SETTLEMENT AGREEMENT
Exhibit 10.1
THIS SETTLEMENT AGREEMENT (the “Settlement Agreement”)
is made as of May 22, 2008 (the “Settlement Date”), by and
between COMMERCE PLANET, INC., a Utah corporation, with its
principal executive offices at 00 Xxxxx Xx Xxxxxx Xxxx, Xxxxx 0, Xxxxxx,
Xxxxxxxxxx 00000 (the “Company”), XXXXXXX XXXX, a
California resident, with an address at 000 Xxxxxxxx Xx., Xxxxx Xxxxxxx,
Xxxxxxxxxx 00000 (“Hill”). The Company and Hill may
hereinafter be referred to singularly as a “party,” and collectively as
the “parties.”
PREAMBLES:
WHEREAS, during 2006, the Company and Hill entered into that
certain Executive Stock Award Agreement (the “Stock Award
Agreement”) pursuant to which the Company issued to Hill for nominal
consideration, 13 shares of the Company’s Series D convertible preferred
stock (the "Series D Preferred") as bonus compensation based
upon the Company’s achievement of certain monthly gross sales revenues
in fiscal 2006, for past services and to incentivize future performance;
WHEREAS, the Company and Hill agree that the best option to
resolve the compensation issues relating to the Stock Award Agreement
(and the Company’s obligation to have issued Form 1099’s to the
Executive prior to April 15, 2007) and would have the best tax
implications for Hill is for the Company and Hill to rescind ab
initio the Stock Award Agreement as of the Settlement Date by
reason of the Company’s failure to obtain stockholder approval for the
Stock Award Agreement and the stock award to Hill thereunder; and
WHEREAS, the parties are desirous of settling and releasing any
claim, liability or obligation that any party has or may have against
the other or owe to the other in connection with the Stock Award
Agreement, the Series D Preferred stock award, or all other compensation
matters.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Rescission of the Stock Award Agreement. On the
Settlement Date, the Company and Hill agree to rescind ab initio
the Stock Award Agreement and the stock award of the Series D Preferred
to Hill thereunder by reason of the Company’s failure to obtain
stockholder approval for the Stock Award Agreement and the stock award
of the Series D Preferred to Hill.
2. Warranties and Representations of the Company.
(a) Organization and Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Utah, and has all requisite corporate power and authority
to own and operate its assets and properties and to carry on its current
or contemplated business.
(b) Power and Authority. All corporate action on the part of the
Company, and its officers, directors and stockholders, necessary for the
authorization, execution and delivery of this Settlement Agreement, the
performance of all obligations of the Company hereunder, have been taken
or will be taken, as required.
(c) Governmental Consents. To the Company’s knowledge, no
consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal,
regional, state or local governmental authority on the part of the
Company is required in connection with the transactions contemplated
hereunder.
4. Further Assurances. The parties hereby agree to
execute and to deliver such additional documents, agreements and
instruments, and take or cause to be taken such additional action as
another party may request in order to more fully give effect to the
settlement reflected in this Settlement Agreement.
5. Release by Hill. In consideration of the below
discharge and release provisions and other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Hill, in his
own behalf and on behalf of his legal and personal representatives,
heirs, executors, administrators, affiliates, partners, parents,
subsidiaries and each of their respective officers, directors,
shareholders, owners, employees, agents, and successors and assigns
(also, the “Releasors”) hereby absolutely, fully,
irrevocably and unconditionally release, relieve, waive, relinquish and
discharge the Company and the Company’s legal and personal
representatives, affiliates, partners, parents, subsidiaries and each of
their respective officers, directors, shareholders, owners, employees,
agents, and successors and assigns (also, the “Releasees”)
from all actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, obligations, promises, variances, trespasses,
damages, costs, judgments, liabilities, extents, executions, claims and
demands whatsoever, in law or equity, whether based on state or federal
statute or common law, known or unknown, fixed or contingent, that it
ever had, now has or hereafter can, shall or may have against any of the
Releasees for, upon or by reason of, the Stock Award Agreement, the
Series D Preferred stock award or all other compensation matters, but
expressly excluding any claims arising from any breach by a Releasee of
its obligations under this Settlement Agreement. The Releasors shall
indemnify and hold the Releasees harmless from any breach by any of the
Releasors of the foregoing discharge and release provisions.
With respect to matters subject to California jurisdiction only, it is a
material condition hereof and it is the intention of the parties in
executing this Settlement Agreement that the same shall provide a full
release for the Releasees and as such this is to be effective as to bar
each and every claim, demand and cause of action as outlined herein
except those that arise from the breach of this Settlement Agreement. In
furtherance of this intention, the Releasors expressly waive any and all
rights and benefits conferred upon them by the provisions of Section
1542 of the California Civil Code which provides: 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.
6. Release by Company. In consideration of the
foregoing discharge and release provisions and other valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company, in its own behalf and on behalf of its legal
and personal representatives, affiliates, partners, parents,
subsidiaries and each of their respective officers, directors,
shareholders, owners, employees, agents, and successors and assigns
(also, the “Releasors”) hereby absolutely, fully,
irrevocably and unconditionally release, relieve, waive, relinquish and
discharge Hill and each of his legal and personal representatives,
affiliates, partners, parents, subsidiaries and each of their respective
officers, directors, shareholders, owners, employees, agents, and
successors and assigns (also, the “Releasees”) from all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, obligations, promises, variances, trespasses,
damages, costs, judgments, liabilities, extents, executions, claims and
demands whatsoever, in law or equity, whether based on state or federal
statute or common law, known or unknown, fixed or contingent, that it
ever had, now has or hereafter can, shall or may have against any of the
Releasees for, upon or by reason of, the Stock Award Agreement, the
Series D Preferred stock award or all other compensation matters, but
expressly excluding any claims arising from any breach by a Releasee of
its obligations under this Settlement Agreement. The Releasors shall
indemnify and hold the Releasees harmless from any breach by any of the
Releasors of the foregoing discharge and release provisions.
With respect to matters subject to California jurisdiction only, it is a
material condition hereof and it is the intention of the parties in
executing this Settlement Agreement that the same shall provide a full
release for the Releasees and as such this is to be effective as to bar
each and every claim, demand and cause of action as outlined herein
except those that arise from the breach of this Settlement Agreement. In
furtherance of this intention, the Releasor expressly waives any and all
rights and benefits conferred upon them by the provisions of Section
1542 of the California Civil Code which provides: 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.
7. Confidentiality.
(a) The parties warrant that the terms and conditions of this Settlement
Agreement (the “Confidential Information”) shall remain
confidential and shall not be disclosed to any entity or person unless
disclosure is: (i) ordered by a court of competent jurisdiction; (ii)
reasonably necessary for the conduct of the business of the Company;
(iii) required by federal or state securities laws; or (iv) necessary
for the enforcement of the Settlement Agreement, in which case the
Settlement Agreement shall be filed with the court and/or judicial body
under seal.
(b) Hill agrees that his obligations under Section 7(a) hereof are
necessary and reasonable in order to protect the Company and its
business, and expressly agree that due to the unique nature of the
Confidential Information, monetary damages would be inadequate to
compensate the Company for any breach of any covenants and agreements
set forth herein. Accordingly, Hill agrees and acknowledges that any
such violation or threatened violation will cause irreparable injury to
the Company and that, in addition to any other remedies that may be
available, in law, in equity or otherwise, the Company shall be entitled
(i) to obtain injunctive relief against the threatened breach of this
Settlement Agreement or the continuation of any such breach, without the
necessity of proving actual damages and, (ii) to be indemnified by Hill
from any loss or harm, including but not limited to attorney’s fees,
arising out of or in connection with any breach or enforcement of Hill’s
obligations under Section 7(a) hereof.
8. Miscellaneous.
(a) Entire Agreement. All agreements, covenants, representations
and warranties, express or implied, oral or written, of the parties
hereto concerning the subject matter hereof are contained herein. No
other agreements, covenants, representations or warranties, express or
implied, oral or written, have been made by any party hereto to any
other party concerning the subject matter hereof. All prior and
contemporaneous conversations, negotiations, possible and alleged
agreements, representations, covenants and warranties concerning the
subject matter hereof are merged herein.
(b) Negotiations between the Parties. The parties acknowledge
that each party has reviewed this Settlement Agreement, that this
Settlement Agreement has been voluntarily negotiated at arms length, and
that each party has had an opportunity to consult with legal counsel.
There shall be no presumption that any ambiguities in this Settlement
Agreement shall be resolved against any party. Any controversy regarding
the construction or interpretation of this Settlement Agreement shall be
decided neutrally, in light of its conciliatory purposes, and without
regard to events of authorship.
(c) Amendments and Waivers. This Settlement Agreement may not be
modified or amended except by an instrument or instruments in writing
signed by the party against whom enforcement of any such modification or
amendment is sought. Any party may, by an instrument in writing, waive
performance or compliance by any other party with respect to any term or
provision of this Settlement Agreement on the part of such other party
to be performed or complied with. The waiver by any party of a breach of
any term or provision of this Settlement Agreement shall not be
construed as a waiver of any subsequent breach.
(d) Notices. Any notice or other communication required or
permitted hereunder shall be in writing and delivered, or mailed by
registered or certified mail, return receipt requested, postage prepaid,
to the addresses first set forth above, or to such other address or
addresses as may hereafter be furnished by one party to the other party
in compliance with the terms hereof. Any party may, by like notice,
change the address to which notice should be given. All such notices and
communications shall be effective when delivered at the designated
addresses or five days after deposited in the mails in conformity with
the provisions hereof.
(e) Assignment. Neither this Settlement Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof
shall be assignable by either party without the prior written consent of
the other party.
(f) Binding Nature. This Settlement Agreement shall be binding
upon and shall inure to the benefit of the signatories and their
respective heirs, executors, administrators, trustees, beneficiaries,
predecessors, successors, affiliated and related entities, officers,
directors, principals, agents, employees, assigns, representatives, and
all persons, firms, associations, and/or corporations connected with
them, including, without limitation, their insurers, sureties and/or
attorneys.
(g) No Prejudicial Value. This Settlement Agreement is without
prejudice or value as precedent and shall not be used in any proceeding
or hearing to create, prove, or interpret the obligations under, or
terms and conditions of, any other agreement.
(h) Warranty Of Authorized Signatories. Each of the signatories
hereto warrants and represents that he is competent and authorized to
enter into this Settlement Agreement on behalf of the party for whom he
purports to sign.
(i) Section and Other Headings. The section and other headings
contained in this Settlement Agreement are for reference purposes only
and shall not be deemed to be a part of this Settlement Agreement or to
affect the meaning or interpretation of this Settlement Agreement.
(j) Execution in Counterparts. This Settlement Agreement may be
executed in counterparts, each of which shall be deemed to be an
original and all of which together shall be deemed to be one and the
same instrument.
(k) Governing Law. This Settlement Agreement shall be governed by
and construed in accordance with the laws of the State of California,
without giving effect to the conflicts of law provisions thereof.
(l) Consent to Jurisdiction. Each of the parties hereto: (i)
consents and submits to the jurisdiction of the Courts of the State of
California and of the Courts of the United States for a judicial
district within the territorial limits of the State of California for
all purposes of this Settlement Agreement, including, without
limitation, any action or proceeding instituted for the enforcement of
any right, remedy, obligation and liability arising under or by reason
of this Settlement Agreement; and (ii) consents and submits to the venue
of such action or proceeding in the City and County of Santa Xxxxxxx (or
such judicial district of a Court of the United States as shall include
the same).
IN WITNESS WHEREOF, the parties have executed and delivered this
Settlement Agreement as of the date first above written.
|
COMMERCE PLANET, INC. |
||
|
By: |
/s/ Xxxx Xxxx |
|
|
Name: |
Xxxx Xxxx |
|
|
Its: |
Chief Executive Officer |
|
|
/s/ Xxxxxxx Xxxx |
||
|
Xxxxxxx Xxxx |
||
5
