EXHIBIT 10.6
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE ("Agreement") is made as
of November 19, 2002 by and among Xxxxxxx X. Wall, an individual ("Wall"), on
the one hand, and US Global Aerospace, Inc., a publicly traded Delaware
corporation (formerly, Caring Products International, Inc.) (OTCBB: USGA)
("USGA"), its wholly owned subsidiary USDR Global Aerospace, Ltd., a Delaware
corporation ("Global"), and USDR Aerospace, Ltd, a Texas limited partnership
("Aerospace") (USGA, Global and Aerospace are sometimes referred to hereinafter
collectively as the "USGA Parties"), on the other hand. USGA, Global, Aerospace
and Wall are sometimes referred to hereinafter collectively as the "Parties",
and each, individually, as a "Party").
RECITALS
A. From March 28, 2002 up to and including July 18, 2002, Wall loaned
the USGA Parties a total of $475,000 (the "Wall Personal Loan"), in several
installments as set forth on Schedule I attached hereto.
B. Wall and USGA are the parties to that certain Consulting Services
Agreement dated as of May 15, 2002 (the "Consulting Agreement"), pursuant to
which USGA issued 1,000,000 shares of USGA common stock to Wall pursuant to
USGA's 2001 Employee Stock Compensation Plan, registered on Form S-8 with the
Securities and Exchange Commission (the "S-8 Shares").
C. From May 15, 2002 until the present, Wall sold 495,000 of the S-8
Shares to Xxxx Xxx Xxxxx ("Van Zandt"), ECON Investor Relations Inc. ("ECON"),
and/or one or more clients of ECON (Van Zandt, ECON and all of ECON's clients,
nominees and agents are hereinafter referred to collectively as the "ECON
Parties"), and subsequently agreed to transfer an additional 100,000 shares in
the aggregate to the ECON Parties as a result of a significant diminution in the
market value of USGA's common stock.
D. In addition to the Wall Personal Loan, from May 23, 2002 up to and
including June 20, 2002, Wall loaned the USGA Parties $300,000, and directed the
ECON Parties to wire transfer to the USGA Parties (i) $50,000 on May 23, 2002,
(ii) $45,000 on July 26, 2002, and (iii) $100,000 on August 14, 2002 (all of the
foregoing funds are hereinafter referred to collectively as the "ECON Sales
Proceeds").
E. USGA alleges that, notwithstanding the foregoing, Wall has certain
executory obligations to USGA that Wall is presently unable to perform.
F. The USGA Parties and Wall have agreed to settle all disputes arising
from the foregoing facts in the manner set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the mutual
promises, covenants and conditions herein contained, the Parties agree as
follows:
1. Termination of Consulting Agreement. At the Closing (as hereinafter
defined), the Consulting Agreement shall be terminated, rescinded and cancelled
in its entirety and of no further force or effect.
2. Issuance of USGA Restricted Shares to Wall. At the Closing, USGA
shall issue and Wall shall accept 1,002,772 restricted shares of USGA common
stock (the "Wall Restricted Shares"), in full and final satisfaction of the Wall
Personal Loan and any and all interest accrued thereon (a conversion of debt and
interest at $0.50 per share).
3. Closing; Conditions Precedent. The consummation of the transactions
contemplated by this Agreement (the "Closing"), and the obligations of the
Parties hereunder, shall be contingent on the following conditions precedent:
a. This Agreement shall be fully executed by all Parties.
b. Wall shall deliver a release of the USGA Parties by the ECON
Parties acceptable to USGA.
c. USGA shall execute and deliver transfer instructions as to the
issuance of the Wall Restricted Shares.
d. The USGA Parties shall have entered into a settlement
agreement with Live Oak Capital, LLC and related parties
acceptable to USGA.
4. Releases.
(a) Wall hereby, for himself, his past and present employees,
agents, executors, administrators, trustees, partners, representatives,
controlled entities and affiliates, successors and assigns, forever discharges
and releases each of the USGA Parties and each of their respective past and
present employees, officers, directors, agents, attorneys, insurers,
representatives (including, without limitation, Xxxx Xxxxxxxx), affiliates,
assigns, subsidiaries, parents, predecessors, successors and related entities
from any and all claims, damages, actions, judgments, obligations, attorneys'
fees, indemnities, subrogations, duties, demands, controversies and liabilities
of every nature at law or in equity, liquidated, or unliquidated, known or
unknown, matured or unmatured, foreseeable or unforeseeable, which they had or
have arising out of any circumstance, thing, or event alleged, or arising out of
the Consulting Agreement, that certain Agreement and Plan of Share Exchange,
dated as of May 15, 2002, by and among USGA, Global and the stockholders of
Global (the "Share Exchange Agreement"), and any ancillary agreement or
instrument entered into pursuant thereto, the ECON Sales Proceeds, and any and
all other matters of any nature whatsoever, including without limitation any and
all past, present, pending or threatened litigation.
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(b) Each of the USGA Parties hereby, for itself, and its past
and present employees, officers, directors, agents, representatives, parents,
subsidiaries, controlled entities and affiliates, successors and assigns,
forever discharges and releases Wall and each of his past and present employees,
agents, executors, administrators, trustees, partners, representatives,
controlled entities and affiliates, successors and assigns from any and all
claims, damages, actions, judgments, obligations, attorneys' fees, indemnities,
subrogations, duties, demands, controversies and liabilities of every nature at
law or in equity, liquidated, or unliquidated, known or unknown, matured or
unmatured, foreseeable or unforeseeable, which they had or have arising out of
any circumstance, thing, or event alleged, or arising out of the Consulting
Agreement, the Share Exchange Agreement, and any ancillary agreement or
instrument entered into pursuant thereto, and any and all other matters of any
nature whatsoever, including without limitation any and all past, present,
pending or threatened litigation.
(d) Each of the Parties understands and agrees that the
releases set forth above extend to all claims of every kind, nature and
description whatsoever, known or unknown, suspected or unsuspected. Each of the
Parties understands and acknowledges that he/it is familiar with and expressly
waives and relinquishes every right or benefit he/it has or may have under the
provisions of Section 1542 of the Civil Code of the State of California, which
reads as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his settlement
with the debtor."
5. Indemnification. Wall shall indemnify each of the USGA Parties and
each of their respective past and present employees, officers, directors,
agents, attorneys, insurers, representatives (including, without limitation,
Xxxx Xxxxxxxx), assigns, subsidiaries, parents, predecessors, successors and
related entities from any and all third-party claims for brokerage or other fees
arising out of or in connection with the transactions contemplated by the Share
Exchange Agreement, and any alleged claims or consequential damages resulting
from any alleged non-payment thereof.
6. No Disparagement. Each Party hereby agrees to refrain from any
communication with any other person, entity, regulatory body or governmental
authority which in any way disparages or defames any other Party, unless such
communication is required in response to a valid order by a court of competent
jurisdiction or other governmental or regulatory body, or as otherwise required
by applicable law.
7. Confidentiality. This Agreement and the terms and conditions hereof
shall at all times be kept strictly confidential by the Parties, except to the
extent disclosure of the same is required in response to a valid order by a
court of competent jurisdiction or other governmental or regulatory body, or as
otherwise required by applicable law.
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8. Entire Agreement. This Agreement contains the sole, complete and
entire agreement and understanding of the Parties concerning the matters
contained herein and may not be altered, modified, or changed in any manner
except by a writing duly executed by the Parties. No Party is relying on any
representations other than those expressly set forth herein. All prior
discussions and negotiations have been and are merged, integrated into and
superseded by this Agreement.
9. Waiver. The delay or failure of a Party to exercise any right, power
or privilege hereunder, or failure to strictly enforce any breach or default
shall not constitute a waiver with respect thereto; and no waiver of any such
right, power, privilege, breach or default on any one occasion shall constitute
a waiver thereof on any subsequent occasion unless clear and express notice
thereof in writing is provided.
10. Applicable Law; Venue. This Agreement shall be governed by and
construed and enforced in accordance with and subject to the laws of the State
of California, and any and all actions brought under this Agreement shall be
brought in the state and/or federal courts of the United States sitting in the
City of Los Angeles, State of California.
11. Advice of Counsel. The Parties represent that prior to the
execution of this Agreement they had the opportunity to seek the benefit of
independent legal counsel of their own selection regarding the substance of this
Agreement. The Parties acknowledge and agree that the law firm Xxxxxx,
Xxxxxxxxxx & Xxxxx has not represented any Party other than USGA and Global in
connection with the negotiation, preparation, execution and delivery of this
Agreement.
12. No Liability. This Agreement is executed by the Parties hereto for
the sole purpose of settling the matters described herein, and it is expressly
understood and agreed, as a condition hereof, that this Agreement should not
constitute nor be construed to be an admission of the truth or correctness of
any claim asserted.
13. Warranties. The Parties, and each of them, warrant: (i) that no
other person or entity had or has or claims, any interest in any of the claims,
demands, causes of action, or damages covered in this Agreement; (ii) that they,
and each of them, have the sole right and exclusive authority to execute this
Agreement; and (iii) that they have not sold, assigned, transferred, conveyed or
otherwise disposed of any claim, demand, cause of action, obligation, damage or
liability covered in this Agreement.
14. Counterparts. This Agreement may be executed in one or more
counterparts, all of which together constitute one single document.
15. Facsimile Signatures. This Agreement and any documents relating to
it may be executed and transmitted to any other party by facsimile, which
facsimile shall be deemed to be, and utilized in all respects as, an original,
wet-inked document.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Parties hereto have executed this Settlement
Agreement and Mutual Release as of the day and year first written above.
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XXXXXXX X. WALL, an individual
US GLOBAL AEROSPACE, INC., a Delaware corporation
By: ________________________________
Name: Xxxx Xxxxxxxx
Title: Chief Executive Officer
USDR GLOBAL AEROSPACE, LTD., a Delaware corporation
By: ________________________________
Name: Xxxx Xxxxxxxx
Title: Chief Executive Officer
USDR AEROSPACE, LTD., a Texas limited partnership
By: United States Defense Research, L.C.
Its: General Partner
By: ___________________________
Name: Xxxx Xxxxxxxx
Title:
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