Exhibit
10.1
SETTLEMENT AGREEMENT
This Settlement Agreement
(“Agreement”) is made and entered into this 20
th day of March, 2007 by and between Flash Motors, Inc.,
an Arizona corporation (“Flash”) and Colfax Financial
Corporation, a Utah corporation (“Colfax’).
RECITALS:
A-Flash and Colfax entered into an Asset
Purchase Agreement (“Purchase Agreement”) on the 14
th day of November, 2006, wherein Colfax purchased
substantially all the assets of Flash except for the Excluded
Assets provided for in Paragraph 1.2 of the Purchase Agreement.
A copy of said Purchase Agreement is attached hereto as
Exhibit “A” and made a part hereof by
reference.
B-Flash and Colfax entered into a
Consultant and Non-Compete Agreement (“Consulting
Agreement”) on the 14 th day of November, 2006,
wherein Flash agreed to provide the services of Harry March
(“March”) to serve as a consultant to Colfax for a term
of five (5) years and further agreed that during said term not to,
among other things,
(a)
engage in any business competitive with
the business of Colfax;
(b)
provide any service to another company,
individual, directly or indirectly, that Colfax did not approve;
and
(c)
engage in any business activities that
materially interfere with Flash’s or March’s consulting
obligations, subject to exceptions provided for in the Consulting
Agreement.
A copy of said Consulting Agreement is
attached hereto as Exhibit “B” and made a part hereof
by reference.
C-Pursuant to the Consulting Agreement
Colfax agreed to pay to Flash the sum of One Million Four Hundred
Thousand and no/100 Dollars ($1,400,000). Said sum to be
evidenced by two promissory notes payable as follows:
(d)
a Four Hundred Thousand and no/100
Dollars Note with interest thereon from the 14 th
day of November, 2006 at a rate equal to twenty (20%)
percent per annum payable interest only for a period of sixty (60)
months or in the alternative payable in full at any time with
thirty (30) days written notice. A copy of said note is
attached hereto as Exhibit “C” and made a part hereof
by reference.
(e)
a One Million and no/100 Dollars Note
with interest thereon from the 14 th day of November,
2006 at a rate equal to ten (10%) percent per annum payable
interest only for a period of sixty (60) months or in the
alternative payable at any time after twenty-four (24) months with
thirty (30) days written notice of demand for payment. A copy
of said note is attached hereto as Exhibit “D” and made
a part hereof by reference.
D-Subsequent to entering into the
Purchase Agreement and the Consulting Agreement Flash and Colfax
have consummated the Purchase Agreement by Colfax conveying to
Flash the sum of One Hundred Thousand and no/100 Dollars as
provided therein and Flash has performed all its requirements under
such Purchase Agreement.
E-Flash, pursuant to the Consulting
Agreement, has undertaken through the services of March to perform
its obligations under said Consulting Agreement.
F-Colfax has complied with the terms of
the Purchase Agreement and has made the interest payments provided
for in the Promissory Notes,
G-Notwithstanding the fact that both
Flash and Colfax have complied with the terms of their Agreements,
the parties have discovered that they have irreconcilable
differences as to how the business involved should be operated and
based thereon have come to the conclusion that the existing
situation is unsatisfactory to each of them.
H-Based upon such difference, Flash and
Colfax entered into negotiations and determined that substantial
revisions in the agreed upon arrangements were
necessary.
NOW THEREFORE for and in consideration of
the mutual covenants herein contained and other valuable
consideration the receipt and sufficiency of which are hereby
acknowledged by the parties it is agreed as follows:
1. Recitals . The
Recitals set forth above are herein incorporated into the body of
this Settlement Agreement as if set forth in full in the
body.
2. Agreement to Cancel and
Replace . The Consulting Agreement provided for in
Exhibit “B” shall be cancelled and replaced with a
NON-SOLICITATION AGREEMENT covering existing accounts and customers
and the prospects set forth in Exhibit “E”. A
copy of the NON-SOLICITATION AGREEMENT is attached hereto as
Exhibit “F” and made a part hereof by
reference.
3. Promissory Notes .
The Promissory Notes described herein and in Exhibits
“C” and “D” shall be deemed paid by
entering into a new Promissory Note in the principal am
