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EXHIBIT 10.3
SETTLEMENT AGREEMENT
AND GENERAL RELEASE
THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE
(“Agreement”) is entered into by and between
Shearson
Foundation, European American Investments, October Funds, Cohiba
Partners, Strong Partners and Rancho Malibu
(“Investors”) and Who’s
Your Daddy, Inc . (“WYD”), a Nevada corporation
and is effective as of November 13, 2007.
R E C I T
A L S
WHEREAS , the Investors have made cash payments to, or on
behalf of, WYD totaling $1,242,877 through the date of this
agreement and intend to make an additional $95,000 in cash payments
to WYD prior to May 1, 2008;
WHEREAS, WYD has not been able to close on a financing or
otherwise obtain cash to repay these advances;
WHEREAS, the parties and their attorneys, if so chosen, have
had a sufficient opportunity to evaluate the merits of their
respective positions; and
WHEREAS, in order to avoid the time, expense and uncertainty
of litigation in this matter, the parties have agreed on November
13, 2007 to settle their differences on the terms and in the manner
set forth in this Agreement.
NOW, THEREFORE , in consideration of the mutual covenants
and agreements contained herein, and for other good and valuable
consideration, the adequacy of which is acknowledged by the parties
hereto, and intending to be legally bound, the parties agree as
follows:
S E T T L
E M E N T
1. Settlement
Terms .
a. WYD
shall issue to the Investors 1,460,354 (One Million Four
Hundred Sixty Thousand and Three Hundred and Fifty Four)
shares of Common Stock (the “Settlement
Shares”). WYD and the Investors agree that
the first 83,333 of these shares are being issued under an
option agreement dated June 22, 2007 at a value of $3.00 per
share and the remaining 1,377,021 shares are being issued at
$0.79 per share, which is average closing price
for WYD’s common stock for thirty days prior
to the date of this Agreement.
b.
Certificates
for the Settlement Shares shall be delivered no later than December
31, 2007.
c.
In
return, the Investors shall consider the issuance to them of these
Settlement Shares as full payment for any and all cash advances and
financing transactions made to the Company through the date of this
Agreement.
d.
The Investors agree to advance WYD $95,000 prior to May 1, 2008 in
exchange for 120,259 shares issued and included in the 1,460,354
shares set forth in a. above. In the event that any
portion of this $95,000 has not been paid to WYD by that date, the
Investors agree that a pro rata number of shares equivalent to the
difference between cash paid to WYD and $95,000 shall be cancelled
at a rate of 1.27 shares for each dollar that the advances made by
the Investors is less than $95,000.
2. General Release by
the Parties of All Known and Unknown Claims .
The parties hereto do
hereby jointly and severally irrevocably and unconditionally
release and forever discharge each other, their agents,
directors, officers, employees, business partners,
representatives, attorneys, insurers,
affiliates/subsidiaries, parent corporations, sister
corporations, (and agents, directors, officers, employees,
representatives, attorneys of such affiliates/subsidiaries
parent corporations, sister corporations), and their
predecessors, successors, heirs, executors, administrators,
and assigns, and all persons and entities acting by, through,
under or in concert with any of them (hereinafter
collectively the "Releasees"), or any of them, from any of
all actions, causes of action, suits, debts, charges,
complaints, claims, liabilities, obligations, promises,
agreements, controversies, damages and expenses (including
attorneys' fees and costs actually incurred), of any nature
whatsoever, in law or equity, known or unknown, suspected or
unsuspected, which either party ever had, now has, or may now
have against each other by reason of any act, event, or
omission concerning any matter or thing, including, without
limiting the generality of the foregoing, any matters claimed
or alleged relating to the account of Who’s Your Daddy,
Inc., or which could have been raised relating to the same,
or which may be based upon or connected with the
same. Notwithstanding anything herein set forth to
the contrary, no provision of this Agreement shall constitute
or be construed as a release or discharge of any obligations,
claims or causes of action hereafter arising out of the
breach of any of the terms, provisions or conditions of this
Agreement. Notwithstanding the above, this General Release
shall have no force or effect should the Settlement Amount
not clear or should Plaintiff be required, for any reason, to
repay the Settlement Amount.
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