Document:

Specimen Stock Certificate

    Exhibit
      4.1

     

     

     

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    2Exhibit 10.3

    
      
        

      

    

    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:

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	 	
              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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