Exhibit 10.1
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TERMINATION, SETTLEMENT AND RELEASE AGREEMENT
THIS TERMINATION, SETTLEMENT AND RELEASE AGREEMENT (this "Agreement") is
made as of November 30, 2005 by and between GSV, Inc., a Delaware corporation
("GSV"), and 000 Xxxxxx Xxxxxx Corporation, a New Jersey corporation
("Landlord") (hereinafter individually a "Party," and together the "Parties").
Background:
A. GSV and Landlord are parties to that certain Lease Agreement dated June
11, 1998 (the "Lease") pertaining to the third floor of the building located at
000-000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx (the "Premises").
B. The term of the Lease continues until December 31, 2008.
C. In June 2001, with Landlord's consent, GSV sublet the Premises to
Xxxxxx.xxx for the remainder of the term of the Lease. The rent on the sublease
was guaranteed by Lumbermens Mutual Casualty Company, d/b/a Xxxxxx Insurance
Company ("Xxxxxx"), until May 2003. In September 2002 Xxxxxx.xxx ceased business
operations and defaulted on the sublease. Xxxxxx made all payments of rent due
under the sublease through May 2003. GSV ceased paying the rent due under the
Lease in July 2003. The accrued rent due under the Lease as of the date of this
Agreement is $356,249.04.
D. Landlord represents that it presently owns the Premises and has not
assigned any of its rights under the Lease to any other person or entity.
E. The Parties desire to reflect their agreement as to certain matters, and
to settle and compromise certain claims in connection with the terms and
conditions set forth below.
NOW, THEREFORE, for and in consideration of the agreements contained
herein, the adequacy and receipt of which are hereby acknowledged, the Parties
hereby agrees as follows:
1. Termination of Lease. The Parties hereby agree that the Lease
is terminated, effective as of the date of this Agreement, and that except as
set forth herein all rights and obligations of the Parties under the Lease are
of no further force or effect. GSV further agrees that as of the date of this
Agreement it has vacated the Premises, removed all equipment and goods or other
property belonging to GSV, and left the Premises in broom clean condition. As of
the date of this Agreement, all equipment, fixtures, goods or other property not
removed by GSV shall be deemed abandoned, and the Landlord shall have the right,
without any notice, to sell or otherwise dispose of the same at the expense of
GSV, and shall not be accountable to GSV for any part of the proceeds of such
sale, if any. Upon execution and delivery of this
Agreement, the Landlord shall have the right to remove all persons, goods,
fixtures and chattel from the Premises, without notice, without liability for
damages at GSV's cost. Notwithstanding any other provision to the contrary
contained in this Agreement, any and all indemnity obligations of GSV contained
in Article 8th of the Lease shall continue in full force and effect from and
after the date hereof.
2. Payments to Landlord. In full satisfaction of all amounts payable by
GSV to Landlord pursuant to the Lease, in full settlement of all issues,
disputes, controversies or claims between GSV and Landlord, and in consideration
of Landlord's release of GSV contained in this Agreement, GSV agrees that:
(a) Cash. GSV shall pay Landlord a cash payment of $70,000, of
which $50,000 shall be paid on the date of execution of this Agreement
and the balance of $20,000 will be paid one month thereafter.
(b) Security Deposit. GSV hereby releases any claim to the
security deposit previously given to Landlord by GSV pursuant to
Article 13th of the Lease, which shall become the property of
Landlord.
(c) Note. Upon execution of this Agreement, GSV shall deliver to
Landlord a promissory note in the form of Exhibit A hereto in the
principal amount of $356,249.04 (the "Note"), dated the date hereof
and executed by GSV. The Note shall mature 24 months after the date of
execution of this Agreement and shall bear interest at the rate of 7%
per annum. All principal and interest shall be due and payable upon
maturity of the Note. Payment and performance of all obligations under
the Note shall be guaranteed by Polystick U.S. Corporation
("Polystick") in the form of Exhibit B hereto (the "Guaranty") and
secured by the Pledge Agreement of Polystick in the form of Exhibit C
hereto (the "Pledge Agreement"), each dated the date hereof and
executed by Polystick and delivered to Landlord.
(d) Shares. Upon the execution of this Agreement, GSV shall
deliver to Landlord 200,000 shares of Series C Preferred Stock, $.001
par value ("Series C Preferred Stock"), of GSV (the "Shares"), which
shall have a liquidation preference over GSV's common stock, par value
$.001 per share ("Common Stock"), equal to $1 per share of Series C
Preferred Stock and shall be convertible at the election of the holder
into shares of Common Stock initially at the rate of one share of
Common Stock for each share of Series C Preferred Stock, all as set
forth in the form of Certificate of Designation attached hereto as
Exhibit D hereto, which shall have been filed with the Secretary of
State of Delaware on or prior to the date of execution of this
Agreement (this Agreement, together with the Note, the Guaranty, the
Pledge Agreement and such Certificate of Designation, referred to,
collectively, as the "Settlement Documents"); provided that as a
condition to
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GSV's obligation to deliver the Note and the Shares Landlord shall
have executed and delivered to GSV an investment representation
certificate in the form of Exhibit E hereto (the "Investment
Representation Certificate").
(e) Legal Fees. Upon the execution of this Agreement GSV shall
reimburse the legal fees and costs of Landlord up to a maximum of
$10,000.
3. Releases.
(a) Upon execution of this Agreement and Landlord's receipt of the
items set forth in Section 2 to be delivered at the execution, subject only to
the further delivery of $20,000 as provided in Section 2(a), Landlord hereby
fully releases and forever discharges GSV, its direct and indirect parents,
subsidiaries and affiliates, together with their respective officers, directors,
partners, shareholders, employees and agents (collectively, the "GSV Group"),
from and against any and all actions, causes of action, lawsuits, liabilities,
claims, demands, damages, expenses, loss of compensation, liabilities and
obligations of any nature whatsoever, whether known or not known, and whether
now existing, that it may now or hereafter have or claim to have against the GSV
Group or any member thereof, for, upon, or by reason of any matter, event, or
cause of any kind, arising out of or related to the Lease, including but not
limited to claims of breach of contract, defamation, libel or slander; provided,
however, that such release and discharge shall not operate with respect to the
provisions of the Settlement Documents, or any of them.
(b) Upon execution of this Agreement, GSV hereby fully releases
and discharges Landlord and its direct and indirect parents, subsidiaries and
affiliates, together with their respective officers, directors, partners,
shareholders, employees and agents (collectively, the "Landlord Group") from and
against any and all actions, causes of action, lawsuits, liabilities, claims,
demands, damages, expenses, loss of compensation, liabilities and obligations of
any nature whatsoever, whether known or not known, and whether now existing,
that it may now or hereafter have or claim to have against the Landlord Group or
any member thereof, for, upon, or by reason of any matter, event, or cause of
any kind, arising out of or related to the Lease, including but not limited to
claims of breach of contract, defamation, libel or slander; provided, however,
that such release and discharge shall not operate with respect to the provisions
of the Settlement Documents, or any of them.
(c) It is expressly agreed that this Agreement is a full and
final settlement, release, discharge of and from any and all claims, actions,
demands, damages, causes of action, held or possessed by the Parties, in any way
related to the Lease, subject to the terms and conditions hereof.
4. No Admission of Liability. It is further understood and agreed that
this Agreement is entered into in full, final, and complete compromise of
disputed claims and causes of action as aforesaid and is not to be construed as
an admission of liability or waiver of any
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defenses and that the Parties have expressly denied any and all liability and
negligence and expressly reserved any and all rights to any and all available
defenses of any nature whatsoever.
5. Governing Law. This Agreement will be construed and interpreted in
accordance with the laws of the State of New Jersey, without giving effect to
the choice or conflict of law principles thereof.
6. Entire Agreement. This Agreement represents the entire understanding
between the Parties with respect to the subject matter contained herein, and
supersedes all prior written or oral understandings or representations. No
modification, amendment or waiver of any terms or conditions of this Agreement
will be effective unless made in a writing dated subsequently hereto and signed
by the Parties.
7. Representations. (a) Each of the Parties acknowledges and represents
that (i) they are represented by legal counsel in connection with the
consideration and execution of this Agreement, (ii) in executing this Agreement,
the Party has relied solely upon the Party's own judgment, belief and knowledge,
and the advice and recommendation of the Party's own independently selected
legal counsel concerning the nature, extent and duration of the Party's rights
and claims, (iii) that the Party has not been influenced to any extent
whatsoever in executing this Agreement by any representations or statements not
expressly contained or referred to herein, (iv) such Party is authorized to
enter into this Agreement, all authorizations (if any) necessary for such Party
to enter into this Agreement have been obtained, and such Party hereby waives
any claim that this Agreement is unenforceable by virtue of lack of authority,
lack of execution formalities or otherwise, and (v) none of the claims that are
the subject of this Agreement have been previously assigned by such Party.
Landlord represents that it has not filed or permitted to be filed against GSV
or any of its affiliates, individually or collectively, any lawsuits and he
covenants and agrees that it will not do so at any time hereafter with respect
to the subject matter of this Agreement, except as may be necessary to enforce
the Settlement Documents, or any of them. GSV represents that it has not filed
or permitted to be filed against Landlord any lawsuits and GSV covenants and
agrees that it will not do so at any time hereafter with respect to the subject
matter of this Agreement, except as may be necessary to enforce the Settlement
Documents, or any of them.
(b) GSV further represents and warrants to Landlord that: (i) GSV is
duly organized, validly existing and in good standing under the laws of the
State of Delaware; (ii) the execution and delivery by GSV of the Settlement
Documents to which it is a party, and the performance by GSV of its obligations
thereunder, including, without limitation, the issuance of the Shares, have been
duly authorized by all necessary corporate action, and GSV has contemporaneously
herewith delivered to Landlord certificated copies of resolutions duly adopted
by its board of directors, which remain in full force and effect, and of its
certificate of incorporation and by-laws, as amended to date; (iii) the
Settlement Documents to which it is a party constitute the valid and legally
binding obligations of GSV enforceable against GSV in accordance with their
respective terms; (iv) neither the execution and delivery of the Settlement
Documents to which it
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is a party, nor the consummation of the transactions contemplated thereby, will
violate any provision of the certificate of incorporation or by-laws of GSV, or
any law, rule, regulation, writ, judgment, injunction, decree or determination
or other order of any court, government or governmental agency or binding upon
GSV or conflict with or breach any contract or agreement to which GSV is a
party; (v) the authorized capital stock of GSV consists of 1,500,000 shares of
Series B Preferred Stock, $.001 par value, all of which are validly issued and
outstanding, fully paid and non-assessable, and 75,000,000 shares of Common
Stock, 7,472,703 of which, as of the date hereof, are validly issued and
outstanding, fully paid and non-assessable, no other shares of capital stock of
GSV are authorized, issued or outstanding, and there are no subscriptions,
warrants, options, calls, commitments by or agreements or other obligations to
which GSV is bound relating to the issuance or purchase of any shares of capital
stock other than this Agreement, or as identified in the SEC Documents (as
hereinafter defined); (vi) upon issuance pursuant to this Agreement, the Shares
will be validly issued, fully-paid and non-assessable, free of any pre-emptive
rights or other charge or encumbrance, GSV has duly reserved for issuance from
the authorized and unissued Common Stock such number of shares sufficient for
issuance upon conversion of the Shares, and, upon issuance pursuant to the
foregoing Certificate of Designation, such shares of Common Stock will be
validly issued, fully-paid and non-assessable, free of any preemptive rights or
other charge or encumbrance; (vii) assuming the accuracy of Landlord's
representations contained in the Investment Representation Certificate, the
issuance of the Shares, and the issuance of the shares of Common Stock issuable
upon conversion of the Shares, are exempt from the registration requirements
under the Securities Act of 1933, as amended (the "Securities Act"); and (viii)
GSV's most recent Annual Report on Form 10-KSB and its Quarterly Report on Form
10-QSB, each as filed with the Securities and Exchange Commission (collectively,
the "SEC Documents"), do not contain any untrue statement of a material fact nor
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
8. Attorneys' Fees. In the event of a breach of Section 2(a) of this
Agreement by GSV, Landlord shall be entitled to recovery of all of its
reasonable attorneys' fees and costs in collecting the amounts owed thereunder
and enforcing its rights thereunder.
9. Jurisdiction. The parties agree that the exclusive jurisdiction for
all disputes arising out of this Agreement are the Courts of the State of New
Jersey or the Federal Courts located in the State of New Jersey.
10. Registration Rights.
(a) Landlord shall from time to time have the right to include all of
the shares of Common Stock issued or issuable upon conversion of the Shares and,
in the event the Landlord exercises its rights under Section 6 of the Pledge
Agreement, all of the shares of Common Stock issued or issuable upon conversion
of the Pledged Shares (as defined therein)(the "Registrable Securities") as part
of a registration statement (the "Registration Statement") filed by GSV in
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connection with any public offering of its securities (excluding registration
statements on Forms S-4 and S-8).
(b) GSV shall give Landlord notice of such a proposed registration at
least 20 days prior to the filing of a Registration Statement. At the written
request of Landlord, delivered to GSV within 10 days after the receipt of the
notice from GSV, which request shall state the number of Registrable Securities
that Landlord wishes to sell or distribute publicly under such Registration
Statement proposed to be filed by GSV, GSV shall include the Registrable
Securities in the Registration Statement.
(c) With respect to the Registration Statement prepared and filed
pursuant to this Section, and the inclusion of Registrable Securities in the
Registration Statement pursuant to this Section 8, all fees, costs and expenses
of registration shall be borne by GSV, including all registration, filing and
other fees payable to any securities exchange or automated quotation system on
which GSV's securities are or will be listed (an "Exchange") and the National
Association of Securities Dealers, Inc.; printing expenses, fees and
disbursements of counsel and accountants for GSV; all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified. All sales commissions, underwriting discounts and
similar payments will be borne by the selling shareholders.
(d) If the Registration Statement is filed in connection with an
underwritten secondary registration on behalf of security holders having
contractual registration rights that exist on the date hereof ("Other Holders"),
and the managing underwriters advise GSV in writing that in their good faith
opinion the number of securities requested to be included in such Registration
Statement exceeds the number that can be sold in such offering, GSV will include
in such Registration Statement (i) first, the securities of such Other Holders
requesting such registration pursuant to demand registration rights, pro rata
among such Other Holders, (ii) second, Registrable Securities requested to be
included in such Registration Statement and such other securities requested to
be included in such registration statement by security holders other than Other
Holders on whose behalf such registration statement is being filed who have
contractual registration rights that existed on the date of this Agreement
("Additional Holders"), pro rata among Landlord and such Additional Holders on
the basis of the number of Registrable Securities of Landlord and other
securities of such Additional Holders requested to be included in such
Registration Statement, and (iii) third, other securities requested to be
included in such Registration Statement.
(e) GSV will keep Landlord advised in writing as to the initiation of
the registration and as to the completion thereof. At its expense, GSV will:
(i) Keep such registration effective for a period of twelve (12)
months;
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(ii) Hold in confidence and not make any disclosure of
information concerning Landlord provided to GSV unless (i) disclosure
of such information is necessary to comply with federal or state
securities laws or with legitimate rules or orders of any stock
exchange or similar body, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in the
Registration Statement, (iii) the release of such information is
ordered pursuant to a subpoena or other order from a court or
governmental body of competent jurisdiction or (iv) such information
has been made generally available to the public other than by
disclosure in violation of this or any other agreement; and, upon
learning that disclosure of such information concerning Landlord is
sought in or by a court or governmental body of competent jurisdiction
or through other means, give prompt notice to Landlord and, at the
expense of Landlord, undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information;
(iii) Use its commercially reasonable efforts to register or
qualify the Registrable Securities covered by such Registration
Statement under the securities or blue sky laws of such jurisdictions
as Landlord shall reasonably request (provided that GSV shall not be
required in connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service of process in
any such jurisdiction where it has not been qualified); and
(iv) Keep such registration or qualification in effect for as
long as such Registration Statement remains in effect, and do any and
all other acts or things which may be necessary or advisable to enable
Landlord to consummate the public sale or other disposition of the
Registrable Securities in such jurisdictions.
(f) GSV shall have no obligation under this Section 10 to make any
offering of its securities, or to complete an offering of its securities that it
proposes to make or to complete the registration of any Registrable Securities
if it does not complete the offering of the securities it proposes to make, and
shall incur no liability to Landlord for its failure to do so.
(g) It shall be a condition precedent to the obligations of GSV to take
any action pursuant to this Section 10 with respect to the Registrable
Securities that Landlord shall furnish to GSV such information regarding itself,
the Registrable Securities held by it, and the intended method of distribution
of such securities as shall reasonably be required to effect the registration of
Landlord's Registrable Securities. In the event of any such registration of
Registrable Securities, GSV and the Landlord shall enter into such
indemnification and contribution arrangements as are customary for transactions
of that nature.
11. Miscellaneous. Except in connection with any legal proceeding
between the Parties hereto relating to the enforcement of this Agreement,
neither Party will at any time make any disparaging statement in respect of the
other Party that is likely to come to the attention of
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any member of the media or any employee, client or vendor of GSV, Landlord or
any of their respective affiliates.
12. Notices and Addresses. All notices, offers, acceptances and any
other acts under this Agreement shall be in writing, and shall be sufficiently
given if delivered to the addressee in person, by overnight courier service or
similar receipted delivery, or, if mailed, postage prepaid, by certified mail,
return receipt requested, as follows:
To Landlord: 000 Xxxxxx Xxxxxx Corporation
00 Xxxxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attn.: Xxxxx X. Xxxxxxx
With a copy to: XxXxxxxx & English, LLP
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
To GSV: GSV, Inc.
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Gilad Gat, President
With a copy to: Xxxxx & Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
13. Survival of Representations. Each representation and warranty
contained herein shall survive the execution and delivery of this Agreement for
a period of one year from the date hereof.
14. Benefits. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and assigns.
15. Execution in Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
GSV, INC.
By: /s/ Gilad Gat
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Name: Gilad Gat
Title: Chief Executive Officer
(Principal Executive Officer)
000 XXXXXX XXXXXX CORPORATION
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: President
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