SETTLEMENT AGREEMENT AND GENERAL RELEASE
EXHIBIT
10.3
SETTLEMENT AGREEMENT AND
GENERAL RELEASE
THIS SETTLEMENT AGREEMENT AND GENERAL
RELEASE (“Agreement”) is entered into by and between Shearson
Foundation, European American Investments, October Funds, Cohiba Partners,
Strong Partners and Rancho Malibu (“Investors”) and Who’s
Your Daddy, Inc. (“WYD”), a Nevada corporation and is effective as of
November 13, 2007.
R E C I T A L
S
WHEREAS, the Investors have
made cash payments to, or on behalf of, WYD totaling $1,242,877 through the date
of this agreement and intend to make an additional $95,000 in cash payments to
WYD prior to May 1, 2008;
WHEREAS, WYD has not been able
to close on a financing or otherwise obtain cash to repay these
advances;
WHEREAS, the parties and their
attorneys, if so chosen, have had a sufficient opportunity to evaluate the
merits of their respective positions; and
WHEREAS, in order to avoid the
time, expense and uncertainty of litigation in this matter, the parties have
agreed on November 13, 2007 to settle their differences on the terms and in the
manner set forth in this Agreement.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements contained herein, and for
other good and valuable consideration, the adequacy of which is acknowledged by
the parties hereto, and intending to be legally bound, the parties agree as
follows:
S E T T L E M E N
T
1. Settlement
Terms.
a. WYD
shall issue to the Investors 1,460,354 (One Million Four Hundred Sixty Thousand
and Three Hundred and Fifty Four) shares of Common Stock (the “Settlement
Shares”). WYD and the Investors agree that the first 83,333 of these
shares are being issued under an option agreement dated June 22, 2007 at a value
of $3.00 per share and the remaining 1,377,021 shares are being issued at $0.79
per share, which is average closing price for WYD’s common stock for
thirty days prior to the date of this Agreement.
b. Certificates
for the Settlement Shares shall be delivered no later than December 31,
2007.
c. In
return, the Investors shall consider the issuance to them of these Settlement
Shares as full payment for any and all cash advances and financing transactions
made to the Company through the date of this Agreement.
d. The
Investors agree to advance WYD $95,000 prior to May 1, 2008 in exchange for
120,259 shares issued and included in the 1,460,354 shares set forth in a.
above. In the event that any portion of this $95,000 has not been
paid to WYD by that date, the Investors agree that a pro rata number of shares
equivalent to the difference between cash paid to WYD and $95,000 shall be
cancelled at a rate of 1.27 shares for each dollar that the advances made by the
Investors is less than $95,000.
2. General Release by the
Parties of All Known and Unknown Claims.
The parties hereto do hereby jointly
and severally irrevocably and unconditionally release and forever discharge each
other, their agents, directors, officers, employees, business partners,
representatives, attorneys, insurers, affiliates/subsidiaries, parent
corporations, sister corporations, (and agents, directors, officers, employees,
representatives, attorneys of such affiliates/subsidiaries parent corporations,
sister corporations), and their predecessors, successors, heirs, executors,
administrators, and assigns, and all persons and entities acting by, through,
under or in concert with any of them (hereinafter collectively the "Releasees"),
or any of them, from any of all actions, causes of action, suits, debts,
charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages and expenses (including attorneys' fees and costs
actually incurred), of any nature whatsoever, in law or equity, known or
unknown, suspected or unsuspected, which either party ever had, now has, or may
now have against each other by reason of any act, event, or omission concerning
any matter or thing, including, without limiting the generality of the
foregoing, any matters claimed or alleged relating to the account of Who’s Your
Daddy, Inc., or which could have been raised relating to the same, or which may
be based upon or connected with the same. Notwithstanding anything
herein set forth to the contrary, no provision of this Agreement shall
constitute or be construed as a release or discharge of any obligations, claims
or causes of action hereafter arising out of the breach of any of the terms,
provisions or conditions of this Agreement. Notwithstanding the above, this
General Release shall have no force or effect should the Settlement Amount not
clear or should Plaintiff be required, for any reason, to repay the Settlement
Amount.
3. Waiver of
Civil Code Section 1542.
Each of the Parties to this Agreement
warrants and represents that it is their intention in executing this Agreement
that it shall be effective as a bar to each and every claim, demand, suit,
action, cause of action and debt hereinabove specified; and in furtherance of
this intention, they each HEREBY EXPRESSLY WAIVE ANY AND ALL RIGHTS AND BENEFITS
CONFERRED UPON THEM BY THE PROVISIONS OF SECTION 1542 OF THE CIVIL CODE OF
CALIFORNIA WHICH PROVIDES AS FOLLOWS:
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.
Notwithstanding Section 1542 of the
Civil Code of California, each of the parties to the Agreement expressly agrees
that this Agreement shall be given full force and effect according to each and
all of its express terms and provisions, including as well, those relating to
unknown and unspecified claims, demands, suits, actions, causes of action and
debts, if any, and those relating to any other claims, demands, suits, actions,
causes of action and debts hereinabove specified.
4. No Assignment/No Actions
Filed.
The parties each represent and warrant
that they have made no assignment, and will make no assignment, of any claim,
chose in action, right of action, or any right of any kind whatsoever, embodied
in any of the claims and allegations which are being released, and that no other
person or entity of any kind had or has any interest in any of the demands,
obligations, actions, causes of actions, debts, liabilities, rights, contracts,
damages, attorneys' fees, costs, expenses, losses, or claims referred to
herein.
5. Assumption
of Risk of Different Facts.
The parties acknowledge that they may
hereafter discover facts different from or in addition to those they now know or
believe to be true with respect to the claims, demands, causes of action,
obligations, damages, and liabilities of any nature whatsoever that are the
subject of this Agreement, and the parties expressly agree to assume the risk of
the possible discovery of additional or different facts, and agree that this
Agreement shall be and remain effective in all respects regardless of such
additional or different facts.
6. Governing
Law.
This Agreement and its terms and
provisions shall be interpreted, enforced and governed by and under the laws of
the State of California.
7. Severability.
If any portion of this Agreement shall
be held invalid or inoperative, insofar as reasonable and possible, the
remainder of this Agreement shall be considered valid and operative and effect
shall be given to the intent manifested by the portion held invalid or
inoperative, and the parties authorize any modifications necessary to these
provisions held invalid or inoperative so the parties' intent may be carried
out.
8. Entire
Agreement/Modification.
This Agreement supersedes any and all
agreements, either oral or written, between the parties hereto and contains all
of the covenants and agreements between the parties. Each party to
this Agreement acknowledges that no representations, inducements, promises, or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not embodied herein, and that no other agreement,
statement, or promise not contained in this Agreement shall be valid or
binding. Any modification of this Agreement will be effective only if
it is in writing signed by both Parties.
9. Further
Assurances.
The parties hereto hereby agree to
execute such other documents and to take such other action as may be reasonably
necessary to further the purposes of the Agreement.
10. No
Waiver.
No breach of any provision hereof can
be waived unless in writing. Waiver of any one breach of any
provision hereof shall not be deemed to be a waiver of any other breach of the
same or any other provision hereof.
11. Authority
to Execute Agreement.
The parties represent and warrant that
each of them is fully competent and authorized to execute this Agreement by
their signatures hereto.
12. Captions
and Interpretations.
Paragraph titles or captions contained
herein are inserted as a matter of convenience and for reference only, and in no
way define, limit, extend or describe the scope of this Agreement or any
provision hereof. This Agreement is to be interpreted without regard
to the draftsman. The terms and intent of this Agreement, with
respect to the rights and obligations of the parties, shall be interpreted and
construed on the express assumption that each party participated equally in its
drafting.
13. Counterparts.
This Agreement may be executed in
counterparts by facsimile, with original signatures to follow, each of which
shall constitute an original, but all of which shall constitute one and the same
agreement.
14. Choice of
Law.
This Agreement will be governed by the
laws of the State of California.
Executed
on the dates set forth below:
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Dated: November 13,
2007
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Shearson
Foundation
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By:
___________________________________
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Printed
Name:___________________________
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Its:
___________________________________
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Dated:
November 13,
2007
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European
American Investments
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By:
___________________________________
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Printed
Name:___________________________
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Its:
___________________________________
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Dated:
November 13,
2007
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October
Funds
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By:
___________________________________
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Printed
Name:___________________________
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Its:
___________________________________
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Dated:
November 13,
2007
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Cohiba
Partners
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By:
___________________________________
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Printed
Name:___________________________
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Its:
___________________________________
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Dated: November 13,
2007
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Strong
Partners
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By:
___________________________________
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Printed
Name:___________________________
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Its:
___________________________________
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Dated:
November 13,
0000
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Xxxxxx
Xxxxxx
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By:
___________________________________
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Printed
Name:___________________________
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Its:
___________________________________
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Dated:
November 13,
2007
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Who’s
Your Daddy, Inc.
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By:
___________________________________
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Printed
Name:___________________________
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Its:
___________________________________
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