Exhibit 10.43
SETTLEMENT AGREEMENT
This Settlement Agreement (the "Agreement") is entered into this day of October,
2000, between MFIC Corporation, a Delaware corporation having its principal
offices at 00 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("MFIC"), and X.X. Xxxxx
Corporation, a New Jersey corporation having its principal offices at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, together with its Engineered
Materials Division having its principal offices at 0000 Xxxxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxx, Xxxxxxx 00000 ("XXXXX").
WHEREAS, MFIC commenced an action against XXXXX in the United States District
Court for the District of Massachusetts, Civil Action No. 00-CV-11437-EFH, (the
"MFIC Case"); and
WHEREAS, XXXXX commenced an action against MFIC and Epworth Manufacturing
Company ("Epworth") in the Superior Court of Xxxxxx County, Georgia, Civil
Action No. 2000-CV-37580, which MFIC removed to the United States District Court
for the Northern District of Georgia, Rome Division, Civil Action No.
4:00-CV-279-HLM (the "XXXXX Case"); and
WHEREAS, both the MFIC Case and the XXXXX Case relate to the sale of seven (7)
Zinger(R) horizontal media xxxxx purchased by XXXXX from Epworth, now the
Epworth Mill Division of MFIC Corporation, together with all spare parts,
equipment, accessories, gauges, and accessions (collectively referred to
hereinafter as the "Equipment"); and
WHEREAS, MFIC and XXXXX wish to fully and finally settle and terminate all
suits, causes of action, cases and controversy concerning the sale of the
Equipment to XXXXX.
NOW THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which both
parties mutually acknowledge, MFIC and XXXXX agree as follows:
1. MFIC shall pay the sum of one hundred thousand dollars ($100,000) to XXXXX
upon execution of this Agreement.
2. Upon execution of this Agreement, MFIC shall execute a term purchase money
promissory note in the form annexed hereto as Exhibit A (the "Note") and loan
and security agreement in the form annexed hereto as Exhibit B (the "Security
Agreement"). The Note is in the face amount of $350,000 payable to the order of
XXXXX and bears interest at a rate of ten percent (10%) per annum, payable
quarterly in arrears. The Note has a principal maturity date two (2) years from
the execution of this Agreement. Up to and including February 28, 2001 (the
"Prepayment Date"), MFIC may prepay the Note and discharge all obligations
thereunder by tendering the sum of three hundred thousand dollars ($300,000)
plus accrued and unpaid interest outstanding under the Note. The Security
Agreement is a purchase money security agreement on the Equipment, which MFIC
will repurchase from XXXXX pursuant to this Agreement.
3. Simultaneously with the execution of this Agreement, XXXXX shall:
A. Execute the Mutual Cross Releases in the form as attached hereto as
EXHIBIT C, releasing to the fullest extent permitted by law, but subject to
the express obligations of this Agreement and Exhibits A through C hereof,
any and all claims, and/or causes of action against MFIC and Epworth
arising out of or relating to the purchase and use of the Equipment by
XXXXX; and
B. Execute the Stipulation of Dismissal in the form annexed hereto as
Exhibit D or in such other form as may be required by the Court in order to
terminate, with prejudice, the XXXXX Case; and
C. Execute a xxxx of sale for the Equipment to transfer all of its right,
title and interest free and clear of any liens, claims, charges or other
encumbrances and ship to MFIC (at MFIC's direction and expense) the
Equipment for reconditioning and resale by MFIC. XXXXX shall retain a
purchase money security interest in the Equipment or any portion thereof
until resale of such Equipment, or any portion thereof, by MFIC.
4. Simultaneously with the execution of this Agreement, MFIC shall:
A. Execute the Mutual Cross Releases in the form as attached hereto as
EXHIBIT C, releasing to the fullest extent permitted by law, but subject to
the express obligations of this Agreement and Exhibits A through C hereof,
any and all claims, and/or causes of action against XXXXX arising out of or
relating to the purchase and use of the Equipment by XXXXX; and
B. Execute the Stipulation of Dismissal in the form annexed hereto as
Exhibit E or in such other form as may be required by the Court in order to
terminate, with prejudice, the MFIC Case.
5. The parties further covenant and agree as follows:
A. Upon receipt of the Equipment pursuant to paragraph 3(C) hereof, MFIC
shall recondition the Equipment in a manner reasonably necessary to prepare
the Equipment for sale to a third party.
B. MFIC hereby covenants and agrees to make reasonable efforts to sell the
Equipment to a third party in an arms-length transaction, upon commercially
reasonable terms and conditions.
X. XXXXX warrants and represents to MFIC that XXXXX has good and marketable
title to the Equipment free and clear of any liens, claims, charges or
other encumbrances.
6. This Settlement Agreement shall be binding upon the parties and their
respective successors or assigns.
7. The terms and provisions of this Agreement are contractual and not merely a
recital. This Agreement is voluntarily entered into and is not based, in whole
or in part, upon any
2
representation or statement of any kind not contained herein by any party hereto
or such party's respective attorneys or representatives, oral or otherwise, as
to the merit, legal validity, or value of any claim, demand, right, entitlement,
action or cause of action of any of the parties hereto or as to any other matter
whatsoever. Each party agrees with or warrants to the other: (a) that the
covenants, agreements and/or payments provided for herein, constitute good and
sufficient consideration for the covenants, agreements and/or payments made or
received by it; (b) that is it duly authorized to execute this Agreement; (c)
that is has not heretofore assigned to any other individual or entity of any
kind all or any portion of any claims released by it hereunder; and (d) that
this Agreement is a full, fair, arms-length, final and complete accord,
satisfaction and settlement of all matters contained herein, including all
claims that were asserted or could have been asserted in the MFIC Case or the
XXXXX Case. The parties further acknowledge and agree that the wording in this
Agreement is the product of joint cooperation, collaboration, and negotiation
between the parties and their respective legal counsel.
8. This Agreement constitutes the entire agreement between the parties with
respect to the subject matter of the Agreement and there are no understandings
or agreements or representations relative to the Agreement which are not fully
expressed in the Agreement.
9. This Agreement may be executed in a number of counterparts, each of which
shall be deemed to be an original, and all of which taken together shall
comprise but a single instrument.
10. Should any provision of this Agreement be invalid or unenforceable for any
reason, the remaining provisions hereof shall remain of full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal by their
duly authorized representative, as of the date and year first written above.
MFIC CORPORATION
By:__________________________________________________ Attest:_____________________________________
Name:________________________________________________ Name:_______________________________________
Title:_______________________________________________ Title:______________________________________
[Corporate Seal]
3
X.X. XXXXX CORPORATION
By:__________________________________________________ Attest:_____________________________________
Name:________________________________________________ Name:_______________________________________
Title:_______________________________________________ Title:______________________________________
[Corporate Seal]
4
EXHIBIT A
PURCHASE MONEY PROMISSORY NOTE
$350,000 October ____, 0000
Xxxxxx, Xxxxxxxxxxxxx
FOR VALUE RECEIVED, the undersigned promises to pay to the order of X.X. XXXXX
CORPORATION ("CREDITOR"), a New Jersey Corporation with its principal place of
business in Edison, New Jersey, the principal sum of THREE HUNDRED AND FIFTY
THOUSAND DOLLARS ($350,000), with interest thereon, or on such part thereof as
shall from time to time remain unpaid, from the date of this promissory note
(the "Note") until paid, at the rate set forth below, payable as follows:
Interest shall be payable on the unpaid principal balance hereunder at
a rate of ten percent (10%) per annum. Interest shall be compounded annually,
and shall be calculated based on a 360-day year of twelve 30-day months.
Payments of accrued interest shall be paid quarterly in arrears, commencing on
December 31, 2000 or, if such date falls on a non-business day, on the next
business day thereafter.
Up to and including February 28, 2001 (the "Prepayment Date"), MFIC may
prepay this Note and discharge all obligations hereunder including all principal
and interest whether accrued or unpaid or not, by tendering the sum of three
hundred thousand dollars ($300,000), whether paid in one or more installments,
plus accrued and unpaid interest outstanding on this Note (in the aggregate the
"Prepayment Amount"). Upon receipt by CREDITOR of the full Prepayment Amount on
or before the Prepayment Date, CREDITOR shall xxxx the Note paid in full and
return it to MFIC.
All outstanding principal and interest shall be due and payable on the
two year anniversary of this Note. Payments shall be made to CREDITOR at its
principal place of business and shall be deemed made by placing such payment in
any form of traceable overnight delivery or by wire transfer.
This Note is subject to and secured by the terms of that certain Loan
and Security Agreement dated as of even date herewith between the undersigned
and the CREDITOR (hereinafter, as it may be amended or supplemented from time to
time, called the "Security Agreement").
The undersigned agrees to pay all costs and expenses, including all
attorneys' fees in connection with the collection of this Note upon default. The
undersigned shall pay to CREDITOR a late charge of five (5%) percent of any
payment of interest not paid to CREDITOR within three (3) business days after
receipt by the undersigned of written notice sent by CREDITOR to the
undersigned, by any form of traceable delivery whether by United States mail or
any private delivery service, to the effect that said payment was not received
by CREDITOR when due.
At the option of CREDITOR, the Note shall become immediately due and
payable in full without notice or demand upon the occurrence at any time of an
"Event of Default" under the Security Agreement or any of the following events:
(1) default in any payment of interest due hereunder, and the continuation of
such default for three (3) business days after receipt by the undersigned of
written notice of such default sent by CREDITOR to the undersigned by any form
of traceable delivery, whether by United States mail or any private delivery
service; (2) the liquidation, termination or dissolution of the undersigned; (3)
any levy, seizure or attachment of any of the undersigned's property; or (4) if
the undersigned, shall: (i) cease generally to pay its obligations as they
become due, or be unable, or admit in writing its inability to pay its debts as
they mature, or make a general assignment for the benefit of, or enter into any
composition, trust mortgage or other arrangement with creditors; (ii) apply for,
or consent (by admission of material allegations of a petition or otherwise) to
the appointment of a receiver, trustee or liquidator of the undersigned, or of a
substantial part of its assets, or authorize such application or consent, or
proceedings seeking such appointment shall be commenced against the undersigned,
and continue undismissed for sixty (60) days; or (iii) apply for, or consent (by
admission of material allegations of a petition or otherwise) to the application
of any bankruptcy, reorganization, readjustment of debt, insolvency,
dissolution, liquidation or other similar law of insolvency, dissolution,
liquidation or other similar law of any jurisdiction, or authorize such
application or consent, or proceedings to such and shall be instituted against
the undersigned, and remain unstayed or undismissed for sixty (60) days, be
approved as properly instituted or result in adjudication of bankruptcy or
insolvency.
The undersigned hereby: (1) waives presentment, demand, protest and
notices of every kind and description (other than any notice of default in
payment as herein provided); (2) waives any defenses based upon, and
specifically assents to, any and all extensions and postponements of the time of
payment and all other indulgences and forbearances which may be granted by the
holder to the undersigned; and (3) agrees to be bound by all other terms
contained in this Note.
No delay or omission on the part of CREDITOR in exercising any right
hereunder shall operate as a waiver of such right or of any other right of
CREDITOR, nor shall any delay, omission or waiver on any one occasion be deemed
a bar to or waiver of the same or any other right on any future occasion.
No single or partial exercise of any power hereunder shall preclude
other or future exercise thereof or the exercise of any other power.
Signed in the presence of: MFIC CORPORATION
____________________________________________ By:______________________________
Name:____________________________
Title:___________________________
2
EXHIBIT C
MUTUAL CROSS RELEASES
This MUTUAL CROSS RELEASE AGREEMENT (the "Release") is made as of
October ____, 2000, by and between MFIC Corporation ("MFIC"), a Delaware
corporation, and X.X. XXXXX Corporation ("XXXXX"), a New Jersey corporation.
WHEREAS, except for the obligations contained in a Settlement Agreement
of even date herewith, XXXXX and MFIC wish to settle all claims between XXXXX
and MFIC arising out of or relating to the purchase and use of the Equipment (as
"Equipment" is defined in the Settlement Agreement of even date herewith;
hereinafter the "Equipment") including all pending litigation.
NOW THEREFORE, for good and valuable consideration and the mutual
payment of one dollar, the receipt of which is hereby acknowledged, the parties
agree as follows:
1. Release of XXXXX. MFIC, together with any of its subsidiaries or
divisions, hereby jointly and severally remise, release and forever discharge
XXXXX and its representatives, successors, assigns, and all persons acting
through, by or in concert with it from any and all debts, demands, actions,
torts, breaches, causes of action, suits, accounts, covenants, agreements,
contingencies, promises, understandings, damages, expenses, compensation, claims
or liabilities that any of the releasors now has, may have or ever had, whether
in law or in equity, or whether known or unknown, from the beginning of the
world to the date hereof arising out of or relating to the purchase and use of
the Equipment by XXXXX, including but not limited to, any claim relating to,
arising out of or that could have been made in either X.X. Xxxxx Corporation v.
MFIC Corporation and Epworth Manufacturing Company, a/k/a Epworth
Xxxxxxxxx-XXXXXX, a/k/a Lake Shore Industries, Inc., Civil Action No.
4:00-CV-279-HLM, pending in the United States District Court for the Northern
District of Georgia, Rome Division, or MFIC Corporation v. X. X. Xxxxx
Corporation , Civil Action No. 00-CV-11437-EFH, pending in the United States
District Court for the District of Massachusetts. MFIC acknowledges that
subsequent to the date of this Release, it may determine that it has incurred or
suffered loss, damage, or injuries related to the releases herein given, but
which were unknown or unanticipated at the time this Release was executed. MFIC
assumes the risk that the releases contained herein shall apply to all unknown
and unanticipated results arising from or related to the releases herein given,
as well as to results known and anticipated, and has so acted upon the advice of
legal counsel. Notwithstanding anything in this Release to the contrary, there
shall be no release of the covenants terms and conditions of the Settlement
Agreement of even date herewith, including without limitation Exhibits A through
C thereof.
2. Release of MFIC, Epworth and Lakeshore. XXXXX, together with any of
its subsidiaries or divisions, hereby jointly and severally remise, release and
forever discharge MFIC, Epworth Manufacturing Company, Epworth Xxxxxxxxx-XXXXXX,
and Lake Shore Industries, Inc. and their representatives, successors, assigns,
and all persons acting through, by or in concert with them from any and all
debts, demands, actions, torts, breaches, causes of action, suits, accounts,
covenants, agreements, contingencies, promises, understandings,
damages, expenses, compensation, claims or liabilities that any of the releasors
now has, may have or ever had, whether in law or in equity, or whether known or
unknown, from the beginning of the world to the date hereof arising out of or
relating to the purchase and use of the Equipment by XXXXX, including but not
limited to, any claim relating to, arising out of or that could have been made
in either X.X. Xxxxx Corporation v. MFIC Corporation and Epworth Manufacturing
Company, a/k/a Epworth Xxxxxxxxx-XXXXXX, a/k/a Lake Shore Industries, Inc.,
Civil Action No. 4:00-CV-279-HLM, pending in the United States District Court
for the Northern District of Georgia, Rome Division, or MFIC Corporation v.
X.X. Xxxxx Corporation , Civil Action No. 00-CV-11437-EFH, pending in the United
States District Court for the District of Massachusetts. XXXXX acknowledges that
subsequent to the date of this Release, it may determine that it has incurred or
suffered loss, damage, or injuries related to the releases herein given, but
which were unknown or unanticipated at the time this Release was executed. XXXXX
assumes the risk that the releases contained herein shall apply to all unknown
and unanticipated results arising from or related to the releases herein given,
as well as to results known and anticipated, and has so acted upon the advice of
legal counsel. Notwithstanding anything in this Release to the contrary, there
shall be no release of: (i) the covenants, terms and conditions of the
Settlement Agreement of even date herewith, including without limitation
Exhibits A through C thereof; or (ii) any claim over by Xxxxx against MFIC for
any debts, demands, actions, torts, breaches, causes of action, suits, accounts,
covenants, agreements, contingencies, promises, understandings, damages,
expenses, compensation, claims or liabilities asserted by a third party against
Xxxxx arising out of or relating to the resale of the Equipment by MFIC.
3. Valid Consideration. The parties hereto warrant, represent and
acknowledge that this Release is executed and delivered by the parties hereto
for adequate consideration and value and is valid, binding and enforceable in
accordance with its terms.
4. No Duress. The parties hereto warrant, represent and acknowledge
that they have executed and delivered this Release without any duress or
wrongful pressure whatsoever imposed by any party hereto or by any other person
or entity acting on behalf of or in concert with any party hereto or by any
independent third party, and that this Release has been executed as the free act
and deed of the parties hereto.
5. No Alienation of Claims. The parties hereto warrant and represent to
one another that they have not granted or purported to grant to any other person
or entity any interest whatsoever in any claim, action or cause of action
released herein, as security or otherwise, and that their execution hereof does
not require the consent of or notice to any third party in order to be fully
effective as to any claim, action or cause of action that may have existed in
favor of them at any time.
6. Effective Date. The effective date (the "Effective Date") shall be
the date as of which all parties hereto have executed and delivered this
Release. This Release shall not be enforceable against any party prior to the
Effective Date.
7. Entire Agreement. The parties hereto acknowledge, warrant and
represent that the effect of this Release is not subject to any condition that
has not been satisfied fully and completely as of its Effective Date and that
there are no other agreements between the parties
2
hereto, either oral or in writing, that impair the scope of this Release or its
validity, binding effect or enforceability in any respect whatsoever, other than
the Settlement Agreement between the parties dated as of the date hereof. This
release is intended to be broadly construed to effect the purposes and intent of
the parties hereto.
8. Amendment and Waiver. No provisions hereof may be amended or waived
other than by written document executed and delivered by the parties hereto.
9. No Admission. It is expressly understood and agreed by all parties
hereto that this Release is entered into for the purpose of avoiding litigation,
and the request of the parties hereto that one another execute this Release does
not constitute an admission by the parties hereto of the existence of any claim,
action, cause of action or defense on behalf of the parties hereto or any other
person or entity.
10. Admissibility of Release. This Release may be pleaded in any action
or other proceeding which may be brought, instituted or taken in connection with
the matters addressed herein, by one party hereto against the other person or
entity.
11. Assignment. This Release shall be binding upon the heirs,
successors and assigns of the parties hereto and shall inure to the benefit of
the heirs, successors and assigns of the parties hereto.
12. Severability. Should any provision of this Release be invalid or
unenforceable for any reason, the remaining provisions hereof shall remain of
full force and effect.
13. Counterparts. This Release may be executed in one or more
counterparts and each such counterpart shall constitute an original.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
by their duly authorized representative, as of the date and year first written
above.
MFIC CORPORATION
By:__________________________________________________ Attest:_____________________________________
Name:________________________________________________ Name:_______________________________________
Title:_______________________________________________ Title:______________________________________
[Corporate Seal]
3
X.X. XXXXX CORPORATION
By:__________________________________________________ Attest:_____________________________________
Name:________________________________________________ Name:_______________________________________
Title:_______________________________________________ Title:______________________________________
[Corporate Seal]
0
XXXXXXX X
XXXXXX XXXXXX XXXXXXXX XXXXX
for the
NORTHERN DISTRICT OF GEORGIA
ROME DIVISION
------------------------------------
X.X. XXXXX CORPORATION, )
)
Plaintiff, )
) Civil Action No. 4:00-CV-279-HLM
v. )
)
MFIC CORPORATION, et al. )
)
Defendants. )
------------------------------------)
VOLUNTARY STIPULATION OF DISMISSAL
Pursuant to Fed. R. Civ. P. Rule 41(a)(1), the parties in the above-captioned
action hereby stipulate to the voluntary dismissal of all claims and
counterclaims with prejudice and without costs to any party.
MFIC Corporation X. X. Xxxxx Corporation
By its attorneys, By its attorneys,
_________________________________________ __________________________________________
Xxxxxx X. Xxxxx, Georgia Bar No. 011150 Xxxxxxx X. X. Xxxxx Georgia Bar No. 664637
Xxxxxx X. Xxxxxxx, Georgia Bar No. 469600 Xxxx X. Xxxxxxxx Georgia Bar No. 081601
Xxxxxx, Xxxxxxx & Xxxxxx, LLP Xxxxx, Day, Xxxxxx & Xxxxx
1600 Atlanta Financial Center 3500 SunTrust Plaza
0000 Xxxxxxxxx Xxxx, X.X. 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000-0000
(000) 000-0000 (000) 000-0000
Dated: October , 0000
Xxxxxxx X
XXXXXX XXXXXX DISTRICT COURT
for the
DISTRICT OF MASSACHUSETTS
------------------------------------
)
MFIC CORPORATION, )
)
Plaintiff, )
) Civil Action No. 00-CV-11437-EFH
v. )
)
X.X. XXXXX CORPORATION, )
)
Defendant. )
------------------------------------)
VOLUNTARY STIPULATION OF DISMISSAL
Pursuant to Fed. R. Civ. P. Rule 41(a)(1), the parties in the above-captioned
action hereby stipulate to the voluntary dismissal of all claims and
counterclaims with prejudice and without costs to any party.
X. X. Xxxxx Corporation MFIC Corporation
By its attorneys, By its attorneys,
________________________________ ____________________________________
Xxxxxxx X. X. Xxxxx Xxxxxxx X. Xxxxxx, Esq., BBO #541240
Georgia Bar No. 664637 Xxxxxx Xxxxxx LLP
Xxxx X. Xxxxxxxx 000 Xxxxxxxx Xxxxxx
Xxxxxxx Bar No. 081601 Xxxxxx, XX 00000
Xxxxx, Day, Xxxxxx & Xxxxx (000) 000-0000
0000 XxxXxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
(000) 000-0000
Dated: October , 2000
