EXHIBIT 10.16
SETTLEMENT AGREEMENT AND RELEASE
BETWEEN
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
AND
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
DATED AUGUST 31, 2000
SETTLEMENT AGREEMENT AND RELEASE
This SETTLEMENT AGREEMENT AND RELEASE ("Agreement") is made and
entered into between BioLogix International, Ltd. ("BioLogix"), ▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ Song,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. ("THCL") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") as of August
31, 2000 (the "Effective Date"). BioLogix, THCL and the Board Members (as
defined herein) and ▇▇▇▇▇▇▇, are sometimes referred to herein singularly as
"Party" or collectively as "Parties".
RECITALS
A. BioLogix is a corporation duly organized and validly existing
under the laws of the State of Delaware which conducts business in California.
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇
Song are each directors of and are collectively all the directors of BioLogix
and THCL, respectively as of the date of this Agreement (collectively, the
"Board Members" or individually, a "Board Member").
B. THCL, formerly known as Innovative Tracking Solutions, Inc.,
is a corporation duly organized and validly existing under the laws of the State
of Delaware.
▇. ▇▇▇▇▇▇▇ is an individual residing in Marin County, California.
D. On or about July 30, 1999, a majority of the shareholders of
BioLogix common stock voted in favor of BioLogix entering into a transaction
with THCL whereby THCL purchased the internet-related assets of BioLogix in
exchange for substantially all the common stock of THCL. In such transaction,
THCL did not acquire the medical devices, medical patents, computer-related
audio or certain other assets of BioLogix.
E. A dispute has arisen between the Parties concerning, among
other things, the actions and conduct of ▇▇▇▇▇▇▇ as an officer and director of
BioLogix, ▇▇▇▇▇▇▇'▇ ownership of shares of common stock in BioLogix, the
conversion of such shares into shares of THCL common stock, and ▇▇▇▇▇▇▇'▇ claims
against BioLogix and THCL.
F. On October 22, 1999, BioLogix filed an action in the Superior
Court of the State of California in and for the County of San Francisco entitled
BIOLOGIX INTERNATIONAL, LTD. ▇. ▇▇▇▇▇▇▇ AND DOES 1-100, Case No. 307364 (the
"BioLogix Action").
G. On November 1, 1999, BioLogix filed an Ex Parte Application
for an order to show cause re preliminary injunction and temporary restraining
order, and declarations of ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇ ▇▇▇▇ in
support thereof (collectively, the "Ex Parte Application").
H. On or about December 6, 1999, ▇▇▇▇▇▇▇ filed a verified
cross-complaint for breach of contract and declaratory relief against BioLogix
and THCL and Does 1-50 in the BioLogix Action ("Cross-complaint").
I. On December 10, 1999 the Court in the BioLogix Action filed an
Order granting BioLogix's motion for preliminary injunction ("Order"), and on
December 21, 1999, the Court entered an amended order on BioLogix's motion for
preliminary injunction ("Amended Order").
For good and valuable considerations the receipt and sufficiency
of which is hereby acknowledged, the Parties hereto covenant and agree as
follows:
1. ▇▇▇▇▇▇▇ BIOLOGIX SHARES. As of August 4, 1999,
▇▇▇▇▇▇▇ claims that BioLogix had validly issued and authorized to be issued a
total of five million, one hundred two thousand, eight hundred thirty four
(5,102,834) shares of BioLogix common stock to ▇▇▇▇▇▇▇ (collectively, the
"▇▇▇▇▇▇▇ BioLogix Shares").
2. CONVERSION OF ▇▇▇▇▇▇▇'▇ BIOLOGIX SHARES TO THCL
SHARES. By this Agreement, ▇▇▇▇▇▇▇ hereby tenders for conversion and within five
(5) days of the Effective Date, BioLogix and THCL, jointly and severally, agree
to convert or cause to be converted up to two million two hundred thousand
(2,200,000) shares of the total ▇▇▇▇▇▇▇ BioLogix Shares to THCL Stock (the
"Exchanged Shares"). Within five (5) days of the Effective Date, BioLogix and
THCL agree to deliver the Exchanged Shares to ▇▇▇▇▇▇▇ by deposit into an escrow
account as defined in Section 2(e) of this Agreement. One million (1,000,000) of
the Exchanged Shares shall be released to ▇▇▇▇▇▇▇ upon delivery to the Escrow
Account subject to the restrictions of Section 2(c), (d) and (e) herein. In the
event the Weighted Average Trading Price (as defined herein) of THCL stock
during any twenty (20) day trading period meets the criteria below within 36
months of the Effective Date of this Agreement, BioLogix and THCL agree to
release additional Exchanged Shares to ▇▇▇▇▇▇▇ from the Escrow Account, subject
to the restrictions of Section 2(c), (d) and (e) herein, according to the
following schedule: (1) five hundred thousand (500,000) of the Exchanged Shares
if the Weighted Average Trading Price is $0.75; (2) an additional five hundred
thousand (500,000) of the Exchanged Shares if the Weighted Average Trading Price
is $1.25; and (3) an additional two hundred thousand (200,000) of the Exchanged
Shares if the Weighted Average Trading Price is $2.00. The Weighted Average
Trading Prices of $0.75, $1.25 and $2.00 are collectively referred as the
"Required Prices."
(a) The Weighted Average Trading Price shall mean
the aggregate number of shares traded each day times the closing price on that
day during 20 trading days (the "Numerator"); the Numerator shall then be
divided by the 20 trading days to determine the Weighted Average Trading Price.
(b) The Board of Directors of THCL has authorized
a reverse stock split of 1 for 3 for each share of THCL stock. In the event of
any reverse stock split of THCL shares, the number of Exchanged Shares delivered
to ▇▇▇▇▇▇▇ and all other share amounts herein shall be reduced in accordance
with the stock split on all issued shares of THCL. However, the Required Prices
shall increase by fifty percent (50%) of the aggregate reverse stock split. For
example, in the event of a 1 for 3 reverse stock split by THCL, the Required
Prices would be increased by one hundred fifty percent (150%).
(c) The Exchanged Shares issued to ▇▇▇▇▇▇▇ pursuant
to this Agreement shall be unregistered common stock of THCL bearing a
restrictive legend regarding
the sale or transfer of said shares and may be sold only pursuant to Rule 144
or Rule 144A of the Securities Act of 1933, as amended (collectively, "Rule
144"), subject to Section 2(d) below. It is hereby acknowledged that
consideration is being paid for the Exchanged Shares upon execution of this
Agreement. Subject to Sections 2(d) and (e) below, the Exchanged Shares may
be sold pursuant to the provisions of and in accordance with Rule 144 and
THCL represents and covenants that it and its employees, agents, and
attorneys shall cooperate with ▇▇▇▇▇▇▇ so that all restrictive legends shall
be removed from such Exchanged Shares and such Exchanged Shares may be sold,
in part or in whole, pursuant to Rule 144. The Rule 144 holding period for
purposes of the Exchanged Shares shall be deemed to have commenced as of the
Effective Date.
(d) THCL agrees to register twenty percent (20%) of
Exchanged Shares issued to ▇▇▇▇▇▇▇ in the SB-2 Registration Statement to be
filed by THCL with the Securities and Exchange Commission and which shall be
"freely trading" securities upon the effective date of said SB-2 Registration
Statement (the "Registered Shares"). The Exchanged Shares to be registered by
THCL under this paragraph shall be pro rata in accordance with the number of
Exchanged Shares released to ▇▇▇▇▇▇▇ in each tranche under this Section (i.e.
20% of the 1,000,000 shares initially released to ▇▇▇▇▇▇▇, 20% of the 500,000
shares if the Weighted Average Trading Price is $0.75, 20% of the 500,000 shares
if the Weighted Average Trading Price is $1.25 and 20% of the 200,000 shares if
the Weighted Average Trading Price is $2.00.)
(e) THCL shall deposit all the THCL Exchanged
Shares into account No. 284-16669 at ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ at its
Sacramento office ("▇▇▇▇▇▇▇ ▇▇▇▇▇") ("Escrow Account"). ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ will act
as the account representative of the Escrow Account. The escrow agent of the
Escrow Account ("Escrow Agent") shall be ▇▇▇▇▇▇▇ ▇▇▇▇▇ and shall hold the sole
authorization to sell, transfer or otherwise dispose of the Exchanged Shares
upon ▇▇▇▇▇▇▇'▇ instruction in accordance with the terms of is Agreement. The
Escrow Account shall be administered by the Escrow Agent in accordance with the
Escrow Agreement enter into by ▇▇▇▇▇▇▇ and THCL of even date and attached hereto
as Exhibit "A" to this Agreement. The Escrow Agreement shall provide that THCL
or its counsel will receive a duplicate copy of the monthly account statements
on the Escrow Account. The Escrow Agreement shall further provide the Exchanged
Shares deposited into the Escrow Account shall be transferred only through
market sales of the shares and shall not be transferred to any other account
through means other than a market sale of the shares.
The Escrow Agent shall comply with ▇▇▇▇▇▇▇'▇ instructions, so
long as no more than ten thousand (10,000) shares in total are sold,
transferred, or otherwise disposed of, on any public market within any one
twenty-four hour trading day (the "Limitation"). Such Limitation shall be
non-cumulative. ▇▇▇▇▇▇▇ also agrees to file any documentation required by the
Securities and Exchange Commission ("SEC") regarding any sale of the Registered
Shares and will provide THCL with copies of such documentation.
(f) Promptly on or after the Effective Date,
▇▇▇▇▇▇▇ shall identify the brokerage accounts of ▇▇▇▇▇▇▇ from which the
2,200,000 shares of BioLogix common stock, in total or in part, are to be
converted to the Exchanged Shares. To the extent that any amount of BioLogix
common stock held in such identified brokerage accounts or the stock
certificates submitted for conversion exceeds the 2,200,000 shares of BioLogix
common stock to be
converted to Exchanged Shares, new stock certificates shall be issued by
BioLogix for any such balance and returned to the originating account.
(g) The remaining two million nine hundred two
thousand eight hundred thirty four (2,902,834) shares of the ▇▇▇▇▇▇▇ BioLogix
Shares (collectively, "Remaining ▇▇▇▇▇▇▇ Shares") shall be reissued or returned
to ▇▇▇▇▇▇▇ or, to the extent such ▇▇▇▇▇▇▇ BioLogix Shares are held in personal
accounts held in ▇▇▇▇▇▇▇'▇ name, or for the benefit or under the control of
▇▇▇▇▇▇▇, such ▇▇▇▇▇▇▇ BioLogix Shares shall be released from any restriction,
other than that imposed by the securities laws, rules, or regulations, imposed
on ▇▇▇▇▇▇▇ precluding him from the sale, transfer or hypothecation of such
Remaining ▇▇▇▇▇▇▇ Shares. BioLogix and the Board Members have not verified
whether and do not warrant such Remaining ▇▇▇▇▇▇▇ Shares are validly issued or
authorized. The Parties also agree to cooperate to issue or reissue such
additional stock certificates to ▇▇▇▇▇▇▇, or take such other action as may be
necessary to effectuate and establish ▇▇▇▇▇▇▇'▇ ownership and voting rights on
such remaining ▇▇▇▇▇▇▇ BioLogix Shares, to the extent such actions are
consistent with applicable securities laws.
(h) ▇▇▇▇▇▇▇ agrees to transfer to ▇▇▇▇▇▇ ▇▇▇▇▇
("Shill") two hundred and twenty-five thousand (225,000) of the Exchanged
Shares, of which twenty percent (20%) shall be Registered Shares received by
▇▇▇▇▇▇▇ under Section 2(d) of this Agreement, as a fee for serving as an
intermediary during the negotiation of this Settlement Agreement. The Parties
hereby acknowledge and agree that THCL shall have no further obligation to Shill
whatsoever. ▇▇▇▇▇▇▇ shall use his reasonable best efforts to cause Shill to
execute a release of any claim against BioLogix and THCL for compensation as a
result of serving as an intermediary on negotiations between the Parties prior
to the Effective Date, or if and only if Shill does not execute such a release,
the Parties agree that ▇▇▇▇▇▇▇ shall indemnify BioLogix and THCL from any claim
filed by Shill for compensation as a result of serving in such capacity. ▇▇▇▇▇▇
▇▇▇▇▇ will execute this Agreement acknowledging his agreement to release any
claim against THCL and BioLogix relating to any claim for compensation in
connection with the negotiation of this Agreement.
(i) ▇▇▇▇▇▇▇ shall provide notarized letters to
BioLogix and THCL for delivery to brokerage firms stating the following:
"Pursuant to the terms of the Settlement Agreement and Release between BioLogix
International, Ltd. ("BioLogix"), ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. ("THCL"), and
myself, I withdraw my prior request to convert my 5,102,834 shares of BioLogix
common stock to THCL common stock."
(j) ▇▇▇▇▇▇▇ expressly waives any and all right to
request the exchange of or to exchange any BioLogix shares owned or controlled
by ▇▇▇▇▇▇▇ or held for the benefit of ▇▇▇▇▇▇▇ for THCL shares except as
expressly set forth in this Agreement.
3. RESIGNATION OF CURRENT BIOLOGIX BOARD AND NOTICE OF
THCL AND BIOLOGIX SHAREHOLDER MEETINGS.
(a) On of before the Effective Date each Board
Member agrees to convert 100% of the shares held by him in BioLogix into THCL
shares and shall tender his resignation as a member of the BioLogix Board of
Directors effective upon the Effective Date of
this Agreement. The Board Members further agree to elect ▇▇▇▇▇▇▇ and the
board of directors for the Entities (as defined below) as interim board
members for BioLogix pending the election of the new board of Directors at
the annual shareholders meeting of BioLogix. Each Board Member further
consents to the termination of any other agency, employment, consulting or
similar relationship between such Board Member and BioLogix. ▇▇▇▇▇▇▇ and
BioLogix agree to indemnify and hold the Board Members harmless for any and
all actions taken by ▇▇▇▇▇▇▇ or BioLogix after the Effective Date.
(b) ▇▇▇▇▇▇▇ agrees that he shall take no action,
directly or indirectly to oppose or obstruct: (1) the calling or scheduling of
an Annual THCL Shareholder Meeting; and/or (2) the orderly conduct of such
meeting. It is agreed that ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇ shall not attend any Annual
Meeting of the THCL shareholders held within 12 months of the Effective Date of
this Agreement; but may appoint a representative to do so. It is agreed that
▇▇▇▇▇▇▇ shall vote any of the Exchanged Shares to which he is entitled under
this Agreement FOR any Proxy Statement of THCL at any Annual Meeting of THCL
shareholders within 12 months of the Effective Date of this Agreement, as
recommended by the THCL Board of Directors; provided that ▇▇▇▇▇▇▇ is entitled to
proper notice and review of the Proxy Statement, Information Circular and/or all
related proxy materials before any such meeting. It is agreed that any violation
of the covenant set forth in this Section 3(b) shall result in the forfeiture of
the Exchanged Shares. ▇▇▇▇▇▇ ▇▇▇▇▇ will execute this Agreement acknowledging his
agreement not to attend any Annual Meeting of THCL shareholders held within 12
months of the Effective Date of this Agreement.
(c) BioLogix and THCL, and each Board Member hereby
covenants to forbear from taking any action to oppose or obstruct: (1) the
calling or scheduling of such Annual BGIX Shareholder Meeting; and/or (2) any
proposal to elect or any election of ▇▇▇▇▇▇▇ or any other candidates for board
members of BioLogix nominated by ▇▇▇▇▇▇▇ or his agents to the Board of Directors
at such Annual BGIX Shareholder Meeting.
(d) Except as set forth in this Agreement, each
Board Member of BioLogix represents and covenants that he shall not take any
material action on behalf of BioLogix until his resignation from the Board
becomes effective. ▇▇▇▇▇▇▇ shall also agree that such BioLogix Shareholder
Meeting shall be noticed and conducted no later than ninety (90) days from the
Effective Date of this Agreement, or as soon thereafter as may be practicable.
(e) All corporate records of BioLogix, including,
but not limited to, any audit records, audit working papers and notes, stock
records, list of shareholders, shall be returned to the New BioLogix Board, or
their designee, within thirty (30) days of the Effective Date of this Agreement.
▇▇▇▇▇▇▇ and BioLogix agree that they shall cooperate in every way possible in
assisting THCL in securing Reporting Company Approval, including, but not
limited to producing documentation, providing affidavits and otherwise assisting
in the response to any SEC concerns regarding the operations of BioLogix.
4. ENTITIES' STOCK. The Parties acknowledge and agree
that, as of the Effective Date, MUSIX Corporation ("MUSIX"), The CyberSound
Corporation ("CyberSound"), The Health Channel NetCasting Corporation
("NetCasting"), MedTel Corporation ("MedTel") and The Virtucare Corporation
("Virtucare") (collectively, the
"Entities"), collectively, claim to own or control at least 6,000,000 shares
of BioLogix common stock which have been requested for coversion to common
stock of THCL, but which as of the Effective Date have not been converted
(collectively, the "Entities' BioLogix Stock"). The Parties further
acknowledge and agree that, as of the Effective Date, MedTel claims to own
one million (1,000,000) shares of THCL common stock (the "Entities' THCL
Stock"). Nothing in this Section shall act as or constitute a representation
or warranty by BioLogix, THCL or any of the Board Members regarding the
validity, authority, legality or propriety of any the Entities or any of the
transaction(s) allegedly entered into by BioLogix and any of the Entities or
any BioLogix shares issued to any of the Entities.
(a) ▇▇▇▇▇▇▇ agrees that any pending request for
conversion of Entities' BioLogix Stock into THCL stock shall be and is hereby
withdrawn, and no further request for conversion or conversion of any Entities'
BioLogix Stock into THCL common stock shall be made in the future.
(b) ▇▇▇▇▇▇▇, on behalf of the Entities, shall
provide notarized letters to BioLogix and THCL for delivery to brokerage firms
stating the following: "Pursuant to the terms of the Settlement Agreement and
Release between BioLogix International, Ltd. ("BioLogix"), ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
Inc. ("THCL"), and myself, (insert name of each of the Entities) withdraws its
prior request to convert shares of BioLogix common stock to THCL common stock."
(c) ▇▇▇▇▇▇▇ further agrees that MedTel's one
million (1,000,000) shares of THCL Stock shall be tendered to the transfer agent
for THCL and BioLogix shall issue to MedTel one million (1,000,000) shares of
BioLogix common stock in the form the shares were originally delivered by MedTel
to THCL to reverse the prior exchange of the Entities' THCL Shares.
(d) The disposition of all the Entities' BioLogix
Stock, as well as the management and control of the Entities themselves, shall
be determined by the New BioLogix Board.
5. DISTRIBUTION OF CERTAIN INTEREST IN MUSIX. As a
member of the New BioLogix Board, ▇▇▇▇▇▇▇ agrees to propose a resolution to
implement to shareholders of BioLogix a pro rata dividend consistent with the
BioLogix announcement on September 8, 1998 ("MUSIX Dividend") by BioLogix.
6. OWNERSHIP OF ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ ASSETS. The
Parties agree and acknowledge that assets of the ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Internet
web site including, without limitation, all hardware, software, intellectual
property, trade names, URLs, trademarks associated with the web site, including
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, are owned and the personal property of THCL exclusively.
7. DISPOSITION OF PENDING ACTION. Within three (3)
days of the Effective Date, ▇▇▇▇▇▇▇ shall dismiss or cause his counsel to
dismiss the Cross-Complaint in the BioLogix Action with prejudice. Within three
(3) days of the Effective Date, BioLogix shall
dismiss or cause its counsel to dismiss without prejudice its complaint
against ▇▇▇▇▇▇▇ in the BioLogix Action.
8. COVENANT NOT TO ▇▇▇ OR COOPERATION IN SUIT.
BioLogix, THCL, and each of the Board Members, covenant not to ▇▇▇ and not to
pursue litigation against ▇▇▇▇▇▇▇ for any causes and causes of action, liens,
claims of lien, suits, debts, dues, sums of money, accounts, covenants,
contracts, controversies, agreements, promises, damages, judgments, executions,
claims, and demands, whatsoever, at law or in equity, which they ever had, now
have, or may claim to have prior to the Effective Date. BioLogix and each of the
Board Members agree to forbear from assisting any other person or entity from
initialing or pursuing a demand, claim or action against ▇▇▇▇▇▇▇, the New
BioLogix Board, or any of the Entities, except as may be ordered by a court or
other governmental agency. Subject to the obligations in this Paragraph 8,
nothing in this Agreement, including the release in Paragraph 9, shall preclude
BioLogix, THCL or any Board Members from filing a cross-claim or cross-complaint
against ▇▇▇▇▇▇▇ in any action filed by a third party arising from acts or
omissions by ▇▇▇▇▇▇▇ during the period that ▇▇▇▇▇▇▇ was an officer and member of
the Board of Directors of BioLogix.
9. RELEASES AND WAIVERS.
(a) Subject to compliance with all the obligations
in this Agreement, ▇▇▇▇▇▇▇, for himself, his representatives, employees, agents,
successors and assigns, hereby releases, acquits, and forever discharges
BioLogix and THCL, and each of them, and their respective agents, officers,
directors, shareholders, corporations, entities, attorneys, employees,
representatives, heirs, successors, and assigns, of and from all manner of
action and actions, causes and causes of action, liens, claims of lien, suits,
debts, dues, sums of money, accounts, covenants, contracts, controversies,
agreements, promises, damages, judgments, executions, claims, and demands,
whatsoever, at law or in equity, which they ever had, now have, or may claim to
have prior to the Effective Date.
(b) Subject to compliance with all the obligations
in this Agreement (including, but not limited to the right BioLogix, THCL and
the Board Members to pursue ▇▇▇▇▇▇▇ in the event of a third party claim against
them), each Board Member, on behalf of themselves, and their respective
representatives, employees, agents, successors and assigns, hereby release,
acquit, and forever discharge ▇▇▇▇▇▇▇, and each of the Entities, and their
respective agents, officers, directors, shareholders, corporations, entities,
attorneys, employees, representatives, heirs, successors, and assigns, of and
from all manner of action and actions, causes and causes of action, liens,
claims of lien, suits, debts, dues, sums of money, accounts, covenants,
contracts, controversies, agreements, promises, damages, judgments, executions,
claims, and demands, whatsoever, at law or in equity, which they ever had, now
have, or may claim to have prior to the Effective Date, arising from or related
to BioLogix, THCL, any of the Entities (including, but not limited to, any claim
of ownership of any stock or security of any class or nature in any of the
Entities).
10. CIVIL CODE SECTION 1542. Subject to the terms of
this Agreement, the foregoing releases are intended to extend to all claims
known or unknown, suspected or unsuspected, prior to the Effective Date, and
▇▇▇▇▇▇▇ and each Board Member hereto expressly
waive all rights that ▇▇▇▇▇▇▇ may have under California Civil Code Section
1542, which provides as follows:
"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."
11. REPRESENTATIONS AND COVENANTS OF BIOLOGIX, THCL AND
EACH BOARD MEMBER.
(a) No Further Issuance of BioLogix Stock.
BioLogix represents and warrants that, except for the BioLogix shares issued
under the terms of this Agreement, no additional shares of common stock or any
class of securities of BioLogix were authorized or issued from July 22, 1999
through the Effective Date. The Board Members further agree that they shall take
no actions to issue or authorize any additional securities of BioLogix except as
set forth herein.
(b) No disposition of the Entities' Stock. BioLogix
represents and warrants that, from July 22, 1999 through the Effective Date,
except as set forth herein, there has been no action taken by BioLogix or any
Board Member to modify the status of the Entities, the Entities' stock or the
Entities' claimed ownership of BioLogix common stock, including, but not limited
to, canceling, transferring or selling any stock of the Entities or the BioLogix
common stock claimed to be owned by the Entities. BioLogix and each Board Member
also covenants that it will not take any such action as described in the
preceding sentence after the Effective Date. Nothing in this paragraph shall act
as or constitute a representation or warranty by BioLogix, THCL or any of the
Board Members regarding the validity, authority, legality or propriety of any
the Entities or any of the transaction(s) allegedly entered into by BioLogix and
any of the Entities or any BioLogix shares issued to any of the Entities.
(c) Purposes of Paragraph 3. To the extent that
BioLogix, THCL, or any Board Member owns or controls, directly or indirectly,
any common stock or class of securities of BioLogix, BioLogix, THCL and each
Board Member represents and covenants, that it or he will not vote any such
stock or securities, or take any other action to contravene or oppose the
purposes and provisions of Paragraph 3 of this Agreement.
(d) BioLogix Stock Records. Upon execution of this
Agreement by ▇▇▇▇▇▇▇, BioLogix and THCL agree to provide to ▇▇▇▇▇▇▇ a copy of
BioLogix's most recent stock register or other similar documentation identifying
all the holders of BioLogix stock or securities, the quantity and class of stock
or securities held by such holder as of such date, respectively.
12. NONCOMPETITION, NONSOLICITATION AND TRADENAME
RESTRICTIONS.
(a) ▇▇▇▇▇▇▇ agrees that he shall not be an officer,
director, control person, consultant, employee or act in any other capacity,
directly or indirectly, with any company operating in the healthcare internet
industry during the one year period of time
following the Effective Date (the "Restrictive Period"); except in the market
segments of Internet portals for medical research in acute care,
biotechnology industry information exchange, the fitness industry, and
Virtucare (as defined in the 1998 Acquisition Agreement of BioLogix and The
VIRTUCARE Corporation). ▇▇▇▇▇▇▇ further agrees that during this one year
period he shall not take any action in order to facilitate such a plan to
compete. It is agreed that this noncompetition covenant is being created in
connection with the sale of a portion of ▇▇▇▇▇▇▇'▇ interest in BioLogix (the
Exchanged Shares which shall be converted in to THCL shares) and as a result,
it is the intention of the parties that this noncompetition covenant shall be
an enforceable covenant created in connection with the sale of an interest in
a business.
(b) ▇▇▇▇▇▇▇ agrees that during the Restrictive
Period, ▇▇▇▇▇▇▇ shall not solicit any THCL employee or THCL shareholder, for the
purpose of employment or investment in any business venture. ▇▇▇▇▇▇▇ further
agrees that he shall not disparage the business reputation or plans of THCL in
anyway, in any private or public form, directly or indirectly, during the
Restrictive Period.
(c) ▇▇▇▇▇▇▇, BioLogix and any entity affiliated
with or controlled by either of these parties shall not use any tradename
confusingly similar to ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. It is hereby agreed that upon the
effective date ▇▇▇▇▇▇▇ shall change the name of The Health Channel NetCasting
Corporation to another name not confusingly similar to the ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and
that ▇▇▇▇▇▇▇ shall be prohibited from utilizing the name The Health Channel
NetCasting Corporation in perpetuity.
It is hereby understood that the terms of this Section 12 are a material
inducement to THCL and the Board Members to enter into this Agreement. In the
event there is a breach of any covenant set forth in this Section 12, THCL shall
be entitled to offset damages arising therefrom against any shares held in the
escrow account and to secure an injunction prohibiting the continued breach of
this Section 12.
13. THCL STOCK. THCL represents and warrants that all
the common stock of THCL comprising such Exchanged Shares to be issued to
▇▇▇▇▇▇▇ pursuant to this Agreement is duly authorized and validly issued.
14. EACH SIDE TO BEAR OWN ATTORNEYS' FEES. Except as
may be specified in this Agreement herein, each of the Parties hereto shall bear
its respective costs and attorneys' fees incurred in the BioLogix Action,
including, but not limited to, the Cross-Complaint, and nothing in this
Agreement shall be construed or interpreted to require any Party, now or at any
time hereafter, to pay any costs or attorneys' fees of any other Party related
in any way to any claim related to the BioLogix Action.
15. REQUEST FOR COURT ACTION.
(a) In addition, all parties to the BioLogix action
shall stipulate to request that the Court modify the Order and Amended Order re:
Preliminary Injunction issued against ▇▇▇▇▇▇▇ in order to effect the terms of
this Agreement, including, allowing ▇▇▇▇▇▇▇ to convert up to 2.2 million of the
▇▇▇▇▇▇▇ Shares into THCL shares and the limitations upon trading such shares set
forth in this Agreement.
(b) All parties to the BioLogix Action shall also
stipulate to request and submit supporting materials to request that the Court
place the Complaint, Ex Parte Application, and any other pleadings which the
parties may mutually agree, under seal, or take such other measures and actions
to effectuate same.
16. FURTHER ACTION. The Parties hereto agree to
cooperate, execute, and deliver any further agreement, documents or papers or
take whatever action as may be reasonably required to accomplish any and all of
the terms of this Agreement.
17. CONFIDENTIALITY. The Parties, their counsel and
▇▇▇▇▇▇ ▇▇▇▇▇ shall hereinafter hold confidential and not disclose to any third
party (except accountants, legal counsel, and their agents) the terms and
conditions of this Agreement unless disclosure is required by a court or other
governmental agency. The only disclosure or announcement made in connection with
or in relation to this Agreement or the settlement reached by the Parties herein
shall be in a joint press release in the form attached hereto as Exhibit B to
this Agreement. It is hereby understood that the terms of this Section 17 are a
material inducement to THCL and the Board Members to enter into this Agreement.
In the event there is a breach of any covenant set forth in this Section 17,
THCL shall be entitled to offset damages arising therefrom against any of the
Exchanged Shares and to secure an injunction prohibiting the continued breach of
this Section 17. ▇▇▇▇▇▇ ▇▇▇▇▇ will execute this Agreement acknowledging his
agreement to hold confidential and not to disclose to any third party the terms
and conditions of this Agreement unless disclosure is required by a court or
other governmental agency.
18. SUCCESSORS AND ASSIGNS. This Agreement is binding
upon and inures to the benefit of the Parties hereto and their respective
successors, assigns, and legal representatives.
19. NO ADMISSION. Each Party hereto acknowledges that
this Agreement effects the settlement of claims which have been and are denied
and contested, and nothing herein is intended to constitute an admission of
liability by any Party hereto.
20. AUTHORITY. Each signatory hereto represents and
warrants that he or she is authorized to enter to this Agreement on behalf of
the indicated Party. Each Party hereto represents and warrants that it has not
heretofore assigned or transferred any claim, demand, liability, or cause of
action that is the subject of this Agreement.
21. FULL UNDERSTANDING. Each Party hereto acknowledges
having read this Agreement and fully understands its provisions, and
acknowledges that no other representation or promise has been made to induce
said Party to enter into this Agreement.
22. NO RELIANCE. Except as expressly stated in this
Agreement, none of the Parties has made any statement or representation to the
others regarding any fact that is relied upon in entering into this Agreement.
No Party to this Agreement relies upon any statement, representation, or promise
of any other Party not contained herein in executing this Agreement or in making
the settlement provided for herein.
23. REVIEW BY COUNSEL. Each Party has been represented
by counsel and/or has had the opportunity to retain and/or seek advice from
counsel.
24. ENTIRE AGREEMENT. This Agreement embodies the
entire agreement and understanding between the Parties hereto relating to the
subject matter contained herein and supersedes all prior agreements and
understandings between them with respect thereto. There are no agreements,
representations, warranties, or statements, whether oral or in writing, with
respect to the subject matter of this Agreement, except as expressly set forth
herein.
25. GOVERNING LAW. This Agreement is made and entered
into in the State of California and shall be interpreted and enforced under the
laws of the State of California, without regard to its conflicts of laws and
principles.
26. RULES OF CONSTRUCTION. This Agreement has been
reviewed by counsel for each Party hereto and approved as to form and content.
Accordingly, this Agreement shall be deemed to have been jointly drafted by each
Party hereto for purposes of applying any rule of construction.
27. MODIFICATION. This Agreement may be amended or
modified only by a writing signed by the Party against whom enforcement is
sought.
28. COUNTERPARTS. This Agreement may be executed in
counterparts all of which taken together shall constitute one agreement binding
on all the Parties hereto. A facsimile signature on this Agreement shall have
the same force and effect as an original signature.
29. INTERPRETATION. Whenever possible, each provision
of this Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement. It is
the intention of the Parties that if any such provision is held or determined to
be illegal, invalid, or unenforceable, there will be added in lieu thereof a
provision as similar to such provision as is possible to be legal, valid, and
enforceable.
30. The Effective Date of this Agreement shall be the
date upon which it is executed below by all Parties hereto.
IN WITNESS WHEREOF, the Parties to this Agreement have caused
this Agreement to be executed by the duly authorized representatives.
BIOLOGIX INTERNATIONAL, LTD. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
[Print Name]
Dated: August 31, 2000
Its: C.O.O.
▇▇▇▇▇▇ ▇▇▇▇▇
Dated: August 31, 2000
----------------------
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC. /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Dated: August 31, 2000
------------------------
▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
[Print Name]
Its: C.O.O.
Dated: August 31, 2000
--------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ Balazs ▇▇▇▇ ▇▇▇▇▇
-------------------------------
Balazs ▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Jefffrey ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇ Song
-------------------------------
▇▇▇▇▇▇ Song
Approved as to form: Approved as to form:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ Zesara ▇. ▇▇▇▇
------------------------------ ----------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Zesara ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Attorney for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attorney for BioLogix International, Ltd.,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. and ▇▇▇▇▇▇ ▇.
▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ Dated: August 31, 2000
Bodai, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ Song ----------------------
Dated: August 31, 2000
-------------------------
