Exhibit 10.46
MUTUAL RELEASE AND SETTLEMENT AGREEMENT
THIS MUTUAL RELEASE AND SETTLEMENT AGREEMENT is entered into
effective as of July 7, 2001, by and among TSET, Inc., a Nevada
corporation ("TSET"), Xxxxxx & Price Ltd., a corporation organized and
existing under the laws of the Isle of Man ("FPL"), and Xxxx X. Xxxxx,
an individual residing in the State of California ("Xxxxx"). TSET.
FPL, and Xxxxx are collectively referred to herein as "the Parties."
WHEREAS, TSET and FPL entered into that certain Term Sheet, dated as
of May 28, 1999 (the "Term Sheet");
WHEREAS, a dispute has arisen among the Parties involving, among
other things, certain terms and conditions set forth in the Term Sheet; and
WHEREAS, the Parties intend, individually and collectively,
that this Agreement memorialize the terms and conditions upon which
they shall release and settle any and all claims, counterclaims,
cross-claims, and causes of action between or among them that have
been, could have been, or could be asserted against each other
(hereinafter collectively referred to as "claims") including, without
limitation, any and all claims arising out of the Term Sheet and
relating to that certain lawsuit filed by TSET in Clackamas County,
Oregon, captioned TSET, Inc. x. Xxxxxx & Price Ltd., civil case no.
CCV-0001304 (the "Lawsuit");
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises set forth herein and for other good and valuable consideration, the
delivery, receipt, and sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1. MUTUAL RELEASE AND SETTLEMENT.
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(a) FPL and Xxxxx individually, collectively,
mutually, fully, completely, comprehensively, and
forever relinquish, waive, and release TSET and
all parents, subsidiaries, affiliated
corporations, directors, officers, employees,
shareholders, representatives, attorneys,
insurers, agents, accountants, successors, and
assigns, individually, jointly, and collectively
("the Released Parties"), from and against any
and all claims whatsoever, now existing or
hereafter arising, including, without limitation,
any and all claims related to the Term Sheet
and/or the Lawsuit, known or unknown, now
existing or hereafter arising, based upon
intentional or unintentional conduct, acts of
omission or commission, statutory provisions or
common law, or otherwise.
(b) TSET fully, completely, comprehensively, and
forever relinquishes, waives, and releases FPL
and Xxxxx and all parents, subsidiaries,
affiliated corporations, directors, officers,
employees, shareholders, representatives,
attorneys, insurers, agents, accountants,
successors, and assigns, individually, jointly,
and collectively ("the Released Parties"), from
and against any and all claims whatsoever, now
existing or hereafter arising, including, without
limitation, any and all claims related to the
Term Sheet and/or the Lawsuit, known or unknown,
now existing or hereafter arising, based upon
intentional or unintentional conduct, acts of
omission or commission, statutory provisions or
common law, or otherwise.
(c) TSET agrees to dismiss with prejudice and without
costs to any party the claims asserted by it in
the Lawsuit, and FPL and Xxxxx agree to dismiss
with prejudice and without costs to any party the
claims asserted by FPL and Xxxxx in the Lawsuit,
and the Parties mutually agree not to directly
or indirectly prosecute or hereafter maintain or
institute, or cause to be prosecuted, maintained,
or instituted against each other, any action at
law, suit, or proceeding in equity, or
administrative proceeding, for any claim,
counterclaim, or cross-claim released pursuant to
this Agreement, or otherwise. Notwithstanding
the foregoing, nothing in this Section 1 shall
prevent any Party from bringing a legal or
equitable action seeking to enforce the terms
hereof. The execution and delivery of this
Agreement by the Parties shall effect and
constitute a comprehensive, complete, and final
waiver, relinquishment and release of the
Released Parties from and against any and all
claims of the Parties against each other (and in
any combination of Parties with respect thereto)
relating to any aspect of any obligation under
the Term Sheet. Except as otherwise provided
herein, upon execution and delivery of this
Agreement, the Parties shall have no further,
continuing, or additional performance obligations
of any nature whatsoever under the Term Sheet to
each other or any other person.
2. RELEASE AND SETTLEMENT CONSIDERATION.
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In consideration of the release, settlement, and covenants set forth
herein, the Parties agree as follows:
(a) Within 10 business days after receipt of a copy
of this Agreement showing execution by a duly
authorized representative of FPL and by Xxxxx,
TSET shall authorize the issuance to FPL of
375,000 restricted shares of TSET's common stock,
par value $0.001 per share (the "TSET Shares"),
to a mutually agreeable third party escrow agent
(the "Escrow Agent"), to be held as set forth
herein for the benefit of FPL and Xxxxx. TSET
shall instruct its Transfer Agent to prepare and
deliver to the Escrow Agent certificates
representing the TSET Shares as soon as
practicable thereafter. The TSET Shares shall
bear the customary legend restricting
transferability, to be affixed by the Transfer
Agent.
(b) FPL and Xxxxx acknowledge that TSET intends in
good faith to file a registration statement on
Form S-1 (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC"),
such filing being anticipated to occur within the
30-business day period next following the date
hereof, and intends to include the TSET Shares in
the Registration Statement. FPL and Xxxxx
acknowledge and agree that declaring the
effectiveness of the Registration Statement is
within the sole discretion of the SEC, that there
can be no assurance that the SEC will declare
effective the Registration Statement, and that
the number of TSET Shares that may be registered
pursuant to the Registration Statement may be
less than the total number of TSET Shares
mentioned in Subsection (a) above. TSET agrees
that it shall use its best efforts to obtain
registration of the TSET Shares. TSET's
inability to obtain registration for all or any
of the TSET Shares mentioned in Subsection (a)
shall not constitute a breach of this Agreement
or give rise to any claim of liability of TSET in
favor of FPL or Xxxxx or any other person. Upon
the declaration of effectiveness of the
Registration Statement by the SEC, the Escrow
Agent shall deliver the TSET Shares to the
Transfer Agent to enable removal of any
restrictive legends thereon.
(c) Notwithstanding any registration of the TSET
Shares pursuant to Subsection (b) above, FPL and
Xxxxx each agree that they shall not,
individually or collectively, sell, assign,
transfer, pledge, encumber, or convey (in any
case, "transfer") a total of more than 5,000
TSET Shares on any trading day, and agree that in
no case shall they transfer a total of more than
12,500 TSET Shares during any 5 consecutive
trading days or more than a total of 50,000 TSET
Shares during any 30 day period. The Parties
agree that the first permitted transfer of any
TSET Shares shall not occur before the lapse of
30 days following receipt by the Escrow Agent of
the stock certificates mentioned in the last
sentence of Subsection (a) above. The Parties
further agree that the Escrow Agent shall be
instructed that it can release a maximum of
50,000 TSET Shares for transfer by FPL and Xxxxx
in any given 30 day period. Furthermore, the
Escrow Agent shall notify TSET of the date and
quantity of any such releases. The provisions of
this Subsection (c), including the limitation on
transfer of shares during any given trading
period described in this Subsection (c), shall
continue in full force and effect until all TSET
Shares received by FPL and Xxxxx pursuant to this
Agreement have been transferred.
(d) In addition to ensuring compliance with the
provisions of Subsection (c) above, FPL and Xxxxx
shall each be responsible for ensuring that any
transfer of the TSET Shares by them is effected
in compliance with all applicable federal and
state securities laws. FPL and Xxxxx shall be
each responsible for the declaration and payment
of any and all taxes applicable to receipt of the
TSET Shares pursuant to this Agreement and any
transfer thereof. TSET shall bear no
responsibility for FPL's and Xxxxx' compliance
with law or payment of any tax liabilities.
3. ALLOCATION OF TSET SHARES.
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TSET's sole responsibility with respect to the TSET Shares shall be
the delivery of the TSET Shares to the Escrow Agent. FPL and Xxxxx agree
that any allocation of ownership of the TSET Shares between them shall be
their sole responsibility, and that neither FPL nor Xxxxx will require TSET
or its representatives to intervene in or become a witness or a stakeholder
in connection with any dispute with respect to questions of such allocation.
Accordingly, unless otherwise instructed in a writing signed by both FPL and
Xxxxx, as to the number of shares to be allocated to FPL and to Xxxxx,
respectively, certificates representing the TSET Shares shall be prepared in
the name and for the benefit of FPL and its attorney, Xxxxx X. Xxxxxxx. The
indemnification provisions of Section 4 hereof shall apply with respect to
any dispute between FPL and Xxxxx regarding the allocation of the TSET
Shares.
4. INDEMNIFICATION OF TSET.
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FPL and Xxxxx, jointly and severally (in either case, the
"Indemnifying Parties"), shall indemnify, protect, defend, and hold harmless
TSET and its directors, officers, shareholders, employees, agents,
attorneys, accountants, representatives, successors, and assigns
(hereinafter collectively referred to as the "Indemnified Parties") from and
against any and all known or unknown now existing or hereafter arising
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities, damages, and expenses, irrespective of whether the Indemnified
Party is a party to the action for which indemnification is sought
hereunder, and including reasonable attorneys' fees and disbursements
(collectively, the "Indemnified Liabilities"), incurred or suffered by the
Indemnified Parties or any of them relating to or arising from the Term
Sheet, the Lawsuit and the allegations contained or that could have been
contained therein, and/or the relationship among the Parties to this
Agreement. To the extent the foregoing indemnification may be unenforceable
for any reason, the Indemnifying Parties shall make the maximum contribution
to the satisfaction of the Indemnified Liabilities which is permissible
under applicable law. The Indemnifying Parties acknowledge and agree that
the Indemnified Liabilities shall include, without limitation, any legal or
equitable claims threatened or instituted by any person not a party to this
Agreement relating directly or indirectly to the Term Sheet, the Lawsuit, or
any combination thereof.
5. SECTION 1542 WAIVER.
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The Parties, whether or not residents of the State of California,
each expressly waives and relinquishes, to the fullest extent permitted by
law, the provisions, rights, and benefits of Section 1542 of the California
Civil Code (and all other similar statutes of any state or territory), which
provides:
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.
Each of the Parties may hereafter discover facts in addition to or
different from those which he or it now knows or believes to be true, but
each Party hereby waives any and all provisions, rights and benefits
conferred by any law of any state or territory of the United States, or
principle of common law that is similar, comparable or equivalent to Section
1542 of the California Civil Code. Except as otherwise provided herein, the
Parties and each of them fully, finally, and forever settle and release any
and all claims, known or unknown, suspected or unsuspected, contingent or
noncontingent, whether or not concealed or hidden, that now exist or
heretofore have existed upon any theory of law or equity now existing or
coming into existence in the future, including, but not limited to, conduct
that is negligent, intentional, with or without malice, or a breach of any
duty, law or rule, without regard to the subsequent discovery or existence
of such different or additional facts.
6. NO ADMISSION OF LIABILITY.
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This Agreement is being entered into solely for the purpose of
releasing, settling, and compromising the claims and the Lawsuit described
herein and is not intended to be, and shall not be construed as
constituting, any admission of any liability by any of the Parties. In
addition, without limiting the foregoing, TSET denies any contractual
relationship or other liability to Xxxxx.
7. CONFIDENTIALITY OF SETTLEMENT.
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FPL and Xxxxx agree that they will keep each of the terms of this
Agreement confidential, and that such confidentiality is a material term of
this Agreement. Except as required by law or court order, neither FPL nor
Xxxxx shall directly or indirectly make, publish, or cause to be made or
published any statement to any third party regarding the subject matter of
this Agreement. Such obligation of confidentiality shall not in any way be
diminished by, and shall continue in full force and effect regardless of,
any obligation of TSET, as a publicly-held company, to make disclosures with
respect thereto in fulfillment of the reporting requirements to which TSET
is subject under applicable federal and state securities laws. If inquiries
are made of FPL or Xxxxx by any third party regarding the transactions set
forth herein, FPL and Xxxxx shall state only that the dispute between the
Parties has been amicably resolved on mutually agreeable terms.
8. REPRESENTATIONS AND WARRANTIES.
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FPL and Xxxxx each represent and warrant to TSET that to the best of
their knowledge, no other person or entity has any interest in, right to, or
claim with respect to this Agreement, including the TSET Shares.
9. LEGAL FEES.
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Each Party shall bear and be responsible for the payment of its own
respective legal fees, costs, and disbursements, including those incurred in
connection with this Agreement. Notwithstanding the foregoing, the parties
agree that, in any action for breach of this Settlement Agreement, or
enforcement of this Settlement Agreement, the prevailing party shall be
entitled to its reasonable attorney fees incurred in connection with such
action.
10. REPRESENTATION AND WARRANTY AS TO AUTHORITY, EXECUTION,
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DELIVERY, AND PERFORMANCE.
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The Parties represent and warrant to each other that (a) each has the
requisite power and authority to enter into and perform its obligations
under this Agreement, (b) the execution and delivery of this Agreement and
the consummation by each of them of the transactions contemplated herein
have been duly authorized by the appropriate managing authority of TSET and
FPL, and no further consent or authorization is required, (c) this Agreement
constitutes and upon its execution shall constitute the valid and binding
obligations of the Parties enforceable against each of them in accordance
with the terms hereof, 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 creditors' rights and remedies, and
(d) the person executing and delivering this Agreement on behalf of TSET and
FPL has been lawfully and fully authorized to do so.
11. COUNTERPARTS.
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This Agreement may be executed in two or more identical 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 Party; provided that a facsimile signature shall be considered due
execution and shall be binding upon the signatory thereto with the same
force and effect as if the signature were an original, not a facsimile
signature.
12. HEADINGS.
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The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.
13. SEVERABILITY.
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If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect
the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
14. INTEGRATION; AMENDMENT.
-----------------------
This Agreement supersedes all other prior oral or written agreements
between the Parties with respect to the subject matter hereof, and contains
the entire understanding of the Parties with respect to the matters covered
herein and, except as specifically set forth herein or therein, none of the
Parties hereto makes any representation, warranty, covenant or undertaking
with respect to such matters. No provision of this Agreement may be amended
other than by an instrument in writing signed by all of the Parties hereto,
stating that such instrument is intended to amend the provisions hereof, and
no provision hereof may be waived other than by an instrument in writing
signed by the Party against whom enforcement is sought. The term "Agreement"
and all reference thereto, as used herein, shall mean this Agreement as
originally executed or, if later amended or supplemented, then as so amended
or supplemented.
15. MISCELLANEOUS.
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This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective heirs, successors, and assigns. Neither FPL nor
Xxxxx shall assign this Agreement or any rights, duties, or obligations
hereunder, including by merger or consolidation, without TSET's prior
written consent. This Agreement is intended for the benefit of the Parties
and the Released Parties, and is not for the benefit of, nor may any
provision hereof be enforced by, any other person. The language used in this
Agreement shall 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.
16. GOVERNING LAW.
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This Agreement shall be governed by and construed in accordance with
the laws of the State of Oregon, exclusive of its conflicts of laws
principles.
17. REPRESENTATION BY COUNSEL.
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Each of the Parties hereto represents that it has had the full
opportunity to consult with counsel with respect to the significance of this
Agreement, and that each fully understands this Agreement and the terms
hereof.
IN WITNESS WHEREOF, the Parties have executed and delivered this
Agreement effective as of the date first written above.
TSET, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
XXXXXX & PRICE LTD.
By: /s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
Title: President
as authorized signatory
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
