DEBT SETTLEMENT AGREEMENT AND RELEASE
EXHIBIT
10.40
THIS
DEBT
SETTLEMENT AGREEMENT AND RELEASE (this “Agreement”)
is
made and entered into as of the 19th day
of
July, 2006, by and between Xxxxxxxx X. Xxxxx (“Xxxxx”),
and
Xxxxxxx Technologies Corporation, a Delaware corporation (the “Company”).
WHEREAS,
as of
the date hereof, the Company has an outstanding promissory note payable to
the
order of Fegen in the principal amount of $210,547.95 (the “Note”)
with
accrued but unpaid interest on such Note equaling $3,497.81 (the “Interest”);
and
WHEREAS,
the
Company and Fegen desire to cancel the Note and settle and release all
outstanding obligations, debts, and liabilities with respect thereto, including
without limitation the Interest, and to certain other matters between them
pursuant to the terms of this Agreement.
NOW,
THEREFORE,
for
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged and confessed, the parties agree as follows:
1. RELEASE
BY FEGEN.
Fegen,
on behalf of himself and his heirs, representatives, successors and assigns,
hereby fully, finally and completely RELEASES AND FOREVER DISCHARGES the Company
and its predecessors, successors, assigns, partners, members, managers,
affiliates, subsidiaries, parents, officers, shareholders, directors, employees,
attorneys, and agents, past, present and future (the “Company
Released Parties”),
of
and from any and all actions, causes of action, suits, debts, disputes, damages,
claims, obligations, liabilities, and demands of any kind whatsoever, at law
or
in equity, whether matured or unmatured, liquidated or unliquidated, vested
or
contingent, known or unknown, solely with respect to matters arising in
connection with the Note (including principal, any interest thereon or other
fees or obligations related thereto) that Fegen had, now has, or hereafter
may
have against the Company Released Parties (the “Fegen
Claims”).
Fegen
hereby agrees that he will not assert, and that he is estopped from asserting,
against any and all of the Company Released Parties, any Fegen Claims that
are
released in this Agreement.
2. CONSIDERATION.
As
consideration for the execution and delivery of this Agreement, and upon
delivery and cancellation of the Note pursuant to Section 3 below, the Company
shall (i) issue a stock certificate representing 286,000 shares of the Company’s
capital stock (the “Shares”),
and
(ii) issue a warrant to acquire 286,000 shares of the Company’s capital stock at
an exercise price of $1.00 in substantially the form of Exhibit
A
attached
hereto (the “Warrant”)
(collectively, the “Securities”).
3. DELIVERY
AND CANCELLATION OF NOTE.
Upon
execution and delivery of this Agreement, Fegen shall deliver to the Company
the
Note which shall be marked as “cancelled” by the Company. Fegen hereby releases
and forever discharges the Company’s obligation to pay all or any portion of the
Note.
4. FEGEN
REPRESENTATIONS AND WARRANTIES.
As of
the date hereof, Fegen represents and warrants the following:
(a)
|
He
has not assigned, pledged, or transferred in any manner to any person
or
entity any right, title, or interest to the Note, Interest, or any
of the
Fegen Claims.
|
(b)
|
He
has the requisite power and authority to enter into this
Agreement.
|
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(c)
|
He
recognizes that acquiring the Securities involves a high degree of
risk
and is suitable only for persons of adequate financial means who
have no
need for liquidity in this investment, in that
(a) it may not be possible to liquidate the investment in the event
of
emergency; (b) transferability is extremely limited; and (c) in the
event
of a disposition, a complete loss of investment could
occur.
|
(d)
|
He
(a) is competent to understand and does understand the nature of
the
investment, and (b) is able to bear the economic risk of the
investment.
|
(e)
|
He
is an accredited investor as defined in Rule 501 of Regulation D
promulgated by the Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933, as amended (the “Act”).
|
(f)
|
He
has significant prior investment experience, including investment
in
nonlisted and nonregistered securities, and that he has read all
of the
documents furnished or made available by the Company to evaluate
the
merits and risks of the investment, recognizes the highly speculative
nature of this investment, and is able to bear the economic risk
hereby
assumed.
|
(g)
|
All
information regarding the Company which was requested or desired
by him
has been furnished, all other documents which could be reasonably
provided
have been made available for inspection and review, and he believes
that
such information is sufficient to make an informed decision with
respect
to his acquiring the Securities
herein.
|
(h)
|
He
is acquiring the Securities for his own account, for investment,
and not
for distribution or resale to others, and that he will not sell,
transfer,
or otherwise dispose of the Securities or any portion thereof unless
they
are registered under the Act or unless an exemption from such registration
is available.
|
(i)
|
He
may, with the Company’s written consent, transfer the Securities if such
request for transfer is accompanied by an opinion of counsel satisfactory
to the Company that neither the sale nor the proposed transfer of
the
Securities results in a violation of the Act or any applicable state
“blue
sky” laws (collectively, the “Securities
Laws”).
|
(j)
|
He
consents to the placement of a legend on the certificates evidencing
the
Shares and on the Warrant stating that they have not been registered
under
the Act and setting forth or referring to the restrictions on
transferability and sale thereof.
|
5. INDEMNIFICATION.
Fegen
agrees to hold the Company, its officer and directors, and their respective
heirs, representatives, successors, and assigns harmless and to indemnify them
against all liabilities, costs, and expenses (including attorneys’ fees)
incurred by them as a result of any sale or distribution of the Securities
by
Fegen in violation of any Securities Laws or any misrepresentation
herein.
6. ENTIRE
AGREEMENT.
This
Agreement constitutes the entire agreement between the parties as to the subject
matter hereof. There are no verbal understandings, agreements, representations
or warranties that are not expressly set forth herein. This Agreement shall
not
be changed orally, but only in writing signed by the parties
hereto.
7. SEVERABILITY.
Any
provision of this Agreement which is for any reason prohibited or found or
held
invalid or unenforceable by any court or governmental agency shall be
ineffective to the extent of such prohibition or invalidity or unenforceability,
without invalidating the remaining provisions hereof in such jurisdiction or
affecting the validity or enforceability of such provision in any other
jurisdiction.
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8. BINDING
EFFECT.
This
Agreement shall be binding upon and inure to the benefits of the parties hereto,
their respective successors and assigns.
9. GOVERNING
LAW.
This
Agreement shall be governed by and construed, enforced and interpreted in
accordance with the laws of the State of Nebraska (without regard to principles
of conflicts of laws). The parties consent to the sole and exclusive
jurisdiction of the state courts and U.S. federal courts having jurisdiction
in
Xxxxxxx County, Nebraska for any dispute arising out of this
Agreement.
10. COUNTERPARTS.
This
Agreement may be executed in any number of original counterparts, each of which
having been so executed and delivered shall be deemed an original and all of
which, collectively, shall constitute one agreement; it being understood and
agreed that the signature pages may be detached from one or more such
counterparts and combined with the signature pages from any other counterparts
in order that one or more fully executed originals may be assembled. A facsimile
signature shall be deemed to be original signature.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be executed and delivered as of
the
day and year first written above.
/s/
Xxxxxxxx X.
Xxxxx
XXXXXXXX
X. XXXXX
XXXXXXX
TECHNOLOGIES CORPORATION
By:
/s/
Xxxxx X.
Xxxxxxxxx
Xxxxx
Xxxxxxxxx
Chief
Executive Officer
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