SETTLEMENT AND SECURITY
AGREEMENT
THIS
SETTLEMENT AND SECURITY AGREEMENT (“Agreement”) is made
effective the 15th day of June 2009, by and between Cool Clean
Technologies, Inc. (“Cool Clean”) and ECO
2 Plastics Inc. f/k/a ITec Environmental Group,
Inc. f/k/a Beechport Capital Corporation (“ECO
2 ”). Cool Clean and ECO
2 may be referred to below individually as a
“Party” and collectively as “the
Parties.”
WHEREAS, on or about February 27, 2009, Cool
Clean filed a lawsuit against ECO 2 in
the United States District Court for the District of Minnesota,
Civil Action No. 09-CV-482 (the “ Lawsuit
”).
WHEREAS, Cool Clean alleges claims in the
Lawsuit related to a promissory note entered into between the
Parties on or about August 18, 2005 in the amount of $175,000 (the
“ Note ”). A true and correct copy of
the Note is attached as Exhibit B to the Complaint filed in the
Lawsuit on or about February 27, 2009.
WHEREAS, Cool Clean also alleges claims in the
Lawsuit related to an Equipment Rental Agreement entered into
between the Parties on or about October 15, 2005 (the “
Rental Agreement ”). A true and correct
copy of the Rental Agreement is attached as Exhibit C to the
Complaint filed in the Lawsuit on or about February 27,
2009.
WHEREAS, ECO 2 denies all claims in the Lawsuit and alleges
that it is entitled to a refund of a deposit payment in the amount
of $181,673.79 made to Cool Clean on or about October 3, 2005 (the
“ Deposit Payment ”). Cool Clean
denies that ECO 2 is
entitled to a refund of the Deposit Payment.
WHEREAS, the Parties desire to resolve the
Lawsuit and all other claims between them on the terms contained
herein.
NOW, THEREFORE, for good and valuable
consideration, the receipt of which is hereby acknowledged, the
Parties agree as follows:
1.
Defined Terms .
“ Senior Debt ” shall mean
all indebtedness of ECO 2 for
all principal, fees, expenses, interest, penalties, post bankruptcy
petition interest, and all other amounts payable for money borrowed
in connection with, under or pursuant to, (a) the $2,000,000 loan
to ECO 2
from the California Integrated Waste
Management Board; (b) that certain Convertible Note and Warrant
Purchase Agreement dated as of September 2, 2008, by and among
ECO 2,
Trident Capital, Inc., Trident
Capital Fund-VI, L.P., Trident Capital Fund-VI Principals Fund,
L.L.C., Hutton Living Trust dated 12/10/1996, and certain other
investors; (c) that certain Convertible Note and Warrant Purchase
Agreement dated as of December 17, 2008, by and among ECO
2, Peninsula Packaging, LLC, Trident Capital
Fund-VI, L.P., Trident Capital Fund-VI Principals Fund, L.L.C.,
Hutton Living Trust dated 12/10/1996, and certain other investors;
(d) that certain Convertible Note Purchase Agreement dated as of
June 2, 2009, by and among ECO 2, Peninsula Packaging, LLC, Trident Capital
Fund-VI, L.P., Trident Capital Fund-VI Principals Fund, L.L.C.,
Hutton Living Trust, Whittaker Capital Partners, LLC, and certain
other investors; and (e) all extensions and renewals of the
foregoing indebtedness.
“ Senior Debt Documents ”
shall mean all documents, instruments, and agreements executed in
connection with the Senior Debt, as they may from time to time be
modified, amended or restated.
“
Senior Lenders ” shall mean those individuals or
entities holding Senior Debt, including any transferee, assignee,
or subsequent holder of any Senior Debt.
2.
Payments . ECO 2 shall pay Cool Clean the sum total of One
Hundred Seventy-Five Thousand Dollars
($175,000.00). Payment of this sum shall be made in the
following installments. The first payment, in the amount
of One Hundred Thousand Dollars ($100,000.00), shall be paid no
later than June 22, 2009. The second payment, in the
amount of Eighteen Thousand Seven Hundred Fifty Dollars
($18,750.00), shall be paid no later than September 30,
2009. The third payment, in the amount of Eighteen
Thousand Seven Hundred Fifty Dollars ($18,750.00), shall be paid no
later than December 30, 2009. The fourth payment, in the
amount of Eighteen Thousand Seven Hundred Fifty Dollars
($18,750.00), shall be paid no later than March 30,
2010. The fifth payment, in the amount of Eighteen
Thousand Seven Hundred Fifty Dollars ($18,750.00), shall be paid no
later than June 30, 2010. Payment will be made by either
wire transfer or direct electronic deposit to the following
account:
Acct.
Name DUFAULT
LAW FIRM PC IOLTA
Acct.
No. 9065192255
Bank: Wells
Fargo
Rout. No.
(Wire)
121000248
Rout. No. (Direct
Deposit)
091000019.
3.
Stipulation for Dismissal . Contemporaneous with
the signing of this Agreement, the Parties shall execute, through
counsel, a stipulation and agreed order for dismissal of the
Lawsuit with prejudice and without fees or costs to either
Party. Such stipulation and agreed order of dismissal
shall be presented to the Court by counsel for ECO
2 upon confirmation of receipt by Cool Clean of
the first payment provided for in Paragraph 2 above.
4.
Grant of Security Interest . As collateral
security for the prompt and complete payment and performance when
due of the payments identified in Paragraph 2 above, ECO
2 grants to Cool Clean a security interest in all
of ECO 2
’s right, title and interest
in, to and under the following, whether now existing or hereafter
acquired (all of which collateral being hereinafter called the
“Collateral”); provided, however , that as
further described in Paragraph 5 below, the security interest
granted hereunder shall be subordinate to any security interest
granted by ECO 2 to
any and all holders of Senior Debt. Subject to the
provisions of this Agreement, Cool Clean is entitled to a security
interest in the following:
CONTRACTS
All contracts,
contract rights, royalties, license rights, leases, instruments,
undertakings, documents or other agreements in or under which
ECO 2
may now or hereafter have any right,
title or interest whether now existing or hereinafter created and
all forms of obligations owing to ECO 2 arising out of the sale or lease of goods, the
licensing of technology or the rendering of services by ECO
2 , whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefore,
as well as all merchandise returned to or reclaimed by ECO
2 ;
EQUIPMENT,
FURNISHINGS AND MISCELLANEOUS PERSONAL PROPERTY
All presently
owned and hereafter acquired furniture, furnishings, equipment,
machinery, inventory, vehicles (including motor vehicles and
trailers) computer hardware and software, accounting or bookkeeping
systems, client or customer lists and information, data sheets and
other records of any kind, wherever located, stored or inventoried,
which are used or which may be used in ECO 2 ’s business;
FIXTURES
All materials
used by ECO 2 in
connection with its business operations, including, but not limited
to, supplies, trade equipment, appliances, apparatus and any other
items, now owned or hereafter acquired by ECO
2 , and now or hereafter attached to, or installed
in (temporarily or permanently) any real property now or in the
future owned or leased by ECO 2 ;
GENERAL
INTANGIBLES
All general
intangibles and other personal property of ECO
2 , now owned or hereinafter acquired, including,
without limitation, the following: (a) permits,
authorizations and approvals presently and hereafter issued by any
federal, state, municipal or local governmental or regulatory
authority in favor of ECO 2 ;
(b) all plans, specifications, renderings and other similar
materials presently owned or hereafter acquired by ECO
2 ; (c) all presently existing and hereafter
created contracts, leases, licenses and agreements to which
ECO 2
is a party; (d) all presently and
hereafter existing policies and agreements of insurance in favor of
ECO 2
; (e) all presently and hereafter
existing equity contribution agreements and other equity financing
arrangements in favor of ECO 2 ;
(f) all copyrights, chattel paper, electronic chattel paper,
licenses, money, insurance proceeds, contract rights, subscription
lists, mailing lists, licensing agreements, patents, trademarks,
service marks, trade styles, patents, patent applications,
franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer
programs, computer discs, computer tapes, literature, reports,
catalogs, design rights, income tax refunds, payments of insurance
and rights to payment of any kinds, trade names, refundable,
returnable or reimbursable fees, deposits or other funds or
evidences of credit or indebtedness deposited by or on behalf of
ECO 2
with any governmental agencies,
boards, corporations, providers of utility services, public or
private; (g) all presently existing and hereafter acquired computer
programs, computer software and other electronic systems and
materials of any kind of ECO 2 ;
(h) goodwill; and (i) all other presently existing and hereafter
acquired documents, accounts, general intangibles and intangible
personal property of any kind;
DOCUMENTS
All documents,
cash, deposit accounts, securities, securities entitlements,
securities accounts, investment property, financial assets, letters
of credit, certificates of deposit, instruments, chattel paper, and
electronic chattel paper now owned or hereafter acquired and
ECO 2
’s books relating to the
foregoing;
INTELLECTUAL
PROPERTY
All copyright
rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work thereof,
whether published or unpublished, now owned or hereaf
