SETTLEMENT AGREEMENT AND GENERAL RELEASE
Exhibit
10.3
This
Settlement and General Release Agreement (the “Agreement”) is made and entered
into as of this 15th day
of January, 2010, by and between Who’s Your Daddy, Inc., a Nevada corporation
(the “Company”) and Xxxxxx Xxxxx (the “Claimant”), (individually, a “Party”;
collectively, the “Parties”).
RECITALS
WHEREAS, Claimant contends
that the Company is indebted to it in the amount of $183,981.28 consisting of
accrued and unpaid salary of $178,683.58 plus loans and advances made by you of
$5,297.70; and
WHEREAS, the Company is
indebted to various taxing authorities for unpaid payroll withholdings and taxes
in the approximate amount of $258,000.00 (including penalties and interest) for
which Claimant would bear some financial responsibility in his former position
as an Executive Officer of the Company; and
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 collection or litigation in this matter, the
Parties have agreed 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:
1.
SETTLEMENT
In full
settlement of their differences, the Company agrees to pay to Claimant all
amounts described in Exhibit A attached hereto.
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 or 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 the Company, 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.
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3.
CLAIMANT
REPRESENTATION
In the event that any part of the
settlement amount in Exhibit A is in the form of common stock of the Company
(the “Shares”), Claimant represents that:
(a) Claimant
is experienced in evaluating companies such as the Company, is able to fend for
itself in transactions such as the one contemplated by this Agreement, has such
knowledge and experience in financial and business matters such that Claimant is
capable of evaluating the merits and risks of Claimant’s prospective investment
in the Company, and has the ability to bear the economic risks of the
investment;
(b) Claimant
is accepting the Shares for Claimant’s own account and not with the view to, or
for resale in connection with, any distribution thereof. Claimant
understands that the Shares have not been registered under the Securities Act of
1933 (the “Securities Act”) by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent as expressed
herein. Claimant further represents that it does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to any third person with respect to any of the
Shares. Claimant understands and acknowledges that the offering of
the Shares pursuant to this Agreement will not be registered under the
Securities Act on the ground that the sale provided for in this Agreement and
the issuance of securities hereunder is exempt from the registration
requirements of the Securities Act;
(c) Claimant
acknowledges that it is an “Accredited Investor” as defined in Rule 501 of
Regulation D as promulgated by the Securities and Exchange Commission, as can be
viewed on the internet at xxx.xxx.xxx;
(d) Claimant
acknowledges that, because the indebtedness to Claimant is more than six months
old, the Company will endeavor to obtain an opinion from counsel confirming that
the Shares need not contain a legend substantially as follows:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION,
PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL (WHICH
OPINION IS REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING THE AVAILABILITY
OF SUCH EXEMPTION. THE FOREGOING RESTRICTIONS EXPIRE WITHOUT FURTHER
ACTION SIX MONTHS FROM THE DATE OF ORIGINAL ISSUANCE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE.
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4.
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CONFIDENTIALITY
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The
Parties to this Agreement and their attorneys, if so chosen, agree to keep
confidential the identity of the Parties and the amount paid under this
Agreement, and not to publicize, advertise, communicate, or otherwise disclose
voluntarily to the media, members of the public, and/or any legal publication,
the identity of the Parties and the amounts paid under this
Agreement. It is understood and agreed that this Agreement of
confidentiality is important and valuable consideration for the above-stated
payments.
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5.
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WAIVER
OF CIVIL CODE SECTION 1542
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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 this
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.
6.
NO ASSIGNMENT/NO ACTIONS
FILED
Claimant
represents and warrants that it has 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, as set forth herein, and that no other person or entity of any kind
had or has any interest in any of the demands, obligations, actions, causes of
action, debts, liabilities, rights, contracts, damages, attorneys’ fees, costs,
expenses, losses, or claims referred to herein.
7.
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.
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8.
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.
9.
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.
10. 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 each of the Parties hereto.
11. 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.
12. 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.
13. AUTHORITY
TO EXECUTE
The
Parties represent and warrant that each of them is fully competent and
authorized to execute this Agreement by their signatures
hereto.
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14. 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.
15. 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.
IN WITNESS WHEREOF, the
Parties hereto have placed their signatures hereon on the day and year first
above written.
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COMPANY:
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CLAIMANT:
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WHO’S
YOUR DADDY, INC.
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XXXXXX
XXXXX
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a
Nevada corporation
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an
Individual
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By:
Xxxxxxx X. Xxxx
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Its:
Chief Executive Officer
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By:
Xxxxxx Xxxxx
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EXHIBIT
A
DESCRIPTION OF SETTLEMENT
PAYMENT
In full
settlement of their differences and in accordance with the provisions of this
Agreement, the Company shall pay Claimant the following amounts:
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Cash
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NONE
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Shares
of the Company’s common stock
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75,000
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