COMPROMISE, SETTLEMENT AND MUTUAL RELEASE AGREEMENT
This Compromise, Settlement and Mutual Release Agreement ("Agreement") is
made as of June 20, 2002 between REPUBLIC CREDIT CORPORATION I, ("Republic") of
Denver, Colorado (Creditor), and Xxxxxxx Communications Corporation ("MCC") of
Cedar Rapids, Iowa (Debtor) and Silent Woman, L.L.C. ("SW") of Cedar Rapids,
Iowa. Republic, MCC, and SW shall collectively be referred to herein as "the
Parties."
WHEREAS, during the period between January 1, 1998 and December 31, 1999 MCC
made, executed, and delivered Promissory Notes to certain individuals
("Individuals"), as set forth in Exhibit "A" and as attached hereto, ("the
Notes"); 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, Republic then became the FDIC's assignee with respect to the
underlying loans; and
WHEREAS, Republic is, and has been, actively pursuing payment of the Notes and
on or about April 24, 2001, filed a Petition at Law, No. LACV 040002, in the
Iowa District Court in and for Linn County demanding payment on certain of the
Notes, said Petition attached hereto as Exhibit "B"; and
WHEREAS, on or about June 25, 2001, the Court entered a Default Judgment (the
"Default Judgment") in favor of Republic on its claim as set forth in Exhibit
"C"; 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 obtain satisfaction of the outstanding Default
Judgment; and
WHEREAS, SW is willing to provide partial consideration for the release and
satisfaction of the Default Judgment, and MCC's full release from its
obligations under the Notes; and
WHEREAS, Republic is willing to accept such consideration from SW and the
remaining consideration required pursuant to this Agreement from MCC, in
exchange for a Release and Satisfaction of the Default Judgment, and the release
of any and all claims Republic may have against MCC related to the Notes; and
WHEREAS, MCC is likewise willing to tender consideration to Republic and release
Republic from all claims MCC may have against Republic related to said Notes;
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 JUDGMENTS
The Parties acknowledge that Republic currently holds MCC Notes in the
amounts set forth in Exhibit "A" hereto; that Republic has obtained a Default
Judgment against MCC, as evidenced by the court order set forth in Exhibit "C"
hereto.
SECTION TWO
AGREEMENT FOR DIFFERENT TERMS OF PAYMENT
The Parties agree that payment of the indebtedness on terms and provisions
different from, and in substitution of, the terms and provisions for payment of
the indebtedness contained in and represented by the Notes and the Default
Judgment, is desirable and in the best interest of all of the Parties. The
Parties agree that the provisions of this Agreement supersede and control any
and all prior agreements between MCC and Republic, and that no other document or
instruments shall supersede this 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 OF JUDGMENT
3.1. METHOD OF PAYMENT: Republic agrees to accept the following, in full
satisfaction of the obligations under the Notes and the Default Judgment
described in Section 1 above:
(a) Upon execution of this Agreement by the Parties, MCC shall
deliver to Republic Fifteen Thousand Dollars ($15,000) in cash,
by wire transfer or guaranteed funds, which $15,000 shall be
nonrefundable; and
(b) At the Closing of the Merger, MCC shall deliver to Republic Four
Hundred and Eighty-four Thousand and Nine Hundred Dollars
($484,900) in cash or electronic funds transfer; and
(c) Prior to the Closing of the Merger, SW shall deliver to Republic
One Hundred Dollars ($100) in cash or electronic funds transfer.
3.2. RELEASE AND SATISFACTION OF JUDGMENT; RETURN OF NOTES: At the Closing
of the Merger, Republic shall provide to MCC a Release and Satisfaction of the
Default Judgment set forth in Exhibit "C"; and each of the original Notes in its
possession and which are enumerated in Exhibit "A".
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SECTION FOUR
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
4.1. MCC hereby represents and warrants to Republic 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 Agreement and to perform fully the obligations required hereunder.
4.2. MCC hereby represents and warrants to Republic that MCC has taken all
actions necessary to authorize it to enter into and perform fully its
obligations under this Agreement, and as of the closing of the Merger, this
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 Agreement nor the consummation of the transactions
contemplated under this 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. MCC represents that it has made full disclosure of any and all
information that might materially impact directly or indirectly the substance or
intent of this transaction and has furnished all information necessary to
Republic.
4.4. Republic hereby represents and warrants to MCC that Republic is a
corporation duly organized, validly existing and in good standing under the laws
of Colorado, and that it has all requisite power, authority and approvals
required to enter into, execute and deliver this 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
Agreement.
4.5. Republic represents and warrants that, as of the Closing of the
Merger, that it is not aware of the existence of any notes other than the Notes
made by MCC that Republic 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 in the Default Judgment to any other person or entity; and that,
barring any breach of this Agreement by MCC, Republic shall not bring any legal
cause of action against MCC with respect to any Note. Republic's representation
herein does not include any legal cause of action that Republic may have against
any individuals in connection with any of the Notes.
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4.6. SW hereby represents and warrants to Republic that SW is a limited
liability company duly organized, validly existing and in good standing under
the laws of Delaware, 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 limited liability company 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. SW has all
requisite power, authority and approvals required to enter into, execute and
deliver this Agreement and to perform fully its obligations hereunder.
SECTION FIVE
MUTUAL RELEASE AND INDEMNIFICATION
5.1. SATISFACTION AND RELEASE: Upon fulfillment of the obligations of
each of MCC, SW, and Republic, as set forth in Section Three of this 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 Agreement has, or may have had, with respect to or
relating to the Notes and Default Judgment from the beginning of time until the
Closing of the Merger and the obligations of MCC to Republic, as described in
Section One and set forth in Exhibits "A" and "C" attached hereto, shall forever
be cancelled and discharged, and MCC shall be fully released from the
obligations described in Section One above. For the purposes of this Agreement,
Republic's predecessors include the Federal Deposit Insurance Corporation,
Hartford-Carlisle Savings Bank and their agents and assigns.
5.2. In return for the consideration, warranties and representations given
by Republic, MCC agrees to indemnify, defend if requested, and to keep harmless
Republic, from and against any and all liabilities, losses, damages, penalties,
claims, actions, suits, costs and expenses, including court costs and reasonable
legal fees, of whatever kind imposed on, incurred by or asserted against
Republic in any way arising from the representations or warranties, made by MCC
herein, whether set forth in Section Four of this Agreement or elsewhere.
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 Agreement shall be null, void and of no further force or effect.
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SECTION SEVEN
MISCELLANEOUS
7.1. CLOSING. For purposes of this Agreement, "Closing of the 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 December 31, 2002, this Agreement is
null and void, except that the Fifteen Thousand Dollars ($15,000) paid to
Republic pursuant to Section 3.1(a), and any expenses paid to Republic pursuant
to Section 7.3 of this Agreement shall not be refundable to MCC.
7.2. AMENDMENT. Subject to applicable law, this Agreement may only be
amended or supplemented by mutual agreement in writing by the parties.
7.3. EXPENSES. At the time of execution of this agreement, and at Closing
of the Merger, MCC shall pay Republic and reimburse Republic for its attorney
fees, and other fees and expenses, in connection with the negotiation,
preparation, review, and completion of the Agreement and for expenses related in
any manner to the negotiation, preparation, review, or completion of any
documents relating to the Agreement between the parties, as well as any fees
incurred by Republic in connection with the foreclosure on the Notes listed in
Exhibit "A". MCC shall pay to Republic any additional legal or other
professional fees, expenses and costs incurred by Republic in connection with
its suit(s) against MCC on the Notes, whether or not the transactions
contemplated hereby are consummated. MCC is to make payment on these invoices at
the time they are submitted by Republic or its counsel. Failure by MCC to make
payments hereunder of any of the expenses incurred by Republic, as set forth in
this paragraph, shall cause this Agreement to be null and void, and of no
further consequence, except that the payments made pursuant hereto by MCC to the
point that this Agreement is nullified shall remain the absolute property of
Republic and be nonrefundable. Upon nullification of the agreement, Republic may
pursue any claims it may have against MCC.
7.4. EXPRESS LIMITATION OF CERTAIN LIABILITY AND RELIANCE. It is understood
and expressly agreed by the Parties that, except for the obligations undertaken
by SW as set forth herein, SW has no legal duty or obligation of any kind or
nature to Republic and that SW is a party hereto for the sole purpose of
inducing Republic to join in this Agreement. SW's liability and obligation to
Republic pursuant to this Agreement is expressly limited to the payment of the
specifically designated consideration set forth in Paragraph 3.1(b).
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7.5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the Parties and their respective successors and assigns.
This 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
Agreement.
7.6. GOVERNING LAW. The validity, interpretation, enforceability, and
performance of this 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.
7.7. COUNTERPARTS. This Agreement maybe executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7.8. ENTIRE AGREEMENT. The parties intend that the terms of this Agreement
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.
7.9. SEVERABILITY. If any provision of this Agreement, or the 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 Agreement and such provisions as applied to other Persons, places, and
circumstances shall remain in full force and effect.
7.10. ADDITIONAL DOCUMENTS. Each of the Parties agree, without further
consideration, to execute and deliver such other documents and take such further
action as may be reasonably required to effectuate the provisions of this
Agreement.
7.11. EXHIBITS. All Exhibits attached hereto shall be deemed to be a part
of this Agreement and are fully incorporated in this Agreement by this
reference.
7.12. SURVIVAL. All representations warranties, and agreements contained
in this Agreement or made pursuant to the transactions contemplated by this
Agreement, whether set forth in Section Four or elsewhere, shall survive the
closing of the Merger and performance pursuant to this Agreement.
7.13. BINDING AGREEMENT. The terms, provisions, covenants and conditions
contained in this Agreement shall apply to and inure to the benefit of and be
binding upon the parties and their respective successors and assigns.
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In Witness Whereof, the Parties have executed this Agreement.
REPUBLIC CREDIT CORPORATION I
BY:
--------------------------------- ----------------------
Date
XXXXXXX COMMUNICATIONS CORPORATION
BY:
--------------------------------- ----------------------
Principal Accounting Officer Date
BY:
--------------------------------- ----------------------
Attorney For MCC Date
SILENT WOMAN, L.L.C.
BY:
--------------------------------- ----------------------
Xxxxx Xxxxxxx, Member Date
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RECEIPT FOR PAYMENT DISCHARGING CLAIM IN FULL
ACCEPTANCE BY CREDITOR OF PAYMENT IN A DIFFERENT FORM
Received of Xxxxxxx Communications Corporation ("MCC"), of P.O. Box 412,
Marion, Linn County, Iowa, and Silent Woman, L.L.C. ("SW"), of Cedar Rapids,
Linn County, Iowa, consideration constituting full payment to Republic for the
Default Judgment on the Notes and the Notes as set forth on Exhibit "A" hereto,
as follows:
(1) Fifteen Thousand Dollars ($15,000) in cash or electronic funds transfer
from MCC at the time of execution of Compromise, Settlement Agreement and
Mutual Release; and
(2) One Hundred Dollars ($100) in cash or electronic funds transfer from SW at
the Closing of the Merger; and
(3) Four Hundred and Eighty-four Thousand Nine Hundred Dollars ($484,900) in
cash or electronic funds transfer from MCC at the Closing of the Merger;
and
Such payment to Republic constitutes full and complete satisfaction of any
and all debts due Republic from MCC with respect to Republic's legal interest in
the Notes and the Default Judgment which it has obtained. Republic acknowledges
that SW is a third-party to the indebtedness Republic sought to collect from MCC
and that SW has no legal duty or obligation to pay or agree to pay any amount of
consideration to Republic to effectuate the satisfaction of any indebtedness
that is, or may be, owed to Republic by MCC. This instrument is intended as a
receipt of consideration received by Republic in full discharge of any and all
amounts due to Republic from MCC related to the Notes and the Default Judgment.
Dated
--------------------------------
REPUBLIC CREDIT CORPORATION I
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 Republic Credit Corporation I; that
this Receipt and Acceptance was signed on behalf of the Republic Credit
Corporation I 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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LIST OF EXHIBITS TO ACCORD AND SATISFACTION
EXHIBIT DESCRIPTIONS
1. EXHIBIT "A": Listing of MCC promissory Notes representing MCC's obligations
to certain individuals, which is the subject of the attached Agreement.
2. EXHIBIT "B": Republic's Petition at Law, No. LACV 040002.
3. EXHIBIT "C": Default Judgment in favor xx Xxxxxxxx xx Xx. XXXX 000000.
4. EXHIBIT "D": Definitive Merger Agreement between MCC and Polar Molecular.
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