Exhibit Q (BC403442)

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SETTLEMENT AGREEMENT AND MUTUAL RELEASE
Settlement Agreement (the “Agreement”), dated as of December __, 2007, by and
between Max Ely Ltd. d/b/a/ Sola (“Sola”), having an address at 45 East 20th Street, 2nd Floor,
New York, NY 10003, Catherine Michiels (“Michiels”) and Catherine Michiels Fine Custom
Jewelry, Inc. (“CMFCJ”) (CMFCJ and Michiels are collectively referred to herein as the
“Debtors”) both having an address at 1823 Burnell Drive, Los Angeles, CA 90065.
WHEREAS, on or about October 25, 2005, Sola and Michiels entered into a sales
commission agreement (the “Commission Agreement”) whereby Sola was engaged to act as an
independent commission-based sales representative to market and sell Michiels’ jewelry in
consideration for the full and timely payment to Sola of the commissions set forth in the
Commission Agreement; and
WHEREAS, on or about October 23, 2006, Michiels formed the corporate entity
CMFCJ and agreed that CMFCJ would jointly and severally assume Michiels’ obligations to
Sola pursuant to the Commission Agreement; and
WHEREAS, pursuant to the terms of the Commission Agreement, Debtors are
obligated to pay commissions to Sola in an amount equal to Thirty Four Thousand One Hundred
Twenty Eight Dollars and Fifty Three Cents ($34,128.53) (the “Commissions”); and
WHEREAS, pursuant to the terms of the Commission Agreement, Debtors are
obligated to pay Sola’s attorneys’ fees in an amount equal to Four Thousand One Hundred
Seventeen Dollars and Fifty Cents ($4,117.50) (the “Attorneys’ Fees”); and
WHEREAS, despite repeated demand by Sola, Debtors have failed to make
payment of the Commissions and Attorneys’ Fees; and
WHEREAS, Sola commenced an action against the Debtors in the Supreme
Court of New York, County of New York, captioned Max Ely Ltd. d/b/a Sola v. Catherine
Michiels, et al., Index No. 603411/07 (the “Action”) seeking payment of the Commissions and
Attorneys’ Fees; and
WHEREAS, the parties to this Agreement desire to amicably and in good faith
resolve without further resort to legal process all claims that have been asserted or might have
been asserted in the Action; and
WHEREAS, Sola and the Debtors (each separately a “Party” and collectively
“Parties”) desire, by this Agreement to settle fully all differences, disputes and claims that may
exist between them; and
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained and for good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Parties hereby agree as follows:
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1. Termination of Prior Agreements, Discussions and Understandings.
The Parties acknowledge and agree that this Agreement sets forth the entire agreement
and understanding between the Parties with respect to the subject matter hereof and merges and
supercedes all prior discussions, representations, agreements, contracts, memoranda and
understandings with respect to such subject matter. The Parties acknowledge that any and all
prior agreements between them are hereby cancelled and/or rendered void and the Parties shall
have no further obligations to each other thereunder.
2. Non-Dischargeable Obligation. The Debtors expressly acknowledge the
validity of their obligation to pay Sola the Commissions and Attorneys’ Fees which, in the
aggregate, amount to Thirty Eight Thousand Two Hundred Forty Six Dollars and Three Cents
($38,246.03) (the “Judgment Amount”). The Debtors also expressly acknowledge and agree that
the Judgment Amount represents a non-dischargeable obligation that shall not be discharged or
waived by any form of bankruptcy proceeding.
3. Settlement Payment. The Debtors hereby agree to pay the Judgment
Amount to Sola as follows:
a. Upon execution hereof, Debtors shall pay the sum of One Thousand
Six Hundred Dollars ($1,600) (the “Initial Payment”) to the order of “Max Ely Ltd.” in the form
of a certified, cashier’s or bank check.
b. Commencing on January 1, 2008 and continuing through and
including December 1, 2008, Debtors shall make twelve (12) consecutive and successive
monthly payments each of which shall be (i) in an amount not less than One Thousand Six
Hundred Dollars ($1,600), (ii) payable to the order of “Max Ely Ltd.,” in the form of a certified,
cashier’s or bank check, (iii) delivered to Max Ely Ltd d/b/a Sola, 45 East 20th Street, 2nd Floor,
New York, NY 10003, and (iv) received by Sola on or before the 15th day of each respective
month. In the event any of the foregoing payments are not received by Sola by the fifteenth (15th)
day of each respective month, said payment shall be deemed untimely and shall automatically
constitute an event of default without the need for Sola to deliver any further or additional
notices to Debtors.
c. The balance of the Judgment Amount then outstanding, due and owing
to Sola, after giving effect to all of the payments made by Debtors pursuant to Subparagraph 3(a)
and 3(b) above (the ”Balance”) shall be fully paid by Debtors to Sola on or before December 31,
2008 (the “Final Payment Date”).
4. No Admissions. This Agreement does not constitute an admission by the
Parties. This Agreement may not be introduced in any action or proceeding by anyone for any
purpose except to evidence its terms.
5. Release by Sola. Provided that the Debtors have made timely payment of
all amounts to be paid under this Agreement pursuant to the terms set forth herein, then, in
consideration thereof and as a condition precedent thereto, upon the Debtors’ full satisfaction of
the Judgment Amount, Sola shall irrevocably and unconditionally release, waive and discharge
Debtors, including their respective heirs, executors, administrators, affiliates, successors, assigns,
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directors, officers, employees, shareholders, representatives and agents, from any and all actions,
causes of action, claims, complaints, demands, damages, rights, remedies and liabilities of
whatsoever kind or character, in law or equity, suspected or unsuspected, past or present, known
or unknown, that Sola has ever had, may now have, or may later assert against Debtors, from the
beginning of time to the effective date of this Agreement, including specifically any and all
claims and causes of action arising from the Commission Agreement.
6. Release by Debtors. In consideration of this Agreement and the good and
valuable consideration provided therein, upon execution hereof, Debtors hereby irrevocably and
unconditionally release, waive and forever discharge Sola, including its respective heirs,
executors, administrators, affiliates, successors, assigns, directors, officers, employees,
shareholders, representatives and agents, from any and all actions, causes of action, claims,
complaints, demands, damages, rights, remedies and liabilities of whatsoever kind or character,
in law or equity, suspected or unsuspected, past or present, known or unknown, that Debtors ever
had, may now have, or may later assert against Sola, from the beginning of time to the effective
date of this Agreement, including specifically any and all claims and causes of action arising
from the Commission Agreement.
7. Confidentiality. The Parties expressly agree that the existence of this
Agreement and all of its terms and conditions and the compromise negotiations which concluded
with this Agreement shall be kept and remain strictly confidential except to the extent that
disclosure is expressly required by law or regulation of any governmental authority or in
connection with disclosure to the Parties’ attorneys, financial and/or tax advisors and immediate
family, provided, however, that the Parties’ attorneys and immediate family shall agree to keep
such information in the strictest confidence. The provisions of this Paragraph are material terms
of this Agreement and shall survive its expiration or termination.
8. Non-Disparagement/Reference. The Parties agree that they will not,
directly or indirectly, disparage or criticize each other or issue any communication, written or
otherwise, or take any other action or engage in any other conduct, nor cause or permit their
attorneys or other representatives to do so on their behalf, that is intended to be or could
reasonably be expected to be inconsistent with or injurious to the interests of the other. The
provisions of this Paragraph are material terms of this Agreement and shall survive its expiration
or termination. Efforts any Party to enforce this Agreement shall not thereby be deemed a
breach of this Paragraph.
9. Remedies for Breach.
a. Contemporaneously with the execution of this Agreement, Debtors
shall each execute and deliver to Oved & Oved LLP (“Oved”), affidavits of confession of
judgment (the “Affidavits of Confession of Judgment”) in the forms annexed hereto as Exhibit A
and Exhibit B, respectively, and made a material part hereof. The executed Affidavits of
Confession of Judgment shall be held in escrow by Oved and shall be used, as set forth herein, to
enforce the provisions of Paragraph 3 of this Agreement.
b. In the event of a default by Debtors of any of the terms and conditions
of Paragraph 3 of the Agreement, Sola shall have the right, without further notice of any kind to
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Debtors, to cause the Affidavits of Confession of Judgment to be entered against Debtors for the
full Judgment Amount, notwithstanding any prior payments made by Debtors pursuant to this
Agreement.
c. The Parties hereby agree that the Judgment Amount is an appropriate
sum of liquidated damages (the “Liquidated Damages”) in the event that Sola is forced to
enforce a judgment following Debtors’ default under this Agreement, notwithstanding any prior
payments which may have been made by Debtors pursuant to this Agreement. Sola’s costs and
attorneys’ fees incurred in any attempts to enforce this Agreement are not included in the
Liquidated Damages and shall accrue up until the time of the entry of judgment and be added
thereto.
d. Provided that Debtors have made timely payment of all amounts to be
paid under this Agreement pursuant to the terms set forth herein, then, in consideration thereof
and as a condition precedent thereto, within ten (10) business days after the Debtors’ full
satisfaction of the Judgment Amount, Oved shall release from escrow and return the executed
Affidavits of Confession of Judgment to the Debtors at the address provided above, or at such
other address as Debtors may hereafter provide to Sola in writing.
10. Stipulation of Discontinuance. Contemporaneously with the execution
of this Agreement, Oved shall execute and file with the Clerk of the Supreme Court of the State
of New York, County of New York a notice discontinuing the Action, in the form annexed
hereto as Exhibit C and made a material part hereof.
11. Escrow Provision.
a. The Parties hereby appoint Oved as the escrow agent in accordance
with the terms and conditions contained herein and Oved hereby accepts such appointment.
b. Oved shall not be bound in any way by any agreement or contract
between the Parties to which Oved is not a party (whether or not Oved has knowledge thereof)
and has undertaken to perform only such duties as are expressly set forth herein.
c. Oved shall not be held liable in any event if it accepts as accurate and
acts in good faith upon the contents of any notice received by it from the Parties, delivered to it
in accordance with the terms of this Agreement.
d. Oved shall not be liable for any exercise of judgment in the
performance of its duties hereunder but only for its own gross negligence, willful misfeasance or
fraud and the duties of Oved shall be determined solely by the express provisions of this
Agreement.
e. The Parties to this Agreement acknowledge and agree that such duties
of Oved, in its capacity as escrow agent, are purely ministerial in nature, and that accordingly, no
Party shall make any claim, or raise as a defense, the assertion that Oved should, in any manner,
be disqualified, prevented or prohibited from representing Sola in any dispute among the Parties
with respect to this Agreement or otherwise by reason of its service as escrow agent of this
Agreement.
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f. Oved may act or refrain from acting in respect to any matter referred
to in this Agreement in full reliance upon and with the advice of counsel which may be selected
by it (including any member of its own firm) and shall be fully protected in so acting or
refraining from action upon the advice of such counsel.
g. In the event of any litigation involving Oved in its capacity as escrow
agent hereunder, the Parties shall be jointly and severally liable to Oved for all expenses incurred
in connection therewith, including court costs and reasonable counsel fees, which counsel may
include Oved, except for expenses incurred in respect of litigation arising out of willful
misconduct or gross negligence on the part of Oved.
12. Attorneys’ Fees. If any Party brings any proceeding to enforce or
construe this Agreement or any portion thereof, the prevailing party shall be awarded all of its
costs, expenses, expert witness fees, and attorneys’ fees in connection with such enforcement
action.
13. Miscellaneous Provisions.
a. No oral understanding, statements, promises or inducements contrary
to the terms of this Agreement exist. This Agreement cannot be changed or terminated orally.
b. If any court of competent jurisdiction concludes that any part, term or
provision of this Agreement is illegal, unenforceable or in conflict with any state, federal or any
other applicable law, it is the Parties intention that the Agreement be deemed to be modified so
that its purpose can lawfully be effectuated and, as so modified, the balance of this Agreement
shall be enforceable and remain in full force and effect.
c. This Agreement shall extend to, be binding upon, and inure to the
benefit of the Parties and their respective successors, heirs and assigns.
d. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. Any action or proceeding between the Parties shall be
commenced only in the civil, state or Federal Courts located in the State, City and County of
New York, and all Parties hereby submit to the exclusive jurisdiction of the said Courts.
e. This Agreement may be executed in any number of counterparts each
of which when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement.
f. Each of the Parties hereto has joined in and contributed to drafting this
Agreement and each of the Parties hereby agree that there shall be no presumption favoring any
of the parties based upon draftsmanship.
g. No waiver of any breach of any term or provision of this Agreement
shall be construed to be, nor shall be, a waiver of any other breach of this Agreement. No waiver
shall be binding unless in writing and signed by the party waiving the breach.
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h. The Parties hereto warrant and represent to each other that they are
legally authorized and entitled to settle and release every claim, right, act, damage, debt, demand,
liability, accounting, reckoning, obligation, cost, right or action, claim for relief, or cause of
action referred to and released herein, and to give a valid full and final acquittance therefor, to
make the payments provided for herein, and to enter into this Agreement. The Parties further
warrant and represent to one another that this Agreement has been duly authorized, executed and
delivered by such party and constitutes legal, valid, binding and enforceable obligations of such
party.
14. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient only if in writing and if sent by registered or
certified mail to the following:
a. If to Sola:
Sola Showroom
45 E 20th Street 2nd Floor
New York, NY 10003
Attn: Ms. Lisa Natt-Irom
With a copy sent simultaneously and in like manner to:
Oved & Oved LLP
101 Avenue of the Americas, 15th Floor
New York, NY 10013
Attn: Terrence A. Oved, Esq.
b. Michiels and Catherine Michiels Fine Custom Jewelry, Inc.:
1823 Burnell Drive
Los Angeles, CA 90065
Attn: Catherine Michiels
15. Costs, etc. The Parties shall be solely responsible for their respective
attorneys’ fees and other related costs associated with this Agreement.
16. Acknowledgments.
a. The Parties hereto acknowledge and represent that the have read and
fully understand this Agreement, that they are voluntarily entering into this Agreement including
a general release of their claims against the Parties, and that they have consulted with their legal
counsel before doing so.
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IN WITNESS WHEREOF, the Parties have hereunto set their hand and
executed this Agreement as of the day and year first set above.
________________________________________ December ___, 2007
Catherine Michiels Date of Execution
Catherine Michiels Fine Custom Jewelry, Inc.
________________________________________ December ___, 2007
Catherine Michiels, President Date of Execution
Max Ely Ltd. d/b/a Sola
________________________________________ December ___, 2007
Elisa Natt-Irom, President Date of Execution
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IN PRESENCE OF:
STATE OF NEW YORK
COUNTY OF ss:
On November __, 2007, before me personally came Catherine Michiels, known to me to be the individual
described in, and who executed the foregoing SETTLEMENT AGREEMENT AND RELEASE and duly
acknowledged to me that she executed the same in her acting corporate capacity as an authorized agent for Catherine
Michiels Fine Custom Jewelry, Inc.
NOTARY PUBLIC
STATE OF NEW YORK
COUNTY OF ss:
On November __, 2007, before me personally came Catherine Michiels, known to me to be the individual
described in, and who executed the foregoing SETTLEMENT AGREEMENT AND RELEASE and duly
acknowledged to me that she executed the same
NOTARY PUBLIC
STATE OF NEW YORK
COUNTY OF ss:
On November __ 2007, before me personally came Elisa Natt-Irom, known to me to be the individual
described in, and who executed the foregoing SETTLEMENT AGREEMENT AND RELEASE and duly
acknowledged to me that she executed the same in her acting corporate capacity as an authorized agent for Max Ely
Ltd. d/b/a Sola.
NOTARY PUBLIC
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EXHIBIT A
CONFESSION OF JUDGMENT
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EXHIBIT B
CONFESSION OF JUDGMENT
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EXHIBIT C
STIPULATION OF DISCONTINUANCE