COMPROMISE, SETTLEMENT AND MUTUAL RELEASE AGREEMENT
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This Compromise, Settlement and Mutual Release Agreement ("Settlement
Agreement") is made as of August 1, 2002 between Buckeye Retirement Co., L.L.C.,
Ltd. ("Buckeye") of ▇▇▇▇▇▇ Falls, Ohio (Creditor), and ▇▇▇▇▇▇▇ Communications
Corporation ("MCC") of Cedar Rapids, Iowa (Debtor). Buckeye and MCC shall
collectively be referred to herein as "the Parties".
WHEREAS, on November 10, 1998 and on April 13, 1999, MCC made, executed,
and delivered Promissory Notes to certain individuals ("Individuals"), as set
forth in Exhibit "A" hereto, ("the Notes"); and
WHEREAS, a certain individual ("Individual Debtor") pledged the Notes as
collateral for a $350,000 loan as evidenced by an original bank note (the
"Loan") through the Hartford-Carlisle Bank on or about April 9, 1999; and
WHEREAS, the Hartford-Carlisle Bank became insolvent and the assets of the
Bank were assumed by or assigned to the Federal Deposit Insurance Corporation
("FDIC"); and
WHEREAS, Buckeye, through the ▇▇▇▇▇ Company ("▇▇▇▇▇"), then became the
FDIC's assignee with respect to the Loan as set forth on Exhibit "B" hereto, and
the collateral MCC notes, as set forth on Exhibit "A" hereto; and
WHEREAS, Buckeye and ▇▇▇▇▇ are, and have been, actively pursuing payment of
the Loan and the Notes; and
WHEREAS, on December 19, 2001, MCC entered into a Definitive Merger
Agreement (the "Merger Agreement") with Polar Molecular Corporation ("Polar");
and
WHEREAS, one of the Merger Conditions is that MCC will eliminate its debt
obligations under the Notes; and
WHEREAS, Buckeye is willing to accept consideration pursuant to this
Settlement Agreement, and its exhibits, from MCC, in exchange for the release of
any and all claims Buckeye may have against MCC related to the Notes, and
assignment to MCC of any claims Buckeye has against the Individual Debtor with
respect to the Loan; and
WHEREAS, MCC is likewise willing to tender consideration to Buckeye and
release Buckeye from all claims MCC may have against Buckeye related to said
Notes and the Loan;
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
SECTION ONE
EXISTENCE OF NOTES AND LOAN
The Parties acknowledge that Buckeye currently holds the Notes in the
amounts set forth in Exhibit "A" hereto; and that Buckeye, through ▇▇▇▇▇, is
the assignee of the FDIC with respect to the Loan in the amount set forth in
Exhibit "B" hereto.
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SECTION TWO
AGREEMENT FOR DIFFERENT TERMS OF PAYMENT
The Parties agree that payment of the Notes and Loan on terms and
provisions different from, and in substitution of, the terms and provisions for
payment of the Notes and Loan contained in and represented by the Notes and
Loan, is desirable and in the best interest of the Parties. The Parties agree
that the provisions of this Settlement Agreement supersede and control any and
all prior agreements between MCC, Buckeye, and ▇▇▇▇▇, and that no other document
or instruments shall supersede this Settlement Agreement between the Parties,
except as hereafter may be otherwise agreed to by all of the Parties in writing.
SECTION THREE
TERMS OF PAYMENT AND RELEASE
3.1. METHOD OF PAYMENT: Buckeye agrees to accept the following, in full
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satisfaction of the obligations under the Notes and the Loan described in
Section 1 above:
3.1.1. Cash Deposit. Upon execution of this Settlement Agreement by the
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Parties, MCC shall deliver to Buckeye Twenty-Five Thousand Dollars ($25,000) in
cash, by wire transfer or guaranteed funds, which $25,000 shall be
nonrefundable; and
3.1.2. Cash Payment. At the Closing of the Merger, MCC shall deliver to
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Buckeye Seventy-Five Thousand Dollars ($75,000) in cash or electronic funds
transfer; and
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3.1.3. MCC Common Stock. At or prior to the Closing of the Merger, and in
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accordance with the offering memorandum attached hereto as Exhibit "C" and
Buckeye's subscription therefor, MCC shall deliver to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company
Financial Services, Inc. ("BFC") as brokerage agent for Buckeye, Four Hundred
Seventy-Five Thousand (475,000) shares of MCC Common Stock, no par value per
share (the "MCC Common Stock"). The Parties agree that MCC shall pay to BFC all
commissions related to BFC's subsequent sale of the MCC Common Stock on behalf
of Buckeye. The Parties agree that: (a) the MCC Common Stock shall be offered
and issued to the Investor under the private offering exemptions from
registration available under the Securities Act and the laws of the states in
which the Shares will be sold, and that the Shares offered pursuant to Exhibit
"C" hereto will not, prior to issuance, be registered under the Securities Act
or under the securities laws of any state or other jurisdiction. As a result,
the Shares as initially issued cannot be transferred without registration under
the Securities Act and applicable state securities laws or an exemption
therefrom and the Shares will be "restricted securities" as that term is defined
in Rule 144 under the Securities Act; and (b) MCC shall use its best efforts to
register with the Securities and Exchange Commission the resale by Buckeye of
the shares prior to the closing of the Merger (which registration may also
include any other securities to be sold by MCC, any successor of MCC or any
other securityholder of MCC or any successor of MCC), and any such registration
shall cause the shares to be freely tradable at or prior to the closing of the
Merger.
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3.2. RELEASE AND RETURN OF NOTES AND LOAN DOCUMENTS: At such time that
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Buckeye has received all of the consideration set forth in Section 3.1, Buckeye
shall immediately provide to the Escrow Agent, pursuant to Exhibit 6 of the
Offering Memorandum: (1) each of the original Notes in its possession and which
are enumerated in Exhibit "A", and (2) any and all of the original Loan
documents, and related security interests, including an assignment of the
original note related to the Loan set forth in Exhibit "B". Buckeye shall take
any and all steps necessary to cause the Loan, and any and all security
interests therein or other collateral therefor, to be directly assigned, without
prior cancellation unless requested in writing by MCC, directly to MCC, such
that MCC shall stand in the place of Buckeye and its predecessors with respect
to any potential legal causes of action against the Individual Debtor.
SECTION FOUR
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
4.1. MCC hereby represents and warrants to Buckeye that MCC is a
corporation duly organized, validly existing and in good standing under the laws
of Iowa, has all requisite power to own, lease and operate its assets,
properties, business, and to carry on its business as conducted; is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in every jurisdiction in which the nature of its business or the
locations of its properties requires such qualification or licensing. MCC has
all requisite power, authority and approvals required to enter into, execute and
deliver this Settlement Agreement and to perform fully the obligations required
hereunder.
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4.2. MCC hereby represents and warrants to Buckeye that MCC has taken all
actions necessary to authorize it to enter into and perform fully its
obligations under this Settlement Agreement, and this Settlement Agreement and
any related documents will be the legal, valid and binding obligations of MCC in
accordance with its terms, and neither the execution nor the delivery by MCC of
this Settlement Agreement nor the consummation of the transactions contemplated
under this Settlement Agreement will violate any provisions of the Articles of
Incorporation or the Bylaws of MCC or any other covenants or agreements
currently binding MCC.
4.3. Buckeye hereby represents and warrants to MCC that Buckeye is the
legitimate assignee of ▇▇▇▇▇, is a limited liability company duly organized,
validly existing and in good standing under the laws of Ohio, and that it has
all requisite power, authority and approvals required to enter into, execute and
deliver this Settlement Agreement and to perform fully the obligations required
hereunder and has taken all actions necessary to authorize it to enter into and
perform fully its obligations under this Settlement Agreement.
4.4. Buckeye represents and warrants that it is not aware of the existence
of any notes or loans, other than the Notes and the Loan as defined in the
Settlement Agreement, that Buckeye has any right or interest in; and that it has
not sold, assigned, or transferred any right or interest it has, or may have, in
any of the Notes or Loan to any other person or entity; and that, barring any
breach of this Settlement Agreement by MCC, Buckeye shall not bring any legal
cause of action against MCC with respect to any Note, or any persons or entities
with respect to the Loan. Buckeye's representation herein includes any legal
causes of action that Buckeye may have against any and all individuals in
connection with any of the Notes and Loan.
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SECTION FIVE
MUTUAL RELEASE AND INDEMNIFICATION
5.1. SATISFACTION AND RELEASE: Upon fulfillment of the obligations of
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each of MCC and Buckeye, as set forth in Section 3 of this Settlement Agreement,
the Parties are hereby, each by the other, released, together with their
respective parent companies, subsidiaries, affiliates, officers, directors,
employees, agents, assigns and predecessors or successors in interest, from any
and all indebtedness, claims, causes of action or demands of any nature which
any of the Parties to this Settlement Agreement has, or may have had, with
respect to or relating to the Notes and Loan (except that any action that MCC
has against the Individual Debtor is not released hereby) from the beginning of
time until the Closing of the Merger and the obligations of MCC to Buckeye, as
described in Section One and set forth in Exhibits "A" and "B" attached hereto,
shall forever be cancelled and discharged, and MCC shall be fully released from
the obligations described in Section One above. Buckeye hereby assigns and
shall cause to be assigned any and all claims it may have against the Individual
Debtor to MCC. For the purposes of this Settlement Agreement, Buckeye's
predecessors include the FDIC, Hartford-Carlisle Savings Bank, and their agents
and assigns.
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SECTION SIX
RELEASE FROM PERFORMANCE; NULLIFICATION OF AGREEMENT
In the event that the Merger does not close, for any reason, the Parties
hereto shall be released from any and all requirements of performance hereunder
and this Settlement Agreement shall be null, void and of no further force or
effect.
SECTION SEVEN
MISCELLANEOUS
7.1. CLOSING. For purposes of this Settlement Agreement, "Closing of the
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Merger" shall refer to that time set forth in Article II, Section 2.01 of the
Merger Agreement between MCC and Polar unless otherwise agreed in writing by the
parties thereto. Notwithstanding the prior sentence, the Parties agree that if
the Merger is not closed prior to midnight March 31, 2003, this Settlement
Agreement is null and void, except that any cash paid to Buckeye shall not be
refundable to MCC.
7.2. AMENDMENT. Subject to applicable law, this Settlement Agreement may
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only be amended or supplemented by mutual agreement in writing by the parties.
7.3. EXPENSES. Each party shall pay its own expenses and fees in connection
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with the matters contemplated in this transaction.
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7.4. SUCCESSORS AND ASSIGNS. This Settlement Agreement shall be binding
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upon and shall inure to the benefit of the Parties and their respective
successors and assigns. This Settlement Agreement does not create, and shall not
be construed as creating, any rights or claims enforceable by any third person
or entity not a party to this Settlement Agreement.
7.5. GOVERNING LAW. The validity, interpretation, enforceability, and
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performance of this Settlement Agreement shall be governed by and construed in
accordance with the law of the State of Iowa. The Parties have agreed that
personal jurisdiction and venue shall be solely in the state and federal
district courts located in Cedar Rapids, Linn County, Iowa.
7.6. COUNTERPARTS. This Settlement Agreement maybe executed in
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.7. ENTIRE AGREEMENT. The parties intend that the terms of this Settlement
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Agreement and its exhibits shall be the final expression of their agreement with
respect to the subject matter hereof and may not be contradicted by evidence of
any prior or contemporaneous agreement.
7.8. SEVERABILITY. If any provision of this Settlement Agreement, or the
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application thereof to any person, place, or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of this Settlement Agreement and such provisions as applied to other
persons, places, and circumstances shall remain in full force and effect.
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7.9. ADDITIONAL DOCUMENTS. Each of the Parties agrees, without further
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consideration, to execute and deliver such other documents and take such further
action as may be reasonably required to effectuate the provisions of this
Settlement Agreement.
7.10. EXHIBITS. All Exhibits attached hereto shall be deemed to be a part
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of this Settlement Agreement and are fully incorporated in this Settlement
Agreement by this reference.
7.11. SURVIVAL. All representations warranties, and agreements contained
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in this Settlement Agreement or made pursuant to the transactions contemplated
by this Settlement Agreement, whether set forth in Section 4 or elsewhere, shall
survive the closing of the Merger and performance pursuant to this Settlement
Agreement.
7.12. BINDING AGREEMENT. The terms, provisions, covenants and conditions
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contained in this Settlement Agreement shall apply to and inure to the benefit
of and be binding upon the parties and their respective successors and assigns.
[SIGNATURE PAGE FOLLOWS]
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In Witness Whereof, the Parties have executed this Settlement Agreement.
BUCKEYE RETIREMENT CO., L.L.C., LTD.
BY: _____________________________________
Date __________________________________
▇▇▇▇▇▇▇ COMMUNICATIONS CORPORATION
BY: _____________________________________
Date __________________________________
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LIST OF EXHIBITS
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EXHIBIT DESCRIPTIONS
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1. EXHIBIT "A": Description of the subject MCC Notes
2. EXHIBIT "B": Listing of the subject Loan
3. EXHIBIT "C": Offering Memorandum and Subscription Agreement
4. EXHIBIT "D": Receipt for Payment Discharging Claim in Full
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EXHIBIT "A"
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1. $350,000 ORIGINAL MCC PROMISSORY NOTE DATED NOVEMBER 10, 1998, DUE TO ▇▇▇
▇. ▇▇▇▇▇▇▇ , SIGNED BY ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CEO.
2. $225,000 ORIGINAL MCC PROMISSORY NOTE DATED APRIL 13, 1999, DUE TO ▇▇▇ ▇.
▇▇▇▇▇▇▇, SIGNED BY ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CEO.
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EXHIBIT "B"
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$350,000 ORIGINAL BANK NOTE DATED APRIL 9, 1999, EVIDENCING A LOAN TO ▇▇▇ ▇.
▇▇▇▇▇▇▇ BY THE HARTFORD-CARLISLE BANK
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EXHIBIT "D"
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RECEIPT FOR PAYMENT DISCHARGING CLAIM IN FULL
ACCEPTANCE BY CREDITOR OF PAYMENT IN A DIFFERENT FORM
Received of ▇▇▇▇▇▇▇ Communications Corporation ("MCC"), of ▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇, consideration constituting full payment to Buckeye
for the Notes as set forth on Exhibit "A" and the Loan as set forth in Exhibit
"B" of the Compromise, Settlement, and Mutual Release Agreement to which this
Exhibit "D" is appended, as follows:
(1) Twenty-Five Thousand Dollars ($25,000) in cash or electronic funds transfer
from MCC at the time of execution of the Compromise, Settlement Agreement
and Mutual Release to which this is appended; and
(2) Seventy-Five Thousand Dollars ($75,000) in cash or electronic funds
transfer from MCC at or prior to the Closing of the Merger; and
(3) Four Hundred Seventy-Five Thousand (475,000) shares of MCC Common Stock, no
par value per share, pursuant to the terms of the Settlement Agreement and
the Offering Memorandum to which this Exhibit "D" is appended.
Such payment to Buckeye constitutes full and complete satisfaction of any
and all debts due Buckeye from MCC with respect to Buckeye's legal interest in
the Notes and the Loan. This instrument is intended as a receipt of
consideration received by Buckeye in full discharge of any and all amounts due
to Buckeye from MCC related to the Notes and Loan. The terms in this document
shall have the same meaning as the terms in the Compromise, Settlement, and
Mutual Release Agreement to which this is appended, unless otherwise defined
herein.
[SIGNATURE PAGE FOLLOWS]
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Dated __________________________________
BUCKEYE RETIREMENT CO., L.L.C., LTD.
BY:_________________________________________________
Its ________________________________
STATE OF ________________,
___________________ COUNTY, ss:
On this day of______________________ , 2002, before me, the
undersigned, a Notary Public in and for said County and State, personally
appeared ______________________________, to me personally known, who being by me
duly sworn, did say that he is the President of Buckeye and that this Receipt
and Acceptance was signed on behalf of the Buckeye by authority of its Board of
Directors; and that __________________________, as officer, acknowledged the
execution of the foregoing instrument to be the voluntary act and deed of the
corporation, by it and by him voluntarily executed.
__________________________________
Notary Public in and for State of _______
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