Exhibit 10.1
SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is entered into this 10th day
of December, 2003, by and between Nutrastar, Inc., a Nevada corporation
("Nutrastar") and Xxxxxxxx XxXxxx ("XxXxxx") (collectively referred to as the
"Nutrastar Defendants"), on one hand, and Faraday Financial, Inc., a Delaware
corporation ("Faraday"), on the other hand.
RECITALS
A. On July 16, 2002, Faraday filed an action against, among others, the
Nutrastar Defendants in the Third Judicial District Court, for Salt Lake County,
State of Utah, Case No. 020906477 (the "Lawsuit"), which sought money damages
for alleged breaches of contract, unjust enrichment and conversion;
B. On January 3, 2003, the Nutrastar Defendants filed their Answer and
Counterclaim (the "Counterclaim"), asserting numerous affirmative defenses and
seeking the recision of various of the parties' agreements;
X. Xxxxxxx and the Nutrastar Defendants wish to resolve finally the
respective claims and defenses in the Lawsuit and Counterclaim.
NOW, THEREFORE, IN CONSIDERATION of the foregoing covenants, promises,
and releases set forth herein, the parties hereto agree as follows:
1. Faraday's Release and Discharge. Subject to the provisions of
Section 4, and in consideration of the payments set forth in Section 3, Faraday,
on behalf of itself and its respective past, present and future insurers,
assignees, subrogees, affiliates, subsidiaries, parent persons or entities,
partners, limited partners, joint venturers, members, managers, shareholders,
directors, officers, employees, employers, trustors, trustees, beneficiaries,
loan participants, agents, fiduciaries, and attorneys does hereby fully and
irrevocably release, acquit and forever discharge the Nutrastar Defendants,
together with all of the Nutrastar Defendants' past, present, and future
insurers, assignees, subrogees, shareholders, directors, officers, employees,
employers, trustors, trustees, beneficiaries, agents, fiduciaries, and attorneys
and each of them who might be liable or claim to be liable, none of whom admit
liability, but all of whom expressly deny liability, of any form any and all
past, present, or future claims, demands, debts, contracts, actions, or causes
of action, suits, or causes of suit, of any kind or nature whatsoever, whether
known or unknown, suspected or unsuspected, and in whatever legal theory or
form, which Faraday now has, claims to have, or has at any time heretofore had,
or claims to have had, arising from, by reason of, or in any way connected with
any transaction, agreement, contract, act, or omission, whatsoever, pertaining
to the Lawsuit or Counterclaim. However, if the terms and conditions of Section
4 are not satisfied, the release and discharge provided for in this Section
shall be null and void.
2. Nutrastar's Release and Discharge. Subject to the provisions of
Section 4, and in consideration of the payments set forth in Section 3, the
Nutrastar Defendants, on behalf of themselves and their respective past, present
and future insurers, assignees, subrogees, affiliates, subsidiaries, parent
persons or entities, partners, limited partners, joint venturers, members,
managers, shareholders, directors, officers, employees, employers, trustors,
trustees, beneficiaries, loan participants, agents, fiduciaries, and attorneys
do hereby fully and irrevocably release, acquit and forever discharge Faraday,
together with all of Faraday's past, present, and future insurers, assignees,
subrogees, shareholders, directors, officers, employees, employers, trustors,
trustees, beneficiaries, agents, fiduciaries, and attorneys and each of them who
might be liable or claim to be liable, none of whom admit liability, but all of
whom expressly deny liability, of any form any and all past, present, or future
claims, demands, debts, contracts, actions, or causes of action, suits, or
causes of suit, of any kind or nature whatsoever, whether known or unknown,
suspected or unsuspected, and in whatever legal theory or form, which the
Nutrastar Defendants now have, claim to have, or have at anytime heretofore had,
or claim to have had, arising from, by reason of, or in any way connected with
any transaction, agreement, contract, act, or omission, whatsoever, pertaining
Page 1
to the Lawsuit or Counterclaim. However, if the terms and conditions of Section
4 are not satisfied, the release and discharge provided for in this Section
shall be null and void.
3. Payments. In consideration of the mutual releases set forth above,
Faraday and the Nutrastar Defendants agree as follows:
a. On September 18, 2003, Faraday converted its existing 735,730
preferred shares of Nutrastar stock to 735,730 shares of
Nutrastar common stock; and
b. On September 18, 2003, Nutrastar paid to Faraday its deferred
dividends as of September 18, 2003, in the total amount of
$90,127.00 in the form of restricted common stock based on a
per share price of $.075 per share for a total of 1,201,692
Nutrastar common shares.
4. Guarantee. Nutrastar covenants, agrees, and guaranties that in the
event Faraday, after the expiration of twelve (12) months from the execution of
this Agreement, is unable to realize $551,797.00 plus any legal fee's Faraday
incurred as of the date of this agreement (approximately $9,800.00 dollars)
through the sale of its Nutrastar common stock obtained by Faraday through
Section 3 of this Agreement, along with the Nutrastar common stock already in
the possession of Faraday (approximately an additional 1 million shares to be
verified with Faraday), that Nutrastar shall have 90 days from the date that
Faraday demonstrates that through its best efforts it has not bee able to
realize $551,797.00 plus any legal fee's Faraday incurred as of the date of this
agreement (approximately $9,800.00 dollars)through the sale of its Nutrastar
common stock to transfer to Faraday additional Nutrastar common shares to make
up any deficiency between the actual sales price obtained by Faraday after
Faraday has sold all of its Nutrastar shares and the amount of $551,797.00 plus
any legal fee's Faraday incurred as of the date of this agreement (approximately
$9,800.00 dollars). Should Faraday choose not to sell any portion of its common
stock during the twelve month period, the value of any such common stock still
remaining shall be credited against outstanding balance remaining of the
original $551,797.00. Furthermore, should the value of the common stock exceed
the $551,797.00, Faraday shall be entitled to keep the excess. Faraday further
agrees that it will use its best efforts to obtain the highest selling price for
its Nutrastar shares. In the event that Nutrastar fails in the time allowed to
provide Faraday with sufficient shares of Nutrastar common stock to satisfy the
$551,797.00, Faraday reserves the right to lift the stay of this lawsuit
described in Section 5 and to seek to collect the deficiency between the amounts
actually obtained by Faraday through the sale of all of its Nutrastar stock and
the amount of $551,797.00.
Page 2
5. Stay of Proceedings and Dismissal with Prejudice. Concurrently with
the execution of this Agreement, counsel for Faraday and counsel for the
Nutrastar Defendants shall file with the Court a joint stipulated motion to stay
all proceedings. Furthermore, Faraday and the Nutrastar Defendants agree that if
within the time period provided in Section 4, the value of Faraday's common
stock meets or exceeds $551,797.00 or notwithstanding the valve of Faraday's
Nutrastar stock, Faraday has not attempted to lift the stay of the lawsuit
within 18 months after the execution of this Agreement that counsel for Faraday
and the Nutrastar Defendants shall deliver to the other an executed stipulation
for dismissal with prejudice of the Complaint and Counterclaim. Faraday hereby
authorizes counsel for the Nutrastar Defendants to file said stipulation for
dismissal with the Court.
6. Miscellaneous.
7. Amendment and Waiver. No amendment or waiver of any provisions of
this Agreement shall in any event be effective unless the same shall be in
writing and signed by the parties hereto, and then such waiver or consent shall
be effective only in the specific instance or for the specific purpose for which
it is given.
8. Parties in Interest. This Agreement shall inure to the benefit of
and be binding upon the parties named herein and their respective successors and
assigns.
9. Entire Transaction. This Agreement contains the entire understanding
among the parties with respect to the transactions contemplated hereby and shall
supersede all other agreements and understandings between the parties. Other
than this Agreement, there are no other agreements, statements, representations,
and/or warranties, oral or otherwise, upon which any of the other parties hereto
are relying.
10. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Utah. The parties agree that any
dispute arising from this Agreement shall be litigated in courts located in Salt
Lake County, Utah.
11. Headings. This section and other headings contained in this
Agreement are for purposes of reference only and shall not effect in any way the
meaning or interpretation of this Agreement.
12. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same Agreement. Facsimile signatures shall
be deemed to be originals.
13. Attorney's Fees. In the event of breach of this Agreement, the
party found at fault hereby agrees to pay the costs and reasonable attorney's
fees incurred in the enforcement thereof.
14. Incorporated Documents. All exhibits, attachments, and other
documents to be delivered by parties hereto concurrently herewith are hereby
incorporated in this Agreement by this reference.
NUTRASTAR, INC., a Nevada corporation
By: /s/ Xxxxxxxx XxXxxx
---------------------------------------
Its:
/s/ Xxxxxxxx XxXxxx
------------------------------------------
XXXXXXXX XxXXXX
FARADAY FINANCIAL, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Its: President
Page 3
