AMENDED AND RESTATED SETTLEMENT AGREEMENT
EXHIBIT
2
AMENDED
AND RESTATED SETTLEMENT AGREEMENT
This
Amended and Restated Settlement Agreement (this “Agreement”), dated as
of April 8, 2009, is made by and between Xxxxxx X. Xxxxxxxxx, not
individually but solely in his capacity as the receiver of Northshore Asset
Management, LLC and related entities (the “Northshore
Receiver”), and Connecticut Banking Commissioner Xxxxxx X. Xxxxxx,
successor to Xxxx X. Xxxxx, not individually but solely in his capacity as
receiver of Circle Trust Company (collectively with Connecticut Banking
Commissioner Xxxx X. Xxxxx when serving as such and receiver of Circle Trust
Company, the “Circle
Receiver”), amends and restates the Settlement Agreement, dated as of May
25, 2006, by and between the Northshore Receiver and the Circle Receiver (the
“Existing
Agreement”).
WHEREAS,
each of the Northshore Receiver and the Circle Receiver has asserted and
believes that one or more entities for which he is acting as receiver owns and
is entitled to the 1,000,000 shares of common stock, no par value, of Startech
Environmental Corporation (“Startech”)
represented on the date hereof by certificate number 6381-8 (the “Subject Securities”)
and a bona fide dispute
exists over such ownership and entitlement;
WHEREAS,
the Northshore Receiver and the Circle Receiver entered into the Existing
Agreement in settlement of the dispute with respect to the Subject Securities
and desire to amend and restate its terms, and are entering into this Agreement
to do so; and
WHEREAS, on April 6, 2009, the United States
District Court for the Southern District of New York entered an order approving the execution and delivery of this Agreement, and the
Northshore Receiver’s performance of his obligations
hereunder.
NOW,
THEREFORE, for good and valuable consideration, including the mutual promises
and agreements herein made, receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. Representations
of the Circle Receiver. The Circle Receiver hereby represents
and warrants to the Northshore Receiver and agrees in favor of the Northshore
Receiver on the date hereof that (a) the Circle Receiver has not assigned
any interest in any matter released or purported to be released by him hereby to
any other person or entity, and (b) (i) the Circle Receiver has full
power and authority to execute and deliver this Agreement and perform his
obligations hereunder, (ii) the execution and delivery of this Agreement by
the Circle Receiver, the performance by the Circle Receiver of his obligations
hereunder and the consummation of the transactions by the Circle Receiver
contemplated by this Agreement have been duly authorized and approved,
(iii) this Agreement has been duly executed by the Circle Receiver and
constitutes a legal, valid and binding obligation of the Circle Receiver,
(iv) the execution and delivery of this Agreement by the Circle Receiver,
the performance by the Circle Receiver of his obligations hereunder and the
consummation of the transactions contemplated hereby by the Circle Receiver do
not and will not (x) violate, contravene, breach, or constitute an event of
default under, any contract, agreement, indenture or instrument to which the
Circle Receiver or Circle Trust Company (“Circle Trust”) is a
party, or by which any of their respective properties or assets are bound, or to
which the Circle Receiver or Circle Trust may be subject or (y) violate,
contravene or breach any statute, law, judgment, decree, order, regulation or
rule of any court or governmental authority applicable to the Circle Receiver or
Circle Trust and (v) the Subject Securities may be dealt with in accordance
with this Agreement, without any further receivership action on the part of the
Circle Receiver or any approval of any court or other governmental
authority.
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2. Representations of the
Northshore Receiver. The
Northshore Receiver hereby represents and warrants to the Circle Receiver and
agrees in favor of the Circle Receiver on the date hereof that (a) the
Northshore Receiver has not assigned any interest in any matter released or
purported to be released by him hereby to any other person or entity, and
(b) (i) the Northshore Receiver has full power and authority to
execute and deliver this Agreement and perform the Northshore Receiver’s
obligations hereunder, (ii) the execution and delivery of this Agreement by
the Northshore Receiver, the performance by the Northshore Receiver of his
obligations hereunder and the consummation of the transactions contemplated by
this Agreement by the Northshore Receiver have been duly authorized and approved
by all requisite receivership action, (iii) this Agreement has been duly
executed by the Northshore Receiver and constitutes a legal, valid and binding
obligation of the Northshore Receiver, (iv) the execution and delivery of
this Agreement by the Northshore Receiver, the performance by the Northshore
Receiver of the Northshore Receiver’s obligations hereunder and the consummation
of the transactions contemplated hereby by the Northshore Receiver do not
(x) violate, contravene, breach, or constitute an event of default under,
any contract, agreement, indenture or instrument to which the Northshore
Receiver is a party, or by which any of the Northshore Receiver’s properties or
assets are bound, or to which the Northshore Receiver may be subject or
(y) violate, contravene or breach any statute, law or judgment, decree,
order, regulation or rule of any court or governmental authority applicable to
the Northshore Receiver and (v) the Subject Securities may be dealt with in
accordance with this Agreement, without any further receivership action on the
part of the Northshore Receiver or any approval of any court or other
governmental authority.
3. [Intentionally
Omitted]
4. Disposition of Subject
Securities.
(a) The
Northshore Receiver agrees to cause, within five days after the date of this
Agreement, the delivery of the Subject Securities (including any stock
certificates representing the same) to the Circle Receiver. Upon
receipt, the Circle Receiver shall hold the same as custodian for Circle Trust
and for certain of the Northshore Releasees (as defined) until such time as the
Circle Receiver shall sell the Subject Securities as permitted
hereby.
(b) The
Circle Receiver shall have the sole and exclusive right, on behalf of the Circle
Receiver, Circle Trust, certain Northshore Releasees and the Northshore
Receiver, to sell any or all of the Subject Securities at any time or from time
to time; provided, that, notwithstanding anything to the contrary contained
herein, the Circle Receiver may only sell or dispose of the Subject Securities
in a transaction involving a “bona-fide” third party unrelated to Circle Trust
or the Circle Receiver on the FINRA Over-The-Counter Bulletin Board in which the
sole consideration received in respect of the Subject Securities is cash, which is a direct and outright sale (i.e., not
involving any options, puts, calls or other derivative positions or any
contingent or deferred payments) and which complies with all applicable
laws, including, without limitation, all applicable securities
laws.
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(c) The
Circle Receiver shall distribute the Net Proceeds (as defined below) of any sale
permitted by Section 4(b) in accordance with Sections 5 and 6.
(d) Notwithstanding
anything to the contrary contained herein, the Northshore Receiver shall be
entitled to sell or otherwise dispose of any shares of common stock of Startech
(other than the Subject Securities) at any time or from time to time free and
clear of any restriction, irrespective of whether the Subject Securities have
been already sold or otherwise disposed of.
(e) The
Circle Receiver shall on each day that
a sale
of any of the Subject Securities is made inform or
cause the selling broker to inform the Northshore Receiver (or his
representatives), no later than the close of
business on the day of such sale,
as to (i) the number of Subject Securities sold, the date of such sale,
the price(s) of such sale and (ii) any
other matters pertaining to such sale necessary for the Northshore Receiver
to complete and file Form 4 reports with
the Securities and Exchange Commission pertaining to such sale (except, solely
with respect to this clause (ii), any information pertaining to such sale that
is already in the possession of the Northshore Receiver or specific to the
Northshore Receiver (but not otherwise solely known by or available to the
selling broker or the Circle Receiver)).
5. Assignment of Right to
Proceeds. Pursuant
to the Existing Agreement, the Northshore Receiver conveyed, transferred and
assigned to the Circle Receiver the right to receive a portion of the proceeds
from the sale of the Subject Securities as set forth in Section 6 and the
Circle Receiver acknowledged and agreed that the Northshore Receiver is entitled
to receive the balance of the proceeds from the sale of the Subject Securities,
free and clear of any claim or other right of the Circle Receiver, Circle Trust
or any of the their affiliates or any other person or entity. The
parties confirm and acknowledge that the provisions of the Existing Agreement
described in this Section 5 and this Section 5 shall continue as obligations of
the parties hereunder.
6. Distribution
of Proceeds. The
Circle Receiver shall pay 50% of the Net Proceeds (as defined) to the Northshore
Receiver and 50% of the Net Proceeds to the Circle Receiver; provided, however,
that under no circumstances shall the Circle Receiver be entitled to, nor shall
the Circle Receiver retain, an aggregate amount of Net Proceeds greater than the
Cap Amount, and the Northshore Receiver shall be entitled to, and the Circle
Receiver shall pay to the Northshore Receiver, all Net Proceeds once the Circle
Receiver has received an aggregate amount of Net Proceeds equal to the Cap
Amount. Subsequent to the date of this Agreement, the Circle Receiver
shall on the 1st business day of every calendar month pay to the Northshore
Receiver any Net Proceeds that the Northshore Receiver is entitled to pursuant
to the preceding sentence; provided, that on any day that the amount of the Net
Proceeds the Northshore Receiver is entitled to pursuant to the preceding
sentence equals or exceeds $10,000, the Circle Receiver shall not later than the
close of the following business day pay such Net Proceeds to the Northshore
Receiver. In addition to the payments contemplated to be made to the
Northshore Receiver
by the preceding sentences of this Section 6 and at the time that any such
payments are to be made, the Circle Receiver shall pay to the Northshore
Receiver the Northshore Receiver Incurred Costs. The “Cap
Amount” means the sum of $1,275,126.91 and the Northshore Receiver
Incurred Costs.
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The
“Net Proceeds”
means the (1) the actual cash proceeds derived from the sale of the Subject
Securities minus (2) the underwriting discounts and commissions, brokerage
commissions and discounts and other selling fees and expenses payable to
underwriters, brokers or other third party selling agents (excluding amounts
payable to Xxxxx Xxxxxxx Xxxxxxx Israels LLP or other attorneys of the Circle
Receiver) directly associated with the sale of the Subject
Securities.
The
“Northshore Receiver
Incurred Costs” means an amount equal to 5% of the actual gross sale
proceeds for the Subject Securities. The Northshore Receiver Incurred
Costs shall be paid to the Northshore Receiver from the Net Proceeds received by
the Circle Receiver in accordance with the first paragraph of this Section 6 in
reimbursement of certain legal and other advisory fees and expenses incurred by
the Northshore Receiver relating to the sale of the Subject
Securities.
7. Releases.
Other
than the right to enforce this Agreement, the Circle Receiver agrees he will
have no claims in the case (the “Receivership
Proceedings”) captioned Securities and Exchange Commission v. Northshore
Asset Management, LLC, et al., Case No. 05-CV-2192 (RO), pending in the District
Court. The Circle Receiver acknowledges and agrees that all claims
filed by the Circle Receiver on behalf of Circle Trust and himself in the
Receivership Proceedings have been withdrawn and disallowed in their entirety
with prejudice and expunged from the schedule or register of filed claims in the
Receivership Proceedings.
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(b) The
Northshore Receiver on behalf of (i) himself and each of his successors and
assigns and (ii) the Northshore Entities and each of their respective
subsidiaries, successors and assigns (collectively, the “Northshore
Releasors”) hereby irrevocably releases and forever discharges
(A) the Circle Receiver and each of his successors and assigns and
(B) Circle Trust and each of its subsidiaries, and each of their respective
successors and assigns (collectively, the “Circle Releasees”),
from any and all claims, proceedings, rights, demands, remedies, contracts,
agreements, debts, liabilities, orders, obligations and causes of action
whatsoever, whether known or unknown, suspected or unsuspected, at law or in
equity or otherwise, which the Northshore Receiver or any of the other
Northshore Releasors now has, ever had or may hereafter have against the Circle
Receiver and/or the other Circle Releasees or any of them, due to, arising from,
or in connection with, any action, matter, thing or omission occurring or
existing on or prior to the date hereof. Notwithstanding anything
contained in this Section 7(b) to the contrary, the Northshore Receiver and
the other Northshore Entities shall retain and not release or discharge
(x) any claims, proceedings, rights, demands, remedies, contracts,
agreements, debts, liabilities, orders, obligations and causes of action
whatsoever arising out of or related to (i) the Northshore Receiver’s claim
for the return of $9 million of investor funds transferred by NSAM or an
affiliate thereof to Circle Trust on or about August 27, 2004,
(ii) the common stock of Circle Trust owned by one or more Northshore
Releasors, (iii) the Supplemental Motion for Approval of the Settlement
Regarding Claims of the United States Department of Labor, Trust Advisors Stable
Value Plus Fund and Northshore SEC Receiver, dated August 29, 2006, filed in the
case captioned Xxxx X. Xxxxx, Banking Commissioner v. Circle Trust Company
(Docket No. CV-05-4017063 S) pending in the Superior Court, Judicial District of
Hartford, Connecticut (the “Connecticut Court”)
and the related order issued by the Connecticut Court (collectively, the “Supplemental Circle
Settlement”) or (iv) this Agreement (or any right to enforce the same) or
(y) any right to defend against or dispute any claims, proceedings, rights,
demands, remedies, contracts, agreements, debts, liabilities, orders,
obligations and causes of action whatsoever not released by the Circle Receiver
under Section 7(a).
The
Northshore Receiver acknowledges that he has agreed to amend the proof of claim
(the “Ardent
Claim”) filed on or about April 14, 2006 in Circle Trust’s receivership
proceeding by the Northshore Receiver as Receiver for Ardent L.P. and Ardent
Ltd., solely to eliminate any claims related to (i) NSAM’s transfer of the
Subject Securities to Circle Trust and (ii) the Northshore Entities’
contribution of $3.9 million to Circle Trust in August and September, 2004 in
satisfaction of the Connecticut Department of Banking’s request that the
Northshore Entities adequately capitalize Circle Trust.
The
Northshore Receiver acknowledges and agrees the claim evidenced by the claim
filed on or about April 14, 2006 in Circle Trust’s receivership proceedings by
the Northshore Receiver as Receiver for NSAM, shall be withdrawn and disallowed
in its entirety with prejudice and expunged from the schedule or register of
filed claims or interests in such proceedings.
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Notwithstanding
anything contained herein to the contrary, (i) this Section 7(b) shall have
no effect on (x) the proof of claim or interest (the “NSCT Claim”) filed on
or about April 14, 2006 in Circle Trust’s receivership proceeding by the
Northshore Receiver as Receiver for NSCT or (y) the Ardent Claim, to the extent
that such claim relates to Northshore’s (or its affiliates’) transfer of
$9,000,000 to Circle Trust (the “Remaining Ardent
Claim”) or (z) the Supplemental Circle Settlement, and (ii) the NSCT
Claim, the Remaining Ardent Claim and the Supplemental Circle Settlement shall
survive this Agreement in all respects and neither the Northshore Receiver or
any of the Northshore Entities releases, discharges or waives any rights, claims
or causes of action with respect thereto.
The
Circle Receiver specifically acknowledges that the Supplemental Circle
Settlement is effective and binding on him and the Circle
Releasees.
8. Further Assurances;
Authority to Carry Out Agreement. The
Circle Receiver and the Northshore Receiver each hereby agree to execute such
agreements, contracts, orders, receipts, notices, requests, certificates,
endorsements, powers of attorney, authorizations or other documents, and to take
such further actions, as the other may reasonably request in furtherance of, and
in order to carry out and give effect to, the terms of this
Agreement.
9. Binding Effect and
Assignment. This
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. However, no party
may assign any of its rights or delegate any of its obligations under this
Agreement without the prior written consent of the other party hereto; provided, that this
Agreement shall automatically be transferred and the obligations hereunder
delegated to any successor receiver or other similar official appointed, from
time to time, for Circle Trust or the Northshore Entities,
respectively.
10. Knowledge. Each
of the Circle Receiver and the Northshore Receiver has received or has had full
and complete access to all the information he considers necessary or appropriate
and material to make an informed decision with respect to the subject matter of
this Agreement and the entering into this Agreement.
11. No Other Representations and
Warranties. Except
as set forth in this Agreement, neither the Circle Receiver nor the Northshore
Receiver make any representations or warranties to the other whether express or
implied.
12. Representation. Each
of the parties to this Agreement acknowledge that they have had access to and
have been represented by competent counsel in connection with the negotiation,
execution and performance of this Agreement.
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13. Severability. Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability, without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement in such jurisdiction or in
any other jurisdiction. If any provision of the Agreement is
interpreted to be so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
14. Notices. Any
notice required under this Agreement shall be in writing and shall be given (and
shall be deemed to be duly given upon receipt) by delivery in person, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
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If
to the Northshore Receiver:
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Xxxxxx
X. Xxxxxxxxx, Esq.
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c/o
King & Spalding LLP
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0000
Xxxxxx xx xxx Xxxxxxxx
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Xxx
Xxxx, XX 00000
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Telecopier: (000)
000-0000
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with
a copy to:
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Xxxxxx
X. Xxxxxx, Esq.
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Xxxx
Xxxxxxx LLP
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000
Xxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Telecopier: (000)
000-0000
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If
to the Circle Receiver:
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Xxxxxx
X. Xxxxxx
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Connecticut
Banking Commissioner
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Department
of Banking
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000
Xxxxxxxxxxxx Xxxxx
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Xxxxxxxx,
Xxxxxxxxxxx 00000
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Telecopier:
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| Xxxxxx X. Xxxxxx, Esq. | |
| Xxxxx Xxxxxxx Xxxxxxx Israels LLP | |
| City Place 1 | |
| 000 Xxxxxx Xxxxxx | |
| Xxxxxxxx, Xxxxxxxxxxx 00000 | |
| Telecopier: (000) 000-0000 | |
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15. No Waiver. A
waiver by any party of any term or condition of this Agreement in any one
instance shall not be deemed or construed to be a waiver of such term or
condition for any other instance in the future (whether similar or dissimilar)
or of any subsequent breach hereof. All rights, remedies,
undertakings, obligations and agreements contained in this Agreement shall be
cumulative and none of them shall be a limitation of any other remedy, right,
undertaking, obligation or agreement of any of the parties.
16. Entire
Agreement. This
Agreement supersedes all prior agreements between the Northshore Receiver and
the Circle Receiver with respect to the subject matter of this Agreement and
constitutes (along with the additional documents referred to in this Agreement)
a complete and exclusive statement of the terms of the agreement between the
Northshore Receiver and the Circle Receiver with respect to its subject
matter. The parties hereto agree that, on the date hereof, the
Existing Agreement is hereby superceded, amended and restated in its entirety by
this Agreement.
17. Time of
Essence. With
regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence.
18. Counterparts. This
Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all the counterparts together
shall constitute one and the same instrument. The exchange of copies
of this Agreement and of signature pages by facsimile transmission shall
constitute effective execution and delivery of this Agreement as to the parties
and may be used in lieu of the original Agreement for all purposes.
19. Specific
Performance. Each
of the Northshore Receiver and the Circle Receiver acknowledges and agrees that
the other would be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that any
breach of this Agreement could not be adequately compensated in all cases by
monetary damages alone. Accordingly, in addition to any other right
or remedy to which any party may be entitled, at law or in equity, each party
shall be entitled to enforce any provision of this Agreement by a decree of
specific performance and to temporary, preliminary and permanent injunctive
relief to prevent breaches or threatened breaches of any of the provisions of
this Agreement, without posting any bond or other undertaking.
20. Expenses. Except
as otherwise provided in this Agreement, including, without limitation, with
respect to the Northshore Receiver Incurred Costs, each party to this Agreement
will bear its respective fees and expenses incurred in connection with the
preparation, negotiation, execution and performance of this Agreement and the
transactions contemplated thereby.
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21. Adjustment. The
number of Subject Securities, amounts and other terms herein shall be equitably
adjusted by the parties hereto in the event of and at the time of any
distribution payable in securities on the Subject Securities or the subdivision
or combination of the shares of common stock of Startech or similar event
concerning the shares of common stock of Startech, and this Agreement shall
apply to any securities issued in respect of (or in exchange for) the Subject
Securities (and to any successive securities issued in respect thereof), in
which case, the term Subject Securities shall include any and all such
securities. The parties confirm and
agree that the Existing Agreement contemplated and this Agreement continues to
contemplate that any distribution or dividend (including any liquidating
distribution or dividend) made by Startech
on (or in respect of) the Subject
Securities shall be Net Proceeds and shall be allocated between the parties in
accordance with Section 6 of this Agreement.
[Remainder
of this page left intentionally blank]
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IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above and the parties hereto agree
that this Agreement amends and restates the Existing
Agreement in its entirety.
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By:
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/s/ Xxxxxx X. Xxxxxxxxx | |
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XXXXXX
X. XXXXXXXXX, not individually but solely in his capacity
as
Receiver of Northshore Asset Management,
LLC and related entities
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By:
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/s/ Xxxxxx X. Piktin | |
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CONNECTICUT
BANKING COMMISSIONER
XXXXXX
X. XXXXXX Successor
to XXXX X. XXXXX, not individually
but
solely in his capacity as Receiver of Circle Trust Company
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