SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This
Settlement Agreement and Mutual Release (the
“Agreement”) is made effective as of September 3, 2019
(“Effective Date”), by and between INTEGRITY MEDIA, INC
(“INTEGRITY”), on the one hand, and ROBERT ROSITANO JR.
(“ROSITANO”), and FRIENDABLE, INC.
(“FRIENDABLE”) on the other hand. Each of these parties
sometimes are referred to herein collectively as the
“Parties,” and individually as a
“Party.”
RECITALS
A. The
Parties agree to waive the following underlined portion of Evidence
Code Section 622, which reads: “The facts recited in a
written instrument are conclusively presumed to be true as between
the parties thereto, or their successors in interest;
but this
rule does not apply to the recital of a
consideration.” The
effect of such waiver shall be to make the recital of consideration
conclusive between the parties.
B. WHEREAS,
a dispute has arisen and now exists among INTEGRITY, FRIENDABLE and
ROSITANO regarding claims relating to common stock / shares of
FRIENDABLE owned by INTEGRITY and as more specifically alleged in
the civil action known as Integrity Media, Inc. vs.
Friendable, Inc. et al., Orange
County Case No. 30-2016-00867956-CU-CO-CJC, hereafter referred to as the
“Action.”
C. WHEREAS,
the Parties are in a position to raise, and have raised, certain
statutory, common law, and equitable claims and defenses against
one another with respect to the Action;
D. WHEREAS
Defendants FRIENDABLE and ROSITANO deny any liability to INTEGIRTY
in the Action. The parties continue to dispute the allegations and
denials made by the other, and enter into and execute this
Agreement without admitting or conceding the truth or legal
sufficiency of any of the allegations and denials made by the
other, but rather in order to completely resolve their differences
and disputes with each other.
E. WHEREAS,
the Parties and, each of them, desire to settle the Claims to avoid
the cost of further litigation, and have agreed to resolve and
settle definitively the Claims and all controversies and disputes
between them, and any of them, including the principals, officers
and members of any organization, and desire to commit their
settlement to writing.
F. WHEREAS,
the Parties wish to compromise, settle and release the Claims, and
all disputes and other matters between them, including those that
are or could have been alleged in the Action or any other
proceeding, with the exception of any matters expressly reserved
herein, and they enter into this Agreement for that
purpose.
AGREEMENTS AND RELEASES
In
consideration of the mutual promises of this Agreement, each
promise of each Party constituting consideration for all the
promises of the other Party, the sufficiency of which consideration
is hereby acknowledged, the Parties agree:
1. Consideration.
For settlement of any and all outstanding judgments, claims, causes
of action, liabilities, demands, obligations or damages whatsoever,
from the beginning of time to the Effective Date of this Agreement,
that the Parties have against one another including, but not
limited to, their officers, directors, attorneys, partners,
employees, agents, representatives, successors, assigns, and
insurers, whether asserted or unasserted, the Parties agree as
follows:
a.
The
Settlement Sum payable by FRIENDABLE to INTEGRITY is $750,000 plus
$30,000 in costs.
b.
The
Settlement Sum will be paid by FRIENDABLE to INTEGRITY as
follows.
c.
FRIENDABLE
entered into a Debt Restructuring Agreement (“Restructuring
Agreement”) with certain creditors of FRIENDABLE wherein said
creditors agreed to exchange their convertible notes to common
stock in FRIENDABLE. In return, FRIENDABLE agreed to file for a
reverse split of its common stock and, subject to FINRA process and
approval, and to complete all actions necessary to deem the reverse
split effective. The reverse split ratio is 18,000 for 1 (for every
18,000 shares held the shareholder will have 1 share post-split).
The reverse stock split has been completed as of the effective date
this Settlement.
d.
Within
10 days of full execution of this Settlement Agreement, FRIENDABLE
will issue 750,000 shares of FRIENDABLE common stock (the
“Shares”) to Integrity Media, for and in exchange of
INTEGRITY’s 275 preferred shares of FRIENDABLE that it
presently holds.
e.
Until the Shares
are issued, they shall be reserved with FRIENDABLE’s transfer
agent (Nevada Agency and Transfer Company) pursuant to a
“Share Reservation Letter” to be signed by the
FRIENDABLE, INTEGRITY and the Transfer Agent. This “Share
Reservation Letter” will ensure Integrity has access to all
750,000 issuable shares in total, as they will have been
“Reserved” for issuance. The Transfer Agent Agreement
or "Share Reservation Letter" will be in the same form as all other
note holders (per the Restructuring Agreement).
f.
Integrity’s
opinion letter will be provided by Integrity and shall be
acceptable to Friendable’s counsel and its Transfer
Agent.
g.
All shares of
common stock issued to INTEGRITY will have a minimum price of $1.00
per share.
h.
All shares of
common stock issued to INTEGIRTY shall be issued without any
encumbrances or restriction except, as required by law, but shall
be subject to the terms of the Leak Out Agreement attached to and
incorporated within the Restructuring Agreement. Under said
agreements, commencing on the date of the issuance and ending on
July 30, 2020, INTEGRITY agrees that in any given calendar month as
calculated on the last day of each preceding 30-day period,
INTEGRITY may only sell up to 20% of the Shares beneficially owned
by INTEGRITY.
i.
As set forth in the
Restructuring Agreement, the $750,000 settlement sum will be used
for calculation purposes and protection at the reset dates of 120
and 240 days as set forth in the Restructuring Agreement. The
minimum price protection, as stated in the Restructuring Agreement,
has two timetables or “resets” that the shares then
held will be at a minimum of $1.34 per share at Days 120 and
240 and if not at that share price then additional shares
will issue to INTEGRITY under the same terms as set forth in the
Restructure Agreement.
j.
FRIENDABLE and
INTEGRITY will review INTEGRITY’s sale of Friendable’s
common stock, once it is completed. If INTEGIRTY’s sale of
its 750,000 shares does not gross $750,000 based on the share price
when sold, or able to be sold under the terms of the Leak Out
Agreement, then FRIENDABLE will “true up”
INTEGRITY’s position by issuing a new block of common stock
priced per share to balance out the settlement sum of
$750,000.
k.
On or before
December 31, 2019, Friendable must raise a minimum of $400,000.00
in capital through a share offering, as set forth in the
Restructure Agreement.
l.
FRIENDABLE shall
pay $30,000 in costs to INTEGIRTY to recoup Integrity’s legal
costs in this action. Integrity agrees to a payment plan of a
minimum of 5% of each capital raise by FRIENDABLE until the $30,000
is paid in full. However, the entire $30,000 must be paid in full
at or before six months from the date of execution of the
settlement agreement. If the $30,000 is not paid in full within six
months from the date of the settlement agreement, then ROSITANO
will be personally liable for the balance.
2. It
is further agreed by and between the parties and is also
consideration for this Settlement Agreement that:
a.
Friendable shall
comply with all reporting obligations pursuant to Section 12(g) of
the Securities Exchange Act of 1934, including timely filing all of
its periodic reports, and it shall not be classified as a
“shell” under Rule 144 under the Securities Act of
1933, as amended.
b.
ROSITANO shall
maintain his role as CEO of FRIENDABLE and INTEGRITY shall not vote
its shares or otherwise interfere with ROSITANO’s role as
CEO.
c.
INTEGRITY will not
engage in or assist others in engaging in any market manipulation
of Friendable’s stock.
d.
ROSITANO
personally guarantees FRIENDABLE’s performance of this
Settlement Agreement and will execute a personal guarantee in
suitable form as provided by INTEGRITY.
3. The
consideration described herein shall separately and collectively,
as the context requires, be referred to as the “Settlement
Sum.”
4. Reservation
of Jurisdiction Over Settlement. Pursuant to California Code of Civil Procedure
section 664.6, the parties agree to file a stipulation with the
court, prior to dismissal of the Action, for the c ourt to retain
jurisdiction over the parties to enforce the settlement until
performance in full of the terms of the
settlement.
5. Dismissal
of Actions. Subject to the
court’s retention of jurisdiction pursuant to paragraph 4 of
this Agreement, INTEGRITY will dismiss the Action with prejudice,
subject to the terms of this Agreement, upon receipt of the Shares
from the Transfer Agent.
6. Mutual
General Release of All Parties. Effective upon and only upon full
performance of the Settlement Sum, and excepting the rights and
obligations conferred by this Agreement, the Parties on behalf of
herself, himself, or itself and on behalf of his, her or its
companies, successors, heirs, assigns and agents irrevocably and
unconditionally releases, acquits and forever discharges one
another and their past, present and future affiliates,
predecessors, employees, partners, joint ventures, successors,
assigns, attorneys, insurers, sureties, agents, shareholders,
officers, directors, and all persons acting by, through, under, or
in concert with any of them, individually and jointly, from all
charges, complaints, promises, agreements, controversies, suits,
rights, demands, costs, losses, debts, actions, causes of action,
claims, judgments, obligations, damages, liabilities and expenses,
including any claims for attorney fees and costs, of whatsoever
kind and character, known and unknown, suspected and unsuspected,
anticipated and unanticipated, which any Party now has, owns or
holds, or claims to have, own or hold against another Party from
the beginning of time through the date of final execution of this
Agreement (together, “Claims”), including without
limitation all Claims that were or could have been asserted in any
Action or Arbitration or in any special action or proceeding of any
kind.
7. Release
of Unknown or Mistaken Facts and Claims. Each of the Parties to this Agreement
acknowledges that (a) he, she or it may hereafter discover facts in
addition to or different from those which he, she or it now knows
or believes to be true with respect to the Claims as defined
herein, and (b) he, she or it may have sustained or may yet sustain
damages, costs or expenses that are presently unknown and that
relate to the Claims as defined herein. Each of the Parties
acknowledge, however, that he, she or it has negotiated, agreed
upon and entered into this Agreement in light of this situation.
Accordingly, the Parties waive any and all rights that they may
have under any state or federal statute or common law principle
that would otherwise limit the effect of this Agreement to Claims
known or suspected at the date on which the parties hereto execute
this Agreement.
8. It
is further understood and agreed that, as part of the consideration
and as inducement for the execution of this Agreement, the Parties,
with full knowledge and with the specific intent to release all
Claims, DO HEREBY SPECIFICALLY WAIVE THE PROVISIONS OF SECTION 1542
OF THE CALIFORNIA CIVIL CODE, WHICH STATES
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND
THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR OR RELEASED
PARTY.”
9. Although
the present litigation is being settled, INTEGRITY shall expressly
maintain status as a creditor for purposes of Civil Code §
3439, et seq. until full performance of this Settlement Agreement.
Therefore, any transfer made or obligation incurred by ROSITANO
including but not limited to transfers of title in any assets owned
by ROSITANO during the term of the Settlement may be voidable under
Civil Code § 3439.05.
NON-DISCLOSURE AND NON-DISPARAGEMENT
10. Agreement Confidential. The
Parties, and their attorneys, agree to keep the terms, amount, and
facts of this Agreement completely confidential and will not
hereafter disclose any information concerning this Agreement or
settlement in general to anyone except their attorneys,
accountants, certified tax person, and insurance brokers and
carriers, and immediate families (meaning spouses and siblings).
This Agreement may also be disclosed as part of any public filings
or related disclosures by FRIENDABLE. The Parties agree they will
not otherwise disclose the terms or conditions of this Agreement or
settlement and will not repeat or reassert directly or indirectly
any of the allegations advanced in connection with the Claims nor
assist or cause any third party to assert or repeat or reassert
directly or indirectly any of the allegations they have so
advanced, except as expressly provided for in this Agreement.
If either party receives such a
subpoena or order, that party shall, within five (5) calendar days
after receipt thereof, send, by mail and by facsimile a copy
thereof to the other party to this Agreement.
11. Non-Disparagement. The Parties
each agree that they will not in any way, or by the encouragement
of others, disparage the professional, business, commercial or
financial reputation of one another or any of her, his, its, or
their employees, officers, directors, products or services. The
Parties and their attorneys agree not to disclose any of the
documents, or any portion thereof, or any information contained
therein, obtained in connection with the Claims, except as may
otherwise be provided for within this Agreement, including any
public filings or disclosures that FRIENDABLE may make. INTEGRITY
agrees that it will not counsel or
assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims,
charges or complaints by any third party against any Releasee,
including without limitation any class action.
GENERAL TERMS
12. No
Admission Of Liability. This
Agreement is entered into for the purpose of settling disputed
claims and avoiding the expense, inconvenience, and uncertainty of
litigation. Nothing in this Agreement, nor any consideration given
pursuant to it, shall constitute an admission of any act, omission,
liability or damages of any party. The Parties and, each of them,
expressly deny any liability to one another and agree that nothing
about this Agreement, or its contents, constitutes any admission or
concession of any kind by the Parties with respect to any fact,
liability, or fault.
13. No
Assignment Or Transfer. The
Parties, and each of them, warrant that they have not heretofore
assigned or transferred, or purported to assign or transfer, to any
person or entity, in whole or in part, any rights, any claims or
any other matters released herein. The Parties, and each of them,
shall indemnify and defend and hold each of the other Parties
harmless from and against any Claims based upon or arising in
connection with such prior assignment or transfer, or any purported
assignment or transfer, of any claims or other matters released
herein, including claims for attorneys’ fees and all actual
costs of suit.
14. No
Pending Lawsuits, Proceedings Or Actions. The Parties, and each of them, each represent
and warrant that, other than the Action, they do not have any other
lawsuits, Claims, actions or proceedings pending against one
another. The Parties, and each of them, further represent and
warrant that they have not initiated or caused to be initiated any
lawsuits, Claims, actions or proceedings in their own name against
any other Party.
15. Authority.
The Parties represent and warrant that: (a) he, she or it is
authorized to sign this Agreement on behalf of each individual or
entity for which he, she or it signs this Agreement; (b) the
signatures of the individuals on behalf of each entity constitute
all the signatures necessary to bind that entity; (c) he, she or it
is the sole owner of the Claims being released in this Agreement
and has not subrogated, assigned or transferred any right to or
interest in any of those Claims
16. Indemnity.
The Parties shall indemnify, defend and hold one another harmless
from any liability related to the breach or falsity of any
representation or warranty in this Agreement, or any claims of
preferential transfer, including any attorney’s fees and
costs incurred in connection therewith.
17. Binding
Agreement. This Agreement shall
be binding upon and shall inure to the benefit of the Parties
hereto and their respective successors, heirs, assigns, agents, and
all persons acting by, through, under, or in concert with any of
them, individually and jointly. This Agreement may be pled as a
full and complete defense to any action or other proceeding, which
may be instituted, prosecuted or maintained in breach of this
Agreement.
18. Final
Agreement. This Agreement is
the complete and final expression of the agreement of the Parties.
It supersedes and replaces any prior or contemporaneous statements,
promises, understandings and agreements between the Parties, none
of which is binding or enforceable.
19. Amendments
and Modifications. This
Agreement may be amended only by a writing signed by the Party and
his or her attorney charged with the terms of the amendment. The
Parties each agree that they will make no claim at any time that
this Agreement has been orally amended or modified. No oral waiver
of any term shall be effective for any purpose regardless of the
evidence or circumstances.
20. Representation
by Counsel. Each of the Parties
was represented by counsel in the negotiation and execution of this
Agreement, or had the opportunity to consult and be represented by
counsel. The Parties acknowledge and agree that the advice of legal
counsel has been obtained by each of them before signing this
Agreement and the releases herein, or have voluntarily chosen to
forego the advice of any particular legal counsel, and each Party
executes this Agreement containing a general release voluntarily,
and with the intent of extinguishing of any and all Claims between
one another.
14. Further
Actions/Cooperation. Each of
the Parties shall execute and deliver such further documents and
take such further actions as may reasonably be required to
effectuate the terms of this Agreement.
15. Choice of
Law. This Agreement shall be
interpreted, governed and enforced in accordance with the laws of
the State of California. Because the Action was pending in Orange
County at the time this Agreement was entered into, it shall be the
place of enforcement of this Agreement regardless of any change in
any Party’s county of residence or principal place of
business.
16. Waiver.
No failure to enforce or election not to enforce any provision of
this Agreement shall constitute a waiver of such provision or of
the right to enforce compliance with such provision on any other
occasion.
17. Severability.
If any provision of this Agreement is found to be void, voidable,
illegal, invalid, or unenforceable, that provision shall be severed
from the Agreement and the remaining provisions shall remain in
full force and effect and may be enforced to the fullest extent
permitted by law.
18. Attorney’s Fees
and Costs. For any dispute
arising out of this Agreement, the
prevailing party shall be entitled to recover his attorney’s
fees and costs, to be fixed by the Court.
19. Agreement Voluntary
and Clearly Understood / Counterparts. In affixing their signatures to this Agreement,
each of the parties is acknowledging that he or she has read the
Agreement and discussed it with his or her or its attorneys, that
each understands all of its terms, and agrees to be bound by its
provisions. The parties have not entered into the terms of this
settlement under duress or coercion, but upon due reflection. This
Agreement may be signed in counterpart or duplicate copies, and any
signed counterpart or duplicate copy shall be equivalent to a
signed original for all purposes. Signatures delivered by
electronic or facsimile copy are acceptable and shall be deemed the
same as an original signature
SIGNATURES
I
acknowledge that I have carefully read the foregoing Agreement; I
understand completely its contents; I understand the significance
and consequence of signing this Agreement; and I intend to be
legally bound by its terms.
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Dated: September 25,
2019
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/s/ Kurt Divich
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Integrity Media, Inc.
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By: Kurt
Divich
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Its
President
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Approved
as to form by counsel:
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Dated: September 26,
2019
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Tyler San Juan,
Esq.
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I
acknowledge that I have carefully read the foregoing Agreement; I
understand completely its contents; I understand the significance
and consequence of signing this Agreement; and I intend to be
legally bound by its terms.
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Dated: September 16,
2019
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/s/ Robert Rositano
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Friendable, Inc.
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By
Robert Rositano Jr.
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Its
CEO
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Dated: September 16,
2019
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/s/ Robert Rositano
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Robert
Rositano Jr.
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Individually
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Approved
as to form by counsel:
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Dated: September 18,
2019
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Carlos
Martinez
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