Document:

ex106.htm

    SETTLEMENT
AGREEMENT

    

    THIS SETTLEMENT AGREEMENT (the “Agreement”) is
effective as of September 30, 2008 (the “Effective Date”) by
and between AudioStocks, Inc. (the “Company”) and Luis J.
Leung, an individual (collectively the “Employee”).  The
Company and Employee may be individually referred to herein as a “Party” and
collectively as the “Parties.”

    

    RECITALS

    

    WHEREAS,
as of the Effective Date, the Employee has provided certain services related to
his employment agreement with the Company and is currently owed a total of
$104,010 relating to such services (the “Services”);

    

    WHEREAS,
the Employee and the Company desire to settle and finalize $94,010 of the
compensation currently owed to the Employee in connection with the Services
provided to the Company as of the Effective Date, with the additional $10,000
remaining on the Company’s financial books and records;

    

    WHEREAS,
the Parties wish to enter into this Agreement and fully settle and forever
resolve any and all past, present and future claims the Employee may have
against the Company as described herein;

    

    NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and for good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed as follows:

    

    AGREEMENT

    

    1.           Release of
Claims.    The Employee hereby agrees to fully settle
and forever resolve any and all past, present and future claims the Employee may
have against the Company for claims arising from and/or relating directly or
indirectly to the payment of $94,010 in compensation currently owed in
connection with and relating to the Services (hereinafter collectively referred
to as “Claims”).

    

    2.           Compensation.   As
compensation for the Services and the release of the Claims, the Company shall
issue the Employee 1,750,309 shares of the Company’s common stock (the “Settlement Shares”).
The Settlement Shares shall represent the complete and final settlement of the
total compensation the Employee has claimed as due and payable in connection
with Claims.

    

    3.           Waiver of Section
1542.     In signing this Agreement, the
Employee has been advised of, understands and knowingly waives his rights under
California Civil Code Section 1542 which provides as follows: A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

    

    4.           No Further
Claims.     The Employee covenants and agrees
never to commence against the Company, any legal action or proceeding based in
whole or in part upon the Services, Claims, demands, allegations, and/or
injuries released in this Agreement.

    

    5.           No
Admission.    This Agreement shall not be considered
as an admission of liability by either Party and by entering into this
Agreement, neither Party has admitted the validity of any Claims herein
released.

    

    6.           Compliance with Securities
Laws.    The Employee understands that the Settlement
Shares it is receiving hereunder are characterized as “restricted securities”
under the federal securities laws and that under such laws and applicable
regulations such securities may be resold without registration under the United
States Securities Act of 1933, as amended only in certain limited circumstances.
It understood that the certificates evidencing the Settlement Shares issued
hereunder will bear a legend in substantially the below form:

    

    “THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR A LEGAL OPINION THAT SUCH REGISTRATION IS
NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.”

    

    In
addition, the Employee hereby represents and warrants that they are an
“accredited investor” as such term is defined in the Securities Act of 1933 and
Securities and Exchange Act of 1934.

    

    7.           Miscellaneous.

    

    a.           Necessary
Acts.  Each Party to this Agreement agrees to perform any
further acts and execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.

    

    b.           Entire Agreement;
Modifications; Waiver.  This Agreement constitutes the entire
agreement between the Parties pertaining to the subject matter contained in it.
This Agreement supersedes all prior and contemporaneous agreements,
representations, and understandings of the Parties.  No supplement,
modification, or amendment of this Agreement shall be binding unless executed in
writing by all the Parties.  No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.  No waiver shall be binding unless executed in writing by the
Party making the waiver.

    

    c.           Dispute
Resolution.   The subject matter of this Agreement shall
be governed by and construed in accordance with the laws of the State of
California (without reference to its choice of law principles), and to the
exclusion of the law of any other forum, without regard to the jurisdiction in
which any action or special proceeding may be instituted.  EACH PARTY
HERETO AGREES TO SUBMIT TO THE PERSONAL JURISDICTION AND VENUE OF THE STATE
AND/OR FEDERAL COURTS LOCATED IN THE NORTH COUNTY OF SAN DIEGO, CALIFORNIA FOR
RESOLUTION OF ALL DISPUTES ARISING OUT OF, IN CONNECTION WITH, OR BY REASON OF
THE INTERPRETATION, CONSTRUCTION, AND ENFORCEMENT OF THIS AGREEMENT, AND HEREBY
WAIVES THE CLAIM OR DEFENSE THEREIN THAT SUCH COURTS CONSTITUTE AN INCONVENIENT
FORUM.  AS A MATERIAL INDUCEMENT FOR THIS AGREEMENT, EACH PARTY
SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY ISSUES SO
TRIABLE.

    

    d.           Attorney’s
Fees.   Should any Party hereto employ an attorney for the
purpose of enforcing or constituting this Agreement, or any judgment based on
this Agreement, in any legal proceeding whatsoever, including insolvency,
bankruptcy, arbitration, declaratory relief or other litigation, the prevailing
party shall be entitled to receive from the other Party or Parties thereto
reimbursement for all reasonable attorneys’ fees and all reasonable costs,
including but not limited to service of process, filing fees, court and court
reporter costs, investigative costs, expert witness fees, and the cost of any
bonds, whether taxable or not, and that such reimbursement shall be included in
any judgment or final order issued in that proceeding.  The
“prevailing party” means the party determined by the court to most nearly
prevail and not necessarily the one in whose favor a judgment is
rendered.

    

    e.           No Oral Change;
Waiver.  This Agreement may only be changed, modified, or
amended in writing by the mutual consent of the Parties hereto.  The
provisions of this Agreement may only be waived in or by writing signed by the
Party against whom enforcement of any waiver is sought.

    

    f.           Severability.  If
any provision of this Agreement is invalid, illegal, or unenforceable, the
balance of this Agreement shall remain in effect.  If any provision is
inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances.  If any
compensation provision is deemed unenforceable or illegal, then in the case of
the delivery of common stock to the Employee, Employee shall be entitled to
receive a cash benefit equal to the value of the common stock that would have
been tendered had such a provision not been illegal or
unenforceable.

    

    g.           Execution of the
Agreement.  The Company, the party executing this Agreement on
behalf of the Company, and the Employee, have the requisite corporate power and
authority to enter into and carry out the terms and conditions of this
Agreement, as well as all transactions contemplated hereunder. All corporate
proceedings have been taken and all corporate authorizations and approvals have
been secured which are necessary to authorize the execution, delivery and
performance by the Company and the Employee of this Agreement.  This
Agreement has been duly and validly executed and delivered by the Company and
the Employee and constitutes a valid and binding obligation, enforceable in
accordance with the respective terms herein.  Upon delivery of this
Agreement, this Agreement, and the other agreements and exhibits referred to
herein, will constitute the valid and binding obligations of Company, and will
be enforceable in accordance with their respective terms.

    

    h.           Joint Drafting and Exclusive
Agreement.  This Agreement is the only Agreement executed by
and between the Parties related to the Claims described herein.  There
are no additional oral agreements or other understandings related to the Claims
described herein.  This Agreement shall be deemed to have been drafted
jointly by the Parties hereto, and no inference or interpretation against any
one Party shall be made solely by virtue of such Party allegedly having been the
draftsperson of this Agreement.  The Parties have each conducted
sufficient and appropriate due diligence with respect to the facts and
circumstances surrounding and related to this Agreement.  The Parties
expressly disclaim all reliance upon, and prospectively waive any fraud,
misrepresentation, negligence or other claim based on information supplied by
the other Party, in any way relating to the subject matter of this
Agreement.

    

    i.           Conflicts of
Interest.  The Parties shall exercise their best efforts to the
other Party aware of any conflicts of interest that exist between such Party,
including any other business of entity that such Party beneficially owns or
controls, and any interest of the other Party.  Disclosure of such
conflicts of interest may be made in writing or through oral
communication.  Acknowledgement of such conflicts of interest and
waiver of any cause of action against a Party related to a conflict of interest
may be made in writing or through oral communication.

    

    j.           Acknowledgments and
Assent.  The Parties acknowledge that they have been given at
least ten (10) days to consider this Agreement and that they were advised to
consult with an independent attorney prior to signing this Agreement and that
they have in fact consulted with counsel of their own choosing prior to
executing this Agreement.  The Parties may revoke this Agreement for a
period of three (3) calendar days after signing this Agreement, and the
Agreement shall not be effective or enforceable until the expiration of this
three (3) day revocation period.  The Parties agree that they have
read this Agreement and understand the content herein, and freely and
voluntarily assent to all of the terms herein.

    
 

    IN
WITNESS WHEREOF the Parties have executed this Agreement effective as of the day
and year first above written.

    

    
      	
              COMPANY

               

              Audiostocks,
      Inc.

            	
              EMPLOYEE

               

              Luis
      J. Leung

            
	
               

              /s/ Luis J. Leung

               

              ___________________________________

            	
               

              /s/ Luis J. Leung

               

              ___________________________________

            
	
              By:
      Luis Leung

            	
              By:
      Luis J. Leung

            
	
              Its:
      President

            	
              An
      individual10-Q

Exhibit 10.1  

 YA GLOBAL INVESTMENTS, L.P.

 101 Hudson Street, Suite 3700

 Jersey City, NJ 07302 

July 15, 2008 

Global Energy, Inc.

Migdal Aviv

7 Abba Hillel Street

Ramat Gan, 52520

Israel

Attention: Asi Shalgi

Dear Mr. Shalgi: 

        This
letter shall set forth our understanding regarding certain financing arrangements between
Global Energy, Inc. (the “Company”) and YA Global Investments, L.P. (the
“Buyer”). In connection with the Securities Purchase Agreement dated July
6, 2007 (the “Securities Purchase Agreement”) between the Company and the
Buyer, the Company has issued, and the Buyer holds, the following secured convertible
debentures (collectively, the “Debentures”): 

	Issuance Date
	Outstanding Principal Amount
	Accrued and Unpaid
Interest
 ( as of June 30, 2008)

	 		
			
			
			
	July 6, 2007	 	 	$	   500,000	 	$	  49,315.07	 
	October 23, 2007	 	 	$	 1,500,000	 	$	 103,150.68	 
	December 7, 2007	 	 	$	 1,000,000	 	$	  56,438.36	 
	March 20, 2008	 	 	$	   500,000	 	$	  13,972.60	 
	May 13, 2008	 	 	$	   500,000	 	$	  10,684.93	 
	TOTAL 	  	  	$ 	 4,000,000 	  	$ 	 233,561.64 	  

All capitalized terms not otherwise
defined herein shall have the meaning assigned to them in the Debentures or the Securities
Purchase Agreement as applicable. 

        The
Company is seeking to raise additional financing by selling units consisting of common
stock and warrants (the “Offering”) pursuant to the terms of the private
placement memorandum dated July 16, 2008 and attached hereto as Exhibit A (the
“Private Placement Memorandum”). The Buyer hereby consents to the Company
conducting and closing on the Offering in accordance with the terms set forth in the
Private Placement Memorandum, provided that (i) the gross proceeds of the Offering are at
least $3,000,000 (“Minimum Offering Amount”), and (ii) the Company closes
on the Minimum Offering Amount on or before September 30, 2008, unless extended in writing
by the Buyer (the “Closing Deadline”). 

	I. 	Agreements
Effective On Execution. The Buyer and the Company agree to the           following,
which shall be effective as of the date of execution of this letter           agreement: 

	 	1.	The
Buyer hereby defers the payment of Interest that was or will be due on the
          January 31, 2008, April 30, 2008, and July 31, 2008 Interest Payment Dates
until           the earlier of (i) September 30, 2008, or (ii) the closings of the
Offering for           the Minimum Offering Amount. For purposes of clarity, the total
Interest amount           that will be accrued on the Debentures as of July 31, 2008 will
be $267,534.25. 

	 	2.	The
Buyer hereby defers the payment of Installment Amounts that will be due on           the
July 31, 2008 and August 31, 2008 Installment Dates until September 30,           2008,
provided however, in the event that the Minimum Offering Amount is           successfully
raised on or before September 30, 2008, then such Installment           Amounts shall be
further deferred in accordance with Section II.2. below. 

	 	3.	In
consideration of the Buyer’s accommodations herein, the Company shall
          issue the Buyer 200,000 restricted shares of the Company’s common stock. 

	II. 	Agreements
Effective upon Effective Date. The Buyer and the Company           hereby agree to
the following, provided however, that the agreements contained           in this section
shall only become effective if and when the Company successfully           raises the
Minimum Offering Amount by the Closing Deadline (if accomplished,           such date of
accomplishment being referred to as the “Effective           Date”): 

	 	1.	The
Company shall pay the Buyer the deferred accrued and unpaid Interest of
          $267,534.25, in cash, on the business day after the Effective Date. Thereafter,
          the Company shall make monthly payments of accrued and unpaid interest
beginning           on November 1, 2008, and continuing on the first Business Day of each
successive           calendar month thereafter. 

	 	2.	The
Buyer shall defer the start of the Installment payments until February 2,           2009.
The first Installment Date therefore shall be February 2, 2009, and           subsequent
Installment Dates shall continue on the first Business Day of each           subsequent
calendar month thereafter. Furthermore, the Buyer shall reduce the           Installment
Amount due on the first eleven Installment Dates (i.e, the February           2, 2009
Installment Date through and including the December 1, 2009 Installment           Date)
to a Principal amount of $100,000. After the December 1, 2009 Installment           Date,
the remaining Installment Dates shall be the first Business day on or           after
January 31, 2010, April 30, 2010, July 31, 2010, and October 31, 2010
          (collectively, the “Remaining Installment Dates”). The
          Installment Amount with respect to the Remaining Installment Dates shall be
          equal to the Principal amount of $725,000. For the purposes of this section,
all           payment amounts are amounts to be paid in total among all of the Debentures
and           not per Debenture. The Buyer shall apply payments received to particular
          Debentures in its sole discretion and notify the Company promptly of such
          application. The Company shall have the option to make all payments described
in           this section in cash without any premiums as set forth in the Debentures 

	 	3.	The
Installment Amount on any Installment Date shall be reduced by the Principal
          amount of any conversions made by the Buyer prior to such Installment Date. For
          example, if the Buyer converted $200,000 of outstanding Principal of the
          Debentures prior to the February 2, 2009 Installment Date, the Company’s
          payment of the $100,000 Installment Amount pursuant to the February 2, 2009 and
          the March 1, 2009 Installment Dates would automatically be deferred. 

	 	4.	Pursuant
to Section 5 of the Debentures, the Conversion Price shall be reduced           as a
result of the issuance of shares in connection with the Offering. For           example,
if the shares are issued at a price of $0.35 per share, then the           Conversion
Price shall be reduced to $0.35. 

	 	5.	Pursuant
to Section 8 of the Warrants issued to the Buyer pursuant to the           Securities
Purchase Agreement, the exercise price of the Warrants and the number           of shares
underlying the Warrants shall be adjusted based on the exercise price           of the
warrants issued in connection with the Offering. For example, if the           exercise
price of the warrants is set at $0.50 per share, then, the exercise           price of
the Buyer’s warrants shall be reduced to $0.50 and the total           number of
shares underlying the Buyer’s warrants shall be increased from           600,000 to
1,500,000 shares. 

	 	6.	In
the event that the Company raises net proceeds from the Offering of at least
          $7,000,000, then on the date that such amount is raised, the following
          additional amendments shall be made: 

	 	a.	The
anti-dilution provisions of Section 5(a) of the Debentures and Section 8(a)           of
the Buyer’s warrants or other provisions which provide for reductions of
          conversion/exercise price based on the issuance of securities at a price less
          then current conversion/exercise price shall be deleted and no longer in effect
          (provided that no subsequent anti-dilution provisions are added, or adjustments
          for dilution made, to the shares or warrants issued in the Offering) and
          thereafter if the Company issues shares of its common stock at prices below the
          Conversion Price of below the exercise price, no further adjustment to such
          price shall be made.  

	 	b.	The
Interest Rate shall be increased from 10% to 12% from that point forward.  

	 	7.	In
connection with the Registration Rights Agreement (“Registration           Rights
Agreement”) on July 6, 2007 between the Buyer and the Company,           the
Company has filed and obtained effectiveness of the registration statement           (the
“Registration Statement”) originally filed with the           Securities
and Exchange Commission (File number 333-150559) on May 1, 2008 to           register the
resale by the Buyer of up to 6,600,000 shares of common stock           underlying the
Debentures and Warrants. In connection with the Registration           Statement and the
Registration Rights Agreement, the Company and Buyer agree as           follows: 

	 	a.	The
Company shall take all necessary step to maintain the effectiveness of the
          Registration Statement at all times until all shares registered have been
          resold, including, without limitation, filing, as soon as practicable within 20
          Business Days of the Effective Date, any and all supplements and amendments to
          the Registration Statement to update the Registration Statement to reflect the
          changes to the Debentures and Warrants set forth herein, and to file, in a
          timely matter, all supplements and amendments to keep current the financial
          information contained in the Registration Statement in accordance with the
rules           and regulations of the SEC.  

	 	b.	The
Buyer agrees that Company shall not be required to file any additional
          registration statements on behalf of the Buyer, or register the resale of any
          additional shares on behalf of the Buyer.  

	 	c.	The
Company represents, warrants, and agrees that after the Effective Date, for           the
purposes of Rule 144, the holding period for each of the Debentures shall
          commence on the respective date that the Buyer fully paid for such Debenture,
          which are the dates referenced next to each of the Debentures in the table
          above.  

	III. 	Representations,
Warranties, and Covenants or General Effect. 

	 	1.	The
Company hereby acknowledges, confirms and agrees that as of the date hereof,
          Company is indebted to the Buyer under the Debentures in the outstanding
          principal amount set forth in the table above, plus accrued and unpaid interest
          thereon, and any other fees, costs, expenses and other charges now or hereafter
          payable (collectively, the “Obligations”) and such Obligations
          are unconditionally owed by Company to the Buyer, without offset, defense or
          counterclaim of any kind, nature or description whatsoever.

	 	2.	The
Company hereby acknowledges, confirms and agrees that the Buyer has and           shall
continue to have valid, enforceable and perfected first-priority liens           upon and
security interests in the pledged property heretofore granted to the           Buyer
pursuant to the Security Agreement dated July 6, 2007 between the Company           and
the Buyer (the “Security Agreement”) or otherwise granted           to
or held by the Buyer. 

	 	3.	The
Buyer acknowledges that the Company has approved a 12 for 1 reverse stock           split
of its common stock, and should it proceed, the conversion price of the
          Debentures, the exercise price of the Warrants and the number of Warrants will
          be adjusted on the same ratio as the reverse stock split. 

	 	4.	Effect
of this Agreement. Except as modified pursuant hereto, no other           changes or
modifications to the Debentures, Securities Purchase Agreement, or           other
related transaction documents are intended or implied and in all other           respects
such documents are hereby specifically ratified, restated and confirmed           by all
parties hereto as of the effective date hereof. 

	 	5.	Each
party shall pay all its own costs and expenses regarding the entering of           this
Agreement. There are no other fees, charges or expenses other than as set           out
herein and in the Debentures and ancillary documents. 

[SIGNATURE
PAGE IMMEDIATELY TO FOLLOW]  

        IN
WITNESS WHEREOF, this letter agreement is executed and delivered as of the day and
year first above written. 

			GLOBAL ENERGY, INC.

By: /s/ Asi Shalgi
——————————————

Asi Shalgi
Chief Executive Officer 

			YA GLOBAL INVESTMENTS, L.P.

By:    Yorkville Advisors, LLC
Its:    Investment Manager 

			By: /s/ Gerald Eicke
——————————————

Gerald Eicke
Managing Member

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