RELEASE AND SETTLEMENT AGREEMENT
This Release and Settlement Agreement ("Agreement") is made
among Princeton Capital Finance Company LLC ("PCF") and Comtex
Scientific Corporation ("Comtex"), Amasys Corporation ("Amasys"),
Infotechnology, Inc. ("Infotechnology"), Telecommunications
Industries, Inc. ("TII"), C.W. Gilluly ("Mr. Gilluly"), and Marny
Gilluly ("Ms. Gilluly"). Comtex, Amasys, Infotechnology, TII,
Mr. Gilluly and Ms. Gilluly are collectively referred to as the
"Defendants".
RECITALS
R.1. On or about February 17, 1995, Comtex and PCF entered
into a Contracts Financing Agreement (the "Financing Agreement")
R.2. Pursuant to the terms of the Financing Agreement, Comtex
agreed to make various payments to PCF, including the remission
to PCF of the proceeds of certain accounts receivable (the
"Accounts"), to perform various other obligations, and Comtex
represented and warranted to PCF that all Accounts assigned by
Comtex to PCF would be valid, legally enforceable, and represent
a bona fide undisputed indebtedness.
R.3. Comtex defaulted on its obligations under the Financing
Agreement by failing, despite demand, to pay to PCF all sums due
PCF under the Financing Agreement.
R.4. On or about February 17, 1995, Defendant Amasys executed
and delivered to PCF a Corporate Guaranty (the "Amasys
Guaranty"), pursuant to which it agreed to guaranty payment of
the Obligations of Comtex to PCF.
R.5. Amasys defaulted on its obligations under the Amasys
Guaranty by failing to pay the sums unpaid by Comtex.
R.6. On or about February 17, 1995, Defendant Infotechnology
executed and delivered to PCF a Corporate Guaranty (the
"Infotechnology Guaranty"), pursuant to which it agreed to
guaranty payment of the Obligations of Comtex to PCF.
R.7. Infotechnology defaulted on its obligations under the
Infotechnology Guaranty by failing to pay the sums unpaid by
Comtex.
R.8. On or about February 17, 1995, Defendant TII executed
and delivered to PCF a Corporate Guaranty (the "TII Guaranty"),
pursuant to which it agreed to guaranty payment of the
Obligations of Comtex to PCF.
R.9. TII defaulted on its obligations under the TII Guaranty
by failing to pay the sums unpaid by Comtex.
R.10. On or about February 17, 1995, Defendant Mr. Gilluly
executed and delivered to PCF a Personal Guaranty (the
"Gilluly Guaranty"), pursuant to which he agreed, to the extent
and under the circumstances set forth in the Gilluly Guaranty, to
guaranty payment of the Obligations of Comtex to PCF.
R.11. On or about February 17, 1995, Defendant Ms. Gilluly
executed and delivered to PCF the Gilluly Guaranty, pursuant to
which she agreed, to the extent and under the circumstances set
forth in the Gilluly Guaranty, to guaranty payment of the
Obligations of Comtex to PCF.
R.12. PCF commenced litigation in the United States District
Court for the Eastern District of Virginia (Alexandria Division),
Case. No. 96-1729-A against the Defendants (the "Litigation"). The
Litigation is presently pending.
R.13. PCF sued the Defendants to recover the amount of
$262,523.91, plus attorneys' fees of $52,504.78, plus costs of suit
and pre- and post judgment interest.
R.14. TII entered into certain agreements with the United States
House of Representatives pursuant to which accounts receivable were
created (the "TII Receivables").
R.15. PCF and the Defendants wish to settle their dispute.
Now Therefore, in consideration of the mutual promises contained
herein, the parties agree as follows:
1. Conditional only upon the receipt by PCF of the sum of
$271,000.00 in good funds (the "Payment") whether directly from
Defendants or from escrow, PCF hereby releases and forever
discharges Defendants from all debts, demands, actions, causes of
action, suits, dues, sum and sums of money, accounts, contracts,
controversies, agreements, promises, omissions, damages and
liabilities and any and all other claims of every kind, nature and
description whatsoever, both at law and in equity, which against
Defendants or their successors, heirs or assigns PCF now has or
ever had with respect to or in any manner connected with the
Litigation.
2. In consideration for the foregoing Release contained in
the immediately preceding paragraph, Defendants hereby release and
forever discharge PCF from all debts, demands, actions, causes of
action, suits, dues, sum and sums of money, accounts, contracts,
controversies, agreements, promises, omissions, damages and
liabilities and any and all claims of every kind, nature and
description whatsoever, both at law and in equity, which against
PCF or its successors or assigns, Defendants now have or ever had
with respect to or in any manner connected with the Litigation.
3. Upon execution of this Agreement, Comtex, Amasys,
Infotechnology and TII shall execute the Consent to Judgment (the
"Consent") in the Litigation attached hereto as Exhibit B.
Defendants acknowledge that execution of the Consent is a material
inducement for PCF to enter into this Agreement.
4. The executed Consent shall be held pursuant to the terms
hereof by Jeremy S. Friedberg, Esquire, Leitess & Associates, P.C.,
201 Pomona Square, 1700 Reisterstown Road, Baltimore, Maryland
21208. The Consent shall be filed with the Court, only in the
event that Defendants default under the terms of this Agreement, as
described below.
5. Upon execution of this Agreement, PCF shall dismiss the
Litigation, without prejudice, as to Mr. Gilluly and Ms. Gilluly.
6. Upon execution of this Agreement, Defendants shall
execute the Assignment of Claim attached hereto as Exhibit C.
7. Upon execution of this Agreement, Defendants shall
execute and shall use their best efforts to cause the contracting
and disbursing officers responsible for the TII Receivables to
execute the Notice of Assignment attached hereto as Exhibit D
within twenty-one (21) days from the date hereof.
8. Upon execution of this Agreement, Defendants shall
execute such documents as PCF shall require to grant PCF a security
interest in the account receivable due Defendants on account of the
TII Receivables.
9. Upon execution of this Agreement by all parties and receipt
by PCF of the Payment, PCF shall dismiss the Litigation, with
prejudice.
10. The following, or any one of the following, shall be an
"Event of Default" under this Agreement:
a. The failure of Defendants to make the Payment within
sixty (60) days of the date of this Agreement.
b. The breach, by Defendants, of any representation or
warranty set forth in this Agreement, including the Recitals.
c. The breach or failure of timely observance by Defendants
of any term, condition or covenant set forth in this Agreement.
11. Upon default, PCF may take all steps necessary to enter
and execute upon the Consent, including but not limited to
enrolling the Consent with the United States District Court for
the Eastern District of Virginia.
12. Upon Defendants' default hereunder, PCF may take any
action permitted at law or in equity to enforce its rights
against Defendants.
13. Jeremy S. Friedberg, Esquire shall hold funds paid to PCF
hereunder and shall apply funds, in excess of amounts described
in Paragraph 1, within ten (10) business days of such receipt as
follows: a) to satisfy Defendants' obligations to PCF and b) any
funds in excess of amounts due PCF shall be remitted to
Defendants in care of John J. McDermott, Esquire, O'Connor &
Hannan, 1919 Pennsylvania Avenue, N.W., Suite 800, Washington,
DC 20006-3483.
14. PCF's failure to pursue any or all of its remedies upon
Event of Default, or PCF's excuse of an Event of Default, shall
not constitute waiver of any right or remedy available to PCF
under this Agreement or at law, and may be done merely as an
accommodation to Defendants, at the PCF's sole discretion.
PCF's failure to pursue any or all of its remedies upon Event of
Default, or PCF's excuse of an Event or Events of Default, shall
not constitute a waiver of such Default(s) or any other
Default(s) at any other time.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of Virginia.
16. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held
to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provision of this Agreement
unless the consummation of the transaction contemplated hereby
is adversely affected thereby.
17. This Agreement and the exhibits hereunder set forth the
entire understanding of the parties hereto with respect to the
subject matter herein and it shall not be changed or terminated
orally. There are no other warranties or representations made
or relied upon by any of the parties to this transaction other
than those expressly set forth hereinabove. This Agreement may
be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together
shall constitute one and the same instrument. If counterparts
are employed, then, all counterpart signature pages shall be
assembled into a single document containing all original
signatures.
18. Notwithstanding anything to the contrary contained herein,
the release by PCF of Defendants set forth in paragraph 1 shall be
null and void and of no force and effect in the event that
Defendants (or any successor, assign or representative thereof in
bankruptcy or otherwise) seeks to avoid or recover the payments by
Defendants to PCF of the Payment.
IN WITNESS WHEREOF, the undersigned, and each of them have
hereunto set their hands on this 21st day of February, 1997.
PRINCETON CAPITAL FINANCE COMPANY LLC
By:/S/ CARL S. HERINGER
CARL S. HERINGER
Print or type Name and Title
COMTEX SCIENTIFIC CORPORATION
By: /S/ CHARLES W. TERRY
CHARLES W. TERRY, PRESIDENT
Print or type Name and Title
AMASYS CORPORATION
By: /S/ C.W. GILLULY
C.W. GILLULY, PRESIDENT
Print or type Name and Title
(Signatures continued from prior page)
INFOTECHNOLOGY, INC.
By: /S/ C.W. GILLULY
C.W. GILLULY, PRESIDENT
Print or type Name and Title
TELECOMMUNICATIONS INDUSTRIES, INC.
By: /S/ C.W. GILLULY
C.W. GILLULY, PRESIDENT
Print or type Name and Title
/S/ C.W. GILLULY
C.W. GILLULY
/S/ MARNY GILLULY
MARNY GILLULY