EXHIBIT 10.1




                             SETTLEMENT AGREEMENT

                       AND MUTUAL RELEASE OF ALL CLAIMS
                       --------------------------------

      THIS  SETTLEMENT   AGREEMENT  AND   MUTUAL   RELEASE  OF   ALL   CLAIMS
 ("Agreement") by and among  Swiss-American Products, Inc. ("Plaintiff"),  on
 the  one  hand,  and  Carrington  Laboratories,  Inc.  and  G.  Scott  Vogel
 ("Defendants"), on the other hand, is made and entered into as of the  _____
 day of December, 2005 ("Effective Date").  The Plaintiff and the  Defendants
 are sometimes hereinafter collectively referred to as the "Parties".

                                   RECITALS
                                   --------

      WHEREAS, Plaintiff  has  filed suit  against  Defendants in  the  193rd
 Judicial District  Court,  Dallas  County, Texas,  which  is  styled  Swiss-
 American Products, Inc. v. Carrington Laboratories, Inc. and G. Scott Vogel,
 and pending as Cause No. 01-5163 (the "Litigation"); and,

      WHEREAS, the Parties desire to  avoid the uncertainty, aggravation  and
 costs of further litigation and settle all disputes between and among them.

      NOW THEREFORE,  for  and  in  consideration  of  the  premises,  mutual
 promises,  covenants,  conditions  and  obligations  contained  herein,  the
 receipt and sufficiency of which is hereby acknowledged, the Parties  hereto
 agree as follows:

                                   AGREEMENT

 A.   No Admission of Liability

      The Parties  acknowledge  that  in  making  this  Agreement,  they  are
 settling a  disputed  claim,  and  nothing  herein  shall  be  construed  an
 admission of liability by any party to the other.

 B.   Payments

      Defendant  Carrington  Laboratories,  Inc.  ("Carrington")  shall   pay
 to Plaintiff  the  amount  of  Four  Hundred  Thousand  and  no/100  Dollars
 ($400,000.00) via wire transfer on the Effective Date of this Agreement.

      On the  Effective Date  of this  Agreement, Carrington  shall issue  to
 Plaintiff a 6.0% Subordinated Promissory Note (the "Promissory Note"), which
 shall be in the form attached as Exhibit "A" hereto, in the principal amount
 of Four Hundred Thousand and no/100 Dollars ($400,000.00). Carrington agrees
 that the  subordinated  debt  would  only  be  subordinated  to  the  Senior
 Indebtedness (as defined in the Promissory Note) and would be pari passu  in
 seniority, payment and other  terms/restrictions with the subordinated  debt
 issued to the purchasers (the "Purchasers") pursuant to the Promissory  Note
 and Warrant Purchase Agreement (the "Purchase Agreement") dated November 18,
 2005, among  Carrington and  the  Purchasers listed  on  Schedule I  to  the
 Purchase Agreement.  Carrington  agrees that when payments  are made to  the
 Purchasers under  their promissory  notes issued  pursuant to  the  Purchase
 Agreement, Plaintiff will  also be  paid its pro  rata share,  based on  the
 ratio of  the  indebtedness  under the  Promissory  Note  to  the  aggregate
 indebtedness payable  under the  Promissory Note  and the  promissory  notes
 issued under the Purchase Agreement.

      In connection with  the terms of  the Promissory  Note, Plaintiff  will
 prior to or simultaneous  with the issuance to  Plaintiff of the  Promissory
 Note, execute and deliver  to Comerica Bank  and Carrington a  Subordination
 Agreement in the  form attached hereto  as Exhibit  "B" (the  "Subordination
 Agreement").

      On the  Effective Date  of this  Agreement, Carrington  shall issue  to
 Plaintiff a Series C  Common Stock Purchase  Warrant (the "Warrant"),  which
 shall be in  the form attached  as Exhibit "C"  hereto, exercisable for  two
 hundred thousand (200,000) shares of  Carrington common stock (the  "Warrant
 Shares" and,  collectively with  the Promissory  Note and  the Warrant,  the
 "Securities") and shall be  exercisable at the exercise  price set forth  in
 Section 2(b) of the Warrant.

      The  Parties  agree  to  cooperate  fully  in  executing  any  and  all
 supplementary documents  and to  take all  additional  actions that  may  be
 necessary or appropriate to  give full force and  effect to the basic  terms
 and intent of this Agreement.

 C.   Covenant Not to Use Formula.

      For purposes of reference, the parties agree that Carrington and Swiss-
 American will each keep one exclusive, identical copy of the  Swiss-American
 formula for Skintegrity Wound Cleanser that was at issue in this  Litigation
 (the  "Exclusive  Copy of  the Swiss-American  Formula").  For  verification
 purposes, Carrington  and  Swiss-American each  agree,  by virtue  of  their
 counsel's signature  to  this  Agreement  and  by  their  signature  on  the
 Exclusive Copies of the Swiss-American Formula, that they both have received
 their Exclusive Copy of the Swiss-American  Formula, that it is the  formula
 that was at issue  in the Litigation, and that it  is identical to the  copy
 given to the other party.  The formula  contained in the Exclusive  Copy  of
 the Swiss-American Formula shall be referenced herein as the "Swiss-American
 Formula."  Carrington  shall  maintain  its  Exclusive Copy  of  the  Swiss-
 American Formula.  Swiss-American and/or  its counsel shall maintain  Swiss-
 American's  Exclusive  Copy   of  the  Swiss-American  Formula.   Defendants
 covenant and agree that within forty-five (45) days after the Effective Date
 of this Agreement, all other documents containing the Swiss-American Formula
 in the possession of Defendants, their  attorneys or their experts shall  be
 returned to Plaintiff and all electronic  files and backup files  containing
 the the Swiss-American Formula shall be destroyed.

      Defendants covenant and agree that that they will not possess, maintain
 or use  the Swiss-American  Formula  in any  way  except to  maintain  their
 Exclusive Copy of the  Swiss-American  Formula.  Carrington agrees that  the
 Swiss-American Formula shall  be maintained in  confidence.  The  Defendants
 represent that,  since  the filing  of  the Litigation,  the  Swiss-American
 Formula has not been disclosed to  third parties, except to their  attorneys
 and pursuant the Protective Order entered in the Litigation.

      Defendants covenant and agree that they will not manufacture, market or
 sell a product with the identical  ingredients and the identical  percentage
 of ingredients as in the Swiss-American Formula.

 D.   Mutual Release and Discharge

      Plaintiff,  its  successors,  assigns,  agents,  officers,   directors,
 shareholders, employees, attorneys, subsidiaries and all related parties and
 entities acting in privity with the  foregoing, fully releases, acquits  and
 forever discharges Defendants, their successors, assigns, agents,  officers,
 directors, shareholders, employees, attorneys, subsidiaries and all  related
 parties and entities acting in privity  with the foregoing, of and from  any
 and all  claims,  demands  and  causes of  action  held  by  Plaintiff,  its
 successors, assigns, agents,  officers, directors, shareholders,  employees,
 attorneys, subsidiaries  and  all related  parties  and entities  acting  in
 privity with the  foregoing, which  arise from, result  from or  in any  way
 relate to the Litigation or any claim or  cause of action which it may  have
 of whatsoever nature, whether  arising in contract, or  in tort or based  on
 any other  theory  of recovery,  known  or unknown,  presently  existing  or
 existing in the  past, of whatever  nature, except  for obligations  arising
 hereunder.

      Defendants, their  successors,  assigns, agents,  officers,  directors,
 shareholders, employees, attorneys, subsidiaries and all related parties and
 entities acting in  privity with the  foregoing, fully  release, acquit  and
 forever discharge  Plaintiff,  its successors,  assigns,  agents,  officers,
 directors, shareholders, employees, attorneys, subsidiaries and all  related
 parties and entities acting in privity  with the foregoing, of and from  any
 and all  claims, demands  and causes  of action  held by  Defendants,  their
 successors, assigns, agents,  officers, directors, shareholders,  employees,
 attorneys, subsidiaries  and  all related  parties  and entities  acting  in
 privity with the  foregoing, which  arise from, result  from or  in any  way
 relate to the Litigation or any claim or cause of action which they may have
 of whatsoever nature, whether  arising in contract, or  in tort or based  on
 any other  theory  of recovery,  known  or unknown,  presently  existing  or
 existing in the  past, of whatever  nature, except  for obligations  arising
 hereunder.

      The Parties shall  file an  agreed motion  and, in  the forms  attached
 hereto as  Exhibits "D"  and "E"  dissolving  the temporary  injunction  and
 dismissing the Litigation with prejudice.  All parties shall bear their  own
 costs and attorneys' fees in the Litigation.

 E.   Representations and Warranties

      1. Each  Party to this Agreement warrants and  represents that he or it
 has the  power and  authority to  enter into  this Agreement  and that  this
 Agreement and all documents delivered pursuant to this Agreement are  valid,
 binding and enforceable upon him or it.

      2. Each  Party  to  this  Agreement  warrants  and  represents that no
 consent, approval, authorization or  order of, and no  notice to, or  filing
 with, any court, governmental  authority, person or  entity is required  for
 the execution, delivery, and performance of this Agreement, other than, with
 respect to Carrington (i) compliance with any applicable requirements of the
 Securities Act of 1933, as amended  (the "Securities Act"); (ii)  compliance
 with  any  applicable  requirements of the Securities Exchange Act  of 1934,
 as  amended  (the "Exchange  Act");  (iii)  compliance  with  any applicable
 state securities  laws;  and  (iv)  such  consents,  approvals,  orders,  or
 authorizations which, if  not obtained, and  such declarations, filings,  or
 registrations which,  if  not  made,  would  not,  individually  or  in  the
 aggregate, have a material adverse effect  on the business, assets,  results
 of operations, or  financial condition of  Carrington.  The  representations
 and warranties of Carrington contained in this Section E.2., insofar as such
 representations and warranties pertain to compliance by Carrington with  the
 requirements of the Securities Act and applicable state securities laws, are
 based on  the  representations  and warranties  of  Plaintiff  contained  in
 Section E.3.

      3. Plaintiff hereby  represents  and  warrants  to  and  covenants with
 Carrington that:

      (a)  Plaintiff is a corporation  duly incorporated  under the  laws  of
 Texas and is validly existing in good standing under such laws.

      (b)  Plaintiff has adequate means of providing for Plaintiff's  current
 needs and  possible  contingencies,  and Plaintiff  has  no  need  now,  and
 anticipates no need in the foreseeable future, to sell the Securities to  be
 acquired by Plaintiff  hereunder.  Plaintiff  is able to  bear the  economic
 risks of this investment, and consequently, without limiting the  generality
 of the foregoing, is able to hold the Securities for an indefinite period of
 time and has a sufficient net worth to sustain a loss of Plaintiff's  entire
 investment in the Securities in the event such loss should occur.

      (c)  Plaintiff recognizes that Plaintiff's investment in the Securities
 involves a high  degree of risk  that may result  in the loss  of the  total
 amount  of  the  investment.   Plaintiff  acknowledges  that  Plaintiff  has
 carefully considered all risks incident to the purchase of the Securities.

      (d)  Plaintiff is acquiring the Securities  for Plaintiff's own account
 (as principal) for  investment and not  with a view  to the distribution  or
 resale of all or any part thereof.

      (e)  Plaintiff  has  not  offered or sold any portion of the Securities
 and has no present intention of dividing Plaintiff's  interest in any of the
 Securities with others or of reselling or otherwise disposing of any portion
 of the  Securities either  currently or  after  the passage  of a  fixed  or
 determinable period of time or upon  the occurrence or nonoccurrence of  any
 predetermined event or circumstance.

      (f)  Plaintiff  is  aware that Plaintiff must bear the economic risk of
 an  investment in the Securities for an indefinite period of time because of
 the restrictions  on  transferability  referred  to  below.  Plaintiff  also
 recognizes that no federal or state agency has passed upon the Securities to
 date or  made  any  finding  or  determination as  to  the  fairness  of  an
 investment in the Securities.

      (g)  Plaintiff and its advisors,  if any, have  been furnished with all
 publicly  available  materials  relating  to  the  business,  finances   and
 operations  of  Carrington  and  such  other  publicly  available  materials
 relating to the offer and sale of  the Securities as have been requested  by
 Plaintiff. Plaintiff  and  its advisors,  if  any, have  been  afforded  the
 opportunity to  ask questions  of Carrington.  Other than  to other  persons
 party to this  Agreement and its  professional advisors who  have agreed  to
 keep such  information  confidential  in  accordance  with  this  Agreement,
 Plaintiff has maintained the confidentiality of  all disclosures made to  it
 in connection with this  transaction (including the  existence and terms  of
 this transaction).

      (h)  Plaintiff  has not  received  any offer  to acquire the Securities
 pursuant to  any  advertisement,  article,  notice  or  other  communication
 published in  any newspaper,  magazine or  similar media  or broadcast  over
 television or radio or pursuant to  attendance at any seminar or meeting  to
 which  Plaintiff  was  invited  by  such  general  solicitation  or  general
 advertising.

      (i)  In  making  a  decision to subscribe for the Securities, Plaintiff
 has  relied  upon  independent  investigations  made  by Plaintiff  and  its
 advisors,  if  any,  without  assistance  of Carrington  or its  affiliates,
 employees or agents.

      (j)  Plaintiff understands and agrees  that (i) its  acquisition of the
 Securities will not be registered under applicable securities laws, and (ii)
 a legend  in  substantially  the  following  form  will  be  placed  on  any
 certificate(s) evidencing the  Securities, in addition  to any other  legend
 required by law or other agreement to be noted thereon:

           THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THOSE  ISSUABLE
      UPON THE EXERCISE HEREOF: (I) HAVE  BEEN OR WILL BE ISSUED PURSUANT  TO
      AN EXEMPTION FROM  REGISTRATION UNDER THE  SECURITIES ACT  OF 1933,  AS
      AMENDED, AND APPLICABLE STATE SECURITIES OR  BLUE SKY LAWS IN  RELIANCE
      UPON THE REPRESENTATION OF  THE HOLDER HEREOF THAT  THE SAME HAVE  BEEN
      ACQUIRED  FOR  INVESTMENT  PURPOSES;  AND  (II)  MAY  NOT  BE   RESOLD,
      TRANSFERRED OR CONVEYED IN THE ABSENCE OF REGISTRATION PURSUANT TO  THE
      APPLICABLE SECURITIES LAWS OR UNLESS AN OPINION OF COUNSEL SATISFACTORY
      TO THE COMPANY IS FIRST OBTAINED THAT SUCH IS NOT THEN NECESSARY.   ANY
      TRANSFER CONTRARY HERETO IS VOID.

      (k)  Plaintiff confirms that Plaintiff has been advised to consult with
 its own  attorney  regarding  legal matters  concerning  Carrington  and  to
 consult with  independent tax  advisors regarding  the tax  consequences  of
 investing in Carrington.

      (l)  The execution,  delivery,  and performance  by  Plaintiff  of this
 Agreement and the consummation by it of the transactions contemplated hereby
 do not  and will  not (i)  conflict with  or result  in a  violation of  any
 provision of its charter, bylaws or similar organizational documents or (ii)
 violate any  applicable law  binding upon  Plaintiff,  except for  any  such
 violations which  would not,  individually or  in the  aggregate affect  the
 ability of Plaintiff to consummate the transactions contemplated hereby.

      (m)  Plaintiff is not acquiring the securities as  part of a "group" as
 such term is generally  understood pursuant to  Section 13(d) of  Regulation
 13D-G of the Exchange Act or if Plaintiff is a member of a group, the  group
 will beneficially own,  within the meaning  of Section  13(d) of  Regulation
 13D-G of the Exchange Act, less than 15% of Carrington's common stock  after
 giving effect to the transactions contemplated hereby.

      (n)  Plaintiff understands  that the  Promissory  Note and Warrant  are
 being offered and sold to Plaintiff in reliance on specific exemptions  from
 the registration  requirements  of  the  United  States  federal  and  state
 securities  laws  and  that  Carrington is relying  in  part  upon the truth
 and  accuracy  of,  and  Plaintiff's  compliance  with, the representations,
 warranties, agreements, acknowledgements and understandings of Plaintiff set
 forth herein in order to determine  the availability of such exemptions  and
 the eligibility of Plaintiff to acquire the Promissory Note and Warrant.

      (o)  Plaintiff,  either alone or together with its representatives, has
 such knowledge,  sophistication and  experience  in business  and  financial
 matters, including investing in companies engaged  in the business in  which
 Carrington is engaged,  so as  to be capable  of evaluating  the merits  and
 risks of the prospective investment in the Promissory Note and Warrant,  and
 has so evaluated the merits and risks of such investment.  Plaintiff is able
 to bear  the economic  risk of  an  investment in  the Promissory  Note  and
 Warrant and is able to afford a complete loss of such investment.

      (p)  Plaintiff acknowledges that Plaintiff understands the meaning  and
 legal consequences  of the  representations,  warranties and  covenants  set
 forth in this Section  E.3. hereof and that  Carrington has relied and  will
 rely upon  such representations,  warranties  and covenants,  and  Plaintiff
 hereby agrees  to defend,  indemnify and  hold harmless  Carrington and  its
 officers, directors,  controlling persons,  agents and  employees, from  and
 against any and  all loss, damage  or liability, joint  or several, and  any
 action in respect thereof, to which  any such person may become subject  due
 to or arising out of Plaintiff's breach of any such representation, warranty
 or covenant.

      4. Carrington hereby represents and warrants to Plaintiff that:

      (a)  Carrington understands the meaning  and legal  consequences of the
 representations, warranties and  covenants set  forth in this  Section  E.4.
 hereof as well as those  contained in Section C  entitled Convenant  Not  to
 Use  Formula  and  that  Plaintiff  has  relied  and  will  rely  upon  such
 representations, warranties and covenants,  and Carrington hereby agrees  to
 defend, indemnify and hold harmless  Plaintiff and its officers,  directors,
 controlling persons,  agents and  employees, from  and against  any and  all
 loss, damage  or liability,  joint or  several, and  any action  in  respect
 thereof, to which any such person may  become subject due to or arising  out
 of Carrington's breach of any such representation, warranty or covenant;

      (b)  Corporate  Organization.    Carrington  is   a  corporation   duly
 organized, validly existing,  and in  good standing  under the  laws of  the
 State of Texas and has all requisite corporate power and corporate authority
 to own, lease, and operate  its properties and to  carry on its business  as
 now being conducted.

      (c)  Qualification.  Carrington  is  duly qualified  or licensed  to do
 business and is in good standing in each jurisdiction in which the  property
 owned, leased, or  operated by it  or the conduct  of its business  requires
 such qualification or licensing, except  jurisdictions in which the  failure
 to be so qualified or licensed would not, individually or in the  aggregate,
 have  a  material  adverse  effect  on  the  business,  assets,  results  of
 operations, or financial condition of Carrington.

      (d)  Capitalization of Carrington.

                   (i)   The authorized capital stock of Carrington  consists
 of (i) 30,000,000 shares  of Carrington's common stock,  $.01 par value  per
 share (the "Common Stock"),  of which, as of  November 14, 2005,  10,790,230
 shares were outstanding, and (ii) 1,000,000  shares of preferred stock,  par
 value $100 per share, of which, as of November 14, 2005, none of which  were
 outstanding.  All  outstanding shares of  capital stock  of Carrington  have
 been validly issued and are fully  paid and nonassessable, and no shares  of
 capital stock of  Carrington are  subject to, nor  have any  been issued  in
 violation of, preemptive or similar rights.  As of November 14, 2005, (A) an
 aggregate of  1,444,881  shares  of Common  Stock  were  issuable  upon  the
 exercise of outstanding options granted under Carrington's 1995 Stock Option
 Plan, (B) an aggregate of 500,000  shares of Common Stock were reserved  for
 issuance  under  Carrington's  2004 Stock Option Plan, of which an aggregate
 of 170,500  shares  of Common  Stock  were  issuable  upon  the  exercise of
 outstanding options granted thereunder, (C) an aggregate of 1,250,000 shares
 of Common Stock were reserved for issuance under Carrington's Employee Stock
 Purchase Plan, of which an aggregate of 960,112 shares of Common Stock  have
 been issued thereunder, and (D) an  aggregate of 300,000 shares of a  series
 of the Carrington's preferred stock designated  as Series D Preferred  Stock
 are reserved  for issuance  upon the  exercise  of certain  preferred  share
 purchase rights  associated  with  the Common  Stock,  which  rights  become
 exercisable by the holders  thereof upon the  occurrence of certain  events,
 including the  acquisition  of, or  the  announcement of  the  intention  to
 acquire, more than 15% of the outstanding Common Stock by any person, entity
 or group.

                   (ii)   Except as set  forth above in  this Section  E.4(d)
 and as contemplated by this Agreement,  as of November 14, 2005, there  were
 outstanding (A) no  shares of capital  stock or other  voting securities  of
 Carrington, (B) no securities of Carrington convertible into or exchangeable
 for shares of capital stock or other voting securities of Carrington, (C) no
 options or other  rights to acquire  from Carrington, and  no obligation  of
 Carrington to issue  or sell, any  shares of capital  stock or other  voting
 securities of Carrington or any securities of Carrington convertible into or
 exchangeable for such capital stock or voting securities, and (D) no  equity
 equivalents, interests in the ownership or earnings, or other similar rights
 of or with respect to Carrington.

                (iii)  Except  pursuant   to  the   Purchase  Agreement   and
 Carrington's stock option and employee stock purchase plans, Carrington  has
 not issued any  securities, or the  right to purchase  any securities  since
 November 14, 2005.

      (e)  Authority  Relative  to  this  Agreement.    Carrington  has  full
 corporate power and  corporate authority  to execute,  deliver, and  perform
 this Agreement,  the  Promissory Note  and  the Warrant  (collectively,  the
 "Transaction Documents")  and to  consummate the  transactions  contemplated
 thereby.  The execution,  delivery,  and  performance by  Carrington of  the
 Transaction Documents,  and  the  consummation by  it  of  the  transactions
 contemplated thereby, have been duly  authorized by all necessary  corporate
 action of Carrington.  The Transaction Documents have been duly executed and
 delivered by Carrington and constitute valid and legally binding obligations
 of Carrington,  enforceable  against  Carrington in  accordance  with  their
 respective terms,  except that  such enforceability  may be  limited by  (i)
 applicable bankruptcy, insolvency,  reorganization, moratorium, and  similar
 laws affecting creditors' rights generally, (ii) equitable principles  which
 may limit the availability of certain  equitable remedies (such as  specific
 performance) in certain  instances, and (iii)  public policy  considerations
 with respect to the enforceability of rights of indemnification.

      (f)  Noncontravention.   The execution,  delivery, and  performance  by
 Carrington of the Transaction  Documents and the consummation  by it of  the
 transactions contemplated thereby do not and  will not (i) conflict with  or
 result in  a  violation  of  any  provision  of  the  Restated  Articles  of
 Incorporation or Bylaws  of Carrington, (ii)  conflict with or  result in  a
 violation of any provision of, or constitute (with or without the giving  of
 notice or the passage of time or both)  a default under, or give rise  (with
 or without the giving of notice or the passage of time or both) to any right
 of termination, cancellation,  or acceleration under,  any bond,  debenture,
 note,  mortgage,  indenture,  lease,  agreement,  or  other  instrument   or
 obligation to which Carrington is a party  or by which Carrington or any  of
 its properties may be bound, (iii)  result in the creation or imposition  of
 any lien or encumbrance upon the properties of Carrington, or (iv)  assuming
 compliance with  the matters  referred to  in  Section E.4(g),  violate  any
 Applicable Law (as hereinafter defined) binding upon Carrington, except,  in
 the case of  clauses (ii), (iii),  and (iv) above,  for any such  conflicts,
 violations, defaults, terminations, cancellations, accelerations, liens,  or
 encumbrances which  would not,  individually or  in  the aggregate,  have  a
 material adverse effect on the business,  assets, results of operations,  or
 financial condition  of  Carrington  or on  the  ability  of  Carrington  to
 consummate the transactions contemplated hereby.

      (g)  Governmental  Approvals.     No  consent,   approval,  order,   or
 authorization  of,  or  declaration,  filing,  or  registration  with,   any
 Governmental Entity (as hereinafter defined) is  required to be obtained  or
 made  by  Carrington  in  connection   with  the  execution,  delivery,   or
 performance by Carrington of the  Transaction Documents or the  consummation
 by it of the  transactions contemplated thereby,  other than (i)  compliance
 with any applicable requirements of the Securities Act; (ii) compliance with
 any applicable requirements of the Exchange  Act; (iii) compliance with  any
 applicable state securities laws; and (iv) such consents, approvals, orders,
 or authorizations which, if not obtained, and such declarations, filings, or
 registrations which,  if  not  made,  would  not,  individually  or  in  the
 aggregate, have a material adverse effect  on the business, assets,  results
 of  operations,  or  financial  condition of  Carrington  or on  the ability
 of Carrington  to  consummate  the  transactions  contemplated  hereby.  The
 representations and  warranties  of  Carrington contained  in  this  Section
 E.4(g), insofar as such representations and warranties pertain to compliance
 by Carrington with  the requirements of  the Securities  Act and  applicable
 state securities laws, are  based on the  representations and warranties  of
 the Plaintiff contained in Section E.3.

      (h)  Authorization  of  Issuance.    The  Securities  have  been   duly
 authorized for  issuance and,  when issued  and delivered  by Carrington  in
 accordance with the provisions of the applicable Transaction Documents, will
 be validly issued, fully paid, and nonassessable.  The Warrant Shares,  when
 issued in accordance with  the terms of the  Transaction Documents, will  be
 validly issued, fully paid and nonassessable.  Carrington has reserved  from
 its duly  authorized  capital  stock 200,000  shares  of  Common  Stock  for
 issuance of the  Warrant Shares.  The  issuance  of the  Securities and  the
 Warrant Shares is not subject to any preemptive or similar rights.

      (i)  Private Placement Memorandum; SEC Filings.

           (i)  None of the  information contained in  the Private  Placement
 Memorandum (the "Private Placement Memorandum")  given to the Plaintiff,  as
 of such date, contains any untrue statement  of a material fact or omits  to
 state any material fact required to be stated therein or necessary in  order
 to make  the statements  contained therein,  in light  of the  circumstances
 under which they are made, not misleading.

           (ii) Carrington has delivered to  Plaintiff accurate and  complete
 copies of (A)  Carrington's Annual Report  on Form 10-K  for the year  ended
 December 31, 2004, (B)  Carrington's Annual Report  to Shareholders for  the
 fiscal year ended December 31, 2004, (C) Carrington's Proxy Statement  dated
 April 14, 2005,  relating to the  2005 Annual Meeting  of Shareholders,  (D)
 Carrington's Quarterly Report on Form 10-Q  for the quarter ended  September
 30, 2005 and (E) Carrington's Current  Report on Form 8-K filed on  November
 22, 2005, in each case in the  form filed by Carrington with the  Securities
 and  Eschange  Commission  (collectively,  the  "SEC Filings").  None of the
 SEC Filings, including,  without  limitation,  any  financial  statements or
 schedules included therein, as of the date of filing thereof, contained  any
 untrue statement of a  material fact or omitted  to state any material  fact
 required to be stated therein or  necessary in order to make the  statements
 contained therein, in light of the circumstances under which they were made,
 not misleading.  The financial statements of Carrington included in the  SEC
 Filings present  fairly, in  conformity with  generally accepted  accounting
 principles applied on a consistent basis (except as may be indicated in  the
 notes thereto), the consolidated financial position of Carrington as of  the
 dates thereof and its consolidated results of operations and cash flows  for
 the periods then ended (subject to normal year-end audit adjustments in  the
 case of any unaudited interim financial statements).

      (j)  Absence of Undisclosed Liabilities.  Except  as and to the  extent
 disclosed in the Private Placement Memorandum or the SEC Filings, (a) as  of
 September 30, 2005,  Carrington had no  liabilities or obligations  (whether
 accrued, absolute,  contingent,  unliquidated,  or  otherwise)  material  to
 Carrington, and (b) since  September 30, 2005,  Carrington has not  incurred
 any such material liabilities or obligations,  other than those incurred  in
 the ordinary course of business.

      (k)  Absence of Certain Changes.  Except  as  disclosed in the  Private
 Placement Memorandum or the SEC Filings, since September 30, 2005, there has
 not been any  material adverse change  in the business,  assets, results  of
 operations, or financial condition of Carrington.

      (l)  Scope of Representations and Warranties.  Except  as set forth  in
 this Agreement, Carrington  makes no  representations or  warranties to  the
 Plaintiff and  hereby disclaims  all liability  and responsibility  for  any
 representation, warranty,  statement, or  information made  or  communicated
 (orally or  in writing)  to  Plaintiff (including  but  not limited  to  any
 opinion,  information,  projection,  or advice  that  may have been provided
 to Plaintiff  by  any  officer,  director, employee,  agent,  consultant  or
 representative of Carrington).

 F.   Miscellaneous Provisions

      1. Construction

      This Agreement shall be construed and interpreted in accordance of  the
 laws of  the State  of Texas,  without  reference to  its conflict  of  laws
 provisions, and any  dispute arising hereunder  shall be  brought in  Dallas
 County, Texas.

      2. Severability

      To the extent any provision of  this Agreement is deemed  unenforceable
 or contrary  to  law, all  provisions  of  this Agreement  shall  be  deemed
 severable, and  all remaining  provisions shall  remain  in full  force  and
 effect.

      3. Integration

      This Agreement is fully integrated and represents the entire  agreement
 and  understanding  of  the Parties.  This  Agreement  shall  supersede  and
 replace  any  prior  agreements   or  understandings  between  the   Parties
 concerning the subject matter of this Agreement.

      4. Amendments

      This Agreement may not be amended or modified except by a writing  duly
 executed by the party or the authorized representative of the party  against
 which such amendment or modification is subject to be enforced.

      5. Registration Rights

      The Company shall use  its commercially reasonable efforts  to register
 the  Warrant Shares  with the  Securities and Exchange  Commission under the
 Securities  Act of  1933, as amended, on or before February 16, 2006, on the
 same terms and conditions as the registration rights  contained  in  Section
 4.4  of  the  Purchase  Agreement,  with the  Warrant Shares  having  rights
 thereunder pari passu with the shares issuable  under the warrants issued to
 the Purchasers under the Purchase Agreement.

      6. Counterparts and Signatures

      This Agreement may be executed in  any number of counterparts, each  of
 which shall be  deemed an  original.  This Agreement  and  all  counterparts
 hereto shall be considered a single, enforceable contract.  For purposes  of
 this Agreement, a signature transmitted via  facsimile or telecopy shall  be
 deemed as effective as an original.

      7. Successors

      This Agreement shall be  binding upon and inure  to the benefit of  the
 Parties and their respective successors and assigns.

      8. No Assignment

      The rights and privileges afforded by this Agreement are not assignable
 by any party without the written consent of the other parties.

      9. Survival

      All  representations,   warranties,  covenants   and   indemnifications
 contained in this Agreement shall survive  after the Effective Date of  this
 Agreement.

      10.  Confidentiality

      From the Effective Date  forward, the Parties agree  not to reveal  the
 terms  of  this  Agreement  or  any  information  concerning  the  business,
 financial  condition,  operations,  prospects,  assets  and  liabilities  of
 Carrington acquired from Carrington during the negotiation of this Agreement
 to anyone who is not a Party to this Agreement.  However, the Parties  agree
 that this section shall not prevent  any Party from revealing or  discussing
 the terms of this Settlement Agreement  (a) with his or its legal  advisors,
 accountants,  tax  advisors,  or  financial  advisors;  (b)  in  any  action
 regarding the  breach, enforcement,  or  interpretation of  this  Settlement
 Agreement; and (c) as required by law, contract, governmental agency, or any
 court of competent jurisdiction.

      11.  Notices

      All notices, requests,  demands, and other  communications required  or
 permitted to be  given or made  hereunder by any  Party hereto  shall be  in
 writing and shall be  deemed to have  been duly given  or made if  delivered
 personally or  transmitted  by first  class  registered or  certified  mail,
 postage prepaid, return receipt requested, to  the Party at the address  set
 forth under such Party's name on the signature page hereof (or at such other
 address as shall be specified by the Party by like notice).

 AGREED:

 SWISS-AMERICAN PRODUCTS, INC.

 __________________________________                Dated:______________, 2005
 By:  William O. Kling
 Its: President

 Address:  2055 Luna Road, Ste. 126
           Carrollton, TX  75006
           Attn:  President


 CARRINGTON LABORATORIES, INC.


 _________________________________                 Dated:______________, 2005
 By:  Carlton E. Turner
 Its: President and CEO

 Address:  2001 Walnut Hill Lane
           Irving, Texas  75038
           Attn:  Chief Financial Officer


 _________________________________                 Dated:______________, 2005
 G. SCOTT VOGEL

 Address:  325 Blue Quail Ct.
           Bedford, TX 76021