Document:

EXHIBIT 10.45

 

SETTLEMENT AND CONSULTING AGREEMENT
 
September 27, 2004
 
Mr. Raymond Skiptunis
4133 Demoline Circle
Las Vegas, NV  89141
 
Dear Ray:
 
Please consider this letter the basis of the agreement (the “Agreement”) between you and Power Efficiency Corp. (PEC) regarding amounts owed you:
1.               For consulting services
2.               For deferred salary that has not yet been pay
 
1. Consulting Agreement:
Beginning in September, you agree to provide PEC with services on a month-to-month basis regarding the following items:
a.               Negotiations with approximately 10 former employees regarding back pay PEC owes them, and
b.              Negotiations with creditors to which PEC owes payments.
 
For these consulting services you will receive $2,000 per month. All payments owed for consulting will be accrued and deferred until PEC closes a financing of at least $1 million (the “Financing”). After the Financing, the monthly consulting payment will be paid at the end of the month in which the consulting is complete.
 
You and PEC agree that these consulting services will be completed on a month-to-month basis and that PEC reserves the right to terminate this consulting agreement when it needs to. PEC will provide you with as much notice as possible whether it will require these consulting services for each proceeding month.
 
2. Payment of Amounts Currently Owed to You
PEC currently owes you approximately $43,700 in accrued and unpaid back pay for services rendered and for assistance with PEC’s efforts to raise capital. In lieu of paying you the full amount owed to you in cash, PEC agrees to make the following payments to you for this back pay:
a.               $25,000 promptly after the company closes the Financing, and
b.              36,000 warrants with an exercise price of $0.65 per share. The Warrants will have a term of five years and also provide a “cashless exercise” provision which allows you to convert “value” in the Warrants to common stock which means if you elect to use this provision no cash will be required.

c.               The company also wishes to offer the
alternative of a cash settlement for all back wages.  Upon the first month of positive cash flow,
the company will develop a payment schedule to satisfy your back wages within 6
months. You will have the option at that time to settle for cash or to use the
warrants.  You may choose which
alternative makes the most economic sense to you at that time.

 

By
signing this letter in the space provided below, you agree to the terms of this
Agreement and that the consideration in #2 above completely fulfills Power
Efficiency Corporation’s obligation regarding all amounts owed to you by PEC,
excluding amounts for the consulting agreement in #1 above. Furthermore, you
agree to the compensation and other terms of the consulting agreement provided
above in #1.

 

Please
sign this letter below and send the signed original to me at:

3900
Paradise Road, Suite 283

Las
Vegas, Nevada 89109.

 

	Thanks and regards,
	 

	 
	 

	/s/ John Lackland
	 
	 

	 
	 

	BJ Lackland
	 

	Interim CFO
	 

	Power Efficiency Corporation
	 

	 
	 

	/s/ Raymond Skiptunis
	 
	9-30-04   
	 

	Accepted and Agreed
	Date

	Raymond SkiptunisEXHIBIT 10.46

 

SETTLEMENT AGREEMENT
 

This
Settlement Agreement (hereinafter the “Agreement”) is entered into this 15th
day of December, 2004, by and between and among Richard J. Koch (“Koch”),
located at 1604 Sound Watch Drive, Wilmington, North Carolina 28409, and Power
Efficiency Corporation (“PEC”), located at 3900 Paradise Road, Suite 283, Las
Vegas, Nevada, 89109.

 

Whereas: PEC
owes Koch $84,447.56 of back salary, accrued vacation and other expenses.

 

Whereas: PEC
has requested and Koch has agreed to accept other consideration in lieu of a
portion of the cash amounts owed Koch.

 

NOW, THEREFORE, in consideration of the foregoing and of
the promises and covenants contained herein, it is hereby covenanted and agreed
as follows:

 

1.                                        In consideration of the foregoing and the
terms set forth herein, PEC shall pay or deliver to Koch the following:

 

(a)          Upon execution of this Agreement, PEC shall
pay the sum of $16,889.51 in gross wages to Koch, and will make appropriate
withholdings from this amount for taxes.

 

(b)         Upon execution of this Agreement, PEC will
issue a Promissory Note to Koch in the principal amount of $25,334.27 payable
in 18 monthly payments of principle and interest with an interest rate of 15%,
a draft copy of which is attached hereto as Exhibit A. From each monthly
payment PEC shall make all appropriate tax withholdings.

 

(c)          At the first meeting of or unanimous written
consent of the board of directors of PEC, PEC will issue to Koch Warrants to
acquire 85,000 shares of PEC common stock at the exercise price of $.65 cents
per shares. A draft copy of the Warrant is attached hereto as Exhibit B.

 

2.                                       Koch, accepts the cash, the Promissory Note
and the Warrants provided for herein as complete settlement of the $84,447.56
that is currently owed to him by PEC and further agrees that PEC does not and
will not owe him any further payment of any kind.

 

3.                                       The parties agree that the validity,
interpretation and effect of this Agreement be governed by the laws of the
State of Nevada, and that if any provision of this Agreement is held to be
invalid, such provision shall be deleted and the remainder of this Agreement
shall remain in full force and effect.

 

4.                                       The parties agree that any legal suit, action
or proceeding arising out of or relating to this Agreement shall be instituted
exclusively in and subject to the jurisdiction of the courts of the State of
Nevada, Clark County. The parties further waive any objection to the venue of
any such suit, action or proceeding and the right to assert that such forum is
not a convenient forum.

 

5.                                       The parties agree that this settlement
represents the entire Agreement of the parties and that no modification or
amendment of this Agreement shall be binding or effective, unless such
modification or amendment is in writing and executed by each party hereto. This
Agreement may be executed in several counterparts, each of which when so
executed shall be deemed to be an original and such counterparts together shall
constitute one and the same Agreement. 
Any counterpart of this Agreement shall be validly and effectively
delivered, if delivered by facsimile transmission.

 

6.                                       The parties agree that the employment
agreement entered into between PEC and Koch on June 9th, 2003, is
hereby terminated and the parties hereby release each other from any and all
obligations and claims under this employment agreement, with the exception of
section 10, which will survive and is hereby incorporated in this Agreement.

 

IN WITNESS
WHEREOF, the parties
hereto have executed this Agreement as of the date and year first above written

 

	
  POWER EFFICIENCY CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Steven Strasser

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
  CEO

  
	
   

  	
   

  
	
  RICHARD J. KOCH

  
	
   

  	
   

  
	
   

  	
  /s/
  Richard Koch

  	
   

  
	
  Richard
  J. KochEXHIBIT 10.47

 

MANAGEMENT AGREEMENT
 

November
18, 2004

 

Board
of Directors

of
Power Efficiency Corporation

3900
Paradise Road, Suite 283

Las
Vegas, NV 89109

 

Dear
Sirs:

 

This
letter is to establish the management agreement (the “Agreement”) between Power
Efficiency Corporation (“PEC”) and Northwest Power Management, Inc. (“NPM”).
NPM is a company wholly owned by me that currently leases the office space at
3900 Paradise, Suite 283 in Las Vegas, Nevada and pays for all insurance,
telephones, internet access and all other administrative costs associated with
the office. NPM also currently employs and pays all the salaries and benefits
for BJ Lackland, Brooke Rawlings, and me. As you know, I am currently acting as
PEC’s CEO, BJ is acting as PEC’s interim CFO, and Brooke is spending a large
percentage of her time doing bookkeeping and administrative work for PEC.

 

Since
BJ and I were appointed PEC’s CFO and CEO, respectively, over two months ago,
Brooke, BJ and I have spent almost all of our business efforts on PEC. I expect
this to remain the case for the foreseeable future.

 

I
therefore propose that PEC pay 80% of the basic administrative costs associated
with NPM’s office and administrator, Brooke Rawlings. I also propose that PEC
reimburse NPM $5,000 per month for each of BJ’s and my salaries. This is the
same amount PEC is paying monthly for all of its executives. As itemized on the
attached budget, 80% of the administrative costs plus $5,000 per month for each
of BJ and me totals approximately $20,000 per month. I therefore propose PEC
pay NPM $20,000 each month, plus the reimbursement of any reasonable direct
expenses, such as travel and entertainment on behalf of PEC. The payment would
be due at the end of each month, starting with November 2004.

 

This
Agreement shall be cancelable upon 30 days written notice by either PEC or NPM.
Since BJ and I both serve as officers and directors of PEC, and together
currently comprise 33% of the board, written notice from PEC shall mean a
letter notice of cancellation signed by no less than 50% of PEC’s directors.
Notice of cancellation from NPM shall be a letter from me to PEC’s board of
directors. Furthermore, the amount of the payment to NPM from PEC should be
reviewed and adjusted when any of the following events occur:

•                  PEC raises the salaries of any of its senior
executives, or

•                  NPM personnel cease fulfilling
administrative, bookkeeping, CFO, or CEO functions for PEC

 

If
you agree with the terms of this letter, please sign in the space provided
below. By signing, you acknowledge that you understand and accept that this is
a material contract between two related parties because of the following
relationships between the companies and individuals involved in and surrounding
this Agreement:

•                  NPM is a corporation wholly owned by me

•                  BJ and I are officers and directors of PEC
and together currently comprise two of PEC’s six directors. However, BJ and I
will abstain from voting at board meetings on any matters related to this
Agreement.

•                  Summit Energy Ventures LLC (“Summit”)
currently owns approximately 35% of the outstanding stock of PEC and is
therefore an affiliate of PEC

•                  I own over 50% of Summit and have effective
voting control over 100% the PEC shares that Summit owns

 

This
agreement will take effect only upon approval of a majority of the directors
present at the PEC board meeting planned for Thursday, November 18, 2004, and
the signing of this Agreement by all of the PEC directors except BJ and me.

 

	
  Regards,

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Steven Strasser

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Steven
  Strasser

  
	
  President,
  NPM

  
	
   

  
	
  Agreed
  and accepted by:

  
	
   

  
	
  /s/ Nick Anderson

  	
   

  	
  /s/ Raymond Skiptunis

  	
   

  
	
  Nicholas
  Anderson

  	
   

  	
   

  	
  Raymond
  Skiptunis

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Len Bellezza

  	
   

  	
  /s/ Richard Pulford

  	
   

  
	
  Leonard
  Bellezza

  	
   

  	
   

  	
  Richard
  Pulford

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