Exhibit 10.54


 


SETTLEMENT
AGREEMENT


 


This
Settlement Agreement is entered into between POLAR MOLECULAR HOLDING
CORPORATION, a Delaware corporation, with principal offices at 4600 S. Ulster
Street, Suite 940, Denver, Colorado 80237 (“Polar”) and HOLME ROBERTS &
OWEN LLP, a Colorado limited liability partnership, with offices at 1700
Lincoln Street, Suite 4100, Denver, Colorado 80203 (“HRO”).


 


HRO
has performed legal services for Polar for which it has rendered statements to
Polar. HRO has received payment for a portion of its charges but the amount of
$543,000 remains unpaid at this date. Polar has advised HRO that it is
presently financially unable to pay the balance due and has offered to issue
shares of its Common Stock in satisfaction of one-half of the amount due
($271,500) and to agree to a payment schedule for the remaining balance of
$271,500.


 


In
consideration of the foregoing and the mutual covenants herein, it is agreed as
follows:


 


1.
Polar shall issue to HRO 1,357,500 shares of Polar Common Stock (the “Shares”),
valued at $0.20 per share, the closing price of such shares as reported on the
Over the Counter Bulletin Board Market on May 7, 2004, in satisfaction of
$271,500.00 of Polar’s indebtedness to HRO.


 


2.
Polar agrees to repay the balance of $271,500.00 in four equal monthly
installments of $67,875.00 each on July 1, 2004, August 1, 2004, September 1,
2004 and October 1, 2004. Upon receipt of payments totaling $271,500.00,
HRO shall release its security interest granted by Polar in Polar’s assets and
file appropriate notices of such release.


 


3.
Polar represents that, with the exception of the issuance of shares of Common
Stock to Lockhart Chemical Corporation, Polar’s sole outsource contract
manufacturer, and to certain employees and consultants in satisfaction of
unpaid compensation, Polar has not issued shares of its Common Stock at a price
of $0.10 per share to any other of its creditors as payment of indebtedness due
such creditors. Polar further represents, warrants and agrees that, since January 1,
2004 it has not, and it will not issue any of its Common Stock in satisfaction
of any other indebtedness outstanding at this date at a value below the then
current fair market value as determined by reference to the price quoted on the
Over the Counter Bulletin Board Market.


 


4. HRO hereby represents and agrees that it understands that
the Shares have not been registered under the Securities Act of 1933 (the “1933
Act”) or any state securities laws and that the Shares are being issued to HRO
in reliance upon an exemption from such registration requirements for
transactions not involving a public offering. HRO represents that it is
acquiring the Shares for investment and with no view toward distribution of the
Shares to the public, except pursuant to an effective registration statement
under the 1933 Act covering the Shares or pursuant to an applicable exemption
from any registration requirement. HRO acknowledges that the certificates
representing the Shares shall bear a legend calling attention to such
restrictions on the transfer of the Shares.


 





















 


5. Polar agrees that it will cause the Shares to be registered
under the 1933 Act pursuant to an appropriate form of registration statement
covering the Shares, and that it will use due diligence in preparing and filing
such registration statement and pursuing the effectiveness thereof. Polar shall
also cause the Shares to be registered or available for public sale pursuant to
an exemption from registration under the Colorado Securities Act. Polar will use
all reasonable efforts to obtain effectiveness of the 1933 Act registration
statement on or before December 1, 2004. If such registration statement is
not declared effective prior to that date, HRO may, at its election, demand
that Polar repurchase the Shares at a purchase price (the “Repurchase Price”)
equal to the higher of the price at which the Shares were valued for purposes
of this Agreement, as set forth in paragraph 1 above, or the closing price of
the Shares on its principal trading market on December 1, 2004. Any such
election shall be made in writing, no later than December 15, 2004. Upon
receipt of such notice of election Polar shall repurchase the shares at the
Repurchase Price as soon as practicable, but in no event no later than December 30,
2004.


 


IN
WITNESS WHEREOF this Agreement is  entered
into this 7th day of May, 2004.


 


	
  POLAR
  MOLECULAR HOLDING CORPORATION

  
	
   

  
	
  /s/
  Mark L. Nelson

  	
   

  
	
  Mark L.
  Nelson

  
	
   

  
	
   

  
	
  HOLMES
  ROBERTS & OWEN, LLP

  
	
   

  
	
  /s/
  Robert H. Bach

  	
   

  
	
  Robert
  H. Bach

  
	
  A
  Partner