Attorney for Plaint(/f John Thomas Bridge and Opportunity Fund LP If

Transcription

1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK X JOHN THOMAS BRDGE AND OPPORTUNTY FUND LP, -against- Plainitff, NOTCE OF DEFAULT ndex No. ANAST AS OS "TOMMY" BELESS, Defendant X PLEASE TAKE NOTCE that attached hereto is the Notice of Default pursuant to Paragraph.B of the Mutual Release and Settlement Agreement dated October 1, 2015, and Paragraph 3( e) of the Affidavit for Judgment by Confession under C.P.L.R. 3218, dated September 25, and sworn to by Anastasios Belesis. Dated: January 24, 2017 New York, New York KAPLAN FOX & KLSHEM ER LLP 850 Third A venue 14 1 h Floor New York, New York Tel: (2 12) Fax: (2 12) Attorney for Plaint(/f John Thomas Bridge and Opportunity Fund LP f 1 of 50

2 Jeff Campisi From: Sent: To: Subject: Attachments: Jeff Campisi Monday, October 17, :16 AM Troy Tindal; Debus v. John Thomas Capital Management Group, LLC. et al. (Cause No ) A TB, Belesis and JTF Settlement. pdf Gentlemen, as of this morning, have not received the Settlement Amount of $300,000. The payment was due October 15, Under Section.B of the Settlement Agreement dated October 1, 2015, am providing notice that the Settlement Amount has not been paid in accordance with the Settlement. Jeffrey P. Campisi Kaplan Fox & Kilsheimer LLP 850 Third Avenue; 14th Floor New York, NY Phone: (212) jcampisi@kaplanfox.com 2 of 50

3 CAUSE NO ' PAUL F. RODNEY, derivatively on behalf of; PATRJOT BRDGE AND OPPORTUNTYi FUND LP J, and EDWN DEBUS, derivativelyi on behalf of PATRJOT BRJDGE AND! N THE DSTRCT COURT OF OPPORTUNTY FUND LP,, HARRS COUNTY, TEXAS Plaintiffs,! 89th JUDCAL DSTRCT VS. ' JOHN THOMAS CAPTAL MANAGEMENT! GROUP LLC, n/k/a PATROT28 LLC,: GEORGE R. JARKESY JR., JOHN THOMASj FNANCAL, NC., ANASTASOS "TOMMY'' BELESS, ATB HOLDNG LLC, MFR, P.c. : also known as MFR GROUP, NC., DOEREN! MAYHEW & CO., P.C., DOEREN MAYHEW! TEXAS, PLLC, SOUTH PADRE VENTURES 2,\ LLC, successors to MFR, P.C., and JUAN! ' PADLLA,, i ' Defendants,! PATRJOT BRDGE AND OPPORTUNTY! FUND LP, and PATROT BRJDGE AND! OPPORTUNTY FUND LP, i as nominal Defendants. MUTUAL RELEASE AND SETTLEMENT AGREEMENT THS MUTUAL RELEASE AND SETTLEMENT AGREEMENT (the "Settlement" or "Stipulation"), executed below to be made effective as of October, 2015 (the 'Effective Date"), is made and entered into by and among ED DEBUS, derivatively on behalf of PATROT BRDGE AND OPPORTUNTY FUND LP ("Fund ''), and John Thomas Financial, Jnc. ("JTF"), Anastasios ''Tommy" Belesis ("Belesis"), ATB Holdi ng LLC ("ATB") (collectively, 3 of 50

4 Belesis, JTF and A TB are referred to as the "Belesis Defendants'' or the "Settling Defendants") by and through their undersigned attorneys. The foregoing may from time to time be referred to herei n individually as a "Party" and collectively as the "Parties." This Settlement is intended by the Settling Parties to fully, finally and forever resolve, discharge and settle the Released Claims against the Settling Defendants, upon and subject to the terms and conditions hereof. RECTALS WHEREAS, on September 16, 2013 Plaintiff Paul Rodney ("Rodney") commenced this action in the District Court of Harris County Texas and filed an original petition ("Original Petition"). WHEREAS, the Original Petition included derivative claims by Rodney on behalf of Patriot Bridge and Opportunity Fund L.P. ("Fund 1") and Fund 11 against the Belesis Defendants. WHEREAS, on July 3, 2014, the Belesis Defendants moved to stay the litigation and to compel arbitration. WHEREAS, on September 19, 2014, the Court granted the Belesis Defendants' motion to stay and to compel arbitration ("September 19 Order"). WHEREAS, on September 24, 2014, Plaintiffs filed the First Amended Petition that, among other things, added claims by Debus on behalf of Fund ll. WHEREAS, on November 11, 2014, the Belesis Defendants filed a motion to clarify the September 19 Order, and further moved for protection from discovery served by Debus. WHEREAS, on January , the Court denied the Belesis Defendants' motion for clarification of the September 19 Order, and further denied the Belesis Defendants' motion for protection from discovery. 2 4 of 50

5 WHEREAS, on March 0, 2015, Plaintiffs filed a Second Amended Petition (the 'Petition") alleging breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of contract, professional negligence and civil conspiracy. WHEREAS, in response to Debus's requests for production of documents, the Belesis Defendants produced hundreds of thousands of pages of documents. WHEREAS, Plaintiff and the Belesis Defendants patticipated in a mediation on May 27,2015. WHEREAS, following arms-length negotiations with the assistance of an experienced mediator and additional negotiations, Debus and the Settling Defendants have agreed to a settlement (the "Settlement") of the Action; WHEREAS, Plaintiffs counsel has conducted discovery relating to the claims and the underlying events and transactions alleged in the Petition. Plaintiffs counsel and Plaintiff recognize the expense, risks and uncertain outcome of any litigation and subsequent appeals, especially for a complex action such as this with its inherent difficulties and delays. Plaintiff: on behalf of Fund, desires to settle his claims against the Settling Defendants in this Action on the terms and conditions set forth in this Stipulation. Furthermore, Plaintiff deems this Settlement to be fair, reasonable, adequate and in the best interests of Fund ; and WHEREAS, the Settling Defendants, while continuing to deny all allegations of wrongdoing or liability whatsoever arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged, in the Action, also recognizes the expense, risks and uncertain outcome of any litigation, especially a complex action such as this, and the Settling Defendants desire to settle the claims against it so as to avoid lengthy, distracting and timeconsuming litigation and lhe burden, inconvenience and expense connected therewith, without in 3 5 of 50

6 any way acknowledging any fault or liability, such that this Stipulation and all related documents are not, and shall not in any event be construed or deemed to be evidence of or an admission or concession on the part of the Settling Defendants with respect to any claim or of any fault or iability or wrongdoing or damage whatsoever, or any infirmity in the defenses that the Settling Defendants have asserted, of or by it or of any other person. NO W, THEREFORE, T S HEREBY STPULATED, CONSENTED TO AND AGREED, between Plaintiff and the Settling Defendants, by and through their respective attorneys or counsel of record, that this Action shall be settled, compromised, and dismissed with prejudice, subject to the approval of the Court, in the manner and upon the terms and conditions hereaf1er set torth:. CERTAN DEFNTONS A. To the extent not otherwise defined herein, as used in this Stipulation, the foll owing terms have the meanings specified below: A. "Action" means the derivative action pending in this Court under the abovetitled caption. B. "Court" means the District Court of Harris County, Texas, h Judicial District. C. "Effective Date" means the date upon which the dismissal of the Belesis Defendants becomes both final and no longer subject to appeal or review, whether by exhaustion of any possible appeal, lapse of time, or otherwise. D. "Escrow Account" means the interest-bearing account created pursuant to Section. E. "Escrow Agent" means Plaintiffs Counsel or their designees. The Escrow Agent shall perform the duties as set forth in this Stipulation. 4 6 of 50

7 F. "Execution Date" means the date that this Stipulation has been signed by all Parties through their counsel. G. "Final Dismissal with Prejudice" means the dismissal to be entered by the Court, substantially in the form of Exhibit A hereto. H. "Final Settlement Approval Hearing" means the final hearing to be held by the Cowt to determine whether the proposed Settlement should be approved as fair, reasonable and adequate; whether all Released Claims should be dismissed with prejudice; whether an order approving the Settlement should be entered thereon; whether the Plan of Allocation of the Settlement Fund should be approved; and whether and in what amounts to award attorneys' fees and expenses to Plaintiffs Counsel and award to Plaintiff.. "Gross Settlement Fund" means the Settlement Amount plus all interest earned thereon. J. "Limited Partners" means all persons or entities who own limited partnership interests in Fund ; excluded from this definition are any defendants named in the Petition; any director, officer, subsidiary, or affiliate of any ofthe Defendants; any entity in which any excluded person has a controlling interest; and their legal representatives, heirs, fam ily members, successors and assigns. K. "Net Settlement Fund" means the Gross Settlement Fund, Jess: (i) attorneys' fees and expenses, and award to Plaintiff; (ii) taxes and tax expenses; (iii) Notice and Administration Expenses; and (iv) such other fees and expenses authorized by the Court. L. "Notice and Administration Account" means the interest-bearing account to be established and maintained by the Settlement Administrator from the Gross Settlement Fund. 5 7 of 50

8 The Notice and Administration Account may be drawn upon by the Settlement Administrator for Notice and Administration Expenses without prior approval of the Court. M. "Notice and Administration Expenses" means all expenses incurred (whether or not paid) in connection with the settlement administration, and shall include, among other things, the cost of publishing summary notice in the national edition of nvestor 's Business Daily or other national news service (if required by the Court), printing and mailing the notice, as directed by the Court and the cost of distributing the Net Settlement Fund to Limited Partners. N. "Parties" means Plaintiff, derivatively on behalf of Fund and the Belesis Defendants. 0. ''Person" means any individual, corporation, partnership, association, affiliate, joint stock company, trust, estate, unincorporated association, limited liability company, professional company, government and any political subdivision thereof, and any other type of legal or political entity. P. "Plaintiffs Counsel" means the law firms of Kaplan Fox & Kilsheimer LLP, and Gruber Hurst Elrod Johansen Hail Shank LLP. Q. "Plan of Allocation" means the plan or formula of allocation of the Net Settlement Fund, to be approved by the Court, which plan or formula shall govern the distribution of the Net Settlement Fund to the Limited Partners. The Plan of Allocation is not a part of this Stipulation, the Settling Defendants shall have no responsibility or liability with respect thereto, and any order or proceedings relating to the Plan of Allocation shall not operate to terminate or cancel this Stipulation or affect the finality of the Final Judgment or any other orders entered by the Court pursuant to this Stipulation. 6 8 of 50

9 R. "Released Claims" shall mean any and all claims, debts, demands, rights, causes of action or liabilities of every nature and description whatsoever (including, but not limited to, claims for damages, interest, attorneys' fees, expert or consulting fees, and any other costs, expenses, or liability whatsoever), whether based in law or equity, whether fixed or contingent, accrued or unaccrued, liquidated or unliquidated, matured or not matured, pursuant to 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 any forum by Fund, or its successors or assigns, against any of the Released Parties, which arise out of, are based on, or relate in any way to, directly or indirectly, any of the allegations, acts, transactions, facts, events, matters, occurrences, acts, representations or omissions involved, set forth, alleged or referred to, in the Petition, or which could have been alleged based upon the facts alleged in the Petition, and which arise out of, are based upon or are related in any way, directly or indirectly, to claims alleged in the Petition against Belesis, JTF or A TB by Fund. S. 'Released Parties" means the Settling Defendants, and their respective present and former parents, subsidiaries, divisions and affiliates, successors and predecessors, the present and former employees, agents, insurers, advisors, investment advisors, members, partners, shareholders, principals, officers, directors, and attorneys of each of them, any person, firm, trust, corporation, officer, director or other individual or entity in which the Belesis Defendants have a controlling interest or which is related to or affiliated with Beles is Defendants, and the legal representatives, heirs, successors in interest or assigns of the Belesis Defendants. T. "Settlement Administrator" means the court-appointed company or entity that shall provide notice of the Settlement to the Lim ited Partners and distribute the Net Settlement Fund to the Limited Partners. 7 9 of 50

10 U. "Settlement Amount" means $300,000 (Three-Hundred Thousand Dollars) in cash. V. "Settlement Fund" means the payments to be made in accordance with Section ofthis Stipulation. W. "Settling Defendants" means Belesis, JTF and ATB. X. "Settling Defendants' Counsel" means the Tindal Law Firm. Y. "Settling Parties" means the Plaintiff derivatively on behalf of Fund and the Settling Defendants. Z. "Settling Parties' Claims" means any and all claims, rights, or causes of action or liabilities whatsoever, whether based in federal, state, local, statutory or common law or any other law, rule or regulation, including both known claims, Unknown Claims, that have been or could have been asserted in the Action or any forum by the Settlin g Defendants or their successors, agents, employees, partners, members, managers, shareholders and assigns against any of the Plaintiffs in the Action, the Funds, their attorneys or experts, or the Limited Partners, 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. "Unknown Claims" means any and all Released Claims which Plaintiff or Fund does not know or suspect to exist in their favor at the time ofthe release of the Released Part ies, and any Settling Parties' Claims which Belesis Defendants do not know or suspect to exist in his, or its favor, which if known by him or it might have affected his or its decision(s) with respect to the settlement. The parties each acknowledge the sufficiency of the consideration exchanged by signing this Agreement. The parties acknowledge and agree that the releases contained herein are material to the transaction. The parties expressly waive and assume the risk 8 10 of 50

11 of all claims for damage that exist as of this date, but of which they do not know or suspect to exist, whether through ignorance, oversight, error, negligence, or otherwise, and which, if known, would materially affect their decision to enter into this Agreement. The parties funher acknowledge that they have entered this Agreement as a complete compromise of matters involving disputed issues of law and fact, and assume the risk that their legal status with respect to one another and the merit and value of the claims and defenses compromised through this Agreement may be other than they believe.. THE SETTLEMENT CONSDERATON A. Belesis shall pay or cause to be paid the Settlement Amount by wire transfer into the Escrow Account in accordance with the provisions of this Agreement by wire transfer or check on or before October 15, B. n the event Settlement Amount is not paid by October S, 2016, Plaintiff will provide notice in writing to Troy Tindal, counsel for the Belesis Defendants, and to Mr. Belesis via at belesisthomas@gmail.com that states the Settlement Amount has not been paid in accordance with the Settlement ("Default Notice Date"). C. n the event Belesis fails to pay the Settlement Amount when due and fails to cure such default within thirty (30) business days of the Default Notice Date, interest shall be added to the Settlement Amount, calculated at five (5) percent per year, and running from the Execution Date to the date of payment of the Settlement Amount. C. Belesis may, at hi s sole discretion, pay the settlement amount before it is due. D. As security for payment of the Settlement Amount, Belesis will execute a judgment by confession substantially in the form and content of Exhibit B attached hereto. n the event Belesis fails to pay the Settlement Amount in accordance with the terms and conditions of th is 9 11 of 50

12 Settlement, Belesis agrees that Fund may seek the entry of the judgment by confession in accordance with N.Y.C.P.L.R CONDTONS OF SETTLEMENT AND EFFECT OF DSAPPROVAL, CANCELLATON OR TERMNATON A. This Settlement shall be subject to the following conditions and, except as provided herein, shall be canceled and terminated unless: A. The Court enters the Preliminary Approval Order substantially in the form and content of Exhibit C ("Preliminary Approval Order"), as provided in Section Y; B. The Court has approved the settlement as described herein, following notice to the Limited Partners and a Hearing and has entered the Final Dismissal with Prejudice of the Belesis Defendants, as provided in Section V; and C. An Effective Date has occurred. B. Upon the occurrence of the Effective Date, Plaintiff and Fund, on behal f of themselves, thei r successors and assigns, and any other Person claiming (now or in the future) through or on behalf of them, shall hereby be deemed to have, and by operation of the Final Dismi ssal with Prejudice shall have, fully, tinally, and forever, RELEASED, RELNQUSHED, SETTLED AND DSCHARGED the Released Parties from the Released Claims, and shall have covenanted not to sue the Released Parties with respect to all such Released Claims, and shall be permanently barred and enjoined from instituting, commencing, or prosecuting any such Released Claim against any of the Released Parties. Neither Fund nor the Plaintiff shall hereafter bring, initiate, report, or voluntarily participate in any claim, lawsuit, arbitration. administrative investigation, complaint, or proceeding, or any other proceeding of any type against the Belesis Defendants or any of the other Released Parties which in any way arises out of or involves those claims or allegations which are the subject of this Stipulation of 50

13 C. Upon the occurrence of the Effective Date, the Settling Defendants, their successors and assigns, and any other Person claiming (now or in the future) through or on behalf of the Settling Defendants, shall hereby be deemed to have, and by operation of the Final Dismissal with Prejudice shall have, fully, finally, and forever, RELEASED, RELNQUSHED, SETTLED AND DSCHARGED Plaintiff and Fund from the Settling Parties' Claims, and shall have covenanted not to sue Plaintiff with respect to all such Settling Parties' Claims, and shall be permanently barred and enjoined from instituting, commencing, or prosecuting any such Settling Parties' Claims against Plaintiff. The Settling Defendants shall not hereafter bring, initiate, report. or voluntarily participate in any claim, lawsuit, arbitration, administrative investigation, complaint, or proceeding, or any other proceeding of any type against Plaintiff and Fund which in any way arises out of or involves those claims or allegations which are the subject of this Stipulation. D. f all of the conditions specified in paragraph A of this Section are not met, then the Stipulation shall be canceled and terminated, unless Plaintiffs Counsel and the Settling Defendants' Counsel mutually agree in writing to proceed with the Settlement. E. f either (a) the Effective Date does not occur, (b) this Stipulation is canceled or terminated pursuant to its terms, or (c) the Stipulation does not become final for any reason, all of the Parties to this Stipulation shall be deemed to have reverted to their respective status prior to the execution ofthi.s Stipulation, and they shall proceed in all respects as if this Stipulation had not been executed and the related orders had not been entered, preserving in that event all of their respective claims and defenses in the Action. V. NO ADMSSONS A. The Settling Defendants intend the settlement as described herein to be a final and complete resolution of all disputes between it with respect to the Action and to compromise claims 13 of 50

14 that are contested and shall not be deemed an admission by any Settling Defendants as to the merits of any claim or defense or any allegation made in the Action. B. Neither the Stipulation nor the settlement, nor any act performed or document executed pursuant to or in furtherance of the Stipulation or the settlement: (a) is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any Released Claim, of any allegation made in the Action, or of any wrongdoing or liability of the Settling Defendants; or (b) is or may be deemed to be or may be used as an admission of, or evidence of, any liability, fault or om iss ion of the Settling Defendants in any civil, criminal or administrative proceeding or investigation in any court, administrative agency or other tribunal. Neither the Stipulation nor the settlement. nor any act performed or document executed pursuant to or in furtherance of the Stipulation or the settlement shall be admissible in any proceeding for any purpose, except to enforce the terms of the settlement, and except that the Settling Defendants may file the Stipulation and/or the Judgment in any action that may be brought against any of 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 other theory of claim preclusion or issue preclusion or similar defense or counterclaim. C. As further consideration in support of the Stipulation, the Plaintiff covenants and agrees that he shall not hereafter bring, initiate, report, or voluntarily participate in any civil, criminal or administrative proceeding in any court, administrative agency or other tribunal of any type against Settling Defendants with respect to the Released Claims. V. THE ESCROW ACCOUNT A. The Escrow Account, including any interest earned thereon net of any taxes on the income thereof, shall be used to pay: (i) taxes and tax expenses; (ii) attorneys' fees and expenses; (i ii) Notice and Administration Expenses; and (iv) reimbursement awards to Plaintiff. The balance of 50

15 of the Escrow Account shall be the Net Settlement Fund and shall be distributed to the Limited Partners as set forth in the Plan of Allocation. Fund shall look solely to the Net Settlement Fund for payment and satisfaction of any and all Released Claims. B. All funds held by the Escrow Agent shall be deemed in custodia legi s of the Court and shall remain subject to the jurisdiction of the Court until such time as such funds shall be distributed pursuant to the Stipulation and/or further orders of the Court. The Escrow Agent shall invest any funds exclusive of the Notice and Administration Account, in United States Government obligations with a maturity of 80 days or less, and shall collect and reinvest all interest accrued thereon. Any funds held in the Notice and Administration Account may be held in an interest bearing bank account insured by the FDC. C. The Escrow Agent shall not disburse the Gross Settlement Fund except as provided in this Stipulation, by order of the Court, or with the prior written agreement of Plaintiffs Counsel. D. The Escrow Agent shall be authorized to execute only such transactions as are consistent with the terms of this Stipulation and the order(s) ofthe Court. E. After the Senlement Payment is made, the Senling Defendants shall have no interest in the Gross Senlement Fund or in the Net Scnlement Fund. V. PRELMNARY APPROVAL ORDER; NOTCE ORDER; AND SETTLEMENT HEARNG As soon as is practicable following the Execution Date, Pla intiff shall apply for entry the Preliminary Approval Order, requesting, inter alia, the preliminary approval of the dismissal with prejudice. The Senling Parties shall request that, after the Mailed Notice in substantially the same form as Exhibit D been mailed, respectively, in accordance with th is Stipulation, above, the Court hold the Final Approval Settlement Hearing and finally approve the settlement of the Action with respect to the Senling Parties of 50

16 V. FNAL DSMSSAL WTH PREJUDCE At the Final Settlement Approval Hearing, the Parties shall jointly request entry of the Final Dismissal with Prejudice, substantially in the form anached hereto as Exhibit A. V. DSTRBUTON OF NET SETTLEMENT FUND A. The Net Settlement Fund shall be distributed to the Limited Partners substantially in accordance with the terms of the Stipulation and a Plan of All ocation to be approved by the Court, subject to and in accordance with the following: A. Any such Plan of Allocation is not a part of this Stipulation. No funds from the Net Settlement Fund shall be distributed to the Limited Partners until after all appeal s fi om any order(s) of the Court approving the settlement as described herein and from the Final Judgment and any further proceedings on remand have been resolved, or the time for any such appeals has expired and the Settlement Payment is made; provided however, that attorneys' fees and expenses awarded by the Court shall be payable from the Settlement Fund upon award, notwithstanding the existence of any timely filed objections thereto, or potential for appeal therefrom, or collateral attack on the Settlement or any part thereof, subject to Plaintifrs Counsel's obligation to make appropriate refunds or repayments to the Settlement Fund plus accrued interest at the same net rate as is earned by the Settlement Fund, if and when, as a resu lt of any appeal and/or further proceedings on remand, or successful collateral attack, the fee or cost award is reduced or reversed. B. Neither the Settling Defendants nor their counsel shall have any responsibility tor, interest in, or liability whatsoever with respect to the investment or distribution of the Gross Settlement Fund, the Plan of Allocation, the determination, administration, or calculation of claims, the distribution of the Net Settlement Fund, or any losses incurred in connection with any such maners of 50

17 C. No person shall have any claim against Plaintiff or Plaintiffs Counsel, Fund, the Settlement Administrator, the Settling Defendants or their respective counsel based on investments or distributions made substantially in accordance with this Stipulation and the Settlement contained herein, the Plan of Allocation or further orders of the Court. X. TAX TREATMENT A. The Parties, their counsel, the Court, and the Escrow Agent shall treat the Escrow Account as being at all times a "qualified settlement fund" within the meaning of Treas. Reg for all periods on and after the date of the Court order preliminarily approving this Agreement. The Parties, their counsel, the Court and the Escrow Agent agree to take no action inconsistent with the treatment of the Escrow Account in such manner. ln addition, the Escrow Agent, and as necessary, the Settling Defendants, shall make the "relation back election" (as defined in Trcas. Reg G)) back to the earliest permitted date. Such elections shall be made in compliance with the procedures and requirements contained in such regu lations. t shall be the responsibility of the Escrow Agent to timely and properly prepare and deliver the necessary documentation for signature by all necessary parties and thereafter to cause the appropriate fi ling to occur. All provisions of this Agreement shall be interpreted in a manner that is consistent with the Escrow Account being a "qt1alified settlement fund" within the meaning of Treas. Reg B. For the purpose of 4688 of the nternal Revenue Code of 986, as amended, and the regulations promulgated thereunder, the "administrator" shall be the Escrow Agent. The Escrow Agent shall satisfy the administrative requirements imposed by Treas. Reg B-2 by e.g., (i) obtaining a taxpayer identification number, (ii) timely and properly satisfying any information reporting or withholding requirements imposed on distributions from the Escrow Account. and (iii) timely and properly filing or causing to be filed on a timely basis, all federal, of 50

18 state, local and foreign tax returns and other tax related statements necessary or advisable with respect to the Escrow Account (including, without limitation, all income tax returns, all informational returns, and all returns described in Treas. Reg ( )), and timely and properly paying any taxes imposed on the Escrow Account. Such returns and statements (as well as the election described in thi s X.8. shall be consistent with this X.8. and in all events shall reflect that all taxes (including any estimated taxes, interest or penalties) on the income earned by the Escrow Account shall be paid out of the Escrow Account as provided in X.C. hereof. C. All (i) taxes arising with respect to the income earned by the Escrow Account and (ii) tax expenses shall be paid out of the Escrow Account. Further, taxes and the tax expenses shall be treated as, and considered to be, a cost of administration of the settlement and shall be timely paid by the Escrow Agent out of the Escrow Account without prior order from the Court, and the Escrow Agent shall be obligated (notwithstanding anything herein to contrary) to withhold from distribution to claimants any funds necessary to pay such amounts (as well as any amounts that may be required to be deducted or withheld under Trcas. Reg ( 1 )(2)). All parties and their tax attorneys and accountants shall to the extent reasonably necessary carry out the provisions of paragraphs A-C of this Section. D. The Settling Defendants shall have no responsibility to make any filings relating to the Escrow Account and will have no responsibility to pay tax on any income earned by the Escrow Account. n the event the Stipu lation is canceled or terminated, the nsurer shall be responsible for the payment of all taxes (including any interest or penalties), if any, on said income. X. ALLOCATON OF NET SETTLEMENT FUND A. The Net Settlement Fund shall be all ocated among Limited Partners in the manner set forth in notice provided to the Limited Partners under the Preliminary Approval Order of 50

19 B. The Settling Defendants shall have no responsibility for and no obligati ons or iabilities of any kind whatsoever in connection with the determination, administration, calculation or payment of distributions to Limited Partners. The Plan of Allocation may be considered by the Cou rt separately from the Court's consideration of the fairness, reasonabl eness or adequacy of the Settlement, and any order or proceeding relating to the Plan of Allocation, or any appeal from any order relating thereto, or reversal or modification thereof, shall not operate to affect or delay the finality of the Final Judgment. C. The Settling Defendants shall have no involvement the notice and administration process, which will be conducted by the Settlement Administrator in accordance with this Stipulation and the Plan of Allocation. D. No Limited Partner shall have any claim against Plaintiffs Counsel, the Settling Defendants' Counsel, or the Settlement Administrator based on or in any way relating to the distributions from the Net Settlement Fund and any applicable Orders of the Court. E. Any change in the allocation of the Net Settlement Fund ordered by the Court shall not affect the validity or finality of this Settlement. X. MSCELLANEOUS PROVSONS A. The Parties hereto: (a) acknowledge that it is their intent to consummate the Settlement contemplated by this Stipulation; (b) agree to cooperate to the extent necessary to effectuate and implement all terms and conditions of this Stipulation; and (c) agree to exercise their best efforts and to act in good faith to accomplish the foregoing terms and conditions of the Stipulation. B. All counsel who execute this Stipulation represent and warrant that they have authority to do so on behalfoftheir respective clients of 50

20 C. All of the exhibits attached hereto are hereby incorporated by reference as though fully set forth herein. D. This Stipulation may be amended or modified only by a written instrument signed by counsel for all Parties to this Stipulation. E. This Stipulation and exhibits attached hereto constitute the entire agreement among the Parties hereto and supersede any and all prior agreements, written or oral, among the Parties hereto and no representations, warranties or inducements have been mad e to any party concerning this Stipulation or its exhibits other than the representat ions, warranties and covenants contained and memori alized in such documents. F. This Stipulation may be executed in one or more original, photocopied or facsimile counterparts. All executed counterparts and each of them shall be deemed to be one and the same instrument. Counsel for the Parties to this Stipulation shall exchange among themselves original signed counterparts and a complete set of original executed counterparts shall be filed with the Cow1. G. This Stipulation shall be binding upon, and inure to the benefit of the successors, assigns, executors, administrators, affiliates (including parent companies), heirs and legal representatives of the Parties hereto. No assignment shall relieve any party hereto of obligations hereunder. H. Unless otherwise stated, all term s of this Stipulation and all exhibits hereto shall be governed and interpreted according to the laws of the State oftexas without regard to its rules of conflicts of law and in accordance with the laws of the United States.. The Settling Defendants, Plaintiff, and Fund hereby irrevocably submit to the jurisdiction of the Court with respect to enforcement of the terms of this Stipulation and for any of 50

21 suit, action, proceeding or dispute arising out of or relating to this Stipulation or the applicability of this Stipulation, except for any proceeding relating to the entry of the judgment by confession. J. The Parties to this Stipulation intend the Settlement to be a final and complete reso lution of all disputes asserted or which could be asserted by Fund against the Released Parties with respect to the Released Claims. Accordingly, Plaintiff and the Settling Defendants agree not to assert in any forum that the litigation was brought by Plaintiff or their counsel, or defended by the Settling Defendants, or their counsel, in bad faith or without a reasonable basis. The Parties hereto shall assert no claims of any violation of Rule 13 of the Texas Rules of Civil Procedure relating to the prosecution, defense, or settlement of the Action. The Parties agree that the amount paid and the other terms of the Settlement were negotiated at arm's-length in good faith by the Parties, and reflect a settlement that was reached voluntarily after consultation with experienced legal counsel. K. This Stipulation, offer of this Stipulation and compliance with this Stipulation shalt not constitute or be construed as an admission by any of the Released Parties of any wrongdoing or liability. This Stipulation is to be construed solely as a reflection ofthe Settling Parties' desire to facili tate a resolution of the Claims in the Action and of the Released Claims. The Settling Parties agree that no party was or is a "prevailing party" in this case. n no event shall th is Stipulation, any of its provisions, or any negotiations, statements or court proceedings relating to its provisions in any way be construed as, offered as, received as, used as or deemed to be evidence of any kind in the Action, any other action, or any judicial, administrative, regulatory or other proceeding, except a proceeding to enforce this Stipulation. L. Except as otherwise provided herein, each party shall bear their own costs of 50

22 M. Notices required or permitted by this Stipulation shall be submitted either by overnight mail, or in person as follows: Notice to Plaintiff: Jeffrey P. Campisi, Esq. Kaplan Fox & Kilsheimer LLP 850 Third Avenue New York, NY jcampisi@kaplanfox.com Notice to the Settling Defendants: Troy Tindal, Esq. Tindal Law Firm El Camino Real, Suite 190 Houston, Texas N WTNESS WHEREOF, the Parties hereto, intending to be legally bound October, of 50

23 KAPLAN FOX & KLSHE\1F.R LLP Jeflrey P. Campisi tadmitt~dpm hac \ ice) 850 Third ;hemjc. 14th Floor New York. N'{ 002::! Tel : {212) 687-J9RO Fa.x: (212) MCHAEL K.! HRST State Bur No. OJ 16:1 0 JONATHAN R. CHLDERS State Bar No Ross A venue. Suite 2500 Dallas, Texas Counsel for Plailltiff Ed Debus derivati~ e~v 011 behalf of Patriot Bridge ami Opportunity Fund LP Counsel for tlte Belesis Defendants of 50

24 CAUSE NO PAUL F. RODNEY, derivatively on behalf o~ PA TRlOT BRDGE AND OPPORTJNTY; FUND LP, and EDWN DEBUS, derivatively! on behalf of PATROT BRDGE AND~ TN THE DSTRCT COURT OF OPPORTUNTY FUND LP, ~ 1 HARRS COUNTY, TEXAS Plaintiffs, 189th JUDCAL DSTRCT VS. JOHN THOMAS CAPTAL MANAGEMENT! GROUP LLC, n/kja PATROT28 LLC,i GEORGE R. JARKESY JR., JOHN THOMAS! FNANCAL, NC., ANASTASOS "TOMMY"! BELESS, ATB HOLDNG LLC, MFR, P.C. ) also known as MFR GROUP, NC., DOEREN! MAYHEW & CO., P.C., DOEREN MAYHEW: TEXAS, PLLC, SOUTH PADRE VENTURES! 2, LLC, successors to MFR, P.C., and JUAN PADLLA,! Defendants, PATROT BUDGE AND OPPORTUNTY: FUND LP, and PA TRlOT BRDGE AND! OPPORTUNTY FUND LP, i as nominal Defendants. FNAL ORDER OF DSMSSAL WTH PREJUDCE AS TO THE BELESS DEFENDANTS WHEREAS, the Court has been informed that EDWN DEBUS, by his attorneys, on behalf of Patriot Bridge and Opportunity Fund LP ("Fund ") and Defendants John Thomas Financial, nc. ("JTF"), Anastasios "Tommy" Belesis ("Belesis"), A TB Holding LLC ("ATB") (collectively, the "Belesis Defendants") have reached a mutually agreeable settlement ofthis Action; 24 of 50

25 WHEREAS, for good cause shown, and upon due consideration of the Stipulation and Final Order of Dismissal; T S HEREBY ORDERED, ADJUDGED AND DECREED that: l. This Order incorporates by reference the definitions in the Stipulation of Settlement between Plaintiffs and the Belesis Defendants dated September _, 2015, and all capitalized terms used herein shall have the same meanings as set forth in the Stipulation of Settlement. 2. This Court has the requisite jurisdiction to consider and enter this Order. 3. This Court hereby dismisses the Action in its entirety as to the Belesis Defendants., with prejudice and without costs (except as othervvise provided in the Stipulation). 4. The Court finds that the distribution of the Notice: (i) was implemented in accordance with the Preliminary Approval Order; (ii) constituted the best notice reasonably practicable under the circumstances; (iii) constituted notice that was reasonably calculated, under the circumstances, to apprise Limited Partners of the pendency of the Action; of the effect of the Settlement; of Plaintiffs Counsel's motion for an award of attorneys' fees and reimbursement of expenses; of Plaintiffs request for award; of their right to object to the Settlement, the Plan of Allocation, Plaintiffs Counsel's motion for an award of attorneys' fees and reimbursement of expenses, and/or Plaintiffs request tor an award; and of their right to appear at the Settlement Hearing; (iv) constituted due, adequate, and sufficient notice to all persons or entities entitled to receive notice of the proposed Settlement; and (v) satisfied the requirements the United States Constitution (including the Due Process Clause), and all other applicable law and rules. 5. This Court hereby fully and finally approves the Settlement set forth in the Stipulation in all respects (including, without limitation, the amount of the Settlement, the releases provided for therein, including the release of the Released Claims as against the 25 of 50

26 Released Party, and the dismissal with prejudice of claims against the Defendant), and finds that the Settlement is, in all respects, fair, reasonable and adequate to the Parties and is in the best interests of Plaintiffs and the Funds. The Court further finds that the Settlement set forth in the Stipulation is the result of arm's-length negotiations between experienced counsel representing the interests of the Parties. Accordingly, the Settlement embodied in the Stipulation is hereby finally approved in all respects. The Parties are hereby directed to implement, perform and consummate the Settlement in accordance with the terms and provisions contained in the Stipulation. 6. The mutual releases as set forth in the Stipulation, together with the definitions relating thereto, are expressly incorporated herein in all respects. Accordingly, as of the Effective Date: a. Plaintiff, on behalf of Fund, its successors and assigns, and any other person or entity claiming (now or in the future) through or on behalf of Plaintiff, shall be deemed to have, and by operation of this Order of Dismissal shall have, fully, finally, and forever released, relinquished, and discharged all Released Claims against the Belesis Defendant and shall have covenanted not to sue Defendant with respect to all such Released Claims, and shall be permanently barred and enjoined from instituting, commencing, or prosecuting any such Released Claims against the Belesis Defendants. b. The Belesis Defendants shall be deemed to have, and by operation of this Order Dismissal shall have, fully, finally and forever released, relinquished and discharged Plaintiffs from all Settling Party's Claims, except to enforce the releases and other terms and conditions contained in the Stipulation. 7. All persons or entities, are hereby permanently enjoined, barred and restrained from commencing, prosecuting or asserting any action, for contribution, indemnity or 26 of 50

27 otherwise, against the Belesis Defendants seeking, as damages or otherwise, the recovery of all or any part of any liability or any settlement which they pay or are obligated to pay or agree to pay to Plaintiff, as a result of such persons' or entities' pa~ticipation in any acts, facts, statements or omissions that were or could have been alleged in the Action as claims, cross-claims, counterclaims, third-party claims or otherwise, whether asserted in the Action in this Court or in any federal or state court or any other court, arbitration proceeding, administrative agency or other forum in the United States or elsewhere. 8. Upon the Effective Date, all obligations of the Belesis Defendants to Plaintiffs arising out of, based upon, or otherwise related to the transactions and occurrences that were alleged, or could have been alleged, on behalf of Plaintiff in the Petition in the Action shall be fully, finally, and forever discharged, and all persons and entities shall be permanently barred and enjoined from instituting, prosecuting, pursuing or litigating in any manner (regardless of whether such persons or entities purport to act individually, representatively, or in any other capacity and regardless of whether such persons or entities purport to allege direct claims, claims for contribution, indemnification, or reimbursement, or any other claims) any such obligations. 9. Any person or entity so barred and enjoined shall be entitled to judgment reduction if and when a verdict or final judgment is ultimately reached. n that event, that verdict or judgment will be reduced by the greater of (i) an amount that corresponds to the percentage of responsibility of the Belesis Defendants, or (ii) the amount paid to Plaintiff by the Belesis Defendants. n addition, nothing in this Order shall preclude any person or entity so barred and enjoined from developing evidence in discovery or presenting evidence or arguments at trial in support of such a reduction. 27 of 50

28 10. This Order of Dismissal is a final dismissal in the Action as to all claims among Defendant, on the one hand, and Plaintiffs, on the other. This Court finds that there is no just reason for delay and expressly directs entry of dismissal as set forth herein. 11. Without affecting the finality of this Bar Order of Di smissal in any way, this Court retains continuing jurisdiction over all proceedings related to the implementation and enforcement of the terms of the Stipulation. 12. This Court hereby finds that each Settling Party and its respective counsel has complied with the requirement of RuJe 13 of the Texas Rules of Civil Procedure as to all complaints, responsive pleadings, and dispositive motions related to the Released Claims, and that insofar as it relates to the Released Claims, the Action was not brought for any improper purpose and is not unwarranted by existing law or legally frivolous. 3. n the event that this Order of Dismissal is reversed on appeal, the provisions of Paragraph.E of the Stipulation of Settlement shall apply. 14. Without further order of the Court, the parties may agree to reasonable extensions of time to carry out any of the provisions of the Stipulation of Settlement. T S SO ORDERED. DATED: THE HONORABLE WLLAM BURKE 28 of 50

29 Sep :12AH Bele5i p. 1 SUPREME COURT OF THE STATE OF NEW YORK COL"NTY OF NEW YORK X JOHN THOMAS BRDGE AND OPPORTUNTY FUND LP, -against- Plainitff, AFFDAVT FOR JUDGME~T BY CONFESSON (CPLR 3218) ndex No. ANASTASOS.. TOMMY" BELESS, Defendant X STATE OF NEW YORK COUYrY OF NEW YORK : SS.: ANASTASOS "TOMMY'' BELESS, being duly sworn, deposes and says: 1. currently reside at 60 Beach Street -Apt. la, County of New York, State of New York and authorize entry of judgment in New York County. 2. confess judgment in this court in favor of John Thomas Bridge and Opportunity Fund LP (the "Fund"), a Delaware limted partnership, for the sum of Three-Hundred Thousand ($300,000) Dollars plus interest of five (5) percent per year (running from the date of execution of this affidavit to the date of payment of the Settlement Amount), and hereby authorize the Fund or its attorneys, representatives, executors, administrators, successor, assigns or any of its limited partners to enter j udgment for that swn against me. 3. This confession of judgment is to n.ssure Fund n and jts limited partners against all lirbility arising upon the following facts: a. was named a defendant in the action captioned PAUL F. RODNEY, derivatively on behalf of PATROT BRDGE AND OPPORTUNTY FUND LP, and EDWN DEBUS, derivatively on behalf of PATROT BRDGE AND OPPORTUNTY FUND LP D (' Fund "), vs. JOHN THOMAS CAPTAL MANAGEMENT GROUP LLC, nlk!a 29 of 50

30 S e p : 12AM Beles is p.2 PA TROT28 LLC, GEORGE R. JARKESY JR., JOHN THOMAS FNANCAL, NC., ANASTASOS "TOMMY" BELESS, ATB HOLDNG LLC, MFR, P.C., also kno\\n as l\1fr GROUP, NC., DOEREN MAYHEW & CO., P.C., DOERE:K MAYHEW TEXAS, PLLC, SOUTH PADRE VENTURES 2, LLC, successors to MFR, P.C., and JUAN PADJLLJA, Cause No , pending in the District Court of Harris County,!89th Judicial District (the "Action"). See Exhibit A. b. On August 16, 2015, agreed to settle the claims that were asserted again.st me in the Action by paying $300,000 (Three-Hundred Thousand dollars) ("Settlement Amount") to Fund on or before October 15, c. The parties executed a stipulation of settlement oo September_, 2015 ("Settlement"). See Exhibit B. d. As security for payment of the Settlement Amount, agreed to execute this judgment by confession. e. agreed that in the event failed to pay the Settlement Amount when due and fail to cure such default within thirty (30) business days of the Notice Default Date (as defined in the Settlement), interest shall be added to the Settlement AmoWlt, calculated at five (5) percent per year, and running from the Execution Date to the date of payment of the Settlement AmoWlt. f. The sum confessed does not exceed wnount of liabilit4& Anastasios "Tommy'' Belesis 30 of 50

31 CAUSE NO PAUL F. RODNEY, derivatively on behalf o~ PATROT BRDGE AND OPPORTUNTY: FUND LP, and EDWN DEBUS, derivativelyj on behalf of PATROT BRDGE AND! N THE DSTRCT COURT OF OPPORTUNTY FUND LP, i HARRS COUNTY, TEXAS Plaintiffs, 189th JUDCAL DSTRCT! vs. JOHN THOMAS CAPTAL MANAGEMENT! GROUP LLC, nlk/a PA TROT28 LLC,i GEORGE R. JARKESY JR., JOHN THOMAS! FNANCAL, NC., ANAST ASOS "TOMMY"! BELESS, A TB HOLDNG LLC, MFR, P.C.,i also known as MFR GROUP, NC., DOERENi MAYHEW & CO., P.C., DOEREN MA YHEWi TEXAS, PLLC, SOUTH PADRE VENTURES! 2, LLC, successors to MFR, P.C., and JUAN PADLLA,! Defendants, PATROT BRDGE AND OPPORTUNT~ FUND LP, and PATROT BRDGE AND! OPPORTUNTY FUND LP,! as nominal Defendants. NOTCE OF PENDENCY AND SETTLMENT OF DERVATVE LTGATON HEARNG THEREON, AND RGHT TO APPEAR TO: ALL LMTED PARTNERS OF PATROT BRDGE AND OPPORTUNTY FUND L.P. (AK/A THE JOHN THOMAS BRDGE AND OPPORTUNTY FUND, L.P. ) ("FUND ") PLEASE READ THS NOTCE CAREFULLY AND N TS ENTRETY. THS NOTCE RELATES TO A PROPOSED SETTLEMENT AND DSMSSAL OF LTGATON AND CONTANS MPORT ANT NFORMATON REGARDNG YOUR RGHTS. YOUR RGHTS MAY BE AFFECTED BY THESE LEGAL PROCEEDNGS. F THE COURT APPROVES DSMSSAL, YOU WLL BE FOREVER BARRED FROM CONTESTNG THE APPROVAL OF THE PROPOSED PARTAL SETTLEMENT. 31 of 50

32 CAUSE NO PAUL F. RODNEY, derivatively on behalf o~ PATROT BRDGE AND OPPORTUNTY; FUND LP, and EDWN DEBUS, derivativelyj on behalf of PATRlOT BRlDGE AN) N THE DSTRCT COURT OF OPPORTUNTY FUND LP,! i HARRS COUNTY, TEXAS Plaintiffs, h JUDCAL DSTRCT vs. JOHN THOMAS CAPTAL MANAGEMENT; GROUP LLC, n!kla PATROT28 LLC,l GEORGE R. JARKESY JR., JOHN THOMASj FNANCAL, NC., ANASTASOS "TOMMY"! BELESS, ATB HOLDNG LLC, MFR, P.C.,! also known as MFR GROUP, NC., DOERENl MAYHEW & CO., P.C., DOEREN MA YHEwj TEXAS, PLLC, SOUTH PADRE VENTURES 2,! LLC, successors to MFR, P.C., and JUAN PADLLA,. Defendants, PATRlOT BRDGE AND OPPORTUNTY! FUND LP, and PATROT BRDGE AND! OPPORTUNTY FUND LP, as nominal Defendants. i NOTCE OF PENDENCY AND SETTLMENT OF DERVATVE LTGATON HEARNG THEREON, AND RGHT TO APPEAR TO: ALL LMTED PARTNERS OF PATROT BRDGE AND OPPORTUNTY FUND L.P. (A/KJA THE JOHN THOMAS BRDGE AND OPPORTUNTY FUND, L.P. ) ("FUND ") PLEASE READ THS NOTCE CAREFULLY AND N TS ENTRETY. THS NOTCE RELATES TO A PROPOSED SETTLEMENT AND DSMSSAL OF LTGATON AND CONTANS MPORTANT NFORMATON REGARDNG YOUR RGHTS. YOUR RGHTS MAY BE AFFECTED BY THESE LEGAL PROCEEDNGS. F THE COURT APPROVES DSMSSAL, 32 of 50

33 YOU WLL BE FOREVER BARRED FROM CONTESTNG THE APPROVAL OF THE PROPOSED PARTAL SETTLEMENT. THE COURT HAS MADE NO FNDNGS OR DETERMNATONS CONCERNNG THE MERTS OF THE ACTON. THE RECTATON OF THE BACKGROUND AND CRCUMSTANCES OF THE DSMSSAL CONTANED HEREN DO NOT CONSTTUTE THE FNDNGS OF THE COURT. T S BASED ON REPRESENTATONS MADE TO THE COURT BY COUNSEL FOR THE SETLNG PARTES. Notice is hereby provided to you of the proposed settlement and dismissal (the "Settlement") in the above-captioned derivative lawsuit (the "Action"). This Notice is provided by order of the 189th Judicial District Court, for Harris County, Texas (the "Court"). t is not an expression of any opinion by the Court. t is to notify you of the terms of the proposed Settlement and Dismissal of the Action.. WHY YOU HAVE RECEVED THS NOTCE This Notice provides information regarding the Settlement of a shareholder derivative Action. Plaintiff Ed Debus ("Plaintiff') has brought the Action derivatively on behalf of Fund. Plaintiff and Defendants and John Thomas Financial, nc. ("HF"), Anastasios "Tommy" Belesis ("Belesis"), A TB Holding LLC ("ATB") (together, the "Settling Parties") have agreed upon terms to settle the Action and have signed written Stipulation of Settlement (the "Stipulation") setting forth those settlement terms. On April 22, 2016, at 11 a.m., the Court will hold a hearing (the "Settlement Hearing") in the District Court for Harris County, Texas,!89th Judicial District, 20 Caroline Street, Houston, Texas before the Honorable William Burke. The purpose of the Settlement Hearing is to determine whether: (i) the Settlement of the Action upon the terms and subject to the conditions set forth in the Stipulation are fair, reasonable, and adequate and should be approved by the Court, including $300,000 in cash plus interest in exchange for releases of the Fund 's claims against JTF, Belesis, ATB; (ii) whether the Plaintiffs proposed plan of allocation to the Limited Partners of the Settlement is fair, adequate and reasonable; (iii) the Action against JTF, Belesis, ATB should be dismissed with prejudice; and (iv) whether the Court should approve Plaintiffs Counsel's motion for attorneys' fees and reimbursement of litigation expenses, and any motion for an incentive award to Plaintiff.. SUMMARY OF THE LTGATON This Action was filed on September 16,2013, and on March 10,2015, Plaintiff's filed the Second Amended Petition ("Petition"). The Petition alleges breach of fiduciary duty (Count ) and aiding and abetting breach of fiduciary duty (Count ), waste (Count ), professional negligence (Count V), civil conspiracy (Count V), and breach of contract (Counts V and V) against various defendants. After litigating their respective claims and/or defenses over the course of several years, counsel for the Settling Parties engaged in arm's-length negotiations concerning the 2 33 of 50