Exhibit 10.16
MEMORANDUM OF UNDERSTANDING
RESCISSION OF SHARE PURCHASE AGREEMENT DATED APRIL 14, 2004 BY AND BETWEEN CARE
CONCEPTS I, INC., AND XXXXXX SPORTS, INC., AND XXXX XXXXXX
THIS MEMORANDUM OF UNDERSTANDING ("MEMO) is entered into this 10th day of
November, 2004 between CARE CONCEPTS I, INC., a Delaware corporation (the
"Company"), and XXXX XXXXXX, an individual, ("XXXXXX") and XXXXXX SPORTS, INC.,
a Florida corporation that became a subsidiary of the Company by written
agreement dated April 14, 2004 (the "Subsidiary").
WHEREAS, CARE is developing its interactive media brands primarily in
adult entertainment; and
WHEREAS, XXXXXX desires to reacquire the shares of stock in XXXXXX SPORTS
currently owned by CARE, representing 80% of the total shares authorized;
WHEREAS, the Parties acknowledge that all covenants, promises, obligations
and duties under the Share Purchase Agreement as amended of April 14, 2004 have
not yet been performed, and the contract between them is executory;
WHEREAS, the Parties wish to mutually rescind the executory contract of
April 14, 2004;
THEREFORE, the Parties acknowledge the receipt of good and valuable
consideration, and hereby agree and set forth as follows:
The Parties hereby mutually agree to terminate, rescind, discharge and
negate all duties and obligations, covenants and promises made pursuant to the
Share Purchase Agreement ("Agreement") entered into by the Parties on April 14,
2004, whereby CARE acquired 80% of the authorized shares of XXXXXX SPORTS, and
XXXXXX retained 20% of the authorized shares of XXXXXX SPORTS.
Section 9.1 of the Agreement states that the Parties may terminate:
(a) by mutual consent of Buyer and Seller holding a majority of
the Company Common Shares;
Section 9.2 of the Agreement states that in the event the Agreement is
terminated, the procedure upon termination is:
(a) each party shall redeliver all documents and other material of
any other party relating to the transactions contemplated hereby, whether
obtained before or after the execution hereof, to the party furnishing the same;
(i) CARE shall deliver to XXXXXX all share certificates
representing its 80% ownership interest in XXXXXX SPORTS;
(ii) XXXXXX and XXXXXX SPORTS shall deliver to CARE a
promissory note, attached hereto as Exhibit A, for $405,000 principal plus
accrued interest, for the benefit of the Promissee CARE.
(iii) XXXXXX and XXXXXX SPORTS acknowledge that any failure to
satisfy these promissory note as written as Exhibits A constitutes a
breach by XXXXXX of this rescission, enforceable against him, in
accordance with the remedies available under Florida Corporate Law for
breach of a contract, and enforceability may not be limited by XXXXXX'x or
XXXXXX SPORTS' bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditor rights. The NOTE
HOLDERS may rely on the US Bankruptcy Code, Title 11, Chapter 5,
Subchapter II, Section 523 Exceptions to Discharge, in that XXXXXX and
XXXXXX SPORTS hereby represents his and its financial condition is such
that the NOTE HOLDERS may reasonably rely on XXXXXX and XXXXXX SPORTS
performing their obligations under this Memo.
(b) all information received by any party hereto of the other
party or the Company (other than information which is a matter of public
knowledge or which has heretofore been or is hereafter published in any
publication for public distribution or filed as public information with any
governmental authority) shall not at any time be used for the advantage of, or
disclosed to third parties by, such party to the detriment of the party
furnishing such information.
The Parties further agree that no party hereto shall have any further liability
or obligation to any other party under or in connection with this Agreement
except:
XXXXXX, his heirs and assigns, and XXXXXX SPORTS and its assigns, hereby
indemnify, defend and hold harmless, release, remise, acquit, satisfy and
forever discharge CARE, its subsidiaries, agents, officers, directors,
employees, representatives, personal representatives, successors, heirs or
assigns, from any and all claims, counterclaims, cross claims or other causes of
action arising out of or related to any ownership interest CARE has or ever had
in XXXXXX SPORTS by any Party whatsoever, including past, present and future
investors and employees of XXXXXX SPORTS, together with any claim or demand
which XXXXXX ever had, now has, or may have against the others or which could
have been asserted, upon or by reason of any matter, cause or thing whatsoever,
specifically limited to any claim, action, cause of action, defense, affirmative
defense, counter-claim and cross claim which was or could have been asserted by
any and all Parties, from the beginning of the world to the day of these
presents and forever in the future.
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Memorandum the date first hereinabove set forth.
CARE CONCEPTS I, INC.:
BY: /s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX, CEO
XXXXXX SPORTS, INC.:
By: /s/ Xxxx Xxxxxx
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XXXX XXXXXX
XXXX XXXXXX, AN INDIVIDUAL
By: /s/ Xxxx Xxxxxx
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XXXX XXXXXX
