Preview | Separation Agreement |

SEPARATION AGREEMENT

This Separation Agreement is made as of this1st day of June, 2005 by and among, on the one hand, Logistical Support, Inc., a Utah corporation (the ?Company?), Hill Aerospace and Defense, LLC, a California limited liability company (?HAD?), Logistical Support, LLC, a California limited liability company (?LS? and together with the Company and HAD, ?Logistical?), and on the other hand, Mr. Harry Lebovitz (?Lebovitz?), Hill Industries, Inc., a California corporation (?Hill Inc.?) and Hill Industries, LLC, a California limited liability company (?Hill LLC? and together with Hill Inc, the ?Hill Entities?) (collectively, the ?Parties? and each a ?Party?).

WITNESSETH:

WHEREAS, Lebovitz is a member of the Board of Directors of the Company and is a significant shareholder of the Company; and

WHEREAS, Lebovitz currently manages one or more of HAD or LS and has access to the facility, books, records, and other properties of Logistical; and

WHEREAS, Lebovitz owns and/or controls each of the Hill Entities; and

WHEREAS, the Company and Lebovitz have determined to separate Lebovitz and the Hill Entities from Logistical and the business and operations and properties of Logistical; and

WHEREAS, the Company, Mr. Bruce Littell, a Member of the Board of Directors of the Company and Lebovitz agree that this Separation Agreement and the actions contemplated hereby and the terms hereof, and the results intended hereby, are in the best interests of the Company and its shareholders.

NOW, THEREFORE, the Company, Lebovitz and the Hill Entities intending to be legally bound, and in consideration of the covenants and promises set forth herein, and other good and valuable consideration, the receipt of which is hereby acknowledged, hereby agree as follows:

1. Resignation and Leave of Absence. Effective immediately and without any further action on the part of Lebovitz or the Company, Lebovitz hereby resigns from the Board of Directors of the Company (the ?Board Resignation?). Such Board Resignation is hereby accepted by the Company. Effective immediately, Lebovitz shall be on a leave of absence from any and all management and other employment positions he holds with HAD, LS or the Company (the ?LOA?). The Company hereby approves of the LOA. The Company and Lebovitz hereby agree that such LOA shall be unpaid and that no salary, sick days, vacation days or other benefits shall accrue or be due or payable to Lebovitz during such LOA.

2. Stock Purchase.

(a) Purchases. The Company hereby agrees, upon the terms and conditions set forth herein, to purchase from Lebovitz and the Hill Entities $25,000.00 per month of the shares of common stock of Logistical Support, Inc. (the ?Common Stock?) owned by Lebovitz and/or the Hill Entities, at a price per share of $0.25 (the ?Purchase Price?). Accordingly, commencing on June 15, 2005 and on each calendar month thereafter for a period of 12 months in total (the ?Purchase Period?), the Company shall tender to Lebovitz and/or the Hill Entities, as applicable the amount of $25,000, up to an aggregate during the Purchase Period of $300,000.00 (the ?Purchase Amount?), provided the conditions of this Section 2 are satisfied. Within five (5) business days of the date hereof, Lebovitz shall deliver, or cause the Hill Entities to deliver, to the Company at the Company?s principal office, stock certificates representing not less than 1,200,000 shares of Common Stock (the ?Purchased Shares?), with stock powers endorsed to the Company, and with appropriate instructions to the Transfer Agent of the Company to transfer such shares to the order of the Company, and a request from the Transfer Agent for an opinion of counsel to remove any restrictive legends on the certificates. Upon the payment by the Company of the monthly purchase amount (the ?Monthly Purchase Amount?) the Company shall be deemed to own (an additional) 100,000 of the Purchase Shares. The balance of the Purchased Shares, until the aggregate of the Monthly Purchase Amount of $300,000.00 has been tendered, shall be held in trust under this Agreement by the Company. Should this Agreement be terminated by the Company for any reason, the Company shall be obligated to return any shares held by it that have not been purchased by payment of the Monthly Purchase Amount to Lebovitz.

(b) Conditions. The Company shall have no obligation to purchase the Purchased Shares, or tender such Monthly Purchase Amount, or any portion thereof, if at the time the Monthly Payment Amount is to be tendered (i) the certificates representing such shares are not properly executed, (ii) the stock powers are not duly completed in blank, (iii) the instructions to the Transfer Agent are incomplete or are rejected by the Transfer Agent, (iv) an opinion of counsel cannot be obtained to the satisfaction of the Transfer Agent with respect to the transfer and re-issuance of the certificates, (v) there shall be, or there shall have been, an Event of Default under Section 8 of this Agreement, or (vi) for any other reason that prevents the legal transfer and conveyance of such shares to the Company, or such conveyance cannot be made without restriction, lien, claim or encumbrance upon such shares. In addition, each of the representations and warranties set forth under Section 4 shall be true and correct in all material respects as of the date of payment by the Company of each Monthly Payment Amount. In the event any representation or warranty shall be untrue, false, or misleading at such date, the Company shall have no obligation to tender the Monthly Purchase Amount and may demand return and repayment of any portion of the Purchase Amount discovered to have been made while a breach of the representations and warranties existed or while an Event of Default existed.

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