SETTLEMENT AGREEMENT
This
Settlement Agreement (this "Settlement Agreement") is entered into
this 15th day
of
August, 2006 ("Effective Date") by and between Plaintiffs Language Access
Network, Inc. ("LAN")
and Risk Capital Management, LLC ("Risk") (collectively, LAN and Risk are
referred
to as
"Plaintiffs") and Defendant Xxxxxxx Xxxxxxxxxxx ("Xxxxxxxxxxx.").
WHEREAS,
LAN
filed
a Complaint for Declaratory Judgment and Request for Expedited Hearing Under
Civ. R. 57 against Xxxxxxxxxxx on May 6, 2006 and Plaintiffs filed an Amended
Complaint (collectively, the "Complaint") against Xxxxxxxxxxx on June 27, 2006
in Language
Access Network, et al., x. Xxxxxxxxxxx,
Case No.
06-CVH-05-5984, Franklin County, Ohio Common Pleas Court (Xxxxxxxx, J.) (the
"Litigation");
WHEREAS,
the
Complaint sought to recover from Xxxxxxxxxxx his stock interest in
LAN,
which
stock interest totals 2,920,000 shares ("Shares");
WHEREAS,
the
parties desire to compromise and settle all claims and controversies
asserted
in the Complaint, and intend that the full terms and conditions of their agreed
resolution
be set
forth in this Settlement Agreement.
NOW, THEREFORE,
for
good
and valuable consideration, the mutual promises, covenants and conditions
contained herein and other good and valuable consideration, the sufficiency
of
which is hereby acknowledged, the parties hereby covenant and agree as
follows:
PROMISES,
COVENANTS AND CONDITIONS
1.
Xxxxxxxxxxx
shall distribute the Shares as follows:
| (a) |
Xxxxxxxxxxx
shall cause 1,400,000 of his Shares ("Surrendered Shares") to be
evidenced
by a new certificate or certificates and endorse such certificate
or
certificates to LAN or deliver such certificate or certificates along
with
an executed stock power conveying Title in LAN to LAN. LAN acknowledges
that the Surrendered Shares have been delivered to and received by
LAN.
|
| (b) |
Xxxxxxxxxxx
shall transfer an aggregate of 150,000 of the shares held by him
in LAN in
a private transaction to counsel representing him with regard to
the
Litigation ("Attorney Transferees"),
subject to the terms of this Settlement
Agreement.
|
| (c) |
Xxxxxxxxxxx
shall retain and/or transfer 1,370,000 of
e
shares held him in LAN ("Remaining
Shares"), subject to the terms of this Settlement
Agreement.
|
2.
Except
as
otherwise provided herein, Xxxxxxxxxxx shall not sell, transfer, or otherwise
convey in a public market more than an aggregate of the following:
| (a) |
20,000
of the Remaining
Shares per month for a period of twelve
(12) months, with the first month ending July 31,
2006.
|
| (b) |
40,000
of the Remaining Shares per month after the twelve month period ending
June 30, 2007, and continuing for each month thereafter until
depleted.
|
| 3. |
The
parties acknowledge LAN's issuance of correspondence to Pacific Stock
Transfer on June 30, 2006 permitting Xxxxxxxxxxx to sell a portion
of his
Remaining Shares and agreeing to the removal of the restrictive legend
on
LAN share certificate number 0263.
|
| 4. |
In
the event that Xxxxxxxxxxx transfers Remaining Shares in any private
transaction, then Xxxxxxxxxxx shall ensure that each private transferee,
including subsequent transferees, of the Remaining Shares complies
with
the aggregate stock.transfer restrictions of Paragraphs 2(a) or (b),
as
applicable. By way of example, If Xxxxxxx xxxxx 20,000 of the Remaining
Shares in September, 2006 and gifts 10,000 of the Remaining Shares
to a
charity, the recipient must agree in writing that it cannot sell
the
gifted shares, unless its sales, when aggregated with Xxxxxxxxxxx'x
sales
are less than the 20,000 or 40,000 share per month limits of Section
2(a)
or (b) as applicable.
|
| 5. |
The
per month resale restrictions set forth in Section 2(a) and (b) of
this
Settlement Agreement are non-cumulative, meaning that if less than
the
permitted amount of shares are sold in any month, the amount of unsold
shares shall not be carried forward and added to the amount of shares
permitted to be sold in any following
month.
|
| 6. |
In
the event of a stock purchase sale or merger wherein all of LAN's
stock is
sold to a third party, Xxxxxxxxxxx may participate in the transaction
and
sell or
otherwise
dispose of his Remaining Shares pursuant to that transaction in excess
of
the per month restrictions set forth herein and to an extent consistent
with other similarly situated
shareholders.
|
| 7. |
Prior
to Xxxxxxxxxxx transferring 150,000 of his shares in LAN to the Attorney
Transferees, such Attorney Transferees must agree in writing not
to sell,
or allow a private transferee to
sell, more than an aggregate of 5,000 shares per month in the public
market until July 1,
2007, after which time the Attorney Transferees, along with any private
transferees, may sell up to an aggregate of 7,500 shares per month
into
the public market until depleted. In the event of a stock purchase
sale or
merger wherein all of LAN's stock is sold to a third party, the Attorney
Transferees may participate in the transaction and sell or otherwise
dispose of their stock pursuant to that transaction in excess of
the per
month restrictions set forth herein and to an extent consistent with
other
similarly situated shareholders. A copy of the written agreement
entered
into by the Attorney Transferees shall be provided to LAN within
7 days
after such agreement is fully
signed.
|
| 8. |
Xxxxxxxxxxx
agrees that a breach of the stock transfer restrictions set forth
in this
Settlement Agreement constitutes irreparable harm and injury to Plaintiffs
for which there is not an adequate remedy at law and that, therefore,
in
addition to any other rights and remedies, including damages; Plaintiffs
shall be entitled to specific performance or an injunction restraining
any
such breach.
|
2
| 9. |
LAN
may provide a copy of this Settlement Agreement to
Pacific Stock Transfer Company or any other stock transfer agent
utilized
by LAN for the transfer of its shares ("Transfer
Agent").
|
| 10. |
(a)
The parties agree that LAN may direct the Transfer Agent to place
a legend
on the certificate or certificates making up the Remaining Shares
and the
shares transferred to the Attorney Assignees setting forth the existence
of this Settlement Agreement and the transfer restrictions set forth
in
this Settlement Agreement, which legend on the Remaining Shares shall
state substantially as follows:
The
transfer of these shares is subject to a Settlement Agreement dated
August
_ 2006 by
and
between Language Access Network Inc.
("LAN") and Xxxxxxx Xxxxxxxxxxx and
others, which restricts the public sale, transfer or other conveyance
of
these shares by Xxxxxxxxxxx and any private transferee of these
shares, to
no more than an aggregate of the following:
(1) 20,000
of
the
LAN shares per month for a period of twelve (12) months, with the
first
month ending July 31, 2006.
(2) 40,000
of
the
LAN shares per month after the twelve month period ending June
30, 2007,
and continuing for each month thereafter until depleted
This
restriction shall not apply in the event of a stock purchase/sale
or
merger wherein all
of LAN's shares
are sold to a third party, in which
case
the shares may be sold in excess of the per month restriction to
the
extent consistent with other similarly situated
shareholders.
(b)
The
legend on the shares transferred to the
Attorney
Transferee Grey Xxxxx under this
Settlement Agreement shall state substantially as follows:
The
transfer of
these
shares is subject to a Transfer Agreement dated
August
, 2006,
between Xxxxxxx Xxxxxxxxxxx Grey Xxxxx and Xxxxx X. XxXxxxx which
restricts the public sale, transfer, or other conveyance of these
Language
Access Network Inc. ("LAN') shares by Grey Xxxxx, and any private
transferee of these shares, to no more than an aggregate of the
following:
(1) 1000
of the LAN Shares per month for a period of twelve (12) months,
with the
first month ending July 31, 2006.
(2) 1500
of the LAN Shares per month after the twelve month period ending
June 30,
2007, and continuing for each month thereafter until
depleted
This
restriction shall not apply in the event of a stock purchase/sale
or
merger wherein all of Language Access Network's shares are sold
to a third
party, in which case the shares may be sold in excess of the per
month
restriction to
the extent consistent
with other similarly situated
shareholders.
|
3
|
(c)
The legend on the shares transferred to the Attorney Transferee
Xxxxx X.
XxXxxxx
under
this Settlement
Agreement shall state substantially as follows:
The
transfer of these shares are subject to a Transfer Agreement
dated August
, 2006, between Xxxxxxx Xxxxxxxxxxx Grey Xxxxx and Xxxxx X. XxXxxxx,
which
restricts the public sale, transfer, or other conveyance of these
Language
Access Network Inc. ("LAN') shares by Xxxxx X. XxXxxxx, and any
private
transferee of these shares, to no more than an aggregate of the
following:
(1) 4000
of the LAN Shares per month for a period of twelve (12) months,
with the
first month ending July 31, 2006.
(2) 6000 of
the
LAN Shares per month after the twelve month period ending June
30,
2007,
and continuing for each month thereafter until depleted.
This
restriction shall not apply in the event of a stock purchase/sale
or
merger wherein all of LAN's shares are sold to a third, in which
case the
shares may be sold party in excess of the per month restriction
to the
extent consistent with other similarly situated
shareholders.
(d)
Xxxxxxxxxxx
agrees to provide the certificate or certificates constituting
the
Remaining
Shares
and the shares transferred to the Attorney Transferees to the
Transfer
Agent for the placement of the appropriate legend. All certificates
representing any of the
Remaining Shares, including any Remaining Shares transferred
in private
transactions
and the shares transferred to the Attorney Transferees, shall
continue to
bear such legend and all such shares shall continue to be subject
to the
terms of this Settlement Agreement until such shares are sold
in the
public market. However, LAN acknowledges that upon execution
hereof, other
than as restricted by the terms of that certain Lock Up Agreement
dated
March 27, 2006 or by applicable law, there shall be no restrictions
other
than as imposed by this Settlement Agreement upon Xxxxxxxxxxx,
the
Attorney Transferees or recipients of Remaining Shares from Xxxxxxxxxxx
in
private transactions, or as set otherwise set forth in this paragraph.
Specifically, LAN does not object to an assertion that the Remaining
Shares and the shares to be transferred to the Attorney Transferees
under
this Agreement have been held by Xxxxxxxxxxx for more than 2
years.
|
| 11. |
(a)
Xxxxxxxxxxx agrees that he will not make statements or representations,
or
otherwise communicate, directly or indirectly, in writing, orally,
or
otherwise, or take any action which may, directly or indirectly,
disparage
the Plaintiffs or any of their respective officers, directors,
employees,
advisors, businesses or reputations.
(b) The
Plaintiffs, and their respective officers and directors, agree
to not make
statements or representations, or otherwise communicate, directly
or
indirectly, in writing, orally, or otherwise, or take any action
which
may, directly or indirectly, disparage Xxxxxxxxxxx or his business
or
reputation.
(c) Notwithstanding
the foregoing, nothing in this Agreement shall preclude either
Xxxxxxxxxxx
or the Plaintiffs and their respective officers and directors
from
making
|
4
|
truthful
statements or disclosures that are required by applicable law,
regulation
or governmental entity with authority over Plaintiffs' business,
or as
part of a legal process, including either party's defense of a
third party
legal action. Further, Plaintiffs and their respective officers
and
directors may indicate that Xxxxxxxxxxx'x departure from LAN occurred
as
of
May 1, 2006 and that as part of the departure, 1,400,000 shares
were
returned to LAN, which accounts for approximately one half of
Xxxxxxxxxxx'x holdings.
(d) Xxxxxxxxxxx
agrees to LAN's issuance of a press release regarding the Surrendered
Shares, which press release was issued on July 6,
2006.
|
| 12. |
Within
14 days after the Effective Date, Xxxxxxxxxxx shall execute an irrevocable
proxy for the voting of the Remaining Shares in his possession in
favor
of
the
Board
of Director's
of
LAN, and agrees
to refrain from attending meetings of the shareholders notwithstanding
the
receipt of a form invitation to attend such meeting. The parties
agree
that such proxy shall be deemed to be coupled with an interest to
the
extent required for irrevocable proxies under the corporate law of
the
State of Nevada.
|
| 13. |
The
parties agree that Xxxxxxxxxxx'x service as Chief Executive Officer,
Treasurer and Board Member of LAN ended effective May 1, 2006 and
further
agree that the purported July 15, 2005 Independent Contractor Agreement
between Global Institute for Gaming Innovation, Inc. and Xxxxxxx
X.
Xxxxxxxxxxx is null and void ab
initio (from
the beginning) and is not, and has never been, of any binding effect
or
force.
|
| 14. |
(a)
The parties hereto, for themselves and for their respective predecessors,
successors, affiliates, assigns, heirs, executors, administrators,
and
legal representatives release and forever discharge each other, and
all
related
companies and entities, and all of their respective predecessors,
successors, subsidiaries, divisions, employees, officers, officials,
directors, stockholders, representatives, attorneys, assigns and
agents of
and from all claims, demands, damages, fees, expenses, actions, causes
of
action or suits in equity, or whatever kind or nature
whether heretofore or hereafter accruing, or whether now known or
not
known to the parties, asserted or not asserted in this Litigation
as a
claim or counter-claim, which arise from or are related to the allegations
set forth in the Complaint, the Litigation, Xxxxxxxxxxx'x service
and
status as CEO, Treasurer, Board Member or shareholder of LAN (including,
but not limited to, any claims by Xxxxxxxxxxx for compensation or
salary,
whether on not on the books of LAN), or the operation of and actions
by
and on behalf of LAN that occurred any time on or prior to the Effective
Date.
(b)
Notwithstanding the foregoing, Xxxxxxxxxxx
shall be entitled to indemnification in the event of claims against
Xxxxxxxxxxx by persons not a party to this Settlement Agreement relating
to his activities on behalf of LAN to the extent provided for by
LAN in
its bylaws or by agreement, or by applicable law, and LAN shall be
entitled to any and all defenses to any such claim for indemnification
and
to seek recovery from Xxxxxxxxxxx of any payments made pursuant to
such
claim for indemnification to the extent provided in the LAN bylaws
or by
agreement, or applicable law. Further, LAN, its officers and directors
reserve the right to seek indemnification, contribution and other
appropriate recovery from Xxxxxxxxxxx in the event LAN has a claim
filed
or pursued against it by a
|
5
|
third
party for which LAN, its officers
and/or directors believe Xxxxxxxxxxx is wholly or partially
responsible or liable.
|
| 15. |
Within
two (2) days after the Effective Date LAN shall file or cause its
counsel
to file an appropriate notice pursuant to Ohio Civ. R. 41(a) dismissing
with prejudice the Complaint.
|
| 16. |
The
parties hereto expressly represent and warrant that they have received
independent advice from their respective attorneys with regard to
the
settlement provided for herein and with respect to the advisability
of
executing this Settlement Agreement. The parties have not relied
on any
statements, representations, omissions, inducements or promises in
executing this Settlement Agreement except as expressly stated
herein.
|
| 17. |
As
executed, this Settlement Agreement shall constitute the entire agreement
between the parties with respect to the subject matter hereof and
shall
supersede all prior oral or written agreements and undertakings between
them respecting the subject matter hereof. The parties hereto further
agree that this Settlement Agreement has been drafted utilizing input
from
each of them and that none of them separately shall be construed
to have
drafted it for purposes of interpreting this document should it be
necessary to do so. This Settlement Agreement shall not be modified,
altered or discharged except by a writing signed by all of the parties
hereto.
|
| 18. |
This
Settlement Agreement is binding upon, and shall inure to the benefit
of
the parties and their respective agents, employees, representatives,
officers, directors, subsidiaries, predecessors, successors and
assigns.
|
| 19. |
This
Settlement Agreement shall be interpreted under and governed by laws
of
the State of Ohio.
|
| 20. |
This
Settlement Agreement may be executed in any number of counterparts,
each
of which shall be deemed an original. All such counterparts shall
together
constitute but one and the same
documents.
|
6
IN
WITNESS WHEREOF, the
parties hereby execute this
Settlement Agreement consisting of 7 pages, including signatures, intending
to
be legally approved.
XXXXXXX
XXXXXXXXXXX
/s/
Xxxxxxx Xxxxxxxxxxx
Xxxxxxx
Xxxxxxxxxxx
DATE:_____________
LANGUAGE
ACCESS NETWORK, INC.
BY:
/s/
Xxxxxx Xxxxx
Xxxxxx
Xxxxx
ITS:
President
DATE:
August 11, 2006
RISK
CAPITAL MANAGEMENT, LLC
BY:
/s/Hall
Risk
Hall
Risk
ITS:
Member
DATE:
August 12, 2006
7
TRANSFER
AGREEMENT
This
Transfer Agreement (this "Transfer Agreement") is entered into effective the
___
day of August,
2006 ("Effective Date") by and between Xxxxxxx Xxxxxxxxxxx ("Xxxxxxxxxxx"),
Grey
Xxxxx
("Xxxxx), Xxxxx X. XxXxxxx (XxXxxxx) and Language Access Network,
Inc.
WHEREAS,
LAN
filed
a Complaint for Declaratory Judgment and Request for Expedited Hearing Under
Civ. R. 57 against Xxxxxxxxxxx on May 6, 2006 and Plaintiffs filed an Amended
Complaint (collectively, the "Complaint") against Xxxxxxxxxxx on June 27, 2006
in Language
Access Network, et al., x. Xxxxxxxxxxx,
Case No.
06-CVH-05-5984, Franklin County, Ohio Common Pleas Court (Xxxxxxxx, J.) (the
"Litigation");
WHEREAS,
the
Complaint sought to recover from Xxxxxxxxxxx his stock interest in
LAN,
which
stock interest totaled 2,920,000 shares ("Shares");
WHEREAS,
pursuant
to a Settlement Agreement of even date herewith, the parties to the Litigation
compromised and settled all claims and controversies asserted in the
Complaint,
WHEREAS,
pursuant
to and in accordance with the Settlement Agreement, Xxxxxxxxxxx is
authorized to transfer 150,000 LAN shares to Xxxxx and XxXxxxx as the "Attorney
Transferees" as such term
is
defined in the Settlement Agreement,
NOW, THEREFORE,
for
good
and valuable consideration, the mutual promises, covenants and conditions
contained herein and other good and valuable consideration, the sufficiency
of
which is hereby acknowledged, the parties hereby covenant and agree as
follows:
| 1. |
Xxxxxxxxxxx
shall deliver to Xxxxx 30,000 LAN shares as full and
final payment
for legal services in connection with the
Litigation.
|
| 2. |
Xxxxxxxxxxx
shall deliver to XxXxxxx 120,000 LAN shares as full and final payment
for
legal
services in connection with the Litigation_ 100,000 LAN shares shall
be
transferred upon
execution hereof and the balance of 20,000 LAN shall be delivered
on
October 1, 2006.
|
| 3. |
Except
as otherwise provided herein, the public sale, transfer, or other
conveyance of Xxxxx'
shares by Xxxxx, and any private transferee of these shares, shall
be
restricted, in
the aggregate, to no more than the
following:
|
| (a) |
1000
of the LAN Shares per month for a period of twelve (12) months, with
the first
month ending July 31, 2006.
|
| (b) |
1500
of the LAN Shares per month after the twelve month period ending
June 30,
2007, and continuing for each month thereafter until
depleted.
|
| 4. |
Except
as otherwise provided herein, the public
sale, transfer,
or other conveyance of
XxXxxxx'x shares by XxXxxxx, and any private transferee of these
shares,
shall be restricted, in the aggregate, to no more than the
following:
|
| (a) |
4000
of the LAN Shares per month for a period of twelve (12) months, with
the
first month ending July 31,
2006.
|
IN
WITNESS WHEREOF, the
parties hereby execute this
Transfer Agreement consisting of 3 pages, including signatures, intending to
be
legally approved.
Xxxxxxx
Xxxxxxxxxxx
/s/
Xxxxxxx Xxxxxxxxxxx
Xxxxxxx
Xxxxxxxxxxx
DATE:_____________
Grey
Xxxxx
/s/
Grey Xxxxx
DATE:
August
10, 2006
Xxxxx
X. XxXxxxx
/s/
Xxxxx X. XxXxxxx
DATE:
_____________
LANGUAGE
ACCESS NETWORK, INC.
By:
/s/ Xxxxxx Xxxxx
Xxxxxx
Xxxxx
Its:
President
DATE:
August 11, 2006
