SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the “Agreement”) is made
and entered into as of February 22, 2010 (the “Effective Date”) by
and between: (i) Tactical Air Defense Services, Inc., a Nevada corporation (the
“Company”); and
(ii) DS Enterprises, Inc., a California corporation (the “Settlor”) (The
Company and the Settlor may be individually referred to hereinafter as a “Party” and
collectively as the “Parties”).
RECITALS
WHEREAS,
on or about September 8, 2006, the Company and the Settlor entered into a
Financial Advisory Services Agreement (the “Advisory
Agreement”).
WHEREAS,
pursuant to the terms of the Advisory Agreement, the Settlor completed the
services under the Advisory Agreement and was issued a convertible promissory
note on May 8, 2007 (the “Note,” a copy of
which are attached hereto as Exhibit
A).
WHEREAS,
pursuant to the terms of and the rights afforded by the Note, the Settlor has
made numerous demands upon the Company for conversion of the balance of the Note
into 66,385,157 shares of the Company’s common stock, par value $0.001 (the
“Common
Stock”).
WHEREAS,
the Company has reviewed the Note and confirms the existence of and liability
for the Note.
WHEREAS,
the Company is unable to settle the Note through the payment of cash and in an
effort to clean up its balance sheet, the Company believes it to be in the best
interest of the Company and its shareholders to settle the Note through the
issuance of shares of Common Stock as further described herein.
WHEREAS,
the Parties wish to enter into this Agreement and settle and forever resolve the
claims the Settlor has against the Company related to the Note.
NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and for good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed as follows:
AGREEMENT
1. Release of
Claims. Upon issuance of the Settlement Shares (as
further defined and described herein) the Settlor hereby agrees to fully settle
and forever resolve any and all past, present and future claims the Settlor may
have against the Company related to Advisory Agreement and the Note, including
all principal and interest due thereunder as of the Effective Date (hereinafter
the “Claims”).
2. Consideration. As
consideration for the release of the Claims, the Company shall issue and
transfer to the Settlor or its assignees, free and clear of any security
interests, liens, claims or other encumbrances whatsoever, Forty Five Million
Eight Hundred and Five Thousand Seven Hundred and Fifty Eight (45,805,758)
shares of Common Stock (the “Settlement Shares”).
The Settlement Shares shall be issued to the Settlor or its assignees: (i)
within five (5) business days of the Effective Date via DWAC electronic transfer
pursuant to the transfer instructions attached hereto as Exhibit B;
(ii) pursuant to a valid Company Board of Directors resolution; and (iii) as
unrestricted, free trading shares pursuant to the opinion letter provided by the
Settlor’s counsel (the “Opinion Letter,” a
copy of which has been attached hereto as Exhibit
C), which the Company hereby irrevocably authorizes the Company’s
transfer agent, Transfer Online, Inc., to accept. The Settlement Shares shall be
deemed to have been converted from the Note and, as such, the issuance date for
such Settlement Shares shall tack back to the original issuance date of the Note
pursuant to Rule 144 promulgated under the Securities Act of 1933. The
Settlement Shares shall represent the total compensation due and payable to the
Settlor in connection with Claims. In the event the Settlement Shares are not
issued as free trading unrestricted shares due to events outside of the
Company’s control, this Agreement shall be nullified in its entirety and the
Note shall remain as issued and valid.
3. Assignability. This
Agreement shall be binding upon the Company and its successors, and shall inure
to the benefit of the Settlor and their successors and assigns. The Settlement
Shares, and all of the terms and conditions described herein, are assignable and
may be transferred sold, or pledged, hypothecated or otherwise granted as
security by the Settlor at their sole discretion.
4. Waiver of Section
1542. In signing this Agreement, the Parties
has been advised of, understand and knowingly waive their rights under
California Civil Code Section 1542 which provides 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. No Further
Claims. The Parties covenant and agree never
to commence against each other, any legal action or proceeding based in whole or
in part upon the Claims, demands, allegations, and/or injuries released in this
Agreement.
6. Dispute
Resolution. The subject matter of this Agreement shall
be governed by and construed in accordance with the laws of the State of
California (without reference to its choice of law principles), and to the
exclusion of the law of any other forum, without regard to the jurisdiction in
which any action or special proceeding may be instituted. EACH PARTY
HERETO AGREES TO SUBMIT TO THE PERSONAL JURISDICTION AND VENUE OF THE STATE
COURTS LOCATED IN THE NORTH COUNTY OF SAN DIEGO, CALIFORNIA FOR RESOLUTION OF
ALL DISPUTES ARISING OUT OF, IN CONNECTION WITH, OR BY REASON OF THE
INTERPRETATION, CONSTRUCTION, AND ENFORCEMENT OF THIS AGREEMENT, AND HEREBY
WAIVES THE CLAIM OR DEFENSE THEREIN THAT SUCH COURTS CONSTITUTE AN INCONVENIENT
FORUM. AS A MATERIAL INDUCEMENT FOR THIS AGREEMENT, EACH PARTY
SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY ISSUES SO
TRIABLE.
7. Attorney’s
Fees. Should any Party hereto employ an attorney for the
purpose of enforcing or constituting this Agreement, the Advisory Agreement or
the Note, or any judgment based on this Agreement or the Note, in any legal
proceeding whatsoever, including insolvency, bankruptcy, arbitration,
declaratory relief or other litigation, the prevailing party shall be entitled
to receive from the other Party or Parties thereto reimbursement for all
reasonable attorneys’ fees and all reasonable costs, including but not limited
to service of process, filing fees, court and court reporter costs,
investigative costs, expert witness fees, and the cost of any bonds, whether
taxable or not, and that such reimbursement shall be included in any judgment or
final order issued in that proceeding.
8. Necessary
Action. At all times after the execution of this
Agreement, each Party hereto agrees to take or cause to be taken all such
necessary action including, without limitation, the execution and delivery of
such further instruments and documents, as may be reasonably requested by any
Party for such purposes or otherwise necessary to complete or perfect the
transaction contemplated hereby.
9. Authority to
Bind. Each Party to this Agreement represents and
warrants that the execution, delivery and performance of this Agreement and the
consummation of the transaction provided in this Agreement have been duly
authorized by all necessary action of the respective person or entity, including
receipt of approvals from any governing board of directors, and that the person
executing this Agreement on its behalf, if applicable, has the full capacity to
bind that entity.
10. Time of
Essence. Time is of the essence in the performance of all
obligations under this Agreement.
11. Signatures. This
Agreement may be signed in counterparts and the Agreement, together with its
counterpart signature pages, shall be deemed valid and binding on each Party
when executed by all Parties. Facsimile signatures shall be valid and binding
for all purposes.
12. No Oral Change;
Waiver. This Agreement may only be changed, modified, or
amended in writing by the mutual consent of the Parties hereto. The
provisions of this Agreement may only be waived in or by writing signed by the
Party against whom enforcement of any waiver is sought.
13. Severance. Should
any provision of this Agreement be held by a court of competent jurisdiction to
be invalid, void or unenforceable for whatever reason, the remaining provisions
not so declared shall, nevertheless, continue in full force and effect, without
being impaired in any manner whatsoever.
14. Acknowledgments and
Assent. The Parties acknowledge that they have been
given adequate time to consider this Agreement and that they were advised to
consult with an independent attorney prior to signing this Agreement and that
they have in fact consulted with counsel of their own choosing prior to
executing this Agreement. The Parties agree that they have read this Agreement
and understand the content herein, and freely and voluntarily assent to all of
the terms herein.
SIGNATURE
PAGE
IN
WITNESS WHEREOF the Parties have executed this Settlement Agreement effective as
of February 22, 2010.
|
COMPANY:
A
Nevada corporation
___________________________________
By:
Xxxxxx Xxxxxxx
Its:
Chief Executive Officer
|
SETTLOR:
DS
Enterprises, Inc.
A
California corporation
___________________________________
By:
Xxxx Xxxxx, CFA
Its:
President
|
A
FACSIMILE COPY OF THIS AGREEMENT SHALL HAVE THE SAME LEGAL EFFECT AS AN ORIGINAL
OF THE SAME
