SETTLEMENT AGREEMENT
AND GENERAL MUTUAL RELEASE
This Agreement and Release (hereinafter "the Agreement") is entered into by and
between Xxxxxxx X. Xxxxxxxxx, Consultant, (hereinafter "Xxxxxxxxx") and American
Custom Components, Inc. (hereinafter, ACC) with reference to the following.
RECITALS
X. Xxxxxxxxx and ACC entered into a contract on July 7, 1997 wherein
Xxxxxxxxx was to act as a consultant for hire, and was to provide to ACC certain
services more specifically set forth in said contract. Said Contract is attached
hereto and made apart hereof as Exhibit X.
X. Xxxxxxxxx and ACC have jointly and collectively decided to terminate
all business and contractual relationships which now exists between them
specifically including the Exhibit A contract.
C. Therefore, Xxxxxxxxx and ACC hereto desire to enter into a settlement
upon the terms and conditions set forth hereafter, and in connection therewith
to release each other hereto from any further liability, except as such
liability is imposed upon a party under the terms of this agreement.
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NOW, THEREFORE, XXXXXXXXX AND ACC HEREBY AGREE AS FOLLOWS:
1. PAYMENT BY ACC TO XXXXXXXXX: (a) As and for the total consideration
due and owing to XXXXXXXXX by ACC, ACC agrees to issue ONE HUNDRED THOUSAND
(100,000) Warrants to purchase common stock of American Custom Components, Inc.
Said warrants are to be purchased by Xxxxxxxxx from ACC for the total price of
$.01 each. Said warrants are to be purchased by Xxxxxxxxx no later than one (1)
year from the date of this agreement. Said warrants are valid for a term of
three (3) years from the date of their purchase and are transferrable and/or
assignable. ACC agrees to file a S8 Registration for the common stock to be
purchased through the Warrants by Xxxxxxxxx when ACC qualifies as a reporting
company.
(b) Xxxxxxxxx agrees that for a minimum of two (2) years (the "lock-Up
Period"), that he will not offer to sell, sell, contract to sell, grant any
option to purchase, make any short sale or otherwise dispose of any of the
shares of ACC common stock or any other ACC securities or securities that are
convertible into ACC common stock.
(c) The foregoing restriction is expressly agreed to preclude Xxxxxxxxx
from engaging in any hedging or other transaction which is designed to or
reasonably expected to lead to or result in a sale or disposition of ACC
securities even if such securities would be disposed of by someone other than
the undersigned; however, after the S8 Filing becomes effective, Xxxxxxxxx would
be allowed to sell increments of ONE THOUSAND SHARES OF COMMON STOCK (1,000) in
any week in which 30,000 shares of ACC common stock are traded and for each
increment of 30,000 shares traded during said week. To accomplish all sales,
Xxxxxxxxx specifically agrees to place all of his common stock in a stock broker
account designated by ACC, and will provide ACC with a duplicate account status.
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(d) Furthermore, in consideration of the foregoing, Xxxxxxxxx and ACC
agree that it would be difficult to ascertain damages to ACC for a violation of
the above, and the parties agree to a liquidated damages provision for each and
every violation of this agreement to be the total amount received by Xxxxxxxxx
from the sale of ACC common stock by Xxxxxxxxx.
2. All sums previously paid to Xxxxxxxxx by ACC are deemed to be earned,
and no funds are to be refunded to ACC by Xxxxxxxxx.
3. The above constitutes the total consideration due each party by the
other party for all contractual effort performed by either party on behalf of
the other party.
4. RELEASE FROM LIABILITY: Xxxxxxxxx and ACC hereby releases acquits,
and forever discharges the other party and its present principals, officers,
agents, associates, representatives, directors, employees, predecessors,
successors and assigns and all persons acting by, through, under or in concert
with them, or any of them, jointly or individually, of and from any and all
claims demands, causes of action, obligations, damages and liabilities, whether
known or unknown, which such party has or may hereafter obtain or accrue against
the other party; PROVIDED, HOWEVER, that such release shall not extend to any
obligations performed or not paid pursuant to the terms of this Agreement.
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5. WAIVER OF CIVIL CODE SECT. 1542: Each party hereto understands and
expressly waives any and all rights and benefits conferred by the provisions of
Section 1542 of the CALIFORNIA CIVIL CODE 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.
6. NO ADMISSION OF LIABILITY: Nothing contained herein is to be
construed to be an admission of any liability by any party or any other party
hereto.
7. REVIEW BY LEGAL COUNSEL: Each party hereto further warrants and
represents that in executing this Agreement, such party has been represented by
and relied on legal advice from such party's own attorney, that the terms of
this Agreement and its consequences have been completely read and explained by
that attorney and that such party fully understands the terms of this Agreement.
8. RECOVERY OF LEGAL FEES AND COSTS: If any party hereto fails to comply
with any provision hereof and the other party institutes court proceedings in
order to enforce the terms hereof, the prevailing party therein shall be
entitled to recover its reasonable legal fees and costs.
9. CALIFORNIA LAW TO GOVERN: This Agreement is entered into in the State
of California and shall be governed by and construed under the laws of the State
of California to whose jurisdiction the parties hereto submit.
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10. WARRANTY OF AUTHORITY: Each party hereto warrants that it has full
authority to enter into this Agreement and, if a corporate or similar business
entity, that its entry into this Agreement has been properly authorized by such
persons or governing body as possess the right to so authorize such action; that
it has taken no action or entered into any agreement that would prevent or
interfere with its compliance with the terms hereof; and, that it has not sold
or assigned to any third party any claim which it waives or releases under the
terms hereof.
11. COUNTERPART COPIES: This agreement may be executed in multiple
originals and each multiple original or counterpart shall be deemed to
constitute an original of this Agreement at to any persons or entities whose
original signature, or their representative appears thereon. Facsimile copies of
original signatures are deemed as original if another party's original signature
appears thereon.
12. This Settlement Agreement is meant to be confidential. Neither
Xxxxxxxxx nor ACC desire that the terms of this agreement or the circumstances
which preceded it be disclosed to the public, nor any person who does not now
have knowledge of this agreement or the actions and circumstances which preceded
it. Therefore, both parties agree to its confidentiality; furthermore, both
parties agree that it would be difficult to ascertain damages as a result of the
disclosure of the terms of this Settlement Agreement.
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Therefore, both Xxxxxxxxx and ACC agree to liquidated damages in the amount of
TEN THOUSAND DOLLARS ($10,000.00) for each and every intentional disclosure of
the terms herein or the circumstances which preceded this agreement.
IN WITNESS WHEREOF, THE UNDERSIGNED HEREBY EXECUTE THIS AGREEMENT:
Dated: October 13, 1997 /s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx,
Individually as Consultant
Dated: October 13, 1997 /s/ Xxxx Xxxxxxxxxx
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American Custom Components, Inc.
by Xxxx Xxxxxxxxxx
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