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| 8-K - Patient Safety Technologies, Inc | v206994_8k.htm |
SETTLEMENT
AGREEMENT
This
Settlement Agreement (the “Agreement”) is made
and entered into as of December 27, 2010, by and among CoreStream Energy, Inc.,
a Nevada corporation (formerly Zealous, Inc.), and its predecessors, affiliates,
successors and subsidiaries (collectively “CoreStream”), Angel
Acquisition Corp., a Nevada corporation, Zealous Asset Management, LLC, a
Delaware limited liability company (“ZAM”), Zealous
Partners, LLC, a Delaware limited liability company (“ZP”), Ault Glazer
Capital Partners, LLC, a Delaware limited liability company (“AGCP”), Zealous
Interactive, Inc., Health and Wellness Partners, Inc., Zealous Capital Group,
Inc., Zealous Trading Group, Inc., Zealous Capital Markets, LLC, ASNI-II, Inc.,
Zealous ATS, LLC, Zealous Real Estate Partners, LLC, Zealous Real Estate
Consulting, LLC, Ault Glazer & Co., Inc., a Colorado corporation, Zealous
Income Partners, L.P., Milton “Todd” Ault, III and all of their respective
Affiliates, subsidiaries, predecessors, and assigns (collectively,
and jointly and severally (and for added emphasis, each and every instance of
this defined term includes, without limitation, Milton “Todd” Ault III,
CoreStream and AGCP) the “Zealous/Ault
Parties”), Patient Safety Technologies, Inc. (“PST”), Bodnar Capital
Management, LLC, a Delaware limited liability company (“BCM) and Steven
Bodnar (“Bodnar”) (the
Zealous/Ault Parties, PST, BCM and Bodnar, are each referred to herein as a
“Party” and
collectively, as the “Parties”).
RECITALS
A. WHEREAS,
pursuant to an Amendment and Early Conversion of Secured Convertible Promissory
Note, dated September 5, 2008, between AGCP and PST (the “Amendment of Note”),
PST and AGCP amended a Secured Convertible Promissory Note dated on or about
August 10, 2008 (the “Note”), having an
original principal balance of $2,530,558.40 and made other agreements which
provided, subject to certain conditions, that the entire principal balance owing
under the Note would be converted into 1,300,000 shares of PST common stock and
other consideration. Bodnar and BCM have no knowledge of these
facts.
B
WHEREAS, pursuant to an Agreement for the Advancement of Common Stock Prior to
Close of the Amendment and Early Conversion of Secured Convertible Promissory
Note Dated September 5, 2008, dated September 12, 2008 (the “Advancement
Agreement”), PST and AGCP agreed that PST would advance 300,000 shares of
PST common stock to AGCP on the understanding that the conversion of the Note
into PST common stock contemplated by the Amendment of Note would occur by
September 19, 2008. Bodnar has no knowledge of these
facts.
C.
WHEREAS, PST advanced to AGCP the 300,000 shares contemplated by the Advancement
Agreement plus, subsequently, an additional 500,000 shares of PST common stock,
such that the total number of shares advanced by PST prior to the date hereof in
connection with the Amendment of Note and the Advancement Agreement was 800,000
(300,000 +500,000), with a remaining maximum balance due AGCP, subject to the
conditions in the Amendment of Note, being equal to 500,000 shares of PST common
stock (such 500,000 shares, the “Shares”). Bodnar
and BCM have no knowledge of these facts.
Settlement
Agreement, dated December 27, 2010
Page 1 of
21
D. WHEREAS,
in an unrelated matter, BCM become the judgment creditor of amongst
others, AGCP, by virtue of a judgment (the “BCM First Judgment”),
dated on November 19, 2008, rendered in favor of BCM against ZAM, AGCP and
Milton “Todd” Ault, III, in the action known as BODNAR CAPITAL MANAGEMENT,
LLC v. AULT GLAZER CAPITAL PARTNERS LLC, ZEALOUS ASSET MANAGEMENT, LLC and
MILTON “TODD” AULT, III, Civ. No: 3:08-CV-00199 (JBA) filed in the United
States District Court of Connecticut ("BCM First Action"), in the amount of
$350,000, which, after interest and attorneys fees assessed at the time of
entry, resulted in a total judgment as entered of $371,885.96 (the “BCM First Judgment
Amount”).
E.
The BCM First Judgment Amount continues to accrue interest until satisfied and
is subject to increase to account for BCM's attorneys' fees incurred in
collection.
F.
WHEREAS, BCM procured a Writ of Execution from the United States District Court,
Central District of California, Case No. CV-09-00144 ABC-(JCx) (the “Writ”) instructing
the United States Marshals Service, as levying officer, pursuant to a Notice of
Levy served on PST on October 26, 2010 (the “Levy”) to levy upon
PST “all stock of Patient Safety Technologies owed to the judgment debtor
[AGCP]” in order to satisfy an amount equal to the BCM First Judgment Amount
plus a levy fee
of $45.00 plus
daily interest of $101.88 (including all daily interest through the Effective
Date (as defined below), the “Total BCM First Judgment
Amount”).
G.
WHEREAS, there is a 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 Amendment Agreement and the Advancement, as well as
2,600 shares of PST’s Series A Preferred Stock (the “Series A
Preferred”).
H.
WHEREAS, subject to and consistent with the terms of this Agreement, BCM and the
Zealous/Ault Parties wish to have the Total BCM First Judgment Amount satisfied
by the issuance and delivery to BCM of the Shares that PST conditionally owes to
AGCP, and PST is willing to issue and deliver such Shares to BCM and provide
other consideration to AGCP in consideration of receiving a dismissal and
release of the Action (Causes of action 3 through 10 of the Action) and its
underlying claims and certain other covenants and agreements
herein.
I. WHEREAS,
PST and BCM deny ZAM’s allegations in the Action and nothing contained in this
Agreement shall be construed as an admission by any party of any liability of
any kind to any other party or any other person.
J.
WHEREAS, although some of the Zealous/Ault Parties might have ceased to exist
under applicable state law, lack good standing or owe taxes in order to be
reinstated (the “Suspended Zealous
Entities”), the other Zealous/Ault Parties (the “Non-Suspended Zealous/Ault
Parties”) intend to assume responsibility for any such Suspended Zealous
Entity’s obligations hereunder on the terms and conditions set forth herein,
with the goal of making this Agreement effective and binding to the maximum
possible extent.
Settlement
Agreement, dated December 27, 2010
Page 2 of
21
K.
WHEREAS, the Parties hereto agree and acknowledge that because it may be
difficult to know for certain whether each and every claim being released herein
is owned by each and every party purporting to release such claim, it is
therefore a material inducement to each of them to entering this Agreement that
the releases and covenants herein be granted by all of the Parties signatories
hereto, and each Party hereto agrees that it benefits directly and indirectly
from the structure of this Agreement and the parties and claims affected
hereby.
NOW
THEREFORE, the Parties adopt the foregoing Recitals as a statement of their
intent and, in consideration of the mutual promises and agreements set forth
below, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree to the
following:
1.
Effective
Date. Upon execution of this Agreement by all Parties hereto,
this Agreement shall become effective on the date of the Agreement recited above
(the “Effective
Date”); provided, however, as
provided in Section 3.1.1 and Section 3.2.1 below, certain provisions of this
Agreement shall only become legally binding upon performance of conditions
specified herein.
2.
Stock and Cash
Consideration and Delivery.
2.1 Within
ten (10) business days after the Effective Date, PST shall issue the Shares to
BCM, in the name and to the address, and with the shareholder information set
forth on Schedule 1
hereto. BCM shall promptly acknowledge in writing receipt of the
certificate representing the Shares to the other Parties. BCM
understands that the certificate representing the Shares are, under the SEC’s
Regulation D, considered “restricted securities” and shall bear a restrictive
legend in the form of Schedule
2 hereto. PST at its sole cost and expense, will be required
to cooperate and assist BCM, to a commercially reasonable extent, with BCM's
efforts to remove the restrictions and any restrictive legend (the “Legend”)
from the Shares, such that they are freely tradable after complying with
applicable law regarding restricted stock transfers. PST will be
required to so act within 10 days of each request by BCM in its efforts to
remove the restrictions and the Legend from the Shares, which would include for
example only and without limitation, executing and/or countersigning any
documents or Schedules reasonably required by BCM in its sole discretion in
connection with BCM's efforts to remove the restrictions and the Legend from the
Shares, such as for example only, signing a form sent to PST by or on behalf of
BCM and PST returning it to BCM within 10 days of PST's receipt thereof from BCM
or its representatives or providing legal opinions to its transfer agent in
compliance with any applicable SEC rules or regulations for purposes of removing
the Legends or instructing PST's transfer agent to remove the
Legend. Notwithstanding anything in the paragraph to the contrary,
BCM shall also reasonably cooperate with PST and provide customary paperwork to
PST in connection with a proposed transfer, and PST shall not be required to do
more than what is customarily done by public companies in connection with a
request to transfer restricted stock.
Settlement
Agreement, dated December 27, 2010
Page 3 of
21
Further, in connection with a proposed
sale of the Shares, PST will promptly, i.e, within 10 days of being requested by
BCM, instruct its transfer agent to re-issue the Shares without any
restrictive legend or the Legend, including, if necessary, procuring a customary
legal opinion to the transfer agent upon the following being satisfied: (i) PST
has received a representation letter from BCM that it has held and owned the
Shares (and has not hedged such ownership) for at least 6 months
after PST delivers the Shares to BCM, and that BCM is not an
affiliate of PST (and has not been an affiliate of PST in the 3 months before
the date of the proposed sale) and (ii) adequate current public information
about PST is available. "Affiliate" and "current public
information" being defined within the meaning of applicable law. If
applicable law or any of the facts and conditions contemplated in this paragraph
change between now and the date of BCM's proposed sale, then PST, at its sole
cost and expense will cooperate and assist BCM, to a commercially reasonable
extent, to take all necessary action (subject to the last sentence of the
preceding paragraph and compliance with applicable law regarding restricted
stock transfers) for removal of the restrictive Legend from the
Shares." PST and BCM agree that the applicable 6 month holding period
commences on the date that PST sends to the shares to BCM.
2.2 Upon
receipt of the Shares by BCM, BCM shall acknowledge satisfaction of the BCM
First Judgment described in paragraph D above and execute and deliver to AGCP
and the other defendants named in the BCM First Action, a Satisfaction of
Judgment in the usual form under the Federal Rules of Civil
Procedure.
2.3 Within
ten (10) business days after the Effective Date, PST shall pay Pacific Premier
Law Group (“PPLG”), counsel for
AGCP and the Zealous/Ault Parties, entirely for the account and benefit of AGCP
in payment of amounts AGCP owes to PPLG, the total sum of sixteen thousand
dollars ($16,000) (the “Cash”) by causing
said amount to be wired to the account set forth on Schedule 3
hereto. AGCP and PPLG shall promptly acknowledge receipt of such
funds to the other Parties.
3. Effectiveness of Releases;
Dismissal of Causes of Actions. As further provided below,
certain releases and agreements provided for herein will become effective, upon
satisfaction of certain conditions, in connection with Causes of Action 3
through 10 of the Action, inclusive (the “Note Causes of
Action”) and certain other releases and agreement provided for herein
will become effective, upon satisfaction of certain other conditions, in
connection with Causes of Action 1 and 2 of the Action (the “Series A Causes of
Action”), as follows:
3.1 Note Causes of Action;
Delivery of Shares and Cash.
3.1.1 At the
moment that PST has delivered the Shares to BCM pursuant to Section 2.1 and the
Cash to PPLG pursuant to Section 2.2 (the “Note Conditions”),
all of the releases and agreements this Agreement that are identified as
becoming effective “upon satisfaction of the Note Conditions” (or comparable
terminology) shall become effective, valid, binding, enforceable and
non-revocable, even if the Court (as defined below) rejects the stipulations or
orders of dismissal contemplated hereby.
3.1.2 To
further perfect the effectiveness of such releases and agreements, but not as a
condition to the effectiveness thereof, within two (2) business days of ZAM
receiving the Cash and receiving written or email confirmation from or on behalf
of by BCM of its receipt of the certificates representing the Shares, ZAM shall
file a notice of dismissal with the Court in which the Action was filed (the
“Action
Court”): (i) with prejudice, of
PST as to the Note Causes of Action, (ii) without prejudice, of
Louis Glazer and Melanie Glazer, as to Causes of Action 8, 9 and 10 of the
Action, and (iii) with prejudice, of
Steven Bodnar as to Cause of Action 10 of the Action, in each case, without
costs or attorneys’ fees. ZAM shall take any and all other reasonably
necessary actions to cause the dismissal of the Note Causes of Action to be
entered by the Action Court.
Settlement
Agreement, dated December 27, 2010
Page 4 of
21
3.1.3 Regardless
of any failure, breach or default in connection with the Series A Causes of
Action or the Interpleader/Agreement Condition or any release or agreement
related thereto, the releases, covenants and agreements that are identified as
becoming effective “upon satisfaction of the Note Conditions” (or comparable
terminology) shall remain valid, binding and enforceable in accordance with
their terms and conditions and shall not be affected in any way
whatsoever.
3.2 Series A Causes of Action;
Interpleader/Agreement.
3.2.1 At the
moment that either (i) PST files
an Interpleader action with the Los Angeles County Superior Court (the “Interpleader Court”)
within 30 days after the Effective Date (provided, if the
Interpleader Court dismisses or otherwise objects to such action, then an
additional 30 days shall be added in which PST may seek to amend the action to
address the court’s objections or concerns), interpleading with the Interpleader
Court $9,100.00 (currently due) and any other dividends that may become due
prior to filing with the Interpleader Court (the “Interplead Property”)
representing the dividends on 2,600 shares of Series A Preferred allegedly owned
by Zealous Partners, LLC (“ZP”) (pursuant to an
allegedly proper assignment from Zealous Income Partners, LLC) for the quarters
ended June 30, 2010 and the quarter ended September 30, 2010, and naming ZP and
Louis Glazer and such affiliates and related parties as PST deems appropriate as
nominal defendants in such Interpleader action, or (ii) ZP and Louis
Glazer reach written agreement after the date hereof regarding the disposition
of the Series A Preferred and the dividends thereon (an “Ault—Glazer
Agreement”) (clauses (i) or (ii) being referred to as the “Interpleader/ Agreement
Condition”), all of the releases and agreements this Agreement that are
identified as becoming effective “upon satisfaction of the
Interpleader/Agreement Condition” (or comparable terminology) shall become
effective, valid, binding, enforceable and non-revocable. PST shall at all times
reserve the right to interplead the Interplead Property with the Interpleader
Court even if any other Party or Person wishes to pursue, or is pursuing, an
Ault—Glazer Agreement, with the effects and consequences described
herein.
3.2.2 To
further perfect the effectiveness of such releases and covenants not to sue, but
not as a condition to the effectiveness thereof, within two (2) business days
either of ZAM
receiving a copy of the Interpleader Action filed stamped by the Interpleader
Court, receiving a copy of an Ault—Glazer Agreement, ZAM shall file a
stipulation of dismissal with prejudice of PST as to the Series A Causes of
Action, without costs or attorneys’ fees. ZAM shall take any and all
other reasonably necessary actions to cause the dismissal to be entered by the
Action Court. If PST fails to comply with any part of this Section
3.2 the sole consequences are that neither the stipulation of dismissal with
prejudice of PST as to the Series A Causes of Action nor the release and
covenant not to sue with respect to such Series A Causes of Action will become
effective but PST shall not be liable for any damages and all other releases,
covenants not to sue and provisions of this Agreement shall remain valid,
binding and effective in accordance with their terms.
Settlement
Agreement, dated December 27, 2010
Page 5 of
21
3.2.3 During
the 30 (or, as applicable under Section 3.2.1, 60) days in which PST is
permitted to interplead the Interplead Property, ZAM shall forebear from any and
all action in connection with the Series A Causes of Action. If
for any reason the court in the Interpleader Action refuses to accept the case
or the Interplead Property and an Ault—Glazer Agreement has not been reached
during that same period, the Zealous/Ault Parties shall reasonably cooperate
with PST to find an alternative court, or comparable arrangement (including
involving an escrow agent) to substantially approximate the result of the
intended Interpleader Action (an “Alternate
Arrangement”), in which case the consummation of such Alternate
Arrangement shall have the same effect as satisfaction of the
Interpleader/Agreement Condition.
4. Agreements and
Acknowledgments Regarding the Consideration.
4.1 Irrevocably
and automatically upon satisfaction of the Note Conditions:
4.1.1 Each
Zealous/Ault Party (including, without limitation, AGCP), agrees that the
delivery of the Shares to BCM pursuant to this Agreement (i) is pursuant to its
request and is a direct material benefit to AGCP in that it constitutes a
payment to its judgment creditor, BCM and has induced BCM to enter this
Agreement which benefits AGCP, and (ii) constitutes a complete
and irrevocable discharge and extinguishment and repayment in full of
the Note, the Amendment of Note (including the Security Agreement and Guaranty
of Payment referenced therein), the Advancement Agreement (including all
amendments or course of performance related thereto, the “Note Documents”), all
indebtedness represented thereby (including, without limitation, principal,
interest, fees (including attorneys fees and costs of collection), default
penalties, accrued amounts, damages, conversion rights, lost opportunities and
every other kind of consideration, compensation or value (“Indebtedness”))
including any Indebtedness due, owing, allegedly due or owing, arising out of,
in connection with, related to or under, including for any breach or default,
actual or alleged, under the Note Documents, and fully satisfies and terminates
all obligations and conversion privileges arising under the Note Documents, and
that PST has no obligation to issue any Zealous/Ault Party any shares of capital
stock under the Note Documents or otherwise, such obligations being fully
discharged;
4.1.2 (i)
Each of the Note Documents shall terminate and be of no further force or affect
and no party thereto shall have any further liability to the other thereunder
(except that Section 3.4 of the Amendment of Note shall remain in effect), (ii)
AGCP shall, and shall be deemed to have, fully and unconditionally released
every security interest created by that certain Security Agreement referenced in
the Amendment of Note, and shall terminate, and shall be deemed to have
terminated, every other lien, security interest, charge, encumbrance and pledge
(“Liens”) on or
affecting the assets, business or stock of PST and its subsidiaries, and shall
promptly file (and hereby authorizes PST to file) termination statements under
the Uniform Commercial Code (or equivalent law) in every applicable state and
jurisdiction evidencing the termination of all such Liens and (iii) the Guaranty
of Payment executed by SurgiCount Medical, Inc. referenced in the Amendment of
Note is terminated, released and is of no further force and effect, with no
liability to PST or SurgiCount Medical thereunder.
4.2 Irrevocably
and automatically upon satisfaction of the Note Conditions, BCM agrees that the
delivery of the Shares to BCM pursuant to this Agreement (i) is a direct
material benefit to BCM and (ii) constitutes complete and irrevocable discharge
and extinguishment and satisfaction in full of the BCM First Judgment against
all defendants named in the BCM First Action and the First BCM Total Judgment
Amount, including any amounts owing on account of any failure of AGCP to have
paid the BCM Total Judgment Amount.
Settlement
Agreement, dated December 27, 2010
Page 6 of
21
4.3 Irrevocably
and automatically upon satisfaction of the Note Conditions, BCM agrees that the
delivery of the Shares to BCM pursuant to this Agreement fully satisfies the
Levy and Writ and the entirety of PST’s obligations thereunder; the Levy and
Writ will be deemed withdrawn (and will notify the U.S. Marshall to that
effect) and BCM agrees not to seek new levies or writs, or
take any other legal action, against PST in connection with the Shares; and BCM
agrees that PST has no obligations to BCM in connection with the Note
Documents.
4.4 Irrevocably
and automatically upon satisfaction of the Interpleader/Agreement
Condition:
4.4.1 The
Zealous/Ault Parties agree that PST is not, as of the Effective Date, in arrears
with respect to more than 6 quarters of dividends on its Series A Preferred
Stock and will not claim otherwise.
4.4.2 The
Zealous/Ault parties agree that each time that PST pays a dividend or other
distribution or redemption amount on or with respect to the Series A Preferred
Stock after the Effective Date (“Future Amounts”), it
may do so to the Interpleader Court, and all such interplead Future Amounts
shall be deemed covered by the releases and covenants not sue as if they were
the Interplead Property and shall not be deemed in arrears (and if PST for any
reason fails to pay such Future Amounts to such court, then the sole consequence
is that such Future Amounts shall be excluded from the releases and covenants
not sue herein, but any amounts already paid to such court shall remain covered
by the same and no other releases or covenants not to sue shall be impaired or
affected). In addition, the Zealous/Ault Parties agree not to hold
PST accountable if they disagree with the judgment of the court in the
Interpleader Action, and shall look solely to other parties for recourse, if
any, they may have in connection with the outcome of the Interpleader
Action.
5. Releases; Covenants Not to
Sue.
5.1.1 Releases of
PST. Irrevocably and automatically upon satisfaction of the
Note Conditions (solely as to sub-paragraph (i) of this Section 5.1, and
irrevocably and automatically upon satisfaction of the Interpleader/Agreement
Condition (solely as to sub-paragraph (ii) of this Section 5.1), the
Zealous/Ault Parties, on behalf of themselves and their Related Parties (as
defined in Section 5.5) (collectively (and for added emphasis, each and every
instance of this defined term includes, without limitation, Milton “Todd” Ault
III , AGCP and CoreStream), the “Zealous/Ault Releasing
Parties”), hereby release, absolve, and forever discharge PST, and each
of its Related Parties (the “PST Released
Parties”) from any and all Claims (as defined in Section 5.5) which the
Zealous/Ault Releasing Parties, and each of them, now have, owns, or holds, or
at any time heretofore had, owned, or held, or could or shall or may hereafter
have, own, or hold based upon, related to, or by any reason of any manner,
cause, fact, act or omission occurring or arising (i) before and through the
date hereof or, if later, the date the Note Conditions are satisfied, relating
to or arising out of the Note Causes of Action or which could have been asserted
in the Note Causes of Action (or without limitation, claims of fraud or fraud in
the inducement relating to any matter including the entry into this Agreement),
together with any other matter, incident, circumstance, contract, breach, error
or omission by on behalf of PST or the PST Released Parties whether or not
related to the Action (except for the Series A Causes of Action) and (ii)
heretofore or, if later, the date the Interpleader/Agreement Condition is
satisfied, relating to or arising out of the Series A Causes of Action or which
could have been asserted in the Series A Causes of Action, together with any
other matter, incident, circumstance, contract, breach, error or omission by on
behalf of PST or the PST Released Parties in connection with the Series A Stock
or the Interplead Property. To the extent (but only to the extent) that the
release by Milton "Todd" Ault, III of any Claim contained in this paragraph
would be legally invalid unless approved by the bankruptcy court currently
presiding over the pending bankruptcy case of Milton "Todd" Ault (a "Section 5.1.1 Barred
Claim"), then the release in this paragraph shall not operate to release
such Section 5.1.1 Barred Claim unless and until such court approval is
obtained; provided, however, that whether
or not such court approval is obtained, Milton "Todd" Ault, III represents and
warrants that he does not have any Claim that would be released by this
paragraph or that would be a Section 5.1.1 Barred Claim. Further, in
the event that any court finds that Milton "Todd" Ault III does not have the
power to release the claims herein and/or invalidates his release, any release
by the other parties hereto of any claim or claims against Milton Todd Ault, III
will be deemed to be null and void and/or withdrawn.
Settlement
Agreement, dated December 27, 2010
Page 7 of
21
5.1.2 Covenant Not to
Sue. The Zealous/Ault Parties also hereby covenant to refrain
from, directly or indirectly (including by causing the Zealous/Ault Releasing
Parties to refrain from), suing, asserting or threatening any claim or demand,
or commencing, instituting or causing to be commenced, or maintaining, any
proceeding of any kind (in court, arbitration or otherwise) against any PST
Released Party, based upon any matter purported to be released by the
Zealous/Ault Releasing Parties in this Section 5.1. The releases in
Section 5.1.1(i) and 5.1.1(ii) and the related covenants not to sue are
independent, and no failure to satisfy the conditions to one such release shall
affect the validity and effectiveness of the other.
5.2 Releases of BCM; Covenant
Not to Sue; Non-Disparagement.
5.2.1 Release. Irrevocably
and automatically upon satisfaction of the Note Conditions, the Zealous/Ault
Releasing Parties (and for added emphasis, each and every instance of this
defined term includes without limitation Milton “Todd” Ault, III and
CoreStream), for themselves, and for its/his/their heirs, executors, successors,
predecessors, affiliates and/or assigns, hereby release, absolve, and forever
discharge Steven Bodnar and BCM, and each their Related Parties (the “BCM Released
Parties”) knowingly and unconditionally and its/his/their heirs,
executors, successors, predecessors and affiliates and/or assigns, from any and
all actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims, and demands whatsoever in any manner and/or in any form,
including in law, admiralty or equity, which the Zealous/Ault Releasing Parties
and/or the Zealous/Ault Releasing Parties' heirs, executors, successors,
subsidiaries, affiliates, parents, predecessors and assigns ever had, now have
or hereafter can, shall or may have, or by reason of any matter, cause or thing
whatsoever from the beginning of the world to the day of the date of this
Agreement, including without limitation, any claims or causes of action related
to the facts or actions alleged in Cause of Action 10 in the Action or which
could have been asserted in the in the Action or without limitation, claims of
fraud or fraud in the inducement relating to any matter including the entry into
this Agreement. To
the extent (but only to the extent) that the release by Milton "Todd" Ault, III
of any Claim contained in this paragraph would be legally invalid unless
approved by the bankruptcy court currently presiding over the pending bankruptcy
case of Milton "Todd" Ault (a "Section 5.2.1 Barred
Claim"), then the release in this paragraph shall not operate to release
such Section 5.2.1 Barred Claim unless and until such court approval is
obtained; provided, however, that whether
or not such court approval is obtained, Milton "Todd" Ault, III represents and
warrants that he does not have any Claim that would be released by this
paragraph or that would be a Section 5.2.1 Barred Claim. Further, in
the event that any court finds that Milton "Todd" Ault III does not have the
power to release the claims herein and/or invalidates his release, any release
by the other parties hereto of any claim or claims against Milton Todd Ault, III
will be deemed to be null and void and/or withdrawn.1
1 All
Parties acknowledge that the release in this Section 5.2 is worded differently
than the other releases solely as a result of separate negotiations between BCM
and the Zealous/Ault Parties, and the difference is not intended to imply
anything with respect to such other releases.
Settlement
Agreement, dated December 27, 2010
Page 8 of
21
5.2.2 Covenant Not to
Sue. The Zealous/Ault Parties (and for added emphasis, each
and every instance of this defined term includes without
limitation Milton “Todd” Ault, III and CoreStream), for themselves,
and for its/his/their heirs, executors, successors, predecessors, affiliates
and/or assigns also hereby covenant to refrain from, directly or indirectly
(including by causing the Zealous/Ault Releasing Parties to refrain from),
suing, asserting or threatening any claim or demand, or commencing, instituting
or causing to be commenced, or maintaining, any proceeding of any kind (in
court, arbitration or otherwise) against any BCM Released Party, based upon any
matter purported to be released by the Zealous/Ault Releasing Parties in this
Section 5.2.
5.2.3 Non-disparagement.
The Zealous/Ault Parties, the Zealous/Ault Releasing Parties and/or (for added
emphasis) Milton "Todd" Ault, III on the one hand and Steven Bodnar, BCM and/or
and the BCM Released Parties on the other, agree not to make any statements,
written or verbal, or cause or encourage others to make any statements
(excluding any statements required by law, i.e. to SEC), written or verbal, that
defame, disparage or in any way criticize the personal or business reputation,
practices, or conduct of each other, their employees, directors, and officers,
managers or shareholders. The Parties named in this Section 5.2.3 acknowledge
and agree that this prohibition extends to statements, written or verbal, made
to anyone, including but not limited to, the news media, investors, potential
investors, any board of directors or advisory board or directors, industry
analysts, competitors, strategic partners, vendors, employees (past and
present), and clients. The Parties understand and agree that this
Section 5.2.3 is a material provision of this Agreement and that any breach of
this Section shall be a material breach of this Agreement, and that each Party
would be irreparably harmed by violation of this provision.
5.3 Releases of
AGCP.
5.3.1 Release. Irrevocably
and automatically upon satisfaction of the Note Conditions, PST, on behalf of
itself and its Related Parties (the “PST Releasing
Parties”), hereby release, absolve, and forever discharges AGCP and each
of their Related Parties (excluding, for purposes of this Section 5.3, Milton
“Todd” Ault III, unless and until the Ault Release Condition is satisfied) (the
“AGCP Released
Parties”), from any and all Claims which the PST Releasing Parties, and
each of them, now have, owns, or holds, or at any time heretofore had, owned, or
held, or could or shall or may hereafter have, own, or hold based upon, related
to, or by any reason of any manner, cause, fact, act or omission occurring or
arising before and through the date hereof or, if later, the date the Note
Conditions are satisfied, relating to or arising out of Section 3.2(a) or
Section 3.2(b) of the Note Documents.
Settlement
Agreement, dated December 27, 2010
Page 9 of
21
5.3.2 Covenant Not to
Sue. PST also hereby covenant to refrain from, directly or
indirectly (including by causing the PST Releasing Parties to refrain from),
suing, asserting or threatening any claim or demand, or commencing, instituting
or causing to be commenced, or maintaining, any proceeding of any kind (in
court, arbitration or otherwise) against any AGCP Released Party, based upon any
matter purported to be released by the PST Releasing Parties in this Section
5.3.
5.4 Release of AGCP; Covenant
Not to Sue by BCM/Bodnar.
5.4.1 Release. Irrevocably
and automatically upon satisfaction of the BCM First Judgment, BCM
and Steven Bodnar, on behalf of itself and its Related Parties (the “BCM Releasing
Parties”), hereby release, absolve, and forever discharges the AGCP
Released Parties (excluding, for purposes of this Section 5.4, Milton “Todd”
Ault III, unless and until the Ault Release Condition is satisfied), from any
and all Claims which the BCM Releasing Parties, and each of them, now have,
owns, or holds, or at any time heretofore had, owned, or held, or could or shall
or may hereafter have, own, or hold based upon, related to, or by any reason of
any manner, cause, fact, act or omission occurring or arising heretofore related
to the BCM First Judgment.
5.4.2. Covenant Not to
Sue. BCM also hereby covenants to refrain from, directly or
indirectly (including by causing the BCM Releasing Parties to refrain from),
suing, asserting or threatening any claim or demand, or commencing, instituting
or causing to be commenced, or maintaining, any proceeding of any kind (in
court, arbitration or otherwise) against any AGCP Released Party, based upon any
matter purported to be released by the BCM Releasing Parties in this Section
5.4. Specifically excluded from the Release set out in Section 5.4.1
and any Release executed by BCM or Bodnar in this Agreement and the Covenant not
Sue set out in this Section 5.4.2, and any Conveant not to Sue executed by BCM
or Bodnar in this Agreement is BCM's right to enforce and/or levy in the
broadest manner possible , and against any applicable individual or party,
including the defendants named , in the the Judgment, as amended from
time to time, obtained in that certain action first filed in the United States
District Court for the District of Connecticut, known as, BODNAR CAPITAL
MANAGEMENT, LLC v. MILTON “TODD” AULT, III, ZEALOUS HOLDINGS, INC.,
f/k/a The Ault Glazer Group, Inc., f/k/a Ault Glazer Bodnar & Company, Inc.
et al., , Civil No. 3:08CV1601 (JBA). (The Judgment obtained therein
will be referred to as the "BCM Second Judgment"
and the Action shall be referred to as the "BCM Second Action"),
and/or their successors, predecessors, heirs, affiliates, assigns, transferees
or garnishees of any description, all without limitation .
5.5. Definitions. For
purposes of this Agreement, the following definitions shall apply:
“Affiliate” means,
with respect to any specified Person, any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person.
Settlement
Agreement, dated December 27, 2010
Page 10
of 21
“Applicable Party,”
“Applicable Released
Parties” and “Applicable Releasing
Parties”: In connection with Section 5.1, the Applicable Party means the
Zealous/Ault Parties, the Applicable Released Parties means the PST Released
Parties and the Applicable Releasing Parties means the Zealous/Ault Releasing
Parties; In connection with Section 5.2, the Applicable Party means the
Zealous/Ault Parties, the Applicable Released Parties means the BCM Released
Parties and the Applicable Releasing Parties means the Zealous/Ault Releasing
Parties; and In connection with Section 5.3, the Applicable Party means PST, the
Applicable Released Parties means the AGCP Released Parties and the Applicable
Releasing Parties means the PST Releasing Parties; In connection with Section
5.4, the Applicable Party Means BCM, the applicable Released Parties means the
AGCP Released Parties and the Applicable Releasing parties the BCM Releasing
Parties.
“Ault Release
Condition” means that Milton “Todd” Ault III has (i) delivered a written
joinder to this Agreement, reasonably satisfactory to PST and BCM, providing
that he personally obligates himself to all of the releases and covenants herein
as if he were one of the Zealous/Ault Parties, (ii) received a final order from
the Bankruptcy court with jurisdiction over his currently pending bankruptcy
case expressly stating that such joinder agreement is approved and without any
conditions therein, the form and substance of such order to be reasonably
satisfactory to PST and BCM and (iii) not taken action after the date hereof
that, were he a party hereto as of the date hereof, would have been a breach
hereof.
“Claims” means all
claims, demands, controversies, causes of action, damages (actual, incidental,
consequential, lost opportunities, punitive or other), rights, liabilities,
obligations, contracts, costs or expenses (including attorneys fees and costs of
investigation), whatsoever, in each case whether known or unknown, suspected or
unsuspected, and in each case under any legal or equitable theory.
“Person” means an
individual, corporation, limited liability company, partnership, joint venture,
trust or unincorporated organization, association or group, or other form of
business enterprise, or a governmental entity.
“Related Parties”
means, with respect to a specified Person or Persons, the predecessors,
successors, assigns, transferees, parents, subsidiaries, Affiliates, officers,
directors, boards of directors (and committees thereof), equity holders,
shareholders, partners, joint venturers, agents, attorneys, representatives and
employees of such Person or Persons, and each of them and the immediate family
of any the foregoing who is a natural person, and its/his/their heirs and
executors.
5.6 Notwithstanding
anything in this Section 5 to the contrary, nothing in this Section 5 shall
operate to release, absolve, discharge, affect or modify any obligation a Party
has to another Party under or arising out of this Agreement or any breach
hereof.
7. Waiver of Civil Code
Section 1542.
7.1 Each
Party acknowledges the risk that subsequent to the execution of this Agreement,
a Party may discover facts or may incur, suffer or discover losses, damage or
injuries which are unknown and unanticipated at the time this Agreement is
executed, which if known on the date of execution of this Agreement, may have
materially affected his, her or its decision to give the release contained in
this Agreement. Despite this knowledge and understanding, it is the
express intention of the Parties to settle fully, finally and forever all claims
arising out of or related to the Action. The Parties acknowledge that
they are familiar with Section 1542 of the Civil Code of the State of
California which provides as follows:
Settlement
Agreement, dated December 27, 2010
Page 11
of 21
“A
general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.”
7.2 The
Parties abandon, release, waive and relinquish all rights and benefits which
they may acquire under Section 1542 of the Civil Code of the State of
California (or any similar law of any other state) pertaining to the subject
matter of this Agreement..
7.3 The
Parties hereby acknowledge that the foregoing waiver of the provisions of
Section 1542 of the California Civil Code (or any similar law of any other
state) was separately bargained for. The Parties expressly consent
that this release shall be given full force and effect in accordance with each
and all of its express terms and provisions, including those terms and
provisions relating to unknown and unsuspected claims, if any.
8. Representations and
Warranties. Each of the undersigned Parties represents and
warrants that with respect to the respective releases and covenants given by the
Parties hereto, no portion of any claim, right, demand, action or cause of
action released hereunder, and no portion of any recovery or settlement to which
any Party might be entitled based upon any such claim, right, demand, action or
cause of action, has been assigned or transferred to any other person, firm or
corporation, in any manner, including by way of subrogation, operation of law,
attorneys’ lien, power of attorney, or otherwise. Further, each of
the undersigned Parties individually/as entity represents and warrants that he,
she or it has the right, power and authority to enter into this Agreement, and
that this Agreement constitutes such Party’s legal, valid and binding
obligation, enforceable against such Party in accordance with its
terms. Each Party, person and entity executing this Agreement has
full power and authority to do so, and all necessary resolutions and
authorizations have been obtained. Each Party agrees, with respect to
any transfer or assignment or purported transfer or assignment by such party, to
indemnify and hold harmless each other party against any claim, demand, debt,
obligation, liability, cost, expense, right of action or cause of action, based
on, arising out of, or in connection with, any such transfer or assignment or
purported transfer or assignment. Each Party represent to each other
Party that it is an “accredited investor” as defined under Regulation D of the
Securities Act of 1933.
The Zealous/Ault Parties represent to
the other Parties hereto that: (a) CoreStream Energy, Inc. was formerly known as
Zealous, Inc., and now wholly-owns all of the outstanding equity interests of
Zealous Interactive, Zealous Holdings, Inc. (which is now in Chapter 7
Bankruptcy proceedings) and Health and Wellness Partners, Inc.; (b) Zealous
Holdings, Inc. now wholly-owns all of the outstanding equity interests of
Zealous Capital Markets, LLC and of Zealous Asset Management, LLC; (c) Zealous
Asset Management, LLC now is the sole general partner of Zealous Partners, LLC,
and the sole manager of Ault Glazer Capital Partners, LLC; (d) Zealous Capital
Markets, LLC now wholly-owns Zealous, ATS; and (e) each signature hereto has all
corporate and shareholder power and authority necessary to enter, deliver and
perform its obligations under this Agreement, this Agreement does not require
any court approval with respect to any Zealous/Ault Parties and the bankruptcy
proceedings of Zealous Holdings, Inc. have no effect on the validity or
enforceability of this Agreement or any Zealous/Ault's party ability to enter,
deliver and perform this Agreement.
Settlement
Agreement, dated December 27, 2010
Page 12
of 21
9. Representation by
Counsel. Each of the undersigned Parties represents and
warrants that it has been represented by legal counsel of its choosing in
connection with this Agreement and the settlement to which it relates and
executes it knowingly and voluntarily after receiving such legal advice, and
that, in executing this Agreement, the Parties represent and acknowledge that
they have been fully advised by their legal counsel as to their rights and
consequences of signing this Agreement. The Parties further represent
and acknowledge that they fully understand and appreciate the meaning of each of
the terms of this Agreement and that they understand that they may be waiving
legal rights or claims by signing this Agreement and that they are voluntarily
entering into this Agreement with a full and complete understanding of its terms
and legal effect and with the intent to be legally bound by this
Agreement.
10. Reliance. Each
of the undersigned Parties represents and warrants that, in executing this
Agreement, it has relied solely on the statements expressly set forth herein,
and has placed no reliance whatsoever on any statement, representation, or
promise of any other Party, or any other person or entity, not expressly set
forth herein, or upon the failure of any other Party or any other person or
entity to make any statement, representation or disclosure of anything
whatsoever. The discovery by any Party, subsequent to the execution
of this Agreement, of any facts not heretofore known to that Party, or that the
facts or law upon which any Party relied in executing this Agreement were not as
that Party believed it to be, shall not constitute grounds for declaring this
Agreement void, avoidable or otherwise unenforceable. This paragraph
is intended by the Parties to preclude any claim that any Party was fraudulently
induced to enter this Agreement, or was induced to enter this Agreement by a
mistake of fact or law.
11. General
Provisions.
11.1 Indemnification; Liquidated
Damages. Without in any way limiting any of the rights and
remedies otherwise available to any of the any of the Applicable Released
Parties hereunder, the Applicable Party (as defined in Section 5) shall
indemnify and hold harmless each of its Applicable Released Parties (as defined
in Section 5) from and against any and all loss, liability, claim, damage or
expense (including costs of investigation and defense and reasonable attorneys’
fees) whether or not involving third party claims, arising directly or
indirectly from or in connection with (a) the assertion by or on behalf of the
Applicable Releasing Parties (as defined in Section 5) of any claim or other
matter purported to be released pursuant to Section 5 by the Applicable Party
and/or (b) the assertion by any third party of any claim or demand against any
of the Applicable Released Parties which claim or demand arises directly or
indirectly from, or in connection with, any assertion by or on behalf of the
Applicable Releasing Parties against such third party of any claims or other
matters purported to be released pursuant to Section 5 by the Applicable Party;
provided,
however, solely in connection with a violation of a covenant not to sue
in Section 5, the breaching Party and the aggrieve Party agree that, (i) for
each violation of such covenant by the breaching Party, the breaching Party
shall pay the aggrieved party, as liquidated damages, and not as penalty,
$100,000, plus all attorneys fees and expenses of the aggrieved party in
connection with enforcing the covenant not to sue, and that (ii) these
liquidated damages are reasonable in amount and appropriate in connection with
the covenants not to sue in this Section 5 because damages will be extremely
difficult to calculate in the event of a breach of said covenants and that (iii)
the liquidated damages provided for in this Section 11.1 are the only monetary remedy for
breach of the covenants not to sue in Section 5, but do not in any way limit any
non-monetary remedy (such as injunction) that are available for breach of the
covenants not to sue, and do not in any way limit or apply to any other breach
of Section 5 (such as in respect to the releases) or any other term, condition
or provision of this Agreement.
Settlement
Agreement, dated December 27, 2010
Page 13
of 21
11.2 Attorneys
Fees. In any dispute arising from or relating to this
Agreement, the prevailing party shall be entitled to recovery of its reasonable
attorneys’ fees and costs, in addition to all other damages and remedies
available.
11.3 Governing Law; Consent to
Jurisdiction.
11.3.1 The
Zealous/Ault Parties and the Zealous/Ault Releasing Parties agree, confirm and
warrant that the State or Federal Court Courts sitting in the State of
California, County of Los Angeles, with California law to apply, without giving
effect to any conflict of laws principles, will be the sole and exclusive forum
for any disputes or actions between or among the Zealous/Ault Parties and the
Zealous/Ault Releasing Parties and PST or the PST Released Parties, including
without limitation, claims for breach of this Agreement, and the Zealous/Ault
Parties and the Zealous/Ault Releasing Parties consent to the personal
jurisdiction of the State or Federal Court Courts sitting in the State of
California, County of Los Angeles and will not raise any objection thereto on
the basis of personal or subject matter jurisdiction.
11.3.2 The
Zealous/Ault Parties and the Zealous/Ault Releasing Parties agree, confirm and
warrant that the State or Federal Courts sitting in the State of Connecticut,
with Connecticut law to apply, without giving effect to any conflict of laws
principles, will be the sole and exclusive forum for any disputes or actions
between or among the Zealous/Ault Parties and the Zealous/Ault Releasing Parties
and BCM, Bodnar or the BCM Released Parties, including without limitation,
claims for breach of this Agreement, and the Zealous/Ault Parties and the
Zealous/Ault Releasing Parties consent to the personal jurisdiction of the State
or Federal Court Courts sitting in the State of Connecticut, and will not raise
any objection thereto on the basis of personal or subject matter jurisdiction
for any matter related to this Agreement.
11.3.3 For added
emphasis, Milton “Todd” Ault, III is expressly included within each reference in
this Section 11.3 to the Zealous/Ault Parties and the Zealous/Ault Releasing
Parties, and the absence of such references for added emphasis in such
definitions appearing in other parts of this Agreement do not in any way imply
that Milton “Todd” Ault III is excluded therefrom.
11.4 Full
Satisfaction. This Agreement, and the rights and benefits
provided by it, are acknowledged by the Parties to be in full and complete
settlement and satisfaction of the claims that are released.
11.5 No
Admissions. The Parties understand and acknowledge that this
Agreement constitutes a compromise and settlement. Neither the fact
of this Agreement, its terms and conditions, nor any action taken or statements
made by the Parties in connection with this Agreement shall ever, under any
circumstances, be deemed or construed to be: (a) an admission of
the truth or falsity of the claims asserted in the Action; or (b) an
acknowledgement or admission by any Party of any fault or liability
whatsoever.
Settlement
Agreement, dated December 27, 2010
Page 14
of 21
11.6 Entitled
Costs. Other than as set forth herein, the Parties shall bear
their own costs and attorneys’ fees incurred in the Action.
11.7 Integration. Except
as otherwise stated herein, this Agreement contains the entire and only
understanding between the Parties with respect to the subject matter hereof and
supersedes any and all prior and/or contemporaneous oral or written
negotiations, agreements, representations and understandings with respect to the
subject matter hereof. The Parties, and each of them, represent and
agree that no promise, statement or inducement has been made that caused it to
sign this Agreement, other than those expressly set forth in this
Agreement. Any and all representations that any Party considers to be
material to its decision to enter into this Agreement have been included in this
Agreement and each Party agrees that any alleged representation not included in
this Agreement was not material to its decision to enter into this
Agreement. This Agreement shall be accepted as conclusive proof that
any reliance by any Party on any alleged representation not included in this
Agreement shall not be justified. In any action where any Party
contends that any other Party has made any representation, or failed to disclose
any fact, and such contention is inconsistent with this paragraph, the court,
arbitrator or other tribunal shall summarily dismiss any such claim, even if the
applicable law would not support such summary dismissal.
11.8 Modification. This
Agreement may not be altered, amended, or extinguished except by a writing which
expressly refers to this instrument and is signed subsequent to the date of this
instrument by duly authorized representatives of the Party against whom
enforcement of any such alteration or amendment is sought.
11.9 Successors
and Assigns. This Agreement shall be binding upon and inure to
the benefit of the executors, administrators, heirs, successors, and assigns of
the Parties.
11.10 Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. Signatures by facsimile and scanned portable digital
format (aka, pdf) signatures shall be of the same force and effect as if in
original ink.
11.11 Headings. The
headings and captions used in this Agreement are for convenience only and shall
not be deemed to affect in any way the language of the provisions to which they
refer.
11.12 Interpretation. This
Agreement shall be interpreted as if jointly drafted by the Parties, and no
provision shall be interpreted against any Party because such provision was
drafted by that Party.
11.13 Severability. If
any portion of this Agreement is found invalid, that portion may be severed from
the Agreement and shall not affect the validity of the remainder of the
Agreement.
Settlement
Agreement, dated December 27, 2010
Page 15
of 21
11.14. Pleading of Release as Bar
to Suit. The provisions of this Agreement may be pleaded as a
full and complete defense to, and may be used as the basis for any injunction
against, any action, suit or other proceeding that may be instituted, prosecuted
or attempted in breach of this Agreement.
11.15 Disclosure. All
Parties acknowledge that if PST determines that it is required to
publicly disclose and file this Agreement on the SEC’s public EDGAR
database, PST may do so, and comply with its other disclosure
obligations in connection with this Agreement under applicable law, SEC forms
and rules and stock exchange regulations.
11.16 Confidentiality. The
Parties hereto agree not to disclose the
terms of this Agreement and/or the facts and issues relating to and/or addressed
in this Agreement to any person and/or entity, except as provided for specifically in Paragraph 11.15 above, and as
otherwise required by law, and as may be needed for any law enforcement
purpose. Except as provided for specifically in Paragraph 11.15
above, and as otherwise required by law, and as may be needed for any law
enforcement purpose, this Agreement and the terms thereof
shall be maintained in strict confidence by all parties. Except as provided for
specifically in Paragraph 11.15 above, and as otherwise required by law, and as
may be needed for any law enforcement purpose, no party shall initiate, nor
participate in, a press release, press conference or other public disclosure
of the settlement embodied by this Agreement, it being agreed by all Parties
that the policy of the law is best served by private
settlements. In the event of press or
other inquiry, the Parties agree they will state that they have “no comment”,
except PST as provided in Section 11.15 and that is entitled to refer
the inquiring party to its SEC filings and provide its legal analysis of this
Agreement. In the event any Party hereto receives service of process
seeking to require disclosure of the terms of this Agreement, then such Party
will immediately notify the other Parties and will reasonably cooperate with the
other Parties to obtain confidential treatment, to the extent it is
available.
11.17 Separate
Obligations. Every obligation assigned in this Agreement to a
given Party is the obligation only of that given Party; no other Party hereto is
a guarantor or surety or is otherwise responsible for the another Party’s
obligations herein.
11.18 Suspended
Parties. No obligation of any Zealous/Ault Party shall be
reduced, mitigated or affected by virtue of the fact that some of the
Zealous/Ault Parties might be Suspended Zealous/Ault Parties. The
Zealous/Ault Parties hereby jointly and severally covenant to (i) indemnify each
other Party hereto arising from any obligation of any Zealous/Ault Party being
affected by the fact that some of the Zealous/Ault Parties might be Suspended
Zealous/Ault Parties, (ii) not assert any defense to any obligation herein on
account of there being any Suspended Zealous/Ault Parties, and (iii) cause each
other Zealous/Ault Party to perform its obligations hereunder and take all
necessary action reasonably requested by any other Party hereto to cure the
reason for any Zealous/Ault Party being a Suspended Zealous/Ault Party is so
being in any way adversely affects another Party’s rights
hereunder.
Settlement
Agreement, dated December 27, 2010
Page 16
of 21
IN
WITNESS WHEREOF, the Parties have
approved and executed this Agreement on the dates set forth opposite their
respective signatures.
|
Patient
Safety Technologies, Inc.
|
CoreStream
Energy, Inc.
|
|
|
By:/s/
Brian Stewart
|
By:/s/
Chris Rainbolt
|
|
|
Its:
President and CEO
|
Its:
CEO
|
|
|
Angel
Acquisition Corp.
|
Ault
Glazer Capital Partners, LLC
|
|
|
By:/s/
Milton “Todd” Ault III
|
By:
/s/ Milton “Todd” Ault III
|
|
|
Its:
Pres
|
Its:
Mgr
|
|
|
Zealous
Asset Management, LLC
|
Zealous
Partners, LLC
|
|
|
By:
/s/ Milton “Todd” Ault III
|
By:
/s/ Milton “Todd” Ault III
|
|
|
Its:
Mgr
|
Its:
Mgr
|
|
|
Zealous
Interactive, Inc.
|
Health
and Wellness Partners, Inc.
|
|
|
By:
/s/ Milton “Todd” Ault III
|
By:
/s/ Milton “Todd” Ault III
|
|
|
Its:
Pres
|
Its:
Chairman & CEO
|
|
|
Zealous
Capital Group, Inc.
|
Zealous
Trading Group, Inc.
|
|
|
By:
/s/ Milton “Todd” Ault III
|
By:
/s/ Milton “Todd” Ault III
|
|
|
Its:
Mgr
|
Its:
CEO/Pres
|
|
|
Zealous
Capital Markets, LLC
|
ASNI-II,
Inc.
|
|
|
By:
/s/ Milton “Todd” Ault III
|
By:
/s/ Milton “Todd” Ault III
|
|
|
Its:
Mgr
|
Its:
Pres
|
|
|
Zealous
ATS, LLC
|
Zealous
Real Estate Partners, LLC
|
|
|
By:
/s/ Milton “Todd” Ault III
|
By:
/s/ Milton “Todd” Ault III
|
|
|
Its:
Mrg
|
Its:
Mgr
|
|
|
Zealous
Real Estate Consulting, LLC
|
Ault
Glazer & Co., Inc.
|
|
|
By:
/s/ Milton “Todd” Ault III
|
By:
/s/ Milton “Todd” Ault III
|
|
|
Its:
Mgr
|
|
Its:
Pres
|
Settlement
Agreement, dated December 27, 2010
Page 17
of 21
|
Signature
page to December 27, 2010 Settlement Agreement,
continued.
|
||
|
Zealous
Income Partners, L.P.
|
Steven
Bodnar
|
|
|
By:
/s/ Milton “Todd” Ault III
|
/s/
Steven Bodnar
|
|
|
Its:
Mgr
|
||
|
Bodnar
Capital Management, LLC
|
Milton
“Todd” Ault, III
|
|
|
By:/s/
Steven Bodar
|
/s/
Milton “Todd” Ault III
|
|
|
Its:
Managing Member
|
|
|
Settlement
Agreement, dated December 27, 2010
Page 18
of 21
SCHEDULE
1
BODNAR
CAPITAL MANAGEMENT, LLC DELIVERY AND REGISTRATION INFORMATION
Registered
Name: Bodnar Capital Management, LLC
Registered
address to be separately provided by BCM
Deliver
certificate to:
Bodnar
Capital Management, LLC
c/o
Grayson
& Associates, PC
124 West
Putnam Avenue
Second
Floor
Greenwich,
Connecticut 06830
Telephone
(203) 622-8100
Facsimile
(203) 622-8104
Attention:
Eric Grayson
Settlement
Agreement, dated December 27, 2010
Page 19
of 21
SCHEDULE
2
SECURITIES
LAW LEGEND
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
APPLICABLE EXEMPTION FROM REGISTRATION UNDER SAID ACT, INCLUDING PURSUANT TO
RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN LOAN OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
Settlement
Agreement, dated December 27, 2010
Page 20
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SCHEDULE
3
PACIFIC
PREMIER LAW GROUP WIRE INSTRUCTIONS
Settlement
Agreement, dated December 27, 2010
Page 21
of 21