OPTION AND WARRANT CACELLATION AGREEMENT
This
OPTION AND WARRANT CANCELLATION
AGREEMENT (the "Agreement") is dated as of
August 3, 2009 by and between uKarma Corporation, a Nevada corporation, with
headquarters located at 000 X. Xxxxx Xx., Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000 (the "Company"), and Xxxx Xxxxxx
(the "Holder").
WHEREAS:
A. The
Company issued to Holder five (5) million options to purchase the Company’s
common stock pursuant to Holder’s employment agreement with the Company; and
575,000 warrants to purchase the Company’s common stock in connection with
Holder’s investment in the Company.
B. The
Company also has made periodic cash advances to the Holder.
X. Xxxxxx
has a 5 year employment agreement with the Company dated April 13,
2006.
D. Company
wishes to cancel Holder’s options and warrants and Employment Agreement in
exchange for forgiveness of Holder repaying advances.
NOW, THEREFORE, the Company
and the Holder hereby agree as follows:
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(1)
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TERMINATION.
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(a) Upon
execution of this Agreement, the Company and Holder hereby agree that all of
Holder’s five million options and 575,000 warrants shall be terminated as well
as Holder’s Employment Agreement and the total advances to Holder as of the date
hereof will be eliminated.
(b) Company
desires and Holder agrees to continue to be the Company’s CEO unless or until
Holder resigns from such role.
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(2)
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COMPANY
REPRESENTATIONS, WARRANTIES AND
COVENANTS.
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(a) Authorization; Enforcement;
Validity. The Company has the
requisite power and authority to enter into and perform its obligations under
this Agreement and to cancel the options, warrants, employment agreement, and
advances in accordance with the terms hereof. When duly executed and
delivered by the Company, this Agreement shall constitute the legal, valid, and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, or similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.
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(3)
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MISCELLANEOUS.
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(a) Governing Law. All
questions concerning the construction, validity, enforcement, and interpretation
of this Agreement shall be governed by the internal laws of the State of
California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of California.
(b) Counterparts. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.
(c) Headings. The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(d) Severability. If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(e) Entire Agreement;
Amendments. This Agreement shall supersede all other prior
oral or written agreements among Holder, the Company, their affiliates, and
persons acting on their behalf with respect to the matters discussed herein and
therein, and this Agreement, and the instruments referenced herein contain the
entire understanding of the parties with respect to the matters covered herein
and therein. No provision of this Agreement may be amended other than
by an instrument in writing signed by the Company and Holder, and any amendment
to this Agreement made in conformity with the provisions of this Section 4(e)
shall be binding on Holder and the Company. No provision hereof may
be waived other than by an instrument in writing signed by the party against
whom enforcement is sought.
(f) Notices. Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one business day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications
shall be:
If to the
Company:
uKarma
Corporation
000 X.
Xxxxx Xx., Xxxxx 000
Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000
Telephone: (000)
000-0000
If to
Holder, to its address and facsimile number set forth below the Holder’s
signature on the signature page to this Agreement, or to such other address
and/or facsimile number as the recipient party has specified by written notice
given to each other party five (5) days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number, and an image of the first page of such
transmission, or (C) provided by an overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile, or receipt from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
(g) Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of the Notes.
(h) No Third Party
Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.
(i) Further
Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments, and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement.
(j) No Strict
Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.
[Signature
Page Follows]
IN WITNESS WHEREOF, the Holder
and the Company have caused their respective signature to this Agreement to be
duly executed as of the date first written above.
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COMPANY:
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UKARMA
CORPORATION
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By:
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/s/ Xxxx Xxxxxx
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Xxxx
Xxxxxx
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CEO
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By:
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/s/ Xxxx Xxxxxxx
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Xxxx
Xxxxxxx
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Director
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HOLDER:
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By:
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/s/ Xxxx
Xxxxxx
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SCHEDULE
1
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Advances Balance as of August 3,
2010
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| $ | 168,172.93 | |
