SETTLEMENT AGREEMENT AND RELEASE
Exhibit
10.24
This
Settlement Agreement and Release (the "Agreement") is dated as of March 24,
2006
and is made by and between ALPHA CAPITAL AKTIENGESELLSCHAFT, WHALEHAVEN CAPITAL
FUND LIMITED, and XXXXX INTERNATIONAL LTD. (collectively the "Investors") and
Hybrid Fuel Systems, Inc., a Georgia corporation ("Hybrid").
WHEREAS,
Hybrid, issued to the Investors an aggregate of $600,000.00 principal amount
promissory notes pursuant to the Subscription Agreement dated on or about March
31, 2005 (collectively the "Debentures");
WHEREAS,
Hybrid desires to redeem all outstanding Debentures, including interest and
liquidated damages ("Remaining Debentures") in accordance with the terms and
conditions hereof; and
NOW,
THEREFORE, in consideration of the mutual conditions and covenants contained
in
this Agreement, and for other good and valuable consideration, the sufficiency
and receipt of which is hereby acknowledged, it is hereby stipulated, consented
to and agreed by and among the Investors and Hybrid as follows:
1.
(a) On
or before March 28, 2006, in full satisfaction of the Remaining Debentures
Hybrid shall (i) pay to the Investors an aggregate of $541,542.00 (the "Funds")
as set forth on Exhibit A hereto, by wire transfer to the bank and account
as
set forth on Exhibit A hereto, and (ii) reduce the exercise price to $0.19
per
share for the warrants on the attached Exhibit B. Each Investor, individually,
hereby agrees that they will not exercise or sell more than sixty-seven thousand
five hundred (67,500) shares underlying the Warrant in any thirty (30) day
period unless Hybrid's common stock is trading above forty cents ($0.40) per
share. Upon receipt of the Funds, the Investors shall return, via overnight
delivery, the Remaining Debentures to Hybrid. The Company agrees to file all
necessary paperwork with the SEC, including any post-effective amendments,
for
the Investors within seven (7) days. The Company shall agree to abide by all
terms and conditions in the original Warrant with respect to registration and
issuance of shares underlying the Warrant.
2.
In
consideration of the foregoing, upon receipt by the Investors, or their agent,
of the Funds, except in connection with third party indemnification, the
Investors release and discharge Hybrid, Hybrid's officers, directors,
principals, control persons, past and present employees, insurers, successors,
agents and assigns ("Hybrid Parties") from all actions, cause of action, suits,
debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages, judgments, extents, executions, claims, and demands
whatsoever, in law, admiralty or equity, which against Hybrid Parties ever
had,
now have or hereafter can, shall or may, have for, upon, or by reason of any
matter, cause or thing whatsoever, whether or not known or unknown, from the
beginning of the world to the day of the date of this Release arising under
the
Debentures and Subscription Agreement dated on or about March 31, 2005. In
addition, all security interests, mortgages and other liens, if any, which
Hybrid may have granted to Investors shall automatically be released and
terminated. Investors authorize Hybrid, or its designees, to file Uniform
Commercial Code financing statement amendments evidencing the release and
termination of Investor's liens in any assets or properties of
Hybrid.
3.
In
consideration of the foregoing, Hybrid releases and discharges Investors,
Investors' officers, directors, principals, control persons, past and present
employees, insurers, successors, agents and assigns ("Investors Parties") from
all actions, cause of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims, and demands whatsoever, in law, admiralty or equity, which
against Investors Parties ever had, now have or hereafter can, shall or may,
have for, upon, or by reason of any matter, cause or thing whatsoever, whether
or not known or unknown, from the beginning of the world to the day of the
date
of this Release arising under the Debentures and Subscription Agreement dated
on
or about March 31, 2005.
4.
Hybrid
and the Investors each understand and agree that this Agreement (including
all
of its terms) is forever deemed confidential between them. Except as required
under the statutes, rules or regulations of any federal or state government,
government agency or court of competent jurisdiction, each of Hybrid and the
Investors, and their respective counsel, shall not disclose or divulge any
of
the matters underlying this Agreement, or any of the terms or substance of
this
Agreement to others.
All
inquiries, if any, regarding the other party's performance shall be responded
to
promptly. Each party shall furnish the other party with a written copy of each
and every written response; or, if such response was oral the date, time and
person to whom a response was given.
5.
All
parties acknowledge and represent that: (a) they have read the Agreement; (b)
they clearly understand the Agreement and each of its terms;
(c)
they
fully and unconditionally consent to the terms of this Agreement;
(d)
they
have had the benefit and advice of counsel of their own selection;
(e)
they
have executed this Agreement, freely, with knowledge, and without influence
or
duress; (f) they have not relied upon any other representations, either written
or oral, express or implied, made to them by any person; and (g) the
consideration received by them has been actual and adequate.
6.
This
Agreement contains the entire agreement and understanding concerning the subject
matter hereof between the parties and supersedes and replaces all prior
negotiations, proposed agreement and agreements, written or oral. Each of the
parties hereto acknowledges that neither any of the parties hereto, nor agents
or counsel of any other party whomsoever, has made any promise, representation
or warranty whatsoever, express or implied, not contained herein concerning
the
subject hereto, to induce it to execute this Agreement and acknowledges ands
warrants that it is not executing this Agreement in reliance on any promise,
representation or warranty not contained herein.
7.
This
Agreement may not be modified or amended in any manner except by an instrument
in writing specifically stating that it is a supplement, modification or
amendment to the Agreement and signed by each of the parties
hereto.
8.
Should
any provision of this Agreement be declared or be determined by any court or
tribunal to be illegal or invalid, the validity of the remaining parts, terms
or
provisions shall not be affected thereby and said illegal or invalid part,
term
or provision shall be severed and deemed not to be part of this
Agreement.
9.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without regard to principles of conflicts of laws. Any action
brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of
New
York or in the federal courts located in the state of New York. Both parties
and
the individuals executing this Agreement and other agreements on behalf of
the
Company agree to submit to the jurisdiction of such courts and waive trial
by
jury. The prevailing party shall be entitled to recover from the other party
its
reasonable attorney's fees and costs.
10.
This
Agreement may be executed in counterparts, each of which, when all parties
have
executed at least one such counterpart, shall be deemed an original, with the
same force and effect as if all signatures were appended to one instrument,
but
all of which together shall constitute one and the same Agreement.
11.
Immediately upon receipt of the funds, Grushko & Xxxxxxx is instructed to
wire the balances to the Investors.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first indicated above.
ALPHA
CAPITAL AKTIENGESELLSCHAFT
| |
|
|
| By: | /s/ Xxxxxx Xxxxxxxx | |
|
Name:
Xxxxxx Xxxxxxxx
Title:
Director
|
||
WHALEHAVEN
CAPITAL FUND
LIMITED
| |
|
|
| By: | /s/ Xxxx Xxxxxxxxxxx | |
|
Name:
Xxxx Xxxxxxxxxxx
Title:
Chief Operating Officer
|
||
XXXXX
INTERNATIONAL
LTD.
| |
|
|
| By: | /s/ Xxxxxxx Xxxxx | |
|
Name:
Xxxxxxx Xxxxx
Title:
|
||
HYBRID
FUEL SYSTEMS, INC.
| |
|
|
| By: | /s/ Xxxx Xxxxxx | |
|
Name:
Xxxx Xxxxxx
Title:
Chief Executive Officer
|
||
EXHIBIT
A
ALLOCATIONS
AND
WIRE
TRANSFER INSRUCTIONS
| INVESTOR |
BANK ACCOUNT
|
AMOUNT
|
| ALPHA CAPITAL AKTIENGESELLSCHAFT | C/O GRUSHKO & XXXXXXX P.C |
$199,500.00
|
| WHALEHAVEN CAPITAL FUND LIMITED | C/O GRUSHKO & XXXXXXX P.C |
$313,500.00
|
| XXXXX INTERNATIONAL LTD. | C/O GRUSHKO & XXXXXXX P.C |
$
28,542.00
|
| TOTAL |
$541,542.00
|
EXHIBIT
B
| PRIVATE WARRANTS |
ISSUED
|
EXPIRATION
|
|
ALPHA
CAPITAL AKTIENGESELLSCHAFT
WHALEHAVEN
CAPITAL FUND LIMITED
XXXXX
INTERNATIONAL LTD.
|
||
|
Total
|
1,600,000
|
|
