Do ASTN shareholders knwo about this?: "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Dover Group, Inc. and Fredric W. Rittereiser. On May 1, 1997, David N.
Rosensaft, a co-founder of UTTC(TM), commenced an action in the U.S. District
Court for the Southern District of New York captioned Rosensaft v. The Ashton
Technology Group, Inc., et al, No. 97 Civ. 3138 ("the Rosensaft lawsuit"). The
Rosensaft lawsuit alleged ten claims against the Company, UTTC(TM), Dover and
Mr. Rittereiser, including breach of contract and securities fraud. On
December 3, 1997, the U.S. District Court for the Southern District of New
York entered judgment in favor of the plaintiff and against Dover and Mr.
Rittereiser. While the Company and its UTTC(TM) subsidiary were initially
parties to this lawsuit, they were dismissed as defendants on August 29, 1997,
leaving only Dover and Mr. Rittereiser as defendants. On January 14, 1998, the
Company entered into an agreement with Dover and Mr. Rittereiser, whereby
Dover and Mr. Rittereiser agreed to reimburse the Company for $413,980 in
legal costs associated with the Rosensaft lawsuit to the extent such costs
were not covered by the Company's directors' and officers' liability insurance
carrier. Dover and Mr. Rittereiser pledged 333,334 shares of UTTC(TM) stock as
collateral in support of their agreement to pay the legal costs. The Company
has submitted a claim to its insurance carrier in the full amount of such
legal costs. To date, the Company and its insurance carrier have not reached
agreement as to whether the legal costs of the Rosensaft lawsuit are covered
by the Company's directors and officers' liability insurance policy.
On March 4, 1998, the U.S. District Court for the Southern District of New
York entered an order awarding damages against Dover and Mr. Rittereiser in
the Rosensaft lawsuit in the amount of $1.2 million. On April 7, 1998, the
Company's Board of Directors, after due deliberation, concluded that the
Company and its UTTC(TM) subsidiary derived mutual benefit from the Rosensaft
settlement entered into by Dover and Mr. Rittereiser. The Board resolved to
fund one-third of the $1.2 million settlement amount. Separately, UTTC(TM)
agreed to fund one-third of the Rosensaft settlement. On April 8, 1998, the
Company loaned $380,000 to Dover and Mr. Rittereiser at an annual interest
rate of 9% for thirty months. In exchange for the loan to satisfy the
Rosensaft settlement, Dover pledged 300,000 shares of the Common Stock under
its control to the Company.
For the fiscal years ended March 31, 1998 and March 31, 1999, the Company
paid Dover $125,000 and $235,000 in consulting fees for consulting services
rendered in connection with the Company's financings and product development." |
