Exhibit 10.1 

 

 

SETTLEMENT AGREEMENT

 

This SETTLEMENT AGREEMENT (the “Agreement”), dated as of December 24, 2013, is
by and between Socket Mobile, Inc. (the “Company”), and Hudson Bay Master Fund,
Ltd. (the “Claimant”).

RECITALS

A. The Company and the Claimant entered into an Amended and Restated Securities
Purchase Agreement dated November 19, 2010 (the “Securities Purchase
Agreement”).

B Pursuant to the Securities Purchase Agreement, the Company issued to the
Claimant a Warrant (as defined in the Securities Purchase Agreement) to purchase
shares of Common Stock (as defined below).

C. A dispute arose between the Claimant and the Company with respect to whether
the Company (i) engaged in transactions that triggered anti-dilution provision
in the Securities Purchase Agreement and Warrant, and (ii) if so, the new
Exercise Price (as defined in the Warrant) of the Warrant. In connection with
this dispute, on October 9, 2013, Claimant filed a lawsuit in the Northern
District of Illinois (the “Litigation”).

 

D. The Company and the Claimant desire to settle all disputes and claims between
them in accordance with the terms of this Agreement.

 

AGREEMENTS

NOW THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Claimant and the
Company hereby agree as follows:

1.                  Company Release. The Company, on its own behalf and its
officers, directors, affiliates, investors and other related Persons (as defined
below) (the Company and all of the foregoing Persons referred to above in this
Section 1 are referred to herein as “Company Releasors”), hereby irrevocably,
fully and unconditionally releases and forever discharges Claimant, its general
partner, and each of the present and former directors, officers, shareholders,
members, managers, investment managers (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement),
investment advisers, partners, employees, agents, advisors and representatives
(Claimant and all such other Persons referred to above are referred to herein
collectively as the “Claimant Releasees”) from all claims, actions, obligations,
causes of action, suits, losses, omissions, damages, contingencies, judgments,
fines, penalties, charges, costs (including, without limitation, court costs,
reasonable attorneys’ fees and costs of defense and investigation), expenses and
liabilities, of every name and nature, whether known or unknown, absolute or
contingent, suspected or unsuspected, matured or unmatured, both at law and in
equity, (collectively, the “Claims”) which any Company Releasor may now own,
hold, have or claim to have against any of the Claimant Releasees for, upon, or
by reason of any nature, cause, action or inaction or thing whatsoever which
arises from the beginning of the world to the date and time of this Agreement
relating to the Company (collectively, the “Company Claims”). The Company, on
behalf of itself and its successors, assigns and other legal representatives and
all of the other Company Releasors, covenants that it will not sue any of the
Claimant Releasees on the basis of or related to or in connection with any
Company Claim herein released and discharged, as provided in this paragraph.
Notwithstanding the foregoing, nothing contained in this paragraph shall in any
way release or relieve any obligations of Claimant under (i) any of the 2010
Transaction Documents (as defined below) or (ii) this Agreement. “Person” means
an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and a
government or any department or agency thereof.

 

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2.                  Claimant Release. Claimant, on its own behalf and on behalf
of its general partner and each of the present and former directors, officers,
shareholders, members, managers, investment managers (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement), investment advisers, partners, employees, agents, advisors and
representatives, and other related Persons, (Claimant and all of the foregoing
Persons referred to above in this Section 2 are referred to herein as “Claimant
Releasors”), hereby irrevocably, fully and unconditionally releases and forever
discharges the Company and its present and former officers, directors,
shareholders, members, managers, partners, employees, agents, advisors,
representatives, affiliates, investors, and other related Persons (collectively
the “Company Releasees”) from all claims, actions, obligations, causes of
action, suits, losses, omissions, damages, contingencies, judgments, fines,
penalties, charges, costs (including, without limitation, court costs,
reasonable attorneys’ fees and costs of defense and investigation), expenses and
liabilities, of every name and nature, whether known or unknown, absolute or
contingent, suspected or unsuspected, matured or unmatured, which the Claimant
Releasors may now own, hold, have or claim to have against any of the Company
Releasees for, upon, or by reason of any nature, cause, action or inaction or
thing whatsoever which arises from the beginning of the world to the date and
time of this Agreement relating to the Company (collectively, the “Claimant
Claims”). Claimant on behalf of itself and its successors, assigns and other
legal representatives and the other Claimant Releasors, covenants that it will
not sue any of the Company Releasees on the basis of or related to or in
connection with any of the Claimant Claims herein released and discharged, as
provided in this paragraph. Notwithstanding the foregoing, nothing contained in
this paragraph shall in any way release or relieve any obligations of the
Company under (i) any of the 2010 Transaction Documents (as defined below) or
(ii) this Agreement. “2010 Transaction Documents” means, collectively, the
Transaction Documents (as defined in the Securities Purchase Agreement).

3.                  Agreements.

The Company and the Claimant agree as follows:

(a)                Warrant. Claimant’s existing Warrant is hereby adjusted such
that: (i) the Exercise Price (as defined in the Warrant) under the Warrant shall
henceforth be $1.25 per share and (ii) as a result of this new Exercise Price,
the securities of the Company purchasable under the Warrant shall be 976,000
shares of Common Stock (as defined below). “Common Stock” means (i) the
Company’s shares of common stock, no par value per share, and (ii) any capital
stock into which such common stock shall have been changed or any share capital
resulting from a reclassification of such common stock.

 

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(b)               Stock.

(i) Court Order. Upon the execution and delivery of this Agreement, the parties
will cause their respective counsel to file a joint application with the Court
seeking the Court’s approval of the fairness to the Claimant of the issuance of
the Shares, the terms of this Agreement and the transactions contemplated
hereunder and under the other Transaction Documents (as defined below) and the
issuance of the Shares pursuant to the exemption from registration provided by
Section 3(a)(10) of the 1933 Act (such order is referred to herein as the “Court
Order”). For purposes of this Agreement, “Shares” means 37,500 shares of Common
Stock (as defined below) issued to Claimant pursuant to this Agreement in
exchange for the Claimant Claims.

(ii) Closing. The closing of the transactions contemplated by this Agreement
(the “Closing”) shall take place at the offices of Greenberg Traurig, LLP, New
York, at 9:00 a.m. local time at a mutually agreeable date following the date on
which the Court Order is entered on the docket of the Court but in no event
later than five (5) Business Days (as defined below) after the Court Order is
entered (the “Closing Date”). “Business Day” means any day other than Saturday,
Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.

(iii) Company’s Deliveries at the Closing. At the Closing the Company shall
cause American Stock Transfer & Trust (together with any subsequent transfer
agent, the “Transfer Agent”) to deliver the Shares to the Claimant without any
restricted legend through the facilities of DTC, in the form of book-entry
credits via the DWAC Program, as follows:

DTC Participant:   DTC number:   Account Number:  

 

(iv) No Legends; Stop Transfer Instructions. None of the Shares nor any
certificates evidencing any of the Shares, if any, shall bear any restrictive or
other legends or notations. The Company shall not, and the Company shall cause
all other Persons (as defined below) to not, issue any stop-transfer order,
instruction or other restriction with respect to any of the Shares. 

(c)               Calculation waiver. Claimant’s Complaint filed in the
Litigation asserts a theory of dilution under which, if the Company issues a
convertible security that triggers the anti-dilution provision of the Securities
Purchase Agreement and/or Warrant, calculation of the Exercise Price adjustment
includes the possible effects of the conversion of interest accrued under the
convertible security. The Company disagrees with Claimant’s dilution theory. As
part of the compromise to settle the Litigation, Claimant agrees to waive any
right to adjust the exercise price of the Warrant below $1.25 pursuant to the
convertible securities issued by Claimant set forth on Schedule A attached
hereto as in effect as of the date hereof. Claimant expressly does not agree to
waive any antidilution rights hereunder with respect to any other securities;
provided, that Claimant reserves the right to waive such antidilution rights, in
whole or in part, with respect to such other securities in the future.

 

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4.                  Dismissal of Lawsuit. Within three (3) business days of the
Closing Date, Claimant shall file a voluntary dismissal with prejudice with
respect to its Complaint filed in the Northern District of Illinois.

5.                  Company Representations and Warranties. The Company
represents and warrants to the Claimant that:

(a)                Organization. The Company is duly organized and validly
existing and in good standing under the laws of the jurisdiction in which it is
formed, and has the requisite power and authority to own its properties and to
carry on its business as now being conducted and as presently proposed to be
conducted. The Company has no Subsidiaries. “Subsidiaries” means any Person in
which the Company, directly or indirectly, (I) owns any of the outstanding
capital stock or holds any equity or similar interest of such Person or (II)
controls or operates any part of the business, operations or administration of
such Person, and each of the foregoing, is individually referred to herein as a
“Subsidiary.”

(b)               Authorization; Enforcement; Validity. The Company has the
requisite power and authority to enter into and perform its obligations under
this Agreement in accordance with the terms hereof. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by the Company’s
board of directors, and no further filing, consent or authorization is required
by the Company, its board of directors or its stockholders or other governing
body. This Agreement has been duly executed and delivered by the Company, and it
constitutes the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with its 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.

(c)                No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby will not (i) result in a violation of the certificate of
incorporation of the Company (the “Certificate of Incorporation”) (including,
without limitation, any certificate of designation contained therein) or (ii)
result in a violation of any law, rule, regulation, order, judgment or decree
applicable to the Company or by which any property or asset of the Company is
bound or affected.

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(d)               Consents. The Company is not required to obtain any consent
from, authorization or order of, or make any filing or registration with any
court, governmental agency or any regulatory or self-regulatory agency or in
order for it to execute, deliver or perform any of its obligations under, or
contemplated by, this Agreement, in each case, in accordance with the terms
hereof or thereof. All such consents, authorizations, orders, filings and
registrations which the Company is required to obtain at or prior to the
consummation of the transactions contemplated by this Agreement have been
obtained or effected on or prior to the consummation of the transactions
contemplated by this Agreement.

(e)                Disclosure. After giving effect to the 8-K filing (as defined
below), the Company confirms that neither it nor any other Person acting on its
behalf has provided the Claimant or any of its agents or counsel with any
information that constitutes or could reasonably be expected to constitute
material, non-public information regarding the Company, other than the existence
of the transactions contemplated by this Agreement. The Company understands and
confirms that the Claimant will rely on the foregoing representations in
effecting transactions in securities of the Company

(f)                Issuance of Securities. The issuance of the Shares is duly
authorized, and upon issuance in accordance with the terms hereof and the Court
Order, the Shares shall be validly issued, fully paid and non-assessable and
free from all preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof, other than such as already may
exist with respect to the Claimant. Subject to the execution of the Court Order,
the offer and issuance by the Company of the Shares is exempt from the
registration provisions of Section 5 of the 1933 Act pursuant to the exemption
contained in Section 3(a)(10) thereof.

6.                  Claimant Representations and Warranties. Claimant represents
and warrants to the Company that:

(a)                Organization. Claimant is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder.

(b)               Validity; Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of Claimant and constitutes
the legal, valid and binding obligations of Claimant enforceable against
Claimant in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.

(c)                No Conflicts. The execution, delivery and performance by
Claimant of this Agreement and the consummation by Claimant of the transactions
contemplated hereby will not (i) result in a violation of the organizational
documents of Claimant, (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which Claimant is a
party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to
Claimant, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of Claimant to perform its obligations hereunder.

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7.                  Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties solely as to the settlement and
compromise of all Company Claims and Claimant Claims between the parties and
supersedes and replaces all prior settlement negotiations and proposed
agreements, written or oral, between the parties solely with respect to the
subject matter contained in this Agreement. Nothing contained in this Agreement
shall (or shall be deemed to), other than as expressly set forth herein, have
any effect on any agreements Claimant has entered into with, or any instruments
Claimant has received from, the Company prior to the date hereof with respect to
any investment made by Claimant in the Company (including, without limitation,
any of the 2010 Transaction Documents) or (ii) waive, alter, modify or amend in
any respect any obligations of the Claimant or the Company, or any rights of or
benefits to Claimant or the Company, in any agreement entered into prior to the
date hereof between or among the Company and Claimant, or any instruments
Claimant received from the Company prior to the date hereof (including, without
limitation, any of the 2010 Transaction Documents), and all such agreements and
instruments shall continue in full force and effect. Except as expressly set
forth herein, neither the Company nor Claimant makes any representation,
warranty, covenant or undertaking, express or implied, with respect to the
matters contained herein or therein. The parties hereto acknowledge that no
other party, or agent, representative or attorney of any other party, has made
any promise, representation, or warranty whatsoever, express or implied, not
expressly contained in this Agreement concerning the subject matter hereof, to
induce this Agreement or otherwise, and the parties acknowledge that they have
not executed this Agreement in reliance upon such promise, representation, or
warranty not expressly contained herein. No party hereto has granted any waiver
or release except as, and to the extent, expressly set forth in this Agreement.
For clarification purposes, the Recitals are part of this Agreement. It is
expressly understood and agreed that nothing contained in this Agreement is
intended to be, is, constitutes or shall be deemed to be or constitute, an
amendment to any of the 2010 Transaction Documents and all of the 2010
Transaction Documents shall continue in full force and effect.

8.                  Governing Law; Jurisdiction; Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of Illinois,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in Cook County, Illinois, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper.

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Each party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address for such notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall (i) be deemed to
limit in any way any right to serve process in any manner permitted by law or
(ii) be deemed or operate to preclude any party hereto from bringing suit or
taking other legal action against any other party hereto in any other
jurisdiction to collect on such other party’s obligations hereunder to such
party or to enforce a judgment or other court ruling in favor of such party
against such other party. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

9.                  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, if delivered personally; (ii) when sent, if sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); (iii) when sent, if sent by e-mail (provided
that such sent e-mail is kept on file (whether electronically or otherwise) by
the sending party and the sending party does not immediately receive an
automatically generated message from the recipient’s e-mail server that such
e-mail could not be delivered to such recipient) and (iv) if sent by overnight
courier service, one (1) Business Day after deposit with an overnight courier
service with next day delivery specified, in each case, properly addressed to
the party to receive the same. The addresses, facsimile numbers and e-mail
addresses for such communications shall be:

If to the Company:

Socket Mobile, Inc.

39700 Eureka Drive

Newark, CA 94560

Telephone: (510) 933-3000

Facsimile: (510) 933-3030

Attention: Chief Executive Officer

 

With a copy (for informational purposes only) to:

Wilson Sonsini Goodrich & Rosati, PC

650 Page Mill Road

Palo Alto, CA 94304

Telephone: (650 493-9300

Facsimile: (650) 493-6811

Attention: Herbert P. Fockler

Email address: hfockler@wsgr.com

 

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If to Claimant:

Hudson Bay Master Fund Ltd.

777 Third Avenue, 30th Floor

New York, NY 10017

Attention: Yoav Roth

Facsimile: (212) 571-1279

E-mail: investments@hudsonbaycapital.com

 

With a copy (for informational purposes only) to:

Greenberg Traurig, LLP
MetLife Building
200 Park Avenue
New York, NY 10166
Telephone: (212) 801-9200
Facsimile: (212) 805-9222

E-mail address: adelsteinm@gtlaw.com
Attention: Michael A. Adelstein, Esq.

Greenberg Traurig, LLP
77 W. Wacker Drive, Suite 3100
Chicago, Illinois 60601

Telephone: (312) 456-1029
Facsimile: (312) 456-8435

E-mail address: aizenbergg@gtlaw.com

Attention: Gabriel Aizenberg, Esq.

 

or to such other address, facsimile number or e-mail address and/or to the
attention of such other Person 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 and recipient facsimile number 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 (iv) above, respectively. A copy of the e-mail transmission containing the
time, date and recipient e-mail address shall be rebuttable evidence of receipt
by e-mail in accordance with clause (iii) above.

10.              Counterparts. This Agreement may be executed in two or more
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 parties. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page
were an original thereof.

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11.              Headings; Gender. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. Unless the context clearly indicates
otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,”
“includes,” “include” and words of like import shall be construed broadly as if
followed by the words “without limitation.” The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Agreement instead of just
the provision in which they are found.

12.              Severability. If any provision of this Agreement is prohibited
by law or otherwise determined to be invalid or unenforceable by a court of
competent jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of
this Agreement so long as this Agreement as so modified continues to express,
without material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

13.              Holding Period.  For the purposes of Rule 144, the Company
acknowledges that the Claimant has held the Warrant for over one year and the
holding period of the Warrant (and upon exercise of the Warrants in a cashless
exercise, the Warrant Shares) shall not be affected by this Agreement, and the
Company agrees not to take a position contrary to this Section 13. 

14.              Disclosure of Transactions and Other Material Information. The
Company shall, on or before 8:30 a.m., New York time, on the second (2nd )
Business Day after the Court Order referenced above in paragraph 2(b)(i), file a
Current Report on Form 8-K describing all the material terms of the transactions
contemplated by this Agreement in the form required by the 1934 Act and
attaching this Agreement (including all attachments, the “8-K Filing”). From and
after the filing of the 8-K Filing, the Company shall have disclosed all
material, non-public information (if any) regarding the Company that was
delivered to the Claimant by the Company, or any of its officers, directors,
employees or agents in connection with the transactions contemplated by this
Agreement. The Company shall not, and the Company shall cause each of its
officers, directors, employees and agents not to, provide Claimant with any
material, non-public information regarding the Company from and after the filing
of the 8-K Filing without the express prior written consent of Claimant. Neither
the Company nor Claimant shall issue any press releases or any other public
statements with respect to the transactions contemplated hereby; provided,
however, the Company shall be entitled, without the prior approval of Claimant,
to issue any press release or make other public disclosure with respect to such
transactions (i) in substantial conformity with the 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) Claimant shall be consulted
by the Company in connection with any such press release or other public
disclosure prior to its release). Without the prior written consent of the
Claimant, the Company shall not disclose the name of Claimant in any filing
(other than the 8-K Filing), announcement, release or otherwise. Notwithstanding
anything contained in this Agreement to the contrary and without implication
that the contrary would otherwise be true, the Company expressly acknowledges
and agrees that Claimant shall not have (unless expressly agreed to by Claimant
after the date hereof in a written definitive and binding agreement executed by
the Company and Claimant), any duty of confidentiality with respect to, or a
duty not to trade on the basis of, any information regarding the Company.

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15.              Successors and Assigns; No Third Party Beneficiaries;
Amendments and Waivers. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted assigns. No
party may assign this Agreement or any rights or obligations hereunder without
the prior written consent of the other party hereto. 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, other than the Company Releasees and the Claimant
Releasees. No provision of this Agreement may be amended other than by an
instrument in writing signed by the parties hereto. No waiver shall be effective
unless it is in writing and signed by an authorized representative of the
waiving party.

16.              Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further reasonable acts and things, and shall
execute and deliver all such other reasonable 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 and the
consummation of the transactions contemplated hereby.

17.              Expenses. Except as otherwise set forth in this Agreement, each
party to this Agreement shall bear its own expenses in connection with the
Litigation, the execution and delivery of this Agreement, and the consummation
of the transactions contemplated by this Agreement.

18.              Survival. The representations, warranties, agreements and
covenants shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement.

19.              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. No
specific representation or warranty shall limit the generality or applicability
of a more general representation or warranty. Each and every reference to shares
of Common Stock and any other numbers in this Agreement that relate to the
Common Stock shall be automatically adjusted for stock dividends, stock splits,
stock combinations and other similar transactions that occur with respect to the
Common Stock after the date of this Agreement.

20.              Remedies. Unless released pursuant to Paragraphs 1 and 2 above,
Claimant and Company shall have all rights and remedies set forth in this
Agreement and all rights and remedies which such holders have been granted at
any time under any other agreement or contract and all of the rights which such
holders have under any law. Any Person having any rights under any provision of
this Agreement shall be entitled to enforce such rights specifically (without
posting a bond or other security), to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law,
including, if appropriate, seeking other available remedies such as specific
performance, temporary, preliminary and/or permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case
without the necessity of showing economic loss and without posting a bond or any
other security.

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21.              No Admission of Liability. This Agreement constitutes a
compromise of disputed Claims, and neither the entering into of this Agreement,
nor the performance of any of the obligations under this Agreement, shall
constitute any admission of any wrongdoing, any violation of any law, statute,
rule, regulation, ordinance or the like of the United States or any state
located in the United States or that any party hereto has any liability to any
other party hereto with respect to any of the Claims released in this Agreement.

22.              Termination. Notwithstanding anything contained in this
Agreement to the contrary, if the Closing has not occurred within ten (10)
Business Days after the Court Order referenced above in paragraph 2(b)(i), then
this Agreement shall automatically be terminated and be null and void ab initio.

 

[signature page follows]

 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the date first above written.

Socket Mobile, Inc.

 

 

Signature:    /s/ David W. Dunlap

David W. Dunlap

 

Title: Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the date first above written.

 

 

Hudson Bay Master Fund Ltd.

 

 

Signature /s/ George Antonopoulos

 

Title Authorized Signatory

 

 

 

 

 

13

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Settlement Agreement

Schedule A

Socket Mobile, Inc.       Schedule of Subordinated Convertible Notes     As of
December 28, 2013       Noteholder Issue Date   Status           Notes issued to
replace August 1, 2012 notes:        Charlie Bass September 4, 2012  
Outstanding      Leon Malmed September 4, 2012   Outstanding      Charles C.
Emery, Jr. September 4, 2012   Outstanding      Lee A. Baillif September 4, 2012
  Outstanding      Kevin J. Mills September 4, 2012   Outstanding         Note
issued to replace notes issued in November/December 2012:        Charlie Bass
September 4, 2012   Outstanding                             Notes issued on
August 1, 2012:          Charlie Bass August 1, 2012   Replaced Sept 4, 2012
     Leon Malmed August 1, 2012   Replaced Sept 4, 2012      Charles C. Emery,
Jr. August 1, 2012   Replaced Sept 4, 2012      Lee A. Baillif August 1, 2012  
Replaced Sept 4, 2012      Kevin J. Mills August 1, 2012   Replaced Sept 4, 2012
     Tim I. Miller August 1, 2012   Repaid      Tom Miller August 1, 2012  
Scheduled for repayment                 Notes issued in November/December 2012:
         Charlie Bass November 7, 2012   Replaced Sept 4, 2012      Charlie Bass
November 14, 2012   Replaced Sept 4, 2012      Charlie Bass November 21, 2012  
Replaced Sept 4, 2012      Charlie Bass November 28, 2012   Replaced Sept 4,
2012      Charlie Bass December 6, 2012   Replaced Sept 4, 2012      Charlie
Bass December 12, 2012   Replaced Sept 4, 2012