Joseph D. & Elizabeth M. Dunne - Page 6




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               On March 18, 1997, Mr. Marcus mailed a letter to a potential           
          business partner.  Mr. Marcus wrote:  “As of January 25, 1997 Joe           
          Dunne was terminated as an employee of FRC, therefore he does not           
          speak for or represent the company in anyway.  In addition, it is           
          our position that Joe has in effect sold his shares of stock to             
          me.”                                                                        
          The Settlement Agreement                                                    
               On May 8, 1997, Mr. Dunne and Mr. Marcus executed a                    
          settlement agreement.  This agreement provided that in exchange             
          for his 50-percent interest in FRC, Mr. Dunne would receive                 
          $175,000 plus 50 percent of FRC’s total net profit from the halon           
          contract.  The parties agreed that the payment of $175,000                  
          represented FRC’s net book value.  The settlement agreement                 
          provided that the $175,000 was payable as of the date of                    
          settlement (the settlement date), but also that it was payable in           
          seven equal monthly payments beginning on June 1, 1997.                     
               Regarding Mr. Dunne’s FRC stock, the settlement agreement              
          provided:                                                                   
               TO BE DELIVERED IN ESCROW FULLY ENDORSED PENDING FINAL                 
               DISTRIBUTION OF ALL MONIES DUE UNDER HALON CONTRACT &                  
               TWO ESCROW ACCTS, OR PAYMENT OF NET B.V. OF FRCI,                      
               WHICHEVER IS LATER.  NO SHAREHOLDER OR DIRECTOR RIGHTS                 
               IN JDD AFTER DATE OF SETTLEMENT.  ESCROW ACCT PROCEEDS                 
               TO BE DISTRIBUTED NET OF ALL COSTS & EXPENSES 1/2 TO                   
               JDD & 1/2 TO RMM.                                                      
                  *       *       *       *       *       *      *                    








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