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 PIaintiffs 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 a 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 I, 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
iniiio (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
DATE:_____________
BY:/s/
Xxxxxx Xxxxx
ITS:
President
DATE:
8/11/06
RISK
CAPITAL MANAGEMENT, LLC
BY:/s/
Hall Risk
ITS:
Member
DATE:
8/12/06
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.
|
INWITNESS
WHEREOF, the
parties hereby execute this Transfer Agreement consisting of (3) pages,
including signatures,
intending to be legally approved.
Xxxxxxx
Xxxxxxxxxxx
/s/
Xxxxxxx Xxxxxxxxxxx
DATE:
Grey
Xxxxx
/s/
Grey Xxxxx
DATE: 8/10/2006
Xxxxx
X. XxXxxxx
/s/
Xxxxx X. XxXxxxx
DATE:
By:
/s/ Xxxxxx Xxxxx
Xxxxxx
Xxxxx
Its:
President
DATE:8/11/06
