EXHIBIT 10(E)
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement ("Agreement"), dated the 1st day of
October, 1st 2000, is entered by and among ESSXSPORT CORP., a Nevada corporation
("EssXSport"), XXXX XXXX ("Xxxx"), and E. XXXX XXXXXXX ("Xxxxxxx"). EssXSport,
Xxxx and Xxxxxxx are collectively herein referred to as the "Parties", or singly
as a "Party" as the context requires or permits.
RECITALS:
A. In connection with the consummation of a certain Exchange Agreement,
herein so-called, dated September 17, 1998, (i) Xxxx, Xxxxxxx and
Xxxxx Xxxxxxx own shares in EssXSport Corp.1 (collectively, the
"Share(s)"); Xxxx owning 137,000 shares evidenced by EssXSport share
certificate number 0002, Xxxxxxx owning 50,000 shares evidenced by
EssXSport share certificate number 0003, and Xxxxx Xxxxxxx owning
50,000 shares evidenced by EssXSport share certificate number 0001,
and (ii) EssXSport and Xxxx entered into an Employment Agreement
("Employment Agreement") having a three (3) year term.
B. As a result of disputes among the Parties, Xxxx and Xxxxxxx commenced
litigation in the United States District Court for the District of
Utah, Central Division, under the caption XXXX XXXX, AN INDIVIDUAL,
AND E. XXXX XXXXXXX, AN INDIVIDUAL, PLAINTIFFS, VS. ESSXSPORT CORP.,
A NEVADA CORPORATION, AND XXXXX XXXXXXXX, AN INDIVIDUAL, DEFENDANTS,
having Case No. 2:99CV 816C (the "Litigation").
X. Xxxx and Xxxxxxx desire to resolve their claims asserted in the
Litigation and the Parties desire to resolve all other claims and
disputes which they or each of them may have against another Party or
any director, officer, employee, agent, attorney, accountant, or
affiliate of any Party arising out of and relating to, but not
limited to: (i) the Exchange Agreement; (ii) the Employment
Agreement; (iii) any other matters or dealings in any way arising out
of or related to claims asserted in the Litigation, and/or (iv) the
relationships and dealings between or among the Parties.
AGREEMENT
In consideration of the mutual promises and the releases set forth below
and other valuable consideration, the sufficiency of which is hereby
acknowledged, the Parties agree to settle and discharge all claims, rights,
liabilities and obligations between or among them as follows:
1. INCORPORATION OF RECITALS; DEFINITIONS, AND REPRESENTATIONS AND
WARRANTIES.
1.1 RECITALS. Each of the recitals is incorporated into this Agreement as
a material part hereof. Each of the Parties represents and warrants
that each of the recitals is true and correct to the best of his or
its knowledge and belief.
1.2 DEFINITIONS. "Claim" or "Claims" shall include any and all claims,
disputes, liabilities, obligations, losses, actions, accounts, dues,
sums of money, executions, extents, reckonings, bonds, liens, bills,
costs, expenses (including attorney's fees), causes of action, suits,
debts, controversies, covenants, contracts, agreements,
representations, promises, infringements, judgments, demands, and/or
damages whatsoever, in law or in equity, whether fixed or contingent,
whether known or unknown, suspected or unsuspected, including those
related to unknown and unsuspected injuries, as well as unknown and
unsuspected consequences of known or suspected injuries, and any or
all of them whether or not asserted in the Litigation, both in the
United States and worldwide.
(1)EssXSport delivered 150,000 EssXSport Shares to Xxxx and Xxxxxxx. Xxxx and
Xxxxxxx, in turn, through a separate arrangement between them and Xxxxx Xxxxxxx,
arranged for Xxxxxxx to receive 50,000 of those shares.
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1.3 REPRESENTATIONS AND WARRANTIES. As a material inducement to the
Parties to enter into this Agreement, each Party, as may be the case,
represents and warrants to each other Party as follows:
1.3.1 As to each Party that is a corporation: (a) that such Party is
validly existing and in good standing under the laws of the state of
its incorporation; (b ) the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will not
violate provisions of the such Party's articles of incorporation or
by-laws and are not prohibited by the provisions of any document,
instrument, or paper to which such Party is a party or is bound; and
(c) has all requisite power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby on
its part to be performed.
1.3.2 This Agreement and each document executed in connection therewith
constitutes a legal, valid and binding obligation of each Party
enforceable against such Party in accordance with its terms, except
as enforcement of such terms may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies and defenses.
1.3.3 No Party has made any transfer, assignment, pledge, hypothecation or
other disposition of any Claim that he or it has or might have
against another Party or has created any lien, encumbrance or other
impediment to the title of any Claim and to the best of his or its
knowledge there are no such liens, encumbrances or other impediments
to the title of any Claim. Each Party is the sole owner of all right,
title and interest in and to all Claims which he or it has or may
have against another Party.
2. DISMISSAL OF THE LAWSUIT AND TERMINATION OF EMPLOYMENT AGREEMENT.
2.1 DISMISSAL OF LITIGATION. Immediately upon execution of this
Agreement, the Parties shall execute and tender to each other a
stipulation in the form of annexed Exhibit "A". The stipulation shall
effectuate a dismissal with prejudice of all of the Claims of the
Parties asserted in the Litigation, each Party to bear his or its own
fees and costs.
2.2 TERMINATION OF EMPLOYMENT AGREEMENT. The Employment Agreement by and
between EssXSport and Xxxx is hereby terminated and is hereby
declared null and void.
3. RELEASES. In consideration of the promises contained herein, the
Parties agree, with the sole exception of rights arising under this
Agreement, including, but not limited to, rights for breach of
express representations and warranties set forth herein, to the
following releases:
3.1 RELEASE BY XXXX AND XXXXXXX. Upon execution of this Agreement and for
good and valuable consideration, the receipt of which is hereby
acknowledged, Xxxx and Xxxxxxx and each of them, for themselves and
on behalf of their marital community, and all their affiliates,
agents, employees, assigns, legal representatives, trustees, heirs
and devisees, will be deemed to have released and forever discharged
EssXSport and its officers, directors, shareholders, employees,
agents, affiliates, trustees, successors, assigns, attorneys,
accountants, consultants and other professionals (the "Released
Parties") from all Claims that they or either of them have or may
have against EssXSport and the Released Parties as of the date of
this Agreement, including, but not limited to, all Claims related to
the Litigation, and in the case of Xxxx all Claims related to the
Employment Agreement. It is an express condition of the consideration
of this Agreement, and it is the intention of Xxxx and Xxxxxxx and
each of them, that this Section 3.1 shall be effective as a bar to
each and every Claim held by them. Xxxx and Xxxxxxx acknowledge that
EssXSport has relied upon the provisions of this Section 3.1 as a
condition to entering into this Agreement. Xxxx and Xxxxxxx, and each
of them, expressly consents, based upon advice of their respective
legal counsel, that the provisions of this Section 3.1 shall be given
full force and effect according to all of its provisions, including
those relating to unknown and unsuspected Claims.
3.2 RELEASE BY ESSXSPORT. Upon execution of this Agreement, and for good
and valuable consideration, the receipt of which is hereby
acknowledged, EssXSport for itself and all of its affiliates,
officers, directors, employees, agents, trustees, successors,
assigns, and legal representatives will be deemed to have released
and forever discharged Xxxx and Xxxxxxx and
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their respective employees, agents, trustees, assigns, heirs,
devisees, attorneys, accountants, consultants an other professionals
(the "Plaintiff Released Parties") from all Claims that it has or may
have against Xxxx and/or Xxxxxxx and the Plaintiff Released Parties
as of the date of this Agreement, including, but not limited to, all
Claims related to the Litigation, and in the case of Xxxx all Claims
related to the Employment Agreement. It is an express condition of
the consideration of this Agreement, and it is the intention of
EssXSport, that this Section 3.2 shall be effective as a bar to each
and every Claim of EssXSport. EssXSport acknowledges that Xxxx and
Xxxxxxx have relied upon this Section 3.2 as a condition to entering
into this Agreement.
EssXSport expressly consents, based upon advice of its legal counsel,
that this Section 3.2 shall be given full force and effect according
to all of its provisions, including those relating to unknown and
unsuspected Claims.
4. RESTRICTIONS ON SHARES.
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4.1 SHARE LOCK-UP. The Shares and each certificate evidencing the Shares
are subject to the Share "lock-up agreement" in the form and
substance of annexed Exhibit "B". Xxxx and Xxxxxxx agree to execute
and to cause Xxxxx Xxxxxxx to execute such Share lock-up agreement
concurrently with the execution of this Agreement.
4.2 RESTRICTED SECURITIES. Xxxx and Xxxxxxx and each of them acknowledge
that (i) the Shares are not and will not be registered under the
Securities Act of 1933, as amended, or any state securities laws,
(ii) the Shares are restricted securities, (iii) transfer of the
Shares is significantly limited, and (iv) the Shares may not be sold
or offered for sale in the absence of an opinion of counsel
satisfactory to EssXSport that registration of such Shares is not
required.
5. CONFIDENTIALITY; NON-DISPARAGEMENT.
5.1 CONFIDENTIALITY. As a material inducement for the Parties to enter
into this Agreement, the Parties agree that they, their attorneys,
accountants, and other consultants shall keep strictly confidential
the terms of this Agreement, and the consideration provided. The
obligation of confidentiality does not prohibit the Parties from
disclosing the simple and single fact that an agreement has been
reached and the Litigation dismissed, but it does preclude the
Parties from disclosing the amount of any compromise that was made,
the rationale or method behind the agreement to compromise, the
substance of settlement negotiations, or the merits or substance of
any of the Claims. Although the Parties shall be entitled to discuss
these matters with necessary parties, such as attorneys, accountants
and other consultants, or as may be required by law (including laws
and regulations regarding so-called public company information
disclosure obligations) or court order, the Parties shall use their
best efforts to maintain the confidential nature of such matters. The
Parties understand and agree that the fact that the Litigation has
settled (but not the terms and conditions thereof) may be disclosed
to others, and that the same shall not be a violation of this Section
5.1. To the extent that an action, motion, or other legal proceeding
is initiated where the disclosure of the terms that are the subject
of this confidentiality agreement are sought, the Party from whom
disclosure is being sought will immediately provide notice to the
other Parties of the pending action, motion, or other legal
proceeding. Any statement or disclosure by any of the Parties, or
their attorney, accountant or other consultant other than
specifically in accordance with the terms of this Section 5.1, shall
be a breach of this Agreement. The Parties recognize and agree that
any breach of the provisions of this Section 5.1 shall cause
substantial harm and damage to the non-breaching Party or Parties, as
may be the case.
5.2 Non-disparagement.
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5.2.1 EssXSport agrees that it will not make or cause to be made any
statements, observations, opinions or communicate any information
(whether oral, written or otherwise) that disparages or is likely in
any way to harm the reputation of Xxxx and/or Xxxxxxx at any time in
the future.
5.2.2 Xxxx and Xxxxxxx and each of them agree that he will not make or
cause to be made any statements, observations, opinions or
communicate any information (whether oral, written or
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otherwise) that disparages or is likely in any way to harm the
reputation of EssXSport or any officer, director, employee or
investor of EssXSport at any time in the future.
5.2.3 The term "disparage" used in this Section 5.2 is hereby defined to
mean the making of comments or statements, oral, written or
otherwise, to any individual or entity that could reasonably be
expected to adversely affect in any manner (i) the conduct of
business by a Party, or (ii) the personal or professional reputation
of a Party.
6. NO ADMISSION OF LIABILITY. It is understood and expressly agreed that
none of the consideration specified in this Agreement shall be
construed as an admission of any liabi1ity or wrongdoing whatsoever
on the part of any Party, or any of the other Released Parties or
Plaintiff Released Parties, by whom liability or wrongdoing has
always been and now is expressly denied, but is made in compromise
and settlement of disputed claims.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire integrated
agreement among the Parties and supersedes any and all prior and
contemporaneous agreements, promises, representations, negotiations,
and understandings of the Parties, whether written or oral.
8. MODIFICATION AND WAIVER. No modification or amendment to this
Agreement shall be effective unless in writing and signed by all
Parties. No waiver shall be effective unless in writing and executed
by the Party against whom enforcement of the waiver is sought.
9. REVIEW OF AGREEMENT. The Parties expressly acknowledge that they have
entered this Agreement knowingly and voluntarily, and that each Party
has had the advice of counsel prior to executing it.
10. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective heirs, legal
representatives, successors and assigns, and the Released Parties and
Plaintiff Released Parties.
11. GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Utah. With respect to any
action or proceeding arising out of or related to this Agreement and
the transactions contemplated hereby the Parties irrevocably submit
to the jurisdiction of any Utah or United States Federal District
Court sitting in Utah and no other court or jurisdiction. The Parties
agree, represent and warrant to each other that the selection of Utah
as a jurisdiction for actions or proceedings is consciously made and
is reasonable to the Parties.
12. EXECUTION OF AGREEMENT. This Agreement may be executed in
counterparts. The execution by all of the Parties by each signing a
counterpart of this instrument shall constitute a valid execution.
This instrument and all of its counterparts so executed shall be
deemed for all purposes to be a single instrument.
13. ATTORNEYS' FEES. In the event any proceeding or litigation is
commenced between or among the Parties or any of them concerning the
terms of this Agreement, or the rights and duties of the Parties, the
prevailing Party in such proceeding or litigation shall be entitled,
in addition to such other relief as may be available or granted, to a
reasonable sum as and for the prevailing Party's attorneys' fees and
costs, including non-taxable costs, and litigation related expenses
including expert witness fees and those fees and costs incident to
any action or participation in (or in connection with) a case or
proceeding involving a party under the applicable chapter of the
federal bankruptcy code (11 U.S.C. 101, et seq.) or any successor
statute thereto, whether such costs expenses and fees are incurred
prior to or after judgment.
14. HEADINGS. The headings used in this Agreement are used for
administrative purposes only and do not constitute substantive matter
to be considered in construing the terms of this Agreement.
15. CONSTRUCTION. This Agreement is intended to express the mutual intent
of the Parties, and irrespective of the identity of the Party or
counsel who prepared this document, no rule of strict construction
shall be applied against any Party. All words used herein shall refer
to the appropriate number or gender, regardless of the number or
gender stated.
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16. MATERIALITY. All covenants, agreements, representations and
warranties made herein shall be deemed to be material and to have
been relied on by the Parties in entering into this Agreement and
shall survive the execution and delivery of this Agreement.
17. INDULGENCE NOT WAIVERS. Neither the failure nor any delay on the part
of any Party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right,
remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with
respect to any other occurrence.
18. NOTICES. All notices or other communications under this Agreement
required or permitted to be given shall be in writing and shall be
deemed to have been duly given when delivered personally or by
facsimile transmission, in either case with receipt acknowledged, or
five days after being sent by registered or certified mail, return
receipt requested, postage prepaid as follows:
If to EssXSport:
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With a copy to: Parsons, Davies, Xxxxxxxx & Xxxxxx
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
Facsimile: 801-363-4378
If to Xxxx: Xxxx X. Xxxx
000 Xxxxx
Xxxxx, XX 00000
Facsimile: ______________
If to Xxxxxxx: E. Xxxx Xxxxxxx
0000 Xxxxx 000 Xxxx
Xxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Any Party may change his or its address by providing notice to the other
Parties in accordance with the provisions of this Section 18.
ESSXSPORT CORP., a Nevada Corporation
By /s/ Xxxxx Xxxxxxxx
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Its President
/s/ Xxxx Xxxx
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XXXX XXXX, Individually
/s/ E Xxxx Xxxxxxx
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E. XXXX XXXXXXX, Individually
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