SETTLEMENT AGREEMENT AND GENERAL
RELEASE
This
Settlement Agreement and Release (the “Agreement”)
is made as of this 15
th day
of August 2007 (the “Effective Date”) by and between
BERRY-SHINO SECURITIES, INC. (“BSSI”), an Arizona
corporation having its principal place of business at 15100 N.
78
th Way,
Suite 100, Scottsdale, Arizona 85260, and its affiliates,
subsidiaries and parents, on the one hand, and NEW DRAGON ASIA
CORPORATION (“NDAC”), a corporation organized and
existing under the laws of Florida having a principal place of
business at 2808 International Chamber of Commerce Tower, Fuhua
Three Road, Shenzhen, China, and its affiliates, subsidiaries and
parents, on the other hand (each of the foregoing, along with their
successors and assigns, a “Party” and collectively, the
“Parties”).
WHEREAS,
on or about July 16, 2003 and March 18, 2004, BSSI alleges it
entered into private placement agreements with NDAC (the
“Private Placement Agreements”), pursuant to which
BSSI was to render services as NDAC’s private placement
agent;
WHEREAS,
BSSI alleges it is entitled to certain warrants
(“Warrants”) to purchase Class A Common Stock,
$.0001 par value (“Common Stock”), as a portion of
its placement agency fee pursuant to the terms of the Private
Placement Agreements;
WHEREAS,
NDAC disputes BSSI’s claims concerning entitlement to
the Warrants and the Parties hereto desire to resolve this
dispute (the “Dispute”) without litigation and its
attendant costs and without admission of liability by
NDAC;
NOW,
THEREFORE, in consideration of the mutual covenants and
promises hereinafter made, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
mutually acknowledged, the Parties agree as
follows:
1.
Within thirty (30) days of the execution and delivery of this
Agreement by all Parties, NDAC shall issue to BSSI an aggregate of
275,000 restricted shares of Class A Common Stock of NDAC (the
“Restricted Shares”). When issued, the Restricted
Shares will be fully paid and non-assessable and have been issued
pursuant to an exemption from registration under the Securities Act
of 1933, as amended (the “Securities Act”). The
certificate evidencing the Restricted Shares shall bear a
restrictive legend, prohibiting transfer except in accordance with
applicable security laws, and stock transfer instructions should be
maintained with respect thereto. The certificates shall bear a
legend:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER
SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXEPT (1) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAW OR (2) PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH
CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURTIES
LAWS.
BSSI
shall be permitted to transfer and/or sell the Restricted
Stock as permitted under Rule 144 or another exemption from
registration under the Securities Act.
2.
BSSI, on behalf of itself and
