SETTLEMENT AGREEMENT AND RELEASE

      This Settlement  Agreement and Release (this  "Agreement") is entered into
this 8th day of April,  2004, by and among  NANNACO,  Inc., a Texas  corporation
("NNCO"),  James J. Taylor,  C.P.A.,  a certified  public  accounting firm doing
business in the state of Texas,  and James J. Taylor,  individually  ("Taylor").
NNCO and Taylor shall be referred to collectively herein as the "Parties."

                                   WITNESSETH:

      WHEREAS,   Taylor  provided  certain  accounting  services  to  NNCO  from
approximately  December 31, 1998 through January 18, 2003 (the "Services"),  for
which Taylor alleges he is owed approximately  Seventy Two Thousand Nine Hundred
Ninety Nine Dollars and Twenty Two Cents ($72,999.22),  a copy of the invoice of
James J. Taylor,  C.P.A.  sent to NNCO being  attached  hereto as Exhibit A (the
"Debt").

      WHEREAS, NNCO and Taylor desire to amicably settle, compromise and resolve
any and all  controversies  and claims  between  themselves  including,  but not
limited to, all  controversies and claims with respect to and arising out of the
Services  and the Debt,  to avoid the burden and expense of  arbitration  and/or
litigation.

      WHEREAS,  in connection with the resolution of such matters,  Taylor shall
provide NNCO 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  valuable  consideration,  the  receipt  and
sufficiency of which is hereby acknowledged, it is mutually agreed as follows:

      1.  Settlement  of Claims  against  and Release of NNCO.  In exchange  for
NNCO's  agreeing  to engage  Taylor  as a  consultant  to NNCO (the  "Consulting
Engagement"),  which Consulting Engagement1 shall be executed by Taylor and NNCO
after receipt by NNCO of this fully  executed  Agreement,  Taylor,  on behalf of
himself,  his  employees,   affiliates  and  assigns,   hereby  fully,  forever,
irrevocably and unconditionally settles,  releases,  remises and discharges NNCO
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  Taylor ever had or now has  against  NNCO,  including,  but not
limited to, all claims  arising out of the Services and the Debt, 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.


1 The Consulting Services Agreement being attached hereto as Exhibit B.


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      2. Representations and Warranties of the Parties.

         2.1  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.

         2.2 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.

         2.3  Effectiveness  of  Representations  and  Warranties.  Each  of the
Parties' representations and warranties contained in this Agreement are true and
correct.

      3. Miscellaneous Provisions.

         3.1 This Agreement  constitutes the complete and exclusive agreement of
the Parties relating to the settlement and release of NNCO.

         3.2 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.

         3.3  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.

         3.4 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.

         3.5 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.

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         3.6 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.

         3.7 No party may assign any of its rights under this Agreement  without
the prior consent of the other party, 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.

         3.8 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 NNCO:                Steve Careaga
                                    Chief Executive Officer
                                    NANNACO, Inc.
                                    7235 North Creek Loop
                                    Gig Harbor, WA  98335

         With a copy to:            David M. Otto
                                    The Otto Law Group, PLLC
                                    900 Fourth Ave., Suite 3140
                                    Seattle, WA 98164

         If to Taylor:              James J. Taylor
                                    Certified Public Accountant
                                    555 IH 35 South, Suite 312
                                    New Braunfels, TX 78130

         3.9 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.

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         3.10 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.

      IN WITNESS  WHEREOF,  the Parties have executed  this  Agreement as of the
date first above written.

                             NANNACO, INC.

                                   ________________________________
                             Name:  Steve Careaga
                             Title:  Chief Executive Officer

                             JAMES J. TAYLOR, C.P.A.

                                   ________________________________
                             Name:  James J. Taylor
                             Title: Owner/Principal

                             ________________________________
                             Name:  James J. Taylor - Individually


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                                    Exhibit A

                            INVOICE FOR NANNACO, INC.

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                                    Exhibit B

                          CONSULTING SERVICES AGREEMENT