EXHIBIT 10.6
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SETTLEMENT AGREEMENT
This Settlement Agreement (this "Agreement") is dated as of this 31st
day of December, 2002 between XXXxxx.xxx, Inc., a Delaware corporation ("CDK"),
Diversified Capital Holdings, LLC, a New York limited liability company
("Diversified"), and Xxx Xxxxxxxxxx ("Xxxxxxxxxx").
1. Diversified entered into a Consulting Agreement dated June 11,
2002 with Xxxxxxxxxx (the "Consulting Agreement").
2. Comprehensive Resource Advisors, Inc. and/or NBM Information
Technology, Inc. are obligated to Xxxxxxxxxx in the amount of
$32,000 (the "Note").
3. Certain aspects of the Consulting Agreement have not been fully
performed and the parties wish to settle their respective
obligations under the Consulting Agreement in the manner set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the Parties,
intending to be legally bound, agree as follows:
1. SETTLEMENT TERMS.
1.1 Settlement Consideration. Subject to the terms and
conditions herein stated, the parties respective obligations shall be
settled on the Closing Date, as described in Section 1.5 of this
Agreement, by CDK and Diversified delivering to Xxxxxxxxxx
consideration consisting of 10,000 shares of CDK Series A Preferred
Stock and the sum of $16,000 (the "Settlement Consideration").
1.2 Payment of the Settlement Consideration.
(a) In full consideration of Xxxxxxxxxx'x settlement
and release of CDK and Diversified from their obligations
under the Consulting Agreement and Note, CDK shall issue and
deliver to Xxxxxxxxxx on the Closing Date 10,000 shares of its
Series A Preferred Stock (the "Series A Shares") and deliver
the sum of $16,000 to Xxxxxxxxxx.
[Note: As a result of amendments to the designation setting
forth the relative rights and preferences of the Series A
Shares and, after giving effect to an amendment to CDK's
certificate of incorporation which has been approved by
shareholders but is not effective, each Series A Share will be
convertible into 2 common shares of CDK.]
(b) Xxxxxxxxxx acknowledges the receipt of $16,000 in
full satisfaction of the Note.
1.3 Closing. The Closing shall take place upon the
satisfaction or waiver of the conditions set forth in Section 2 at
10:00 a.m. at the offices of Xxxxxx & Xxxxxxxxx LLP, 000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxx Xxxx 00000, (and may be by delivery
of documents by overnight courier) not later than January 17, 2003, or
at such other time and date as the parties shall agree in writing. Such
time and date are herein referred to as the "Closing Date."
2. CONDITIONS TO CLOSING.
2.1 CDK and Diversified. CDK and Diversified's obligations
under this agreement and CDK's obligations to issue and deliver the
Series A Shares are subject to the representation and warranties of
Xxxxxxxxxx set forth in this Agreement being true and correct in all
material respects.
2.2 Xxxxxxxxxx. Xxxxxxxxxx'x obligation under this Agreement
shall be subject to the representations and warranties of CDK and
Diversified set forth in this Agreement being true and correct in all
material respects.
3. MUTUAL RELEASES. On the Closing Date, subject to the performance of
CDK of their obligation set forth in Section 1.2 of this Agreement,
each party hereto, such party's heirs, assigns and agents, do hereby
fully and forever, release, waive and discharge each of the parties
hereto, and their respective officers, directors, shareholders, agents,
employees, successors and assigns, (hereinafter collectively referred
to as the "Releasees") from and against each and every claim, demand,
cause of action, obligation, damage, complaint, expense or action of
any kind, description or nature whatsoever, known or unknown, suspected
or unsuspected, that each party has or may hereafter have, against the
Releasees arising out of the Consulting Agreement and the Note. This
mutual release specifically excludes the rights and obligations of the
parties under this Agreement, the Escrow Agreement, the Separation
Agreement and paragraph 7.18 of the Stock Purchase Agreement.
4. REPRESENTATIONS OF XXXXXXXXXX. Xxxxxxxxxx represents, warrants and
agrees as follows:
4.1 Authority to Execute and Perform Agreement; No Breach.
Xxxxxxxxxx has the full legal right and power and all authority and
approval required to enter into, execute and deliver this Agreement and
to perform fully his obligations hereunder. This Agreement has been
duly executed and delivered by Xxxxxxxxxx and, assuming due execution
and delivery by, and enforceability against, CDK and Diversified,
constitutes the valid and binding obligation of Xxxxxxxxxx enforceable
in accordance with its terms, subject to the qualifications that
enforcement of the rights and remedies created hereby is subject to (i)
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors, and
(ii) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law). No
approval or consent of, or filing with, any governmental or regulatory
body, and no approval or consent of, or filing with, any other person
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is required to be obtained by Xxxxxxxxxx or in connection with the
execution and delivery by Xxxxxxxxxx of this Agreement and consummation
and performance by him of the transactions contemplated hereby. The
execution, delivery and performance of this Agreement by Xxxxxxxxxx and
the consummation of the transactions contemplated hereby in accordance
with the terms and conditions hereof by Xxxxxxxxxx will not:
(a) knowingly violate, conflict with or result in the
breach of any of the material terms of, or constitute (or with
notice or lapse of time or both would constitute) a material
default under, any contract, lease, agreement or other
instrument or obligation to which Xxxxxxxxxx is a party or by
or to which any of the properties and assets of Xxxxxxxxxx may
be bound or subject;
(b) violate any order, judgment, injunction, award or
decree of any court, arbitrator, governmental or regulatory
body, by which either Xxxxxxxxxx or the securities, assets,
properties or business of Xxxxxxxxxx is bound; or
(c) knowingly violate any statute, law or regulation.
4.2 Securities Acknowledgements.
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Xxxxxxxxxx hereby acknowledges that:
(a) Neither the Series A Shares nor the shares of
common stock underlying the Series A Shares have been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities act in reliance on
exemptions therefrom.
(b) In connection with the purchase of the Series A
Shares, that no representation has been made by
representatives of CDK regarding its business, assets or
prospects other than that set forth herein and as set forth in
the filings made by CDK pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended and such other
representations and warranties as set forth in this Agreement.
(c) The certificate or certificates representing the
Series A Shares will bear the following legend:
"The securities represented by this certificate have not
been registered under the Securities Act of 1933. The
securities have been acquired for investment and may not
be sold, transferred assigned in the absence of an
effective registration statement for these securities
under the Securities Act of 1933 or an opinion of CDK's
counsel, that registration is not required under said
Act."
4.3 Securities Representations.
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Xxxxxxxxxx hereby represent, warrant and agree as
follows:
(a) The Series A Shares are being acquired solely for
Xxxxxxxxxx'x own account, for investment and are not being
acquired with a view to or for the resale or distribution
thereof, Xxxxxxxxxx has no present plans to enter into any
such contract, undertaking, agreement or arrangement and
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Xxxxxxxxxx further understands that the Series A Shares and
the Shares of Common Stock underlying such Series A Shares,
may only be resold pursuant to a registration statement under
the Securities Act, or pursuant to some other available
exemption;
(b) Xxxxxxxxxx is an "accredited investor" as that
term is defined in Regulation D of the Securities Act and has
sufficient knowledge and experience in financial and business
matters to be capable of evaluating the merits and the risks
of its investment in the Series A Shares and is able to bear
the economic risk of its investment in the Series A Shares;
5. REPRESENTATIONS OF CDK AND DIVERSIFIED. CDK and Diversified
represent, warrant and agree as follows:
5.1 Authorization. Each have full power, legal capacity and
authority to enter into this Agreement, to execute all attendant
documents and instruments necessary to consummate the transaction
herein contemplated, and, as to CDK, to issue and sell the Series A
Shares to Xxxxxxxxxx, and to perform all of its obligations hereunder.
This Agreement and all other agreements, documents and instruments to
be executed in connection herewith have been effectively authorized by
all necessary action, corporate or otherwise, on the part of CDK and
Diversified, which authorizations remain in full force and effect, have
been duly executed and delivered by CDK and Diversified, and no other
corporate proceedings on the part of CDK and Diversified are required
to authorize this Agreement and the transactions contemplated hereby,
except as specifically set forth herein. This Agreement constitutes the
legal, valid and binding obligation of CDK and Diversified and is
enforceable with respect to CDK and Diversified in accordance with its
terms, except as enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, priority or other laws of court decisions
relating to or affecting generally the enforcements of creditors'
rights or affecting generally the availability of equitable remedies.
Neither the execution and delivery of this Agreement, nor the
consummation by CDK and Diversified of any of the transactions
contemplated hereby, or compliance with any of the provisions hereof,
will (i) conflict with or result in a breach or, violation of, or
default under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, lease, credit agreement or other
agreement, document, instrument or obligation (including, without
limitation, any of its charter documents) to which CDK and Diversified
is a party or by which either of them or any of their assets or
properties may be bound, or (ii) violate any judgment, order,
injunction, decree, statute or rule applicable to any Purchaser. No
authorization, consent or approval of any public body of authority or
any third party is necessary for the consummation by CDK and
Diversified of the transactions contemplated by this Agreement.
5.2 Shares. The Series A Shares to be issued and delivered to
Xxxxxxxxxx shall be fully paid, non-assessable and free and clear of
any lien, claim, charge or encumbrance.
6. NO ADMISSION. The parties agree that the execution of this Agreement
is not an admission by any of them of liability with respect to
damages, except as set forth in this Agreement.
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7. MISCELLANEOUS PROVISIONS.
7.1 Severability. In the event that any provision of this
Agreement is found to be illegal or unenforceable by any court or
tribunal of competent jurisdiction, then to the extent that such
provision may be made enforceable by amendment to or modification
thereof, the Parties agree to make such amendment or modification so
that the same shall be made valid and enforceable to the fullest extent
permissible under existing law and public policies in the jurisdiction
where enforcement is sought, and in the event that the Parties cannot
so agree, such provision shall be modified by such court or tribunal to
conform, to the fullest extent permissible under applicable law, to the
intent of the Parties in a valid and enforceable manner, if possible
and if not possible, then be stricken entirely from the Agreement by
such court or tribunal and the remainder of this Agreement shall remain
binding on the parties hereto.
7.2 Amendment. No amendment or modification of the terms or
conditions of this Agreement shall be valid unless in writing and
signed by the party or parties to be bound thereby.
7.3 Governing Law. This Agreement shall be interpreted,
construed, governed and enforced according to the internal laws of the
State of New York without regard to conflict or choice of law
principles of New York or any other jurisdiction. This Agreement shall
be executed in New York and is intended to be performed in New York. In
the event of litigation arising out of this Agreement, the parties
hereto consent to the personal jurisdiction of the State of New York,
and agree to exclusively litigate said actions.
7.4 No Waiver. If any party to this Agreement fails to, or
elects not to enforce any right or remedy to which it may be entitled
hereunder or by law, such right or remedy shall not be waived, nor
shall such nonaction be construed to confer a waiver as to any
continued or future acts, nor shall any other right or remedy be waived
as a result thereof. No right under this Agreement shall be waived
except as evidenced by a written document signed by the party waiving
such right, and any such waiver shall apply only to the act or acts
expressly waived in said document.
7.5 Counterparts. This Agreement may be executed in any number
of counterparts, and each such counterpart will, for all purposes, be
deemed an original instrument, but all such counterparts together will
constitute but one and the same Agreement.
7.6 Binding Agreement. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto, and upon their
respective heirs, successors, assigns and legal representatives.
7.7 Counsel. Each of the parties hereto represents that it,
she or he has consulted legal counsel in connection with this
Agreement, or has been given full opportunity to review this Agreement
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with counsel of his, her or its choice prior to execution thereof and
has elected not to seek such counsel. The parties hereto waive all
claims that they were not adequately represented in connection with the
negotiation, drafting and execution of this Agreement. Each party
further agrees to bear its own costs and expenses, including attorneys'
fees, in connection with the Action and this Agreement. If any Party
initiates any legal action arising out of or in connection with
enforcement of this Agreement, the prevailing Party in such legal
action shall be entitled to recover from the other Party all reasonable
attorneys' fees, expert witness fees and expenses incurred by the
prevailing Party in connection therewith.
7.8 Notices. All notices and demands permitted, required or
provided for by this Agreement shall be made in writing, and shall be
deemed adequately delivered if delivered by hand or by mailing the same
via the United States Mail, prepaid certified or registered mail,
return receipt requested, or by priority overnight courier for next
business day delivery by a nationally recognized overnight courier
service that regularly maintains records of its pick-ups and deliveries
and has daily deliveries to the area to which the notice is sent,
addressed to the parties at their respective addresses as shown below:
Name Address
---- -------
To CDK or Diversified: XXXxxx.Xxx, Inc.
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxxx, President
Facsimile: (000) 000-0000
With a Copy To: Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
To Xxxxxxxxxx: Xxx Xxxxxxxxxx
00 Xxxxxxxx Xxxx
Xxxx Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Notices delivered personally shall be deemed communicated as
of the date of actual receipt. Notices mailed as set forth above shall
be deemed communicated as of the date three (3) business days after
mailing, and notices sent by overnight courier shall be deemed
communicated as of the date one (1) business day after sending.
7.9 Entire Agreement. This Agreement and the Exhibits hereto
set forth the entire agreement and understanding of the parties hereto
in respect of the subject matter contained herein, and supersedes all
prior agreements, promises, understandings, letters of intent,
covenants, arrangements, communications, representations or warranties,
whether oral or written, by any party hereto or by any related or
unrelated third party. All exhibits attached hereto, and all
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certificates, documents and other instruments delivered or to be
delivered pursuant to the terms hereof are hereby expressly made a part
of this Agreement, and all references herein to the terms "this
Agreement", "hereunder", "herein", "hereby" or "hereto" shall be deemed
to refer to this Agreement and to all such writings.
7.10 Successors and Assigns. As used herein the term "the
Parties" shall include their respective successors in interest,
licensees or assigns.
7.11 Documents. At the conclusion of the Action, each Party
shall return to the other all documents and papers produced by the
other in connection with the Action.
7.12 Execution. Each person who signs this Agreement on behalf
of a corporate entity represents and warrants that he has full and
complete authority to execute this Agreement on behalf of such entity.
Each party shall bear the fees and expenses of its counsel and its own
out-of-pocket costs in connection with this Agreement.
7.13 Captions. The captions appearing in this Agreement are
for convenience only, and shall have no effect on the construction or
interpretation of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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Executed by the Parties on this ___ day of _____________, 2003.
DIVERSIFIED CAPITAL HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
XXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
/s/ Xxx Xxxxxxxxxx
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Xxx Xxxxxxxxxx
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