SETTLEMENT TERM SHEET

 

THIS SETTLEMENT TERM SHEET (the "Agreement") is intended to state the essential
terms of a settlement of claims and disputes reached among Anhui Technology
Import and export Co. Ltd. ("AhTech") and Southern Products, Inc. and SigmacUSA,
Inc. (Collectively "SNPD"). SNPD and AhTech may be referred to collectively
herein as the "Parties" and individually as a "Party".

 

WHEREAS, disputes have arisen between SNPD and AhTech concerning certain
transactions, contractual relationships between the Parties, and an array of
ancillary legal issues (Collectively the "AhTech Claims"): and

 

WHEREAS, SNPD is engaged in discussions with a private equity investor
interested in funding SNPD’s future operations into the foreseeable future; and

 

WHEREAS, the private equity investor has expressed an unwillingness to invest
substantial capital to fund SNPD because of the litigation risk surrounding the
AhTech claims; and

 

WHEREAS, SNPD wishes to pay to AhTech and AhTech wishes to accept in settlement
of all claims it may have against SNPD a total of $1,679,400US Dollars
(representing the invoices listed in Schedule A attached hereto), less amounts
covered by Insurance (the "Debt"), paid as described herein, without either
party admitting any liability for the same; and

 

WHEREAS, subject to the consummation of the other transactions contemplated
herein, AhTech and SNPD desire to effect a comprehensive and complete compromise
in full settlement and mutual release of all claims that AhTech may have against
SNPD, including the satisfaction of the AhTech Claims: and

 

NOW THEREFORE, in consideration of payments, releases, and covenants and
agreements stated herein, the Parties have reached certain agreements, the
essential terms of which are as follows:

 

1. Payment on Equity Raises. Contingent upon SigmacUSA"s receipt of funding from
the private equity investor, SigmacUSA shall pay AhTech:

 

(a) 9.8% of the first 3 million of any equity raised by SigmacUSA

(b) 13.1% of the next 3 million of any equity raised by SigmacUSA

(c) 19.7% of the next 4 million of any equity raised by SigmacUSA

 

Payments on equity raised shall be made within 5 business days from funding
directly from the escrow agent, and shall continue until all amounts owed have
been paid in full (either from Equity raises or Sales (below). In the event that
a minimum of SI million dollars is not raised within 120 days hereof, this
Agreement shall be null and void.

 

 

 

2. Payment on Sales. SigmacUSA, Inc. shall pay AhTech 0.98% of its net
collections on a monthly basis. Payments on Sales shall continue until all
amounts owed to each have been paid in full (either from Equity raises or
Sales).

 

3. Mutual Release and Covenant Not To Sue. The Parties agree that each of them
(on behalf of themselves and their agents, representatives, employees, heirs,
executors, successors and assigns) releases, forever discharges and covenants
not to sue any other Party or Parties (and their respective agents,
representatives, members, affiliates, subsidiaries, employees, attorneys,
accountants, professionals, heirs, executors, administrators, successors and
assigns, as the case may be) and releases every other Party from any and all
claims actions, causes of action, suits, debts, damages, demands, judgments, or
executions whatsoever, whether know nor unknown, whether under statute or in
contract, tort or otherwise, and whether in law or in equity, that any Party
ever had, has now, or may ever have against any other Party as of the date of
execution of this Agreement. This Mutual Release and Covenant Not to Sue
includes, without limitation, any claims for payment of the AhTech Claims of
Debt, any claims and counterclaims which were asserted in or could have been
asserted in any Civil Case, all claims for attorneys, fees and costs incurred in
any Civil Case or otherwise, and/or an\ claims, whether known or unknown,
identified in Article 4 below.

 

4. Release of Unknown Claims. It is understood by each Party that there is a
risk that subsequent to the execution of this Agreement, a Party may discover
facts different from or in addition to the facts which he now knows or believes
to be true with respect to the subject matter of this Agreement, or that certain
debts, claims, expenses, or liabilities presently known may be or become greater
than a Party now expects or anticipates. Each Party intends this Agreement to
apply to all unknown or unanticipated results, as well as those known and
anticipated, and u/' it is the intention of each Party to hereby fully, finally,
absolutely, and forever resolve any and all claims and disputes which have
existed, do exist, or may exist relating to the Company or its activities,
assets, liabilities, or members.

 

5. Mutual Non-Disparagement. The Parties shall execute an agreement of mutual
non-disparagement agreeing not, after the date of this Agreement, to disparage
or criticize the character, business operations and practices, ethics, or
actions of one another. With regard to disputes and claims the Parties shall be
authorized to state that all such disputes, claims and rights have been resolved
to their mutual satisfaction.

 

6. Confidentiality. The Parties agree that they shall execute a standard
agreement of confidentiality regarding the terms and agreements reflected in
this Agreement. Notwithstanding this agreement of confidentiality, the Parties
understand and agree that SNPD is a publicly reporting company and as such will
be required to make certain public disclosures of the final settlement agreement
once signed.

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7. Mediation and Arbitration of Claims. The Parties further agree that they
shall participate in non-binding mediation of any claim, controversy or dispute
arising out of this agreement or of any agreement executed by the Parties (or
either of them) to give effect to the agreements reflected in this Agreement.
Such mediation shall be a condition precedent to any action to enforce any such
agreement. Should such claim, controversy or dispute not be resolved through
mediation, the Parties agree exclusively to binding arbitration of such matter
before a single arbitrator pursuant to the rules of the American Arbitration
Association (AAA). The arbitrator shall have the authority to award fees,
including legal fees, and expenses incurred in such arbitration to the
prevailing party in such arbitration. Nothing contained in this Article 8,
however, shall preclude the Parties from seeking equitable relief, where
appropriate, in any court of competent jurisdiction. Any such Mediation or
Arbitration shall be held and follow the rules of court and laws of the state of
Nevada, in the County of Clark.

 

8. Miscellaneous. This Agreement is intended to set forth all essential terms of
a settlement of disputes between the Parties as stated herein. It is anticipated
that the Parties shall promptly proceed to the preparation and execution of such
further documents and agreements as are necessary to give effect to the terms
stated herein and agree to cooperate in the preparation and execution of such
agreements and documents. The laws of the State of Nevada shall govern this
Agreement. Each party is represented by counsel, and has conferred with counsel,
concerning the execution of this Agreement. The language of this Agreement shall
not be presumptively construed in favor of or against any of the parties hereto.

 

WHEREFORE, the parties have executed this Agreement as of the 15th day of April
2013.

 

Anhui Technology Import and Export Co. Ltd. Southern Products, Inc. By: /s/
Authorized Signatory By: /s/ Edward Meadows Its: Authorized Signatory Chief
Executive Officer & Director SigmacUSA, INC.

/s/ Edward Meadows

Edward Meadows Chief Executive Officer

 

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