Exhibit 10.20
THESE MINUTES OF SETTLEMENT dated March 22, 2006.
BETWEEN:
QUADRANGLE HOLDINGS LIMITED, a body corporate ("Quadrangle")
OF THE FIRST PART
- and -
XXXXXXX INTERNATIONAL INC., a body corporate ("Xxxxxxx")
OF THE SECOND PART
Whereas: In 2004, Xxxxxxx and Quadrangle entered into an agreement for the
exercise of certain common stock purchase warrants of Xxxxxxx held by Quadrangle
wherein Quadrangle gave Xxxxxxx a promissory note secured by 500,000 common
shares of Rally Energy Corporation and Xxxxxxx issued Quadrangle 400,000 shares
of its common stock upon the exercise of a previously issued warrant held by
Quadrangle (the "Xxxxxxx Warrant").
And Whereas: Xxxxxxx following improper actions of the previous president and
chief executive officer of Xxxxxxx with respect to the Quadrangle promissory
note and collateral owes Quadrangle the value of 373,000 shares of Rally Energy
Corporation common stock (the "Actions").
And Whereas: Xxxxxxx is desirous of making restitution to Quadrangle and
settling this matter amicably;
And Whereas: Xxxxxxx and Quadrangle have agreed to settle this matter without
prejudice to the rights of Quadrangle in the event that Quadrangle is not repaid
in full pursuant to the terms hereof and without prejudice to the rights of
Quadrangle as against other parties who were directly or indirectly responsible
for the Actions (the "Settlement Agreement").
NOW THEREFORE THE PARTIES HERETO HAVE AGREED as follows, subject to the
execution and delivery of documents described herein, security documents and
such other documents satisfactory to Quadrangle and its counsel to complete the
terms contemplated below:
1. Xxxxxxx shall effect the designation and issuance to Quadrangle of a
Class of Xxxxxxx Preferred Stock the form of which is attached hereto.
The initial stated value of which shall include the reasonable and
accountable expenses of Quadrangle incurred with respect to this
matters to which this Settlement Agreement relate.
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2. The Closing Date shall be no later than March 27, 2006 or such other
date convenient to Quadrangle.
3. All obligations of Quadrangle with respect to the promissory note
given to Xxxxxxx for the exercise of the Xxxxxxx Warrant is released
without any further obligation of Quadrangle.
4. The 400,000 common shares of Xxxxxxx issued to Quadrangle pursuant to
the exercise of the Xxxxxxx shall be credited to the shares issued
pursuant to section 5 below and the Xxxxxxx Warrant shall have expired
pursuant to its terms.
5. Quadrangle shall receive on Closing to 968,750 common shares of
Xxxxxxx equal ten percent of the Initial Stated Value of the Series A
Preferred Stock at $0.08 US per share and a further warrant to acquire
968,750 common shares at a price of $0.08 US in the form attached
hereto.
6. References herein are to Canadian Dollars unless otherwise indicated.
7. This Settlement Agreement shall be governed by the laws of the
Province of Nova Scotia, Canada and the parties irrevocably attorn to
the jurisdiction thereof.
8. Time shall be of the essence in all respects.
9. This Settlement Agreement and the documents flowing therefrom
constitute the entire agreement between the parties and supersedes all
previous agreements, verbal or written, with respect to any matters
referred to herein
10. The rights hereunder may be assigned by Quadrangle or any subsequent
assignee on notice to Xxxxxxx at anytime and from time to time.
Xxxxxxx shall not assign the obligations hereunder with the prior
written consent of the holder of the rights hereunder. References to
Quadrangle include any holder.
11. Xxxxxxx shall file a Current Report on Form 8-K reporting this
Settlement Agreement with Quadrangle and the Change in Control of
Xxxxxxx as result thereof.
12. Quadrangle acknowledges as a result of this Settlement Agreement is
has become an affiliate and control person of Xxxxxxx pursuant to the
United States Securities Exchange Act of 1934 and regulations of the
U.S. Securities and Exchange Commission and shall comply with all
ownership reporting and other obligations of an affiliate of Xxxxxxx.
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13. Upon the redemption of the Preferred Stock issued to Quadrangle or the
conversion in whole or in part into Xxxxxxx common stock, Quadrangle
shall have released Xxxxxxx and its current officers and directors
from any and all liability with respect to the Actions. Such release
shall not apply to any claims against Shannon's previous President and
Chief Executive Officer or any other parties except for the present
officers and directors of Xxxxxxx.
14. The parties acknowledge that a General Security Agreement over Xxxxxxx
assets has been filed with the Province of Alberta on or about
November 23, 2005. Xxxxxxx agrees to take any and all steps necessary
to dispute the validity and obtain the release thereof in favor of the
security interest to Quadrangle referenced in Section VB of the
attached Certificate of Designation of Series A Preferred Stock.
15. This Agreement may be executed in any number of counterparts of the
signature page, each of which shall be considered an original. In
addition, a signature which is reproduced by facsimile transmission
shall be deemed an original.
16. Any notice or other document required or permitted to be given to any
party hereunder shall be validly given if delivered personally
(including by courier service) or mail by prepaid registered mail,
return receipt requested, or sent by facsimile transmittal addressed
to the addressee thereof at the following respective addresses:
If to Xxxxxxx at:
100 - 000X Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx Xxxxxx, Xxxxxx
X0X 0X0
Attention: X. Xxxxxxx (Xxxx) Xxxxxxxx, President
Phone: 000.000.0000 Ext. 1002
Fax: 000.000.0000
and with a copy to:
Xxxxxx Xxxxxxxxx
Secretary and a Director
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx
X.X.X. 00000 Phone: 000.000.0000 Fax: 000.000.0000
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If to Quadrangle: and with a copy to:
TK House Bayside Executive Park RBC Law Inc.
Xxxx Xxx Xxxxxx & Xxxxx Xxxx Xxxxx X000, 1701 Xxxxxx Street
Nassau, The Bahamas Xxxxxxx, XX, X0X 0X0, Xxxxxx
Attention: Xxxxxxx XxXxxxxx Attn: X. Xxxxx Xxxxxxxx
Phone: 0.000.000.0000 Phone: 000.000.0000
Fax: 000.000.0000 Fax: 000.000.0000
Any notice or other document so mailed shall be deemed to have been received by
and given to the addressee on the fourth Business Day following the date of
mailing; if delivered, shall be deemed to have been received by and given to the
addressee on the date of delivery; and if given by facsimile transmittal, shall
be deemed to have been received by and given to the addressee on the next
Business Day following the date of sending. Any part may, at any time, give
notice in writing to the others of any change of address for these purposes. In
the event of any actual or threatened postal interruption in Canada, no such
notice shall be deemed to have been received until it has in fact been received
by the party for whom it is intended.
IN WITNESS WHEREOF the parties hereto have each properly executed these minutes
of settlement.
SIGNED AND DELIVERED ) XXXXXXX INTERNATIONAL
in the presence of ) INCORPORATED
)
)
) By: /s/ X. Xxxxxxxx Xxxxxxxx
------------------------------
____________________________ ) J. Xxxxxxx Xxxxxxxx, President
Witness ) By: /s/ Xxxxxx Xxxxxxxxx
------------------------------
) Xxxxxx Xxxxxxxxx, Secretary
)
)
SIGNED AND DELIVERED ) QUADRANGLE HOLDINGS LIMITED
in the presence of )
) By: /s/ Xxxxx Xxxxxxxxxx, Director
/s/ Xxxxxxx XxXxxxxx ---------------------------
---------------------------- )
Witness ) And:_____________________(cs)
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