PARTIAL SETTLEMENT AGREEMENT AND RELEASE
THIS
AGREEMENT is dated as of July 12, 2007 and is made by and between LAKEWOOD
GROUP, LLC (“LAKEWOOD GROUP”) and XXXXXXXX.XXX, INCORPORATED
(“INNOFONE”).
WHEREAS,
on or about July 11, 2007, Lakewood Group filed an action against Innofone
entitled Lakewood
Group, LLC vs. Xxxxxxxx.xxx, Incorporated,
Case
No: 2007 CA 00_____ NC, (the ““Action””) in the Circuit Court of the Twelfth
Judicial Circuit, Sarasota County, Florida (the ““Court””), whereby Lakewood
Group asserted claims against Innofone failed to pay Lakewood Group according
to
the terms set forth in the Promissory Note and Subscription Agreement,
to
wit: One Million Dollars ($1,000,000.00), plus interest.
WHEREAS,
Innofone currently only has the means to satisfy payment of Lakewood Group’s
bona fide claims through the issuance of authorized shares to Lakewood Group,
pursuant to Section 3(a)(10) of the Securities Act of 1933 (hereinafter the
““Act””)WHEREAS,
Innofone and Lakewood Group desire to partially resolve, settle, and compromise
Lakewood Group’s bona fide claims that it has asserted against Innofone, which
arise out of or relate to the Promissory Note, in the amount of One Million
Dollars ($1,000,000.00) due and owing (hereinafter the ““Compromised
Amount””);
With
this
background incorporated herein, the parties hereby agree to the following
partial settlement:
1.
CLAIMS. Lakewood
Group agrees to partially resolve its bona fide claim with Innofone for the
agreed upon amount as follows:
a).
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Lakewood
Group will reduce the obligation under the Note by the amount of
One
Hundred Thousand Dollars ($100,000.00) in exchange for one million
shares
of common stock of Innonofone. The One Hundred Thousand Dollars
($100,000.00) reduction shall first be applied to interest through
July
13, 2007 and attorneys fees, then to the Note’s principal.
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b.
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In
the event the proceeds from the sales of stock are more than One
Hundred
Thousand Dollars ($100,000.00), Lakewood Group agrees to reduce the
Note
in the exact amount of the proceeds.
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c.
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Lakewood
Group agrees that it will waive the calling of a default for forty-five
(45) days from the date of this Agreement, provided that settlement
shares
are timely delivered within five (5) days of the Order approving
this
Partial Settlement Agreement and, further, provided that no other
event of
default under the Note occurs but for the event of non-payment on
June 25,
2007.
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2.
SETTLEMENT
SHARES.
On or
before the close of business on the day following entry of the Order by the
Court, in accordance with paragraph 4 herein, Innofone shall issue and deliver
by Depository Trust Company (DWAC) Fast Automated Securities System Program
to
Lakewood Group shares of Innofone’s common stock, par value $0.0010 per share,
(““Common Stock””) sufficient to partially satisfy the Compromised Amount
through the issuance of freely trading securities issued pursuant to Section
3(a)(10) of the Act. If Innofone fails to deliver said shares in accordance
with
these terms, Plaintiffs shall be entitled to a judgment for the principal amount
of the Promissory Note, plus interest. The parties agree that the total amount
of Common Stock to be delivered by Innofone to partially satisfy the Compromised
Amounts shall be One Million (1,000,000) shares (the ““ Settlement Shares””).
The transfer agent shall act as escrow agent and shall upon the request of
Lakewood Group issue in the name of Lakewood Group the number of shares
requested so long as the number of shares requested does not make Lakewood
Group
the owner of more than 4.99% of the outstanding Innofone stock.
3.
PARTIAL
SATISFACTION.
Lakewood Group and Innofone agree that delivery of the Settlement Shares
pursuant to the conditions set forth herein shall partially satisfy Innofone’s
obligation by reducing the obligation under the Note by the amount of One
Hundred Thousand Dollars ($100,000.00), applied first to interest through July
13, 2007 and attorneys fees, then to the Note’s principal. This
agreement shall not serve to release any other obligation under the original
Note, Stock Pledge Agreement, Guaranty or Personal Guaranty of this Note or
any
other agreement or document issued in connection with the Note.
4. FAIRNESS
HEARING.
Upon
execution hereof, Lakewood Group and Innofone agree, pursuant to 15 U.S.C.
§§77(a)(10), to immediately submit the terms and conditions of this Partial
Settlement Agreement to the Court for a hearing on the fairness of such terms
and conditions, for the issuance of an exemption from registration of the
Settlement Shares and an Order approving the Partial Settlement Agreement.
Innofone avers it is a ““reporting issuer”” that files reports with the SEC
under Section 13 of the Securities and Exchange Act of 1934 (the ““Exchange Act.
In connection with such a fairness hearing, Innofone, the issuer of the
securities, and Lakewood Group, the proposed entity to whom the securities
are
to be issued, agree that the value of the Settlement Shares is fair and
reasonable. This Agreement shall become binding upon the parties only upon
entry
of an Order by the Court substantially in the form of annexed hereto as Exhibit
A (the ““Order””).
5.
NECESSARY
ACTION.
At all
times after the execution of this Agreement and entry of the Order by the Court,
each party hereto agrees to take or cause to be taken all such necessary action
including, without limitation, the execution and delivery of such further
instruments and documents, as may be reasonably requested by any party for
such
purposes or otherwise necessary to complete or perfect the transaction
contemplated hereby.
6.
CONFIDENTIALITY
AGREEMENT.
At all
times prior to execution of this Agreement, the parties hereto agree to not
disclose to any other person any of the terms of said Agreement, except as
may
be required by law.
7.
RELEASES.
This
Agreement shall only reduce the promissory Note by One Hundred Thousand Dollars
($100,000.00). This partial settlement agreement is expressly not a release
of
any other obligation, Stock Pledge Agreement, Guaranty or Personal Guaranty
of
this Note or any other agreement or document issued in connection with the
Note.
8.
CONTINUING
JURISDICTION:
The
Court of the Twelfth Judicial Circuit in and for Sarasota County, Florida shall
have jurisdiction to specifically enforce this agreement and grant other
equitable relief in connection with this Agreement. The parties consent to
the
jurisdiction of the Court for purposes of enforcing this Agreement and each
party to this Agreement expressly waives any contention that there is an
adequate remedy at law or any like doctrine that might otherwise preclude
injunctive relief to enforce this Agreement.
9.
CONTINUING
OBLIGATION
The
parties agree to use there best efforts to cooperate with the Court to cause
the
Order to be timely entered and agree that delays caused due to Court calendars
shall not constitute a valid reason to void this Agreement.
10.
INFORMATION.
Lakewood Group and Innofone each represent that prior to the execution of this
Agreement, they have had the advice of counsel, namely, Xxxxxx X. Xxxxxx,
Esquire of Xxxxxx X. Xxxxxx, P.A. for Lakewood Group and Xxxxxxx X. Xxxxxxxx,
Esquire of Xxxxxxx X. Xxxxxxxx, P.A. for Innofone, they fully informed
themselves of its terms, contents, conditions and effects, and that no promise
or representation of any kind has been made to them except as expressly slated
in this Agreement.
11. OWNERSHIP
AND AUTHORITY.
Lakewood Group and Innofone represent and warrant that they have not sold,
assigned transferred, conveyed or otherwise disposed of any or all of any claim,
demand, right or cause of action, relating to any matter which is covered by
this Agreement, that each is the sole owner of such claim, demand, right or
cause of action, and each has the power and authority and has been duly
authorized to enter into and perform this Agreement and that this Agreement
is a
binding obligation of each, enforceable in accordance with its
terms.
12. BINDING
NATURE.
This
Agreement shall be binding on
all
parties executing this Agreement and their respective successors, assigns and
heirs.
13.
AUTHORITY
TO BIND.
Each
party to this Agreement represents and warrants that the execution, delivery
and
performance of this Agreement and the consummation of the transaction provided
in this agreement have been duly authorized by all necessary action of the
respective entity and that the person executing this Agreement on its behalf
has
the full capacity to bind that entity. Each party further represents and
warrants that it has been represented by independent counsel of its choice
with
the negotiation +and execution of this Agreement and that counsel has reviewed
this Agreement.
14. SIGNATURES.
This
Agreement may be signed in counterparts and the Agreement, together with its
counterpart signature pages, shall be deemed valid and binding on each party
when duly executed by all parties. Facsimile signatures shall be deemed valid
and binding for all purposes.
15. CHOICE
OF LAW, ETC. Notwithstanding
the place where this Agreement may be executed by the parties, or any other
factor, all terms and provisions hereof shall be governed by and construed
in
accordance with the laws of the State of Florida, applicable to agreements
made
and to be fully performed in that State and without regard to principles of
conflicts of law thereof. Any action brought to enforce, or otherwise arising
out of this Agreement shall be brought only in the Circuit Court of the Twelfth
Judicial Circuit sitting in the State of Florida, County of Sarasota.
16. INCONSISTENCY. In
the
event of any inconsistency
between the terms of this Agreement and any other document executed in
connection herewith, the terms of this Agreement shall control to the extent
necessary to resolve such inconsistency.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first indicated above.
LAKEWOOD
GROUP, LLC
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By:/s/
Lakewood Group,
LLC
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Its:
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XXXXXXXX.XXX,
INCORPORATED
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By:/s/
Xxxx
Xxxxxxxx
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Its:
Chief Executive Officer
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