Exhibit 10.08
SETTLEMENT AGREEMENT
DATE: July 7, 2004
I. PARTIES
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Schimatic Cash Transactions Xxxxxxx.xxx, Inc. dba Smart Chip Technologies,
hereinafter "Company." and
Xxxxxxx X. XxXxxx and X. XxXxxx, Inc., hereinafter called "Mac,"
hereby enter into this Settlement Agreement, hereinafter "Agreement", effective
July 7, 2004.
II. PURPOSE OF AGREEMENT
For the purpose of cleaning up the "stock overhang" of the Company, as dictated
by the Board of Directors, the Company and Mac agree to the following regarding
Stock, Stock Options and Bonuses.
III. AGREEMENT
A. The Company and Mac shall execute, simultaneously with this Agreement, a
Contractor Agreement for two thousand five hundred dollars ($2,500) per
month, paid as the Company's cash flow permits. If there is not enough to
pay salaries, the Board of Directors will determine how salaries are paid.
Mac hereby assigns the contract between himself and SCTN dated August 1,
2002 to X. XxXxxx, Inc. and SCTN hereby accepts such assignment. SCTN and
X. XxXxxx, Inc. hereby agree to extend the contract signed August 1, 2002,
until February 19, 2004.
B. The stock to be issued under the terms of this agreement will settle all
prior agreements related to stock, stock options, and agreements to convert
debts to stock .
C. All stock will be issued effective the date of this agreement, but physical
certificates representing that stock will not be printed and delivered to
Mac until the shareholders meet and approve an increase to the limit of
shares authorized.
D. All references to converting unpaid salary or unpaid business expenses to
stock or stock options in any previous agreements are void. There will be
no conversion rights related to unpaid salaries.
E. Mac agrees that he will not ask for any additional shares or options as
compensation through the end of his Contractor Agreement.
F. Mac agrees to convert his Secured Convertible Note of $910,000 plus
interest to 9-30-2004 to stock under the same terms and conditions as the
rest of the Secured Convertible Note holders.
Xxxxxxx XxXxxx Settlement Agreement (Cont.) Page 2
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G. Mac and the Company agree to convert Mac's accrued salary from 8-01-2002
through 2-19-2004 to 4,123,300 shares, per the terms of his previous
consulting employment agreement.
H. Mac will receive a performance bonus of 3,000,000 shares
X. CONTROLLING LAW
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The validity and construction of this agreement shall be governed by the laws of
the State of Utah without reference to the choice of law principles thereof and
the parties hereto consent to and agree that the courts of the State of Utah,
County of Salt Lake, shall be the jurisdiction and forum for the resolution of
all disputes related to this agreement or arising there from.
XI. ENTIRE AGREEMENT
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This Agreement constitutes the final understanding and agreement between the
parties. This Agreement cannot be amended or changed except by a writing signed
by both of the parties.
XII. NOTICES
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Any notice required to be given or otherwise given pursuant to this Agreement
shall be in writing and shall be hand delivered, mailed by certified mail,
return receipt requested:
If to Mac: if to Company:
Xxxxxxx X. XxXxxx Smart Chip Technologies
000 X. Xxxx Xxxxxxx Xx., 0000 Xxxxx Xxxxx Xx, #000
Xxx Xxxxx, XX. 00000 Xxxxxxx, Xxxx 00000
Subject to review by Xxxxx Xxxxx, the method of recording these transactions may
be modified in conformance with the best interest of the Company, including tax
liability.
I HAVE READ THIS AGREEMENT IN ITS ENTIRETY, I UNDERSTAND ITS TERMS, AND AGREE TO
BE BOUND BY ALL OF ITS TERMS, INCLUDING THE PROVISION FOR BINDING ARBITRATION. I
ALSO UNDERSTAND I HAVE THE RIGHT TO HAVE THIS AGREEMENT REVIEWED BY INDEPENDENT
COUNSEL.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the
date first above writte.
Xxxxxxx XxXxxx Settlement Agreement (Cont.) Page 3
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Xxxxxxx X. XxXxxx /s/ Xxxxxxx X. XxXxxx
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Xxxxx Xxxxx, Chairman Smart Chip Technologies /s/Xxxxx Xxxxx
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Xxxxxx Xxxxxxx, Director Smart Chip Technologies /s/ Xxxxxx Xxxxxxx
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