SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (this "Agreement") is
entered into this 14th day of January 2004, by and between Reality Wireless
Networks, Inc., a Nevada corporation ("RWNT"), and Xxx Xxxxx ("Xxxxx").
RWNT and Xxxxx shall be referred to collectively herein as the "Parties."
WITNESSETH:
WHEREAS, Xxxxx invested a total of $10,000 with RWNT (the "Investment")
and was to receive stock in RWNT in exchange for the Investment (the "Investment
Stock").
WHEREAS, RWNT and Xxxxx desire to amicably settle, compromise and
resolve any and all controversies and claims between themselves with respect to
the Investment and the Investment Stock to avoid the burden and expense of
arbitration and/or litigation.
WHEREAS, in connection with the resolution of such matters, RWNT and
Xxxxx shall provide each other with a full release and settlement in accordance
with the terms hereinafter set forth.
NOW, THEREFORE, it is the desire of the Parties to state in writing the
details of their agreements. For money paid and received and other valuable
consideration between the Parties, it is mutually agreed as follows:
1. Settlement of Claims against and Release of RWNT. In exchange for
RWNT' issuing to Xxxxx 1,020,000 shares of common stock of RWNT (the "Stock"),
which Stock shall be issued after receipt by RWNT of this fully executed
Agreement, Xxxxx, on behalf of himself, his employees, affiliates and assigns,
hereby fully, forever, irrevocably and unconditionally settles, releases,
remises and discharges RWNT and each of its former, current and future officers,
directors, stockholders, attorneys, agents, spouses, administrators, employees
and all persons acting by, through, under, or in concert with them from any and
all claims, charges, complaints, demands, actions, causes of action, suits,
rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts,
agreements, promises, doings, omissions, damages, executions, obligations,
liabilities, and expenses (including attorneys' fees and costs), of every kind
and nature, known or unknown, which Xxxxx ever had or now has against RWNT,
including, but not limited to, all claims arising out of the Investment and the
Investment Stock, all common law claims including, but not limited to, actions
in tort, defamation, breach of contract, and any claims under federal, state or
local statutes or ordinances not expressly referred to above.
2. Settlement of Claims against and Release of Xxxxx. In exchange for
Xxxxx'x settlement of any and all claims against RWNT and release of RWNT, RWNT,
on behalf of itself, its officers, directors, employees, affiliates and assigns,
hereby fully, forever, irrevocably and unconditionally settles, releases,
remises and discharges Xxxxx from any and all claims, charges, complaints,
demands, actions, causes of action, suits, rights, debts, sums of money, costs,
accounts, reckonings, covenants, contracts, agreements, promises, doings,
omissions, damages, executions, obligations, liabilities, and expenses
(including attorneys' fees and costs), of every kind and nature, known or
unknown, which RWNT ever had or now has against Xxxxx including, but not limited
to, all claims arising out of the Investment and the Investment Stock, all
common law claims including, but not limited to, actions in tort, defamation,
breach of contract and any claims under federal, state or local statutes or
ordinances not expressly referred to above.
3. Representations and Warranties of the Parties.
3.1 Authority. Each of the Parties has full power and authority
to enter into this Agreement. All action on the part of each of the Parties
necessary for the authorization, execution and delivery of this Agreement, the
performance of all obligations of each of the Parties hereunder has been taken,
and each of the Parties has all requisite power and authority to enter into this
Agreement.
3.2 Consents and Approvals; No Conflict. The execution and
delivery of this Agreement by each of the Parties does not, and the performance
of this Agreement by the Parties will not, require any consent, approval,
authorization or other action by, or filing with or notification to, any
governmental or regulatory authority. The execution, delivery and performance of
this Agreement by the Parties does not (i) conflict with or violate the charter
or by-laws, partnership or other governing documents of any of the Parties, or
(ii) conflict with or violate any law, rule, regulation, order, writ, judgment,
injunction, decree, determination, contract or award applicable to any of the
Parties.
3.3 Effectiveness of Representations and Warranties. Each ______
of ______ the ______ Parties' representations and warranties contained in this
Agreement are true and correct.
4. Investment.
4.1 Knowledge of Investment and its Risks. Xxxxx has knowledge
and experience in financial and business matters so as to be capable of
evaluating the merits and risks of Xxxxx'x investment in the Stock. Xxxxx
understands that an investment in RWNT represents a high degree of risk and
there is no assurance that the business or operations of RWNT will be
successful. Xxxxx has considered carefully the risks attendant to an investment
in RWNT and that, as a consequence of such risks, Xxxxx could lose Xxxxx'x
entire investment in RWNT.
4.2 Investment Intent. Xxxxx hereby represents and warrants that
(i) it is acquiring the Stock for investment for its own account, and not as a
nominee or agent and not with a view to the resale or distribution of all or any
part of the Stock, and Xxxxx has no present intention of selling, granting any
participation in or otherwise distributing any of the Stock within the meaning
of the Securities Act of 1933, as amended (the "Securities Act") and (ii) Xxxxx
does not have any contracts, understandings, agreements or arrangements with any
person and/or entity to sell, transfer or grant participations to such person
and/or entity, with respect to any of the Stock.
4.3 Accredited Investor. Xxxxx is an "Accredited Investor" as
that term is defined by Rule 501 of Regulation D promulgated under the
Securities Act.
4.4 Disclosure. Xxxxx has reviewed information provided by RWNT
in connection with the decision to acquire the Stock. RWNT has provided Xxxxx
with all the information that Xxxxx has requested in connection with the
decision to acquire the Stock. Xxxxx further represents that he has had an
opportunity to ask questions and receive answers from RWNT regarding the
business, properties, prospects and financial condition of RWNT. All such
questions have been answered to the full satisfaction of Xxxxx.
4.5 Restrictions. Xxxxx understands that it must bear the
economic risk of his investment in RWNT and the Stock for an indefinite period
of time. Xxxxx further understands that (i) neither the offering nor the sale of
the Stock has been registered under the Securities Act or any applicable State
securities laws ("State Acts") or securities laws of other applicable
jurisdictions in reliance upon exemptions from the registration requirements of
such laws, (ii) the Stock must be held by Xxxxx indefinitely unless the sale or
transfer thereof is subsequently registered under the Securities Act and any
applicable State Acts, or an exemption from such registration requirements is
available, (iii) except as otherwise provided in Section 4.7 and that certain
Registration Rights Agreement attached hereto as Exhibit C, RWNT is under no
obligation to register any of the Stock on Xxxxx'x behalf or to assist Xxxxx in
complying with any exemption from registration, and (iv) RWNT will rely upon the
representations and warranties made by Xxxxx in this Agreement in order to
establish such exemptions from the registration requirements of the Securities
Act and any applicable State Acts or securities laws of other applicable
jurisdictions.
4.6 Transfer Restrictions. Xxxxx will not transfer any of the
Stock unless such transfer is exempt from registration under the Securities Act
and such State Acts and securities laws of other applicable jurisdictions, and,
if requested by RWNT, Xxxxx has furnished an opinion of counsel satisfactory to
RWNT that such transfer is so exempt. Xxxxx understands and agrees that (i) the
certificates evidencing the Stock will bear appropriate legends indicating such
transfer restrictions placed upon the Stock, (ii) RWNT shall have no obligation
to honor transfers of any of the Stock in violation of such transfer
restrictions, and (iii) RWNT shall be entitled to instruct any transfer agent or
agents for the securities of RWNT to refuse to honor such transfers.
4.7. Piggy Back Registration of the Stock. If RWNT proposes to
register any of its securities under the Securities Act (other than pursuant to
a Form X-0, Xxxx X-0 or any other successor form of limited purpose), it will
give written notice by registered mail at least thirty (30) days prior to the
filing of each such registration statement to Xxxxx of its intention to do so.
If Xxxxx notifies RWNT within twenty (20) business days after receipt of any
such notice of its desire to include any of the Stock in such proposed
registration statement, RWNT shall afford Xxxxx the opportunity to have any such
amount of the Stock registered under such registration statement, provided,
however, that if the managing underwriter advises RWNT in writing that the
inclusion of any such amount of the Stock Xxxxx has proposed be included in such
registration statement would interfere with the successful marketing of the
securities proposed to be registered by RWNT, then the securities to be included
in such registration statement shall be included in the following order:
(a) first, the securities proposed to be included in such
registration by RWNT or, if such registration is for securities of specified
security holders of RWNT, by such holders;
(b) second, the Stock held by Xxxxx requested to be included
in such registration; and
(c) third, all other holders of common stock entitled to be
included in such registration statement (pro rata among the holders requesting
such registration based upon the number of shares of common stock requested by
each such holder to be registered).
4.7.1. Notwithstanding the provisions of this Section 4.7,
RWNT shall have the right at any time after it shall have given written notice
pursuant to this Section 4.7 (irrespective of whether a written request for
inclusion of any amount of the Stock shall have been made) to elect not to file
any such proposed registration statement or to withdraw the same after the
filing but prior to the effective date thereof.
4.7.2. In addition, RWNT shall furnish without charge to
Xxxxx, promptly after filing thereof with the Securities and Exchange
Commission, at least one (1) copy of the registration statement described in
Section 4.7, and each amendment thereto or each amendment or supplement to the
prospectus included therein, including all financial statements and schedules,
documents incorporated by reference therein and if Xxxxx so requests in writing,
all exhibits thereto.
4.7.3. Registration of the Stock pursuant to the registration
statement described in this Section 4.7 shall be governed by this Section 4.7
and that certain Registration Rights Agreement attached hereto as Exhibit C.
4.7.4. RWNT shall use its best efforts to file a registration
statement within six (6) months from the date of this Agreement.
5. Miscellaneous Provisions.
5.1 This Agreement constitutes the complete and exclusive
agreement of the Parties.
5.2 The Parties understand that this Agreement constitutes a
compromise and settlement of disputed claims. No action taken by the Parties
hereto, or any of them, either previously or in connection with this Agreement
shall be deemed to be (a) an admission of the truth or falsity of any claims
heretofore made or (b) an acknowledgement or admission by either party of any
fault or liability whatsoever to the other Party or to any third party.
5.3 Each of the Parties declares and represents that no promise,
inducement or agreement which is not specifically provided in this Agreement has
been made by any Party to this Agreement; that this Agreement contains the
entire agreement among the Parties; and that the terms of this Agreement cannot
be modified except in writing signed by all Parties hereto.
5.4 Each of the Parties agrees not to disclose to or discuss
with any person, except as where such disclosure may be required by law, court
order, government agency request or subpoena, or in connection with a legal
proceeding, the substance of this Agreement or matters relating to any act or
omission of any Party in connection with any other Party.
5.5 This Agreement shall be construed, interpreted and applied
in accordance with the substantive laws of the State of Washington, without
reference to its choice of law rules.
5.6 Any dispute between the Parties pertaining to this Agreement
shall be resolved through binding arbitration conducted by the American
Arbitration Association. The Parties agree that any arbitration proceeding shall
be conducted in Seattle, Washington, and consent to exclusive jurisdiction and
venue there. The award of the arbitrator(s) shall be final and binding, and the
Parties waive any right to appeal the arbitral award, to the extent that a right
to appeal may be lawfully waived. Each Party retains the right to seek judicial
assistance (a) to compel arbitration, (b) to obtain injunctive relief and
interim measures of protection pending arbitration, and (c) to enforce any
decision of the arbitrator(s), including but not limited to the final award.
5.7 No Party may assign any of its rights under this Agreement
without the prior consent of the other Parties, which shall not be unreasonably
withheld. Subject to the preceding sentence, this Agreement shall apply to, be
binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the Parties. Nothing expressed or referred to in this
Agreement shall be construed to give any person other than the Parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
Parties to this Agreement and their successors and assigns.
5.8 All notices, demands and communications hereunder shall be
in writing and personally delivered or sent by first class mail, certified or
registered, postage prepaid, return receipt requested, addressed to the parties
at the addresses below set forth, or at such other address as any Party shall
have furnished to the other party in writing, or shall be given by telegram,
telex, facsimile transmission, overnight courier or hand delivery, in any case
to be effective when received, provided that actual receipt shall constitute
notice regardless of method of delivery.
If to RWNT: Reality Wireless Networks, Inc.
000 X. Xxxxxxxx Xxx., Xxxxx X
Xxxxxxxx, Xxxxxxxxxx 00000
With a copy to: Xxxxx X. Xxxx
The Xxxx Law Group, PLLC
000 Xxxxxx Xxx., Xxxxx 0000
Xxxxxxx, XX 00000
If to Xxxxx: ________________________
________________________
________________________
5.9 If any term or provision of this Agreement or any
application thereof shall be invalid or unenforceable, such term or provision
shall be deemed to be severed and the remainder of this Agreement and any other
application of such term or provision shall not be affected or invalidated
thereby.
5.10 This Agreement may be executed by facsimile and in one or
more counterparts, all of which taken together shall constitute one and the same
instrument.
[signature page follows]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
REALITY WIRELESS NETWORKS, INC.
By: ________________________________
Name: Xxxxxx Xxxxxx
Title: President
By: ________________________________
Name: Xxx Xxxxx
