Exhibit 10.1
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
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This Settlement Agreement and Mutual Release (this "Agreement") is
entered into by and between Telenetics Corporation, a California corporation
("Telenetics"), Xxxxx Xxxxx, an individual ("Stone") and Xxxxxxx Xxxxxxx, an
individual ("Taglich," and together with Stone and Telenetics, the
"Defendants"), on the one hand, and Xxxxxxx Armani ("Armani"), on the other.
This Agreement is entered into with reference to the following facts:
RECITALS
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A. On or about August 2, 2002, Armani filed a Complaint against
Defendants in Orange County Superior Court Case No. 02CC12884 ("Case No.
02CC12884"); on or about September 10, 2002, Telenetics filed a cross-complaint
against Armani in said Case No. 02CC12884.
B. The parties to this Agreement wish to settle all differences between
them which arise out of or which in any way are connected with or related to any
of the claims, allegations, causes of action and/or contentions set forth in
Case No. 02CC12884 and otherwise.
C. Without acknowledging the validity of any other party's rights,
claims or defenses in connection with the subject matter of Case No. 02CC12884,
and in order for the parties to this Agreement to settle all differences between
them, and in consideration of the mutual covenants, agreements and promises set
forth in this Agreement, and other good and valuable consideration, each party
to this Agreement agrees as follows:
AGREEMENT
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1. The foregoing Recitals shall be part of this Agreement.
2. Concurrently with the execution of this Agreement, the parties shall
submit a Notice of Settlement in Case No. 02CC12884.
3. (a) Armani shall pay to Telenetics the sum of $20,000,
payable as follows: $5000.00 upon the execution of this Agreement and $2000.00
per month commencing thirty (30) days following the execution of this Agreement
and each thirty (30) days thereafter until paid in full. In the event that any
installment is not received within ten (10) days of its due date the entire
unpaid balance due by the terms hereof shall become immediately due and payable
(b) Armani shall cause to be filed a Request for Dismissal
with Prejudice of his Complaint in the aforesaid Case No. 02CC12884 as to all
defendants forthwith upon the execution of this Agreement.
(c) Telenetics and Armani agree that any press release
concerning this Agreement and/or its terms and effect shall be jointly approved
by Telenetics and Armani, such approval not to be unreasonably withheld.
4. Except for any obligations imposed by this Agreement, Defendants,
and each of them, on the one hand, and Armani, on the other, and, as applicable,
each of their respective agents, successors, predecessors, parent companies,
affiliated companies, related companies, partners, officers, directors,
shareholders, representatives, employees, attorneys, insurance companies,
assigns and heirs, and each of them, past and present, hereby release and
forever discharge each other party and each of his, her, or its respective
agents, successors, predecessors, parent companies, affiliated companies,
related companies, partners, officers, directors, shareholders, representatives,
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employees, attorneys, insurance companies, assigns and heirs, and each of them,
past and present, with respect to any and all claims, demands, charges of
discrimination, liabilities, damages, obligations, debts, attorneys' fees,
costs, accounts, actions, or causes of action which any of the parties have or
claim to have as of the date of this Agreement, in law or equity, whether known
or unknown, which pertain to or which arise out of the facts, circumstances,
and/or events which are asserted, or could have been asserted in Case No.
02CC12884 and/or which pertain to, arise out of, or is in any connected with the
past relationships between the Parties including, without limiting the
generality of the foregoing, any claims related to or arising out of Armani's
employment relationship with Telenetics and the termination of that employment
relationship, his relationship as a Director of Telenetics and the termination,
if any, of that relationship, his relationship as a consultant of Telenetics and
the termination, if any, of that relationship. (collectively, the "Defendant
Released Parties).
5. The release set forth in Section 4 specifically includes, without
limiting the generality of the foregoing in any way, the release of any and all
claims under the California labor laws, the California Fair Employment and
Housing Act, California wage-hour laws, Title VII of the Civil Rights Act of
1964, the Americans With Disabilities Act, The Age Discrimination in Employment
Act, 29 U.S.C. ss. 621 and sections following, COBRA, the Employment Retirement
Income Security Act, defamation claims and/or violations of any other statutes,
rules, regulations, ordinances or law whether federal, state or local and the
release of any and all claims regarding any agreements, claimed or otherwise,
between the parties to this Agreement.
6. Armani represents that, except for Case No. 02CC12884, he has not
filed any complaints or charges against any of the Defendant Released Parties
with any local, state or federal agency or court; he represents that no claims
are currently pending; he promises he will not file any claim at any time
hereafter relating to any claims, demands, causes of action or other liabilities
arising before the date of this agreement; and if any such agency, arbitrator or
court assumes jurisdiction of any complaint or charge against any of the
Defendant Released Parties on behalf of Armani, whenever filed, he will request
such agency or court to withdraw from the matter immediately. Moreover, Armani
agrees that should he bring an action contrary to this Agreement, he shall pay
all costs and attorneys' fees incurred by any and all Defendant Released Parties
for any action brought contrary to this Agreement.
7. (a). In consideration for this Agreement, Armani agrees to
indemnify, defend and hold harmless the Defendant Released Parties against and
from any claim, liability, obligation, loss, damage, assessment, judgment, cost
and expense (including, without limitation, reasonable attorneys' fees and
costs) of any kind or character (collectively, "Losses") arising out of or in
any manner incident, relating or attributable to any actions of Armani
constituting fraud, misrepresentation, breach of fiduciary duty or any knowing
or intentional violation of law or any actions outside the course and scope of
his employment or duties as a director of Telenetics, as the case may be, and
any Losses related to any written or oral agreement executed or consented to, as
the case may be, by Armani on behalf of Telenetics and which written or oral
agreement was not clearly within the course and scope of his employment and
authority and/or had not been approved by the board of directors of Telenetics.
(b). 1) As further consideration for this Agreement,
Telenetics shall indemnify Armani for all liability,
loss and expense that Armani may reasonably incur by
reason of his personal guaranty of the Lease
Agreement covering Telenetics' facility at 00000
Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000, or in
defending suits, actions or other proceedings brought
in connection therewith. Promptly after receipt by
Armani of notice of the commencement of any action,
suit or proceeding in respect of which Armani will
seek indemnification hereunder (a "Facility Action"),
Armani shall notify Telenetics to provide such
indemnification thereof in writing, but any failure
to so notify Telenetics shall not relieve it from
liability that it may have to Armani under this
section except to the extent that Telenetics is
prejuduced by the failure to give such notice.
Telenetics shall be entitled to participate in the
defense of such Facility Action and to assume control
of such defense (including settlement of such
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Facility Action) with counsel reasonably satisfactory
to Armani; PROVIDED, HOWEVER, that (i) Armani shall
be entitled to participate in the defense of such
Facility Action and to employ counsel at his own
expense to assist in the handling of such Facility
Action; (ii) Telenetics shall not consent to the
entry of any judgment or enter into any settlement
that does not include as an unconditional term
thereof the giving by each claimant or plaintiff to
Armani of a release from all liability in respect of
such Facility Action; and (iii) Telenetics shall not
be entitled to control the defense of any Facility
Action unless Telenetics confirms in writing its
assumption of such defense and continues to pursue
the defense reasonably and in good faith. After
written notice by Telenetics to Armani of this
election to assume control of the defense of any such
Facility Action in accordance with the foregoing, (y)
Telenetics shall not be liable to Armani for any
legal expenses subsequently incurred by Armani
attributable to defending against such Facility
Action, and (z) as long as Telenetics is reasonably
contesting such Facility Action in good faith, Armani
shall not admit any liability with respect to, or
settle, compromise or discharge the claim underlying
such Facility Action without Telenetics' prior
written consent. If Telenetics does not assume
control of the defense of such Facility Action in
accordance with this section, Armani shall have the
right to defend and/or settle such Facility Action in
such manner as he may deem appropriate at the cost
and expense of Telenetics, and Telenetics will
promptly reimburse Armani therefor in accordance with
this section. The reimbursement of fees, costs and
expenses required by this section shall be made by
periodic payments during the course of the
investigation or defense, as and when bills are
received or expenses are incurred.
2) If Armani has actual knowledge of any facts or
circumstances other than the commencement of a
Facility Action which cause in good faith him to
believe that he is entitled to indemnification under
this section of this Agreement, then Armani shall
promptly give Telenetics notice thereof in writing,
but any failure to so notify Telenetics shall not
relieve it from any liability that it may have to
Armani under this section, except to the extent that
Telenetics is prejudiced by the failure to give such
notice.
8. As a condition of this Agreement and in furtherance of the release
provisions set forth in this Agreement, the parties expressly waive any and all
rights and benefits conferred upon them by the provisions of section 1542 of the
Civil Code of the State of California with respect to any of the matters
described or set forth in this Agreement. Section 1542 of the Civil Code of the
State of California states:
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.
The parties acknowledge that except for matters expressly represented
or recited in this Agreement, the facts and law in relation to this matter and
the claims released by the terms of this Agreement may turn out to be different
from the facts or law as now known to each party and/or his, her or its agents
and/or representatives, including his, her or its counsel. Each party expressly
assumes the risk of the existence of different or presently unknown facts or law
and agrees that this Agreement shall in all respects be effective and binding as
to each party despite the possibility of the existence of different or new facts
or law.
9. Each of the parties represents and warrants that he or it has not
heretofore assigned, transferred or subrogated, or purported to assign, transfer
or subrogate, to any person or entity, any of the claims released in this
Agreement. Each of the parties agrees that he or it shall indemnify each of the
other parties, including with respect to any attorneys' fees and costs, and hold
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each of the other parties harmless from and against any claims based on or
arising from any such assignment, transfer or subrogation, or any attempted
assignment, transfer or subrogation, of any of the claims released in this
Agreement.
10. Each of the parties agrees to execute and deliver to each other
party all necessary documents and to take such additional action as may be
necessary or reasonably required to effectuate the terms, conditions,
provisions, and intent of this Agreement.
11. Each party executing this Agreement and/or any other documents
related to the settlement between the parties represents and warrants that he,
she or it has been duly authorized to execute this Agreement and any such other
related documents.
12. Each of the parties acknowledges that he, she or it has carefully
read this Agreement and knows and understands the contents and effect of this
Agreement, and each of the parties further acknowledges that he, she or it is
signing this Agreement based on his, her or its own free act.
13. Each of the parties acknowledges that he, she or it has been
advised to seek legal counsel in connection with this matter and the provisions
and execution of this Agreement, and each of the parties acknowledges that he,
she or it either has consulted with his, her or its own legal counsel or has had
a full opportunity to consult with his, her or its own legal counsel in
connection with the settlement between the parties, the terms, conditions, and
provisions of this Agreement, and the execution of this Agreement.
14. This Agreement has been entered into in the State of California,
and all of the terms, conditions and provisions of this Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of California.
15. If any term, condition or provision of this Agreement is held to be
invalid, void or unenforceable, the remaining terms, conditions and provisions
of this Agreement nevertheless shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
16. This Agreement and all of its terms, conditions and provisions
shall be binding upon and shall inure to the benefit of each of the parties and
each of the parties' respective heirs, successors and assigns.
17. The prevailing party in any proceeding to enforce the provisions of
this Agreement shall be entitled to recover all costs, including reasonable
attorney's fees, from the non-prevailing party.
18. Each of the parties shall bear and be responsible for his, her or
its own attorneys' fees and costs incurred in connection with all aspects of
Case No. 02CC12884.
19. This Agreement contains the entire agreement and understanding
concerning the settlement between the parties and replaces any prior
negotiations or agreements between the parties, whether written and/or oral.
20. Each of the parties agrees that no particular party or parties to
this Agreement shall be deemed to be the author of this Agreement or any
particular term, provision or condition of this Agreement. Each of the parties
further agrees that any ambiguities in this Agreement shall be resolved, and the
terms, provisions and conditions of this Agreement shall be construed and
interpreted, without regard to which party or parties may have suggested,
drafted, revised, or otherwise authored this Agreement or any of its particular
terms, provisions or conditions. Each of the parties further agrees that this
Agreement shall be construed and interpreted as if drafted jointly by all of the
parties.
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21. It is understood that this Agreement is entered into in compromise
of disputed claims and that neither the settlement between the parties nor the
performance of any of the terms, provisions, or conditions of this Agreement
shall be construed or interpreted as an admission of liability on the part of
any of the parties to this Agreement.
22. Any disputes arising under this Agreement shall be resolved in
accordance with the laws of the State of California in either the County of
Orange or the County of Los Angeles, State of California.
23. This Agreement may not be changed, altered or modified except in a
writing signed by each of the parties and/or duly authorized representatives of
each of the parties.
24. This Agreement may be executed in counterparts, including facsimile
counterparts, and all such executed counterparts, including with facsimile
signatures, together shall constitute one original Agreement which shall be
binding on all of the parties to this Agreement notwithstanding that all of the
parties are not signatory to the original or the same counterparts.
25. The effective date of this Agreement (the "Effective Date") shall
be the date when this Agreement has been signed by all of the parties to this
Agreement and executed copies of this Agreement with all of the parties'
signatures have been delivered to each of the other parties and/or their
counsel.
26. A copy of this Agreement shall be attached to, and made a part of,
the Notice of Settlement filed in the aforesaid Case No. 02CC12884
IN WITNESS WHEREOF, the undersigned have executed this Settlement
Agreement and Mutual Release on the dates set forth below.
Dated: August 8, 2003 TELENETICS CORPORATION
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, President
Dated: August 8, 2003 /s/ Xxxxxxx Armani
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XXXXXXX ARMANI
Dated: August 8, 2003 /s/ Xxxxx Xxxxx
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XXXXX XXXXX
Dated: August 12, 2003 /s/ Xxxxxxx Xxxxxxx
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XXXXXXX XXXXXXX
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APPROVED AS TO FORM:
LAW OFFICES OF XXXXXXX X. XXXX
By: /s/ Xxxxxxx Xxxx
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Xxxxxxx X. Xxxx
Attorneys for Xxxxxxx Armani
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Xxxxxx X. Xxxxxx III, Attorney for
Telenetics Corporation, Xxxxx Xxxxx and
Xxxxxxx Xxxxxxx
SECRETARY'S CERTIFICATE
I, Xxxxxx Xxxxxxx, declare and state that I am Secretary of
Telenetics Corporation and that on August 8, 2003, the Board of Directors
approved the preceding Settlement Agreement and Mutual Release, authorized the
company's President, Xxxxx Xxxxx, to execute the such agreement on behalf of
Telenetics Corporation.
I declare under penalty of perjury pursuant to the laws of the
State of California and the United States of America that the foregoing is true
and correct.
This 8th day of August, 2003.
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
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