Exhibit 10.1
SETTLEMENT AGREEMENT
This Settlement Agreement (the "Agreement") is made and entered into on the
17th of February, 2000, between COMPOSITECH LTD., a Delaware, U.S.A. corporation
with its principal place of business at 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx
00000-0000, X.X.X. ("Compositech"), XXXXX XXX TECHNOLOGY DEVELOPMENT CORPORATION
(as successor in interest to Fidelity Venture Capital Corp.), a Taiwanese
corporation with its principal place of business at 6th Fl., Bld. 000, Xxx. 0,
Xxx-Xxxxx Xxxx Xxxx, Xxxxxx, Xxxxxx, Xxxxxxxx of China ("CXTDC"), COMPOSITE
TECHNOLOGIES, INC., a Taiwanese company with its principal place of business at
6th Fl., Bld. 000, Xxx. 0, Xxx-Xxxxx Xxxx Xxxx, Xxxxxx, Xxxxxx, Xxxxxxxx of
China ("Technologies"), and investors in Technologies (the "Investors").
(Compositech, CXTDC, Technologies and the Investors are referred to collectively
as the "Parties").
WHEREAS, Compositech, CXTDC and the Investors entered into an Agreement to
Form a Joint Venture, dated February 9, 1998, for the establishment of a joint
venture at Xxxx-Xxxx Science Base, Taiwan (the "Joint Venture Agreement"), and
Compositech and the joint venture company incorporated pursuant to the Joint
Venture Agreement as Technologies entered into a related Patent Information and
Trademark Agreement, dated February 9, 1998 (the "Patent License Agreement"),
whereby Compositech granted certain patent and trademark licenses to
Technologies in exchange for certain royalty payments by Technologies; and
WHEREAS, the Parties wish to terminate the Joint Venture Agreement and the
Patent License Agreement.
NOW, THEREFORE, the Parties agrees as follows:
1. Termination of Agreements. Effective as of the date hereof, the Parties
hereby terminate the Joint Venture Agreement, the Patent License Agreement, and
any other related agreements, whether written or oral, between the Parties
except for this Agreement (collectively, the "Prior Agreements").
2. Exclusive Settlement Terms; No Claim of Liabilities. This Agreement states
exclusively, the terms and conditions of the settlement of all the rights and
obligations of the Parties under the Prior Agreements. None of the Parties shall
make any claims or charges against any other for any liability under or in
connection with the termination of any of the Prior Agreements except, if
necessary, with respect to the rights and obligation set forth herein. Each of
the Parties hereby mutually releases and forever discharges each other Party
from any action, suits, debts, liens, contracts, promises, liabilities, claims,
demands, damages, losses, costs or expenses known or unknown, contingent or
otherwise ("Claims") that such Party has now or may ever have based on, by
reason of, or arising out of the Prior Agreements or the transactions
contemplated thereby except for those Claims arising out of rights and
obligations set forth herein.
3. Satisfaction of Loans. Compositech hereby acknowledges the receipt of U.S.
$500,000 (NTD $16,000,000) as a loan (the "Loan") from Technologies which amount
was used to
purchase 1,600,000 shares of the common stock of Technologies. Technologies and
Compositech hereby agree that all shares of common stock of Technologies held of
record by Compositech, including the 1,600,000 shares of common stock purchased
and the Technical Investment Shares (as such term is defined in the Patent
License Agreement) (the "Shares") shall be transferred as of the date hereof to
Technologies on the books and records of Technologies in full satisfaction of
all debts owed by Compositech to Technologies including, without limitation, the
Loan. Technologies hereby acknowledges that no certificates representing the
Shares were issued to Compositech and agrees that it will take all actions
necessary to effect the transfer of the Shares on its books and records.
4. Conversion of Initial Royalties to Compositech Shares. As of the date hereof,
that portion of Initial Royalties (as defined in Section 5.2.a of the Patent
License Agreement) in the amount of US $1.0 million paid by Technologies to
Compositech shall be converted into a number of shares of common stock, par
value $.01, of Compositech equal to 1,000,000 divided by US $1.7025 rounded to
the nearest share (the "Compositech Shares") and shall be held of record by
Technologies. Compositech will take all actions necessary to issue the
Compositech Shares and will cause a certificate representing the Compositech
Shares to be issued to Technologies as soon as practicable.
5. No Restriction on Business. As of the date hereof, no restrictions, other
than those imposed by applicable law and contractual obligations, if any, with
third parties, shall exist on the ability of either Compositech or Technologies
to manufacture or sell any products or operate their respective businesses in
Taiwan or elsewhere.
6. Return of Information by Parties. Compositech and Technologies shall cause
the return of "Licensor's Information" and "Licensee's Information," as such
concepts are defined in the Patent License Agreement, to Compositech and
Technologies, respectively. Technologies agrees that it will not hereafter
disclose, use or pass on in any way Licensor's Information at any time and will
continue in all respects to fully protect Licensor's Information in accordance
with Article IX of the Patent License Agreement.
7. Compositech Trademark. Technologies shall immediately cease and desist from
all use of the Trademark (as defined in the Patent License Agreement) in any
way. Technologies shall not at any time, adopt or use any xxxx or symbol which
is similar to or is likely to be confused with the Trademark. Technologies shall
change its company name so as not to include the word "Composite."
8. Indemnification. a) Technologies and CXTDC, jointly and severally, agree to
indemnify and hold harmless Compositech and its officers, directors and
employees from and against any and all costs, liability, damages, expenses
(including reasonable attorneys fees and disbursements) arising out of or
related to (i) actions or omissions of Technologies, its officers or directors
after the date hereof or (ii) claims of Investors relating to this Agreement or
the Prior Agreements; and (b) Compositech agrees to indemnify and hold harmless
Technologies, CXTDC, their officers, directors and employees and the Investors
from and against any and all costs, liability, damages, expenses (including
reasonable attorneys fees and disbursements) arising out of or related to
actions or omissions of Compositech, its officers or directors after the date
hereof with respect to Technologies or the Prior Agreements.
9. Further Actions. Each of the Parties hereby covenants and agrees to execute
such documents and to take such further action as may be necessary to implement
this Agreement and to otherwise act in good faith and deal fairly hereunder.
10. Governing Law. This Agreement shall be deemed a contract made under the laws
of the State of New York, U.S.A. and for all purposes, including matters
pertaining to its form and validity shall be construed and enforced in
accordance with the laws of said State without regard to its conflicts of laws
principles.
11. Counterparts. This Agreement may be executed in several counterparts, with
each of such counterparts being deemed an original and all of which together
comprise the whole.
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the
day and year first above written.
COMPOSITECH LTD.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Chairman of the Board
XXXXX XXX TECHNOLOGY DEVELOPMENT
CORPORATION
By: /s/ Xxxx Xxxx Xxx
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Name: Cheng Xxxx Xxx
Title: President
COMPOSITE TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxx Xxx
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Name: Cheng Xxxx Xxx
Title: Chairman of the Board (Interim)
INVESTORS:
By: /s/ Xxxx Xxxx Xxx
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Name: Cheng Xxxx Xxx
