Document:

Unassociated Document

    BROKERAGE
      AGREEMENT

     

    1.
      Definitions

    
      	 	 	 
	
              1.1

            	
              Principal:

            	
              VasoActive
                Pharmaceuticals, INC.

              99
                Rosewood Avenue (Suite 260)

              Danvers,
                MA -1923

            
	 	 	 
	
              1.2

            	
              Broker:

            	
              Ferolie
                Corporation d/b/a

              “EASTERN
                SALES & MARKETING”

              2
                Van Riper Road, POB 409

              Montvale,
                NJ 07645

              Tax
                ID (EIN) #13-1657344

            
	 	 	 
	
              1.3

            	
              Territory:

            	
              Continental
                United States (all markets)

            
	 	 	 
	
              1.4

            	
              Customers:

            	
              All
                classes of retail trade (e.g., grocery, drug, mass merchandise club,
                convenience, specialty) (Wal Mart, direct response, professional
                and
                Internet, are excluded)

            
	 	 	 
	
              1.5

            	
              Products:

            	
              All
                products of Principal offered for sale in the Territory

            
	 	 	 
	
              1.6

            	
              Commission
                Rate:

            	
              5%

            
	 	 	 
	
              1.7

            	
              Effective
                Date:

            	
              August
                1, 2005

            
	 	 	 

    

     

    2. 
      Appointment of Broker

     

    
      2.1
         The
        Principal hereby appoints the Broker, effective as of the Effective Date,
        as the
        Principal's exclusive agent to sell the Products in the Territory. The Broker
        hereby accepts the appointment. 

       

      2.2
         The
        Broker agrees to work the Territory thoroughly, and to offer the Principal's
        unsold supply of Products for sale to the Customers, at frequent and regular
        intervals, at such prices and on such terms and conditions as the Principal
        shall authorize during the term of this agreement. The Broker will furnish
        such
        reports on market conditions as the Principal may from time to time reasonably
        request. The Principal authorizes the Broker to engage sub-agents in any
        portion(s) of the Territory and on such terms as the Broker may determine;
        the
        Broker shall be responsible to supervise any such sub-agents. 

       

      2.3
         The
        Principal will pay the Broker a Commission equal to the Commission Rate applied
        to total "Net Invoiced Sales" of the Products in the Territory during the
        term
        of this agreement. As used in this agreement, "Net Invoiced Sales" means
        gross
        shipments, less any "off-invoice allowances" and "standard returns," as these
        terms are generally understood in the brokerage industry. The Commission
        will be
        paid monthly, on or before the 15th calendar day of the month, on all Products
        paid for during the preceding calendar month. Copies of all invoices must
        be
        sent to the Broker at the same time they are issued to Customers. 

       

      2.4
         The
        initial term of this agreement shall be for one year, commencing as of the
        Effective Date. After the expiration of the initial term, this agreement
        shall
        continue in effect indefinitely, unless and until it is terminated by either
        party, with or without cause, upon 60 days prior written notice to the other
        party. The Broker will be paid the Commission on all Products ordered during
        the
        60-day termination notice period. 

       

      
        
          

        

      

    

     

    

      3. Other
        Provisions

      

      3.1 In
        the
        course of their respective business activities, the Principal and the Broker
        may
        develop trade secrets, confidential and proprietary information, know-how
        and
        data ("Information"). During the term of this agreement, either party may
        disclose such Information to the other party, and the receiving party agrees
        to
        hold all such Information in strict confidence, and will make no use whatsoever
        of such Information to develop, manufacture, distribute or provide products
        or
        services incorporating or resulting from such Information. The parties shall
        limit access to the Information furnished by the other party only to those
        of
        its employees who have a need to know such Information. The obligations of
        confidentiality imposed by this paragraph shall not apply to information
        that is
        or becomes available within the grocery or food industry or to the public
        other
        than by act or omission of the party to whom such information was furnished;
        or
        that is received by either party from an independent source not under an
        obligation of confidentiality to the other party; or that is shown by written
        documentation to have been previously known to the party releasing or using
        such
        information prior to disclosure to it by the party furnishing such information;
        or that the disclosure of which is consented to in writing by the party
        releasing such information; or that is disclosed by any party pursuant to
        a
        court order. The obligation of confidentiality imposed by this paragraph
        shall
        expire 3 years after the effective date of termination of this agreement,
        regardless of the reason for termination. 

      

      3.2
         The
        Principal intends to license its trademarks and trade names to third parties,
        and hereby appoints the Broker as its non-exclusive agent to identify
        prospective licensees. In the event the Principal enters into a licensing,
        sponsorship or similar arrangement with a licensee introduced to the Principal
        by the Broker, the Principal will pay the Broker a finder's fee or royalty
        equal
        to the Commission Rate applied to the license or sponsorship fees or other
        consideration received by the Principal on account of such license, sponsorship
        or arrangement. 

      

      3.3
         The
        Principal shall indemnify and hold harmless the Broker, its directors, officers
        and employees from and against any loss, action, claim, proceeding, liability
        or
        expense (including reasonable attorneys' fees) arising out of any act or
        omission of the Principal, its employees or agents, relative to the Products.
        This indemnity shall survive termination or cancellation of this agreement.
        

      

      3.4
         The
        laws
        of the State of New Jersey shall govern in any dispute arising out of or
        under
        this agreement, and the Principal hereby agrees to the jurisdiction of the
        courts of the State of New Jersey, and agrees to accept service of process
        by
        certified mail, return receipt requested, addressed to the Principal at its
        address above.

      

      
        	
                VasoActive
                  Pharmaceuticals, INC. 

              	
                FEROLIE
                  CORPORATION

              
	 	 
	
                By:
                  /s/
                  Joseph Fratteroli

              	
                By:
                  /s/
                  Anthony J. Scudieri

              
	
                Joseph
                  Fratteroli, President

              	
                Anthony
                  J. Scudieri, PresidentExhibit 10.14

    Exhibit
      10.14

    

    UNITED
      STATES DISTRICT COURT

    DISTRICT
      OF MASSACHUSETTS

    

    
      	
               

            	 
	 	
              )

            
	
              In
                re VASO ACTIVE PHARMACEUTICALS

            	
              )

            
	
              SECURITIES
                LITIGATION

            	
              )

            
	
               

            	
              )
                Master Docket No. 0410708-RCL

            
	 	
              )

            
	
              This
                Document Relates To:

            	
              )

            
	 	
              )

            
	
              ALL
                ACTIONS

            	
              )

            
	
               

            	
              )

            

    

    

    

     

    STIPULATION
      AND AGREEMENT OF SETTLEMENT

    

    This
      Stipulation and Agreement of Settlement dated as of September 21, 2005 (the
      “Stipulation”) is made and entered into by and among Lead Plaintiffs, Edwin
      Choi, Richard Cheng and Joe Huback, on behalf of the Class (as hereinafter
      defined) (collectively referred to hereinafter as the “Plaintiffs”), and
      Defendants, Vaso Active Pharmaceuticals, Inc. (“Vaso” or the “Company”),
John
      J.
      Masiz (“Masiz”), Stephen
      G. Carter (“Carter”), Joseph
      Frattaroli (“Frattaroli”), Bruce
      A.
      Shear, (“Shear”), Gary
      Fromm (“Fromm”), Brian
      J.
      Strasnick (“Strasnick”), William
      P. Adams (“Adams”), Robert
      E.
      Anderson (“Anderson”) and Kashner Davidson Securities Corp. (“Kashner”)
      (collectively hereinafter referred to as the “Defendants”), by and through their
      respective counsel.

     

    WHEREAS:

     

    A. The
      following securities actions have been filed against Vaso and certain of its
      present or former officers and directors, and Kashner:

    
      
        36

        

        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    Dennis
      E.
      Smith v. Vaso Active Pharmaceuticals, Inc., Stephen G. Carter, John J. Masiz,
      No. 04-10708 (RCL);  Christopher
      Pepin v. Vaso Active Pharmaceuticals, Inc., Stephen G. Carter, John J. Masiz,
      04-10763 (RCL); Kourish Alipor v. Vaso Active Pharmaceuticals, Inc., Stephen
      G.
      Carter, John J. Masiz, No. 04-10877 (RCL); Modhi Gude v. Vaso Active
      Pharmaceuticals, Inc., Stephen G. Carter, John J. Masiz, No. 04-10789 (RCL);
      Richard Shapiro v. Vaso Active Pharmaceuticals, Inc., et al., Civ. No. 04-10720
      (RCL) (D. Mass.); Kim Benedetto, et al. v. Vaso Active Pharmaceuticals, Inc.,
      et
      al., Civ. No. 04-10808 (RCL) (D. Mass.); Dean Dummer v. Vaso Active
      Pharmaceuticals, Inc., et al., Civ. No. 04-10819 (RCL) (D. Mass.); Edward Tovrea
      v. Vaso Active Pharmaceuticals, Inc., et al., Civ . No. 04-10851 (RCL); Paul
      E.
      Bostrom v. Vaso Active Pharmaceuticals, Inc., et al., Civ. No. 04-10948 (RCL);
      Ira A. Turret Sep-Ira Dated 01/24/02 v. Vaso Active Pharmaceuticals, Inc.,
      et
      al., Civ. No. 04-10980 (RCL); Richard Pagona v. Vaso Active Pharmaceuticals,
      Inc., et al., Civ. No. 04-11100 (RCL); James Karanfilian v. Vaso Active
      Pharmaceuticals, Inc., et al., Civ. No. 04-11101 (RCL); and Charles Robinson
      v.
      Vaso Active Pharmaceuticals, Inc., et al., Civ. No. 04-11221 (RCL)

     

    B. This
      Stipulation is intended to fully, finally, and forever resolve, discharge and
      settle the actions and all Released Claims, as defined herein, with prejudice
      and without costs, against the Released Parties, as defined herein.

     

    C.
       By
      Order
      dated May 11, 2004, the Court consolidated all of the above-captioned actions
      into In
      re
      Vaso Active Pharmaceuticals Sec. Litig., No.
      04-10708 (RCL) (the “Action”). 

     

    D. By
      Order
      dated November 4, 2004, the Court appointed Edwin Choi, Richard Cheng, and
      Joe
      H. Huback as the Lead Plaintiffs, Schiffrin & Barroway, LLP as Lead Counsel,
      and Shapiro, Haber & Urmy as Local Counsel for the Class;

     

    E. On
      December 3, 2004, Lead Plaintiffs filed the Consolidated Amended Class Action
      Complaint (the “Complaint”). The Complaint alleges, among other things, that
Defendants
      (as defined herein) represented in the Registration Statements filed in
      connection with Vaso’s December 2003 Initial Public Offering (the “IPO”) that
      Vaso had begun marketing and was preparing for the commercial launch of three
      products that had received FDA approval. The Complaint alleges further that
      based on these representations, Defendants conducted an IPO which permitted
      it
      to raise millions of dollars in capital. The Complaint alleges further that
      these representations continued throughout the Class Period, artificially
      inflating the value of its Class A common stock, when in fact, Vaso had not
      received any approval from the FDA for the marketing or sale of any of the
      three
      products. With respect to Defendant Kashner, the Underwriter for the IPO, the
      Complaint alleges that Kashner had a duty to promptly disseminate truthful
      and
      accurate information with respect to Vaso and its affairs, failed to fulfill
      that duty, and caused the materially false and misleading Registration Statement
      to be delivered to potential and actual purchasers of Vaso common stock in
      connection with offers and sales thereof. The Complaint alleges that Defendants
      made these misrepresentations in violation of Sections 10(b) and 20(a) of the
      Securities Exchange Act of 1934 and Rule 10b-5 promulgated under Section 10(b),
      and Sections 11 and 15 of the Securities Act of 1933. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    F. On
      January 20, 2005, Defendants filed Answers to the Complaint denying the
      substance of these allegations. 

     

    G. Beginning
      in April 2005, the Plaintiffs, Defendant Vaso, and the Individual Defendants
      entered into negotiations for a possible resolution of the Action. Soon
      thereafter, Plaintiffs and Defendant Kashner also entered into negotiations
      for
      a possible resolution of the Action.

     

    H. On
      May
      25, 2005, Lead Plaintiffs conducted an interview of Defendant Frattaroli, the
      President and Chief Financial Officer of Vaso, concerning the financial status
      of the Company. Defendant Kashner also produced information concerning its
      financial condition.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    I. Lead
      Plaintiffs and Lead Counsel recognize the burden, expense, risks and uncertain
      outcome of litigating this Action further, and Lead Plaintiffs, on behalf of
      themselves and other members of the Class desire to settle their claims against
      the Released Parties, on terms and conditions hereafter set forth and deem
      said
      Settlement to be fair, reasonable, adequate and in the best interest of the
      Class.

     

    J. The
      Defendants do not admit the allegations of the Complaint. Defendants have
      concluded that it is desirable and beneficial to them that the Action and any
      Released Claims, including Unknown Claims (as defined herein), be fully and
      finally settled on the terms and conditions set forth herein. In determining
      to
      enter into the Stipulation, the Defendants have considered a number of issues,
      including the burden, expense, risks, delays and uncertain outcome of any
      litigation.

     

    K. The
      parties have engaged in extensive discussions and arm’s length negotiations with
      respect to a compromise and settlement of the Plaintiffs’ claims against the
      Released Parties, as hereafter defined, with a view toward settling the issues
      in dispute and achieving the best relief possible consistent with the interests
      of the Class. In agreeing to this Settlement, Plaintiffs do not concede that
      any
      infirmities exist in their claims, nor do Defendants concede any infirmities
      in
      their defenses to such claims, or that the claims are valid or have merit;
      and

     

    L. Based
      upon their investigation and discovery, Lead Counsel concludes that the terms
      and conditions of this Stipulation are fair, reasonable and adequate to Lead
      Plaintiffs and the Class, and Lead Plaintiffs have agreed to settle the claims
      raised in the Action pursuant to the terms and provisions of this Stipulation,
      after considering: (a) the Defendants’ financial condition and inability to
      either contribute any cash amount to a settlement or to satisfy a verdict;
      (b)
      the benefit that Lead Plaintiffs and the Class will receive from the Settlement;
      and (c) the desirability of permitting the Settlement to be consummated as
      provided by the terms of this Stipulation.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    M. Upon
      and
      subject to the terms and conditions hereto, this Stipulation is entered into
      at
      the same time as the stipulation reflecting the settlement of the Federal
      Derivative Action (as defined herein) (the “Federal Derivative Stipulation”),
      which is subject to approval by the Court after notice and hearing. Provided,
      however, the Courts’ approval of the Federal Derivative Stipulation is not a
      condition of the Court’s approval of the Settlement of the Action. In addition,
      upon and subject to the terms and conditions hereto, this Stipulation has been
      negotiated in conjunction with the dismissal with prejudice of the State Court
      Derivative Action (as defined below). The parties to the State Court Derivative
      Action will enter into a stipulation for the dismissal with prejudice of the
      action following the Court’s approval of the settlement of the Federal
      Derivative Action.

     

    NOW
      THEREFORE,
      without
      any admission or concession on the part of Plaintiffs of any lack of merit
      of
      the Action or of any fact alleged in the Action, whatsoever, and without any
      admission or concession of any liability or wrongdoing, or lack of merit in
      the
      defenses, or with respect to the merit of any fact alleged by Plaintiffs,
      whatsoever, by the Defendants, it is hereby STIPULATED
      AND AGREED,
      subject
      to approval of the Court, in consideration of the benefits flowing to the
      parties hereto from the Settlement, that all Released Claims (as defined herein)
      as against the Released Parties (as defined herein) shall be fully and forever
      comprised, settled, released and dismissed with prejudice, upon and subject
      to
      the following terms and conditions:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    DEFINITIONS

    1. As
      used
      in this Stipulation, the following terms shall have the following
      meanings:

     

    (a) “Authorized
      Claimant” means a Class Member (as defined below), who submits a timely and
      valid Proof of Claim and Release in such form and manner, and within such time
      as specified herein, to the Claims Administrator (as defined
      below).

     

    (b) “Claims
      Administrator” means A.B. Data, Ltd. (“A.B. Data”), which shall administer the
      Settlement and also act as Escrow Agent.

    
 

    
      (c) “Class”
        and “Class Members” mean: (i) All
        persons and entities who purchased or otherwise acquired Vaso Class A common
        stock on the open market during the period December 9, 2003 through March
        31,
        2004 (the “Class Period”); and (ii) all persons and entities who purchased or
        otherwise acquired shares of Vaso Class A common stock in connection with
        the
        Company’s initial public offering on or about December 9, 2003 (the “IPO”) (the
“Class” and, with respect to individual members of the Class, “Class Members”).
Excluded
        from the Class are Defendants, the officers and directors of the Company,
        members of Defendants’ immediate families and their legal representatives,
        heirs, successors or assigns and any entity in which Defendants have or had
        a
        controlling interest. Also excluded from the Class are any Class Members
        who
        timely and validly request exclusion from the Class pursuant to the Joint
        Notice
        of Proposed Settlement of Class Action and Derivative Action, Application
        for
        Attorneys’ Fees and Expenses, and Settlement Fairness Hearings.

       

      
        (d) “Court”
          means the United States District Court for the District of
          Massachusetts.

      

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (e) “Defendants”
      means Vaso, Masiz, Carter,
      Frattaroli,
      Shear,
      Fromm,
      Strasnick,
      Adams,
      Anderson
      and Kashner.

     

    (f) “Defendants’
      Counsel” means the law firms of Dilworth Paxson LLP, Wilmer Cutler Pickering
      Hale and Dorr LLP, and Sichenzia Ross Friedman Ference LLP. 

     

    (g) “Defendants’
      Derivative Counsel” means the law firms of Dilworth Paxson LLP, Wilmer Cutler
      Pickering Hale and Dorr LLP, and Young Conaway Stargatt & Taylor,
      LLP.

     

    (h) “Effective
      Date of Settlement” or “Effective Date” means the date defined in paragraph 39
      of the Stipulation. 

     

    (i) “Federal
      Derivative Action” means In
      re
      Vaso Active Derivative Litig., Master
      Docket No. 04-10792 (RCL) (D. Mass.).

     

    (j) “Final
      Judgment and Order” means the order to be entered by the Court approving the
      Settlement, in the form attached hereto as Exhibit B.

     

    (k) “Gross
      Settlement Fund” and “Settlement Fund” mean the One Million One Hundred and
      Twenty-Five Thousand Dollars ($1,125,000) (the “Settlement Cash”), contributed
      by Vaso’s insurers and Kashner, plus any interest earned thereon, and $750,000
      face amount of two year 5% subordinated callable notes convertible at $1.75
      per
      share (with full dilution protection), that Defendant Vaso agrees to contribute
      to the Settlement (the “Settlement Notes”).

     

    (l) “Individual
      Defendants” means Masiz, Carter,
      Frattaroli,
      Shear,
      Fromm,
      Strasnick,
      Adams,
      and Anderson.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (m) “Lead
      Plaintiffs” means Edwin Choi, Richard Cheng and Joe Huback.

     

    (n) “Lead
      Counsel” means the law firm of Schiffrin & Barroway, LLP.

     

    (o) “Net
      Settlement Fund” means the Gross Settlement Fund, as defined herein, net of any
      taxes, as referred to in paragraph 12, on the income thereof, and net of any
      funds or notes used to pay (i) the notice and administrative costs referred
      to
      in paragraph 14, and (ii) the attorneys’ fees and expense award referred to in
      paragraphs 15-17. 

     

    (p) “Notice”
      means the Joint Notice of Proposed Settlement of Class Action and Derivative
      Action, Application for Attorneys’ Fees and Expenses, and Settlement Fairness
      Hearings which is to be sent to Class Members and current shareholders
      substantially in the form attached hereto as Exhibit A-1. 

     

    (q) “Person”
      means any individual, corporation, partnership, association, affiliate, joint
      stock company, trust, estate, unincorporated association, government and any
      political subdivision thereof, and any other type of legal or political
      entity.

     

    (r) “Plaintiffs’
      Counsel” means Lead Counsel and all other counsel representing Plaintiffs in the
      Action.

     

    (s) “Plaintiffs’
      Derivative Counsel” means Barrett, Johnston, & Parsley, Robbins, Umeda &
Fink, LLP and Federman & Sherwood.
      

     

    (t) “Preliminary
      Approval Order” means the order preliminarily approving the Settlement and
      directing notice thereof to the Class, which order is in the form attached
      hereto as Exhibit A.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (u) “Proof
      of
      Claim” means the proposed Proof of Claim and Release in the form attached as
      Exhibit A-2.

     

    (v) “Publication
      Notice” means the Summary Notice of Proposed Settlement of Class Action and
      Derivative Action and Settlement Hearings for publication in the form attached
      as Exhibit A-3.

     

    
      (w) “Released
        Parties” means the
        Defendants and their respective present, former, and future officers and
        directors, parents, and controlling shareholders (including
        but not limited to Biochemics, Inc.),
        and
        their respective present and former subsidiaries,
        affiliates, divisions, and any of the officers, directors, partners, members,
        employees, principals, agents, associates, representatives, attorneys, advisors,
        investment advisors, auditors, fiduciaries, accountants, predecessors,
        administrators, executors, heirs, successors and assigns of each of them,
        and
        any other Person
        in
        which any of the foregoing has or had a controlling interest or which is
        or was
        related to or affiliated with any of the foregoing, any insurer who contributes
        to or reimburses the
        Defendants for a portion of its or their contributions to the settlement
        and who
        receives a release from the Defendants in connection with the
        Settlement,
        and
any
        members of Defendants’ immediate families, or any trust of which any Defendant
        is the settlor or which is for the benefit of any Defendant and/or member(s)
        of
        the Defendant’s family.
        

       

      (x) “Released
        Claims” means any
        and
        all claims, debts, demands, rights or causes of action or liabilities
        (including, but not limited to, any claims for damages, interest, attorneys’
fees, expert or consulting fees, and any other costs, expenses or liability),
        whether based on federal, state, local, statutory or common law or any other
        law, rule or regulation, whether fixed or contingent, accrued or not accrued,
        liquidated or not liquidated, at law or in equity, matured or un-matured,
        whether class or individual in nature, including both known claims and Unknown
        Claims (as defined below), (i) that have been asserted in this Action by
        the
        Class Members or any of them against any of the Released Parties, or (ii)
        that
        could have been asserted in any forum by the Class Members or any of them
        against any of the Released Parties which arise out of or are based upon
        or
        relate
        in any way to the
        allegations, transactions, facts, matters or occurrences, representations
        or
        omissions involved, set forth or referred to in the Complaint and relate
        to the
        purchase or acquisition of shares of Vaso Class A common stock
        in the
        IPO or
        during
        the Class Period. 

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    (y) “Settlement”
      means the settlement contemplated by this Stipulation.

     

    (z) “Settled
      Defendants’ Claims” means any and all claims, rights or causes of action or
      liabilities, whether based on federal, state, local, statutory or common law
      or
      any other law, rule or regulation, including both known claims and Unknown
      Claims, that have been or could have been asserted in the Action or any forum
      by
      the Defendants, their attorneys, or any of them or the successors and assigns
      of
      any of them against the Lead Plaintiffs, Class Members or their attorneys,
      which
      arise out of or relate in any way to the institution, prosecution, or settlement
      of the Action (except for claims to enforce the Settlement).

     

    (aa) “State
      Court Derivative Action” means Weymouth
      v. Masiz et. al. C.A.
      No.
      602-N (Del. Chancery Ct.), which is being voluntarily dismissed with prejudice
      as part of the resolution of the Federal Derivative Action.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (bb) “Unknown
      Claims” means any and all Released Claims, which the Lead Plaintiffs,
      Plaintiffs’ Counsel, or any Class Member do not know or suspect to exist in his,
      her or its favor at the time of the release of the Released Parties, and any
      Settled Defendants’ Claims which any Defendant does not know or suspect to exist
      in his, her, or its favor, which if known by him, her or it might have affected
      his, her, or its decision(s) with respect to the Settlement. All Class Members
      who do not exclude themselves from the Class and this Settlement will be deemed
      to expressly waive any and all rights under any statute or common law principles
      that would limit the effect of the foregoing releases to those claims actually
      known or suspected at the time of execution of this Stipulation, including,
      but
      not limited to Section 1542 of the Civil Code of the State of California, which
      provides:

     

    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.

    

    Lead
      Plaintiffs and Defendants acknowledge, and Class Members by operation of law
      shall be deemed to have acknowledged, that the inclusion of “Unknown Claims” in
      the definition of Released Claims and Settled Defendants’ Claims was separately
      bargained for and was a key element of the Settlement. 

     

    DEFENDANTS
      DO NOT ADMIT ANY 

    WRONGDOING
      OR LIABILITY

    

    2. The
      Defendants have denied, and continue to deny that they have engaged in any
      wrongdoing or otherwise committed any violation of federal or state securities
      laws or other laws and are entering into this Stipulation solely to eliminate
      the burden and expense of litigation. The Defendants make no admission of
      liability or any fact alleged in the Action. In addition, Lead Plaintiffs do
      not
      concede that any infirmities exist in their claims, nor do Defendants concede
      any infirmities in their defenses to such claims.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    SCOPE
      AND EFFECT OF SETTLEMENT

     

    3. The
      obligations incurred pursuant to this Stipulation shall be in full and final
      disposition of the Action as against the Defendants and any and all Released
      Claims against any and all Released Parties.

     

    4. Upon
      the
      Effective Date of this Settlement, Lead Plaintiffs and each Class Member, on
      behalf of themselves, and each of their representatives, heirs, executors,
      administrators, trustees, estates, predecessors, successors, parents,
      subsidiaries, affiliates, custodians, agents, and assigns and any Persons they
      represent, shall be (i) conclusively deemed to have fully, finally and forever
      settled, released, relinquished and discharged with prejudice all Released
      Claims against the Released Parties; (ii) conclusively deemed to have covenanted
      not to sue the Released Parties in any action alleging any Released Claims;
      and
      (iii) forever barred from asserting any Released Claims against any of the
      Released Parties.

     

    5. If
      the
      Settlement is approved by the Court, the Final Judgment and Order will dismiss
      the Action as against the Defendants with prejudice, and will bar and
      permanently enjoin Lead Plaintiffs and each Class Member, regardless of whether
      such Lead Plaintiff or Class Member has submitted a Proof of Claim, from
      prosecuting the Released Claims against any of the Released
      Parties.

     

    THE
      SETTLEMENT CONSIDERATION

     

    6. In
      full
      and final settlement of the claims in this Action, Vaso shall cause its insurer
      to pay $1,100,000 in cash and Kashner will pay $25,000 in cash (collectively
      with the $1,100,000 in cash, the “Settlement Cash”) pursuant to paragraph 6(a)
      below. Vaso will also contribute the “Settlement Notes” (collectively, the
      Settlement Cash with any interest thereon, and the Settlement Notes, shall
      be
      referred to as the “Gross Settlement Fund” or the “Settlement Fund”) as provided
      below in paragraph 6(e).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

      

        (a) Within
          ten (10) business days from the date of the Court’s entry of the Preliminary
          Approval Order, Vaso shall cause its insurer to deposit $1,100,000 in cash
          into
          an interest bearing Escrow Account (the “Settlement Fund”) and Kashner shall pay
          $25,000 into the Settlement Fund. Interest earned on the Settlement Fund
          while
          held in escrow shall accrue for the benefit of the ultimate recipients
          of the
          Settlement Fund. The
          parties
          acknowledge that the portion of the Settlement Cash contributed by Vaso
          represents proceeds of available Directors and Officers Liability Insurance
          which does not constitute property of Vaso, or any estate thereof in the
          event
          of a bankruptcy, pursuant to 11 U.S.C. § 541. 

         

      

      (b) $100,000
        of the $1,125,000 Settlement Cash shall be allocated for the express purpose
        of
        providing notice of the Settlement in this Action and in the Derivative Action
        and to administer the Settlement Fund (the “Notice and Administration Fund”),
        pursuant to the terms of the Preliminary Approval Order entered in this Action.
        Any portion of the Notice and Administration Fund which is not required for
        the
        payment of Notice costs and to administer the Settlement Fund will be returned
        to the Gross Settlement Fund. Any notice and administrative costs in excess
        of
        $100,000 shall be paid from the Gross Settlement Fund upon Court
        approval.

       

    

    (c) With
      respect to the Settlement Notes, in accordance with the timetable described
      in
      (d) below, the Class shall receive the Settlement Notes, less any notes awarded
      by the Court and issued by Vaso to Lead Counsel as attorneys’ fees (the “Net
      Settlement Notes”). 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (d) The
      Settlement Notes shall be convertible duly and validly issued fully paid,
      non-assessable, and free from all liens and encumbrances. In
      the
      event Vaso intends to convert the Settlement Notes, Vaso shall provide Lead
      Counsel with as much notice as practicable.

     

    (e) Subsequent
      to the Effective Date, Vaso shall issue and deliver the Net Settlement Notes,
      if
      any, to the Authorized Claimants, in whole or in part, within ten (10) business
      days of receipt of written instructions from the Claims Administrator in
      accordance with paragraph 32 below and the signing of the Class Distribution
      Order (as defined herein) authorizing the allocation. Vaso shall bear all costs
      of issuing such notes, including the costs associated with registering (if
      necessary), printing and issuing the notes, as well as any costs necessary
      to
      make the notes freely tradable.

     

    (f) The
      parties stipulate, and shall ask the Court to find in the Final Judgment and
      Order, among other things, that the issuance of notes in consideration of this
      Settlement is in reliance upon and subject to the exemption from registration
      under Section 3(a)(10) of the Securities Act of 1933 and any applicable
      provisions of state securities laws and is based on this Court’s approval of the
      note issuance and Settlement as fair, both substantively and procedurally,
      to
      those to whom the notes will be issued. In the event the note issuance is not
      exempt from registration under the Securities Act of 1933 or any state
      securities laws, Vaso will pay all expenses necessary to register the notes
      accordingly. 

    

    
      
        
        

      

      
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    7. Vaso
      warrants that, as of the date of this Stipulation, it is not insolvent, nor
      will
      payment of its portion of the Settlement Cash or distribution of the Settlement
      Notes render Vaso insolvent within the meaning of and/or for the purposes of
      the
      United States Bankruptcy Code. In
      the
      event any case is commenced pursuant to either Chapter 7 or Chapter 11 of the
      Bankruptcy Code in which Vaso is the debtor, whether any such proceeding is
      commenced voluntarily or involuntarily (the “Bankruptcy Proceeding”), Vaso will
      not contend that there was no consideration provided for any portion of the
      Gross Settlement Fund paid by Vaso, any insurance carrier or any other defendant
      based upon Defendants’ failure to admit liability or wrongdoing in connection
      with Plaintiffs’ claims against Defendants. In the event a Bankruptcy Proceeding
      is commenced, Vaso will consent to the modification of the automatic stay
      provisions of the Bankruptcy Code (11 U.S.C. § 362) to the extent necessary to
      effectuate the terms of this Stipulation. In addition, if
      a case
      is commenced with respect to Vaso under the United States (Bankruptcy) Code,
      or
      a trustee, receiver or conservator is appointed under any similar law, and
      in
      the event of the entry of a final order of a court of competent jurisdiction
      determining the payment of the Gross Settlement Fund and any accrued interest,
      or any portion thereof, to be a preference, voidable transfer, fraudulent
      transfer or similar transaction, and that any of these findings preclude payment
      of the $1,100,000 by Vaso’s Officers and Director’s Policy, then, at the
      election of Lead Counsel, the parties shall jointly move the Court to vacate
      and
      set aside the releases given and Final Judgment and Order entered in favor
      of
      the Defendants pursuant to this Stipulation, and the Stipulation shall be null
      and void, and the parties hereto shall be restored to their respective positions
      in the litigation immediately prior to June 1, 2005.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    8. No
      part
      of the Gross Settlement Fund shall constitute, nor shall it be construed or
      treated as constituting, a payment in lieu of fines, penalties, forfeitures
      or
      punitive recoveries.

     

    9. Upon
      the
      Effective Date, all remaining interest or right of each of the Defendants in
      the
      Gross Settlement Fund shall be absolutely and forever extinguished except as
      provided in this Stipulation.

     

    THE
      SETTLEMENT FUND

     

    10. All
      funds
      held in the Escrow Account shall remain subject to the jurisdiction of the
      Court
      until such time as the funds shall be distributed to the Class or returned
      to
      the payors pursuant to this Stipulation and/or further order of the Court.
      Any
      funds in excess of $100,000 shall be invested in short term United States Agency
      or Treasury Securities, and shall collect and reinvest all interest accrued
      thereon. In the event any funds held in the Escrow Account are less than
      $100,000, then such amount may be held in an interest bearing account of the
      Escrow Agent, insured by the FDIC. The Defendants, the Released Parties, and
      their respective Counsel shall bear no risk related to the investment of the
      Settlement Fund. 

     

    11. Subject
      to further order and/or directions as may be made by the Court or pursuant
      to
      written direction by the parties to this Stipulation, the Claims Administrator
      is authorized to execute such transactions on behalf of the Lead Plaintiffs
      and
      the Class as are consistent with the terms of this Stipulation. 

     

    TAX
      TREATMENT OF THE SETTLEMENT FUND

     

    12. (a) The
      parties hereto agree that the Settlement Fund is intended to be a Qualified
      Settlement Fund within the meaning of Treasury Regulation § 1.468B-1. The Claims
      Administrator and, as required, the parties hereto shall jointly and timely
      make
      such elections as necessary or advisable to carry out the provisions of this
      paragraph 12(a), including the “relation-back election” (as defined in Treasury
      Regulation §1.468B-1) back to the earliest permitted date. Such elections shall
      be made in compliance with the procedures and requirements contained in such
      regulations. It shall be the responsibility of the Claims Administrator to
      timely and properly prepare and deliver the necessary documentation for
      signature by all necessary parties, and thereafter to cause the appropriate
      filing to occur.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (b) For
      the
      purposes of § 1.468B of the Internal Revenue Code of 1986, as amended, and the
      regulations promulgated thereunder, the “administrator” as defined in
§1.468B-2(k)(3) shall be A.B. Data. The Claims Administrator shall timely and
      properly file informational and other tax returns necessary or advisable with
      respect to the Settlement Fund (including without limitation the returns
      described in Treasury Regulation §1.468B-2(k and l)), if applicable. Defendants
      Vaso and Kashner agree to provide promptly to A.B. Data the statement described
      in Treasury Regulation §1.468B-3(e). Such returns (as well as the election
      described in paragraph 12(a)) shall be consistent with this paragraph 12 and
      in
      all events shall reflect that all taxes (including any estimated taxes, interest
      or penalties) on the income earned by the Settlement Fund shall be paid out
      of
      the Settlement Fund as provided in paragraph 12(c) hereof.

     

    (c)
       All
      (i)
      taxes (including any estimated taxes, interest or penalties) arising with
      respect to the income earned by the Settlement Fund, including any taxes or
      tax
      detriments that may be imposed upon Defendants or the Released Parties with
      respect to any income earned by the Settlement Fund for any period during which
      the Settlement Fund does not qualify as a “qualified settlement fund” for
      federal or state income tax purposes (“Taxes”), and (ii) expenses and costs
      incurred in connection with the operation and implementation of this paragraph
      12 (including, without limitation, expenses of tax attorneys and/or accountants
      and mailing and distribution costs and expenses relating to filing (or failing
      to file) the returns described in this paragraph 12) (“Tax Expenses”), shall be
      paid out of the Settlement Fund. In all events the Defendants, the Released
      Parties, their respective Counsel, and their insurers shall have no liability
      or
      responsibility for the Taxes or the Tax Expenses or the filing of any tax
      returns or other documents with the Internal Revenue Service or any other state
      or local taxing authority. The Settlement Fund shall indemnify and hold
      Defendants, the Released Parties, their respective Counsel and their insurers
      harmless for Taxes and Tax Expenses (including, without limitation, taxes
      payable by reason of any such indemnification). Further, Taxes and Tax Expenses
      shall be treated as, and considered to be, a cost of administration of the
      settlement and shall be timely paid by the Claims Administrator out of the
      Net
      Settlement Fund without prior order from the Court and the Claims Administrator
      shall be obligated (notwithstanding anything herein to the contrary) to withhold
      from distribution to Class Members any funds necessary to pay such amounts
      including the establishment of adequate reserves for any Taxes and Tax Expenses
      (as well as any amounts that may be required to be withheld under Treasury
      Regulation §1.468B-2(1) and (2)); Defendants, the Released Parties, their
      respective Counsel, and their insurers are not responsible and shall have no
      liability therefore or for any reporting requirements that may relate
      thereto.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (d) The
      parties hereto agree to cooperate with the Claims Administrator, each other,
      and
      their tax attorneys and accountants to the extent reasonably necessary to carry
      out the provisions of this paragraph 12.

     

    SETTLEMENT
      DISBURSEMENTS

     

    13. All
      costs
      of administering this Settlement and the settlement of the Derivative Action,
      including but not limited to the Joint Notice of Proposed Settlement of Class
      Action and Derivative Action, Application for Attorneys’ Fees and Expenses, and
      Settlement Fairness Hearings, administering and distributing the Gross
      Settlement Fund, and taxes and other expenses, are the sole responsibility
      of
      the Plaintiffs and shall be paid out of the Gross Settlement Fund, as provided
      herein. The remainder of the Gross Settlement Fund after the payment of the
      above amounts, as well as attorneys’ fees and expenses shall constitute the “Net
      Settlement Fund,” which shall be distributed to the Authorized Claimants.

     

    COSTS
      OF NOTICE AND CLAIMS ADMINISTRATION

     

    14. A
      portion
      of the Settlement Fund shall be used to pay costs and expenses in providing
      proper Notice of Settlement in this Action and in the Derivative Action, the
      fees and expenses of the Claims Administrator, the costs and expenses of
      administering this Settlement, including without limitation, costs and expenses
      necessary to secure court approval of the Stipulation, such as expert
      affidavits, and the processing and payment of claims, and all taxes. Notice
      and
      administration costs and the fees of the Claims Administrator, up to $100,000,
      shall be advanced from the Settlement Fund, following entry of the Preliminary
      Approval Order as provided in paragraph 6(b). Costs exceeding $100,000 shall
      be
      paid from the Settlement Fund after the Effective Date upon Court
      approval.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    ATTORNEYS’
      FEES

     

    15. A
      portion
      of the Gross Settlement Fund shall be used to pay the attorneys’ fees of
      Plaintiffs’ Counsel and to reimburse them for expenses and costs, including the
      fees and expenses of experts and consultants, in an amount to be approved by
      the
      Court.

     

    16. Lead
      Counsel will apply to the Court for an award from the Gross Settlement Fund
      of
      attorneys’ fees not to exceed twenty-five percent (25%) of the Gross Settlement
      Fund, including twenty-five percent (25%) of the Settlement Cash and twenty-five
      percent (25%) of the Gross Settlement Notes, and reimbursement of expenses,
      plus
      interest. Lead Counsel shall decide the allocation of attorneys’ fees among all
      Plaintiffs’ Counsel. Lead Counsel shall not seek attorneys’ fees from any other
      source other than the Gross Settlement Fund. It is further understood and agreed
      that Lead Plaintiffs and the Class expressly waive any and all rights to recover
      or seek any attorneys’ fees, expenses or costs from the Defendants, the Released
      Parties, and their Counsel in connection with the Action, aside from any
      application that they may make in the Court for an award from the Gross
      Settlement Fund. Any appeal relating solely to the award of attorneys’ fees or
      expenses shall not affect the occurrence of the Effective Date.

     

    17. The
      attorneys’ fees, expenses and costs, including any Settlement Notes awarded,
      shall be payable to Lead Counsel from the Gross Settlement Fund and issued
      to
      Lead Counsel by Vaso immediately following the entry of the Court’s Order
      awarding attorneys’ fees and expenses. No later than 60 days following entry of
      the Preliminary Approval Order, Vaso shall advise Lead Counsel of the number
      of
      days advance notice that will be required for receipt of instructions for
      issuance of the Settlement Cash and Settlement Notes in order to wire such
      Settlement Cash and issue any Settlement Notes awarded as attorneys’ fees
      immediately following the entry of the Court’s Order awarding attorneys’ fees
      and expenses. If the Effective Date does not occur, or the judgment and/or
      order
      making such fee and expense award is reversed or modified, or the Stipulation
      is
      canceled or terminated for any other reason, or if the dismissal with prejudice
      of the Action does not become final (any such occurrence being a “Reimbursement
      Event”), Lead Counsel shall within ten (10) business days after receiving
      written notice from Defendants’ Counsel or from a court of appropriate
      jurisdiction of any Reimbursement Event, refund to the Gross Settlement Fund,
      the fees, expenses and costs previously paid to it, plus the interest earned
      therefrom, in an amount consistent with such Reimbursement Event. Furthermore,
      Lead Counsel as a condition of receiving such fees, expenses and costs, on
      behalf of itself and each partner, agrees that the law firm and its partners
      are
      subject to the jurisdiction of the Court for the purpose of enforcing the
      provisions of this paragraph. 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    18. The
      Released Parties, the Defendants’ and Counsel for any of the Released Parties or
      the Defendants shall not have any responsibility for, and no liability
      whatsoever with respect to any payment to Lead Counsel or any other counsel
      or
      Person who receives payment from the Gross Settlement Fund or claims entitlement
      to receive such payment. 

     

    19. The
      procedure for the allowance or disallowance by the Court of any attorneys’ fees,
      costs and expenses, including the fees of experts and consultants to be paid
      out
      of the Gross Settlement Fund, are not part of the Settlement set forth in the
      Stipulation and are to be considered by the Court separately from the Court’s
      consideration of the fairness, reasonableness and adequacy of the Settlement
      set
      forth in the Stipulation, and any order or proceedings relating solely to the
      payment of any fees, costs or expenses, or any fee and/or expense application,
      or any appeal from any order relating thereto or reversal or modification
      thereto shall not operate to terminate or cancel the Stipulation or affect
      or
      delay the finality of the judgment approving the Stipulation and the settlement
      of the Action set forth herein.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    ADMINISTRATION

     

    20. The
      Claims Administrator shall administer the Settlement subject to the jurisdiction
      of the Court. Except as stated in this paragraph, the Defendants, the Released
      Parties and their respective Counsel shall have no responsibility for the
      administration of the Settlement and shall have no liability to Lead Plaintiffs
      or the Class in connection with such administration of the Settlement. Vaso,
      within three (3) business days following the Preliminary Approval Order, shall
      provide to the Claims Administrator Vaso’s
      transfer records showing names and addresses of record transferees of Vaso
      Class
      A common stock during the Class Period for the purpose of giving the best notice
      practicable to Class Members.
      

     

    21. No
      Authorized Claimant shall have any claim against the Lead Plaintiffs or Lead
      Counsel based on any distributions made in accordance with or as contemplated
      by
      this Stipulation, and in no event shall any Authorized Claimant have any claim
      against any Defendant, Released Party or Counsel for any Defendant or Released
      Party in connection with any distributions or use of any portion of the
      Settlement Fund at such time as any portion of the Settlement Fund is delivered
      to the Escrow Account.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    22. Subsequent
      to the Effective Date, Lead Counsel will apply to the Court, on notice to
      Defendants’ Counsel, for an Order (the “Class Distribution Order”) approving the
      Claims Administrator’s administrative determinations concerning the acceptance
      and/or rejection of the claims submitted in accordance herewith and approving
      any fees and expenses not previously applied for, including the fees and
      expenses of the Claims Administrator, and directing payment of the Net
      Settlement Fund to Authorized Claimants.

     

    DISTRIBUTION
      TO AUTHORIZED CLAIMANTS

     

    23. The
      Claims Administrator shall determine each Authorized Claimant’s pro rata
      share of
      the Net Settlement Fund based upon each Authorized Claimant’s Recognized Claim
      (as defined in the Plan of Allocation described in the Notice annexed hereto
      as
      Exhibit A-1, or in such other Plan of Allocation as the Court
      approves).

     

    24. The
      Plan
      of Allocation proposed in the Notice is not a necessary term of this Stipulation
      and it is not a condition of this Settlement that the Plan of Allocation be
      approved as long as the Plan of Allocation to be used to distribute the
      Settlement has been approved by the Court.

     

    25. Each
      Authorized Claimant shall be allocated a pro rata
      share of
      the Net Settlement Fund based on his, her or its Recognized Claim compared
      to
      the total Recognized Claims of all Authorized Claimants. Lead Counsel shall
      have
      the discretion to request the Court to preclude recovery by Authorized Claimants
      who will receive less than $10 or less than $8 face value in Settlement Notes
      as
      their pro rata share of the Net Settlement Fund. The Defendants shall have
      no
      interest in the Settlement Fund from and after the Effective Date. The
      Defendants, the Released Parties, and their respective Counsel shall have no
      involvement in or responsibility for reviewing or challenging the distributions
      of the proceeds of the Net Settlement Fund to Authorized Claimants.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    26. Any
      Class
      Member who does not submit a timely and valid Proof of Claim will not be an
      Authorized Claimant entitled to receive any of the proceeds from the Net
      Settlement Fund, but will otherwise be bound by all of the terms of this
      Stipulation, including the terms of the Final Judgment and Order to be entered
      in the Action and the releases provided for herein and in such Final Judgment
      and Order.

     

    27. Except
      for their obligation to cause payment of the Settlement Cash and to contribute
      and distribute the Settlement Notes, and to cooperate in the production of
      information with respect to the identification of Class Members from Vaso’s
      shareholder transfer records, as provided herein, Defendants and the Released
      Parties, and their respective Counsel shall have no liability, obligation or
      responsibility for the administration or disbursement of the Net Settlement
      Fund. Lead Counsel shall have the right, but not the obligation, to direct
      the
      Claims Administrator to waive what they deem to be formal or technical defects
      in any Proof of Claim submitted in the interests of achieving substantial
      justice.

     

    28.
       For
      purposes of determining the extent, if any, to which a Class Member shall be
      entitled to be treated as an “Authorized Claimant”, the following conditions
      shall apply:

     

    (a) Each
      Class Member shall be required to submit a Proof of Claim (see attached Exhibit
      A-2), supported by such documents as are designated therein, including proof
      of
      the claimant’s loss, or such other documents or proof as Lead Counsel, in their
      discretion, may deem acceptable;

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (b) All
      Proofs of Claim must be submitted by the date specified in the Notice unless
      such period is extended by Order of the Court. Any Class Member who fails to
      submit a Proof of Claim by such date shall be forever barred from receiving
      any
      payment pursuant to this Stipulation (unless, by Order of the Court a later
      submitted Proof of Claim by such Class Member is approved), but shall in all
      other respects be bound by all of the terms of this Stipulation, including
      the
      terms of the Final Judgment and Order to be entered in the Action. Provided
      that
      it is received before the motion for the Class Distribution Order is filed,
      a
      Proof of Claim shall be deemed to have been submitted when posted, if received
      with a postmark indicated on the envelope and if mailed by first-class mail
      and
      addressed in accordance with the instructions thereon. In all other cases,
      the
      Proof of Claim shall be deemed to have been submitted when actually received
      by
      the Claims Administrator;

     

    (c) Each
      Proof of Claim shall be submitted to and reviewed by the Claims Administrator,
      under the supervision of Lead Counsel, who shall determine in accordance with
      this Stipulation and the Plan of Allocation the extent, if any, to which each
      claim shall be allowed, subject to review by the Court pursuant to subparagraph
      (e) below;

     

    (d) Proofs
      of
      Claim that do not meet the submission requirements may be rejected. Prior to
      rejection of a Proof of Claim, the Claims Administrator shall communicate with
      the claimant in order to remedy the curable deficiencies in the Proof of Claims
      submitted. The Claims Administrator, under supervision of Lead Counsel, shall
      notify, in a timely fashion and in writing, all claimants whose Proofs of Claim
      they propose to reject in whole or in part, setting forth the reasons therefore,
      and shall indicate in such notice that the claimant whose claim is to be
      rejected has the right to a review by the Court or its designee if the claimant
      so desires and complies with the requirements of subparagraph (e)
      below;

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (e) If
      any
      claimant whose claim has been rejected in whole or in part desires to contest
      such rejection, the claimant must, within twenty (20) calendar days after the
      date of mailing of the notice required in subparagraph (d) above, serve upon
      the
      Claims Administrator a notice and statement of reasons indicating the claimant’s
      grounds for contesting the rejection along with any supporting documentation,
      and requesting a review thereof by the Court or its designee. If a dispute
      concerning a claim cannot be otherwise resolved, Lead Counsel shall thereafter
      present the request for review to the Court or the Court’s designee as ordered
      by the Court; and

     

    (f) The
      administrative determinations of the Claims Administrator accepting and
      rejecting claims shall be presented to the Court, on notice to Defendants’
Counsel, for approval by the Court or its designee in the Class Distribution
      Order.

     

    29. Each
      claimant shall be deemed to have submitted to the jurisdiction of the Court
      with
      respect to the claimant’s claim and with respect to the release provided for in
      this Stipulation and the Final Judgment and Order.

     

    30. Payment
      pursuant to this Stipulation and the Class Distribution Order shall be deemed
      final and conclusive against all Class Members. All Class Members whose claims
      are not payable pursuant to this Stipulation and the Class Distribution Order
      shall be barred from participating in distributions from the Net Settlement
      Fund, but otherwise shall be bound by all of the terms of this Stipulation,
      including the terms of the Final Judgment and Order to be entered in the Action
      and the releases provided for herein, and shall be barred from bringing any
      action against the Released Parties concerning the Released Claims.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    31. The
      Net
      Settlement Fund shall be distributed to Authorized Claimants by the Claims
      Administrator only after the Effective Date and after: (i) all Claims have
      been
      processed, and all claimants whose Claims have been rejected or disallowed,
      in
      whole or in part, have been notified and provided the opportunity to be heard
      concerning such rejection or disallowance; (ii) all objections with respect
      to
      all rejected or disallowed claims have been resolved by the Court, and all
      appeals therefrom have been resolved or the time for all potential appeals
      therefrom has expired; (iii) all matters with respect to attorneys’ fees, costs,
      and disbursements have been resolved by the Court, all appeals therefrom have
      been resolved or the time for all potential appeals therefrom has expired;
      and
      (iv) all costs of administration have been paid.

     

    32. The
      Claims Administrator shall calculate the number of Settlement Notes to be
      distributed to the Class Members. Upon completion of the calculations, the
      Claims Administrator shall advise Vaso’s Counsel and Lead Counsel of the number
      of Settlement Notes to be distributed to each Class Member. Vaso’s Counsel shall
      thereafter, promptly upon receipt of that information, distribute the Settlement
      Notes to the Claims Administrator, to distribute to the Class Members in
      accordance with paragraph 6(e).

     

    33. If
      any
      portion of the Net Settlement Fund, either cash or notes, remain in the Net
      Settlement Fund by reason of return mail, uncashed checks or otherwise,
      including the return of certificates of Vaso notes, then the following steps
      shall be taken one (1) year after the initial distribution of the Net Settlement
      Fund: 

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    (a) The
      Claims Administrator shall confirm that it has made all reasonable and diligent
      efforts to have Authorized Claimants who are entitled to participate in the
      distribution of the Net Settlement Fund cash their distribution checks or claim
      ownership of their notes; 

     

    (b) The
      Claims Administrator, proportionate to the initial distribution, shall
re-distribute
      the remaining Net Settlement Fund, after payment of any unpaid costs or fees
      incurred in administering the Net Settlement Fund for such re-distribution,
      to
      Class Members who have cashed their checks and who would receive at least $10.00
      or $8 face amount in Settlement Notes if Lead Counsel determines that the
      benefit to the Class outweighs the cost of the re-distribution; 

     

    (c) If
      after
      six months after such re-distribution any funds shall remain in the Net
      Settlement Fund, Lead Counsel shall make an application to the Court to
      distribute the sum of the unpaid residue to a charity selected by Lead
      Counsel.

     

    PRELIMINARY
      APPROVAL ORDER

     

    34. Promptly
      following the execution of this Stipulation, the parties shall file this
      Stipulation and all of its Exhibits along with an application for the
      Preliminary Approval Order in the form annexed hereto as Exhibit A.

     

    TERMS
      OF FINAL JUDGMENT AND ORDER

     

    35. If
      the
      Settlement is approved by the Court, counsel for the parties shall request
      that
      the Court enter a Final Judgment and Order in the form annexed hereto as Exhibit
      B.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    RIGHT
      OF EXCLUSION AND OBJECTION

     

    36. Any
      Person may seek to be excluded from the Class and the Settlement provided for
      by
      this Stipulation by submitting a written request for exclusion, which request
      must state the dates during the Class Period on which the Person purchased
      Vaso
      shares, the number and price of such shares so purchased or acquired, and the
      date, number and price of the sale of such shares so purchased or acquired.
      Any
      request for exclusion must be submitted to the Claims Administrator fourteen
      (14) days before the Final Settlement Hearing Date established by the Court.
      Any
      Person so excluded shall not be bound by the terms of the Stipulation, nor
      entitled to any of its benefits, and shall not be bound by any Final Judgment
      and Order and/or other order of the Court entered herein, whether pursuant
      to
      this Stipulation or otherwise. 

     

    37. Any
      Class
      Member who does not exclude himself, herself, or itself from the Class and
      the
      Settlement shall have the right to submit written objections concerning the
      Settlement, the Plan of Allocation, and/or Lead Counsel’s application for
      attorneys’ fees, expenses and costs, which objections shall state all of the
      reasons for the objections (e.g.,
      a mere
      statement that “I object” shall not be deemed sufficient). Any written
      objections, and any briefs, affidavits or other evidence submitted in support
      thereof must be filed with the Clerk of the Court by the date set forth in
      the
      Court’s Preliminary Approval Order. All Persons desiring to attend the Final
      Settlement Hearing and be heard as objectors must have filed written objections
      as provided herein, as a condition of appearing and being heard at such hearing.
      Any Class Member who does not timely file written objections pursuant to this
      paragraph and the Notice shall not be permitted to object at the Final
      Settlement Hearing, and shall be foreclosed from objecting to, challenging
      or
      otherwise seeking review of the Settlement, the Plan of Allocation, or
      application for attorneys’ fees and reimbursement of expenses by appeal or
      otherwise, in the Action, unless permitted to do so by the Court.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    SUPPLEMENTAL
      AGREEMENT

     

    38. Simultaneously
      herewith, Lead Counsel and Defendants’ Counsel are executing a “Supplemental
      Agreement” setting forth certain conditions under which this Settlement may be
      terminated at the sole election of Vaso based on the extent to which Persons
      request exclusion from the Class and the Settlement. The Supplemental Agreement
      shall not be filed prior to the deadline for submitting exclusion requests
      unless a dispute arises as to its terms. In the event of termination of this
      Settlement pursuant to the Supplemental Agreement, this Stipulation shall become
      null and void and of no further force and effect and the provisions of paragraph
      42 shall apply. Notwithstanding the foregoing, this Stipulation shall not become
      null and void as a result of the election by Vaso to exercise its option to
      terminate the Settlement pursuant to the Supplemental Agreement until the
      conditions set forth in the Supplemental Agreement have been
      satisfied.

     

    EFFECTIVE
      DATE OF SETTLEMENT, WAIVER OR TERMINATION

    
 

    39. The
      Effective Date of Settlement shall be the date when all the following shall
      have
      occurred:

     

    (a) The
      Settlement has not been terminated under paragraphs 38 or 41; and

     

    (b) Approval
      by the Court of the Settlement, following notice to the Class and a hearing,
      as
      prescribed by Rule 23 of the Federal Rules of Civil Procedure; and the entry
      of
      the Final Judgment and Order in the form set forth in Exhibit B hereto;
      and

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    (c) The
      later
      of (i) the expiration of any time for appeal or review of such Final Judgment
      and Order with no appeal or review having been noticed; or (ii) if any appeal
      is
      taken and not dismissed, after such Final Judgment and Order is upheld on appeal
      in all material respects and is no longer subject to review upon appeal or
      review by writ of certiorari or otherwise. The appeal of an order solely
      relating to the award of attorneys’ fees and expenses shall not prevent the
      Effective Date from occurring except as to any obligation concerning the payment
      of such fees and expenses, as long as there is no appeal of the Final Judgment
      and Order approving the Settlement. 

     

    40. Upon
      occurrence of the Effective Date, any and all remaining interest or right of
      the
      Defendants in or to the Gross Settlement Fund, if any, shall be absolutely
      and
      forever extinguished except as provided in this Stipulation. 

     

    41. Defendants’
      Counsel or Lead Counsel shall have the unconditional right to terminate the
      Settlement and this Stipulation if (a) the Court enters a preliminary approval
      order that is not in the form annexed hereto as Exhibit A hereto except as
      such
      order is consented to by all parties in writing or on the record (in which
      case
      such order shall be regarded as the Preliminary Approval Order); (b) the Court
      enters a Final Judgment and Order in the Action that is not in the form set
      forth in Exhibit B annexed hereto except as such Final Judgment and Order is
      consented to by all parties in writing or on the record (in which case such
      order shall be regarded as the Final Judgment and Order); or (c) the Court
      enters a Final Judgment and Order and appellate review is sought and, on such
      appeal, the Final Judgment and Order is reversed or materially modified.
      Defendants’ Counsel or Lead Counsel shall provide written notice of their intent
      to terminate the Settlement and this Stipulation to all other parties hereto
      within thirty (30) calendar days of the occurrence of any of the events
      referenced above in this paragraph. For purposes of this provision, a
      disallowance or modification limited solely to the award of attorneys’ fees,
      costs and expenses requested by Lead Counsel shall not be deemed a modification
      or disapproval of the Settlement or Final Judgment and Order.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    42. Except
      as
      otherwise provided herein, in the event the Settlement is terminated or if
      the
      Effective Date does not occur for any reason, then the Settlement shall be
      without force and effect upon the rights of the parties, none of its terms
      shall
      be effective or enforceable, and no findings or orders in respect thereto
      (including any findings or orders relative to a settlement class) shall be
      used
      in any proceedings. In such event: (1)
      the
      balance remaining in the Settlement Fund, less any costs incurred in excess
      of
      the Notice and Administration Fund, and any unused or uncommitted portion of
      the
      Notice and Administration Fund, if any, less a reserve for any taxes owed
      thereon, or accrued but unpaid expenses of the Claims Administrator, shall
      be
      refunded to the payor along with any interest accrued thereon, and the Parties
      shall be restored to their respective positions in the Action as of June 1,
      2005. Defendants shall not be entitled to a refund of the used portion of the
      Notice and Administration Fund, the reserve for taxes owed on the Settlement
      Fund, or any accrued but unpaid expenses of the Claims Administrator; and (2)
      the
      settlement documents,
      including this Stipulation, shall be null and void, and inadmissible in any
      proceeding before any tribunal.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    NO
      ADMISSION OF WRONGDOING

     

    43. 
      This
      Stipulation, whether or not consummated, and any negotiations, proceedings
      or
      findings taken pursuant to it:

     

    (a) Shall
      not
      be offered or received against the Defendants, the Released Parties, or counsel
      to any of them as evidence of, or construed as, or deemed to be, evidence of
      any
      presumption, concession, or admission by any of the Defendants with respect
      to
      any fact or issue whatsoever, including any claim of the existence of a class,
      alleged by Lead Plaintiffs, the validity of any claim that had been or could
      have been asserted in the Action or in any litigation, the truth of any fact
      alleged, or the deficiency of any defense that has been or could have been
      asserted in the Action or in any litigation, or of any liability, negligence,
      fault, or wrongdoing of the Defendants;

     

    (b) Shall
      not
      be offered or received against the Defendants, the Released Parties, Lead
      Plaintiffs, the Class, or counsel to any of them, as evidence of a presumption,
      concession or admission of any fault, misrepresentation or omission with respect
      to any statement or written document approved or made by any Defendant, the
      Lead
      Plaintiffs or the Class;

     

    (c) Shall
      not
      be offered or received against the Defendants, the Released Parties, the Lead
      Plaintiffs, the Class, or counsel to any of them, as evidence of a presumption,
      concession or admission with respect to any liability, negligence, fault or
      wrongdoing, or in any way referred to for any other reason as against any of
      the
      parties to this Stipulation, in any other civil, criminal or administrative
      action or proceeding, other than such proceedings as may be necessary to
      effectuate the provisions of this Stipulation; provided, however, that if this
      Stipulation is approved by the Court, the Released Parties may refer to it
      to
      effectuate the liability protection granted them hereunder;

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    (d) Shall
      not
      be construed against the Defendants, the Released Parties, the Lead Plaintiffs,
      the Class, or counsel to any of them, as an admission or concession that the
      consideration to be given hereunder represents the amount which could be or
      would have been recovered after trial; and,

     

    (e) Shall
      not
      be construed as or received in evidence as an admission, concession or
      presumption against the Lead Plaintiffs, the Class, any Class Member, or counsel
      to any of them, that any of their claims are without merit or that damages
      recoverable under the Complaint would not have exceeded the Gross Settlement
      Fund;

     

    (f) Shall
      not
      be construed as or received in evidence as an admission, concession or
      presumption against the Defendants, the Released Parties, or counsel to any
      of
      them that Lead Plaintiffs or the Class have suffered any damage or that the
      consideration to be given hereunder represents the amount of any judgment that
      would have been awarded to Lead Plaintiffs or the Class after a trial;
      and

     

    (g)
       Shall
      not
      be construed against the Defendants, the Released Parties, the Lead Plaintiffs
      or the Class as an admission or concession that any alleged class exists or
      should be subject to certification under Rule 23 of the Federal Rules of Civil
      Procedure. 

     

    MISCELLANEOUS
      PROVISIONS

     

    44. Nothing
      provided herein, to the extent permitted by law, shall prevent the Defendants
      or
      any Released Party from filing the Stipulation and/or Final Judgment and Order
      in any other action that may be brought against them in order to support a
      defense or counterclaim based on principles of res judicata, collateral
      estoppel, release, good faith settlement, judgment bar or reduction or any
      theory of claim preclusion or issue preclusion or similar defense or
      counterclaim.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    45. All
      of
      the exhibits attached hereto are hereby incorporated by reference as though
      fully set forth herein.

     

    46. The
      parties to this Stipulation intend the Settlement to be a final and complete
      resolution of all disputes asserted or which could be asserted by the Class
      Members against the Released Parties with respect to the Released Claims.
      Accordingly, the Lead Plaintiffs, by their counsel, on behalf of the Class,
      and
      the Defendants agree not to assert in any forum that the litigation was brought
      by Plaintiffs or defended by the Defendants in bad faith or without a reasonable
      basis. The parties hereto shall assert no claims of any violation of Rule 11
      of
      the Federal Rules of Civil Procedure relating to the prosecution, defense,
      or
      settlement of the Action. The parties hereto agree that the amount paid and
      the
      other terms of the Settlement were negotiated at arm’s length and in good faith
      by the parties, and reflect a Settlement that was reached voluntarily after
      consultation with experienced legal counsel. 

     

    47. This
      Stipulation may not be modified or amended, nor may any of its provisions be
      waived except by a writing signed by all parties hereto or their
      successors-in-interest, or an agreement of all parties on the record of the
      Court.

     

    48. The
      headings herein are used for the purpose of convenience only and are not meant
      to have legal effect.

     

    49. The
      administration and consummation of the Settlement as embodied in this
      Stipulation shall be under the authority of the Court and the Court shall retain
      jurisdiction for the purpose of entering orders providing for awards of
      attorneys’ fees, expenses and costs to Lead Counsel and enforcing the terms of
      this Stipulation.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    50. The
      waiver of any breach of this Stipulation shall not be deemed a waiver of any
      other prior or subsequent breach of this Stipulation.

     

    51. This
      Stipulation and the exhibits attached hereto, and the Supplemental Agreement,
      constitute the entire agreement among the parties hereto concerning the
      Settlement of the Action, and no representations, warranties, or inducements
      have been made by any party hereto concerning this Stipulation or its exhibits
      other than those contained and memorialized in such documents.

     

    52. This
      Stipulation may be executed in one or more counterparts and by facsimile. All
      executed counterparts and each of them shall be deemed to be one and the same
      instrument provided that counsel for the parties to this Stipulation shall
      exchange among themselves original signed counterparts.

     

    53. This
      Stipulation shall be binding upon, and inure to the benefit of, the successors
      and assigns of the parties hereto, provided that no assignment by any party
      hereto shall operate to relieve such party of its obligations thereunder. The
      construction, interpretation, operation, effect and validity of this
      Stipulation, and all documents necessary to effectuate it, shall be governed
      by
      the internal laws of the Commonwealth of Massachusetts without regard to
      conflicts of laws, except to the extent that federal law requires that federal
      law governs.

     

    54. This
      Stipulation shall not be construed more strictly against one party than another
      merely by virtue of the fact that it, or any part of it, may have been prepared
      by counsel for one of the parties, it being recognized that it is the result
      of
      arm’s length negotiations between the parties and all parties hereto have
      contributed substantially and materially to the preparation of this
      Stipulation.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    55. All
      counsel and any other Person executing this Stipulation and any of the exhibits
      hereto, or any related settlement documents, warrant and represent that they
      have the full authority to do so and that they have the authority to take
      appropriate action required or permitted to be taken pursuant to the Stipulation
      to effectuate its terms.

     

    56. Lead
      Counsel and Defendants’ Counsel agree to cooperate fully with one another in
      seeking Court approval of the Preliminary Approval Order, the Stipulation,
      and
      to promptly agree upon and execute all such other documentation as may be
      reasonably required to obtain final approval by the Court of the
      Settlement.

     

    57. None
      of
      the Plaintiffs nor Defendants, nor counsel for any of them, will make any public
      statement or comment to the press, either directly or indirectly, regarding
      the
      Action, Settlement or Stipulation which disparages the other or the merits
      of
      the claims or defenses which were or could have been asserted in the
      Action.

     

    IN
      WITNESS WHEREOF,
      the
      parties hereto, intending to be legally bound hereby, have caused this
      Stipulation, to be executed on September 21, 2005, by their duly authorized
      attorneys, as of the day and year first above written. 

     

    /s/
      Kay E. Sickles   

    SCHIFFRIN
      & BARROWAY, LLP 

    DAVID
      KESSLER

    KAY
      E.
      SICKLES

    280
      King
      of Prussia Road

    Radnor,
      PA 19087

    Phone:
      (610) 667-7706

    Facsimile:
      (610) 667-7056   

    

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    Lead
      Counsel 

    

    

    /s/
      Richard S. Kraut/JH  

    DILWORTH
      PAXSON LLP

    RICHARD
      S. KRAUT

    1818
      N
      Street NW, Suite 400

    Washington,
      DC 20036

    Phone:
      (202) 452-0900

    Facsimile:
      (202) 452-0930

    

    /s/
      Michael G. Bongiorno  

    WILMER
      CUTLER PICKERING HALE AND DORR LLP

    JEFFREY
      B. RUDMAN

    MICHAEL
      G. BONGIORNO

    60
      State
      Street

    Boston,
      MA 02109

    Phone:
      (617) 526-6000

    Facsimile:
      (617) 526-5000

    

    Attorneys
      for Defendant Vaso and Masiz,  Frattaroli,
      Shear,
      Fromm,
      Strasnick,
      Adams,
      and Anderson

    

    /s/
      John Sten    

    GREENBERG
      TRAURIG

    JOHN
      STEN
      (BBO# 629577)

    KAY
      LEE
      (BBO# 647224)

    One
      International Place, 20th
      Floor

    Boston,
      MA 02110

    Phone
      (617) 310-6000

    Facsimile
      (617) 310-6001

    

    Attorneys
      for Defendant Carter

    

    /s/
      Richard J. Babnick   

    SICHENZIA
      ROSS FRIEDMAN FERENCE LLP

    RICHARD
      J. BABNICK, JR.

    1065
      Avenue of the Americas, 21st
      Floor

    New
      York,
      NY 10018

    Phone:
      (212) 930-9700

    Facsimile:
      (212) 930-9725

    

    Attorneys
      for Defendant Kashner Davidson Securities, Inc.

     

     37

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