Attached files
| file | filename |
|---|---|
| EX-10.1 - Patient Safety Technologies, Inc | v206994_ex10-1.htm |
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): December 30, 2010
PATIENT
SAFETY TECHNOLOGIES, INC.
(Exact
Name of Registrant as Specified in its Charter)
|
DELAWARE
|
001-09727
|
13-3419202
|
||
|
(State
or Other Jurisdiction
|
(Commission
|
(IRS
Employer
|
||
|
of
Incorporation)
|
|
File
Number)
|
|
Identification
No.)
|
2
VENTURE PLAZA, SUITE 350, IRVINE, CALIFORNIA 92618
(Address
of Principal Executive Offices) (Zip Code)
(949)
387-2277
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry Into a Material Definitive Agreement.
On
December 30, 2010, Patient Safety Technologies, Inc. (“we,” or the “Company”) entered
into a Settlement Agreement, dated as of December 27, 2010 and effective as
provided below (the “Agreement”).
The parties to the Agreement other than the Company are Ault Glazer Capital
Partners, LLC (“AGCP”), Zealous Asset
Management, LLC (“ZAM”) and certain of
its affiliates, Milton “Todd” Ault III and a creditor (and such creditor’s
affiliate) to AGCP who also is a shareholder of the Company (the “AGCP
Creditor”). The former relationship of Mr. Ault and AGCP to the
Company have been previously disclosed in the Company’s public
filings.
The
Agreement relates to (i) our previously disclosed Amendment and Early
Conversion agreement, dated September 5, 2008 (the “Note Agreement”),
between us and AGCP and the related and previously disclosed Secured Convertible
Promissory Note dated on or about August 10, 2008 (the “Note”) and a related
and previously disclosed Advancement Agreement between the same parties dated
September 12, 2008 (together with the Note and Note Agreement, the “Note Documents”),
under which there was an original principal balance of $2,530,558.40 and which
provided, subject to certain conditions, that the entire principal balance owing
under the Note would be converted into 1,300,000 shares of our common stock and
other consideration, all but 500,000 of which shares of our common stock (such
500,000 shares, the “Shares”), were
previously delivered to AGCP, (ii) a judgment obtained against AGCP by AGCP
Creditor in a separate lawsuit, which lawsuit is completely unrelated to the
Company, with respect to which, as the Company previously disclosed, AGCP
Creditor procured a Writ of Execution from the United States District Court,
Central District of California, (the “Writ”) and a Notice
of Levy (the “Levy”) to levy upon
the Company against all stock of the Company that the Company owed to AGCP; and
(iii) a previously disclosed case currently pending before the Superior Court of
California, County of Orange, Central Justice Center, entitled “Zealous Asset
Management, LLC v. Patient Safety Technologies, et. al”, Case No. 00424948 (the
“Action”)
concerning, among other things, the Note Documents, as well as 2,600 shares of
our Series A Preferred Stock (the “Series A Preferred”)
and certain dividends thereon.
In broad
terms the Agreement provides that the Company will deliver to AGCP Creditor the
Shares that, as the Company has previously disclosed, it conditionally owed to
AGCP, and AGCP dismisses the Action as against the Company and, upon receiving
the Shares, AGCP Creditor terminates the Writ and Levy and agrees that its
judgment against AGCP is satisfied. In addition, the Note Documents and
the liabilities thereunder are deemed satisfied and extinguished. As a
result of the fact that the Company was carrying a liability in connection with
the Note Documents of approximately $1.42 million and the fair value of the
Shares being less than the face amount of such liability, the Company expects to
record a non-cash gain as a result of the Agreement.
No
liability was admitted by the Company in connection with the
Agreement.
Generally,
the material terms of the Agreement become effective (the “Effective Date”) when
the Company delivers the Shares to AGCP Creditor and makes a cash payment of
sixteen thousand dollars ($16,000) to counsel for AGCP. Shortly after the
Effective Date, AGCP will dismiss the causes of action in the Action related to
the Note Documents and grant certain releases and covenants not to
sue. In addition, the causes of action in the Action related to
the Series A Preferred will be dismissed when the Company either (i) interpleads
$9,100 of dividends currently due on such shares (plus any other dividends that
may become due prior to filing such interpleader action) or (ii) an agreement is
reached as to such shares between various persons other than the Company as to
such dividends and the disposition of the Series A Preferred. The
Agreement also contains provision pertaining to future dividends that may be
paid on the Series A Preferred.
As of
December 31, 2010, the $16,000 in cash and the Shares have been delivered as
required by the Agreement. The Company expects to interplead the
dividends within the time frame required by the Agreement unless the parties to
the dispute regarding the Series A Preferred reach a separate agreement
first. Accordingly, the material terms of the Agreement are,
and/or will shortly be, effective.
Generally,
upon the Effective Date, ZAM, AGCP, Mr. Ault and certain related parties grant
the Company and its related persons general releases and covenants not to sue
regarding the Action and all other claims, except that the causes of action in
the Action regarding the Series A Preferred are only released when the
interpleader (or alternative agreement) is effected as discussed
above. The Company also grants releases and covenants not to sue to
the same parties in connection with certain provisions in the Note Documents,
which provide for payments of amounts to the Company under certain
circumstances, which amounts the Company does not consider to be of material
value.
The
Agreement also contains customary representations and warranties, remedy
provisions (including liquidated damages under certain circumstances) and other
provisions typical of settlement and release agreements.
The
Agreement also settles various matters, subject to the terms and conditions of
the Agreement, between parties to the Agreement other than the Company, which
terms are not summarized herein because they are not related to or do not affect
the Agreement as to, the Company.
The
foregoing description of the Agreement does not purport to be complete and is
qualified in its entirety by the full text of such Agreement, filed as an
exhibit to this Current Report on Form 8-K and incorporated herein by
reference.
Item
9.01. Financial Statements and Exhibits.
|
|
(d)
|
Exhibits
|
|
|
10.1
|
Settlement Agreement dated as of
December 27, 2010 between Patient Safety Technologies, Inc. and
certain other parties.
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
Date:
December 31, 2010
|
Patient
Safety Technologies, Inc.
|
|
|
By:
|
/s/ Brian E. Stewart
|
|
|
Brian
E. Stewart
|
||
|
President
and Chief Executive
Officer
|
||
EXHIBIT
INDEX
|
10.1
|
Settlement
Agreement dated as of December 27, 2010 between Patient Safety
Technologies, Inc. and certain other
parties.
|