First Amendment to Mutual Settlement & Release Agreement



 Exhibit 10.65 
  
 FIRST AMENDMENT TO MUTUAL SETTLEMENT AGREEMENT AND RELEASE 
  
 This First Amendment to Mutual Settlement Agreement and Release
(“Amendment”) is made as of June 27, 2003, and entered into between John S. Rance, Steven E. Rance, Robert M. Upshaw, and Fernando Ficachi (referred to hereinafter as the “Rance Group”) and Berthel Fisher & Company, Thomas J.
Berthel, Ronald O. Brendengen, Eugene I. Davis, Thomas E. Chaplin, Guy O. Murdock, Steven J. Ehlert, Murdock Communications Corporation (“MCC”) and any and all of MCC’s current and former directors, officers, agents, employees,
(referred to hereinafter as the “Murdock Group”). The Rance Group and Murdock Group may be referred to herein individually as the “Party” or collectively as the “Parties”. Unless otherwise stated herein, all defined
terms and abbreviations set forth in the Mutual Settlement Agreement and Release (the “Agreement”), shall have the same meanings herein. 
  
 WHEREAS, the Parties have previously entered into a Mutual Settlement Agreement and Release (“Agreement”), executed on or about October 28,
2002; and 
  
 WHEREAS, the Agreement includes a provision stating
that MCC shall register with the Securities and Exchange Commission the resale by the Rance Group of the Shares (“Effective Registration”) and such registration shall become effective prior to the closing of the Merger, and that such
registration shall cause the Shares to be freely tradable by the Rance Group at or prior to the closing of the Merger; and 
  
 WHEREAS, the Parties now acknowledge that the registration will not become an Effective Registration at or prior to the Closing; and 
  
 WHEREAS, the Rance Group is willing to waive the Effective Registration
provision 

  

 1 








 
in exchange for certain consideration as set forth hereinafter; and 
  

WHEREAS, the parties now desire to amend the Agreement, as follows. 
  
 NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: 
  
 1.    This Amendment is intended to modify the terms, conditions, and provisions of certain paragraphs of the Agreement, more particularly described below. All paragraph numbers identified below
are intended to reference the specific sections and paragraphs as found in the Agreement. 
  
 A.    Under “1. Consideration” on page 4-5 of the Agreement, the stricken language set forth hereafter is hereby deleted, and the bold underlined language is hereby included, beginning
with the 5th full sentence: 
  
 . . . The Parties agree that: (a) the MCC Common Stock shall be offered and issued to the Rance Group 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 effective
registration under the Securities Act and applicable state securities laws or an exemption there from, and the Shares will be “restricted securities” as that term is defined in Rule 144 

  

 2 








 
under the Securities Act; and (b) MCC shall file a registration statement register with the Securities and Exchange Commission
the resale by the Rance Group of the shares prior to the closing of the Merger, (at MCC’s sole expense, which registration statement upon being declared effective by the SEC may also include any other
securities to be sold by MCC, and the successor of MCC or any other security holder of MCC or any successor of MCC), and upon being declared effective by the SEC the registration statement shall cause the
shares to be freely tradable by the Rance Group at or prior to the closing of the Merger; and (c) . . . . 
  
 B.    A new Paragraph 1 (d) is hereby included directly after the last sentence of 1 (c) as follows: 
  
 and; (d) the Parties hereto agree and direct MCC to cancel the
Warrants to Purchase Shares of Common Stock of Murdock Communications Corporation (the “Prior Warrants”) for those persons designated as the Rance Group on Exhibit “F” attached hereto, and MCC shall issue new warrants (“New
Warrants”) to those persons (the “Rance Group Warrant Holders”) which shall entitle the Rance Group Warrant Holders to purchase the identical number of shares under the New Warrants that each Rance Group Warrant Holder was entitled to
purchase under the Prior Warrants; and those persons designated as the Incomex Group on Exhibit “F” shall have the option, pursuant to the language set forth in a letter to 

  

 3 








 
each such person (the “Incomex Group Warrant Holders” and, collectively with the Rance Group Warrant Holders, the “Warrant
Holders”) and pursuant to the terms of the New Warrant offered to those persons, to elect to exchange their Prior Warrants for New Warrants. In each instance under this paragraph 1 (d), the original Prior Warrant shall be provided to the
Company prior to the issuance of the New Warrant. If any Warrant Holder cannot produce the original Prior Warrant, then the Prior Warrant shall be cancelled only after receipt by the Company of an executed lost certificate affidavit. The exchanging
Warrant Holders waive any and all rights or claims under the Prior Warrants, and represent and warrant that each such Warrant Holder has good and valid title to such Warrant Holder’s Prior Warrants and that such Warrant Holder’s Prior
Warrants have not been assigned, encumbered, or exercised. The New Warrants shall include, inter alia, the following provisions: (i) Two thirds (2/3) of the New Warrants shall include a customary cashless exercise
provision, and one third (1/3) shall not include a cashless exercise provision; (ii) The purchase price per share of the stock represented by the New Warrant (the “Exercise Price”) shall be $.70 per share if there is Effective Registration
for the Company’s shares prior to midnight, September 15, 2003. If Effective Registration is not completed prior to September 16, 2003, then the 

  

 4 








 
Exercise Price shall be $.60 for all remaining unexercised New Warrants; (iii) The New Warrants may be exercised at any time after the date of
issuance, and from time to time, but no later than 5:00 P.M., Denver, Colorado time, on September 15, 2005; and (iv) The New Warrants shall be assignable, in whole or in part, subject to the Restrictions on Transferability set forth in the New
Warrant. A form of the cashless and non-cashless New Warrant for the Rance Group Warrant Holders and the Incomex Group Warrant Holders is attached hereto and incorporated herein respectively as Exhibit “G” and “H”.

  
 C.    A new Paragraph 1 (e) is hereby
included as follows: 
  
 and; (e) The Company shall enter
into a Registration Rights Agreement with the Rance Group for the 517,000 shares of the MCC Common Stock, which is attached hereto and incorporated herein as Exhibit “I”. 
  
 D.    Under “11. Entire Agreement” on page 10
of the Agreement, the bold underlined language is hereby included: 
  
 . . . The Parties intend that the terms of this Settlement Agreement, as amended, shall be the final expression of their agreement with respect to the subject matter hereof and represents the culmination of all discussions and
communications between and amongst the Parties and may not be contradicted by evidence of any prior or contemporaneous 

  

 5 








 
agreement. No modification or amendment to this Settlement Agreement shall be valid or binding unless contained in a written instrument and signed by all of
the Parties hereto. 
  
 2.    The Parties agree that this
Amendment complies with Paragraph 11 of the Agreement. 
  
 3.    The Parties agree that the Agreement remains in full force and effect as to all other terms and conditions as contained therein, not expressly amended or extended herein. 
  
 [Signature Page Follows] 
  

 6 








 BY SIGNING BELOW EACH OF THE PARTIES HAS INDICATED THEIR  AGREEMENT TO THIS FIRST AMENDMENT.

  
 IN WITNESS WHEREOF, the Parties have executed this
Amendment as of the day and year first set forth above. 
  
 THE MURDOCK GROUP AND ITS ATTORNEYS 
  
 /s/    Wayne Wright 

 For Murdock Communications Corporation

 By its Principal Accounting Officer, Wayne Wright 
 c/o ARENSON
& ZIMMERMANN, PLC 
 101 Second Street, SE 
 Suite 904

 Cedar Rapids, IA 52401 
  
 /s/    Eugene I. Davis 

 Eugene I. Davis, an Individual 
 Five Canoe Brook Drive 
 Livingston, NJ 07039 
 PH: C/O: 319-363-8199 
  
 AS TO FORM AND CONTENT: 
  
 /s/    James H. Arenson 

 James H. Arenson, Esq. 
 ARENSON & ZIMMERMANN, P.L.C. 
 101 Second Street, SE 
 Suite 904 
 Cedar Rapids, IA 52401 
 PH: 319-363-8199 
 ATTORNEY FOR MURDOCK COMMUNICATIONS CORPORATION AND EUGENE I. DAVIS. 
  

 7 








 AS TO FORM AND CONTENT: 
  

/s/    Richard H. Zimmermann 

 Richard H. Zimmermann, Esq. 
 ARENSON & ZIMMERMANN, P.L.C. 
 101 Second Street, SE 
 Suite 904 
 Cedar Rapids, IA 52401 
 PH: 319-363-8199 
 ATTORNEY FOR MURDOCK COMMUNICATIONS CORPORATION AND EUGENE I. DAVIS. 
  
 /s/    Thomas J. Berthel 

 For Berthel Fisher & Company 
 By its President, Thomas J. Berthel 
 701 Tama Street, Building B 
 P. O. Box 609 
 Marion, IA 52302-0609 
 PH: 319-447-5700 
  
 /s/    Ronald O. Brendengen 

 Ronald O. Brendengen, an Individual 
 c/o 701
Tama Street, Building B 
 P. O. Box 609 
 Marion, IA 52302-0609

 PH: 319-447-5700 
  
 /s/    Thomas J. Berthel 

 Thomas J.
Berthel, an Individual 
 c/o 701 Tama Street, Building B 
 P. O.
Box 609 
 Marion, IA 52302-0609 
 PH: 319-447-5700 
  
 AS TO FORM AND CONTENT: 
  

 8 








 /s/    Stephen J. Holtman 


Stephen J. Holtman, Esq. 
 SIMMONS, PERRINE, ALBRIGHT & ELLWOOD, P.L.C.

 115 Third Street, SE 
 Suite 1200 
 Cedar Rapids, IA 52401-1266 
 PH: 319-366-7641 
 ATTORNEY FOR BERTHEL FISHER & COMPANY/THOMAS J. BERTHEL/RONALD O. BRENDENGEN. 
  

AS TO FORM AND CONTENT: 
  
 /s/    Leonard T. Strand 

 Leonard T. Strand, Esq. 
 SIMMONS, PERRINE, ALBRIGHT & ELLWOOD, P.L.C. 
 115 Third Street, SE 
 Suite 1200 
 Cedar Rapids, IA 52401-1266 
 PH: 319-366-7641 
 ATTORNEY FOR BERTHEL FISHER & COMPANY/THOMAS J. BERTHEL/RONALD O. BRENDENGEN. 
  

/s/    Steven R. Ehlert 

 Steven R. Ehlert, an Individual 
 c/o FIEGEN LAW FIRM, P.C. 
 316 Eighth Avenue, SE 
 P. O. Box 2849 
 Cedar Rapids, IA 52406-2849 
 PH: C/O: 319-362-6063 
  

 9 








 AS TO FORM AND CONTENT: 
  

/s/    Thomas L. Fiegen 

 Thomas L. Fiegen, Esq. 
 FIEGEN LAW FIRM, P.C. 
 316 Eighth Avenue, SE 
 P. O. Box 2849 
 Cedar Rapids, IA 52406-2849 
 PH: 319-362-6063 
 ATTORNEY FOR STEVEN R. EHLERT. 
  
 /s/    Guy O.
Murdock 

 Guy O. Murdock, an Individual 
 1824 Ellis Blvd. NW 
 Cedar Rapids, IA 52405 
 PH: 319-721-0519 
  
 AS TO FORM: 
  
 /s/    Frank Taylor 

 Frank Taylor, Esq. 
 Patrick Williams, Esq. 
 BRIGGS & MORGAN 
 2400 IDS Center 
 80 South 8th Street 
 Minneapolis, MN 55402 
 PH: 612-334-8445 
 ATTORNEYS FOR GUY O. MURDOCK. 
  
 /s/ Thomas E. Chaplin 

 Thomas E. Chaplin, an Individual 
 3590 Kimberly Ct.

 Marion, IA 52302 
 PH: 319-377-9269 
  

 10 








 THE RANCE GROUP AND ITS ATTORNEYS 
  
 /s/    John S. Rance 

 John S. Rance, an Individual 
 16931
Roundhill Drive 
 Huntington Beach, CA 92649 PH: 714-942-8781 
  
 /s/    Robert M. Upshaw 

 Robert M. Upshaw, an Individual 
 2127 Glasgow 
 Cardiff By The Sea, CA 92007 PH: 760-942-8781 
  
 /s/    Steven E. Rance 

 Steven E. Rance, an Individual

 12004 SW Sylvania Ct. 
 Portland, OR 97219 PH: 503-245-5203

  
 AS TO FORM AND CONTENT: 
  
 /s/    David Stroud 

 David Stroud, Esq. 
 1920 Main Street, Suite
210 
 Irvine, CA 92614-7223 
 PH: 949-955-3283 
 ATTORNEY FOR RANCE GROUP- JOHN RANCE, STEVEN E. RANCE, AND ROBERT M. UPSHAW. 
  
 /s/    Fernando Ficachi 

 Fernando Ficachi, an Individual 
 Isla Dorada 
 #8 Isla Brujas, Cancun, Mexico, CP 77500. PH: 011-52-98-83-0631 
  

 11