ex_10-1.htm


    
      

      

    

    Exhibit 10.1 

     

    SETTLEMENT
AGREEMENT

     

    This
Settlement Agreement (the "Agreement") is made and entered into as of July 9,
2008, by and among Artist House Holdings, Inc. (hereinafter "Artist House");
Davi Skin, Inc., a Nevada corporation (hereinafter "Davi"), Carlo Mondavi,
Joshua LeVine and Joseph Spellman (collectively, the "Davi Defendants"); and
Timothy Mondavi.  Artist House, the Davi Defendants and Timothy
Mondavi are referred to in this Agreement collectively as the "Settling
Parties," and each of them individually as a "Settling Party."

     

    WHEREAS,
Artist House filed a lawsuit in the United States District Court for the
District of Nevada entitled, Artist House Holdings, Inc. v. Davi
Skin, Inc., et al., Case No. 2:06-CV-893-RLH-LRL (the
"Action"), against the Davi Defendants, Timothy Mondavi and a number of
unidentified "Roe" and "Doe" defendants.

     

    WHEREAS,
Timothy Mondavi has informally asserted claims of indemnification against Davi
in connection with Artist House's allegations in the Action, and Davi has denied
that he is entitled to any such indemnification.

     

    WHEREAS,
the Settling Parties desire to fully and finally resolve and settle any and all
claims alleged in the Action and any other claim that could have been alleged
against the Davi Defendants, Timothy Mondavi or Artist House in, or in
connection with, the Action, including any claims for indemnification by Timothy
Mondavi (collectively, the "Dispute").

     

    NOW
THEREFORE, in consideration of the terms and conditions set forth in this
Agreement, the Settling Parties agree as follows:

     

    1. Payments; Delivery of
Shares; Cancellation of Warrants. On a date (the "Closing Date") within
ten (10) calendar days after Artist House executes this Agreement, Davi shall
cause to be transmitted to counsel for Artist House a payment in the amount of
$650,000.00 (the "Davi Settlement Amount") in accordance with the instructions
of Artist House's counsel.  On the Closing Date, Artist House shall
deliver or cause to be delivered certificates representing all 566,667 shares of
Davi common stock in its possession (the "Shares") to Davi Skin, Inc., 11990 San
Vicente Boulevard, Suite 300, Los Angeles, California 90049, in accordance with
the instructions of Davi and in such name(s) or affixed with such powers as Davi
shall instruct. On the Closing Date, Artist House's warrants to purchase 283,333
shares of Davi common stock (the "Warrants") shall be cancelled in accordance
with the instructions of Davi and shall no longer be enforceable or of any legal
effect. On or before the Closing Date, Timothy Mondavi shall cause to be
transmitted to counsel for Artist House a payment in the amount of $25,000.00
(the "Timothy Mondavi Settlement Amount") in accordance with the instructions of
Artist House's counsel.

     

    1.1.
Representations and
Warranties of Artist House. In addition to the representations and
warranties set forth in Section 11 below, Artist House represents, warrants and
agrees that:

     

    
      
        
        

      

      
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    1.1.1.
Artist House is the record and beneficial owner of the Shares and Warrants and
has good, valid and marketable title to the Shares and Warrants, free and clear
of any pledge, claim, lien, security interest or other
encumbrance.  Since acquiring the Shares and Warrants, Artist House
(a) has not sold, conveyed, assigned, disposed of or otherwise transferred any
of such Shares or Warrants, (b) has not created or imposed or permitted the
creation or imposition of any pledge, claim, lien, security interest or other
encumbrance on such Shares or Warrants that is still in effect, (c) has not
agreed to sell, convey, assign, dispose of or otherwise transfer any of such
Shares or Warrants (other than as set forth in this Agreement), and (d) has not
agreed to create or impose, or permit the creation or imposition of, any pledge,
claim, lien, security interest or other encumbrance on such Shares or
Warrants.  The number of Shares and Warrants set forth in Section 1
represents all of the Shares and Warrants owned beneficially and/or of record by
Artist House. Artist House can and will transfer and deliver good, valid and
marketable title to the Shares (subject to compliance with applicable securities
laws), free and clear of any pledge, claim, lien, security interest or other
encumbrance.  Artist House has not exercised and will not exercise its
Warrants prior to the Closing Date.

     

    1.1.2.
Artist House's execution, delivery and performance of this Agreement does not
violate or conflict with any law applicable to it, any agreement or instrument
to which it is a party, any order or judgment of any court or other agency of
government applicable to it, or any contractual restriction binding on or
affecting it or any of its assets.

     

    1.1.3.
Artist House is a sophisticated investor knowledgeable in business matters
and/or has had the opportunity to seek independent advice from a professional of
its choice knowledgeable in such matters.  Artist House has been
represented by competent and diligent counsel in the Action.

     

    1.1.4.
Artist House has not relied upon any statements or representations made by any
director, officer, employee, representative or other advisor of Davi in making
its decision to relinquish the Shares and cancel the Warrants. Artist House
acknowledges and agrees that no representations or warranties, whether express
or implied, were given to or are being given to Artist House by Davi, other than
the representations and warranties that are set forth herein.

     

    1.1.5.
Artist House has conducted its own investigation, to the extent that Artist
House has determined necessary or desirable, regarding Davi and its business.
Artist House understands and acknowledges that Davi is currently involved and
will be involved in the future in financing efforts and other efforts to realize
returns in connection with a number of its operations, and that those efforts,
if successful, could materially increase the value of Davi's assets, the Shares
or the Warrants. Davi’s management offered to discuss with Artist House Davi’s
business, management and financial affairs, including current and future plans
and forecasts of Davi and its operating companies, but Artist House voluntarily
declined Davi’s offer to provide that information.

     

    
      
        
        

      

      
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    1.1.6.
Artist House, whether by itself or through its counsel or representatives, has
made its own decision regarding the value of the Shares or Warrants and has
satisfied itself that the consideration it is receiving, which was negotiated at
arm's-length by Artist House's representatives and representatives for Davi, is
fair and adequate. Neither Davi nor any of its representatives expresses an
opinion or makes any recommendation as to whether Artist House should hold or
sell the Shares or cancel the Warrants.  No representation has been
made by Davi or its representatives that the consideration for delivery of the
Shares and cancellation of the Warrants is fair to Artist House or equal to any
purchase price that may be offered to other parties, now or in the
future.  Artist House acknowledges that the consideration it is
receiving under this Agreement may be greater or less than the actual fair
market value of the Shares and Warrants.

     

    1.1.7.
Artist House understands and acknowledges that it will have no future
participation in any Davi gains, profits or distributions with respect to the
Shares and Warrants.  In the event that Davi increases in value by any
means, or if the Shares or Warrants increase in value, Artist House understands
and acknowledges that it is voluntarily forfeiting any opportunity to share in
any resulting increase in value.

     

    1.1.8.
Artist House has reviewed with its own tax and legal advisors the tax and legal
consequences of the transactions contemplated by this
Agreement.  Artist House relies solely on such advisors and not on any
statements or representations of Davi or any of Davi's agents with respect to
such tax and legal consequences. Artist House understands and acknowledges that
Artist House, and not Davi, shall be responsible for Artist House's own tax and
legal liability that may arise as a result of the transactions contemplated by
this Agreement.

     

    1.2.
Representations and
Warranties of the Davi Defendants. In addition to the representations and
warranties set forth in Section 11 below, the Davi Defendants represent, warrant
and agree that:

     

    1.2.1.
The Davi Defendants have the full right, power and authority to enter into this
Agreement on the terms described herein.

     

    1.2.2.
The Davi Defendants have made their own investigation into the merits and risks
of entering into the transactions contemplated by this Agreement, and they have
the capacity and financial and business experience to evaluate the
same.  In addition, the Davi Defendants have and/or have had the
opportunity to seek independent advice from professionals of their own choice
knowledgeable in such matters.  The Davi Defendants have been
represented by competent and diligent counsel in the Action.

     

    1.2.3.
The Davi Defendants have not relied upon any statements or representations made
by any director, officer, employee, representative or other advisor of Artist
House in making their decision to enter into this Agreement and the transactions
contemplated by it.  The Davi Defendants acknowledge and agree that no
representations or warranties, whether express or implied, were given to or are
being given to them by Artist House, other than the representations and
warranties that are set forth herein.

     

    
      
        
        

      

      
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    1.2.4 The Davi Defendants
have reviewed with their own tax and legal advisors the tax and legal
consequences of the transactions contemplated by this Agreement.  The
Davi Defendants rely solely on such advisors and not on any statements or
representations of Artist House or any of Artist House’s agents with respect to
such tax and legal consequences.  The Davi Defendants understand and
acknowledge that the Davi Defendants, and not Artist House, shall be responsible
for the Davi Defendants' own tax and legal liabilities that may arise as a
result of the transactions contemplated by this Agreement.

     

    2.    Releases.

    


    2.1.
Artist House's
Releases. As of the Closing Date, Artist House, on behalf of itself and
on behalf of each of its predecessors and successors, and each of their
respective present and former officers, directors, employees, representatives,
partners, business entities, loan-out companies, agents, attorneys, insurers,
accountants, heirs, executors, administrators, conservators, assignors and
assignees, and each of them ("Artist House Releasing Parties"), hereby knowingly
and voluntarily fully and forever releases and discharges the Davi Defendants
and their employees, representatives, partners, business entities, loan-out
companies, agents, attorneys, insurers, accountants, heirs, executors,
administrators, conservators, assignors and assignees, and each of them ("Davi
Releasees") and Timothy Mondavi and each of his employees, representatives,
partners, business entities, loan-out companies, agents, attorneys, insurers,
accountants, heirs, executors, administrators, conservators, assignors and
assignees, and each of them ("Timothy Mondavi Releasees") from any and all
claims, demands, liens, actions, suits, causes of action, obligations,
controversies, debts, costs, attorneys' fees, expenses, damages, judgments,
orders, and liabilities of whatever kind and/or nature in law, equity or
otherwise, whether now known or unknown, suspected or unsuspected, which have
existed or may have existed, or which do exist or which hereafter can, shall or
may exist, including but not limited to those arising out of, based upon, or
related to Artist House's investment in Davi, or any of the transactions or
occurrences that were alleged or could have been alleged in the Action, or the
Dispute ("Artist House's Released Claims").

     

    2.2.
Davi Defendants'
Releases. As of the Closing Date, the Davi Defendants, on behalf of
themselves and on behalf of each of their predecessors and successors, and each
of their respective present and former officers, directors, employees,
representatives, partners, business entities, loan-out companies, agents,
attorneys, insurers, accountants, heirs, executors, administrators,
conservators, assignors and assignees, and each of them ("Davi Releasing
Parties"), hereby knowingly and voluntarily fully and forever release and
discharge Artist House and each of its employees, representatives, partners,
business entities, loan-out companies, agents, attorneys, insurers, accountants,
heirs, executors, administrators, conservators, assignors and assignees, and
each of them ("Artist House Releasees") and the Timothy Mondavi Releasees from
any and all claims, demands, liens, actions, suits, causes of action,
obligations, controversies, debts, costs, attorneys' fees, expenses, damages,
judgments, orders, and liabilities of whatever kind and/or nature in law, equity
or otherwise, whether now known or unknown, suspected or unsuspected, which have
existed or may have existed, or which do exist or which hereafter can, shall or
may exist, including but not limited to those arising out of, based upon, or
related to Artist House's investment in Davi, or any of the transactions or
occurrences that were alleged or could have been alleged in the Action, or the
Dispute ("Davi's Released Claims").

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    2.3.
Timothy Mondavi's
Releases.  As of the Closing Date, Timothy Mondavi, on behalf
of himself and on behalf of each of his predecessors and successors, and each of
their respective present and former officers, directors, employees,
representatives, partners, business entities, loan-out companies, agents,
attorneys, insurers, accountants, heirs, executors, administrators,
conservators, assignors and assignees, and each of them ("Timothy Mondavi
Releasing Parties"), hereby knowingly and voluntarily fully and forever release
and discharge the Artist House Releasees and the Davi Releasees and from any and
all claims, demands, liens, actions, suits, causes of action, obligations,
controversies, debts, costs, attorneys' fees, expenses, damages, judgments,
orders, and liabilities of whatever kind and/or nature in law, equity or
otherwise, whether now known or unknown, suspected or unsuspected, which have
existed or may have existed, or which do exist or which hereafter can, shall or
may exist, including but not limited to those arising out of, based upon, or
related to Artist House's investment in Davi, or any of the transactions or
occurrences that were alleged or could have been alleged in the Action, or the
Dispute ("Timothy Mondavi's Released Claims").

     

    2.4. The
term "Released Claims" means, as applicable, Artist House's Released Claims,
Davi's Released Claims and/or Timothy Mondavi's Released Claims.  The
term "Releasees" means, as applicable, the Artist House Releasees, the Davi
Releasees and/or the Timothy Mondavi Releasees.

     

    
      3.    Other or Additional
Facts. Each of the Settling Parties expressly and knowingly
acknowledges that it may hereafter discover facts different from and/or in
addition to those which it now knows and/or believes to be true with respect to
such Settling Party's respective Released Claims, and which, if known to that
Settling Party at the time it executed this Agreement, may have materially
affected its decision to execute this Agreement.  Each of the Settling
Parties acknowledges and agrees that by reason of this Agreement and the
releases contained herein, it is voluntarily, knowingly, and after receiving the
advice of counsel assuming any risk of such unknown facts and such unknown and
unsuspected claims and that this Agreement shall be and shall remain in full
force and effect in all respects.

    

     

    
      4.    Unknown Claims. Each
of the Settling Parties further acknowledges that it has been advised of the
existence of section 1542 of the California Civil Code ("Section 1542"), which
provides:

       

      
        
          
          

        

        
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    "A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR."

     

    Notwithstanding
such provision, this Agreement shall constitute a full release in accordance
with its terms. Each of the Settling Parties knowingly and voluntarily waives
the provisions of Section 1542, as well as any other statute, law, or rule of
similar effect, and acknowledges and agrees that this waiver is an essential and
material term of this Agreement, and without such waiver, the Agreement would
not have been accepted.  Each Settling Party hereby represents that it
has been advised by its legal counsel, and that it understands and acknowledges
the significance and consequence of this release and of this specific waiver of
Section 1542 and other such laws.

     

    5.    Dismissal.  Within
five (5) business days after full execution of this Agreement, the Settling
Parties shall jointly prepare, and Artist House shall file, a simple Stipulation
of Dismissal of the Action in its entirety with prejudice, with each Settling
Party to bear its own costs and attorneys' fees.

     

    6.    Covenants Not To
Sue.  Except for the purpose of enforcing the terms of this
Agreement: (a) the Artist House Releasing Parties agree to refrain and forbear
forever from commencing, instituting, prosecuting, or directly or indirectly
participating in, or filing any claim for damages or demand in connection with,
any lawsuit, action or proceeding against the Davi Releasees or the Timothy
Mondavi Releasees, or any of them, based upon any of Artist House's Released
Claims; (b) the Davi Releasing Parties agree to refrain and forbear forever from
commencing, instituting, prosecuting, or directly or indirectly participating
in, or filing any claim for damages or demand in connection with, any lawsuit,
action or proceeding against the Artist House Releasees or the Timothy Mondavi
Releasees, or any of them, based upon any of the Davi Defendants’ Released
Claims; and (c)  the Timothy Mondavi Releasing Parties agree to
refrain and forbear forever from commencing, instituting, prosecuting, or
directly or indirectly participating in, or filing any claim for damages or
demand in connection with, any lawsuit, action or proceeding against the Artist
House Releasees or the Davi Releasees, or any of them, based upon any of Timothy
Mondavi's Released Claims.

     

    7.    Settling Parties To Bear Own
Fees and Costs. Each Settling Party shall bear all of its fees, expenses,
and costs incurred in connection with the Dispute and/or the preparation of this
Agreement.

     

    8.    Authority To Enter into
Agreement. Each individual signing this Agreement warrants and represents
that he or she has full authority to execute the same on behalf of the Settling
Party on whose behalf he or she signs. Each Settling Party hereto agrees to
execute all documents and instruments necessary to implement this
Agreement.

     

    
      
        
        

      

      
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    9.    No Admission of
Liability. This Agreement does not constitute an admission by any of the
Releasees of any liability or wrongdoing whatsoever, including, but not limited
to, any liability or wrongdoing with respect to any of the allegations in the
Dispute.  The Settling Parties agree that this Agreement is the result
of a compromise within the provisions of Rule 408 of the Federal Rules of
Evidence and similar state statutes, including California Evidence Code §§ 1152
and 1154 and Nevada Revised Statutes ("NRS") 48.105 and 48.109, and shall not be
used or admitted in any proceeding for any purpose including, but not limited
to, as evidence of liability or wrongdoing by any Releasee, nor shall it be used
for impeachment purposes, to refresh recollection, or any other evidentiary
purpose; provided, however, that nothing in this Section 9 shall prohibit any
Settling Party and/or that Settling Party's counsel from disclosing the fact,
amount and/or terms of this Agreement to a court, arbitrator, administrative
agency or other tribunal of appropriate jurisdiction for the purpose of
enforcing or effectuating the provisions of this Agreement.

     

    10.   Binding Effect. All
of the Settling Parties hereto acknowledge and agree that it is their collective
intention to fully, finally and forever settle and release all matters relating
to the Released Claims.  In furtherance of such intention, in entering
into this Agreement, each Settling Party acknowledges and agrees that this
Agreement is intended, pursuant to the advice of legal counsel selected by each
Settling Party, to be final and binding between and among the Settling Parties
hereto.  This Agreement shall bind and inure to the benefit of the
Settling Parties hereto and their respective predecessors, successors, heirs,
and assigns.

     

    11.   Additional Representations
and Warranties. The Settling Parties make the following representations
and warranties to one another:

    


    11.1.
Each of the Settling Parties represents, warrants and agrees that (i) it has the
full right and authority to enter into this Agreement and the other documents
and transactions contemplated hereby, (ii) this Agreement and the other
documents and transactions contemplated hereby have been duly authorized by all
requisite action (corporate or otherwise) on its behalf, (iii) the person or
entity executing this Agreement and the other documents contemplated hereby on
that Settling Party's behalf has the full right and authority to fully commit
and bind it.

     

    11.2.
Each of the Settling Parties hereto acknowledges that no other Settling Party,
nor any agent or attorney of any other Settling Party, has made any promise,
representation, or warranty, whatsoever, express or implied, not contained
herein, concerning the subject matter hereof, to induce it to execute this
instrument.  Each of the Settling Parties acknowledges that it has not
executed this instrument in reliance on any promise, representation, or warranty
not contained herein.

     

    11.3.
Each of the Settling Parties hereto has read this Agreement carefully and knows
and understands the contents thereof. Each of the Settling Parties is fully
aware of the legal and binding effect of this Agreement.  Each of the
Settling Parties has made such an investigation of the facts pertinent to this
Agreement and of all the matters pertaining thereto as it deemed
necessary.

     

    
      
        
        

      

      
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    11.4.
Each of the Settling Parties hereto acknowledges that it has been represented by
counsel in the preparation, negotiation and execution of this Agreement, and
that it has executed this document with the consent and the advice of such legal
counsel.

     

    11.5.
Each of the Settling Parties hereto acknowledges and agrees that the terms of
this Agreement are contractual and not merely recitals and are the result of
negotiations between Settling Parties of equal bargaining
positions.

     

    11.6.
Artist House represents and warrants that no person or entity other than Artist
House has, or has had, any interest in any of Artist House's Released Claims;
that Artist House has the sole rights and exclusive authority to execute this
Agreement; and that Artist House has not sold, assigned, transferred, conveyed
or otherwise disposed of any of Artist House's Released Claims to any person or
entity, including any of its parents, subsidiaries, and affiliated and/or
related companies.

     

    11.7. The
Davi Defendants represent and warrant that no other person or entity has, or has
had, any interest in any of the Davi Defendants’ Released Claims.  The
Davi Defendants represent and warrant that they have the exclusive rights and
exclusive authority to execute this Agreement, and that they have not sold,
assigned, transferred, conveyed or otherwise disposed of any of the Davi
Defendants’ Released Claims to any person or entity, including any of Davi’s
parents, subsidiaries, and affiliated and/or related companies.

     

    11.8.
Timothy Mondavi represents and warrants that no other person or entity has, or
has had, any interest in any of Timothy Mondavi's Released
Claims.  Timothy Mondavi represents and warrants that he has the
exclusive rights and exclusive authority to execute this Agreement, and that he
has not sold, assigned, transferred, conveyed or otherwise disposed of any of
Timothy Mondavi's Released Claims to any person or entity.

     

    
      12.    Governing Law. This
Agreement shall be governed by, construed, and enforced in accordance with the
laws of the State of Nevada, without giving effect to its choice of law
provisions. The Settling Parties consent and agree to the exclusive jurisdiction
and venue of the state and federal courts having jurisdiction over Clark County,
Nevada, with respect to any action arising out of or in connection with this
Agreement and/or any breach or alleged breach of any provision of this
Agreement; and each Settling Party waives any objection as to improper venue and
any objection that any state or federal court in Clark County, Nevada, is an
inconvenient forum.

    

     

    
      13.    Joint Preparation.
This Agreement, including any exhibits hereto, shall be construed without regard
to the Settling Party responsible for its preparation, and shall be deemed as
prepared jointly by the Settling Parties hereto.  In resolving any
ambiguity and/or uncertainty existing herein, the Settling Parties agree that no
consideration and/or weight shall be given to the identity of the Settling Party
drafting this Agreement.

       

      
        
          
          

        

        
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      14.    Integration. This
Agreement constitutes the entire agreement and understanding between the
Settling Parties concerning the subject matter hereof, and supersedes and
replaces all prior negotiations, proposed agreements and agreements, written or
oral, between the Settling Parties relating thereto.  This Agreement
may be amended, modified, canceled, and/or waived only by a written instrument
that expressly refers to this Agreement and is executed subsequent to this
Agreement by duly authorized representatives of each of the Settling
Parties.

    

     

    
      15.    Notices. All notices
required and/or permitted hereunder must be given in writing and shall be sent
by personal delivery (including by messenger service) or by overnight courier
(such as FedEx or DHL), postage prepaid, addressed as
follows:

    

    


    
      	
              To
      Davi:

            	
              General
      Counsel

              Davi
      Skin, Inc.

              11990
      San Vicente Blvd., Suite 300

              Los
      Angeles, CA 90049

            


    

     

    with a
copy to:

     

    David
Siegel & Charles E. Elder

    Irell
& Manella LLP

    1800
Avenue of the Stars, Suite 900

    Los
Angeles, CA 90067

     

    
      	
              To
      Artist House:

            	
               K.
      Hirahara, Chief Executive Officer

              Artist
      House Holdings, Inc.

              6F,
      Koujimachi Building No.2 

              Chiyoda-ku,
      Koujimachi 4-2-4, Tokyo 102-0083

              Japan

            


    

     

    with a
copy to:

     

    James D.
Burgess

    Fennemore
Craig, P.C.

    3003 N.
Central Avenue, Suite 2600

    Phoenix,
AZ 85012

     

    
      	
              To
      Timothy Mondavi: 

            	
              Timothy
      Mondavi

              c/o
      Richard Van Duzer

              Farella
      Braun & Martel LLP

              235
      Montgomery Street, 17th Floor

              San
      Francisco, California 94104

            


    

     

    
      
        
        

      

      
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