Exhibit 10.1 

  

JUDGMENT SETTLEMENT AGREEMENT

 

This Judgment Settlement Agreement (this “Agreement”) is entered into as of
December 10, 2018 by and between John M. Fife, an individual (“Lender”), and
MPhase Technologies, Inc., a New Jersey corporation (“Borrower”).

 

A. Borrower previously sold and issued to St. George Investments LLC, a Utah
limited liability company (formerly known as St George Investments LLC, an
Illinois limited liability company) (“SGI”) that certain Convertible Note dated
September 13, 2011 in the original principal amount of $357,500.00 (subject to
an increase to up to $557,500 upon the occurrence of certain events) (the
“Note”) pursuant to that certain Securities Purchase Agreement dated September
13, 2011 by and between SGI and Borrower (the “Purchase Agreement,” and together
with the Note and all other documents entered into in conjunction therewith, the
“Transaction Documents”).

 

B. Effective as of October 17, 2011, SGI assigned the Note and its rights under
all other Transaction Documents to Lender pursuant to a certain Assignment of
Convertible Note (the “Assignment”).

 

C. Following the Assignment, Lender and Borrower entered into a certain
Standstill and Restructuring Agreement (the “Standstill Agreement”) pursuant to
which Lender agreed to not convert a certain portion of the outstanding balance
of the Note into share’s of Borrower’s Common Stock in exchange for certain
payments from Borrower.

 

D. Borrower did not make such payments and Lender ultimately filed a lawsuit
against Borrower in the Eastern Division of the Northern District of Illinois in
the United States District Court, Case No. 12-cv-9647 (the “Lawsuit”).

 

E. On December 15, 2014, Lender was granted summary judgment in the Lawsuit and
on January 28, 2015 a judgment was entered against Borrower (the “Judgment”).

 

F.  Lender agreed to refrain and temporarily forbear from exercising and
enforcing certain remedies against Borrower with respect to the Judgment
pursuant to the terms and conditions of a certain Forbearance Agreement dated
February 9, 2015 entered into between Lender and Borrower (as amended, the
“Forbearance Agreement”).

 

G. Borrower failed to comply with the terms of the Forbearance Agreement and, as
a result thereof, the Forbearance Agreement was terminated.

 

H. Subsequently, on August 18, 2017, Borrower and Lender agreed to settle the
Judgment pursuant to a certain Judgment Settlement Agreement entered into
between Borrower and Lender (as amended, the “Prior Settlement Agreement”).

 

I. Borrower also failed to comply with the terms of the Prior Settlement
Agreement and, as a result thereof, the Prior Settlement Agreement was
terminated and, therefore, Lender has the right to seek all recourse available
to it under the terms of the Judgment and applicable law.

 

 

 

 

J. Nevertheless, Lender has agreed, subject to the terms, conditions and
understandings expressed in this Agreement, to refrain and forbear temporarily
from exercising and enforcing remedies against Borrower with respect to the
Judgment as provided in this Agreement and Borrower and Lender desire to settle
the Judgment on the terms and conditions set forth herein.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

1. Recitals. Each of the parties hereto acknowledges and agrees that the
recitals set forth above in this Agreement are true and accurate, are
contractual in nature, and are hereby incorporated into and made a part of this
Agreement.

 

2. Forbearance. Subject to the terms, conditions and understandings contained in
this Agreement, Lender hereby agrees to refrain and forbear from exercising and
enforcing its remedies pursuant to the Judgment or under applicable laws related
thereto (the “Forbearance”) for the period beginning on the date hereof and
ending on the the earlier of (a) any breach by Borrower of its obligations set
forth in this Agreement, and (b) the date on which Borrower has received the
full Settlement Amount (as defined below).

 

3. Settlement Payments. Borrower and Lender agree that Borrower may satisfy the
Judgment in full by making cash payments (the aggregate of the cash payments
payable to Lender under this Section 3 that are necessary to satisfy the
Judgment, the “Settlement Amount”) to Lender in an amount equal to (a)
$15,000.00, which amount is payable upon execution of this Agreement (and which
Lender hereby acknowledges having received), plus (b) either (i) $265,000.00,
provided such amount is received by Lender on or before January 15, 2019, (ii)
$280,000.00, provided such amount is received by Lender on or before February
15, 2019, or (iii) $375,000.00, which amount, if Borrower elects this option,
shall be payable as follows: (1) Borrower shall make a payment to Lender in the
amount of $15,000.00 on or before January 15, 2019, and (2) Borrower shall
continue making payments of $15,000.00 each month (each, an “Installment
Payment”), with the first such Installment Payment being due and payable on or
before February 15, 2019 and with each additional Installment Payment being due
and payable to Lender on or before the same day of each month thereafter until
January 15, 2020, when Borrower shall pay to Lender the entire unpaid portion of
the Settlement Amount (which would be equal to $195,000.00 if Borrower elects
this option and pays each required Installment Payment prior to its due date).
Each payment made pursuant to this Section 3 shall be made by Borrower to Lender
via wire transfer of immediately available funds.

 

4.  Payment in Full. Upon satisfaction of all of Borrower’s obligations under
this Agreement, including without limitation payment of the full Settlement
Amount, Borrower shall be deemed to have paid the entire Judgment Amount in
full, Borrower shall have no further obligations under the Judgment, the
Judgment shall be deemed to be satisfied, and Lender will file a satisfaction of
judgment with the court that issued the Judgment.

 

5.  Failure to Comply. Borrower understands that the Forbearance, Lender’s
agreement to settle the Judgment for the Settlement Amount, and all other
obligations, restrictions, and limitations of or on Lender hereunder shall
terminate immediately upon the occurrence of any breach of this Agreement
(including, without limitation, Borrower’s obligation to pay the Settlement
Amount as and when required hereunder). In any such case, Lender may seek all
recourse available to it under the terms of the Judgment, this Agreement, or
applicable law following any breach, including without limitation enforcing the
Judgment for the full amount awarded pursuant thereto (less the sum of any
payments made to Lender hereunder or under the Prior Settlement Agreement, which
shall be credited against the amount of the Judgment in such event).

 

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6.  Judgment. Borrower represents, warrants and acknowledges that it was
properly served the complaint and all other applicable documents related to the
Lawsuit and that the Judgment was properly entered. Borrower further agrees that
it will not challenge the Judgment or otherwise seek to have the Judgment set
aside. In furtherance of the foregoing, Borrower acknowledges that the
representations and warranties in the prior sentence are a material inducement
to Lender to enter into this Agreement and that but for such representations and
warranties from Borrower, Lender would not have entered into this Agreement or
agreed to settle the Judgment for the Settlement Amount.

 

7.  Representations, Warranties and Agreements. In order to induce Lender to
enter into this Agreement, Borrower, for itself, and for its affiliates,
successors and assigns, hereby acknowledges, represents, warrants and agrees as
follows:

 

(a)  Borrower has full power and authority to enter into this Agreement and to
incur and perform all obligations and covenants contained herein, all of which
have been duly authorized by all proper and necessary action. No consent or
approval of Borrower, and no consent, approval, filing or registration with or
notice to any governmental authority is required as a condition to the validity
of this Agreement or the performance of any of the obligations of Borrower
hereunder.

 

(b)  All understandings, representations, warranties and recitals contained or
expressed in this Agreement are true, accurate, complete, and correct in all
respects; and no such understanding, representation, warranty, or recital fails
or omits to state or otherwise disclose any material fact or information
necessary to prevent such understanding, representation, warranty, or recital
from being misleading. Borrower acknowledges and agrees that Lender has been
induced in part to enter into this Agreement based upon Lender’s justifiable
reliance on the truth, accuracy, and completeness of all understandings,
representations, warranties, and recitals contained in this Agreement. There is
no fact known to Borrower or which should be known to Borrower which Borrower
has not disclosed to Lender on or prior to the date hereof which would or could
materially and adversely affect the understandings of Lender expressed in this
Agreement or any representation, warranty, or recital contained in this
Agreement.

 

(c)  Except as expressly set forth in this Agreement, Borrower acknowledges and
agrees that neither the execution and delivery of this Agreement nor any of the
terms, provisions, covenants, or agreements contained in this Agreement shall in
any manner release, impair, lessen, modify, waive, or otherwise affect the
liability and obligations of Borrower under the terms of the Judgment or
applicable law related thereto.

 

(d)  Borrower has no defenses, affirmative or otherwise, rights of setoff,
rights of recoupment, claims, counterclaims, actions or causes of action of any
kind or nature whatsoever against Lender, directly or indirectly, arising out
of, based upon, or in any manner connected with, the transactions contemplated
hereby, whether known or unknown, which occurred, existed, was taken, permitted,
or begun prior to the execution of this Agreement. To the extent any such
defenses, affirmative or otherwise, rights of setoff, rights of recoupment,
claims, counterclaims, actions or causes of action exist or existed, such
defenses, rights, claims, counterclaims, actions and causes of action are hereby
waived, discharged and released. Borrower hereby acknowledges and agrees that
the execution of this Agreement by Lender shall not constitute an acknowledgment
of or admission by Lender of the existence of any claims or of liability for any
matter or precedent upon which any claim or liability may be asserted.

 

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(e)  Borrower hereby acknowledges that it has freely and voluntarily entered
into this Agreement after an adequate opportunity and sufficient period of time
to review, analyze, and discuss (i) all terms and conditions of this Agreement,
(ii) any and all other documents executed and delivered in connection with the
transactions contemplated by this Agreement, and (iii) all factual and legal
matters relevant to this Agreement and/or any and all such other documents, with
counsel freely and independently selected by Borrower (or had the opportunity to
be represented by counsel). Borrower further acknowledges and agrees that it has
actively and with full understanding participated in the negotiation of this
Agreement and all other documents executed and delivered in connection with this
Agreement after consultation and review with its counsel (or had the opportunity
to be represented by counsel), that all of the terms and conditions of this
Agreement and the other documents executed and delivered in connection with this
Agreement have been negotiated at arm’s-length, and that this Agreement and all
such other documents have been negotiated, prepared, and executed without fraud,
duress, undue influence, or coercion of any kind or nature whatsoever having
been exerted by or imposed upon any party by any other party. No provision of
this Agreement or such other documents shall be construed against or interpreted
to the disadvantage of any party by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured,
dictated, or drafted such provision.

 

(f) There are no proceedings or investigations pending or threatened before any
court or arbitrator or before or by, any governmental, administrative, or
judicial authority or agency, or arbitrator, against Borrower.

 

(g) There is no statute, regulation, rule, order or judgment and no provision of
any mortgage, indenture, contract or other agreement binding on Borrower, which
would prohibit or cause a default under or in any way prevent the execution,
delivery, performance, compliance or observance of any of the terms and
conditions of this Agreement and/or any of the other documents executed and
delivered in connection with this Agreement.

 

(h) Borrower is solvent as of the date of this Agreement, and none of the terms
or provisions of this Agreement shall have the effect of rendering Borrower
insolvent. The terms and provisions of this Agreement and all other instruments
and agreements entered into in connection herewith are being given for full and
fair consideration and exchange of value.

 

8. Governing Law; Venue. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Utah without regard to the principles
of conflict of laws. Each party consents to and expressly agrees that the
exclusive venue for arbitration of any dispute arising out of or relating to
this Agreement or the relationship of the parties or their affiliates shall be
in Salt Lake County, Utah. Each party hereto submits to the exclusive
jurisdiction of any state or federal court sitting in Salt Lake County, Utah in
any proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the proceeding may only be heard and determined in any such
court and hereby expressly submits to the exclusive personal jurisdiction and
venue of such court for the purposes hereof and expressly waives any claim of
improper venue and any claim that such courts are an inconvenient forum. Each
party hereto hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to its address as set forth in
the Purchase Agreement, such service to become effective ten (10) days after
such mailing. BORROWER 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.

 

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9. Counterparts. This Agreement may be executed in any number of counterparts
with the same effect as if all signing parties had signed the same document. All
counterparts shall be construed together and constitute the same instrument. The
exchange of copies of this Agreement and of signature pages by facsimile
transmission or other electronic transmission (including email) shall constitute
effective execution and delivery of this Agreement as to the parties and may be
used in lieu of the original Agreement for all purposes. Signatures of the
parties transmitted by facsimile transmission or other electronic transmission
(including email) shall be deemed to be their original signatures for all
purposes.

 

10. Attorneys’ Fees. In the event of any arbitration or action at law or in
equity to enforce or interpret the terms of this Agreement, the parties agree
that the party who is awarded the most money shall be deemed the prevailing
party for all purposes and shall therefore be entitled to an additional award of
the full amount of the attorneys’ fees and expenses paid by such prevailing
party in connection with the arbitration, litigation and/or dispute without
reduction or apportionment based upon the individual claims or defenses giving
rise to the fees and expenses. Nothing herein shall restrict or impair an
arbitrator’s or a court’s power to award fees and expenses for frivolous or bad
faith pleading.

 

11.  No Reliance. Borrower acknowledges and agrees that neither Lender nor any
of its officers, directors, members, managers, equity holders, representatives
or agents has made any representations or warranties to Borrower or any of its
agents, representatives, officers, directors, or employees except as expressly
set forth in this Agreement and, in making its decision to enter into the
transactions contemplated by this Agreement, Borrower is not relying on any
representation, warranty, covenant or promise of Lender or its officers,
directors, members, managers, equity holders, agents or representatives other
than as set forth in this Agreement.

 

12.  Severability. If any part of this Agreement is construed to be in violation
of any law, such part shall be modified to achieve the objective of the parties
to the fullest extent permitted and the balance of this Agreement shall remain
in full force and effect.

 

13. Entire Agreement. This Agreement and all other documents referred to herein,
supersede all other prior oral or written agreements between Borrower, Lender,
its affiliates and persons acting on its behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither Lender nor Borrower makes any representation, warranty,
covenant or undertaking with respect to such matters. Notwithstanding the
foregoing, nothing herein shall alter or modify the Judgment or Lender's rights
thereunder, except that Lender agrees to settle the Judgment for the Settlement
Amount so long as Borrower does not breach (as determined in Lender's sole
discretion) any of its obligations set forth herein and nothing herein shall
alter, modify, waive or terminate any right of Lender under applicable law to
execute on any assets of Borrower or otherwise seek to enforce Lender's rights
pursuant to the Judgment.

 

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14. Amendments. This Agreement may be amended, modified, or supplemented only by
written agreement of the parties. No provision of this Agreement may be waived
except in writing signed by the party against whom such waiver is sought to be
enforced.

 

15. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. This
Agreement or any of the severable rights and obligations inuring to the benefit
of or to be performed by Lender hereunder may be assigned by Lender to a third
party, including its affiliates, in whole or in part. Borrower may not assign
this Agreement or any of its obligations herein without the prior written
consent of Lender.

 

16. Time of Essence. Time is of the essence of this Agreement.

 

17. Notices. Unless otherwise specifically provided for herein, all notices,
demands or requests required or permitted under this Agreement to be given to
Borrower or Lender shall be given at such address as has been previously
provided to the other party.

 

18. Further Assurances. Each party shall do and perform or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the 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.

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.

 

 

BORROWER:

       

MPHASE TECHNOLOGIES, INC.

        By: /s/ Ronald A. Durando   Name: Ronald A. Durando   Title: President

        LENDER:         /s/ John M. Fife   John M. Fife, an individual

 

  

[Signature Page to Judgment Settlement Agreement]