Exhibit 10.108
--------------
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT is made this 19th day of August, 2002, by and
among Commodore Applied Technologies, Inc. for itself and on behalf of its
officers, directors, agents, attorneys, and employees (hereinafter "Commodore"),
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇") and Dispute
Resolution Management, Inc. for itself and on behalf of its officers, directors,
agents, and employees ("DRM").
1. Recitals.
---------
(A) On or about August 30, 2000, Commodore entered into an Amended and
Restated Stock Purchase Agreement (the "Agreement") with ▇▇▇▇▇▇▇, Speciale and
DRM.
(B) Commodore breached its obligation under Paragraph 7.2(b) of the
Agreement, thereby giving ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ the right to foreclose on the DRM
stock and the Commodore stock (the "Collateral") pursuant to Paragraph 6 of the
Pledge and Security Agreement attached as Exhibit D to the Agreement.
(C) On May 12, 2002, ▇▇▇▇▇▇▇ and Speciale gave notice to Commodore of
their intent to foreclose on the Collateral..
(D) On July 3, 2002, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ sent a notice to Commodore of
their intent to conduct a foreclosure sale on the Collateral on July 17, 2002.
(E) On July 12, 2002, Commodore filed a Complaint and a Motion for
Temporary Restraining Order against Russell, Speciale, and DRM requesting that
the United States District Court for the Southern District of New York in Case
No. 02 CV 5341 (the "Litigation") temporarily restrain and preliminarily enjoin
▇▇▇▇▇▇▇ and Speciale from conducting the foreclosure sale of the Collateral.
(F) At a hearing on July 16, 2002, Judge ▇▇▇▇▇ ▇▇▇▇ of the United State
District Court for the Southern District of New York denied Commodore's Motion
for a Temporary Restraining Order.
(G) On July 17, 2002, ▇▇▇▇▇▇▇ and Speciale conducted a foreclosure sale
of the Collateral. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ were the successful bidders for the
Collateral.
(H) Commodore is indebted to DRM for loans totaling approximately
$1,100,000.
(I) The parties to this Settlement Agreement desire to compromise and
settle all disputes and controversies between them in accordance with the terms
and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION OF THE PAYMENTS, PROMISES, CONVENANTS
AND MUTUAL AGREEMENTS AS SET FORTH BELOW, THE PARTIES HERETO AGREE AS FOLLOWS,
AND HEREBY STIPULATE THAT SUCH CONSIDERATION SHALL BE DEEMED TO BE SUFFICIENT:
(1) At Closing, Commodore shall deliver the executed Notice of
Dismissal with Prejudice of the Litigation in the form attached hereto as
Exhibit A.
(2) At Closing, Commodore, Russell, Speciale, and DRM shall exchange
mutual releases in the form attached hereto as Exhibits B and C.
(3) Commodore acknowledges that ▇▇▇▇▇▇▇ and Speciale have previously
returned to Commodore 4,750,000 shares of Commodore's common stock. At Closing,
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ agree to return to Commodore an additional 1,187,500 shares
of Commodore's common stock.
2
(4) ▇▇▇▇▇▇▇ and Speciale waive any right they may have to seek and
enforce any deficiency judgment against Commodore to which they may be entitled
after the foreclosure sale on the Collateral.
(5) At Closing or as soon thereafter as practicable, but in no event
later than September 30, 2002, Commodore shall issue to DRM 800,000 shares of
Series H Convertible Preferred Stock (par value $1.00) (the "Preferred Stock")
having the following rights:
(a) The conversion feature would first be exercisable on June
30, 2003.
(b) Only 80,000 shares of the Preferred Stock shall be
convertible in any calendar quarter subsequent to June 30,
2003, and the remaining balance may be converted on or after
August 1, 2005.
(c) The conversion price of the Preferred Stock shall be
determined by the average closing price of Commodore's
common stock in the previous 30 trading days, but in no
event shall the conversion price be less than $.20 per
share.
(d) The Preferred Stock shall have an annual dividend of 3%,
payable in the Preferred Stock within 30 days of the end of
Commodore's fiscal year.
(e) The Preferred Stock shall not be assignable.
(f) Commodore shall file such appropriate documentation as is
necessary with the Securities and Exchange Commission and
any listing exchange to insure that the underlying Commodore
common stock is registered and fully tradable.
(6) At the time of the delivery of the Preferred Stock, DRM shall
provide a proxy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇") in the form attached hereto as
3
Exhibit D. The proxy shall terminate in the event that ▇▇▇▇▇▇ is no longer the
Chief Executive Officer of Commodore or shall expire automatically on the sooner
of August 1, 2004 or when such shares subject to the proxy are no longer owned
by DRM.
(7) Closing shall be at the offices of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, on or before August 23, 2002. The Closing may be
conducted by U.S mail, e-mail or fascimile.
(8) This Settlement Agreement is made pursuant to and shall be governed
by the laws of the State of Utah.
(9) Neither this Settlement Agreement nor any provisions of this
Settlement Agreement can be modified or waived in any part, except by an
agreement in writing signed by each of the parties hereto, expressly consenting
to such modification or waiver.
(10) All parties hereto do hereby acknowledge and agree that they have
been represented by independent counsel of their own choice throughout all
negotiations which preceded the execution of this Settlement Agreement, and that
they have executed this Settlement Agreement with the consent and upon the
advice of said independent counsel.
(11) The parties hereto understand, acknowledge and agree that this
Settlement Agreement shall inure to the benefit of their successors,
administrators, executors, representatives, heirs, and assigns.
(12) Any dispute arising under this Settlement Agreement, including any
dispute regarding the application or interpretation of this Settlement
Agreement, shall be resolved by binding arbitration under the supervision of the
American Arbitration Association pursuant to its rules for resolution of
commercial disputes. Any such proceeding shall be conducted in Salt Lake City,
Utah.
4
Commodore Applied Technologies, Inc.
Dated: August 19, 2002 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------- --------------------
Its: Chairman & CEO
--------------
Dated: August 19, 2002 /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------- ----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Dated: August 19, 2002 /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------- ---------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Dated: August 19, 2002 Dispute Resolution Management, Inc.
---------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Its: President & COO
---------------
5
