CERTAIN OF THE INDEBTEDNESS DESCRIBED HEREIN AND CREATED HEREBY, AS
WITH RESPECT TO AMERICELL ONLY, IS SUBJECT TO A CERTAIN
SUBORDINATION AGREEMENT OF EVEN DATE HEREWITH BETWEEN THE PARTIES
HERETO AND NTFC CAPITAL CORPORATION
SETTLEMENT AND RELEASE AGREEMENT
--------------------------------
THIS SETTLEMENT AND RELEASE AGREEMENT ("AGREEMENT") is made and entered
into this 27th day of March, 1997, by and among EMCEE Broadcast Products, Inc.
("EMCEE"), a Delaware corporation, AND EMCEE Cellular Inc. ("CELLULAR"), a
Delaware corporation, AND AmeriCell PA -- 3 Limited Partnership ("AMERICELL"),
a Pennsylvania limited partnership, AND Rigas Communications, Inc. (the "GENERAL
PARTNER"), a Florida corporation, AND Xxxxxxxxxxx X. Xxxxx ("XXXXX"), an adult
individual.
BACKGROUND:
A. AmeriCell and EMCEE entered into a Purchase and Sale Agreement dated
the 21st day of August, 1991 (the "PURCHASE AND SALE AGREEMENT"), with respect
to, among other things, the sale by EMCEE to AmeriCell of a certain construction
permit issued by the Federal Communications Commission for a nonwireline
Domestic Public Cellular Radiotelephone System more specifically described
therein. Pursuant to the Purchase and Sale Agreement, AmeriCell executed and
delivered to EMCEE a certain Promissory Note dated December 16, 1991, in the
principal sum of Two Million One Hundred Thousand ($2,100,000.00) Dollars (the
"NOTE"), which Note was guaranteed by Rigas pursuant to a certain Personal
Guaranty dated December 16, 1991 (the "GUARANTY").
B. As a result of AmeriCell's and Rigas's failure and refusal to pay the
sums due and owing under the Note and the Guaranty, respectively, EMCEE filed a
certain lawsuit in the Court of Common Pleas of Luzerne County, Pennsylvania, at
No. 274-C of 1997, against AmeriCell, the General Partner, which is the sole
general partner of AmeriCell, and Rigas entitled, "EMCEE Broadcast Products,Inc.
vs. AmeriCell PA -- 3 Limited Partnership, Rigas Communications, Inc. and
Xxxxxxxxxxx X. Xxxxx" (the "LAWSUIT").
C. In order to avoid the time, expense and inherent uncertainties of
litigation, the parties desire to resolve their disputes and differences by and
through this Agreement.
D. Cellular is a part of this Agreement in that EMCEE has assigned to
it the right to receive certain sums identified herein, contingent upon this
Agreement being fully executed and performed by the parties.
NOW, THEREFORE, the parties hereto, each intending to be legally bound
hereby, covenant, agree and represent as follows:
1. Subject to the full and complete performance of each and every term
and condition of this Agreement, and in full settlement of all sums due and
owing under the Note and all liabilities under or with respect to the Lawsuit,
AmeriCell, the General Partner and Rigas hereby jointly and severally covenant
and agree to pay to Cellular, as assignee of EMCEE, the sum of Three Million
($3,000,000.00) Dollars in accordance with the provisions of Section 2 hereof.
In addition, AmeriCell, the General Partner and Rigas jointly and severally
covenant and agree to pay to EMCEE the sum of Ten Thousand Nine Hundred Fifty-
eight Dollars and Forty-six ($10,958.46) Cents, representing all of EMCEE's
attorney's fees incurred since December 16, 1996 in connection with the
attempted collection of the Note and Guaranty and the prosecution of the
Lawsuit. Said attorney's fees shall also be paid in accordance with the
provisions of Section 2 hereof.
2. All of EMCEE's attorney's fees described in Section 1 hereof, as well
as Two Million Five Hundred Thousand ($2,500,000.00) Dollars of the Three
Million ($3,000,000.00) Dollars owing to Cellular pursuant to Section 1 hereof,
must be paid to and received by EMCEE and Cellular, respectively, on April 2,
1997, via wire transfer (at the payor parties' expense) in accordance with the
following wiring instructions: transfer to Wilmington Trust Company,
Wilmington, DE, ABA 000000000. Credit EMCEE Cellular Inc. Account Number
2524-7426.
The remaining Five Hundred Thousand ($500,000.00) Dollars to be paid
to Cellular pursuant to Section 1 hereof shall become immediately due and
payable upon the occurrence of any one or more of the following events: (a) the
sale or other transfer, whether or not voluntary, not in the ordinary course of
business of all or substantially all of AmeriCell's assets or any sale or other
transfer of the nonwireline Domestic Public Cellular Radiotelephone System
described in the Purchase and Sale Agreement, whether or not in the ordinary
course ofbusiness; (b) the merger, consolidation, division or dissolution
(judicial or nonjudicial) of AmeriCell; (c) the filing by or against AmeriCell
of a Petition in Bankruptcy which is not dismissed within thirty (30) days of
the date of filing; (d) the making of an assignment for the benefit of
AmeriCell's creditors;(e) AmeriCell's insolvency or an admission by AmeriCell of
the inability to pay its debts when due; (f) if at any time the General Partner
shall for any reason no longer be AmeriCell's general partner; or (g) if
AmeriCell shall ever be in default under the "Loan and Security Agreement" (as
defined in the Subordination Agreement referenced in the legend above) and such
default is continuing after the expiration of any applicable cure periods.
AmeriCell, the General Partner and Rigas shall notify EMCEE and Cellular
immediately upon the occurrence of any one or more of the foregoing events.
3. It is understood and agreed that all sums payable to EMCEE or
Cellular hereunder shall not be subject to deduction by reason of set off,
defense, counterclaim, recoupment or other defalcation. It is further understood
and agreed that no interest shall accrue on any sum payable to EMCEE or Cellular
hereunder; provided, however, that if the remaining Five Hundred Thousand
($500,000.00) Dollar balance owing to Cellular pursuant to the second paragraph
of Section 2 hereof is not paid within thirty (30) days from the date it becomes
due and owing, interest shall accrue and be payable on such amount immediately
following such 30-day period and until fully paid at the lower of eighteen (18%)
percent per annum or the highest rate of interest per annum permitted to be
charged under applicable law.
4. Upon execution of this Agreement, EMCEE shall authorize its legal
counsel, Xxxxxx X. Xxxxxx, Esquire, to prepare and execute a Praecipe for
Discontinuance of the Lawsuit with prejudice, in form and content as shown and
set forth on Exhibit "A" attached hereto and made a part hereof(the "PRAECIPE").
Upon Emcee's and Cellular's receipt of the sums described in the first paragraph
of Section 2 hereof, EMCEE shall authorize and direct its legal counsel to
deliver the Praecipe to AmeriCell's legal counsel, Xxxxx Xxxxxxx, Esquire, for
filing in the Office of the Prothonotary of Luzerne County, Pennsylvania, at
AmeriCell's expense.
5. Notwithstanding any possible contrary interpretation of any provision
contained herein, in the event all of the sums described in the first paragraph
of Section 2 hereof have not been received by EMCEE and Cellular in strict
accordance with the provisions of this Agreement by April 2, 1997,this Agreement
shall automatically become null and void and of no force or effect; whereupon,
EMCEE may direct its legal counsel to destroy the Praecipe, and EMCEE shall be
free to continue to proceed with the Lawsuit as if this Agreement never existed.
6. In consideration of EMCEE's and Cellular's covenants and agreements
set forth herein, and subject to EMCEE's legal counsel's delivery of the
Praecipe in accordance with the provisions of this Agreement, AmeriCell, the
General Partner and Rigas hereby release EMCEE and Cellular, and all of their
affiliated corporate entities, and their respective directors, officers,
employees, agents, successors and assigns, from all actions, causes of action,
suits, proceedings, rights, remedies, debts, claims, demands, obligations and
liabilities whatsoever (collectively, "CLAIMS"), at law or in equity, known or
unknown, liquidated or unliquidated, direct or contingent, which they (or any
one or more of them) ever had, now have or may hereafter have against all orany
one or more of such released parties, by reason of any matter, cause or thing
whatsoever, including,but not limited to, the Purchase and Sale Agreement,Note,
Guaranty and/or the Lawsuit, occurring at any time from the beginning of time
through and including
the date of this Agreement.
7. In consideration of AmeriCell's, the General Partner's and Rigas's
covenants and agreements set forth herein, except for the joint and several
obligations and liabilities of AmeriCell, the General Partner and Rigas pursuant
to Sections 1 and 2 hereof, EMCEE and Cellular hereby release AmeriCell, the
General Partner and Rigas, and all of their affiliated corporate entities, and
their partners, directors, officers, employees, agents, successors and assigns,
from all Claims, at law or in equity, known or unknown, liquidated or
unliquidated, direct or contingent, which they (or any one of them) ever had,now
have or may hereafter have against all or any one or more of such released
parties, by reason of any matter, cause or thing whatsoever, including, but not
limited to, the Purchase and Sale Agreement, Note, Guaranty and/or Lawsuit,
occurring at any time from the beginning of time through and including the date
of this Agreement.
8. Except with respect to the aforementioned contingent assignment from
EMCEE to Cellular, each party hereto represents to the other parties hereto that
it/he has not sold or assigned any of the Claims which have been released
pursuant to Sections 6 and 7 hereof. It is also understood and agreed that ifany
party hereto shall ever bring an action or proceeding against any other party
hereto in violation of Section 6 or Section 7 of this Agreement, such otherparty
shall be entitled to recover from the violating party all of its/his reasonable
attorney's fees incurred as a result thereof.
9. AmeriCell, the General Partner and Rigas agree that while all or any
part of the Five Hundred Thousand ($500,000.00) Dollars described in the second
paragraph of Section 2 hereof remains outstanding, they shall provide EMCEE and
Cellular with current annual financial statements of AmeriCell (prepared by a
reputable independent certified public accounting firm) within one hundred fifty
(150) days from the end of each of AmeriCell's fiscal years, and in form as
required by AmeriCell's lender, NTFC Capital Corporation, but in all events at
least on a review basis. Failure to provide such financial statements withinsuch
time shall cause the aforementioned Five Hundred Thousand ($500,000.00) Dollar
sum to become immediately due and payable by AmeriCell, the General Partner and
Rigas (jointly and severally) to Cellular, notwithstanding any other provision
contained herein.
10. All disputes arising under or related in any way to this Agreement
shall be settled by arbitration in Xxxxxx-Xxxxx, Pennsylvania, pursuant to the
Commercial Arbitration Rules of the American Arbitration Association, in which
there shall be one arbitrator whose decision shall be final and binding on the
parties hereto, and the judgment upon any award rendered may be entered in the
court of competent jurisdiction. The prevailing party in any such arbitration
shall also be entitled to an award of all of its reasonable attorney's fees
actually incurred as a result thereof, but the cost of the arbitration
proceeding shall be borne equally by the parties. If for any reason the
foregoing arbitration provisions are declared or determined to be illegal,
invalid or otherwise inapplicable with respect to any dispute arising hereunder
or related hereto, the parties hereto hereby agree that such dispute shall be
litigated and resolved only in the Court of Common Pleas of Luzerne County,
Pennsylvania, and the parties hereto irrevocably consent to the exclusive
jurisdiction and venue of said court for such purposes. The prevailing party in
any such litigation shall be entitled to recover all of its reasonable
attorney's fees incurred as a result thereof.
11. It is understood and agreed that this Agreement and any acts
undertaken hereby shall not be construed as an admission of liability, fault or
wrongdoing under any law, regulation or ordinance on the part of any party
hereto.
12. This Agreement shall inure to the benefit of and be binding on the
parties hereto and their respective successors and assigns.
13. Should any provision of this Agreement be declared or determined to
be illegal or invalid, the legality and validity of the remaining provisions
shall not be affected thereby, and said illegal or invalid provision shall be
deemed not to be a part of this Agreement.
14. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania, without regard to conflicts of law
rules or principles.
15. Section 22 of the Subordination Agreement described in the legend
above is incorporated herein by reference and made a part hereof as if fully set
forth at length herein.
16. This Agreement may be executed in as many counterparts as the parties
deem necessary or convenient, and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
17. Except for the provisions of Sections 6 and 7 hereof, no third party
beneficiary rights are intended or created hereby.
18. No provision of this Agreement is to be interpreted for or against
any party because that party's legal counsel drafted such provision.
19. This Agreement constitutes the entire, complete and final agreement
of the parties hereto with respect to the subject matter hereof, supersedes any
and all prior agreements, understandings or discussions (verbal or in writing),
and may be amended, modified or supplemented subsequent to the date hereof only
by a written instrument signed by the party or parties to be bound thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
ATTEST: EMCEE BROADCAST PRODUCTS,INC.
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx X. XxXxxxxxx
------------------------------- -----------------------------
Asst. Corporate Secretary Title: President/CEO
(SEAL)
ATTEST: EMCEE CELLULAR INC.
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxx
------------------------------- ------------------------------
Corporate Secretary Title: President
(SEAL)
WITNESS: AMERICELL PA -- 3 LIMITED
PARTNERSHIP
By: Rigas Communications, Inc., General
Partner
/s/ Xxxx X. Xxxxx, XX By: /s/ Xxxx Xxxxx
------------------------------- ------------------------------
Title: Vice President
ATTEST: RIGAS COMMUNICATIONS, INC.
/s/ Xxxxx Xxxx By: /s/ Xxxx Xxxxx
-------------------------- -------------------------------
Corporate Secretary Title: Vice President
(SEAL)
WITNESS: XXXXXXXXXXX X. XXXXX
/s/ Xxxxx Xxxx /s/ Xxxxxxxxxxx X. Xxxxx
--------------------------- ------------------------------
Signature
EMCEE BROADCAST PRODUCTS, IN THE COURT OF COMMON PLEAS
INC., OF LUZERNE COUNTY
Plaintiff PENNSYLVANIA
vs.
AMERICELL PA -- 3 LIMITED CIVIL ACTION -- LAW
PARTNERSHIP, RIGAS
COMMUNICATIONS, INC. and
XXXXXXXXXXX X. XXXXX,
Defendants NO. 274-C OF
1997
PRAECIPE FOR DISCONTINUANCE
TO THE PROTHONOTARY OF LUZERNE COUNTY:
Please xxxx the above-captioned matter as settled, discontinued, and
ended with prejudice.
LAPUTKA, BAYLESS, XXXXX & XXXX, P.C.
Attorneys for Plaintiff, EMCEE Broadcast
Products, Inc.
BY:_______________________________________
Xxxxxx X. Xxxxxx, Esquire
Atty. I.D.#47287
0 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
(000) 000-0000
Date:
DISCONTINUANCE
AND NOW, this ______ day of _________________, 1997, upon Praecipe
of counsel for the Plaintiff, the above-captioned matter is hereby settled,
discontinued, and ended with prejudice.
PROTHONOTARY:
Date:__________________________ BY:_______________________________________
EXHIBIT "A"
