EXHIBIT 10.19

 

SETTLEMENT AGREEMENT

(with Mutual General Release)

 

THIS SETTLEMENT AGREEMENT (this “Settlement Agreement”), made this 14th day of
January 2014 and to be effective as of such date, by and among:

 

The Parties of the First Part, being:

1. ScripsAmerica, Inc., a Delaware corporation with executive offices at
Corporate Office Center Tysons II, 1650 Tysons Boulevard, Suite 1580, Tyson
Corner, VA 22102 (hereinafter “Scrips”); and

2. Steve Urbanski, an adult individual residing at 1142 Bonnie Lane, Mt.
Pleasant, SC 29464 (hereinafter “Urbanski”);

AND

The Parties of the Second Part, being:

1. GEM Global Yield Fund Limited, a company organized under the laws of the
Cayman Islands and having a principal office at c/o CM Group, Commerce House, 1
Bowring Road, Ramsey, Isle of Man IM8 2LQ (hereinafter “GEM”); and

2. 590 Partners, LLC, a company with offices co-located with GEM (hereinafter
“590"); and

3. Global Emerging Markets and/or The GEM Group, with offices located at 590
Madison Avenue, New York, New York 10022 (hereinafter “GEM Group”, and together
with Scrips, Urbanski, GEM and 590, each a “Party” and collectively, the
“Parties”);

 

WITNESSETH THAT:

WHEREAS, the various parties negotiated various documents, such as a Share
Lending Agreement dated as of October 10, 2013 (entered into between Urbanski
and GEM) (the “Share Lending Agreement”), a Common Stock Purchase Agreement
(entered into between Scrips and GEM) (the “Common Stock Purchase Agreement”),
an Agreement dated as of October 10, 2013 (entered into between Scrips and GEM)
and various other related agreements;

WHEREAS, some of the negotiated agreements were reduced to writing and executed
by the relevant parties; some of the negotiated agreements although reduced to
writing were executed by one party but not the other(s), while others remained
as oral understandings, and some documents, although reduced to writing and
signed by at least one party were not delivered;

WHEREAS, as events have unfolded, certain disagreements have arisen between the
various parties e.g., Urbanski and GEM, and the parties desire to settle the
disputes, to terminate any and all arrangements between themselves, and to
release one another from any and all obligations arising out of the referenced
agreements; and

WHEREAS, the parties desire, among other things, to cancel the Common Stock
Purchase Agreement and enter into a new Common Stock Purchase Agreement and
related Warrants.

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and releases
contained herein, and intending to be legally bound, the parties have agreed,
and do hereby agree, as follows:

 

Page 1 of 7

 

 

 

1. (a) Upon the Parties performing all of the obligations and undertakings
pursuant to this Settlement Agreement, any and all memoranda, agreements,
contracts, understandings and undertakings, written or oral (“Documents”) by and
between/among the parties hereto are, except as otherwise provided herein or to
the extent necessary to effectuate this Settlement Agreement, declared null and
void, ab initio, and of no further effect. Any offers and/or acceptances of any
party, to any such Documents, are, except to the extent necessary to effectuate
this Settlement Agreement, withdrawn and revoked. No party, nor any associate,
affiliate, parent or subsidiary of any party, shall have any right or duty under
any such Document, except to the extent necessary to effectuate this Settlement
Agreement.

(b) The term “associate”, solely for purposes of this Settlement Agreement,
shall include, for Scrips, its administrators, predecessors, successors,
assigns, affiliates, parents, subsidiaries, officers, directors, employees,
associated persons, attorneys, agents, contractors and representatives, and all
persons acting by, through and under each of them, including, without
limitation, Robert Schneiderman and Jeffrey Andrews.

(c) The term “associate”, solely for purposes of this Settlement Agreement,
shall include, for Urbanski, his heirs, executors, administrators, predecessors,
successors, assigns, affiliates, employees, associated persons, attorneys,
agents, contractors and representatives, and all persons acting by, through and
under each of them.

(d) The term “associate”, solely for purposes of this Settlement Agreement,
shall include for the Parties of the Second Part, their administrators,
predecessors, successors, assigns, affiliates, parents, subsidiaries, officers,
directors, employees, associated persons, attorneys, agents, contractors and
representatives, and all persons acting by, through and under each of them,
including, without limitation, Franco Scalamandre, Christopher Brown, and Warren
P. Baker.

 

2. (a) Pursuant to the Share Lending Agreement, Urbanski loaned to GEM a total
of 3,640,786 shares of the Common Stock of Scrips.

(b) On or about the date hereof, GEM shall return to Scrips’ stock transfer
agent, for the benefit of Urbanski, 2,753,506 shares of the Common Stock of
Scrips, being a return and partial repayment of that number of the 3,640,786
borrowed shares.

(c) Scrips hereby agrees to sell to GEM, and GEM hereby agrees to purchase from
Scrips, Eight Hundred Eighty-Seven Thousand, Two Hundred Eighty (887,280) shares
of its restricted Common Stock for the sum of One Hundred Twenty Thousand, Three
Hundred Eighty-One dollars (US$125,381) to be paid as follows:

(i) GEM shall, promptly upon execution of this Settlement Agreement, time being
of the essence, pay to Scrips, by wire transfer to Scrips’ bank account (with
such wire transfer instructions being provided separately by Scrips to GEM), the
sum of One Hundred Ten Thousand, One Hundred Sixty-Nine dollars and Seventy-Five
cents (US$110,169.75) and

(ii) GEM shall, immediately upon execution of this Settlement Agreement, time
being of the essence, pay to the law firm of Gottbetter & Partners, LLP, 488
Madison Avenue, New York 10022 the sum of Fifteen Thousand, Two Hundred Eleven
dollars and Twenty-Five cents (US$15,211.25), which sum GEM represents to be
payment in full to such firm of any amounts owing by Scrips, Urbanski or any
associate thereof in connection with the Documents and the contemplated
transactions.

 

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(d) GEM hereby assigns its right to receive the 887,280 shares to Urbanski and
Urbanski accepts such shares as full and final repayment of the shares owed to
him under the Share Lending Agreement. Scrips shall, immediately upon receipt
the above wire transfer, issue the 887,280 shares purchased by GEM to Urbanski
(the “Share Issuance”). For the avoidance of doubt, it is hereby agreed and
understood by the Parties that with this assignment and issuance, GEM, GEM
Global, 590 and their associates shall have no further obligation whatsoever to
repay any additional shares or any other consideration to Urbanski and his
associates under the Share Lending Agreement or otherwise.

 

3. (a) All Warrants, heretofore issued by Scrips to 590 and/or GEM and any
associates of either are mutually cancelled. The cancelled warrants
(collectively, the “Warrants”) were issued on October 10, 2013, as follows:

 

Warrant ID No. of Shares Warrant holder Exercise Price GEM 001 2,000,000 GEM
$.41 GEM 002 2,000,000 590 $.41 GEM 003 1,500,000 GEM $.55 GEM 004 1,500,000 590
$.55 GEM 005 1,500,000 GEM $.75 GEM 006 1,500,000 590 $.75

 

(b) GEM and 590, jointly and severally, shall, promptly after execution of this
Settlement Agreement, time being of the essence, return all of the original
Warrants marked as “CANCELLED to Scrips.

(c) The Parties of the Second Part agree that no other warrants are owing to,
issuable to, or otherwise owed to GEM, 590 or any associate thereof as the
result of any Document referenced in Paragraph 1 above, other than as set forth
in Paragraph 4 below.

 

4. NEW SHARE PURCHASE ARRANGEMENT. (a) Scrips and the Parties of the Second Part
have negotiated a new arrangement for the above-cancelled Common Stock Purchase
Agreement. Subject to the prior timely performance by all Parties of their
respective obligations in Paragraph 2, the Common Stock Purchase Agreement in
the form to be agreed to among GEM, 590 and Scrips (the “New Common Stock
Purchase Agreement”) shall be executed by such Parties after the date hereof and
promptly delivered to the other parties.

 

(b) On or prior to the date hereof, Scrips shall issue to GEM and 590 new
warrants to purchase common stock of Scrips, dated as of the date hereof, in the
amended form as the specimen attached hereto as Exhibit A (the “New Warrants”),
as follows:

 

Warrant ID No. of Shares Warrant holder Exercise Price GEM 007 1,000,000 GEM
$.41 fixed GEM 008 1,000,000 590 $.41 fixed GEM 009    750,000 GEM $.55 fixed
GEM 010    750,000 590 $.55 fixed GEM 011    750,000 GEM $.75 fixed GEM 012
   750,000 590 $.75 fixed

 

The Warrants shall contain a provision empowering Scrips, in the event that the
Scrips’ common stock trades at or above 160% of the applicable exercise price of
the New Warrant for twenty two (22) consecutive trading days, to call the
affected Warrants for cancellation, with the New Warrant holder having the right
for thirty (30) days after delivery of Scrips’ call to exercise such New Warrant
in accordance with the terms of the New Warrant. For the avoidance of doubt,
Scrips, GEM and 590 hereby agree and acknowledge that the New Warrants will be
fully earned and due, and Scrips shall have an obligation to issue the New
Warrants to GEM and 590, on the date hereof, irrespective of whether any
transactions are consummated under the New Common Stock Purchase Agreement or
otherwise. GEM and Urbanski further agree and acknowledge that GEM, 590 and GEM
Group are entering into this Agreement in reliance on, and as a condition of,
such obligation by Scrips to issue the New Warrants.

Page 3 of 7

 

 

(c) In the event that Scrips raises funding of gross proceeds of $1,500,000 or
more (whether in one or more closings), which funding would be a result of the
actions of GEM, whether direct or indirect, Scrips shall issue to GEM and 590 an
additional 5,000,000 Warrants, divided as set forth in (b) above.

 

5. MUTUAL GENERAL RELEASE. The parties desire this Settlement Agreement to
finally terminate all relations among them. Subject to performance by the
parties of all of their respective obligations and undertakings as provided in
this Settlement Agreement, and for and in consideration of the terms contained
herein, Scrips and Urbanski, the Parties of the First Part, and their
associates, on the one hand, and GEM, 590 and GEM Group, the Parties of the
Second Part, and their associates, on the other hand, do hereby, individually
and collectively, release, remise, hold harmless and forever discharge each
other, as well as their associates of and from any and all manner of actions,
liabilities, causes of action, suits, debts, dues, accounts, sums of money,
damages, reckonings, bills, specialties, bonds, covenants, notes, contracts,
controversies, agreements, judgments, demands, promises, variances, trespasses,
extents, executions, claims, counterclaims and claims whatever nature and kind,
in law, admiralty or in equity (including reasonable attorney’s fees/expenses
and court costs arising directly or indirectly therefrom), whether or not
heretofore known, suspected or asserted, foreseen or unforeseen, which any
party, individually or collectively, ever had, or now has or may have in the
future against the other party by reason of any matter, cause or thing
whatsoever from the beginning of time to the date hereof; provided that nothing
contained in this Agreement shall be deemed to effect a release of any
obligation undertaken by any of the Parties pursuant to this Settlement
Agreement.

 

6. COVENANT NOT TO SUE. Subject to timely performance by the Parties of all of
their respective obligations and undertakings as provided above, each Party, for
itself or himself and its or his associates, hereby covenant not to sue, at law,
admiralty or in equity, or demand arbitration against, or to otherwise seek any
claims, liabilities, redress, damages, injunctions, prohibitions, judgments,
extents, executions, claims sums of money, dues or any other remedy from or
against any other Party or its or his associates, pertaining to the contemplated
transactions (including, without limitation, the Share Issuance) and the
Documents.

 

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7. NO DISPARAGEMENT. Scrips and Urbanski shall not, and shall cause their
associates not to, disparage GEM, 590, GEM Global or any of their associates.
GEM, 590 and GEM Global shall not, and shall cause their associates not to,
disparage Scrips or Urbanski or any of their associates.

 

8. WARRANTY OF AUTHORITY. Each party to this Settlement Agreement hereby
represents and warrants that it has the requisite corporate or individual power
and authority (as applicable) to enter into and to consummate the transactions
require pursuant to this Settlement Agreement and that the completion of the
transactions required hereby has been duly authorized by all necessary action.

 

8. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to the choice of law provisions. The parties agree that venue for
any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in New York, and the parties irrevocably waive any right
to raise forum non conveniens or any other argument that New York is not the
proper venue.  The parties irrevocably consent to personal jurisdiction in the
state and federal courts of the state of New York.  The parties consent to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. 

 

9. SIGNATURES. This Agreement may be executed in multiple counterparts, each one
of which shall be deemed an original, but all of which shall be considered
together as one and the same instrument. Delivery of an executed counterpart of
this Agreement may be made by facsimile or other electronic transmission. Any
such counterpart or signature pages sent by facsimile or other electronic
transmission shall be deemed to be written and signed originals for all
purposes, and copies of this Agreement containing one or more signature pages
that have been delivered by facsimile or other electronic transmission shall
constitute enforceable original documents. As used in this Agreement, the term
“electronic transmission” means and refers to any form of communication not
directly involving the physical transmission of paper that creates a record that
may be retained, retrieved and reviewed by a recipient of the communication, and
that may be directly reproduced in paper form by such a recipient through an
automated process.

 

[Signature Page Follows]

 

Page 5 of 7

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
caused this agreement to be executed in multiple originals, on the date first
mentioned above.

 

SCRIPSAMERICA, INC.

 

 

By: /s/Robert Schneiderman

Name: Robert Schneiderman

Title: CEO

 

GEM GLOBAL YIELD FUND LIMITED 590 PARTNERS, LLC         By:  /s/Chris Brown By:
 /s/Franco Scalamandre   Name: Chris Brown Name: Franco Scalamandre Title:
Title:

 

THE GEM GROUP

 

 

By:  /s/Chris Brown

Name: Chris Brown

Title:

 

STEVE URBANSKI, INDIVIDUALLY

 

/s/Steve Urbanski

 

Page 6 of 7

 

EXHBIT A

 

Form of New Warrants

 

[see attached]

 

 

 

 

 

 

 

 

 

 

 

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