Document:

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
  PartnerExhibit 10.55

 

June 30, 2004

 

Polar Molecular Holding Corporation

4600 South Ulster Street Suite 940

Denver, CO   80237

 

Attention: Mr. Mark L. Nelson - Chairman and President

 

Dear Sirs:

 

Further to our discussions, Dominick & Dominick
Securities Inc. (“Dominick”) is pleased to outline the terms of an agreement
with Polar Molecular Holding Corporation (the “Corporation”) pursuant to which
we have been engaged to act as the Corporation’s agent (“Agent”) for the
private placement offering of common shares or such other equity or debt as may
be agreed upon by the parties, as well as sponsorship of the Corporation for
listing on the TSX Venture Exchange.

 

	
  Issuer:

  	
   

  	
  Polar Molecular Holding Corporation (the “Corporation”).

  
	
   

  	
   

  	
   

  
	
  Agent:

  	
   

  	
  Dominick & Dominick Securities Inc. (the “Agent”)
  and such other members of a selling syndicate as may be agreed upon by the
  Corporation and Dominick.

  
	
   

  	
   

  	
   

  
	
  Nature of Offering:

  	
   

  	
  Reasonable Best Efforts.

  
	
   

  	
   

  	
   

  
	
  Offering:

  	
   

  	
  Up to US$7.0 million in common shares or such other equity
  or debt as agreed upon by the parties.

  
	
   

  	
   

  	
   

  
	
  Offering Price:

  	
   

  	
  To be mutually agreed upon within the context of the market.

  
	
   

  	
   

  	
   

  
	
  Use of Proceeds:

  	
   

  	
  The proceeds will be used to reduce indebtedness, implement
  a marketing plan for the Corporation’s products and for general working
  capital.

  
	
   

  	
   

  	
   

  
	
  Offering Jurisdictions:

  	
   

  	
  Ontario, Alberta, British Columbia and such other
  jurisdictions in Canada as mutually agreed.

  

 

 

	
  Statutory Exemptions

  	
   

  	
   

  
	
  to
  be Relied Upon:

  	
   

  	
  The
  common shares will be sold in the Offering Jurisdictions pursuant to
  prospectus and registration exemptions for “accredited investors”.

  
	
   

  	
   

  	
   

  
	
  Qualifications
  of

  	
   

  	
   

  
	
  Securities

  	
   

  	
   

  
	
  Distributed:

  	
   

  	
  No
  prospectus will be filed to qualify the distribution of common shares or such
  other equity or debt securities issued pursuant to this Offering in the
  Offering Jurisdictions, provided at the time of Closing securities issued in
  the Offering qualify for a hold period terminating four months and one day
  from the Closing Date, pursuant to Multilateral Instrument 45-102 - Resale of
  Securities. The Corporation will file a Registration Statement qualifying the
  securities issued in this Offering for resale in the United States within 90
  days of Closing.

  
	
   

  	
   

  	
   

  
	
  Commission
  and

  	
   

  	
   

  
	
  Sponsorship
  Fee:

  	
   

  	
  The
  Corporation shall pay Dominick (and such other members of a selling
  syndicate) (collectively, the “Agents”), from gross proceeds of the Offering,
  a cash commission fee equal to 8.5% of the gross proceeds of the Offering,
  and broker’s warrants to acquire that number of common shares as is equal to
  10% of the number of common shares issued in connection with the Offering, at
  an exercise price equal to the Offering Price for a period of 24 months from
  Closing.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  Corporation shall pay Dominick a Sponsorship Fee, upon listing on the TSX
  Venture Exchange, in an amount not less than $50,000, plus all disbursements.
  Particulars of the terms of Sponsorship will be set out in a Sponsorship
  Agreement.

  
	
   

  	
   

  	
   

  
	
  Holdover
  Provision:

  	
   

  	
  If
  any person or party or affiliate or associate of such person or party is
  introduced by Dominick, to the Corporation or any of its insiders or
  affiliates, prior to termination of this agreement and with whom discussions
  have been initiated (other than existing shareholders of the Corporation),
  and a transaction subsequently closes with such person or party or affiliate
  or associate of such person or party, within a period of one year after
  termination of this agreement, the Corporation shall pay to Dominick an
  amount in cash equal to 8.5% of the gross proceeds raised, and broker’s
  warrants to acquire that number of common shares as is equal to 10% of the
  gross proceeds raised, at an exercise price equal to current market price of
  the shares at the time of such closing, for a period of 24 months from such
  closing. Dominick will provide to the Corporation a list of investors with
  whom discussions have been initiated.

  

 

 

	
  Right of First Refusal:

  	
   

  	
  If the Offering is completed, the Corporation shall grant a
  right of first refusal to Dominick to act as lead underwriter or agent in
  respect of any subsequent public offering or private placement of equity in
  Canada or the United States by the Corporation, or any of its subsidiaries or
  affiliates for a period of eighteen (18) months from Closing, subject to
  Dominick and the Corporation, acting reasonably, agreeing on the terms and
  conditions thereof.

  
	
   

  	
   

  	
   

  
	
  Costs and Expenses:

  	
   

  	
  Reasonable costs and expenses of the Offering, whether or
  not the Offering is completed, shall be paid by the Corporation including
  (i) reasonable costs and expenses of the Agent(s); and
  (ii) reasonable costs and expenses of Agent(s)’ legal counsel.

  
	
   

  	
   

  	
   

  
	
  Closing Date:

  	
   

  	
  On or about September 15, 2004 or such other date as
  mutually agreed upon.

  
	
   

  	
   

  	
   

  
	
  Termination:

  	
   

  	
  This agreement shall terminate at 5:00 pm (Toronto Time) on
  November 30, 2004, unless this agreement is extended by the mutual
  agreement of the parties.

  
	
   

  	
   

  	
   

  
	
  Indemnity:

  	
   

  	
  In consideration of the Agent entering into this letter of
  engagement, the Company shall indemnify the Agent(s) in accordance with the
  terms of Schedule “A” hereto, which schedule forms part of this
  letter of engagement. This indemnity shall be in addition to, and not in
  substitution of, any other liabilities the Corporation may have to the Agent.
  The indemnity will apply to all services provided by the Agent in connection
  with, or otherwise related to, the Offering.

  

 

Conditions Precedent:

 

The above Offering is subject, but not limited to, the
following:

 

	
   

  	
  a)

  	
   

  	
  listing on the TSX Venture Exchange;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b)

  	
   

  	
  completion of due diligence to the satisfaction of
  the Agent and its legal counsel;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c)

  	
   

  	
  execution of a standard form agency agreement and
  Sponsorship Agreement between the Corporation and the Agent; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  d)

  	
   

  	
  approval of the terms and conditions of the Offering
  by all of the appropriate regulatory authorities, as required, and in
  particular, approval of the TSX Venture Exchange and other securities
  regulatory authorities on or before the Closing Date.

  

 

 

Notwithstanding the foregoing, for greater certainty, the
conditions precedent contained herein regarding the requirement to list on the
TSX Venture Exchange being a condition of closing, may be waived at the sole
discretion of Dominick.

 

We would ask that if the foregoing is in accordance with your
understanding and is agreed to by yourself, that you kindly confirm your
acceptance by enclosing the duplicate copy and returning same to the
undersigned as soon as possible.

 

Yours very truly,

 

	
  DOMINICK & DOMINICK SECURITIES INC.

  	
   

  
	
   

  	
   

  
	
  /s/ P. Margolis

  	
   

  	
   

  
	
  P. Margolis

  	
   

  
	
   

  	
   

  
	
  Agreed and accepted this 30th day of June, 2004.

  	
   

  
	
   

  	
   

  
	
  POLAR MOLECULAR CORPORATION

  	
   

  
	
   

  	
   

  
	
  /s/ Mark L. Nelson

  	
   

  	
   

  
	
  Mark L. Nelson

  	
   

  

 

 

Schedule “A”

Form of Indemnity

 

In consideration for Dominick and
Dominick Securities Inc. (the “Agent”) (and any other agent in a selling
syndicate, with the Agent and members of a selling syndicate referred to
collectively as the “Agents”) accepting the engagement (the “Engagement”)
described in the letter of engagement (the “Letter of Engagement”) to which
this Schedule “A” is attached, Polar Molecular Holding Corporation

(the “Corporation”) agrees to
indemnify and save the Agent(s) and its or their respective affiliates,
directors, officers, employees, partners, agents, advisors and shareholders
(collectively, the “Indemnified Parties” and individually, an “Indemnified
Party”) from and against any and all losses, claims, actions, suits,
proceedings, damages, liabilities or expenses of whatsoever nature or kind
(excluding loss of profits), including the aggregate amount paid in reasonable
settlement of any actions, suits, proceedings, investigations or claims and the
reasonable fees, disbursements and taxes of their counsel in connection with
any action, suit, proceeding, investigation or claim that may be made or
threatened against any Indemnified Party or in enforcing this indemnity
(collectively, the “Claims”) to which an Indemnified Party may become subject
or otherwise involved in any capacity insofar as the Claims relate to, are
caused by, result from, arise out of or are based upon, directly or indirectly,
the Engagement whether performed before or after the Corporation’s execution of
the Letter of Engagement and to reimburse each Indemnified Party forthwith,
upon demand, for any legal or other expenses reasonably incurred by such Indemnified Party in connection with any Claim.

 

The Corporation also agrees that no
Indemnified Party will have any liability (either direct or indirect, in
contract or tort or otherwise) to the Corporation or any person asserting
claims on the Corporation’s behalf or in right for or in connection with the
Engagement, except to the extent that any losses, expenses, claims, actions,
damages or liabilities incurred by the Corporation are determined by a court of
competent jurisdiction in a final judgment that has become non-appealable to
have resulted from the gross negligence or willful misconduct of such
Indemnified Party.

 

In the event and to the extent that
a court of competent jurisdiction in a final judgment that has become
non-appealable determines that an Indemnified Party was grossly negligent or
guilty of willful misconduct in connection with a Claim in respect of which the
Corporation has advanced funds to the Indemnified Party pursuant to this
indemnity, such Indemnified Party will reimburse such funds to the Corporation
and thereafter this indemnity will not apply to such Indemnified Party in
respect of such Claim. The Corporation agrees to waive any right the
Corporation might have of first requiring the Indemnified Party to proceed
against or enforce any other right, power, remedy or security or claim payment
from any other person before claiming under this indemnity.

 

In case any action, suit, proceeding
or claim is brought against an Indemnified Party or an Indemnified Party has
received notice of the commencement of any investigation in respect of which
indemnity may be sought against the Corporation, the Indemnified Party will
give the Corporation prompt written notice of any such action, suit,
proceeding, claim or investigation of which the Indemnified Party has knowledge
and the Corporation will undertake the investigation and defense thereof on
behalf of the Indemnified Party, including the prompt employment of counsel
acceptable to the Indemnified Parties affected and the payment of all expenses.
Failure by the Indemnified Party to so notify will not relieve the Corporation
of its obligation of indemnification hereunder unless (and only to the extent
that) such failure results in forfeiture by the Corporation of substantive
rights or defenses.

 

No admission of liability and
no settlement, compromise or termination of any action, suit, proceeding,
claim, or investigation will be made without the Corporation’s consent and the
consent of the

 

 

Indemnified Parties affected, such consents not to be unreasonably withheld.
Notwithstanding that the Corporation will undertake the investigation and
defense of any Claim, an Indemnified Party will have the right to employ
separate counsel with respect to any Claim and participate in the defense
thereof, but the fees and expenses of such counsel will be at the expense of
the Indemnified Party unless:

 

(a)           employment of such counsel has been
authorized in writing by the Corporation;

 

(b)           the Corporation has not assumed
the defense of the action within a reasonable period of time after receiving
notice of the claim;

 

(c)           the named parties to any such
claim include both the Corporation and the Indemnified Party and the
Indemnified Party will have been advised by counsel to the Indemnified Party
that there may be a conflict of interest between the Corporation and the
Indemnified Party; or from or in addition to those available to the
Corporation;

 

(d)           there are one or more defenses
available to the Indemnified Party which are different

 

in which case such fees and expenses of such counsel to the
Indemnified Party will be for the Corporation’s account. The rights accorded to
the Indemnified Parties hereunder will be in addition to any rights an
Indemnified Party may have at common law or otherwise.

 

If for any reason the foregoing indemnification is unavailable
(other than in accordance with the terms hereof) to the Indemnified Parties (or
any of them) or is insufficient to hold them harmless, the Corporation will
contribute to the amount paid or payable by the Indemnified Parties as a result
of such Claims in such proportion as is appropriate to reflect not only the
relative benefits received by the Corporation or the Corporation’s shareholders
on the one hand and the Indemnified Parties on the other, but also the relative
fault of the parties and other equitable considerations which may be relevant.
Notwithstanding the foregoing, the Corporation will in any event contribute to
the amount paid or payable by the Indemnified Parties as a result of such Claim
any amount in excess of the fees actually received by the Indemnified Parties
hereunder.

 

The Corporation hereby constitutes Dominick as trustee for
each of the other Indemnified Parties of the Corporation’s covenants under this
indemnity with respect to such persons and Dominick agrees to accept such trust
and to hold and enforce such covenants on behalf of such persons.

 

The Corporation agrees to reimburse the Agent(s) monthly for
the time spent by the Agent(s)’ personnel in connection with any Claim at their
normal per diem rates. The Corporation also agrees that if any action, suit,
proceeding or claim is brought against, or an investigation commenced in
respect of the Corporation or the Corporation and the Agent(s) and personnel of
either of the Agent(s) are required to testify, participate or respond in
respect of or in connection with the Engagement, such Agents) will have the
right to employ its own counsel in connection therewith and the Corporation
will reimburse such Agent(s) monthly for the time spent by its personnel in
connection therewith at their normal per diem rates together with such
disbursements and reasonable out-of-pocket expenses as may be incurred,
including fees and disbursements of such Agent(s)’ counsel.

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