RESCISSION AGREEMENT AND RELEASE
EXHIBIT
NO. 5.5
RESCISSION
AGREEMENT AND RELEASE
This
Rescission Agreement and Release (the "Agreement") is entered into on the 27th
day of March, 2007 to be effective as of December 31, 2006, by and between
Real
Property Technologies, LLC (“RPT LLC”) and RPT Group, Inc. (collectively with
RPT LLC the "Company or RPT"), and Shearson Financial Network, Inc. (“SFN”).
RPT, and SFN collectively herein as (the “Parties”).
BACKGROUND
WHEREAS,
The parties agree that an Agreement of Merger and Exchange was executed as
of
June 5, 2006 (the "Exchange Agreement") whereby the stock in RPT Group, Inc.
was
to be exchanged for Exchange Convertible Preferred Stock in SFN (the
"Exchange"); and
WHEREAS,
both parties agree to release each other from any consideration whatsoever
which
is due or has been received, for the Exchange Agreement; and
WHEREAS,
although SFN delivered a Certificate of Designation of Preferred Stock to RPT,
RPT Group, Inc. never acquired the membership interests of RPT LLC and thus
never delivered any stock in RPT Group, Inc. to SFN; and
WHEREAS,
no cash consideration was ever received by either party and thus both parties
desire to rescind; and
WHEREAS,
the parties have determined that the Exchange is not beneficial to either party
and desire to rescind the Exchange effective as of December 31, 2006 and the
parties shall remain in the same position that they were prior to the execution
of the Exchange Agreement (the “Termination”).
WHEREAS,
the parties hereto desire to set forth their respective rights and obligations
with respect to the Termination;
NOW,
THEREFORE, in consideration of the covenants and conditions set forth herein
and
INTENDING TO BE LEGALLY BOUND HEREBY, the undersigned parties to this Agreement
hereby agree as follows:
1. TERMINATION
BY RPT. The shareholders of RPT hereby execute their right to
rescind and release any claim or right they would have to the SFN Exchange
Convertible Preferred Stock as set forth in the Exchange Agreement and shall
return to SFN the Certificate of Designation any documents of SFN that they
have
in their possession. The Shareholders of RPT hereby release any claim
to any benefits under any employment agreement that may have been executed
with
SFN.
2. TERMINATION
BY SFN. SFN hereby releases any claim or right that it would have
to the stock of RPT as set forth in the Exchange Agreement or to any membership
interest in RPT LLC and shall return to RPT any documents it has in its
possession regarding RPT or the stock in RPT.
3. TAX
AND FINANCIAL REPORTING.
(a) The
parties agree that RPT shall not be included in the SFN financials, including
the SFN 10K for the year ending December 31, 2006 nor for any period in
2007. Further, when SFN shall file the 10K it shall add a footnote
concerning this rescission, effective as of December 31, 2006 and thus restating
any prior inclusion of RPT’s results in the SFN filings for
2006.
(b) Due
to this Rescission Agreement, the parties shall file separate tax returns for
tax years including 2006 and 2007 and shall not in any way consolidate their
numbers or tax filings.
(c) Each
party agrees to be responsible for its tax liability on its income for all
of
the year 2006 and 2007.
(d) SFN
shall file an 8K within four (4) days of the execution of this Agreement which
shall disclose the terms of this Agreement.
4. TRANSACTIONAL
FEES. The parties agree that SFN has introduced RPT to the Maxim
Group for the purpose of a public offering of the RPT shares and to a bridge
lender to advance funds to RPT to make the public offering more viable. In
the
event any public offering of RPT occurs with Maxim or any other underwriter
or
any bridge loan is taken by RPT with any lender, or in the event the stock
or
assets of RPT are sold to any third party entity, neither SFN nor any of its
principal shareholders shall be entitled to any fee of any kind or form from
any
such transaction.
5. NO
CONTINUING RELATIONSHIP. Neither SFN nor RPT shall employee a principal of
the other as an officer, employee or consultant nor shall either appoint a
principal of the other to its board of directors.
6. ENFORCEABILITY. If
any covenant set forth in this Agreement is deemed invalid or unenforceable
for
any reason, it is the Parties' intention that such covenants be equitably
reformed or modified to the extent necessary (and only to such extent to)
render it valid and enforceable in all respects. In the event that
the scope referenced above is deemed unreasonable, overbroad, or otherwise
invalid, it is the Parties' intention that the enforcing court shall reduce
or
modify the time scope to the extent necessary (and only to such extent
necessary) to render such covenants reasonable, valid, and enforceable in all
respects.
7. RELEASES.
Subject to and conditioned upon the full performance by each of the parties
of
its obligations under this Agreement:
(a) In
exchange for the benefits received under this Agreement as well as other good
and valuable consideration the receipt of which are hereby acknowledged, to
which SNF may not otherwise be entitled, SFN hereby agrees not to pursue or
further any action, cause of action, right, suit, debt, compensation, expense,
liability, contract, controversy, agreement, promise, damage judgment, demand
or
claim whatsoever at law or in equity whether known or unknown, which SFN ever
had, now have or hereafter can, shall or may have for, upon or by any reason
of
any matter, cause or thing (collectively, "SNF Claims") whatsoever, occurring
up
to and including the date SFN signs this Agreement, against the Company, its
successors, assigns, shareholders, partners, representatives and affiliates
and
all of their respective agents, officers and directors (the "Company
Parties") and hereby releases, acquits and forever absolutely discharges the
Company Parties of and from all of the foregoing, except with respect to the
obligations of the Company set forth in this Agreement, such SNF Claims include,
but are not limited to, all claims for breach of contract, wrongful discharge,
impairment of economic opportunity, intentional infliction of emotional harm,
defamation or other torts, or claims under any applicable federal, state or
local law and all claims arising from the ownership of the Company stock and
the
operations of the Company prior to the date
hereof. Notwithstanding anything herein to the contrary, such
SNF Claims will under no circumstances include any action, cause of action,
right, suit, debt, compensation, expense, liability, contract, controversy,
agreement, promise, damage judgment, demand or claim relating to, arising under
or arising in connection with any breach by the Company of this
Agreement.
(b) In
exchange for the benefits received under this Agreement, as well as other good
and valuable consideration the receipt of which are hereby acknowledged, the
Company and each Shareholder (collectively the “Releasors”) hereby agree not to
pursue or further any action, cause of action, right, suit, debt, compensation,
expense, liability, contract, controversy, agreement, promise, damage judgment,
demand or claim whatsoever at law or in equity whether known or unknown which
the Releasors ever had, now have or hereafter can, shall or may have for, upon
or by any reason of any matter, cause or thing, (collectively, "Company Claims")
whatsoever occurring up to and including the date RPT signs this Agreement,
against SFN, its successors, assigns, directors, employees, shareholders, and
representatives (the “SFN Parties”) and hereby releases, acquits and forever
absolutely discharges the SFN Parties of and from all of the foregoing, except
with respect to the obligations of SFN set forth in this
Agreement. Such Company claims include but are not limited to all
claims for breach of contract, wrongful discharge, impairment of economic
opportunity, intentional infliction of emotional harm, defamation or other
torts, or claims under any applicable federal, state or local law and all claims
arising from the ownership of the SFN Stock and the operations of SFN prior
to
the date hereof. Notwithstanding anything herein to the contrary, such Company
Claims will under no circumstances include any action, cause of action, right,
suit, debt, compensation, expenses, liability, contract, controversy, agreement,
promise, damage judgment, demand or claim relating to, arising under or arising
in connection with any breach by SFN of this Agreement.
8 UNKNOWN
CLAIMS. Both SFN and Company understand that the release of
claims described in Section 8 above covers claims, which they know about, and
those they may not know about the parties acknowledge that they are assuming
the
risk that the facts may turn out to be different from what they believe them
to
be and the parties agree that this release shall be in all respects effective
and not subject to termination or rescission because of such mistaken
belief.
9. AGREEMENT
NOT TO XXX. The parties promise never to file a lawsuit asserting any of the
claims that are released in Section 8 and 9 above. If either does so, and the
action is found to be barred in whole or part by this Agreement, the party
asserting the claim found to be barred by this Agreement agrees to pay the
reasonable attorneys' fees and costs, or the portions thereof, incurred by
the
party released hereby in defending against the Claim(s) which are barred by
this
Agreement.
10. FURTHER
ACKNOWLEDGMENTS. The parties further acknowledge that (a) by this Agreement,
they have consulted with an attorney prior to executing this Agreement, (b)
they
have had the opportunity to read, review and consider all of the provisions
of
this Agreement, (c) they understand its provisions and its final and binding
effect on them, and (d) they are entering into this Agreement freely,
voluntarily, and without duress or coercion.
11. CONFIDENTIALITY.
The parties hereto agree that the terms and conditions of this Agreement are
confidential and further agree that they shall not divulge the terms of this
Agreement to third parties generally, except as required by applicable law
or to
enforce this Agreement or to defend against a claim related thereto and except
that either party may reveal such terms to its accountants, legal counsel and
directors. In addition, SFN agrees not to make any statement to any third party
(other than SFN’s accountants and attorneys) regarding the RPT or its affiliates
other than as may be required by applicable law or to enforce this Agreement
or
to defend against a claim related thereto and the RPT agrees not to make any
statement to any third party regarding SFN other than as may be required by
applicable law or to enforce this Agreement. In the event this covenant of
confidentiality is breached, the RPT and SFN will have and may pursue legal
remedies for any damage arising from a breach of this provision. Prior to any
public disclosure relating to the contents of this Agreement, the RPT shall
confer with SFN on the contents of any such disclosure. SFN shall not divulge
any RPT information whatsoever. Notwithstanding the foregoing, the
parties shall be under no obligation to reach agreement on the contents of
any
such public disclosure required by applicable law, rule or regulation,
including, but not limited to, any public announcement or disclosure required
by
federal or state securities laws, rules or regulations.
12. GOVERNING
LAW; JURISDICTION. The Parties acknowledge and agree that because the
Company's headquarters is located in New York, this Agreement will be finalized
in New York and a substantial portion of this Agreement is to be performed
in
New York, the substantive laws of the State of New York will govern the
enforcement of this Agreement, without regard to its choice of law rules. The
parties further agree and consent to the jurisdiction of the federal and state
courts in New York over any action to enforce this Agreement.
13. ENTIRE
AGREEMENT, ETC. This Agreement represents the entire understanding between
the parties, and there are no agreements or understandings which have not been
set forth herein. This Agreement supersedes any prior understanding, agreement,
practice or contract, oral or written, between the SFN and the Company. This
Agreement may not be modified except by written instrument signed by all
parties. This Agreement may be executed in counterparts, each of which shall
be
deemed an original, but which together shall constitute one and the same
instrument. This Agreement shall be binding upon the parties' heirs, executors,
administrators, successors, and assigns.
IN
WITNESS WHEREOF, and INTENDING TO BE LEGALLY BOUND HEREBY, the undersigned
have
executed this Rescission Agreement and Release as of the date first written
above.
Shearson
Financial Network, Inc.
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RPT
Group, Inc.
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By:
/s/ Xxxxxxx X. Xxxxxx
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By:
/s/ Xxx Xxxxxxxx
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Xxxxxxx
X. Xxxxxx
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Xxx
Xxxxxxxx
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