TERMINATION AGREEMENT AND MUTUAL RELEASE
THIS
TERMINATION AGREEMENT AND MUTUAL RELEASE
(the
“Release”) is made and entered into on this 15th day of October 2008, by and
among (1) Distribution
Management Consolidators Worldwide, LLC, a
Delaware limited liability company having its principal place of business at
000
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (“DMC Worldwide”), (2) Neonode,
Inc.,
a
corporation having a principal place of business at 0000 Xxxxxxxxx Xxxx., Xxxxx
000, Xxx Xxxxx, XX 00000 (“Neonode”), (3) Neonode
AB,
a
Swedish corporation having a principal place of business at Warfvingesv’g 00,
XX-000 00 Xxxxxxxxx, Xxxxxx (“Neonode AB”) (Neonode AB together with Neonode,
the “Neonode Parties”), and (4) Neonode
USA, LLC,
a
Delaware limited liability company having a principal place of business at
000
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (“Neonode USA”) (all the parties together,
the “Parties,” and each individually, a “Party”).
WHEREAS,
DMC
Worldwide and Neonode entered into a Formation and Contribution Agreement,
dated
January 8, 2008, pursuant to which DMC Worldwide and Neonode formed Neonode
USA
(the “Formation Agreement”); and
WHEREAS,
the
Neonode Parties and Neonode USA entered into a License Agreement, dated January
8, 2008, pursuant to which the Neonode Parties granted certain license rights
to
Neonode USA (the “License Agreement”); and
WHEREAS,
the
Parties wish to terminate the Formation Agreement, with the exception of Section
7.3; terminate the License Agreement; dissolve Neonode USA; and release any
and
all claims among them in connection with the Formation Agreement and the License
Agreement, and any other claims or causes of action of whatsoever nature related
to Neonode USA through the date of this Release;
NOW,
THEREFORE,
the
Parties agree as follows:
1. Payment. Neonode
shall pay DMC Worldwide the sum of Two Hundred Twenty-Five Thousand Dollars
($225,000) in full satisfaction and settlement of any and all claims, demands
or
causes of action of whatsoever nature (including but not limited to
reimbursement of expenses incurred and/or additional capital contributions
made)
that DMC Worldwide may have in connection with the Formation Agreement, the
License Agreement, and/or with Neonode USA through the date of this Release.
If
for any reason a bankruptcy court of competent jurisdiction requires DMC
Worldwide to disgorge all or any part of the payment received pursuant to this
agreement, then DMC Worldwide shall have the right to demand payment of the
amount so disgorged from PA Brazil Holding B.V., a Dutch corporation.
2. Dissolution
of Neonode USA.
2.1 The
Parties agree to the dissolution of Neonode USA, and shall jointly take all
steps necessary to dissolve Neonode USA.
2.2 Neonode
and DMC Worldwide will execute and deliver such further instruments and perform
such further acts as may be required to carry out the dissolution of Neonode
USA.
2.3 Except
for activities required to carry out the dissolution of Neonode USA, Neonode
USA
shall not engage in any activities, perform any business, or incur any
liabilities.
2.4 The
Parties acknowledge that Neonode USA has no indebtedness to Neonode or to DMC
Worldwide.
3. Return
of Amounts Deposited in Escrow. The
deposits by each of Neonode and DMC Worldwide, in the amount of $250,000 each,
with their respective attorneys shall be returned to Neonode and DMC Worldwide,
respectively. The Parties acknowledge that none of them now has or ever had
any
interest in said escrow deposits by reason of the Formation Agreement or the
formation or operations of Neonode USA.
4. Mutual
Release. Except
for the obligations set forth and/or reaffirmed in this Release, each Party,
on
behalf of itself and its owners, affiliates, predecessors, successors, and
assigns, hereby fully releases and forever discharges each and every other
Party, including its affiliates, predecessors, successors, and assigns, from
any
and all actions, causes of action, suits, proceedings, claims, payment or other
monetary obligations, and demands of any type or nature whatsoever, which such
Party now has or hereafter may have, whether known or unknown, which are in
any
manner whatsoever, directly or indirectly, connected with or related to: (a)
the
Formation Agreement, (b) the License Agreement, or (c) Neonode USA. Each Party
waives the protection of any applicable statute which provides that a general
release does not extend to claims which the releasing party is not aware of
at
the time of executing the release.
5. Termination
of Agreements
5.1 The
Parties acknowledge and agree that, except for (a) Section 7.3 (Option to
Purchase or Sell/Appraisal Rights) which shall survive until June 30, 2009,
and
(b) Article 9 (Confidentiality) which shall survive for a period of two (2)
years from the date of this Release, the Formation Agreement is hereby rendered
null and void, without further force or effect whatsoever, and that each Party’s
rights and obligations, if any, under the Formation Agreement are hereby
terminated.
5.2 The
Parties acknowledge and agree that, except for Article 5 (Confidentiality)
which
shall survive, the License Agreement is null and void, without further force
or
effect whatsoever, and that each Party’s rights and obligations, if any, under
the License Agreement are hereby terminated.
5.3 Notwithstanding
the above, in the event that prior to June 30, 2009, Neonode sells all or any
part of the intellectual property owned by Neonode AB to an unaffiliated third
party, then DMC Worldwide shall be entitled to fifty percent (50%) of the net
proceeds from such sale, after the deduction of costs, expenses and taxes
relating to such sale.
6. Non-Disparagement.
6.1 Each
Party agrees (and shall direct and cause each of its affiliates, employees,
officers, and representatives) not to make disparaging, critical or otherwise
detrimental comments to any person or entity concerning the other Parties,
and
their affiliates, employees, officers and/or representatives, their business
affairs or financial condition, or
the
circumstances surrounding the termination of the Formation Agreement and the
License Agreement, and the dissolution of Neonode USA.
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6.2 For
purposes
of this Release, the term “disparage” shall mean any oral or written statement
or representation which, directly or by implication, tends, in the minds of
a
reasonable audience, to create a negative impression about the subject of the
statement or representation, but shall not include any statement described
in
section 6.3 or any factual responses to direct inquiries about Neonode USA
or
its termination.
6.3 For
the
avoidance of any doubt, either party may respond to inquiries regarding the
termination of the Formation Agreement and the License Agreement and the
dissolution of Neonode USA by stating, for example and not by way of limitation,
that after the formation of Neonode USA the Neonode Parties changed direction
and were interested in taking a different approach to the exploitation of their
technology, and therefore Neonode and DMC Worldwide agreed to part ways. .
7. Non-Admission
of Wrongdoing.
It is
understood and agreed that this Release does not constitute, and should not
be
construed as, an admission of wrongdoing by any Party.
8. Entire
Agreement. The
Parties agree that this Release constitutes the final and binding agreement
between them, and, except as expressly set forth otherwise herein, shall
supersede any and all other agreements, whether written, oral or implied. This
Release may not be amended or modified except by an agreement in writing signed
by the Party against whom the enforcement of any modification or amendment
is
sought.
9. Governing
Law. This
release shall be governed by the laws of the State of New York without regard
to
its conflict of law provisions and any action brought under this Release shall
be brought exclusively in New York, NY.
10. Successors
and Assigns.
The
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the Parties
hereto.
11. Execution
in Counterparts.
The
Parties agree that this Release may be signed separately in any number of
counterparts, all of which together will constitute a valid and binding
agreement among all the Parties.
12. Authority
to Sign. Each
Party declares that it fully understands and appreciates the meaning of this
Release, agrees to its terms, has had an opportunity to review its terms with
legal counsel, has full authority to sign, and has signed below of its own
free
will and accord.
[Signature
page follows]
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IN
WITNESS WHEREOF,
the
Parties hereto have executed this Release.
| Distribution Management Consolidators Worldwide, LLC | ||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Name: |
Xxxxxx Xxxxxxxx |
|||
| Title: | President | |||
| Date: | October 22, 2008 | |||
| Neonode, Inc. | ||||
| By: | /s/ Per Xxxxxxx | |||
| Name: |
Per Xxxxxxx |
|||
| Title: | CEO | |||
| Date: | October 22, 2008 | |||
| Neonode AB | ||||
| By: | /s/ Per Xxxxxxx | |||
| Name: |
Per Xxxxxxx |
|||
| Title: | CEO | |||
| Date: | October 22, 2008 | |||
| Neonode USA, LLC | ||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Name: |
Xxxxxx Xxxxxxxx |
|||
| Title: | Chairman | |||
| Date: | October 22, 2008 | |||
| PA Brazil Holding B.V. | ||||
| By: | /s/ X. X. Xxxxxx | |||
| Name: |
X. X. Xxxxxx |
|||
| Title: | Director | |||
| Date: | October 22, 2008 | |||
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