SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
This Settlement Agreement and Mutual General Release ("Agreement")
is made as of October 1, 1997 ("Effective Date"), between: Xxxx X. Xxxxxx
("Ostern") and The Eastwoods Group, Inc. ("Eastwoods"), on the one hand,
and Fotoball USA, Inc., a Delaware corporation ("Fotoball") on the other
hand (sometimes referred to individually and collectively as "Party" or
"Parties")
I. RECITALS.
A. This Agreement is made with reference to the following facts:
1. On March 14, 1997, Ostern filed a Complaint for Damages Based
on Breach of Written Contract in San Diego Superior Court, Case No. 708893
("Action"). Ostern alleges in the Action, inter alia, that Fotoball breached
the employment agreement dated January 1, 1996 between Ostern and Fotoball
("Employment Agreement") by failing to review Ostern's base salary for 1997
and for failing to fully pay Ostern's 1996 bonus. A true and correct copy of
the Employment Agreement is attached hereto as Exhibit "A" and is incorporated
herein by this reference.
2. On April 16, 1997, Fotoball answered Ostern's complaint, denied
the allegations in the Action, and raised affirmative defenses to Ostern's
claims.
3. The Parties have reached a settlement of their dispute and desire
to enter into a mutual general release to settle fully and finally any and all
existing and/or potential Claims and Costs as defined herein, except as
expressly reserved.
II. DEFINITIONS.
As used in this Agreement, the following phrases and words have the
following meanings:
A. Associated Entities and Persons.
"Associated Entities and Persons " shall include, to the broadest
extent allowed by law, accountants, administrators, affiliates and partners,
agents, assigns, attorneys, beneficiaries, co-venturers, directors, employees,
former employees, executors, heirs, officers, partners, subcontractors,
predecessor partnerships, predecessors-in-interest, representatives,
shareholders, spouses, subsidiaries, successor partnerships and successors-in
-interest.
B. Claims.
"Claims" shall include all claims, rights, demands, liabilities, and
causes of action (whether asserted, unasserted, known, unknown, contingent,
accrued, inchoate or otherwise) arising out of the Action, the Exclusive
Services Agreement dated December 23, 1993 with Eastwoods, and/or the
Employment Agreement dated January 1, 1996, including without limitation, the
Claims in the Action and any and all Claims for compensation, however derived,
arising out of or related to work performed by Ostern or Eastwoods while an
employee of or consultant to Fotoball regardless of whether such work,
contacts, negotiations or discussions resulted in or will result in any
type of arrangement, contract or compensation of any type to Fotoball
during or at any time after Ostern's employment or Eastwoods' consulting with
Fotoball, including at any time after the Effective Date of this Agreement.
C. Costs.
"Costs" shall include all costs, losses, damages, expenses, attorneys'
fees, other fees, interest, and all other obligations.
III. EMPLOYMENT TERMINATED EFFECTIVE SEPTEMBER 30, 1997.
Ostern shall remain an employee of Fotoball pursuant to the Employment
Agreement to and including September 30, 1997. Effective September 30, 1997,
Ostern's Employment Agreement with Fotoball shall be terminated.
IV. CONSULTING SERVICES.
Effective October 1, 1997 to and including December 31, 1998, Eastwoods,
by whom Ostern is employed, shall render consulting services to Fotoball
pursuant to the Consulting Agreement, a true and correct copy of which is
attached hereto as Exhibit "B."
V. DISMISSAL OF ACTION WITH PREJUDICE.
Within five (5) days of Fotoball's execution of this Agreement, Ostern
shall dismiss the Action with prejudice as to all parties. Ostern shall
serve Fotoball's counsel with a conformed copy of the dismissal.
VI. CONFIDENTIALITY.
The Parties and their Associated Entities agree not to disclose the
terms and conditions of this Agreement to any third person or entity except
in one or more of the following circumstances:
A. Disclosure With Consent.
The Parties may disclose the terms of this Agreement with the prior,
written consent of the other Party.
B. Disclosure When Required By Law
The Parties may discuss the terms of this Agreement when otherwise
required by law.
VII. NON-DISPARAGEMENT; PUBLIC STATEMENT.
The Parties agree that from and after the date of this Agreement, they
will refrain from making disparaging remarks about the other Party, and will
not disparage the other Party, its agents, employees, officers, directors,
partners or other representatives.
Pursuant to Paragraph VI of this Agreement, the Parties agree that in
the event they are contacted at any time by any third party person or entity
enquiring about this Agreement, the Consulting Agreement, the Employment
Agreement, or any aspect of the relationship between Ostern and Fotoball,
past, present or future, the Parties shall respond with the following
statement, only: "Xx. Xxxxxx and Fotoball have mutually agreed to terminate
Xx. Xxxxxx'x employment agreement with Fotoball effective October 1, 1997.
Thereafter, Eastwoods, with whom Xx. Xxxxxx is affiliated, will provide
certain consulting services to Fotoball through December 31, 1998."
VIII. RELEASES, WAIVERS AND INDEMNIFICATIONS.
A. Mutual General Release
Ostern and Eastwoods, for themselves and on behalf of each of their
Associated Entities and Persons, hereby fully and forever release, acquit,
and discharge Fotoball and each of its Associated Entities and Persons, from
any and all Claims and Costs, except as expressly provided in this Agreement.
Fotoball, for itself and on behalf of each of its Associated Entities
and Persons, hereby fully and forever releases, acquits, and discharges
Ostern and Eastwoods and each of their Associated Entities and Persons, from
any and all Claims and Costs except as expressly provided in this Agreement.
B. Waiver of Civil Code Section 1542.
The Parties, for themselves and on behalf of each of their Associated
Entities and Persons, acknowledge that their releases include Claims and Costs
which they do not know or suspect to exist; and hereby waive all rights which
may exist under California Civil Code Section 1542, which provides as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
IX. NO ASSIGNMENT.
Each Party represents and warrants that it has not heretofore assigned
or transferred, or purported to assign or transfer, to any person or entity,
any Claims or Costs herein released, and that it is the sole owner of such
Claims and Costs.
X. COVENANT NOT TO XXX.
Ostern and Eastwoods shall not make, assert or maintain any action,
demand or lawsuit against Fotoball or any of its Associated Entities and
Persons for Claims and Costs released by this Agreement; and Fotoball shall
not make, assert or maintain any action, demand or lawsuit against Ostern and
Eastwoods or any of their Associated Entities and Persons for Claims and Costs
released by this Agreement. No Party shall aid, cause or otherwise encourage
others, and their Associated Entities and Persons, to make, assert or
maintain any action, demand or lawsuit against any other Party.
XI. EXIT INTERVIEW.
Upon execution of this Agreement, Ostern shall participate in an exit
interview. At this exit interview, Ostern shall deliver to Fotoball all
Confidential Information (as defined in the Consulting Agreement) , files,
records, books, locks, keys, samples, combinations, and other property in his
possession or under his control which belongs to Fotoball. Ostern also shall
disclose all persons or entities with whom Ostern has communicated with
respect to Fotoball business during the term of Ostern's employment with
Fotoball up to and including the date of the exit interview, including, but
not limited to, a project with Denny's Restaurants. Ostern, on behalf of
Eastwoods, shall receive the first payment of $50,000 under the Consulting
Agreement after executing this Agreement, the Consulting Agreement, and upon
completion of the exit interview.
XII. PARTIES TO EACH BEAR THEIR OWN COSTS.
The Parties shall each bear their own Costs incurred in connection with
the matters referred to in this Agreement, and in negotiating, preparing and
signing this Agreement.
XIII. ATTORNEYS' FEES.
Should any dispute arise pertaining to this Agreement, the prevailing
Party in any litigation shall be entitled, among other things, to recover
reasonable attorneys' fees and costs incurred in connection with such dispute.
XIV. FURTHER ASSURANCES.
The Parties shall perform any further acts and execute and deliver any
documents which may be reasonably necessary to carry out the intent of this
Agreement.
XV. NO ADMISSION.
The Parties agree and acknowledge that this Agreement is the result of a
compromise and shall never be construed as an admission by any Party or any of
their Associated Entities and Persons of any liability or responsibility
whatsoever, and that each Party, and each of their Associated Entities and
Persons, specifically disclaim any liability or responsibility.
XVI. GOVERNING LAW.
This Agreement is made and entered into at San Diego, California, and
shall be interpreted, enforced and governed by and under the laws of
California.
XVII. INTEGRATION.
This Agreement constitutes the final, complete and exclusive agreement
and understanding between and among the Parties, and supersedes all prior or
contemporaneous written or oral agreements. The Parties each acknowledge that
there are no representations, warranties, agreements, arrangements or
understandings other than as expressly contained in this Agreement.
XVIII. INDEPENDENT ADVICE.
The Parties each acknowledge that they have received independent legal
advice with respect to the advisability of making this Agreement, and
specifically with respect to the meaning and effect of waiving California
Civil Code Section 1542.
XIX. TAX CONSEQUENCES.
The Parties acknowledge and understand that there may be certain tax
consequences connected with entering into this Agreement and by executing this
Agreement, each Party confirms that neither any other Party nor any other
Party's counsel have made any representations in that regard. The Parties
further acknowledge that the separate tax obligations of each Party are the
sole responsibility of that Party.
XX. SEVERABILITY.
If a provision of this Agreement is held to be illegal or invalid by a
court of competent jurisdiction, such provision shall: be rewritten by the
Court to be legal and valid as long as the rewritten provision remains
consistent with the intent of the Parties expressed herein; or deemed to be
severed and deleted. Neither such revision nor such severance and deletion
shall affect the validity of the remaining provisions.
XXI. SUCCESSORS AND ASSIGNS.
This Agreement shall apply to, bind and inure to the benefit of the
Parties and each of their Associated Entities and Persons.
XXII. COUNTERPARTS.
This Agreement may be executed in one or more counterparts all of
which together shall constitute one and the same Agreement.
XXIII. INTERPRETATION.
The Parties have each agreed to the use of the particular language of
the provisions of this Agreement, and any question of doubt ful interpretation
shall not be resolved by any rule of interpretation providing for
interpretation against the Parties who cause an uncertainty to exist or
against the drafter.
XXIV. NO ORAL MODIFICATIONS.
This Agreement may be amended or modified in writing only, signed by
the Parties to be charged or bound by such amendment or modification.
XXV. AUTHORITY
Each of the signatories to this Agreement represents and warrants that
he or she has the right power and authority to execute this Agreement on
behalf of his or her respective entity.
THE FOREGOING IS APPROVED AND AGREED
Dated: 10/10/97 /s/ Xxxx X. Xxxxxx
-------- -----------------------------
Xxxx X. Xxxxxx
THE EASTWOOD GROUP, INC.
Dated: 10/10/97 /s/ Xxxx X. Xxxxxx
-------- -----------------------------
By: Xxxx X. Xxxxxx, President
FOTOBALL USA, INC.
Dated: 10/10/97 /s/ Xxxxxxx Xxxxxx
-------- -----------------------------
By: Xxxxxxx Xxxxxx
APPROVED AS TO FORM AND CONTENT:
XXXXXXX XXXXXX XXXXXXX & XxXXXXX
A Professional Corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Attorneys for Fotoball USA, Inc.
XXXXXXX. XXXXXXXX. XXXXXX & XXXX
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Attorneys for Xxxx X. Xxxxxx
CONSULTING AGREEMENT
This Consulting Agreement is made as of October 1, 1997 ("Effective
Date"), between and among: The Eastwoods Group, Inc. ("Eastwoods") and
Xxxx X. Xxxxxx, on the one hand, and Fotoball USA, Inc., a Delaware
corporation ("Fotoball") on the other hand (sometimes referred to individually
and collectively as "Party" or "Parties").
I. CONSULTING SERVICES.
Effective October 1, 1997 to and including December 31, 1998 ("Term"),
Eastwoods shall render consulting services to Fotoball ("Consulting Services")
pursuant to this Consulting Agreement.
A. Compensation.
So long as Eastwoods and Ostern fully perform the obligations and
covenants of this Consulting Agreement, Fotoball shall make
the following payments to Eastwoods, totalling not more than $350,000:
1. Payments in 1997.
Fotoball shall pay by check to Eastwoods three (3) payments of
$50,000 each on the following dates: October 1, 1997 (or upon completion of
Ostern's exit interview under the Settlement Agreement), November 1, 1997 and
December 1, 1997, for a total payment in 1997 of $150,000.
2. Payments in 1998.
Commencing January 1, 1998, Fotoball shall pay by check to Eastwoods
the sum of $16,666.66 on the first day of each month for twelve (12)
consecutive months, for a total payment in 1998 of $200,000.
The payments shall be made by mail on the first day of the month
addressed to: The Eastwoods Group, 0000 Xxxxxxx Xxxxxx, Xx Xxxxx, Xxxxxxxxxx
00000, or such other address as Fotoball may be notified in writing.
If the first day of the month falls on a weekend or holiday, Fotoball may pay
Ostern on the next available business day.
B. Status of Eastwoods.
Eastwoods is, and shall at all times be, acting and performing as
an independent contractor with respect to Fotoball. Fotoball and Eastwoods
shall not be in the relationship of employer-employee, partners or joint
venturers, and neither party shall have the authority to obligate or bind the
other to any contract, obligation or undertaking whatsoever.
II. NON-COMPETITION/NON-SOLICITATION.
A. Non-Competition.
During the Term of this Consulting Agreement, Eastwoods and Ostern
agree that Eastwoods, and any employee, officer or director of Eastwoods,
including Ostern, or any other person or entity affiliated with Ostern, shall
not directly or indirectly seek to market or sell any "core product
categories" marketed by Fotoball at any time on or before December 31, 1998.
"Core product categories" are sports balls, hockey pucks, miniature tires and
lapel pins.
B. Core Product Referral.
From October ll, 1997 to and including December 31, 1998, in the
event Eastwoods, any employee, officer or director of Eastwoods, including
Ostern, or any other person or entity affiliated with Ostern, is solicited,
contacted or otherwise approached by a person or entity desiring to conduct
core product promotions of sports balls, hockey pucks, miniature tires or
lapel pins marketed by Fotoball at any time on or before December 31, 1998,
Eastwoods or Ostern shall, within 72 hours of such contact refer any and all
such persons or entities directly to Fotoball by letter directed to
Xxxxxxx Xxxxxx.
C. Non-Solicitation.
During the Term of this Consulting Agreement, Eastwoods and
Ostern agree that Eastwoods, and any employee, officer or director of
Eastwoods, including Ostern, and any other person or entity affiliated with
Ostern, shall not, on its own behalf or on behalf of any person or entity,
directly or indirectly hire or solicit the employment of any employee who has
been employed by Fotoball during the Term of this Consulting Agreement.
D. Injunctive Relief.
Ostern, Eastwoods and Fotoball agree that the covenants of
non-competition and non-solicitation are reasonable covenants under the
circumstances, and further agree that if, in the opinion of any court of
competent jurisdiction such covenants are not reasonable in any respect, such
court shall have the right, power and authority to excise and modify such
provision or provisions of these covenants and to enforce the remainder of
these covenants as so amended. Ostern and Eastwoods agree that any breach of
the covenants contained herein would irreparably injure Fotoball.
Accordingly, Ostern and Eastwoods agree that Fotoball, in addition to
pursuing any other remedies it may have in law or in equity, may obtain an
injunction against Ostern and/or Eastwoods from any court having jurisdiction
over the matter, restraining any further violation of this section.
III. CONFIDENTIAL INFORMATION.
A. Eastwoods and Ostern agree that they will not at any time, either
during the Term of this Consulting Agreement or thereafter, use, disclose or
make accessible to any other person, firm, partnership, corporation or any
other entity, any Confidential Information (as defined below) pertaining to
the business of Fotoball except if required to do so by a court of competent
jurisdiction, by any governmental agency having supervisory authority over
the business of Fotoball, or by any administrative body or legislative body
(including a committee thereof) with jurisdiction to order Fotoball to
divulge, disclose or make accessible such information. For purposes of this
Consulting Agreement, "Confidential Information" shall mean nonpublic
information concerning Fotoball's financial data, statistical data, strategic
business plans, product development (or other proprietary product data),
customer and supplier lists, customer and supplier information, information
relating to practices, processes, methods, trade secrets, marketing plans and
other nonpublic, proprietary and confidential information of Fotoball;
provided, however, that Confidential Information shall not include any
information which (i) is known generally to the public other than as a result
of unauthorized disclosure by Eastwoods, (ii) become available to Eastwoods
on a nonconfidential basis from a source other than Fotoball, or (iii) was
available to Eastwoods on a nonconfidential basis prior to its disclosure to
Eastwoods by Fotoball. It is specifically understood and agreed by Eastwoods
and Ostern that any Confidential Information received by Ostern during his
employment with Fotoball is deemed Confidential Information for purposes of
this Consulting Agreement.
B. Upon the termination of the Consulting Services or whenever
requested by Fotoball, Eastwoods and Ostern shall immediately deliver to
Fotoball all Confidential Information, if any, in their possession or under
their control which belongs to Fotoball and was gained after the exit
interview under Section XI of the Settlement Agreeinent between the Parties.
IV. GOVERNING LAW.
This Consulting Agreement is made and entered into at San Diego,
California, and shall be interpreted, enforced and governed by and
under the laws of California.
V. INTEGRATION.
This Consulting Agreement constitutes the final, complete and
exclusive agreement and understanding between and among the Parties,
and supersedes all prior or contemporaneous written or oral agreements.
The Parties each acknowledge that there are no representations, warranties,
agreements, arrangements or understandings other than as expressly contained
in this Consulting Agreement.
VI. INDEPENDENT ADVICE.
The Parties each acknowledge that they have received independent legal
advice with respect to the advisability of entering into this Consulting
Agreement.
VII. SEVERABILITY.
If a provision of this Consulting Agreement is held to be illegal or
invalid by a court of competent jurisdiction, such provision shall: be
rewritten by the Court to be legal and valid as long as the rewritten
provision remains consistent with the intent of the Parties expressed herein;
or deemed to be severed and deleted. Neither such revision nor such
severance and deletion shall affect the validity of the remaining provisions.
VIII. ATTORNEYS' FEES.
Should any dispute arise pertaining to this Consulting Agreement, the
prevailing Party in any litigation shall be entitled, among other things, to
recover reasonable attorneys' fees and costs incurred in connection with such
dispute.
IX. SUCCESSORS AND ASSIGNS.
This Consulting Agreement shall apply to, bind and inure to the benefit
of the Parties and each of their Associated Entities and Persons.
X. INTERPRETATION.
The Parties have each agreed to the use of the particular language of
the provisions of this Consulting Agreement, and any question of doubtful
interpretation shall not be resolved by any rule of interpretation providing
for interpretation against the Parties who cause an uncertainty to exist or
against the drafter.
XI. NO ORAL MODIFICATIONS.
This Consulting Agreement may be amended or modified in writing only,
signed by the Parties to be charged or bound by such amendment or
modification.
XII. AUTHORITY.
Each of the signatories to this Consulting Agreement represents and
warrants that he or she has the right power and authority to execute this
Consulting Agreement on behalf of his or her respective entity.
THE FOREGOING IS APPROVED AND AGREED:
Dated: 10/10/97 /s/ Xxxx X. Xxxxxx
-------- -----------------------------
Xxxx X. Xxxxxx
THE EASTWOOD GROUP, INC.
Dated: 10/10/97 /s/ Xxxx X. Xxxxxx
-------- -----------------------------
By: Xxxx X. Xxxxxx, President
FOTOBALL USA, INC.
Dated: 10/10/97 /s/ Xxxxxxx Xxxxxx
-------- -----------------------------
By: Xxxxxxx Xxxxxx
APPROVED AS TO FORM AND CONTENT:
XXXXXXX XXXXXX XXXXXXX & XxXXXXX
A Professional Corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Attorneys for Fotoball USA, Inc.
XXXXXXX. XXXXXXXX. XXXXXX & XXXX
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Attorneys for Xxxx X. Xxxxxx
