SETTLEMENT AGREEMENT

 

This Settlement Agreement (the “Agreement”) is made and entered into as of January 9, 2008, by and among China Broadband, Inc., a Nevada corporation (sometimes referred to herein as “Broadband”), China Broadband, Ltd., a Cayman Islands limited company and wholly-owned subsidiary of China Broadband, Inc. (Broadband and China Broadband Ltd. sometimes collectively referred to herein as the “Company”), Stephen P. Cherner (“Cherner”), Maxim Financial Corporation (“Maxim”), Mark L. Baum (“Baum”), James Panther (“Panther”), BCGU, LLC (“BCGU” and together with Panther and Baum, the “BCGU Group”), Mark I. Lev (“Lev”), Wellfleet Partners, Inc. (“Wellfleet”, and collectively with Cherner, Maxim, the BCGU Group and Lev the “Investor Group” and collectively with the Company, the “Company Parties”), Pu Yue (“Pu”) and Clive Ng (“Ng” and collectively with Pu, the “Executives”) and Chardan Capital Markets, LLC, a limited liability company formed under the laws of the State of New York (“Chardan”), Jaguar Acquisition Corporation, a Delaware corporation (“Jaguar”), and China Cablecom Holdings, Ltd., a British Virgin Islands subsidiary of Jaguar (“Cablecom Holdings” and together with Jaguar and Chardan, the “Jaguar Parties”).

 

WHEREAS, a dispute has arisen that the parties hereto (collectively, the “Parties”) wish to resolve and settle amicably; and

 

WHEREAS, the Parties have reached this Agreement on the terms and conditions provided herein.

 

NOW, THEREFORE, in consideration of the above premises and for valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties agree, subject to the terms hereof, as follows:

 

 

1.  Transfers by Ng of Securities Issued by China Cablecom Holdings, Ltd. 

 

(a)  As soon as practicable, but (unless required by applicable law) not later than three (3) business days after the closing of the proposed merger of a subsidiary of Cablecom Holdings, as successor to Jaguar in its proposed redomestication merger, with and into China Cablecom, Ltd., a private limited liability British Virgin Islands company (“China Cablecom”) (the “Proposed Merger”), Ng shall transfer to Broadband or its designated subsidiary an aggregate of 390,000 shares of common stock of Cablecom Holdings (collectively, the “Cablecom Holdings Shares”), registered in Ng’s name, without representations, warranties, registration, informational or any other rights being given by Ng except that such shares shall have the same registration or other rights, privileges or benefits as Ng has for all other shares issued to him by Cablecom Holdings pursuant to the Proposed Merger; provided, however, that no Cablecom Holdings Shares shall be deliverable hereunder unless and until Investor Releases (as hereinafter defined) shall have theretofore been duly executed and delivered to Ng by all the persons and entities listed as Investor Release Parties on Annex A (the “Investor Release Parties”). The transfer of the 390,000 Cablecom Holdings Shares shall be deemed, for all purposes, as a capital contribution by Ng to Broadband. Subject to the terms hereof, Ng will deliver to Broadband stock certificates representing the full number of Cablecom Holdings Shares to be transferred as set forth herein; such certificates shall be endorsed in blank or have a stock power endorsed in blank attached thereto in respect of the Cablecom Holdings Shares transferred (subject to the restrictions contained herein) to Broadband. In the event of any stock dividend on the capital stock of China Cablecom or Cablecom Holdings or any split-up, combination, recapitalization, reclassification or other similar adjustment of shares of the capital stock thereof prior to the Proposed Merger or any change in the exchange ratio of shares of Cablecom Holdings offered to holders of China Cablecom shares pursuant to the terms of the Proposed Merger, Ng agrees that an appropriate adjustment to the number of Cablecom Holdings Shares to be transferred hereunder by Ng shall be made in the same manner as the adjustment made in Ng’s other shares of China Cablecom or Cablecom Holdings as a result of such event. Any Cablecom Holdings Shares received by Broadband shall be utilized by Broadband (with the exact mechanics to be determined by Broadband, subject to mutually acceptable restrictions approved by Cablecom Holdings) to secure one or more financings or acquisitions or be sold. In the event that Broadband’s holdings of Cablecom Holdings Shares would have a value at the time of any sale or pledge comprising 40% or more of Broadband’s total assets, potentially causing it to be deemed an investment company under the Investment Company Act of 1940 (the “Investment Company Act”), Broadband shall (unless an exemption from registration under the Investment Company Act is then available to Broadband or Broadband shall have obtained an order from the Securities and Exchange Commission (“SEC”) excluding or exempting Broadband from registration under the Investment Company Act), dispose of such number of Cablecom Holdings Shares that would cause it to not be deemed an investment company under the Investment Company Act, subject to mutually acceptable restrictions approved by Cablecom Holdings. In addition to the restrictions set forth above, Broadband acknowledges that the Cablecom Holdings Shares will be subject to the terms of a lock-up agreement, which terms shall be no more restrictive than the lockup agreement provided by Ng (or any designated affiliate or entity holding such shares on behalf of Ng) to Cablecom Holdings at the time of the Proposed Merger (the “Lock-up Agreement”), and Broadband agrees to comply in all respects with the Lock-up Agreement in respect of the Cablecom Holdings Shares. Broadband shall enter into a similar agreement in respect of the Cablecom Holdings Shares and shall deliver the same to Ng and Cablecom Holdings in advance of Broadband’s receipt of the Cablecom Holdings Shares. Notwithstanding the foregoing, to the extent that Broadband is not subject to the restrictions and limitations of Rule 145 of the Securities Act of 1933, as amended (the “Securities Act”), Broadband shall not be deemed an affiliate of Jaguar and such shares may be sold subject only to the Lock-up Agreement. Ng shall not take any action that would result in the sale, assignment, transfer or encumbrance of the 390,000 Cablecom Holdings Shares to be transferred by Ng to Broadband to any party other than Broadband.

 

(b)  In addition to the foregoing, concurrently with the execution and delivery of this Agreement, provided that Ng shall have theretofore received duly executed and delivered Investor Releases by all the Investor Release Parties, a general release from WestPark Capital, Inc. in form and substance satisfactory to Ng and a duly executed investor representation letter from Lev in form and substance satisfactory to Ng, Ng shall (i) transfer an aggregate of 400,000 Broadband Shares to the Escrow Agent on behalf of Lev in accordance with the terms of the Escrow Agreement referred to below, and (ii) make a charitable gift of an aggregate of 28,444 Broadband Shares to the charitable organization set forth on Annex B (the “Donee”), each such transfer or gift contemplated by this paragraph (b) to be made without representations, warranties, registration, informational or any other rights given by Ng. Subject to the terms hereof, certificates in respect of all 400,000 Broadband Shares referred to in clause (i) shall be delivered (endorsed in blank or with accompanying stock power(s) attached thereto) in escrow to Heller, Horowitz & Feit, P.C., as Escrow Agent (the “Escrow Agent”) in accordance with the Escrow Agreement attached hereto as Annex C; and the 28,444 Broadband Shares referred to in clause (ii) shall be delivered (endorsed in blank or with accompanying stock power(s) attached thereto) to Lev, and Lev shall in turn deliver the same, within three business days of receipt, to the Donee. Lev shall provide to Ng, within seven business days thereafter, evidence reasonably satisfactory to Ng, of such delivery.

 

(c)  Provided that Ng shall have theretofore received from each shareholder listed on Annex D (each, a “Specified Shareholder”) such Specified Shareholder’s executed releases (containing release language substantially similar to the Investor Releases), and a duly executed investor representation letter therefrom, in form and substance satisfactory to Ng, Ng will transfer to such Specified Shareholder the number of Broadband Shares set forth opposite such Specified Shareholder’s name in Annex D hereto, with the maximum aggregate number of Broadband Shares to be transferred pursuant to this paragraph (c) to be 566,790 Broadband Shares; each such transfer contemplated by this paragraph (c) to be made without representations, warranties, registration, informational or any other rights given by Ng. Subject to the terms hereof, Ng will deliver to each transferee stock certificates representing the full number of Broadband Shares to be transferred thereto as set forth herein; such certificates shall be endorsed in blank or have a stock power endorsed in blank attached thereto in respect of the Broadband Shares transferred. The foregoing transfers shall not be deemed for the benefit of the Company, and neither the Company nor Ng shall be liable or otherwise held accountable for any tax liabilities of any party resulting from the transfers by Ng as set forth in Sections 1(b) or (c).

 

 

2.  Employment Agreement Amendments; Past Salary Waiver; Business.

 

(a)  Concurrently with the execution and delivery of this Agreement, China Broadband Ltd. and each of Ng and Pu shall have entered into an amendment to their respective employment agreements dated February 24, 2007 (collectively, the “Executive Employment Agreements”), which are attached hereto as Annexes E and F, respectively, in order to appropriately modify the same to reflect the original intent of the parties thereto (collectively, the “Executive Employment Agreement Amendments”). In addition, Ng hereby acknowledges that he relinquishes and waives any claim to any base salary from China Broadband Ltd. for periods prior to the date hereof.

 

(b)  The Parties hereto acknowledge that (i) Broadband operates a broadband cable internet company based in the city of Jinan in the Shandong province of the People’s Republic of China and is pursuing opportunities in stand-alone, independent broadband services, including electronic program/television program-type publications, in the People’s Republic of China (collectively, “Stand-Alone Broadband Services”), but shall not include the provision of Integrated Cable Services (as defined below), and (ii) the business of China Cablecom and Cablecom Holdings shall include acting as a joint venture provider of cable television services in the People’s Republic of China and related activities (collectively, “Integrated Cable Services”), but shall not include the provision of Stand-Alone Broadband Services. Broadband agrees that any employment agreement entered into between Broadband (or any of its affiliates) and Ng (including the Executive Employment Agreement, as amended in connection herewith) will recognize and permit Ng’s activities and obligations under any employment agreement between Cablecom Holdings (or any of its affiliates) and Ng, and Cablecom Holdings agrees that any employment agreement entered into between Cablecom Holdings (or any of its affiliates) and Ng will recognize and permit Ng’s activities and obligations under his Executive Employment Agreement, as amended in connection herewith. Except as regards future business opportunities and the agreement of the parties hereto regarding their allocation as between China Cablecom and China Broadband solely during the effectiveness of Ng’s Executive Employment Agreement, the foregoing shall not be deemed to be a limitation on, or an agreement to limit, the business of either of Cablecom Holdings or Broadband hereafter.

 

3.  Certain Representations and Warranties.

 

(a)  Each of the Company Parties jointly and severally represents and warrants to Ng and Pu that (i) such Party has full power and authority to enter into this Agreement; that this Agreement has been duly and validly authorized, executed and delivered on behalf of such Party; and that this Agreement is a valid and binding agreement of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditor’s rights and remedies; (ii) such Party has not hypothecated or otherwise encumbered or assigned any claim or cause of action against any of the Cablecom Release Parties (as hereinafter defined); (iii) such Party has not instituted any legal proceeding against, or filed any claim or complaint with any regulatory authority relating to any of the Cablecom Release Parties; and (iv) this Agreement, the Executive Employment Agreement Amendments and the transactions and other agreements contemplated hereby and thereby have been duly authorized, approved and ratified by a special committee of independent and disinterested members of Broadband’s Board of Directors (comprised of Messrs. Zale and Grossman) formed for the purpose of reviewing agreements between or among Ng, Pu and the Company and the transactions relating thereto (the “Special Committee”), which persons shall be elected to the Board of Directors of the Company concurrently with the Closing of the Chardan Private Placement and the execution and delivery of this Agreement.

 

(b)  Ng represents and warrants to each of the Company Parties that (i) as of the date of each transfer by him of Cablecom Holdings Shares and Broadband Shares under the terms of this Agreement, he will be the record owner of such securities and as of the date of each transfer, he will transfer all of his right, title and interest in and to such securities, free and clear of all liens, claims, encumbrances, pledges, security interests and other restrictions, other than as set forth herein or under applicable federal and state securities law restrictions; (ii) he has not hypothecated or otherwise encumbered or assigned any claim or cause of action against any of the Company Parties or their respective affiliates; and (iii) he has not instituted any legal proceeding against any of the Company Parties or their respective affiliates.

 

(c)  Each of the Jaguar Parties jointly and severally represents and warrants to Ng, Pu and the Company Parties that (i) it has full power and authority to enter into this Agreement; that this Agreement has been duly and validly authorized, executed and delivered on behalf of such Party; and that this Agreement is a valid and binding agreement of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditor’s rights and remedies; (ii) it has not hypothecated or otherwise encumbered or assigned any claim or cause of action against any Cablecom Release Parties, the Company Parties or their respective affiliates; and (iii) it has not instituted any legal proceeding against any Cablecom Release Parties, the Company Parties or their respective affiliates.

 

 

4.  Securities Laws Representations. Broadband hereby represents and warrants to Ng as follows:

 

(a)  Broadband is, upon receipt of any Cablecom Holdings Shares hereunder, acquiring such securities for Broadband's own account for investment purposes only and not with a present view toward the public sale or distribution thereof, except for sales duly registered under the Securities Act or pursuant to exemptions from the registration requirements of the Securities Act. Broadband does not have any agreement or understanding, directly or indirectly, with any person regarding the sale or distribution of the Cablecom Holdings Shares or any common stock of China Cablecom or Jaguar, except this Agreement. Broadband understands that the Cablecom Holdings Shares will, when issued, be “restricted securities” within the meaning of Rule 144 under the Securities Act and that, in connection with the receipt of any Cablecom Holdings Shares, it must bear the economic risk of an investment in Jaguar indefinitely, unless the Cablecom Holdings Shares (or securities issued in exchange therefor or in lieu thereof) are registered pursuant to the Securities Act and any applicable state securities or blue sky laws or an exemption from such registration is available.

 

(b)  Broadband understands that the Cablecom Holdings Shares are to be transferred to Broadband hereunder in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws, and that Ng is relying upon the truth and accuracy of, and Broadband’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Broadband set forth herein in order to determine the availability of such exemptions and the eligibility of Broadband to acquire the Cablecom Holdings Shares.

 

(c)  Broadband understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement in respect of the Cablecom Holdings Shares.

 

(d)  Broadband’s consultants and management have carefully reviewed the registration statement on Form S-4 (the “Registration Statement”) filed by Cablecom Holdings with the SEC for the registration of certain shares of common stock thereof, and Broadband understands that the Registration Statement has not been approved or disapproved (nor has the accuracy or adequacy of the information set forth therein been passed upon) by the SEC or any state securities commission. Broadband further acknowledges that no assurances have been or can be given that the Proposed Merger will be consummated or, if it does occur, that it will be on terms similar to those contemplated by the Registration Statement.

 

(e)  Broadband acknowledges that its consultants and management have had the opportunity to ask questions of and receive answers from China Cablecom and Jaguar concerning the business and financial condition of China Cablecom and all of such questions have been answered to the satisfaction of such Parties. Broadband has had an opportunity to obtain any additional information from Jaguar, Cablecom Holdings and China Cablecom that Broadband deemed necessary or appropriate for deciding whether to acquire the Cablecom Holdings Shares. Broadband further acknowledges that, except as expressly set forth herein, no other representations or warranties, oral or written, have been made by Ng, Pu, China Cablecom, Cablecom Holdings, Jaguar or Chardan or any agent, employee or affiliate thereof, and in entering into the transactions, Broadband is not relying upon any information other than that contained in the results of independent investigation by Broadband.

 

(f)  Broadband represents that it is an “accredited investor” as such term is defined in Rule 501 promulgated under the Securities Act.

 

 

5.  General Releases.

 

(a)  Company and Investor Releases. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, including without limitation the mutual promises set forth in this Agreement, the Company and each member of the Investor Group, for itself and themselves, its and their parents, affiliates, subsidiaries, divisions, groups and past and present officers, directors, employees, agents, representatives, attorneys, accountants, auditors, consultants, administrators, beneficiaries, predecessors, successors and assigns (collectively, “Company Release Parties”) and any person or entity claiming by or through any of the Company Release Parties (collectively with the Company Release Parties, the “Broadband Release Parties”) hereby RELEASE AND DISCHARGE Ng, Pu, China Cablecom, Jaguar, Cablecom Holdings, Chardan, and their parents, affiliates, subsidiaries and past and present officers, directors, employees, agents, representatives, attorneys, accountants, auditors, consultants, successors and assigns in any capacity whatsoever (collectively, “Cablecom Release Parties”) of and from all actions, causes of action, suits, debts, dues, sums of money, claims for breaches of contract, claims for breaches of fiduciary duties or conflicts of interest, tortious interference, claims of entitlement to securities, claims for violations of securities laws or regulations, compensation, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages (compensatory, consequential, liquidated, special, punitive or otherwise), judgments, extents, executions, claims, and demands (including attorneys’ fees and costs) of any nature whatsoever, in law, admiralty or equity, against the Cablecom Release Parties that the Broadband Release Parties ever had, now have or hereafter can, shall or may have, whether known or unknown, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this General Release, provided only that nothing herein shall release or otherwise affect the Cablecom Release Parties’ obligations under this Agreement.

 

(b)  Executive Releases. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, including without limitation the mutual promises set forth in this Agreement, Ng and Pu hereby RELEASE AND DISCHARGE the Broadband Release Parties of and from all actions, causes of action, suits, debts, dues, sums of money, claims for breaches of contract, claims for breaches of fiduciary duties or conflicts of interest, tortious interference, claims of entitlement to securities, claims for violations of securities laws or regulations, compensation, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages (compensatory, consequential, liquidated, special, punitive or otherwise), judgments, extents, executions, claims, and demands (including attorneys’ fees and costs) of any nature whatsoever, in law, admiralty or equity, against the Broadband Release Parties that Ng and Pu ever had, now have or hereafter can, shall or may have, whether known or unknown, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this General Release, provided only that nothing herein shall release or otherwise affect the Broadband Release Parties’ obligations under this Agreement or the Company’s obligations to the Executives under the Executive Employment Agreements as modified by the Executive Employment Agreement Amendments (it being understood by Ng that he is relinquishing and waiving any right to base salary from the Company in respect of all periods prior to the date hereof).

 

(c)  Jaguar/Chardan Releases. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, including without limitation the mutual promises set forth in this Agreement, the Jaguar Parties, for themselves, their parents, affiliates, subsidiaries, divisions, groups and past and present officers, directors, employees, agents, representatives, attorneys, accountants, auditors, consultants, administrators, beneficiaries, predecessors, successors and assigns (collectively, the “Jaguar Release Parties”) hereby RELEASE AND DISCHARGE each of the Broadband Release Parties (excluding Ng and Pu) of and from all actions, causes of action, suits, debts, dues, sums of money, claims for breaches of contract, claims for breaches of fiduciary duties or conflicts of interest, tortious interference, claims of entitlement to securities, claims for violations of securities laws or regulations, compensation, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages (compensatory, consequential, liquidated, special, punitive or otherwise), judgments, extents, executions, claims, and demands (including attorneys’ fees and costs) of any nature whatsoever, in law, admiralty or equity, against the Broadband Release Parties (excluding Ng and Pu) that the Jaguar Release Parties ever had, now have or hereafter can, shall or may have, whether known or unknown, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this General Release, provided only that nothing herein shall release or otherwise affect any Broadband Release Parties’ obligations under this Agreement.

 

(d)  Each person or entity settling any claims, or for whom any claims are settled, hereunder (collectively, the “Settling Parties”) further agree not to institute, instigate, urge, support, encourage, voluntarily participate in or profit from any lawsuit, complaint or other action or proceeding of any kind relating to any matter to which these General Releases pertain. Notwithstanding the foregoing, nothing herein shall be deemed to prohibit any party from providing, after taking reasonable measures to ensure the confidentiality of information provided, information or explanations to third party regulatory agencies seeking such information in response to comment letters or inquiries, or in response to civil or administrative subpoenas or court order, or from discussing the provisions hereof and factual circumstances surrounding the events leading to this Agreement in disclosure document filings made with the Securities and Exchange Commission from time to time.

 

(e)  These General Releases may not be changed orally.

 

(f)  With respect to any and all released claims, the Settling Parties stipulate and agree that they expressly waive the provisions, rights and benefits of California Civil Code §1542, which provides:

 

 

 

The Settling Parties expressly waive any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to California Civil Code §1542. The Settling Parties may hereafter discover facts in addition to or different from those which he, she or it now knows or believes to be true with respect to the subject matter of the released claims, but the Settling Parties have fully, finally, and forever settled and released any and all released claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. The Settling Parties acknowledge that the foregoing waiver was separately bargained for and a key element of the settlement of which these releases are a part.

 

6.  Reliance on Independent Legal Advice. Each Party represents and warrants to the other Parties: (a) that it has received advice from his or its own respective, independent legal counsel, or has had the opportunity to be represented by independent legal counsel, prior to its execution of this Agreement, (b) that the legal nature, ramifications and effect of this Agreement have been explained to it by its respective counsel; (c) that it fully understands the terms and provisions of this Agreement and the nature and effect thereof; (d) that it is relying solely on the advice of its own legal counsel in executing this Agreement; (e) that it has not relied upon any representation or statement of any other Party or counsel for any other Party not contained in this Agreement; (f) that it has carefully read this Agreement, knows the contents thereof, and is executing the same freely and voluntarily; and (g) that, as to each of the Company Parties, it is aware that it or his respective attorneys may hereafter discover facts different from or in addition to the facts that they now know or believe to be true with respect to the subject matter hereof, but that its intention is to fully and finally release its respective releasees to the full extent of the releases contained in this Agreement.

 

7.  Investor Releases. As soon as practicable following the execution and delivery of this Agreement, the Company Parties shall deliver to Ng a release agreement in the form attached hereto as Annex G (the “Investor Release”) from each of the Investor Release Parties (other than those Investor Release Parties that are not holders of warrants issued by the Company (and are so identified on Annex A), which Investor Release Parties shall execute releases, in form and substance satisfactory to Ng, containing release language substantially similar to the Investor Releases). Any description of this Settlement Agreement and the circumstances relating hereto that is sent to the Investor Release Parties in connection with the Investor Release shall be in form and substance satisfactory to Ng and his counsel.

 

8.  Private Placement. It is contemplated that, concurrently with the execution and delivery of this Agreement, a private placement of convertible notes and warrants of Broadband, in which Chardan is serving as the placement agent, will be consummated, with the gross proceeds thereof of approximately $4,800,000 (the “Chardan Private Placement”). Ng will, concurrently herewith, sell and assign, subject to any applicable lock-up restrictions, to the investors in the Chardan Private Placement an aggregate of 7,017,814 shares of China Broadband, Inc. common stock currently owned by him or entities under his control in consideration of $7,017.81 in the aggregate, provided that Ng shall have heretofore received duly executed investor representation letters from such investors in form and substance satisfactory to Ng. The Company shall not be liable for or in any way held accountable for the foregoing transfers by Ng and it is intended that Chardan and each investor be solely responsible for their own tax liabilities incurred, if any, as a result of the foregoing transfers.

 

9.  Broadband Warrants. Subject to the determination by Broadband’s Board of Directors and the Special Committee that the economic impact of the following warrant term extensions are acceptable to Broadband, (i) the exercise periods for all 4,000,000 warrants (the “Investor Warrants”) exercisable at $2.00 per share, issued to the Investor Release Parties shall, upon receipt by Ng of Investor Releases from such parties, be extended by letter agreement by Broadband, to five years from the date of the closing of the Chardan Private Placement; and (ii) the holders of 500,000 warrants exercisable at $.60 per share issued to BCGU (the “BCGU Warrants”), 640,000 warrants exercisable at $.60 per share issued to WestPark Capital, Inc. (the “WestPark Warrants”), and 3,974,800 warrants exercisable at $.60 per share originally issued to Maxim (the “Maxim Warrants” and, collectively with the BCGU Warrants and WestPark Warrants, the “Consulting Warrants” and collectively with the Investor Warrants, the “Warrants”), shall, upon the last to occur of (a) execution of this Agreement by all Parties named on the signature page hereto, (b) completion of the Chardan Private Placement and (c) receipt by Ng of Investor Releases from such parties, each receive a scrip warrant (collectively, the “Scrip Warrants”) entitling such holder at any time commencing the time of expiration of their unexercised Consulting Warrants (the shares issuable upon exercise of Consulting Warrants at the time of expiration being herein referred to as the “Remaining Warrant Shares”) and continuing for a period ending on the fifth anniversary of the closing of the Chardan Private Placement, to acquire such number of shares of Common Stock as equals the Remaining Warrant Shares, on the same terms (as modified hereby) as apply in respect of their respective Consulting Warrants. Each Warrant holder, and each holder of Scrip Warrants, shall be responsible for his or its own tax liabilities as a result of the foregoing adjustments.

 

 

10.  Miscellaneous Provisions.

 

(a)  This Agreement sets forth the entire agreement among the Parties with respect to its subject matter and supersedes all prior agreements and understandings among the parties with respect to such subject matter.

(b)  This Agreement may not be changed, modified or amended except by a written instrument signed by the Party to be charged with such change, modification or amendment.

 

(c)  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part hereof.

 

(d)  This Agreement shall be binding on the Parties hereto and their respective predecessors, successors, assigns, parents, subsidiaries, affiliates, divisions, groups and present and former officers, directors, securityholders, and employees.

 

(e)  Unless the Company instructs otherwise in writing, all notices to the Company regarding this Agreement shall be delivered to:

 

 

 

Unless Cherner instructs otherwise in writing, all notices to Cherner regarding this Agreement shall be delivered to:

 

 

Unless Maxim instructs otherwise in writing, all notices to Maxim regarding this Agreement shall be delivered to:

 

 

Unless Baum instructs otherwise in writing, all notices to Baum regarding this Agreement shall be delivered to:

 

Mark L. Baum, Esq.

2038 Corte del Nogal, Suite 110

Carlsbad, California 92011

 

 

Unless Lev instructs otherwise in writing, all notices to Lev and Wellfleet regarding this Agreement shall be delivered to:

 

 

Unless Pu instructs otherwise in writing, all notices to Pu regarding this Agreement shall be delivered to:

 

 

Unless Ng instructs otherwise in writing, all notices to Ng regarding this Agreement shall be delivered to:

 

 

Unless Chardan instructs otherwise in writing, all notices to Jaguar and Chardan regarding this Agreement shall be delivered to:

 

 

	and
Chardan Capital Markets, LLC 17 State Street, Suite 1600 New York, New York 10004	With a copy to:	Grushko & Mittman, P.C. 551 Fifth Avenue, Suite 1601 New York, NY 10176 Attention: Edward M. Grushko, Esq.

 

 

(f)  Unless otherwise indicated or agreed to in writing by the Party to receive the delivery of any document, as used in this Agreement “delivery” shall mean transmission by facsimile or electronic mail (including portable document format) and confirmed by delivery via Federal Express or other recognized overnight delivery service.

 

(g)  The Parties are entering into this Agreement solely in order to avoid expense, inconvenience, risk and delay and to permit the continued operation of the affairs of such Party unhindered by expensive litigation and by distraction and diversion of himself and itself, and thereby to put to rest all potential controversies. This Agreement and each of its provisions, and the settlement provided for herein, whether or not consummated, and any negotiations, proceedings or agreements relating to this Agreement, or any matter arising in connection with such negotiations, proceedings or agreements are not and shall not in any event be: (i) construed as, offered in evidence as, received in evidence as, and/or deemed to be evidence of a presumption, concession or an admission by any Party of the truth of any fact or the validity of any claim that has been, or could have been, asserted against him or it, or of the deficiency of any defense that has been, could have been, or in the future might be asserted in any litigation, or of any liability, fault, wrongdoing or otherwise of any Party; (ii) construed as, offered in evidence as, received in evidence as, and/or deemed to be evidence of a presumption, concession or an admission of any fault, breach of duty, wrongful act or misrepresentation or omission in any statement or written document by any Party; or (iii) construed by anyone for any purpose whatsoever as evidence of a presumption, concession or admission of any liability, fault or wrongdoing on the part of any Party.

 

(h)  This Agreement shall be deemed to have been drafted jointly by the Parties.

 

(i)  It is acknowledged by the Company Parties that the provisions of Sections 5 and 8 hereof will inure to the benefit of Chardan and its successors and assigns.

 

(j)  Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender and the neuter, (ii) words (including terms defined herein) using the singular or plural number also include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement as a whole and not to any particular section, paragraph or other subdivision, and (iv) the term “section” or “paragraph” or other subdivision refer to the specified section or other subdivision of the body of this Agreement.

 

(k)  An amount of $8,000 has been paid by Broadband to counsel for Wellfleet and Lev in payment of its fees and expenses in connection with the contemplated settlement agreement and the related transactions. Broadband acknowledges that it shall pay any additional reasonable fees and expenses actually incurred in connection therewith (up to $10,000 in the aggregate, inclusive of the abovementioned $8,000 amount) and that all reasonable fees and expenses incurred by Wellfleet and/or Lev in securing the Investor Releases shall be borne by the Company. Other than such fees and expenses, each Party shall be responsible for its or his own legal and other expenses in negotiating and concluding the proposed settlement agreement and related transactions, and such Party’s own tax liabilities, it being acknowledged that no further claims in respect of past expense reimbursements shall be made.

 

 

11.  Remedies for Breach.

 

(a)  In the event that any Party to this Agreement believes that a breach of the Agreement has occurred, that Party shall deliver written notice, in accordance with the terms of this Agreement, of the alleged breach to the other Parties to this Agreement.

 

(b)  Any subsequent action to enforce the terms of this Agreement may be brought in any State or Federal court located in the County of New York, State of New York, and, if any such action is brought in a State or Federal Court located in the County of New York, State of New York, no Party shall dispute that such court is the proper venue for the action or that the Party is subject to personal jurisdiction in such court for purposes of the action.

(c)  Notwithstanding any other provision contained herein, the Parties hereto hereby waive any and all right, title, interest or claim of any kind in or to any distribution of the Trust Account (as defined in the Registration Statement filed in connection with the initial public offering of Jaguar’s units) and any remaining net assets of Jaguar as a result of such liquidation with respect to any amounts due under this Agreement and will not seek recourse against the Trust Account for any reason whatsoever. The foregoing section is not for the benefit of any third party beneficiaries.

 

12.  Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of New York, without regard to the conflicts of law principles of such State.

 

13.  Further Assurances. Each Party hereto, at the reasonable request of another Party hereto, shall execute and deliver such other instruments and do and perform such other acts and things as may be reasonably necessary for effecting completely the consummation of this Agreement and the transactions contemplated hereby.

[Signature Pages Follow]

 

IN WITNESS WHEREOF, the Parties have duly authorized the execution and delivery of this Agreement as of the date written below.

 

Dated as of January 11, 2008 

 

 

 

NAME	NUMBER OF BROADBAND SHARES
ASPEN HILL FINANCIAL INC. c/o Jay Weinberg	23,809
JOHN MCELVEEN	23,809
PHOENIX CAPITAL	328,696
THE HOWARD LIVING TRUST   dated December 14, 2005 c/o Mark W. Howard	95,238
THOMAS TZIKAS	95,238
TOTAL:	566,790

 

 

[Employment Agreement Amendment - Clive Ng]

 

[Employment Agreement Amendment - Pu Yue]

 

 

 

[Form of Release Agreement]