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EXHIBIT 10.1
SETTLEMENT AGREEMENT WITH XXXX XXXXXX DATED APRIL 1, 1999
SETTLEMENT AGREEMENT
Agreement made as of the lst day of April, 1999, by and between on
the one hand Xxxx Xxxxxx, residing at 000 Xxxx 00xx Xxxxxx, Xxx. 00X, Xxx Xxxx,
Xxx Xxxx 00000 ("Plaintiff"), and on the other hand (i) Complete Wellness
Centers, Inc. ("CWC"), a corporation organized under the laws of the State of
Delaware, whose principal place of business is 000 Xxxxxxxx Xxxxxx, X.X., Xxxxx
000, Xxxxxxxxxx, X.X. 00000, and (ii) Complete Wellness Weight Management, Inc.,
a corporation organized under the laws of the State of Delaware (collectively
"Defendants"). Plaintiff and Defendants agree as follows:
1. Simultaneously with the execution of this Settlement
Agreement, counsel for Plaintiff and Defendants shall execute the Stipulation
and Order Dismissing Action With Prejudice (in the form attached hereto), which
will be presented within three business days thereafter to the Court (Judge
Xxxxxxx X. Xxxxxx) to be "So Ordered."
2. By not later than one hundred eighty (180) days after the date
of this Settlement Agreement, CWC shall cause to be registered non-restricted,
freely tradeable shares of CWC common stock whose aggregate offering price on
the day the secondary goes to market will equal $80,000. Such shares shall be
issued and registered as follows: "Xxxx Xxxxxx."
3. If, within CWC's sole discretion or otherwise, it registers no
non-restricted, freely tradeable share of CWC common stock within one hundred
eighty days after the date of this Settlement Agreement, CWC may, prior to the
expiration of the foregoing one hundred eighty day period, issue a certified or
bank check in the amount of $80,000, payable to
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"Xxxx Xxxxxx" and "Xxxxxxx Xxxxxxxxxxx, As Attorney For Xxxx Xxxxxx," and
deliver same to Xxxxxxx Xxxxxxxxxxx.
4. If CWC either registers and delivers the stock as provided in
paragraph two above, or pays the $80,000 as provided in paragraph three above,
then Defendants shall have no further obligations to Plaintiff.
5. Contemporaneously with the execution of this Settlement
Agreement, CWC shall sign and deliver (i) the original of the Affidavit of
Confession of Judgment (in the form attached hereto), and (ii) the original of
the Promissory Note (in the form attached hereto) upon which the Affidavit of
Confession of Judgment is based, to Xxxxxxx Xxxxxxxxxxx, who shall hold both
documents in escrow. If the one hundred eighty day period referred to in
paragraphs two and three above expires and CWC has failed to register and
deliver the $80,000 worth of non- restricted, freely tradeable shares of CWC
common stock, or, alternatively, has failed to deliver the certified or bank
check in the amount of $80,000, Plaintiff shall have the right to enter and
enforce immediately the original of the Affidavit of Confession of Judgment,
based upon the original of the Promissory Note. With respect to the Promissory
Note, Defendants agree to waive the notice requirement of presentment and
demand. If CWC registers and delivers the stock or pays the $80,000 pursuant to
paragraphs two and three above, respectively, then Xxxxxxx Xxxxxxxxxxx shall
return the original Affidavit of Confession of Judgment and the original
Promissory Note to Xxxxxxxx, Zulack & Xxxxxxxxxx, LLP within three business days
thereafter.
6. In consideration of the terms of this Settlement Agreement,
Plaintiff and Defendants agree to execute and exchange general releases in the
forms attached hereto. The attorneys for each party shall hold the general
releases in escrow. If CWC registers and delivers the stock or pays the $80,000
pursuant to paragraphs two and three above, respectively, then
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Plaintiff's and Defendants' attorneys shall exchange the general releases they
are holding in escrow within three business days thereafter (or, in the case of
$80,000 payment, after the check is negotiated and clears).
7. This Agreement shall be construed and enforced under the laws
of the State of New York. The Court shall retain jurisdiction with respect to
the enforcement of this Settlement Agreement or any dispute arising therefrom.
Plaintiff and Defendants consent to jurisdiction in the Southern District of New
York, and, in the event that the Southern District of New York refuses to
exercise jurisdiction, in any state court of New York State.
8. Plaintiff and Defendants are entering into this Agreement to
settle the action pending in the United States District Court for the Southern
District of New York captioned "Xxxx Xxxxxx v. Complete Wellness Centers, Inc.
and Complete Wellness Weight Management, Inc.", Index No.98 Civ. 8409. This
Agreement does not constitute and shall not be construed to constitute an
admission of any liability by Defendants in connection with this action. This
Agreement is being entered into by Defendants solely as a compromise of disputed
claims.
9. CWC represents that at the present time it has no intention of
submitting a bankruptcy petition.
10. The terms of this Settlement Agreement, including the amount of
any consideration paid, shall be kept confidential and shall not be directly or
indirectly disclosed by Plaintiff or Defendants or any of their employees,
agents, or attorneys, except by written agreement signed by Plaintiff and
Defendants, Court Order, or as required by law, nor shall any settlement
agreement or release be filed in any court or introduced in evidence in any
action for any purpose whatsoever by anyone, other than in an action between
Plaintiff and Defendants
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hereto to enforce or interpret its terms or to seek modification of this
paragraph, except as otherwise ordered by a court of competent jurisdiction.
IN WITNESS WHEREOF, Plaintiff and Defendants have executed this
Settlement Agreement this 1st day of April 1999.
COMPLETE WELLNESS CENTERS, INC.
BY: /s/ Xxxxxx X. Xxxxxxx Xx.
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An Authorized Officer XXXXXX X. XXXXXXX XX.
COMPLETE WELLNESS WEIGHT
MANAGEMENT, INC.
BY: /s/ Xxxxxx X. Xxxxxxx Xx.
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An Authorized Officer XXXXXX X. XXXXXXX XX.
/s/ Xxxx Xxxxxx
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XXXX XXXXXX
