 1934.
7. Miscellaneous.
a. Necessary
Acts. Each Party to this Agreement agrees to perform any
further acts and execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
b. Entire Agreement;
Modifications; Waiver. This Agreement constitutes the entire
agreement between the Parties pertaining to the subject matter contained in it.
This Agreement supersedes all prior and contemporaneous agreements,
representations, and understandings of the Parties. No supplement,
modification, or amendment of this Agreement shall be binding unless executed in
writing by all the Parties. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the
Party making the waiver.
c. Dispute
Resolution. The subject matter of this Agreement shall
be governed by and construed in accordance with the laws of the State of
California (without reference to its choice of law principles), and to the
exclusion of the law of any other forum, without regard to the jurisdiction in
which any action or special proceeding may be instituted. EACH PARTY
HERETO AGREES TO SUBMIT TO THE PERSONAL JURISDICTION AND VENUE OF THE STATE
AND/OR FEDERAL COURTS LOCATED IN THE NORTH COUNTY OF SAN DIEGO, CALIFORNIA FOR
RESOLUTION OF ALL DISPUTES ARISING OUT OF, IN CONNECTION WITH, OR BY REASON OF
THE INTERPRETATION, CONSTRUCTION, AND ENFORCEMENT OF THIS AGREEMENT, AND HEREBY
WAIVES THE CLAIM OR DEFENSE THEREIN THAT SUCH COURTS CONSTITUTE AN INCONVENIENT
FORUM. AS A MATERIAL INDUCEMENT FOR THIS AGREEMENT, EACH PARTY
SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY ISSUES SO
TRIABLE.
d. Attorney’s
Fees. Should any Party hereto employ an attorney for the
purpose of enforcing or constituting this Agreement, or any judgment based on
this Agreement, in any legal proceeding whatsoever, including insolvency,
bankruptcy, arbitration, declaratory relief or other litigation, the prevailing
party shall be entitled to receive from the other Party or Parties thereto
reimbursement for all reasonable attorneys’ fees and all reasonable costs,
including but not limited to service of process, filing fees, court and court
reporter costs, investigative costs, expert witness fees, and the cost of any
bonds, whether taxable or not, and that such reimbursement shall be included in
any judgment or final order issued in that proceeding. The
“prevailing party” means the party determined by the court to most nearly
prevail and not necessarily the one in whose favor a judgment is
rendered.
e. No Oral Change;
Waiver. This Agreement may only be changed, modified, or
amended in writing by the mutual consent of the Parties hereto. The
provisions of this Agreement may only be waived in or by writing signed by the
Party against whom enforcement of any waiver is sought.
f. Severability. If
any provision of this Agreement is invalid, illegal, or unenforceable, the
balance of this Agreement shall remain in effect. If any provision is
inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances. If any
compensation provision is deemed unenforceable or illegal, then in the case of
the delivery of common stock to the Employee, Employee shall be entitled to
receive a cash benefit equal to the value of the common stock that would have
been tendered had such a provision not been illegal or
unenforceable.
g. Execution of the
Agreement. The Company, the party executing this Agreement on
behalf of the Company, and the Employee, have the requisite corporate power and
authority to enter into and carry out the terms and conditions of this
Agreement, as well as all transactions contemplated hereunder. All corporate
proceedings have been taken and all corporate authorizations and approvals have
been secured which are necessary to authorize the execution, delivery and
performance by the Company and the Employee of this Agreement. This
Agreement has been duly and validly executed and delivered by the Company and
the Employee and constitutes a valid and binding obligation, enforceable in
accordance with the respective terms herein. Upon delivery of this
Agreement, this Agreement, and the other agreements and exhibits referred to
herein, will constitute the valid and binding obligations of Company, and will
be enforceable in accordance with their respective terms.
h. Joint Drafting and Exclusive
Agreement. This Agreement is the only Agreement executed by
and between the Parties related to the Claims described herein. There
are no additional oral agreements or other understandings related to the Claims
described herein. This Agreement shall be deemed to have been drafted
jointly by the Parties hereto, and no inference or interpretation against any
one Party shall be made solely by virtue of such Party allegedly having been the
draftsperson of this Agreement. The Parties have each conducted
sufficient and appropriate due diligence with respect to the facts and
circumstances surrounding and related to this Agreement. The Parties
expressly disclaim all reliance upon, and prospectively waive any fraud,
misrepresentation, negligence or other claim based on information supplied by
the other Party, in any way relating to the subject matter of this
Agreement.
i. Conflicts of
Interest. The Parties shall exercise their best efforts to the
other Party aware of any conflicts of interest that exist between such Party,
including any other business of entity that such Party beneficially owns or
controls, and any interest of the other Party. Disclosure of such
conflicts of interest may be made in writing or through oral
communication. Acknowledgement of such conflicts of interest and
waiver of any cause of action against a Party related to a conflict of interest
may be made in writing or through oral communication.
j. Acknowledgments and
Assent. The Parties acknowledge that they have been given at
least ten (10) days to consider this Agreement and that they were advised to
consult with an independent attorney prior to signing this Agreement and that
they have in fact consulted with counsel of their own choosing prior to
executing this Agreement. The Parties may revoke this Agreement for a
period of three (3) calendar days after signing this Agreement, and the
Agreement shall not be effective or enforceable until the expiration of this
three (3) day revocation period. The Parties agree that they have
read this Agreement and understand the content herein, and freely and
voluntarily assent to all of the terms herein.
IN
WITNESS WHEREOF the Parties have executed this Agreement effective as of the day
and year first above written.
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COMPANY
Audiostocks,
Inc.
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EMPLOYEE
Xxxx
X. Xxxxx
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/s/ Xxxx X. Xxxxx
___________________________________
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/s/ Xxxx X. Xxxxx
___________________________________
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By:
Xxxx Xxxxx
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By:
Xxxx X. Xxxxx
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Its:
President
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An
individual
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