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RESCISSION AGREEMENT
 
THIS RESCISSION AND SETTLEMENT AGREEMENT (the "Agreement"), dated and effective
as of November 9, 2006 (the "Effective Date"), by and among Michael McHugh
("Michael"), Bruce Silva ("Bruce"), and Thomas Monte ("Thomas" and, collectively
with Michael and Bruce, the "Sellers"); Continental Home Loans, Inc. ("CHL"), a
corporation organized and existing under the laws of the State of New York; and
Shearson Financial Network, Inc. ("SFN" or the "Company"), a corporation
organized and existing under the laws of the State of Nevada. The Sellers, CHL
and the Company are sometimes, individually referred to herein as a "Party" and
collectively referred to herein as the "Parties".
 
RECITALS
 
On or about June 7, 2006, the Parties entered into a Stock Purchase Agreement
(the "Stock Purchase Agreement"), and each of the respective Sellers entered
into Employment Agreements with the Company (the "Shearson Employment
Agreements").
 
Certain variances concerning the strategic direction of CHL have arisen between
CHL, the Company and Sellers, and the Parties have reached an agreement that it
is in their respective best interests to rescind the Stock Purchase Agreement
and the Employment Agreements, each of which shall be deemed void ab initio.
 
NOW, THEREFORE, in consideration of the foregoing recitals and the
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:
 
1.     Rescission.
 
1.1    Certificate. Simultaneously with the execution of this Agreement, each of
the Sellers will execute a certificate that represents that he disclaims any
interest in the SFN shares due as part of the Stock Purchase Agreement, and SFN
shall execute a certificate that it disclaims any interest in CHL shares due as
part of the Stock Purchase Agreement.
 
1.2    Non-disparagement. From the date of this Agreement, the Parties shall not
make any public disparaging statements concerning the other company's officers,
directors, employees, attorneys, agents, or contracting parties, or its business
or operations. This non-disparagement agreement shall not in any way prevent the
Parties from disclosing any information to their attorneys or in response to a
lawful subpoena or court order requiring disclosure of information.
 
1.3    Rescission. Effective upon the Closing, the Stock Purchase Agreement and
the Employment Agreements shall be deemed to be void ab initio, and neither
party thereto shall have any right or obligation of whatsoever nature or kind
there under or with respect thereto.
 
1.4    Closing. Subject to the terms and conditions of this Agreement, the
closing of the transactions contemplated herein (the "Closing") shall take place
on or about November 9, 2006 or on such other date as the Parties shall agree
(the "Closing Date"). Such Closing shall take place through an exchange of
originally executed documents using overnight courier service orby facsimile
followed by an exchange of such originally executed documents. At the Closing,
the Sellers, SFN and CHL shall deliver to each other executed copies of this
Agreement and the certificates described in Sections 1.1 and 6 of this
Agreement. Additionally, each of the Parties shall deliver such other documents
as may be required pursuant to the terms hereof.

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2.     Representations and Warranties of SFN. SFN hereby represents and warrants
to CHL and each of the Sellers as follows:
 
2.1    Authority. SFN has the full and unrestricted right, power, capacity and
authority to enter into, execute and deliver this Agreement;
 
2.2    Compliance. SFN's compliance with the respective obligations hereunder
will not violate, conflict with or constitute a breach of any agreement,
arrangement, commitment or understanding to which SFN is a party.
 
2.3    No Consent. Except for a Form 8-K to be filed by SFN with the Securities
and Exchange Commission ("SEC") promptly after the Closing, no consent, approval
or authorization of, or designation, declaration or filing with, any
governmental authority or agency is required on the part of SFN in connection
with the valid execution and delivery of this Agreement. In addition to
disclosing the termination and rescission of the Stock Purchase Agreement and
the Employment Agreements, SFN agrees that SFN shall correct in its Form 8-K to
be filed with the SEC any errors that were included in prior SEC filings
regarding the completion of the acquisition of CHL by SFN.
 
2.4    Disclosure. No representations or warranties by the SFN in this Agreement
and no statement contained in any document (including, without limitation,
financial statements, filings with the Securities and Exchange Commission, or
any certificate, or other writing furnished or to be furnished by SFN to CHL
pursuant to the provisions hereof or in connection with the transactions
contemplated hereby and by the Stock Purchase Agreement) contained, contain or
will contain any untrue statement of material fact or omitted, omit or will omit
to state any material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading.
 
2.5    Absence of Agreements. The officers and directors of SFN have not caused,
in their capacity as officers or directors of SFN, the execution of any
agreements binding CHL or the Sellers to obligations which inure to the
detriment of CHL or the Sellers prior to or subsequent to the date of this
Agreement.
 
2.6    No Violation. Neither the execution and delivery of this Agreement nor
its performance and the consummation of the transactions contemplated hereby
will (a) violate any provision of the Articles of Incorporation or Bylaws of
SFN, (b) violate, or be in conflict with, or constitute a default (or an event
which, with or without due notice or lapse of time, or both, would constitute a
default) under, or result in the modification or termination of, or cause or
permit the acceleration of the maturity of any debt, obligation, contract,
commitment or other agreement to which the SFN is a party or by which it or its
property may be bound, (c) result in the creation or imposition of any mortgage,
pledge, lien, security interest, encumbrance, restriction, charge or limitation
of any kind, upon any property or assets of the SFN, or (d) violate any statute
or law or any judgment, decree, order, regulation or rule of any court
orgovernmental authority.

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2.7    Cease Representation. Subsequent to the date of this Agreement, the SFN
officers and directors shall not represent or hold themselves out as
representing CHL's management, CHL's Board of Directors or as currently
connected to CHL in any way or manner that could convey that the rescission
contemplated by this Agreement has not occurred.
 
3.     Representations and Warranties of CHL. CHL represents and warrants to the
Company that:
 
3.1    Authority. CHL has the full and unrestricted right, power, capacity and
authority to enter into, execute and deliver this Agreement;
 
3.2    Compliance. CHL's compliance with the respective obligations hereunder
will not violate, conflict with or constitute a breach of any agreement,
arrangement, commitment or understanding to which CHL is a party.
 
3.3    No Consent. No consent, approval or authorization of, or designation,
declaration or filing with, any governmental authority or agency is required on
the part of CHL in connection with the valid execution and delivery of this
Agreement, or the delivery of the certificate required by Sections 1.1 and
6 hereof.
 
3.4    Disclosure. No representations or warranties by CHL in this Agreement and
no statement contained in any document (including, without limitation, financial
statements or other writing furnished or to be furnished by CHL to SFN pursuant
to the provisions hereof or in connection with the transactions contemplated
hereby) contained, contain or will contain any untrue statement of material fact
or omitted, omit or will omit to state any material fact necessary in order to
make the statements herein or therein, in light of the circumstances under which
they were made, not misleading.
 
3.5    Absence of Agreements. CHL has not caused to be executed any agreements
binding SFN to obligations which inure to the detriment of SFN prior to or
subsequent to the date of this agreement.
 
3.6    No Violation. Neither the execution and delivery of this Agreement nor
its performance and the consummation of the transactions contemplated hereby
will (a) violate any provision of the Articles of Incorporation or Bylaws of
CHL, (b) violate, or be in conflict with, or constitute a default (or an event
which, with or without due notice or lapse of time, or both, would constitute a
default) under, or result in the modification or termination of, or cause or
permit the acceleration of the maturity of any debt, obligation, contract,
commitment or other agreement to which CHL is a party or by which it or its
property may be bound, (c) result in the creation or imposition of any mortgage,
pledge, lien, security interest, encumbrance, restriction, charge or limitation
of any kind, upon any property or assets of CHL, or (d) violate any statute or
law or any judgment, decree, order, regulation or rule of any court or
governmental authority.
 
3.7    Cease Representation. Subsequent to the date of this agreement, CHL shall
not represent or hold itself out as representing SFN or as currently connected
to SFN in any way or manner that could convey that the rescission contemplated
by this Agreement has not occurred.
 
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4.     Mutual Releases.
 
4.1    No Claims on Certain Assets. All Parties mutually agree and acknowledge
that any assets, production and personnel previously transferred by SFN or any
other entity to CHL, or managed by CHL for SFN, including, but not limited to,
SFN's assets located in Hauppauge, Brentwood, and on the 4th floor of its Garden
City offices (collectively, the "Former SFN Assets") shall remain the sole and
separate property of CHL; that SFN shall make no claim on any of such Former SFN
Assets; and that no Party has any further financial or other obligation to the
other Parties whatsoever in connection therewith.
 
4.2    Release by the SFN. For valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, SFN hereby fully and forever
releases and discharges CHL and its directors, partners, members, managers,
officers, shareholders, employees, agents, heirs, attorneys, executors,
administrators, predecessors, successors and assigns (each, a "CHL Party" and,
collectively, the "CHL Parties"), of and from any and all claims, demands,
agreements, contracts, covenants, suits, actions, causes of action, obligations,
controversies, debts, costs, expenses, accounts, damages, judgments, losses and
liabilities, of whatever kind or nature, in law, equity or otherwise, whether
known or unknown, concealed or hidden (collectively, "Claims"), which SFN has
had, may have had or now has, to and including the date of this Agreement,
against any of the CHL Parties, arising out of or in connection with the Stock
Purchase Agreement, the Employment Agreements, and/or the oral arrangement under
which CHL managed the Former SFN Assets, in return for a management fee. SFN
further represents, warrants and agrees that, effective as of October 1, 2006,
CHL had no further responsibility for managing the Former SFN Assets.
 
4.3    Release by CHL. For valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, CHL hereby fully and forever releases and
discharges SFN and its directors, partners, members, managers, officers,
employees, agents, heirs, attorneys, executors, administrators, predecessors,
successors and assigns (each, a "SFN Party") of and from any and all Claims
which any Party has had, may have had or now has, to and including the date of
this Agreement, against any Parties, including without limitation any Claims
arising out of or in connection with the Stock Purchase Agreement and the
Employment Agreements.
 
4.4    Acknowledgements. All Parties mutually agree and acknowledge that neither
party has any further obligation or liability whatsoever arising out of or in
connection with the Stock Purchase Agreement, the Employment Agreements, and/or
the oral agreement under which CHL managed the Former SFN Assets in return for a
management fee. All Parties intend for their respective releases to be effective
as a bar to all actions, causes of action, suits, claims or demands of every
kind, nature or character whatsoever, known or unknown, suspected or
unsuspected, fixed or contingent, except to the extent arising out of, in
connection with or resulting from any breach of this Agreement. In connection
with such waiver and relinquishment, the Parties hereby acknowledge that he, she
or it is aware that he, his, she, her or it or its attorneys may hereafter
discover claims or facts in addition to, or different from, those which they now
know or believe to exist with respect to the subject matter of this release, but
that the Parties nonetheless intend hereby to fully, finally and forever release
all disputes and differences, known or unknown, suspected or unsuspected, which
do now exist as to the released matters.
 
5.     Insurance. CHL hereby represents that during the period from June 7, 2006
and through the Closing Date (the "Coverage Period") CHL maintained one or more
E&O, general liability, workers' compensation, and health insurance policies in
full force and effect.
 
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6.     Closing deliverables. Each of the Sellers shall deliver a certificate
representing that it disclaims any interest in SFN shares to be delivered under
the Stock Purchase Agreement. SFN shall deliver a certificate representing that
it disclaims any interest in CHL shares to be delivered under the Stock Purchase
Agreement.
 
7.     Indemnification.
 
7.1    By CHL. CHL shall indemnify, defend and hold harmless SFN, and its
directors, officers, employees, agents, heirs, attorneys, executors,
administrators, successors and assigns (each, an "Indemnified Party"), from and
against any and all Damages (as defined in Section 7.4 hereof) incurred or
suffered by any Indemnified Party arising out of, in connection with or
resulting from any breach of any representation, warranty, covenant or
obligation hereunder by CHL.
 
7.2    By SFN. SFN shall indemnify, defend and hold harmless CHL and its
directors, officers, employees, agents, attorneys, successors and assigns (each,
an "Indemnified Party"), from and against any and all Damages incurred or
suffered by any Indemnified Party arising out of, in connection with or
resulting from any breach of any representation, warranty, covenant or
obligation hereunder by SFN.
 
7.3    Indemnification Procedure. If there is asserted any claim or allegation
that in the judgment of an Indemnified Party may give rise to any Damages, or if
an Indemnified Party determines the existence of a potential claim or allegation
whether or not the same shall have been asserted, such Indemnified Party shall
notify the Indemnifying Party within fifteen (15) business days of receipt or
determination of such actual or potential claim or allegation; provided,
however, that failure of the Indemnified Party to provide such timely notice to
the Indemnifying Party shall not relieve the Indemnifying Party of its
obligations hereunder, except to the extent the Indemnifying Party is actually
prejudiced by such failure.
 
7.4    Definition of Damages. The term "Damages" as used in this Section 7 means
all demands, claims, actions or causes of action, assessments, losses, damages,
costs, expenses, liabilities, judgments, awards, fines, sanctions, penalties,
charges, and amounts agreed by the Indemnifying Party to be paid in settlement,
including, without limitation, costs, fees and expenses of investigating and/or
defending any claim or allegation, attorneys, experts, accountants, appraisers,
consultants, witnesses, investigators and any other agents. The Indemnifying
Party shall have the right to assume the sole defense of any claim or allegation
as to which the Indemnified Party is to be indemnified hereunder.
 
8.     Miscellaneous.
 
Notices. All notices required or permitted hereunder, and under any instrument
delivered pursuant hereto, shall be given in writing, and shall be deemed to
have been given and received upon the earlier to occur of: (a) the actual
receipt of any such notice by the intended recipient; and (b) the third business
day following deposit of any such notice enclosed in a wrapper with postage
prepaid, properly addressed to the intended recipient at its address set forth
below, as a certified item, return receipt requested, in an official depository
of and under the care and custody of the United States Postal Service. The
parties' address for notice shall be as follows:

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If to CHL:
290 Broadhollow Road

   
Suite 201

   
Melville, NY 11747

   
Attn: Michael McHugh

 

 
If to SFN:
2470 St. Rose Parkway, Suite 314

   
Henderson, Nevada 89205

   
Attn: Michael Barron

 
8.1    Successors and Assigns. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties.
 
8.2    Governing Law. This Agreement shall be governed by and construed under
the laws of the State of Nevada without regard to its rules regarding choice of
law.
 
8.3    Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforced in accordance with its terms.
 
8.4    Survival. Except for the provision in Section 6 hereof, all of the
provisions of this Agreement shall survive the Closing.
 
8.5    Entire Agreement. This Agreement reflects the entire agreement among the
parties with respect to the matters set forth herein and supersedes any prior
agreements, commitments, discussions and understandings, oral or written, with
respect thereto.
 
8.6    Attorneys' Fees. In the event of any action arising out of this
Agreement, the prevailing party shall be entitled to reimbursement for its costs
and expenses, including reasonable attorneys' fees, in connection therewith.
 
8.7    Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
 
8.8    Amendment. This Agreement may not be amended orally and may only be
amended by a writing signed by each of the parties hereto.

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IN WITNESS WHEREOF, the parties have executed or caused their duly authorized
representatives to execute this Rescission and Settlement Agreement as of the
date first written above.

   
SHEARSON FINANCIAL NETWORK, INC
                         
By:
/s/ Michael A. Barron
     
Title:
CEO and President
                         
CONTINENTAL HOME LOANS, INC.
                         
By:
/s/ Thomas Monte
     
Title:
Seller
               
By:
/s/ Bruce Silva
     
Title:
Seller
               
By:
/s/ Michael McHugh
     
Title:
President
 

 

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