EXHIBIT 10.7
SETTLEMENT AGREEMENT
AND MUTUAL GENERAL RELEASE
Anuvu Incorporated ("Anuvu"), a California corporation, Cell Power, Inc., a
New Hampshire Corporation ("Cell Power"), Whistler, Inc., a Delaware corporation
("Whistler"), [H2 ERA, a California corporation ("H2 ERA"),] Plugless Power
Corp., a New Hampshire corporation ("PPC"), Xxxxxx Xxxxx, Xx. ("Xxxxx Xx."),
Xxxxxx X. X. Xxxxx ("Xxxxx Xx."), Xxxxxx Friszche, Xxxxxxx Xxxxx, Xxxxx Xxxxxx
and Xxxx X. Xxxxx agree as follows:
1. Background and Purpose.
1.1. Cell Power. Cell Power was previously known as Next Level Power
Corp., a New Hampshire Corporation and changed its name to Cell Power on or
about October 31, 2000. All references in this Settlement Agreement and Mutual
General Release ("Agreement") include Next Level Power Corporation.
1.2. Cell Power Agreements. Anuvu and Cell Power have entered into the
following three agreements (collectively "Cell Power Agreements") on the dates
specified:
(a) Licensing Agreement dated effective September 14, 2000;
(b) Exclusive Purchase and License Agreement for Fuel Cell
Production Facility dated effective January 15, 2001;
(c) Joint Venture Agreement for Anuvu/Cell Power, a New Hampshire
Joint Venture dated effective January 15, 2001.
1.3. Plugless Power. Anuvu had also entered into a Royalty Agreement
dated effective September 14, 2000 (the "Royalty Agreement") with PPC. As
additional consideration for this Agreement, PPC has agreed to consent to Anuvu
assigning to Cell Power all of Anuvu's rights and obligations under the Royalty
Agreement and PPC shall release and hold Anuvu harmless from any claim against
Anuvu under the Royalty Agreement as further set forth herein.
1.4. Anuvu. Anuvu also entered into certain agreements with Xxxxx, Sr.
under which Xxxxx, Sr. has asserted a right to certain commissions, stock
options, reimbursement, compensation or loans (collectively, "Commissions") for
assisting Anuvu.
1.5. {Cell Power Ownership. Whistler has agreed to purchase, and
Xxxxx, Sr. and _____________ ("Sellers") have agreed to sell,} [Assignment of
Cell Power Agreements and Royalty Agreement. Cell Power and PPC have agreed to
assign all right, title and interest in the Cell Power Agreements and the
Royalty Agreement to H2 ERA] pursuant to the terms of the {Stock Purchase
Agreement dated ________________, 2002, all shares of Cell Power owned by
Sellers (approximately 59% of Cell Power's outstanding stock)} [Assignment of
Contracts and Licenses dated November __, 2002, in exchange for the transfer of
certain shares of Whistler stock to Cell Power, all as provided therein].
1.6. Disputes. Various differences and disputes have arisen between
Anuvu and Cell Power concerning the rights and responsibilities under the Cell
Power Agreements and the Exclusive Purchase and License Agreement for the Fuel
Cell Production Facility ("Facility Agreement") dated __________, by and between
Anuvu and Cell Power. Various differences and disputes also have arisen between
Xxxxx Xx. and Anuvu and Xxxxx Xx. and Xxxxxx, Xxxxx and Cell Power regarding the
Commissions, regarding alleged breaches by Xxxxxx and Xxxxx of their agency
duties to Xxxxx, Sr. as majority owner of Cell Power (the "Agency Disputes") and
various other matters.
1.7. Settlement. Except as set forth above, each party disputes the
allegations made against him, her, or by any other party and denies that he,
she, or it has liability to any other party. The parties have agreed to settle
and release all disputes and claims which do or may exist between them, or may
exist in the future, arising out of the Cell Power Agreements, the Royalty
Agreement, the Commissions, the Agency Disputes and the Facility Agreement, on
the terms and conditions set forth below.
2. Definitions. The terms and phrases defined in this Section 2 shall
have those meanings whenever used in this Agreement.
2.1. Fuel Cell. "Fuel Cell" refers to all of Anuvu's Fuel Cell stack
technology developed up to the date of signing including but not limited to the
mass-produceable Carbon-X fuel cell technology developed and owned by Anuvu
described in the patent or patents described in Section 3, as well as the
Manual, as defined herein.
2.2. Escrow. "Escrow" refers to an Escrow to be established with
__________________ located at ________________________ pursuant to the "Escrow
Instructions" as defined below.
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2.3. Escrow Instructions. "Escrow Instructions" refers to the
instructions to be provided to _________, a full and complete copy of which is
attached as Exhibit _____.
2.4. License Agreement. "License Agreement" refers to the Agreement
whereby Anuvu shall license to {Cell Power} [H2 ERA] its Fuel Cell technology
and Polyelectric Formula, a full and complete copy of which is attached as
Exhibit _____.
2.5. Manual. "Manual" refers to a written manual to be prepared by
Anuvu describing the Fuel Cell technology and Fuel Cell manufacturing processes
up to the level required to enable {Cell Power} [H2 ERA] to exploit the Fuel
Cell Technology including but not limited to the following information:
(1) Fuel Cell assembly; drawings;
(2) All Fuel Cell parts drawings;
(3) Fuel Cell assembly instructions including the processes and
steps to assemble a Fuel Cell, including allowable tolerances;
(4) All chemical formulas used in the manufacturing of the Fuel
Cell including, but not limited to, the Polyelectric Formula, as well as
instructions on how to manufacture such formulas; and
(5) A list of all Fuel Cell components and the identity of the
suppliers who produce and sell such components.
(6) A list of all equipment necessary to manufacture the Fuel
Cell on a production basis; and
(7) A list of chemicals, components and parts suppliers (setting
forth the chemicals, components or parts they supply) necessary for the
production of the Fuel Cell.
2.6 Polyelectric Formula. "Polyelectric Formula" refers to the polymer
formula used in manufacturing the Fuel Cell.
2.7. Suzuki Vehicle. "Suzuki Vehicle" refers to the vehicle originally
manufactured by Suzuki in the possession of Anuvu which will be first converted
by Anuvu to operate on batteries and then converted by Anuvu to operate on a
Fuel Cell as set forth below and which shall always remain the property of
Anuvu.
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2.8. Xxx Xxxxx. "Xxx Xxxxx" shall mean Xxx Xxxxx or such other
engineer certified by the State of California and who has been retained by {Cell
Power} [H2 ERA] as its technical consultant to review the information to be
provided by Anuvu to {Cell Power} [H2 ERA] under this Agreement; provided that
in the event Xx. Xxxxx is unavailable to perform such duties, an engineer shall
be selected who is acceptable to both parties.
3. Settlement {(Anuvu/Cell Power)}[(Anuvu/H2 ERA)].
3.1. Deliverables. Anuvu shall deliver to {Cell Power, and Cell Power}
[H2 ERA, and H2 ERA] shall deliver to Anuvu, the following items on or before
the date set forth below:
(a) Obligations Upon Execution. Contemporaneously with the
execution of this Agreement, {Cell Power} [H2 ERA] shall:
(1) deposit into Escrow a duly and fully executed original
of the Consent to Assignment of the Royalty Agreement and Release described in
Section 5 below;
(2) deliver to Anuvu an original of the Escrow Instructions
duly executed by {Cell Power} [H2 ERA];
(3) deliver to Anuvu an original of the License Agreement
duly executed by Cell Power; and
(b) First Payment by {Cell Power. Cell Power} [H2 ERA. H2 ERA]
shall deliver the sum of Two Hundred Thousand Dollars ($200,000.00) to Xxxxxxxxx
Genshlea Chediak Xxxxxx Law Corporation ("Xxxxxxxxx") on or before one hundred
twenty (120) days from the date of this Agreement (should {Cell Power} [H2 ERA]
fail to deliver the first payment by that date, {Cell Power} [H2 ERA] shall
still be obligated to deliver the Consent to Assignment of Royalty Agreement as
provided herein and Anuvu shall have no further obligations hereunder), which
can be released to Anuvu only upon the satisfaction of the following three
events:
(1) Anuvu files a patent application for the Polyelectric
Formula used in manufacturing the Fuel Cell and a patent application for the
Fuel Cell technology;
(2) full execution of the Escrow Instructions, and deposit
of the Escrow Instructions into Escrow; and
(3) full execution and deposit into Escrow of the License
Agreement.
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(c) Second Payment By {Cell Power. Cell Power} [H2 ERA. H2 ERA]
shall pay to Xxxxxxxxx an additional Two Hundred Thousand Dollars ($200,000.00)
thirty (30) days from the release of the first payment, which can be released to
Anuvu when it has performed the following:
(1) Anuvu has prepared and delivered to Xxxxxxxxx, to hold
in trust, the completed Manual which Xxxxxxxxx shall allow Xxx Xxxxx to review
during normal business hours at a mutually convenient time; and
(2) Anuvu has provided reasonable access to Xxx Xxxxx to
examine the Suzuki Vehicle for regular inspections during normal business hours
at times that are mutually convenient to Anuvu and Xxx Xxxxx.
(d) Third Payment by {Cell Power} [H2 ERA]. Commencing thirty
days from the release of the second payment, {Cell Power} [H2 ERA] shall pay to
Anuvu an additional Two Hundred Thousand Dollars ($200,000.00) in equal monthly
installments of Sixteen Thousand Six Hundred Sixty-Six and 67/100 Dollars
($16,666.67) on the condition that Anuvu has performed the following:
(1) Xxx Xxxxx has successfully completed the assembly of a
fully functional five kilowatt (5kw) Fuel Cell using the Manual, with the
technological support of Anuvu in Anuvu's facility; and
(2) Anuvu has successfully demonstrated that the Suzuki
Vehicle using the Fuel Cell can operate under its own power for a range of at
least 125 miles on level ground without refueling
(e) Additional Deliverables Of {Cell Power} [H2 ERA]. Within
thirty (30) days after completion of the assembly of one (1) five kilowatt (5kw)
Fuel Cell as set forth above, {Cell Power} [H2 ERA] shall cause Xxx Xxxxx to
execute and deposit into Escrow the Certification attached as Exhibit ___ to
this Agreement and as Exhibit ____ to the Escrow Instructions. Anuvu's only
continuing obligations shall be to provide {Cell Power} [H2 ERA] with technical
support concerning the Fuel Cell, the Polyelectric Formula or manufacturing and
shall be limited to that support required under the License Agreement.
3.2. Trust Account. {Cell Power} [H2 ERA] shall deliver to Anuvu the
payments identified in this Agreement by wire transfer to "Xxxxxxxxx Genshlea
Chediak Xxxxxx Client Trust Account, In Trust for Anuvu Incorporated" to the
following account:
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Xxxxxxxxx Genshlea Chediak Xxxxxx Client Trust Account
Commerce Security Bank
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Account No.: 00000000, ABA Routing No.: 000000000
4. Termination Of Prior Agreements. The Cell Power Agreements are all
terminated and extinguished and all provisions are of no further force or effect
notwithstanding survival of any provisions following termination that are
conjoined therein as of {October} [November] ___, 2001 and replaced solely by
this Agreement and the Exhibits thereto. The parties specifically intend for
this Agreement and the attached exhibits to constitute a novation of the Cell
Power Agreements.
5. Assignment of Royalty Agreement. Following such assignment and the
delivery of all items required by Anuvu pursuant to Section 3 and the payment of
all monies by {Cell Power} [H2 ERA] pursuant to such sections, {PPC} [H2 ERA]
shall deliver the fully executed Consent to Assignment of Royalty Agreement and
Release to Xxxxxxxxx as described in Section 3 above. In the event {Cell Power}
[H2 ERA] defaults in its obligations to provide payments as provided in Section
3, for any reason other than a material breach by Anuvu, then {PPC} [H2 ERA]
shall still be obligated to deliver the Consent to Assignment of Royalty
Agreement as provided herein. Anuvu shall assign to {Cell Power} [H2 ERA] all of
Anuvu's rights, interests, and obligations under the Royalty Agreement and {Cell
Power} [H2 ERA] hereby assumes all those rights, interests, and obligations.
{PPC} [H2 ERA] hereby agrees to release Anuvu from any and all obligations Anuvu
has under the Royalty Agreement.
6. General Cure Rights. With respect to the parties' obligations set
forth in Section 3, above, if either party fails to perform on or before the
date specified, the other party shall notify defaulting party in writing of the
default. The defaulting party shall then have seven (7) business days to cure a
default requiring the payment of monies and fifteen (15) business days to cure a
nonmonetary default. Failure to timely cure the default will be cause for the
non-defaulting party to terminate its continuing duties and obligations under
Section 3 above and, at the election of Anuvu, terminate the License Agreement
of even date herewith between the parties, and seek to recover any and all
damages resulting from the defaulting party's breach.
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7. Settlement (Anuvu/Xxxxx, Sr.). In consideration of the transfer to
Xxxxx, Sr. of 265,000 shares of common stock in Anuvu ("Anuvu Shares") and the
transfer to Xxxxx, Sr. of 50,000 free trading shares of common stock in Whistler
("Whistler Shares"), Xxxxx, Sr. hereby agrees to release any and all claims
against (i) Anuvu with regards to any Commission; (ii) Xxxxxx, Xxxxx and Cell
Power regarding the Agency Dispute; and (iii) all parties, as provided in
Section 8.
8. Mutual Release. Excepting the obligations that are expressly set forth
in this Agreement, the parties to this Agreement shall and do hereby mutually
release and forever discharge each other, and each other's predecessors,
successors, heirs, assigns, executors, administrators, partners, agents,
employees, officers, directors, shareholders, representatives, insurers,
attorneys, affiliates and all persons acting by, under, through or in concert
with any of them, against any and all claims, damages, actions, causes of
action, claims of indemnity, claims of contribution, liabilities, judgments,
liens, contracts, agreements, rights, debts, suits, obligations, promises, acts,
costs, expenses, fees, attorneys' fees, damages, losses and charges of whatever
nature, whether at law or in equity, whether known or unknown, suspected or
unsuspected, fixed or contingent, forever filed or prosecuted (hereinafter
"claims") which the parties now have, claim to have or at any time heretofore
had, or claimed to have, against each other or against the other parties to this
Agreement
9. Unknown Claims.
9.1. Scope of Release. The parties each acknowledge and agree that
this release applies to all claims for injuries, damages, or losses to itself,
himself and its or his property, real or personal (whether those injuries,
damages, or losses are known or unknown, foreseen or unforeseen, or patent or
latent) that each may have against the other, arising out of or based upon any
or all of the matters, facts, events or occurrences alleged or referred to in
the Action and each hereby waives application of California Civil Code Section
1542.
9.2. Section 1542. The parties certify that each has read and
understands the following provisions of California Civil Code Section 1542:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
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10. Effect of Section 1542 Waiver. Each party understands and acknowledges
that the significance and consequence of this waiver of California Civil Code
Section 1542 is that even if any party should eventually suffer additional
damages arising out of the facts referred to in this Agreement within the scope
of the Release, he or it will not be able to make any claim for those damages.
Furthermore, each party acknowledges that he or it intends these consequences
even as to claims for damages that may exist as of the date of this Agreement
but which the party does not know exist, and which, if known, would materially
affect the party's decision to execute this release, regardless of whether the
lack of knowledge is the result of ignorance, oversight, error, negligence, or
any other cause.
11. No Assignment. The parties represent and warrant that no portion of
the Cell Power Agreements, the Royalty Agreement, the Commissions, the Agency
Dispute or any claim, counterclaim, right, demand, action, or cause of action
which any party had, has, or might have arising out of the matters released
hereby, nor any portion of any recovery or settlement to which any party might
be entitled, has been assigned or transferred to any other person or entity in
any manner that limits the right or authority to enter into or perform under
this Agreement and the Exhibits hereto, including by way of subrogation or
operation of law or otherwise. In the event that any claim, counterclaim,
demand, or suit should be made or instituted against any party because of any
such purported assignment, subrogation, or transfer, the party from whom such
purported assignment, subrogation, or transfer was alleged to have occurred
agrees to indemnify and hold harmless the other party against such claim,
counterclaim, demand, or suit and to pay and satisfy any such claim,
counterclaim, demand, or suit, including necessary expenses of investigation,
attorneys' fees, and costs.
12. Mutual Indemnity. Without in any manner limiting the scope of the
general release provided in Section 8, each of the parties agree to indemnify,
defend and hold harmless each of the other parties and their respective agents
from and against any loss, cost, liability, action, suit, proceeding, claim,
demand, expense, penalty or fine, including without limitation attorneys' fees
(without regard to whether litigation is commenced) suffered or incurred,
directly or indirectly, as a result of any claim that arises from a breach of
this Agreement or: (i) in the case Whistler, for any actions by Xxxxx Xx., Xxxxx
Xx., Friszche, Xxxxx and PPC (the "Xxxxx Parties") or {Cell Power} [H2 ERA]
which occurred prior to the Closing Date that result in a claim against Whistler
or {Cell Power} [H2 ERA]; and (ii) in the case of the Xxxxx Parties, for any
actions by Cell Power, Whistler, Xxxxxx or Xxxxx related to the operation of
Cell Power which occur after the closing date that result in a claim against one
of the Xxxxx Parties.
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13. Xxxxx, Sr. Legal Fees. Whistler shall pay $5,000.00 to Xxxxx, Sr. to
assist Xxxxx, Sr. in the payment of legal fees incurred in the matters covered
by this Agreement. The Xxxxx Parties agree that they shall be responsible for
all other legal fees incurred by or on behalf of Cell Power, H2 Era and the
Xxxxx Parties in the matters covered by this Agreement.
14. Arbitration. Any controversy or claim arising out of or relating to
this contract, or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association in accordance with its
Commercial, or other Arbitration Rules, including the OPTIONAL RULES FOR
EMERGENCY MEASURES OF PROTECTION and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. The
Parties to this Agreement expressly agree that any arbitration arising from our
out of this Agreement shall be conducted in Sacramento, California. Further, the
Parties expressly waive their right, if any, to a trial by jury of such claims
or controversies and agree that the award of the arbitrator shall be final and
binding upon them as though rendered by a court of law.
15. Notice. Any notice under this Agreement shall be in writing and shall
be sent by facsimile transmission and by overnight mail, and shall be deemed to
be received on the first business day after the writing was sent by guaranteed
overnight mail. All parties and counsel shall notify all others of any address
or facsimile number changes. All notices shall be delivered as follows:
(a) If to Anuvu:
Xxxx X. Xxxxxxxx
Xxxxxxxxxxx Xxxxxxx
Xxxxxxxxx Genshlea Chediak Xxxxxx
000 Xxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Anuvu, Inc.
c/o Xxx Xxxxx
0000 X Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
(b) If the Xxxxx Parties:
Xxxxxxx X. Xxxxxx
000 Xxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxxxx Xxxxx, Xx.
0000 Xxxxxx Xxxxxx, Xxx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
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(c) If to Cell Power, Whistler, Xxxxxx and Xxxxx:
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X0X0
Facsimile: (000) 000-0000
16. Miscellaneous.
16.1 Confidential Information and Documents. Anuvu and {Cell Power}
[H2 ERA] have entered into confidentiality agreements and/or non-disclosure
agreements. Each of these confidentiality agreements and/or non-disclosure
agreements shall survive this Agreement and are not affected by the scope of the
release contained in this Agreement or the termination of the Action.
16.2 Costs. The parties shall bear their own costs and attorneys' fees
incurred in the Action.
16.3 Entire Agreement. This document, the Stock Exchange Agreement and
the License Agreement constitutes the entire agreement between the parties
relating to the subject matter of this Settlement Agreement, all oral agreements
being merged herein, and supersedes all prior representations. There are no
representations, agreements, arrangements, or understandings, oral or written,
between or among the parties relating to the subject matter of this Settlement
Agreement that are not fully expressed herein or therein.
16.4 Investigation. The parties hereto acknowledge and represent that
they have conducted such investigation of the facts and the law pertaining to
the matters released hereby as they deem necessary, and that in entering into
this Settlement Agreement they have not relied on any statement, promise, or
representation of any other party or any representative of such other party.
16.5 Amendment. The provisions of this Settlement Agreement may be
modified at any time by agreement of the parties. Any such agreement hereafter
made shall be ineffective to modify this agreement in any respect unless in
writing and signed by the party against whom enforcement of the modification or
discharge is sought.
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16.6 Waiver. Any of the terms or conditions of this Settlement
Agreement may be waived in writing at any time by the party entitled to the
benefit thereof, but no such waiver shall affect or impair the right of the
waiving party to require observance, performance, or satisfaction either of that
term or condition as it applies on a subsequent occasion or of any other term or
condition.
16.7. Succession. This Settlement Agreement shall inure to the benefit
of and be binding on the heirs, successors, assigns, executors, and
administrators of the respective parties. The parties acknowledge that {Cell
Power} [H2 ERA] may be acquired by, or assign its assets to another company or
companies, and nothing in this Agreement shall act as a restriction of any kind
on such acquisition or assignment.
16.8. Severability. If any provision of this Settlement Agreement
shall be held illegal, unenforceable, void, or voidable by any court, each of
the remaining terms shall continue in full force and effect and shall in no way
be impaired or invalidated.
16.9. Attorneys' Fees. If the services of an attorney are required by
any party to secure the performance of this Settlement Agreement or to obtain
enforcement, interpretation, or otherwise upon the breach or default of another
party to this Settlement Agreement, or if any judicial remedy or arbitration is
necessary to enforce or interpret any provision of this Settlement Agreement or
the rights and duties of any party in relation thereto, the prevailing party
shall be entitled to reasonable attorneys' fees, costs, and other expenses, in
addition to any other relief to which such party may be entitled.
16.10. Counterparts. This Settlement Agreement may be executed in any
number of counterparts with the same effect as if the parties had all signed the
same document. All counterparts shall be construed together and shall constitute
one agreement.
16.11. Governing Law. The rights and obligations of the parties and
the interpretation and performance of this Settlement Agreement shall be
governed by the law of California, excluding its conflict of laws rules.
16.12. Representation by Counsel. This Agreement has been carefully
read by all parties and the contents hereof are known and understood by all
parties. The parties have each received independent legal advice from attorneys
of their choice with respect to the preparation, review and advisability of
executing this Agreement. Prior to the execution of this Agreement by each
party, the party's attorney has reviewed the Agreement and each party
acknowledges that they have executed this Agreement after independent
investigation and without fraud, duress or undue influence.
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16.13. Representation of Power to Settlement. Each party hereto
warrants and represents that he or it has the power and authority to settle and
release claims as set forth herein, and that his or its signatory is duly
authorized and empowered to sign this Settlement Agreement on his or its behalf.
16.14. Effective Date. This Agreement is dated effective as of
November ___, 2001.
ANUVU INCORPORATED,
A California Corporation
By:
----------------------------------
Xxx Xxxxx, President and CEO
CELL POWER, INC.
A New Hampshire Corporation
By:
----------------------------------
WHISTLER, INC. PLUGLESS POWER CORPORATION,
A Delaware Corporation A New Hampshire Corporation
By: By:
---------------------------------- ----------------------------------
---------------------------------- ----------------------------------
Xxxxxx Xxxxx, Xx. Xxxxxxx Xxxxx
---------------------------------- ----------------------------------
Xxxxxx X. X. Xxxxx Xxxxx Xxxxxx
---------------------------------- ----------------------------------
Xxxxxx Friszche ____________ Xxxxx
APPROVED AS TO FORM AND CONTENT:
XXXXXXXXX GENSHLEA CHEDIAK XXXXXX
A Law Corporation
By:
----------------------------------
Xxxx X. Xxxxxxxx
Attorneys for Anuvu, Inc.
LAW OFFICES OF XXXXXXX X. XXXXXX
By:
----------------------------------
Xxxxxxx X. Xxxxxx
Attorney for the Xxxxx Parties
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