Document:

EX-10.24 SETTLEMENT AGREEMENT

 

Exhibit 10.24

EXHIBIT A

SETTLEMENT AGREEMENT

     This Settlement Agreement (the “Settlement Agreement”) is entered into by and among (a) Allied
Holdings, Inc. and its affiliates that are debtors and debtors in possession (collectively, the
“Debtors”), (b) Yucaipa American Alliance Fund I, LP and Yucaipa American Alliance (Parallel) Fund
I, LP (collectively, “Yucaipa”), (c) the Official Committee of Unsecured Creditors in the
Bankruptcy Cases (the “Creditors’ Committee”), (d) Sopris Capital Advisors, LLC, Aspen Advisors LLC
and Armory Advisors LLC (collectively, the “Equity Holders”), (e) Andrews & Kurth LLP, (f)
Sonnenschein Nath & Rosenthal LLP, (g) Kilpatrick Stockton LLP and (h) Jefferies & Company, Inc.
The entities listed in (a) through (d) of this introductory paragraph are collectively referred to
herein as the “Parties” and individually as a “Party.”

RECITALS

     A. WHEREAS, the Debtors filed petitions for relief on July 31,2005, commencing
jointly administered cases 05-12515 through 05-12526 and 05-12528 though 05-12537 in the
United States Bankruptcy Court for the Northern District of Georgia (collectively, the
“Bankruptcy Cases”); and

     B. WHEREAS, in or about January, 2006, the Equity Holders, together with Virtus
Capital LP and Hawk Opportunity Fund, L.P., formed an ad hoc committee of equity holders
(the “Ad Hoc Equity Committee’’); and

     C. WHEREAS, the Debtors, Yucaipa and The Teamsters National Automobile
Transportation Industry Negotiating Committee filed their First Amended Joint Plan of
Reorganization for the Debtors (dated as of April 5,2007) (as may be amended, the “Plan”); and

     D. WHEREAS, the bankruptcy court supervising the Bankruptcy Cases (the
“Bankruptcy Court”) has scheduled a hearing on confirmation of the Plan commencing May 9,
2007; and

     E. WHEREAS, the Equity Holders and the Ad Hoc Equity Committee have filed in the
Bankruptcy Cases complaints, motions and objections to, among other things, pending motions
for approval of financing, have moved to stay certain orders pending appeal (before die
Bankruptcy Court and the District Court for the Northern District of Georgia), have filed notices
of appeal and have served deposition subpoenas and document requests in connection with their
opposition to confirmation of the Plan; and

     F. WHEREAS, the Parties anticipate more than 10 depositions and the review of tens of
thousands of documents prior to confirmation, including without limitation depositions of
experts regarding the Debtors’ reorganization value (the “Valuation”); and

     G. WHEREAS, the Equity Holders and the Ad Hoc Equity Committee have vigorously
contested various matters in the Bankruptcy Cases and their objection to the Valuation and
confirmation of the Plan will lead to substantial additional administrative claims in the
Bankruptcy Cases; and

1

 

     H. WHEREAS, the Equity Holders disputed the Valuation set forth in the Disclosure
Statement relating to the Plan; and

     I. WHEREAS, in light of the expenses and uncertainty in litigation, the Parties have agreed
that a settlement on the terms set forth below is in the best interest of the Debtors’ estates.

     NOW THEREFORE, IN LIGHT OF THE FOREGOING AND FOR VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HEREBY AGREE:

     1. The recitals set forth above are incorporated by reference and are explicitly made
part of the Settlement Agreement.

     2. Promptly after the Bankruptcy Court enters an order approving the Settlement
Agreement (the “Approval Order”), the Plan shall be modified to provide for the terms and
conditions set forth in this Settlement Agreement, and the effectiveness of the Plan shall be
expressly conditioned on implementation of the Settlement Agreement. This condition to
effectiveness of the Plan may only be waived by the Equity Holders.

     3. On the Effective Date of the Plan, Reorganized Allied Holdings (as defined in the
Plan) will pay up to $325,000.00 (the “Fee Payment”) in the aggregate of actual and documented
fees of Andrews Kurth LLP, Sonnenschein Nam & Rosenthal LLP, Jefferies & Company, Inc.
and Kilpatrick Stockton LLP (collectively, the “Equity Holder Professionals”) for work done on
behalf of any one or more of the Equity Holders in connection with the Bankruptcy Cases. The
Debtors, the Creditors Committee and Yucaipa agree that invoices from any one or more of the
Equity Holder Professionals, accompanied by a written representation from a representative of
each such professional that reasonable time entries (if appropriate) or other detailed support
exists to substantiate such invoices, shall constitute adequate documentation for the purposes of
this paragraph. The allocation of the Fee Payment to and among the Equity Holder Professionals
shall be made in the sole discretion of the Equity Holders.

     4. Within two business days following execution of the Settlement Agreement, the
Equity Holders (for themselves and their respective partners, affiliates and subsidiaries) will
dismiss and withdraw any complaints, requests for shareholder meetings, motions (other than
motions for admission pro hac vice), appeals, discovery, oppositions or objections that have been
filed or served by or on behalf of the Equity Holders in or related to the Bankruptcy Cases (with
the exception of the appeal related to the Stay Motion, as defined in paragraph 11, as to which
appellants will take no further action, except as set forth in paragraph 11, pending the
Bankruptcy Court’s ruling on approval of this Settlement Agreement) (the “Dismissals”). The
Settlement Agreement shall in no way impact discovery to the extent that it has been served by
or on behalf of entities that are not parties to this Settlement Agreement (or partners, affiliates or
subsidiaries of such parties).

     5. Within one business day following the filing of the Dismissals, Andrews Kurth
LLP will file with the Bankruptcy Court a notice, in the form of an amended notice under

2

 

Bankruptcy Rule 2019 (the “Rule 2019 Statement”) that states (i) that the Equity Holders have
resigned from the Ad Hoc Equity Committee, (ii) that the Ad Hoc Equity Committee has been dissolved
and (iii) that Andrews Kurth LLP and Jefferies & Company, Inc. no longer represent the Ad Hoc
Equity Committee or any of its members in connection with the Debtors or the Bankruptcy Cases. The
Equity Holders and the Equity Holder Professionals shall not form another ad hoc equity committee
or comparable committee in the Bankruptcy Cases and shall not give any assistance or encouragement
to any entity or person who attempts to or does reform or form an ad hoc equity committee or
comparable committee in the Bankruptcy Cases. It is a condition to the Settlement Agreement that
the Approval Order (i) authorize and direct the Parties and the Equity Holder Professionals to take
the actions (or refrain from action, as applicable) as described in this Settlement Agreement, and
(ii) contain such other findings and/or directions as any Party may reasonably request in
furtherance of the effective implementation of the terms of the
Settlement Agreement.

     6. Within two business days following execution of the Settlement Agreement, the
Debtors, the Creditors Committee and Yucaipa will dismiss and withdraw any discovery served
on any of the Equity Holders.

     7. Following execution of the Settlement Agreement, and except as provided herein:
(i) the Equity Holders (and any of their respective partners, affiliates or subsidiaries) and the
Equity Holder Professionals shall not appear in or take any action in the Bankruptcy Cases, other
than in connection with the approval of the Settlement Agreement or in response to a motion or
action specifically directed to or against them (but not equity holders generally), and each of
them covenant to take no action to impede or preclude the entry of the order confirming the Plan
(as modified consistent with the Settlement Agreement), the administration of the Bankruptcy
Cases (including any motions or actions supported by Yucaipa and the Debtors that do not
contravene the terms of the Settlement Agreement) or oppose in any way the implementation and
administration of the Plan (or give any assistance or encouragement to any entity or person
taking any of the actions prohibited by subsection (i) of this paragraph 7); (ii) none of the
Debtors, Yucaipa or the Creditors Committee shall make, propose or allow any changes to the
Plan which would be inconsistent with the agreement embodied in this
Settlement Agreement. To the extent the Plan is modified or amended, the Equity Holders (and any of their respective
partners, affiliates and subsidiaries) and the Equity Holder Professionals will continue to abide
by the terms and conditions of the Settlement Agreement so long as such modifications or
amendments are not inconsistent with the agreement embodied in this Settlement Agreement,
and so long as the effectiveness of the Plan, as so modified or amended, remains conditioned
upon approval by the Bankruptcy Court of the terms and conditions of this Settlement
Agreement; and (iii) the Equity Holders will (a) retain ownership of their equity interests in the
Debtors (the “Equity Securities”) through the effective date of the Plan, and (b) vote their Equity
Securities in favor of the slate of directors proposed by the Debtors’ current management in the
event that there is a shareholder meeting before the effective date of the Plan. The Equity
Holders (and their respective partners, affiliates and subsidiaries) and the Equity Holder
Professionals will not share any work product, valuations or analyses of any kind relating in any
way to the Debtors or the Bankruptcy Cases with any individuals or entities; provided however,
that Andrews Kurth LLP may share such of its work product, valuations or analyses existing as
of the date hereof with the members of the Ad Hoc Committee as reflected on the Rule 2019

3

 

Statement
filed by Andrews Kurth LLP on March 23, 2007 to the extent Andrews Kurth LLP
reasonably determines is appropriate under (x) existing engagement arrangements between Andrews
Kurth LLP and such members who are not Equity Holders, and (y) applicable ethics rules; provided
however that if such work product, valuations or analyses was created for a specific member of the
Ad Hoc Committee it may only be shared with such specific member. If any of the Equity Holders (or
their respective partners, affiliates and subsidiaries) or the Equity Holder Professionals are
legally compelled to produce such work product, valuations or analyses they may do so, provided
that any Equity Holder or Equity Holder Professional so compelled shall provide reasonable notice,
under the circumstances, of such legal process to the Debtors, Yucaipa and the Creditors Committee
so as to enable each of them to oppose the production of such work product, valuations or analyses.

     8. Upon the effectiveness of the Plan, (i) the Debtors, Yucaipa and the Creditors
Committee (collectively, and together with their respective current and former agents, officers,
directors, advisors, employees, members, shareholders, attorneys and any of their respective
affiliates, partners, subsidiaries, successors and assigns, the “Plan Proponent Releasees”) on the
one hand, and (ii) the Equity Holders and the Equity Holder Professionals (collectively, and
together with their respective current and former agents, officers, directors, advisors, employees,
members, shareholders, attorneys and any of their respective affiliates, partners, subsidiaries,
successors and assigns, the “Equity Holder Releasees”) on the other hand, mutually release each
other from any and all claims, demands, suits, liabilities, causes of action or damages of any type
whatsoever, whether known or unknown, in law, admiralty or equity, which (a) any of the Plan
Proponent Releasees had or may have against any of the Equity Holder Releasees, or (b) any of
the Equity Holder Releasees had or may have against any of the Plan Proponent Releasees, in
either case from the beginning of time through the date of this Settlement Agreement and which
are or were related in any way to the Debtors, the Equity Securities or the Bankruptcy Cases. All
Parties hereto hereby represent and warrant (severally and not jointly) that each of them now
holds all right, title to and interest in any Claim released hereunder (the “Released Claims”), and
that none of them has assigned or otherwise transferred any right, title or interest in any Released
Claims. Each Party agrees to forever indemnify and hold forever harmless each and every other
Party hereto from all Released Claims, including, but not limited to, reasonable attorneys’ fees
and expert fees, incurred as a result of any person or entity asserting any such Released Claims
against such other Party pursuant to any such assignment or transfer.

     9. The Equity Holders (and their respective affiliates, partners and subsidiaries) and
the Equity Holder Professionals will provide no support, encouragement, information or any
assistance whatsoever to any person or entity in his/hers/its opposition to any action taken by the
Debtors or Yucaipa in the Bankruptcy Cases, including, without limitation the Teamsters for a
Democratic Union.

     10. The proposed treatment of claims in Class 4D of the Plan will be amended to
provide that at least $40 million in face amount of claims may be tendered into that class in
return for cash payouts of at least $0.25 on the claim dollar, and that if such tendered claims
exceed $40 million in face amount, the treatment for tendered claims in that class will be a cash
payout equal to a pro rata share of the total cash consideration allotted for payout of those claims.
Yucaipa will share its participation in Class 4D of the Plan with the Equity Holders as follows:

4

 

the Equity Holders (in the aggregate, and subject to allocation among and between them in
their sole discretion) will have the right to purchase from Yucaipa up to twenty (20) percent of
the Class 4D Claims that participate in the “Cash Out” option provided through Class 4D of the
Plan. On the Effective Date of the Plan, the Equity Holders will pay their pro rata share of the
cash necessary to fund the Cash Out option to Reorganized Allied, which will in turn distribute
such cash (and other cash provided by Yucaipa) to holders of Allowed Class 4D Claims as soon as
practicable after the Effective Date, and, as soon as practicable following the Effective Date, the
Equity Holders will receive that same pro rata share of either the claims that were tendered into
Class 4D, or the equity of the reorganized Debtors into which those claims are converted under the
Plan.

     11. In the event that: (i) the Settlement Agreement is disapproved by the Bankruptcy
Court, or (ii) following entry of the Approval Order the Court does not approve confirmation of
the Plan, or (iii) following confirmation of the Plan, the Plan does not become effective
according to its terms, the Parties agree that, upon any such occurrence, they will each revert to
the status quo ante with respect to all of their legal rights as though this Settlement Agreement
had never been executed. Notwithstanding the foregoing, upon such occurrence, the Parties will
not be able to reverse any court orders entered in reliance on the Approval Order between the
date of the Approval Order and the date of any event listed in paragraph 11 (i) through (iii). In
addition, upon execution of the Settlement Agreement by the Parties, the appropriate Equity
Holders shall request that the United States District Court for the Northern District of Georgia
continue the hearing on the emergency motion for a stay of the order approving that certain
financing provided by Yucaipa Transport LLP to the Debtors (the “Stay Motion”) until such time
as the Bankruptcy Court enters the Approval Order, at which point the Stay Motion shall be
withdrawn.

     12. The Parties have participated jointly in the negotiation and drafting of the
Settlement Agreement. If an ambiguity or question of intent or interpretation arises, the
Settlement Agreement shall be construed as if drafted jointly by the Parties, and no presumption
or burden of proof will arise favoring or disfavoring any Party hereto because of the authorship
of any provision of the Settlement Agreement.

     13. Each of the Parties and, as applicable, the Equity Holder Professionals, represents
that it has full requisite power and authority to execute and deliver and to perform its obligations
under the Settlement Agreement, and the execution, delivery and performance hereof, and the
instruments and documents required to be executed by it in connection herewith (a) have been
duly and validly authorized by it, (b) have been duly executed and delivered by its authorized
signatory, and (c) are not in contravention of its organizational documents or any agreements
specifically applicable to it. The Debtors and Yucaipa further represent that they have authority
to amend the Plan to incorporate the terms of this Settlement Agreement.

     14. The Settlement Agreement is the complete, final and exclusive statement of the
agreement between the Parties with respect to the subject matter hereof. The Settlement
Agreement supersedes all prior or contemporaneous agreements, negotiations, representations,
understandings, and discussions between the Parties and/or their respective counsel with respect
to the subject matter covered hereby. The Settlement Agreement may not be modified, amended

5

 

or supplemented except by a written agreement executed by each Party to be affected by such
modification, amendment or supplement.

     15. The Parties recognize and acknowledge that each of the Parties hereto has had the
opportunity to consult with counsel and that such Party received independent legal advice with
respect to the advisability of entering into the Settlement Agreement. Each of the Parties
acknowledges that the negotiations leading up to the Settlement Agreement were conducted at
arm’s length and each Party knows all of the relevant facts and its rights in connection therewith.

     16. The Settlement Agreement shall be construed and governed in accordance with
the laws of the State of New York and the United States of America, except with respect to
choice of law provisions. Any action, suit or proceeding between any of the Parties with respect
to the terms and conditions of the Settlement Agreement or the enforcement thereof shall be
brought before the Bankruptcy Court presiding in the Bankruptcy Cases, and each Party hereby
irrevocably consents to such jurisdiction with respect to any such action, suit or proceeding.

     17. In the event any Party prevails in an action, motion, application, and/or petition to
enforce any of the terms of the Settlement Agreement, preserve its rights under the Settlement
Agreement, or in the event of breach by any Party of obligations under the Settlement
Agreement, said moving and prevailing Party shall be entitled to reimbursement of its reasonable
costs and expenses incurred in enforcing the terms of the Settlement Agreement, including,
without limitation, reasonable attorneys’ fees, expert fees, and other expenses.

     18. The obligations and duties of the Settlement Agreement shall be binding upon the
Parties, their successors and assigns. Nothing in the Settlement Agreement, express or implied,
is intended or shall be construed to confer upon, or to give to, any person other than the Parties
hereto (and beneficiaries of the releases and exculpation provisions set forth in the Plan) and
their respective successors and assigns, any right, remedy or claim under or by reason of the
Settlement Agreement.

     19. It is understood and agreed by the Parties that money damages alone may not be a
sufficient remedy for a breach of the Settlement Agreement by any Party, and each non-breaching Party shall be entitled to seek specific performance and injunctive or other equitable
relief as a remedy in the event of such a breach.

     20. If any clause or provision of the Settlement Agreement is declared illegal, invalid
or unenforceable under present or future laws effective during the term hereof, it is the intention
of the Parties hereto to reach agreement to terms that will lawful carry out the intended purpose
of any such clause or provision, and to take such action as may be necessary to do so. The
Parties further intend that the remainder of the Settlement Agreement shall not be affected
thereby, and shall remain in full force and effect

     21. The Settlement Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall, together, constitute a single instrument.

6

 

     22. All demands, notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly given (i) when personally delivered by
courier service or messenger, (ii) upon actual receipt (as established by confirmation of receipt
or otherwise) during normal business hours, otherwise on the first business day thereafter, (iii)
three (3) business days after being duly deposited in the mail, by certified or registered mail,
postage prepaid—return receipt requested, to the following addresses, or such other addresses as
may be furnished hereafter by notice in writing, to the following Parties:

	 	 	 
	The Debtors	 	The Creditors Committee
	Ezra H. Cohen, Esq.

	 	Jonathan B. Alter, Esq.
	Jeffrey W. Kelley, Esq.

	 	William F. Govier, Esq.
	Harris B. Winsberg, Esq.

	 	Richard H. Agins, Esq.
	Troutman Sanders LLP

	 	Bingham McCutchen LLP
	600 Peachtree Street, N.E. — Suite 5200

	 	One State Street
	Atlanta, Georgia 30308

	 	Hartford, CT 06105
	Facsimile No.: (404) 885-3900

	 	Facsimile No.: (860) 240-2818

	 	 	 
	The Equity Holders	 	Yucaipa and the Reorganized Debtors
	If to Sopris Capital Advisors, LLC or

	 	Robert A. Klyman, Esq.
	Aspen Advisors LLC:

	 	Latham & Watkins LLP
	 

	 	633 West Fifth Street, Suite 4000
	Peter D. Wolfson, Esq.

	 	Los Angeles, CA 90071
	John A. Bicks, Esq.

	 	Facsimile No.: (213)891-8763
	Sonnenschein Nath & Rosenthal LLP
	 	 
	1221 Avenue of the Americas
	 	 
	New York, NY 10020
	 	 
	Facsimile No.: (212) 768-6800
	 	 
	 
	 	 
	If to Armory Advisors LLC:
	 	 
	 
	 	 
	Paul N. Silverstein, Esq.
	 	 
	Jonathan Levine, Esq.
	 	 
	Andrews Kurth LLP
	 	 
	450 Lexington Avenue
	 	 
	New York, NY 10017
	 	 
	Facsimile No.: (212) 850-2929
	 	 

     23. Each of the Parties agrees to execute and deliver, or to cause to be executed and
delivered, all such instruments, and to take all such action as the other Parties reasonably
request in order to effectuate the intent and purposes of, and to carry out the terms of, the
Settlement Agreement

7

 

     IN WITNESS WHEREOF, the Parties have caused this Settlement Agreement to be
executed on their behalf by their officers thereunto duly authorized, as of April                     ,2007.

Allied Holdings, Inc., as agent and attorney-in fact for each of the Debtors

	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas Duffy
	 	 	 
	 	 	Name: Thomas Duffy
	 	 	Title: Executive Vice
President and General Counsel

Yucaipa Transport, LLC, Yucaipa American Alliance Fund I, LP and Yucaipa American Alliance
(Parallel) Fund I, LP

	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert P. Bermingham
	 	 	 
	 	 	Name: Robert P. Bermingham
	 	 	Title: Vice President

Official Committee of Unsecured Creditors

	 	 	 	 	 
	 

	 	By:	 	 
	 	 	 
	 	 	Name:
	 	 	Title:

Sopris Capital Advisors, LLC on behalf of itself, its affiliates, assigns, and subsidiaries

	 	 	 	 	 
	 

	 	By:
	 	/s/ Nikos Hecht
	 	 	 
	 	 	Name: Nikos Hecht
	 	 	Title: Managing Member

Aspen Advisors LLC on behalf of itself, its affiliates, assigns, and subsidiaries

	 	 	 	 	 
	 

	 	By:
	 	/s/ Nikos Hecht
	 	 	 
	 	 	Name: Nikos Hecht
	 	 	Title: Managing Member

8

 

Armory Advisors on behalf of itself, its affiliates, assigns, and subsidiaries

	 	 	 	 	 
	 

	 	By:
	 	/s/ Jay Burnham
	 	 	 
	 	 	Name: Jay Burnham
	 	 	Title: Managing Partner

AND AS TO SPECIFIC PARAGRAPHS THAT REQUIRE ACTION BY EQUITY HOLDER PROFESSIONALS:

	 	 	 
	 

	 	ANDREWS KURTH LLP
	 
	 	 
	 

	 	By /s/ Paul N. Silverstein
	 

	 	 
	 

	 	Name: Paul N. Silverstein
	 

	 	Title: Attorney
	 
	 	 
	 

	 	SONNENSCHEIN NATH & ROSENTHAL LLP
	 
	 	 
	 

	 	By /s/ John A. Bicks
	 

	 	 
	 

	 	Name: John A. Bicks
	 

	 	Title: of Counsel
	 
	 	 
	 

	 	KILPATRICK STOCKTON LLP
	 
	 	 
	 

	 	By /s/ Alfred S. Lurey
	 

	 	 
	 

	 	Name: Alfred S. Lurey
	 

	 	Title: Partner
	 
	 	 
	 

	 	JEFFERIES & COMPANY, LLP
	 
	 	 
	 

	 	By /s/ Joseph Allgor
	 

	 	 
	 

	 	Name: Joseph Allgor
	 

	 	Title: Assistant General Counsel

9EX-10.41 AMENDMENT NO.2 TO THE MEMORANDUM OF AGREM

 

Exhibit 10.41

AMENDMENT NO. 2 to THE

MEMORANDUM OF AGREEMENT

THIS AMENDMENT No. 2 TO THE MEMORANDUM OF AGREEMENT (this “Amendment”) is made as of May 23,
2007 by and among Veridien Corporation, a Delaware corporation (“Veridien”), and Mycosol, Inc. a
Delaware corporation (“Mycosol”).

     WHEREAS, Veridien and Mycosol entered into that certain Memorandum Of Agreement, dated as of
June 1, 2004 (the “MOA”), and Amendment No. 1 To Memorandum Of Agreement, dated as of February 28,
2005 (the “Amendment No. 1 To MOA”), providing for certain potential investments, stock transfers
and other related rights and options, as more specifically described therein; and

     WHEREAS, Veridien and Mycosol wish to amend the MOA and Amendment No. 1 To MOA as provided
herein to modify certain terms regarding the sale to Veridien of the remaining shares of the Common
Stock of Mycosol held by Mycosol’s Initial Principals.

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained in this
Amendment No. 2 To The Memorandum Of Agreement, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

	 	1.	 	Amendment of MOA and Amendment No. 1 To MOA. Veridien and the Initial
Principals, who, collectively, represent the Board of Directors of Mycosol and
substantially all of its shareholders, hereby amend the MOA and Amendment No. 1 To MOA
and agree:

	 	(a)	 	to extend Mycosol’s Series A Preferred Stock Financing (the
“Series A Financing”) by $500,000 to $2,500,000 at the equivalent
$1.00/share of the Series A Financing.
	 
	 	(b)	 	that Veridien has the right to invest up to the additional
$500,000 in Series A Financing (as newly created) with the same Common
Stock Warrant entitlement as granted to investment in the MOA.
	 
	 	(c)	 	that Initial Principals, Dick Klein and James Hriso, will be
paid their full, monthly salaries of $14,583 and $8,333 respectively,
beginning February 1, 2007, during their respective employment or
consulting with Mycosol. [The parties understand and accept that
Co-Founder and Initial Principal, Jeffrey Selph, left the active employment
of Mycosol in early December 2005, but continues to serve on Mycosol’s
Board of Directors and remains an Initial Principal, a Mycosol shareholder,
and, as requested by Mycosol, a technical consultant to the Company]

 

 

	 	(d)	 	that Mycosol’s Initial Principals’ Deferred Salaries between
November 1, 2005 and January 31, 2007, will be repaid to the Initial
Principals in twelve (12) equal monthly installments from proceeds of a new
Series B Financing or other financing subsequent to the Series A Financing,
provided that this repayment shall be limited to 20% of monies raised from
time to time, from 3rd parties, under the offering(s) [whether
invested directly into Mycosol by 3rd parties or by
3rd parties through Veridien with the primary intended purpose
of the 3rd party being funding for Mycosol].
	 
	 	(e)	 	that Veridien will receive two options (the “Option” or
specifically, “Option A” and/or “Option B”) from the Initial Principals to
acquire all or a portion of their remaining Mycosol Common shares, being
1,882,500 Common shares (the “IP Shares”). Either Option A or Option B can
only be exercised if Veridien is fully compliant as of the exercise date
with Paragraph 1.(a) through 1.(d) of this Amendment No. 2 To The
Memorandum Of Agreement. Payment of the exercised Option to the Initial
Principals can, at Veridien’s option, be made through a combination of a
lump sum cash payment and Veridien Restricted Common Stock (Rule 144). In
the event that Veridien issues any Restricted Common Stock (Rule 144)
pursuant to transactions described in this Paragraph 1.(e), at Veridien’s
sole option, the parties agree to enter into a certain Stock Purchase
Agreement and Escrow Agreement substantially similar to the Stock Purchase
Agreement and Escrow Agreement described in Paragraph 4 of Amendment No. 1
Of MOA. If Veridien exercises either Option in more than one traunch, then
the purchase price of each traunch will be prorated proportionally to the
total fixed price of that Option. If Veridien does not make the full
$500,000 investment (Paragraph 1.(a) of this Amendment No. 2), then the
Option will be prorated proportionally based on the percent (%) of actual
Aggregate Series A Preferred Stock Investments in Mycosol as to that date
divided by $2.5 million.

OPTION A

If Veridien exercises 100% of its Option on or before September 30,
2007, then the purchase price for the IP Shares is fixed at

(i) $2,200,000 if payment is made in cash; or

(ii) $2,640,000 if payment is made with Veridien stock. The number
of shares of Veridien stock will be determined by dividing the
purchase price by the average closing market price of such shares
for the 10-days preceding the date the Option is exercised, but in
any event the factor used shall not be less than $0.061 per share.

OPTION B

If Veridien exercises 100% of its Option between October 1, 2007, and
January 31, 2008, then the purchase price for the IP Shares is fixed at

(iii) $2,500,000 if payment is made in cash; or

(iv) $3,000,000 if payment is made with Veridien stock. The number
of shares of Veridien stock will be determined by dividing the
purchase price by the average closing market price of such shares
for the 10-days

 

 

preceding the date the Option is exercised, but in any event the
factor used shall not be less than $0.061 per share.

Agreement Continues in Effect. MOA and Amendment No. 1 To MOA continue to remain in effect
according to their terms except as formally amended hereby.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment No. 2 To The Memorandum Of
Agreement as of the date first above written.

	 	 	 	 	 	 	 
	Mycosol, Inc.	 	Veridien Corporation
	 
	 	 	 	 	 	 
	Per:

	 	/s/ Richard B. Klein, CEO
	 	Per:
	 	/s/ Sheldon Fenton, CEO
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	For The Initial Principals,	 	Witnessed By,
	 
	 	 	 	 	 	 
	/s/ Richard B. Klein	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	/s/ Jeffrey Selph	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	/s/ James Hriso

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]