Exhibit 10.8
SETTLEMENT AGREEMENT
(WITH RELEASES AND COVENANTS NOT TO XXX)
THIS SETTLEMENT AGREEMENT, made as of this 28th day of December, 2006 by and
among:
CONTINAN COMMUNICATIONS, INC., formerly Texxon, Inc., a Nevada corporation
having its principal office located at 00000 Xxxxxxxx Xxxx, Xxxxx 0000, Xxx
Xxxxxxx, XX 00000 (hereinafter "CONTINAN") and its officers and directors,
Xxxxxx Xxxxxxx ("XXXXXXX"), Xxxxx Xxxxxx ("XXXXXX"), Xxxxxx Xxxxxxxx (XXXXXXXX")
and Xxxx Xxxxxx ("XXXXXX");
AND
FIRST BRIDGE CAPITAL, INC., a Texas corporation with its principal office
located at 0000 Xxxx Xxx Xxx., Xxxxxx Xxxxx 00000 together with its associates
(hereinafter jointly and severally referred to, as the context may require, as
"FBC")
AND
WALL STREET PR, INC., a Texas corporation with its principal offices located at
00000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, together with XXXXXXX XXXXXXX
("XXXXXXX") an adult individual competent to contract (hereinafter jointly and
severally referred to in the singular as "PR" or "XXXXXXX")
WITNESSETH THAT:
WHEREAS, there have been various transactions, agreements and understandings
between CONTINAN (f/k/a Texxon), on the one hand, and PR, FBC and XXXXXXX, on
the other hand, and certain disagreements, misunderstandings, frictions and
disputes have arisen;
WHEREAS, the parties have negotiated with respect to the disagreements,
misunderstandings, frictions and disputes and have reached the terms of a
settlement, for which they desire a written settlement document to evidence and
formalize the terms of such settlement;
NOW, THEREFORE, intending to be legally bound, and in consideration of the
mutual promises and covenants contained herein, the parties have agreed, and do
hereby agree, as follows:
1. On or about July 26, 2006 PR and XXXXXXX entered into a Settlement Agreement
with CONTINAN. An anti-dilution provision was inadvertently omitted from the
document due to a drafting oversight and PR/XXXXXXX and CONTINAN agreed that the
document was to be amended to include such provision. However, as of the date of
this Agreement, that prior settlement agreement has not been amended in writing.
The relevant parties agree that upon the issuance by CONTINAN of 2,710,000
shares of its Common Stock to PR, hereunder; such settlement agreement will have
been fully complied with. Upon issuance of the 2,710,000 shares, the prior
settlement agreement (and the underlying agreement which it settled) shall
become null and void and of no further effect, all alleged breaches being waived
and all claims thereunder being released. The 2,710,000 shares are being issued
pursuant to the terms of the July 7, 2006 Settlement Agreement (which, however,
inadvertently omitted the anti-dilution clause from the December, 2003
Consulting Agreement which was being settled and which anti-dilution clause was
orally agreed to be added) and the holding period for the 2,710,000 shares is
intended to tack back to the December, 2003 Consulting Agreement.
2. In the Plan and Agreement of Reorganization, between TelePlus, Inc. and
Texxon, Inc. (now CONTINAN), there was a provision for the issuance of common
stock purchase warrants for the purchase of 1,000,000 shares of the Common Stock
of Texxon to XXXXXXX. The parties have agreed that such warrants, which have not
been exercised, shall be cancelled and of no further force or effect. XXXXXXX
waives any and all claim to such warrants and the formerly referred to, but
unissued, preferred stock. This provision shall not, however, affect the
warrants issued to Hansel and Xxxxxxxxx.
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3. On or about August 14, 2006 FBC entered into a certain Funding Agreement with
Texxon, Inc. (now CONTINAN). It has been the position of CONTINAN, BUCHERT,
GIBSON, XXXXXXXX and XXXXXX that FBC has not timely met its commitments under
such Funding Agreement and there has been disagreement about the intent of the
phrase "up to One Million Dollars". The relevant parties agree that upon the
payment by FBC and its associates of the sum of Three Hundred Twenty Thousand
Dollars ($320,000) by FBC as provided hereunder, such Funding Agreement will
have been fully complied with (BUCHERT, GIBSON, XXXXXXXX and XXXXXX specifically
concur in this statement) notwithstanding the non-issuance of the warrants to
FBC which issuance is hereby waived (FBC and XXXXXXX specifically concur in this
statement and waiver). Upon payment of the $320,000, such Funding Agreement
shall become null and void and of no further effect, all alleged breaches being
waived and all claims thereunder being released.
4. The parties unanimously appoint Xxxxxxx X. Xxx, Esq., of Fox Law Offices,
P.A., counsel to CONTINAN, as ESCROW hereunder, waiving any inherent potential
conflict of interest.
5. On or before Friday, January 5, 2007, time being of the essence:
(a) FBC shall wire to the ESCROW pursuant to the following wire
instructions the sum of Three Hundred Twenty Thousand Dollars ($320,000):
First Community Bank
Santa Fe, New Mexico Branch
ABA Routing Number 000000000
For further credit to: Fox Law Offices, P.A. Trust Account
Account Number 001539507
Branch Bank Address: First Community Bank
000 Xxx Xxxxx
Xxxxx Xx, Xxx Xxxxxx 00000
Address of Recipient:
Fox Law Offices, P.A. 0 Xxxxxx Xxxx, X.X. Xxx 0000, Xxxxx, XX 00000
(b) CONTINAN shall cause its stock transfer agent to issue a
certificate, in the name of PR, for Two Million Seven Hundred Ten Thousand
(2,710,000) shares of its Common Stock, which shares (pursuant to Paragraph 1
above) shall be free-trading and the certificate shall not bear a restrictive
legend and to send via overnight courier, for further delivery to ESCROW at
Xxxxxx Xxxxx, CPA
Xxxxxxxxxxx & Associates
0000 Xxxxx xx Xxxxxxx
Xxxxx Xx, XX 00000
Telephone: (000) 000-0000, ext. 143
(c) Upon separate receipt of each, ESCROW shall hold the shares and the
funds in safekeeping pending receipt of both. Upon receipt of both, ESCROW shall
simultaneously
(i) Send the stock certificate for the 2,710,000 shares to PR; and
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(ii) Transfer the sum of Twenty Thousand Dollars to the General Account
of Fox Law Offices, P.A. in payment of the legal fees owing for December 2006
and January 2007; and
(iii) Wire the remaining $300,000 to CONTINAN pursuant to the wire
instructions to be provided by CONTINAN.
6. (a) FBC, its associates, PR and XXXXXXX, have loaned funds to CONTINAN, both
prior to the Funding Agreement, as set forth therein, and subsequently thereto
with the understanding of all parties that upon availability of the Private
Placement for Convertible Preferred Stock all of such advances would be
converted to such Convertible Preferred Stock. FBC, its associates and XXXXXXX
agree that the $320,000 being provided pursuant to this Settlement Agreement
shall also be converted to such Convertible Preferred Stock. CONTINAN hereby, as
an inducement to FBC and its associates, PR and XXXXXXX to make such conversion,
grant Demand Registration rights to each of such converting lenders, such
registration statement to be at the expense of the party demanding registration.
CONTINAN shall (and shall cause its counsel and auditors) to cooperate in good
faith, with all due speed, to prepare and file and prosecute such Registration
Statement as rapidly as possible. In addition, the terms of the Convertible
Preferred Stock shall include a cumulative dividend, whether or not earned of
eight per cent (8%) per annum, which shall also be convertible on the same terms
as the stated capital, and shall be exercisable at a rate of seventy percent
(70%) of the average closing bid price for a period 20 consecutive trading days
up to and including the day of conversion. Regardless of the date of the
designation of the preferred stock or the date of conversion, the holding period
for such shares shall tack back to the dates on which the respective loans being
converted shall have been made and CONTINAN shall so advise its transfer agent
on the date of each conversion of preferred stock to common stock.
(b) CONTINAN hereby agrees that the holding period for the Convertible Preferred
Stock shall date from the dates that funds were advanced from time to time.
CONTINAN agrees that it will promptly, with all due speed, and in good faith,
secure such opinion of counsel as may be necessary to remove any legends as
permitted under Rule 144 and that it will not interfere with or disrupt the
conversion or the removal of legends.
(c) CONTINAN agrees that monetary damages may be inadequate compensation for any
violation of (b) above and accordingly agrees that FBC, its associates and/or
XXXXXXX shall be entitled to equitable relief, including but not limited to a
TRO, Preliminary Injunction and Final Injunction and that in the event that it
is necessary for FBC, its associates or XXXXXXX to seek such equitable relief,
CONTINAN shall be solely responsible to the payment of all legal fees and costs
incurred by the party seeking relief. Such payment shall be made within three
(3) business days of written demand by the party to be indemnified.
7. It is the intent of the parties to terminate all prior understandings,
contracts, agreements and commitments between and among them. Accordingly, with
the exception of the on-going contract between CONTINAN and Sandler
Communications Group, Inc., any and all prior understandings, contracts,
agreements and commitments whatsoever, including but not limited to those
specifically set forth in this Settlement Agreement, are hereby terminated,
deemed to be null and void and of no further effect. All rights, duties,
licenses and powers thereunder are forgiven, terminated and released. Each of
the parties hereby releases each of the other parties from any and all claims
arising, directly or indirectly thereunder and covenants not to xxx any other
party for any alleged breach thereof.
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IN WITNESS WHEREOF, intending to be legally bound, the parties have executed
this Settlement Agreement as of this 28th day of December, 2006:
CONTINAN COMMUNICATIONS, INC. WALL STREET PR, INC.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxx
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By: /s/ Xxxxx Xxxxxx FIRST BRIDGE CAPITAL,INC
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By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
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By: /s/ Xxxx Xxxxxx
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