Exhibit 10.14
SETTLEMENT AGREEMENT
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This Settlement Agreement (AGREEMENT) is by and between Xxxxxx X. Xxxxxxx
("Xxxxxxx") and UltraStrip Systems, Inc. ("USSI").
RECITATIONS
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WHEREAS, USSI has executed and delivered to Xxxxxxx a series of twelve
(12) Demand Promissory Notes, in the aggregate principal amount of $368,000
(collectively, the "Demand Notes"), a schedule of the Demand Notes being
appended hereto as EXHIBIT "A", and incorporated herein by reference; and
WHEREAS, USSI has made, executed, and delivered for value to Xxxxxxx two
(2) Promissory Notes dated July 11, 2002 and November 19, 2002 in the aggregate
principal amount of $30,000 (the "Matured Notes"); and
WHEREAS, on or about January 11 and 12, 2005, Xxxxxxx made demand upon
USSI for payment of the Demand Notes and the Matured Notes in the aggregate
principal amount of $398,000, plus accrued interest through December 31, 2005 in
the amount of $82,908, totaling the aggregate sum of $480,908; and
WHEREAS, the Demand Notes and the Matured Notes have not been satisfied;
and
WHEREAS, Xxxxxxx entered into an Employment Agreement with USSI on January
1, 2001, for a term of three (3) years, and separated from USSI in 2003; and
WHEREAS, at the time of Xxxxxxx'x separation from USSI, Xxxxxxx was owed
accrued salary, bonus, and reimbursement of approved expenses in the aggregate
sum of $532,200.81 (the "Compensation"), said sum having been ratified by USSI,
USSI's auditors, and Xxxxxxx; and
WHEREAS, the Compensation remains unpaid and outstanding; and
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WHEREAS, in consideration of this Agreement and the Promissory Note
Modification and Extension Agreement of even date, USSI shall pay to Xxxxxxx the
additional amount that he has alleged to be due or to become due in the sum of
$371,012.68 (the "Additional Settlement Sum"); and
WHEREAS, USSI desires for Xxxxxxx to forbear from availment of legal
remedies, and both Xxxxxxx and USSI desire to amicably resolve all matters
concerning the outstanding obligations under the Demand Notes, the Matured
Notes, the outstanding Compensation, and the disposition of Xxxxxxx'x USSI
Preferred Shares pursuant to the terms and conditions of this Settlement
Agreement and in accordance with the Promissory Note Modification, and Extension
Agreement, a copy of which is attached hereto as EXHIBIT "B", and incorporated
herein by reference.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties mutually agree as follows:
COVENANTS
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1. The recitations set forth above are true and correct.
2. USSI shall timely remit all payments due in connection with the
extensions of the Matured Notes and the Promissory Note Modification and
Extension Agreement (hereinafter the "Note"). All payments shall be
delivered to Baratta at 00 X.X. Xxxxxx Xxxxx Xxxxx, Xxxxxx, XX 00000, or
at such other place as Baratta may, from time to time, designate in
writing. Furthermore, all payments made by USSI to Xxxxxxx shall first be
applied to reduce the principal balance of the Note and thereafter be
applied to accrued interest.
3. USSI shall, upon full execution of this Agreement, pay to Xxxxxxx
the total sum of $15,000 representing a principal reduction of $7,500 for
each Matured Note, together with a one-time payment of Xxxxxxx'x
attorney's fees in the amount of $5,000. After payment of the principal
reduction on each of the Matured Notes, USSI will owe a remaining
principal balance of $7,500 on each Matured Note plus all accrued
interest. USSI shall liquidate and fully satisfy each Matured Note in two
(2) installment payments, the first installment payment to be made on or
before the expiration of ninety (90) days from the date of execution of
this Agreement, May 20, 2006, in the aggregate amount of $7,500, plus all
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accrued interest through the date of payment, and the second installment
payment and all outstanding accrued interest to be made on or before the
expiration of one hundred and eighty (180) days from the date of execution
of this Agreement, August 8, 2006. Interest shall continue to accrue at
the Matured Note rate of Northern Trust Bank's prime plus two percent
(prime + 2%). In the event that USSI defaults by failing to timely remit
any of the installment payments and fails to cure such default as provided
in paragraph 5 below, then all payments due under the Matured Notes as
extended shall accelerate and become immediately due and payable to
Xxxxxxx.
4. Conditioned upon USSI making the aggregate principal reduction
payment set forth in paragraph 3 above, Xxxxxxx will merge and roll all of
the remaining 12 Demand Notes, the outstanding Compensation, and the
outstanding accrued dividends on the Preferred Shares into one (1)
promissory note in the principal amount of $1,347,870 (the "Note") payable
one year from the date of the Note. Interest shall accrue at the rate of
Northern Trust Prime plus two (2%) percent (prime + 2%) from January 1,
2006. Interest is payable quarterly on May 13, August 13, and November 13,
2006, and February 13, 2007. The Note shall contain a cross-default
provision. In the event that USSI defaults by failing to timely pay the
Matured Notes and fails to cure such default as provided in paragraph 5
below, then all payments due under the Note shall accelerate and become
immediately due and payable to Xxxxxxx.
5. In the event that USSI defaults by failing to timely deliver payment
in good funds as due hereunder, then Xxxxxxx shall, as a condition
precedent to collection, provide USSI with written notice of default by
serving USSI and USSI's counsel, Xxxx X. Xxxxxx, PA, with written notice
via facsimile, after which USSI shall have ten (10) business days within
which to cure the default by delivering payment in full to Xxxxxxx and/or
hand-delivering payment to Xxxxxxx'x counsel, Xxxxx X. Xxxxxx, Esq. In the
event that a prospective default is not timely cured, then Xxxxxxx shall
be entitled to file with the Court an affidavit of default, together with
a verified motion setting forth the facts and circumstances of the default
and providing a calculation of the remaining balance due, upon which
Xxxxxxx shall be entitled to seek immediate entry of a judgment for the
remaining amount due through the date of the judgment, less any payments
made prior to the entry of the judgment. In the event that Xxxxxxx
properly moves for entry of a judgment after default and in accordance
with this Agreement then USSI shall be deemed to have waived all defenses
as to liability except for timely payment hereunder.
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6. In consideration of Xxxxxxx'x extension and modification of the
Matured and Demand Notes, within ten (10) days of the date of execution of
this Agreement, USSI will issue to Xxxxxxx a five (5) year warrant for the
purchase of up to 1,000,000 shares of UltraStrip common stock at an
exercise price of one dollar ($1.00) per share.
7. USSI releases and covenants never to bring, commence, maintain,
make, assert, assist, or prosecute, directly or indirectly, any claim,
demand, action, suit, proceeding or cause of action, in law or equity, for
damages or other relief against Xxxxxxx on behalf of USSI, its officers,
directors, or shareholders pertaining to the Matured Notes, the Demand
Notes, the Note, the Compensation, or the Preferred Shares.
8. This Agreement shall be governed by and construed in accordance with
the laws of the State of Florida. The proper venue for any dispute arising
out of this Agreement shall be brought in the Circuit Court for Xxxxxx
County, Florida.
9. This Agreement shall supersede all prior agreements and
understandings between the parties and no waiver or modifications of this
Agreement, or any covenant, condition or limitation herein shall be valid
unless in writing and duly executed by both parties. In the event of a
conflict between the provisions of this Agreement and any other agreement
or writing, including, but not limited to the terms of the Note, this
Agreement shall control and govern the rights and remedies of the parties.
10. In making this Agreement, it is understood and agreed that both
Xxxxxxx and USSI relied wholly upon there own judgment, the judgment of
their agents and attorneys, and upon the recitations and covenants
contained herein. Each person signing this Agreement hereby represents and
warrants his or her full authorization to do so on behalf of the entity
for which he or she is signing, and that neither has assigned any claim or
claims against the other to any third party. Further, both Xxxxxxx and
USSI represent and warrant that this Agreement is signed freely,
voluntarily and not under any undue pressure or duress of any kind.
11. No term or condition of this Agreement shall be more strictly or
narrowly construed for or against any other party simply because one of
the parties acted as scribe in preparing this document.
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12. All notices which maybe necessary or proper for either party to give
or deliver to the other party shall be sent in a manner providing for
proof of delivery and shall be deemed given when received. If given to
USSI notice shall be addressed to:
ULTRASTRIP SYSTEMS, INC.
0000 XX Xxxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000-0000
Facsimile: 000-000-0000
with a copy to:
XXXX X. XXXXXX, PA
Schoeppl and Xxxxx, PA
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
FACSIMILE: 561-394-3121
and if given to Baratta, notice shall be addressed to:
XX. XXXXXX X. XXXXXXX
00 X.X. Xxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
with a copy to:
XXXXX X. XXXXXX, ESQ.
AKERMAN SENTERFITT
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
FACSIMILE: 000-000-0000
13. The waiver or modification of any term or condition or the failure
to insist on the strict performance of any term or condition in this
Agreement shall not void, waive or modify any other terms or condition nor
be construed as a waiver or relinquishment of the right to performance of
any other terms or conditions in this Agreement. If any provision or part
of this Agreement shall be declared illegal, void or unenforceable, it is
agreed that the
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unenforceable provision shall be rewritten in a manner that best serves
the mutual intention of the parties and promote the enforceability of this
Agreement and all other provisions shall continue in full force and
effect.
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WHEREFORE, the parties do hereby accept and agree to the terms and
conditions of this Agreement.
SIGNED:
XXXXXX X. XXXXXXX ULTRA STRIP SYSTEMS, INC.
_______________________________ By: ________________________________
Dated: ____________________________ Print Name: ________________________
Print Title: _______________________
Dated: _____________________________
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