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EXHIBIT 10.3
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SETTLEMENT AGREEMENT AND MUTUAL
GENERAL RELEASE
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This Settlement Agreement and
Mutual General Release (the "Agreement") is entered into as of May
9, 2008 (the "Effective Date") by and between Financial Acquisition
Partners, LP, a Delaware limited partnership ("Creditor"),
NatureWell, Incorporated, a Delaware corporation ("Debtor"),
Dutchess Private Equities Fund, Ltd ("Dutchess"), and NatureWell,
Incorporated, a Nevada corporation ("NWNV") with reference to the
following facts:
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RECITALS
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A.
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Debtor desires to restructure its
existing debt and capital structure (the "Restructuring");
and
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B.
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Dutchess (a creditor of Debtor)
will provide capital to Debtor intended to facilitate the
Restructuring; and
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C.
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As part of the Restructuring
Debtor intends to sell its existing assets to NWNV (the "Asset
Sale"); and
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D.
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As of the Effective Date Creditor
is owed monies from Debtor pursuant to two senior secured notes and
four senior secured convertible notes (all six notes were assigned
to Creditor on April 7, 2008 by Milan Mandaric, Creditor's sole
limited partner) for which there is a remaining aggregate balance
due, including all accrued and unpaid interest and/or penalties, if
any, in the amount of approximately $265,286 ("Amount Due");
and
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E.
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Creditor and Debtor agree that
the Amount Due represents all monies, services and/or any other
form of consideration owed to Creditor by Debtor as of the
Effective Date; and
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F.
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As part of the Restructuring,
Debtor desires to issue to Creditor 108,835,739 restricted shares
of its common stock (the "Consideration") as full payment and final
settlement of the Amount Due and any and all other Claims (as
defined in Section 4 below) Creditor may have, and Creditor desires
to accept such Consideration as full payment and final settlement
of the Amount Due and any and all other Claims it may
have.
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NOW THEREFORE, in consideration
of the mutual promises and agreements set forth herein, and other
good valuable consideration, including but not limited to the
Consideration and the provision by Dutchess of capital to
facilitate the Restructuring, the receipt and sufficiency of which
is hereby acknowledged by the parties, the parties hereby agree as
follows:
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1.
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Representations and
Warranties . Creditor represents and warrants that: (i) as
of the Effective Date, he has not previously assigned or
transferred in any manner, or purported to have assigned or
transferred in any manner, any Claim (as defined in Section 4
below) or right set forth in this Agreement and/or arising out of
the Amount Due, (ii) the Amount Due represents all monies, services
and/or any other form of consideration owed to Creditor by Debtor
as of the Effective Date, (iii) he understands that by signing this
Agreement, and subject only to cancellation of this Agreement
pursuant to Section 3(f) below, Creditor is irrevocably agreeing to
accept the Consideration as full payment and final settlement of
the Amount Due and any and all other Claims Creditor may have, (iv)
upon payment of the Consideration, Creditor shall have received
full and complete payment for the Amount Due and Creditor shall
have no further claims against Debtor, for monies owed, services
rendered or otherwise, (v) Creditor's consent to the Asset Sale is
hereby given pursuant to that Intercreditor, Subordination and
Standby Agreement dated September 2, 2003, as amended (the
"Intercreditor Agreement") in its capacity as a holder of Senior
Debt, (vi) Creditor is an "accredited investor" (or a corporation
or entity not formed for the purpose of investing in Debtor) as
such term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act of 1933, as amended, and (vii) Debtor has
made available to Creditor the opportunity to (A) ask questions of
and receive answers from Debtor concerning Debtor and the
activities of Debtor, including but not limited to the
Restructuring and the Asset Sale, and (B) otherwise obtain any
additional information, to the extent that Debtor possesses such
information and can lawfully provide such to Creditor or could
acquire it without unreasonable effort or expense.
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2.
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Debtor Covenants . In
consideration of the mutual covenants and agreements set forth in
this Agreement, Debtor shall pay to Creditor the Consideration upon
(i) receipt by the Debtor of an executed version of this Agreement,
and (ii) either the closing of the Asset Sale or NWNV agreeing to
permit the issuance of the Consideration prior to the closing of
the Asset Sale (see Section 3(d) below).
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3.
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Other Covenants . The
parties agree that:
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(a)
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by entering into this Agreement
and upon payment of the Consideration all previous agreements or
arrangements between Debtor and Creditor for the payment of any
monies or other forms
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