Exhibit
10.5 





 


SETTLEMENT
AGREEMENT AND RELEASE


 


This
Settlement Agreement and Release (“Settlement Agreement”) is entered into this 12th day of March, 2021 between
SCWorx Corp. (“SCWorx”) on the one hand, and USA Procurements, LLC (“USAP”) on the other hand. SCWorx and USAP
are collectively referred to herein as the “Parties.”


 


WHEREAS,
on May 26, 2020, SCWorx and USAP entered into a Purchase Agreement (“the Contract”) pursuant to which, among other things,
USAP agreed to sell and SCWorx agreed to purchase 150,000 gowns at a price of $3.00 per gown.


 


WHEREAS,
pursuant to the Contract, on May 27, 2020, SCWorx wired the deposit to USAP consisting of 30% of the purchase price, or $135,000.00,
which deposit was to be applied to the Contract purchase price.


 


WHEREAS,
on June 25, 2020, pursuant to Invoice “III/39,” SCWorx wired the sum of $374,000.00 to USAP.


 


WHEREAS,
on July 24, 2020, SCWorx wired the sum of $30,000.00 to USAP.


 


WHEREAS,
SCWorx has made total payment of $539,000.00 to USAP.


 


WHEREAS,
to date, SCWorx has only received and USAP has only delivered 3,000 gowns under the Contract; and


 


WHEREAS,
disputes have arisen between the Parties regarding their respective obligations under the Contract; and


 


WHEREAS,
the Parties now wish to resolve fully and finally any and all disputes, claims, complaints, grievances, charges, actions, petitions,
and/or demands between them related to the Contract;


 


NOW
THEREFORE, in consideration of the promises and mutual covenants herein contained which the Parties mutually agree constitute good,
adequate, and sufficient consideration herefor, the Parties agree as follows for the purpose of being legally bound hereto in all respects:


 


		1.	CONSIDERATION



 


(A).
Within three (3) business days after the execution by SCWorx of this Settlement Agreement, USAP shall make available for delivery
to SCWorx 87,000 level 4 blue medical gowns (double laminate, 35g weight), which gowns shall comply with the specifications required
by the Contract and be packaged in compliance with the packaging example annexed as Ex. A, including such packaging indicating that the
gowns are FDA approved as well as enclosing the spec sheet reflected in Ex. A, and be in good and saleable condition. SCWorx
shall arrange for the shipping of the gowns and agrees to pay for the reasonable cost of shipping the gowns, including securing
reasonable insurance for the shipment.


 


(B).
Within three (3) business days after execution by USAP of this Settlement Agreement, SCWorx agrees to deposit Twenty-Thousand Dollars
and No Cents ($20,000.00) into a third-party escrow account (the “Escrowed Payment”) which Escrowed Payment will be released
upon satisfactory inspection by SCWorx or its designee of the gowns described in paragraph 1(A).


 






     


     


    




 


		(i)	No
                                            later than four (4) business days after USAP’s execution of this Settlement Agreement,
                                            the gowns will be picked up for transport at the warehouse by SCWorx’s designee.



 


		(ii)	Within
                                            nine (9) business days after SCWorx’s designee picks up the gowns at the warehouse,
                                            SCWorx shall complete its inspection of the gowns. The nine (9) business days accounts for
                                            four (4) business days of transport time and five (5) business  days of inspection time.



 


		(iii)	If,
                                            upon inspection, the gowns are in satisfactory condition and in compliance with Paragraph
                                            1(A) of this Settlement Agreement, SCWorx shall, within two (2) business days of the completion
                                            of the satisfactory inspection, notify the escrowee to release the Escrowed Payment to USAP.



 


		2.	WARRANTIES,
REPRESENTATIONS AND COVENANTS OF USAP



 


		A.	USAP
warrants and represents and agrees as follows:



 


		(a)	USAP
                                            will cause to be delivered the gowns as described in Paragraph 1(A) of the Contract in commercially
                                            good and saleable condition.



 


		(b)	The
                                            Release set forth in Section 3(B) hereof shall not be in effect unless and until the gowns
                                            have been delivered to the warehouse all in accordance with the requirements of Section 1(A)
                                            of this Settlement Agreement.



 


		B.	SCWorx
warrants and represents and agrees as follows:



 


		(a)	SCWorx
                                            shall complete its inspection of the gowns, as contemplated by Section 1(B) hereof, within
                                            five (5) business days of delivery of the gowns.



 


		(b)	The
                                            Release set forth in Section 3(A) hereof shall not be in effect unless and until SCWorx notifies
                                            the escrowee to release the Escrowed Payment to USAP.



 


		3.	MUTUAL
RELEASES



 


		(A).	Release
by USAP. In consideration of the above, USAP, including its parents, affiliates, members, subsidiaries, managers, officers, directors,
partners, shareholders, employees, agents and attorneys, subject to satisfaction of the condition set forth in Section 2(B)(b) hereof,
hereby release and forever discharge SCWorx and its subsidiaries, officers, directors, partners, members, shareholders, employees, agents
and attorneys from all actions, causes of action, suits, debts, covenants, contracts, agreements, promises, trespasses, damages, payments,
judgments, claims and demands whatsoever, known or unknown, which USAP ever had, now has or hereafter may have for, upon or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the date of this Settlement Agreement regarding the Contract.
Nothing in this release shall affect any claims that may arise after the execution of this Settlement Agreement and concerning events,
facts or actions post-dating the execution of this Settlement Agreement or which fall outside the scope of this Settlement Agreement.



 






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		(B).	Release
by SCWorx. In consideration of the above, SCWorx, including its parents, affiliates, members, subsidiaries, officers, directors,
partners, shareholders, employees, agents and attorneys, subject to satisfaction of the condition set forth in Section 2(A)(b) hereof,
hereby release and forever discharge USAP and its subsidiaries, managers, officers, directors, partners, shareholders, members, employees,
agents and attorneys from all actions, causes of action, suits, debts, covenants, contracts, agreements, promises, trespasses, damages,
payments, judgments, claims and demands whatsoever, known or unknown, which SCWorx ever had, now has or hereafter may have for, upon
or by reason of any matter, cause or thing whatsoever from the beginning of the world to the date of this Settlement Agreement regarding
the Contract. Nothing in this release shall affect any claims that may arise after the execution of this Settlement Agreement and concerning
events, facts or actions post-dating the execution of this Settlement Agreement or which fall outside the scope of this Settlement Agreement.



 


		(C).	Nothing
in this Section shall prevent the enforcement of the provisions of this Settlement Agreement.



 


		4.	CONFIDENTIALITY



 


		(A).	The
Parties and their respective counsel agree to maintain in the strictest confidence and not disclose to the public, media, or any third
parties (except upon order of a court or governmental body, or as required by law or for reporting to their auditors, investors or similarly
interested parties) the contents and terms of this Settlement Agreement. Notwithstanding the foregoing, the Parties are permitted to
state to third parties, following due inquiry, including media sources, that they have amicably resolved their dispute.



 


		(B).	In
the event that any of the Parties receives a subpoena or court order that would require the production of this Settlement Agreement or
information governed by this confidentiality provision, such Party shall provide each of the other Parties as reasonable as possible,
and to the extent permitted by law, notice of such subpoena or court order prior to the production or disclosure of any such information
sufficient to provide the other Parties adequate opportunity to prevent disclosure or production of such information and the Party receiving
the subpoena or court order agrees to provide any reasonable assistance necessary to secure the protection and non-disclosure of such
information.



 


		5.	NO
                                            ADMISSION OF LIABILITY



 


The
Parties understand and acknowledge that this Settlement Agreement constitutes a compromise and settlement of actual or potential disputed
claims regarding the Contract and the performance thereunder. No action taken by the Parties hereto, or any of them, either previously
or in connection with this Settlement Agreement shall be deemed or construed to be: (a) an admission of the truth or falsity of any claims
made or potential claims against the Parties; or (b) an acknowledgement or admission by any Party of any fault or liability whatsoever
to any other Party, or to any third party.


 






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		6.	NON-DISPARAGEMENT



 


The
Parties agree that from this time forward each Party will refrain from making to a third party any defamatory, derogatory, or disparaging
statements about the other, or any person or entity associated with or representing the other.


 


		7.	REPRESENTATION
BY COUNSEL



 


The
Parties hereby acknowledges that each of them has had the opportunity to or has been represented by counsel of his or its choosing in
connection with the execution and delivery of this Settlement Agreement, that each of the Parties and their counsel has reviewed this
Settlement Agreement prior to execution.


 


		8.	ENTIRE
AGREEMENT



 


The
written pages making up this Settlement Agreement represent the entire agreement and understanding between the Parties concerning the
subject matter of this Settlement Agreement and supersedes any and all prior agreements or understandings, unless otherwise set forth
herein. No materials outside the body of this Settlement Agreement, either written or oral, shall constitute a part of the terms or conditions
of this Settlement Agreement, except where otherwise stated herein.


 


		9.	SEVERABILITY



 


In
the event that any provision or section of this Settlement Agreement is held illegal, invalid, or unenforceable, this Settlement Agreement
shall continue in full force and effect without said provision, section or portion thereof and the Settlement Agreement shall remain
otherwise unaffected.


 


		10.	APPLICABLE
LAW



 


This
Settlement Agreement shall be construed and interpreted in accordance with the laws of the State of New York. Any disputes or litigation
arising out of this Settlement Agreement shall be governed by New York law and any action commenced by either of the parties shall be
commenced in the courts of the State of New York, County of New York, or, if applicable, the United States District Court for the Southern
District of New York and the parties hereby irrevocably submit to the personal jurisdiction of any such courts.


 


		11.	WARRANTY
OF NON-ASSIGNMENT



 


The
Parties represent and warrant that each has not assigned, pledged, or otherwise in any manner whatsoever, sold or transferred the rights
to any dispute regarding the Contract.


 


		12.	ALTERATION
BY WRITTEN AGREEMENT ONLY



 


This
Settlement Agreement may not be altered or amended, except by written agreement between all the Parties.


 






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		13.	BINDING
EFFECT



 


This
Settlement Agreement shall be binding on, and shall be enforceable against, and shall inure to the benefit of the Parties to this Settlement
Agreement and their respective past and present managers, officers, directors, affiliates, member firms, subsidiaries, parents, successors,
shareholders, members, partners, general partners, limited partners, principals, participating principals, managing members or other
agents, management personnel, attorneys, servants, employees, representatives of any other kind (and any officers, directors, members
or shareholders of any of the foregoing which are not natural persons), spouses, estates, executors, estate administrators, heirs, and
assigns.


 


		14.	WAIVER
AND AMENDMENT



 


No
provision of or rights under this Settlement Agreement may be waived or modified unless in writing and signed by the Party whose rights
are thereby waived or modified. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein (whether
similar or not), nor shall such waiver constitute a continuing waiver unless otherwise expressly so provided.


 


		15.	TERMINATION
OF ANY FURTHER OBLIGATIONS UNDER THE CONTRACT



 


In
consideration of the covenants and agreements set forth in this Settlement Agreement, the Parties hereby agree that upon the performance
of the obligations set forth herein, the Contract is terminated and neither party shall have any further rights or obligations under
the Contract. In the event the gowns are not in compliance with Paragraph 1(A) of this Settlement Agreement, this Settlement Agreement
shall be deemed null and void .


 


		16.	FURTHER
ASSURANCES



 


		(A).	Each
Party shall cooperate fully in the execution and delivery of this Settlement Agreement and shall take, or cause to be taken, such further
action as may be reasonably necessary or appropriate to effectuate or facilitate the terms of this Settlement Agreement, including the
execution and delivery of any further documents that may be necessary or appropriate for that purpose. Each Party further agrees to take
no action, directly or indirectly, to avoid or circumvent, in whole or in part, the terms of this Settlement Agreement.



 






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		17.	NOTICE.



 


Any
notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) by electronic mail and (b) by
commercial overnight courier that guarantees next day delivery and such notices shall be addressed as follows:


 


	 

     
	If
    to SCWorx:	Mr.
    Tim Hannibal

     

    Email:
    thannibal@scworx.com

     

    with
    a copy to:

    Carole
    R. Bernstein, Esq.

    Law
    Offices of Carole R. Bernstein

    41
    Maple Avenue North

    Westport,
    Connecticut 06880

    cbernsteinesq@gmail.com

	 	If
    to USAP:	Mr.
    Gabriel Leoni

    USA
    Procurements, LLC

    1100
    Poydras Street

    New
    Orleans, LA 70163

    Email:
    Gl@gabrielleoni.com

     

    With
    a copy to:

    Brian
    L. Bank, Esq.

    Rivkin
    Radler LLP

    926
    RXR Plaza

    Uniondale,
    New York 11556

    brian.bank@rivkin.com



 


or
to such other address as either party may from time to time specify in writing to the other party.


 


		18.	COSTS



 


The
Parties acknowledge that each is to bear its own costs, fees, and expenses, including attorneys’ fees, incurred in connection with
the disputes regarding the Contract, except as set forth in Paragraph 19 of this Settlement Agreement.


 


		19.	RIGHT
TO ATTORNEY’S FEES IN CASE OF BREACH



 


In
the event of any litigation arising out of or concerning a breach of this Settlement Agreement, the prevailing Party shall be entitled
to an award against the nonprevailing party of its reasonable attorney’s fees and costs.


 


		20.	HEADINGS



 


The
various headings of this Settlement Agreement are inserted for convenience only and shall not affect the interpretation of this Settlement
Agreement.


 


		21.	COUNTERPARTS
AND TRANSMISSION OF SIGNATURES



 


This
Settlement Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Original signatures transmitted by electronic mail or facsimile shall be deemed to be original
signatures. No Party shall be bound hereby unless and until all other Parties have executed this Settlement Agreement.


 


		22.	AUTHORIZED
SIGNATURE



 


Each
individual signing this Settlement Agreement in a representative capacity acknowledges and represents that he is duly authorized to execute
this Settlement Agreement in such capacity in the name of, and on behalf of, the designated corporation, partnership, limited liability
company, trust or other entity.


 


		23.	JOINT
PREPARATION



 


This
Settlement Agreement shall be deemed to have been prepared jointly by the parties hereto, and any uncertainty or ambiguity existing herein
shall not be interpreted against any party by reason of its drafting of this Settlement Agreement, but shall be interpreted according
to the application of the general rules of interpretation for arm’s length agreements.


 






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IN
WITNESS WHEREOF, the Parties hereto have caused this Settlement Agreement to be duly executed as of the date indicated on the first
page of this Settlement Agreement.


 





	SCWorx Corp.	 	USA Procurements LLC
	 	 	 
	By:	 	 	By	 
	Name:	 Tim Hannibal	 	Name: 	Gabriel Leoni
	Title:	 President	 	Title:	 Chief Executive Officer


 


 


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