Exhibit 10.5
SETTLEMENT AGREEMENT
This Settlement Agreement, made this 26th day of July, 2006 by and between:
WALL STREET PR, INC., a Texas corporation with its principal offices located at
00000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, together with STOCK COMMUNCATIONS
GROUP INC. with its principal offices located at 0000 Xxxx Xxxx Xxxxx, Xxxxx
000, Xxxxxxx, XX 00000 (hereinafter "PR") jointly and severally referred to in
the singular as "PR".
AND
TEXXON, INC., an Oklahoma corporation having its principal offices located at
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter
"TEXXON")
WITNESSETH THAT:
WHEREAS, during the latter part of 2003, TEXXON and PR negotiated for
the performance by PR of certain financial public relations services for TEXXON
and the payment therefore by the issuance of certain common stock purchase
warrants, having a cashless exercise provision;
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WHEREAS, as a result of such negotiations there were several draft
agreements, each of which contained a different number of common stock purchase
warrants as consideration for the services to be rendered;
WHEREAS, the surviving (executed) agreement, a copy of which is
attached hereto and made a part hereof by reference, calls for the issuance of
common stock purchase warrants for the purchase of 20,000,000 shares of TEXXON's
common stock at an exercise price of $0.001 (the par value) per share;
WHEREAS, there has been a dispute with the former management of TEXXON
(Messrs. Xxxxx and Xxxxxxx) regarding the efficacy of the surviving agreement,
which the current management of TEXXON (being the TelePlus, Inc. management)
desires to settle;
WHEREAS, the parties have negotiated and have reached certain
understandings and desire a document to formalize and evidence those
understandings;
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. Irrespective of the disputes between the prior TEXXON management and PR
regarding the efficacy of the surviving agreement, the parties hereto agree that
for purposes of this Settlement Agreement, such agreement shall be deemed to be
sufficiently valid such that litigation with regard thereto might not be
successful and thereby expose TEXXON to greater cost than that represented by
this settlement, and accordingly the current TEXXON management believes this
settlement to be in the best interests of TEXXON and its shareholders. TEXXON
acknowledges that the issuance of the 20,000,000 shares was contemplated at the
time that the Share Exchange Agreement between TEXXON and TelePlus, Inc. was
negotiated and executed and that the existence of the agreement now being
settled was fully disclosed.
2. PR shall be issued Seven million seven hundred thousand (7,700,000) shares of
TEXXON's common stock, pursuant to a cashless exercise pursuant to such
agreement, in full settlement thereof. Sufficient warrants shall be turned in
and cancelled to cover the issuance of such 7,700,000 shares, and the balance of
the 20,000,000 shares shall thereafter be cancelled and the agreement shall be
of no further force or effect. The issuance of the 7,700,000 shares shall be
made immediately after the execution of this Settlement Agreement, time being of
the essence of this agreement. TEXXON acknowledges that, due to the cashless
exercise provision, and the use of the cashless exercise provision for the
issuance of the 7,700,000 shares, the holding period by PR tacks back to the
date of the original agreement in 2003 and the certificate for the 7,700,000
shares shall not bear a restrictive legend nor shall "Stop Transfer"
instructions be issued with respect thereto.
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3. TEXXON and, subject to the receipt by PR of the 7,700,000 shares, PR each
releases the other from all duties and obligations under the agreement being
terminated. Each of the parties hereto shall bear its own expenses in connection
with the negotiation, drafting, execution and carrying-out of this Settlement
Agreement. Nothing contained in this Settlement Agreement shall be deemed to be
for, or interpreted to be for, the benefit of any third party and no third party
shall have any rights, interests, powers or licenses hereunder. TEXXON, and,
subject to the receipt by PR of the agreed 7,700,000 shares, PR each agrees to
indemnify the other against, and hold the other harmless from, any claim,
charge, cost, expense (including reasonable attorney fees and costs), loss,
suit, judgment, arbitration, award, action, or damages resulting from or out of
the agreement being terminated or this Settlement Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the parties have executed
this Agreement on the date at the head hereof:
WALL STREET PR, INC.
By: /s/ Xxxxxxx Xxxxxxx
-------------------
Name: Xxxxxxx Xxxxxxx
Title: President
STOCK COMMUNICATIONS GROUP, INC.
By: /s/ Xxxxxxx Xxxxxxx
-------------------
Name: Xxxxxxx Xxxxxxx
Title: President
TEXXON, INC.
By: /s/ Xxxx Xxxxxx
----------------
Name: Xxxx Xxxxxx
Title: Chief Financial Officer
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