Case 1:10-cv-02031-DU-JMA Document 231-2 Filed 05/25/12 Page 1 of 8 PagelD #: 6350

UNITED STATES DISTRICf COURT

u.s. SECURITIES AND EXCHANGE
COMMISSION, .
Plaintiff,
v.
SPONGETECH DELIVERY SYSTEMS, INC.,
RM ENTERPRISES INTERNATIONAL, INC.,
STEVEN Y. MOSKOWITZ, MICHAEL E.
METI'ER, GEORGE SPERANZA, JOEL
PENSLEY, and JACK HALPERIN,
. Defeadanta.










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Cue No.IO-CV-2831
(DLl)(JMA)
CONRlljNT OF DEFENPANIST,EVENMOSKOwrrz
1. Defendant Steven Moskowitz ("Defendant") acknowledges having waived service
ofaSUDlD1OllS and the complaint in this action. (see J>ocketNo. 14). enters a general appearance,
and admits the Court's jurisdiction over the Defendant and oVer the subject maUer of this action.
2. Without admitting or denying the allegations of the Complaint (except as to
pencmal and subject maUer jurisdiction, which DmmJant admits). Dcofendant hereby cooseats to
the entry of the Judgment in the Conn attached hereto (the "Judgment") and incorpoI8ted by
n:feteuce herein, whicb, among o1her things:
<a> Pmnanent1y restraius aDd CI\ioins Defimdant from violatiug Sections
5 and 17(a) of the Securities Act of 1933 ("Securities Act") [15
U.S.c. 77e &:. 77q(a)], Sections and 13(bXS) of the
Securities E1CMange Act of 1934 ("ExdumgeAct") [15 U.S.C.
78J(b) and 78m(bX5)]. 13b2-1.
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13b2-2. and 15d-14 [17 C.F.R 240.101>-5, 13b2-1, 13b2-2, and
15d-I4]; and nom aiding and abetting violations of Sections 13(a),
13(b)(2)(A), 13(b)(2)(B), and 15(d) of the ExchaDge Act [15 U.S.C.
78m(a), 78m(b)(2)(A), 78m(b)(2)(B), and 78o(d)] and ExchaDge
Act Rules 121>-20;13a-13, lSd-I, 15d-ll, and lSd-13 [17 C.F.R
121>-20, 13a-13, lSd-I, 15d-ll, and 15d-13);'
(b) Permanently bars defendant, pursuant to Section 20(e) of the
Securities Act [IS U.S.c. 77t(e)] and Section 21(d)(2) of the
Exchange Act [IS U.S.C. 78u(d)(2)], from serving as an officer or
cfuector of any issuer that has a class of securities registered pll1'SUllllt
to Section 12 of the E:icch
8
DgP, Act [IS U.S.c. 781) or that is-
required to file reports pul'SU8Ilt to Section 15(d) of the Exchange
Act [IS U.S.C. 78o(d)]:
(c) Prohibits l)efmdagt nom engaging in any offering of penny stock
pursuant to Securities Act Section 2O(g) [IS U.S.C. 77t(g)) and
Exchange Act Section 21(d)(6) [IS U.S.C. 780(d)(6):
(d) Orders Defendagt to provide a va:ifi.ed writtm accoUDting to the
Comt aud the SEC: and
(e) Prohibits Defeodant from altering, destroying, or i.uta:feting with
Plainliff Securities and Exchange Commjssioo's("Commjuion"}
access to Defendant's boob, recmds, aud ~ .
3.' Defendant agrees that the Court shall order disgorgemeDt of ill-gotten gains,
pre,ilvlgment interest thereon, and civil penalties pursuant to Section 20(d) of the Secmities Act
2
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[15 U.S.C. 77(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. .78u(d)(3)].
Defendant also agrees.that the Court shall order him to reimburse, pmsuant to Section 304 of the
Sarbanes-Oxley Act of2002 ("Sarbanes-Oxley Act") [15 U.S.C. 7243}, to Spongetech
Delivery Systems, Inc. ("Spongetech"), cash bonuses, profits from Spongetech stock sales, any
Spongetech stock options, and any other incentive-based and equity-based compensation
I)cfmdant received from Spongetech during 2007 to pres nt, to the extent such proceeds are not
otherwise ordered to be disgorged. Defendant furthec agrees that the amounts of the
disgoIgeoltmt, civil penalties, and reimbunement shall be determined by the CoUrt upon motion
of the Commission. and that prejudgmerrt interest shall be c:alcn1at
M
from May 5, 2010, based on
the rate of inteJ:est used by the Intemal Revenue Service for the underpayment offederal income
tsx as set forth in 26 U.S.C. 6621(a)(2). Defendant further agrees that in connection with the
Qmmrission's motion for disgorgement, civil money pcnaIti.es,andlorreimbursemeot, and at any
hearing held on such a motion: (a) Defeodant will be precluded' from arguing that he did not
violate the federal iecurlties laws as alleged in the Complaint; (b) Defundant may ~ t cballeoge
the validity of this Consent or the Judgmmt; (c) solely for the purposes of such motion, the
allegations of the Complaint shall be accepted as snddeemed hue by the Court; and (d) the
Court may detmnine the issues raised in the motion on the basis of affidavits. declarations.
exccrpIs of 81I'ODI deposition or inYestigative 1estimony, and cIocumeotary evidebce, without
~ to the sbmdanIs for SllIDmary judgment contained in Rule 56(c) of the Fedeni Rules of
Civil ProcecIure. InCOllDection with the Commission's motion for disgorgemeIlt and/Or civil
pc!l!dties, ~ parties may taIre discovery, includillg discovery from appropdate non-psrties.
4. Defendant 8cknowIedges 1hat the civil ponalty paid in ~ with Paragraph
3, above, may be distributed pmsuant to the Fair FUnd provisions of Section 308(a) of the
3
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Sarbanes-Oxley Act of2002. -Regardless of whether any such Fair Fund distribution is made, the
civil penalty shall be treated as_ a penalty paid to the govemmeo.t for all purposes, including all
tax pmposes. To preserve the deteuent effect of the civil penalty, Defendant agrees that he shall
not, after offset or reduction of any award of compensatory damages in any Relafwl Investor
Action based on Defendant's payment of disgorgement in this action, argue that he is entitled to,
nor shall he further benefit by, offset or reduction of such compeIISIItOl'y damages award by the
amount of any part of Defendant's payment of a civil penalty in this action ("Penalty 01fset"). If
the cowt in any Relafwl Investor Action grants such a Penalty Offset, Defendant agrees that he
sball, within 30 days after entry of a final order granting the Penalty Offset, notifY the
Commission's coUDSel in this action and pay the amount of the Penalty Offset to the United
States Treasury or to a Fair Fund, as the Commission directs. Such a payment shall not be
deemed an additionaJ. civil penalty and shall not be deemed to dJange the amount of the civil
penalty imposed in this action. For purposes of this paragraph, a "Related Investor Action"
means a private damages action brought against Defimdarrt by or on bcbaIf of one or more
investors based on substantially the same fucts as alleged in the Complaint in this action.
s. Defendant agrees that he shall not seek or accept, directly or iDdirectly,
teimbursement or indemnification from any source. including, but not limited to, payment made
pursuant to any insurance policy; with n:gard to any civil money penalty amount that he pays
pursuant to the 1
u
dgment or othet- Cowt order, n:gardless ofwhCther such penalty amount or-any
part d!m-eof-is added to a distribution fund or 01herwise used for the benefit of investors. The
Defmdant further agrees that he shall not claim, assert, or apply for a tax deduclion 01" tax CRIdit
with regml to any federal. state or local tax for any penalty amount that he pays pw:suaut to the
4
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Judgment or other Court orde, regatdless of whether such penalty amount or payment or any
part thereof is added to a distribution fund or otherwise used for the benefit of investors.
6. Defendant agrees DOt to seek or accept indemnification from Spongetech or any
other entity of person for any payments made pursuant to Section 304 of the SaIbanes-Oxley Act
[lS U.S.C. 7243].
7. Defendant waives the eD1ly offindiugs offset and conclusions of law pursuant to
Rule S2 of the Federal Rules of CiVil Prooeclure.
8. Defendant Waives the right, if any, to a jury trial and to appeal from the entty of
the Judgment.
9. Defendant enters into this Consent voluntarily and ICpr es us that no threats,
. offers, promises, or inducemeilU of any kind have been made by the Commission or any
!IIC'JIIJber, officer, employee. agent, or IepIes "'alive of the Coonnission to induce Defendant to
enter into this Consent.
10. Defendant agrees that this Consent shall be incorporated into the Judgment with
the SIIIIIC force and effect as if fully set forth tIirein.
11. Defendatrt will DOt oppose the enforeement of the Judgment on the ground, if any
exists, that it fiIils to comply with Rule 6S( d) of the Federal Rules of Civil Procedure. and hereby .
waives any objection based thet-eon.
12. Defcndalitwaives service of the Judgment and agrees that entry of the Judgment
by the Court and 1iling with the C1edc of the Court will constitute notice to Defendant of its Bms
. .
and conditions. Defendant 1iII:tbm' agrees to provide coUllSel for the Commission, within thirty
days after the Judgment is filed with the Cletk of the Court, with an affidavit or declaratiOn
stating that Defendant has received and read a copy of the Judgment.
S
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13. Consistent with 17 C.F.R. 202.5(1), this Consent resolves only the cIaiJns
asserted against Defendant in this civil proceeding. Defendant acknowledges that no promise or
lepIesenPrtion has been made by the Coounission or any member, officer,employee, agent, or
. representative of the Commission with regard to any criminal liability that may have arisen or
may arise from the 1iIcts underlying this action or immunity ftom any such criminal liability.
Defimdant waives any claim. of Double 1eopaldy based upon thesettlemenl-ofthis pmcwding, .
including the imposition of any remedy Or civil ponalty herein. Defendant further acknowledges
that the Comt's entry of a pennanent iqjunction may have collateral conseqnences under federal
or stat.e law and the IUles and reg1llations at: self-regulatory organizations, licensing boards, and
other regulatory organizatil)ns. Such col1ateral CClJISeQ11eDIle include. but are not limited to, a
slldutory disqualitication with respect to membership or participation in, or association with a
member 0( a self-regulatory organizatioo. This statutory clisqnalificatioo has consequences that
are separate ftom any sanction imposed in an administrative proceeding. In addition, in any
disciplinsry proceeding before the Commission based on the entry oftte injunction in this
action. Defendant understands that it sball not be permitted to contest the factual allegations of
the Complaint in this action.
14. Defendant ui1den1aDds and agrees to comply with the Commission's policy "not.
to penuit a defendant or respondent to consent to ajudgment or order that imposes a sanction
while denyiog the allegation in the Complaint or on:ier for proc:eedings" 17 C.F.R. 202.S.i:n
compliance with this policy. Defenda;" agrees: (i) not to fIIJcc any action or to make or penuit to
be made any public statement denying, cIiIectly or indirectly, any alle.gation in the Coinplaint or
creating the impression that the Complaint is without factual basis; and (ii) that uPon the filiDg of
this Consent, Defendant be:reby withdraws any papers tiled in this action to the extent that they
6
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deny ~ y allegation in the Complaint. If Defendant breaches this agreement, the Commission
may petition the Comt to vacate the Judgment and restore this action to its active docket.
Nothing in this paragraph affects Defendant's: (i) testim,onial obligations; or (Ii) right to take
legal or tiIctual po$itions in litigation or other legal proocedings in which the Commission is not
a party.
15. Defendant hereby waives any rights under the Equal Access to Justice Act, the
Small BlIsiness Regu1atory Enforcement Fairness Act of 1996, or any other provision of law to .
seek from the Uoited States. or any agency, or any official of the United States acting in 11is or
her official capacity, directly or indirectly, reimbursement of attorney's fees or other fees,
expenses,. or costs expended by Defendant to defend against this action. For these purposes,
Defendmt agrees that he is not the prevailing party in this action since the parties have reached
a good faith settlement.
16. In coonection with this action and any related judicial or administrative
proceeding or investigslion commenced by the Cc>mmission or to which the Commission is a
party, Defendant (i) agrees to appear and be ~ e w e d by Commission sIaff at such times and
places as the sIaff requests upon reasonable notice; (ii) will accept service as parties to the action,
by mail, e-mail, or facsimjle transmission, ofnotiees issued by the Commission for documents or
testimony at depositions, hesrings, or trials, or in connection with any related investigation by .
Cnmmission sIBfl; (iii) appoints Defendant's undersigned attorney as agent to receive service of
such notices; (iv) with Iespect to such notices, waives the Itillitoriallimits on servioe of subpocm&
.
conlBined mRule 45 of the Federal RulC$ of Civil ProoeduIe, if applicable. and waives any
applicable loaiI rules, provided that theparly requesting the mstimony reimbullles Defendant's
. trave1.1odging, and subsistence expenses at the tben-prevailing U.S. Oova 11i1lt\lJt per diem rates;
7
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, , .
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and (v) consents to personal jurisdiction over Defendant in any United States District Court for
purposes of enforcing any such subpoeDa.
17. Defendant agrees that the Commission may present the Jndgment to the Court for
signature and entry without further notice.
18. Defendant agrees that this Court sbaIl retain jurisdiction over this IIIlItt for the
purpose ofmakjng the determinations as to monetary relief and for eoforciDg the terms of the
1udgment.
Dated:,--<4 6_2.'--1/--=-1_'1.-_

.J , Steven Moskowitz
on i\.ve.., L ,20l1. I'.!L 0$\.0"> \""L , a person known to me,
personally appeared before me and acknowledged executing the foregoipg Consent
& Associates, P.C.
Broadway, Suite 10
New Yode, NY 10004
OJunselfor Steven Y. Moskowilz
Notary Public
Commi' . THAKURIlAI 'I'IWNII
8810n P_. SIaIa oIHew Yod<
No. 01T111216318
8
In IItonx CoI!I!IY
eon., ........ ExIIIoes Feb. oa; 2O.!:I-
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