GLOBAL SETTLEMENT AGREEMENT
This Global Settlement Agreement (the "Agreement") is
made and entered into this ____ day of May, 1999, by and
between Xxxxxxx Xxxxxx, Xxxxxx Xxxxxx, X.X. Xxxxxxx on
behalf of the Xxxxxx Trust, Midas Corporation, a Nevada
corporation ("Midas") and Black Diamond Mining Corporation,
a Nevada corporation ("Black Diamond") [hereinafter
collectively the "Xxxxxx Group"], Diagnostic International
Inc., a Nevada corporation ("Diagnostic"), Xxxx Xxxxxx, the
duly appointed Chapter 7 Trustee (the "Trustee") in Xxxxxxx
Xxxxxx, Bankruptcy Case No. 94-02801-PHX-GBN, Xxx Xxxxxxxx
("Xxxxxxxx"), Xxxxxxxx Electric Company ("Xxxxxxxx
Electric"), Marathon Investment Corporation, a Texas
corporation ("Marathon"), Quantum Incorporated, an Arizona
corporation ("Quantum"), Xxxxxxx Xxxxx ("Xxxxx"), Great
Southwest Chili Company, Inc., an Arizona corporation
("GSWCCI"), Great Southwest Chili Company, Inc., a Nevada
corporation ("GSWCCII") and Quadrillion Sciences Inc.
("Quadrillion"). The Xxxxxx Group, Diagnostic, the Trustee,
Xxxxxxxx, Xxxxxxxx Electric, Marathon, Quantum, and Xxxxx
will sometimes be referred to as the "Parties".
I. RECITALS
1.1 Diagnostic is a publicly traded corporation and
the Debtor and Debtor-in-possession in Bankruptcy Case No. B-
97-12293-PHX-CGC (the "Bankruptcy Case").
1.2 There is currently pending in the Bankruptcy Case
an Adversary Proceeding identified as ADV. Case No. 98-77,
initiated through the filing of a Complaint by the Xxxxxx
Group (the "Xxxxxx Adversary").
1.3 On or about March 28, 1994, Xxxxxxx X. Xxxxxx
filed for Chapter 7 liquidation in Bankruptcy Case No. B-94-
02861-PHX-GBN (the "Xxxxxxx Xxxxxx Bankruptcy").
1.4 On or about October 1, 1998, Xxxxxx Xxxxxx filed a
Chapter 13 Bankruptcy Case, Case No. B-98-12438-PHX-CGC (the
"Xxxxxx Xxxxxx Bankruptcy").
1.5 There is currently pending in the Xxxxxxx Xxxxxx
Bankruptcy, an Adversary Proceeding, Adv. Case No. 98-475,
initiated through the filing of a Complaint by the Trustee
against the Xxxxxx Group (the "Trustee Adversary").
1.6 On September 9, 1997, Diagnostic filed a Chapter
11 Plan of Reorganization (the "Plan"), which is currently
pending before the Bankruptcy Court and the Xxxxxx Group
objected to confirmation of the Plan (the "Xxxxxx
Objection"). The Xxxxxx Objection is pending before the
Bankruptcy Court.
1.7 In the Xxxxxx Objection, the Xxxxxx Group has
alleged that the security interests held by Marathon and
Quantum are subject to advoidance by Diagnostic on behalf of
the Bankruptcy Estate and that the Bankruptcy Court should
permit the Xxxxxx Group to bring such a cause of action on
behalf of the Estate.
1.8 Marathon, Quantum and Diagnostic dispute that the
security interests of Marathon and Quantum are avoidable on
behalf of the Bankruptcy Estate and allege that the Xxxxxx
Group does not have standing to object to the Bankruptcy
Estate claims.
1.9 On April 23, 1999, the Bankruptcy Court executed
an order, holding that the confirmation process should not
move forward until all pending litigation between the
parties including litigation as to whether any member of the
Xxxxxx Group has standing to assert any claims or equity
interests or to object to confirmation is completed and
resolved by the Bankruptcy Court.
1.10 The parties recognize that proceeding with such
litigation will result in the incurrence by all parties of
substantial attorneys' fees, delay confirmation in the
Diagnostic Chapter 11 Bankruptcy Case for a long period of
time and be contrary to the interests of each of the parties
hereto and the shareholders and creditors in the Diagnostic
Chapter 11 Bankruptcy Case.
II. Representations and Warranties.
The Parties, and where a single party or group of
parties are named below as making a representation, in each
instance make the following representations and warranties
to all of the parties hereto:
1.1 The parties believe that this Agreement and
confirmation of the Plan of Reorganization, as modified by
Diagnostic to reflect and incorporate the terms set forth
herein is in the best interests of each of the parties and
all of the creditors and shareholders of Diagnostic. The
Parties also believe that this Agreement will achieve a
global resolution of their numerous mutual disputes, obtain
a result that will allow Diagnostic to expeditiously confirm
its Plan and permit all parties in the Bankruptcy Case to
maximize their return and minimize their legal and other
costs and expenses.
1.2 Xxxxxxx X. Xxxxxx represents and warrants that he
is authorized to sign this Agreement on his own behalf as an
individual and on behalf of his marital community.
1.3 Xxxxxxx X. Xxxxxx represents and warrants that he
is the President of Midas and is authorized to execute this
Agreement of behalf of Midas and to bind Midas in every
respect as to this Agreement.
1.4 Midas represents and warrants that it is duly
incorporated and in good standing in Nevada, its State of
incorporation, or any other State in which Midas has been or
is now incorporated, or any other State where applicable law
requires it to be qualified as a foreign corporation, that
all corporate resolutions and other actions required by
Midas have been taken to authorize Midas, by and through its
principals to authorize execution and enforcement of the
terms and provisions of this Agreement.
1.5 Xxxxxxx X. Xxxxxx represents and warrants that he
is authorized to execute this Agreement on behalf of Black
Diamond and to bind Black Diamond in every respect as to
this Agreement.
1.6 Black Diamond represents and warrants that it is
duly incorporated and in good standing in Nevada, its State
of incorporation or any other State in which Black Diamond
has been or is now incorporated, or any other State where
applicable law requires it to be qualified as a foreign
corporation, that all corporate resolutions and other
actions required by Black Diamond have been taken to
authorize Black Diamond, by and through its principals, to
authorize execution and enforcement of the terms and
provisions of this Agreement by Xxxxxxx X. Xxxxxx.
1.7 Xxxxxx Xxxxxx, formerly and also known as Xxxxxx
Xxxxxxx and X.X. Xxxxxxx, represents and warrants that she
is currently the duly and legally appointed successor
Trustee of the Xxxxxx Trust and has full authority to
execute this Agreement on behalf of the Xxxxxx Trust and its
beneficiaries and to bind the Xxxxxx Trust and its
beneficiaries and their successors and assigns to all of the
terms of this Agreement.
1.8 Xxxxxx Xxxxxx, formerly and also known as Xxxxxx
Xxxxxxx and X.X. Xxxxxxx represents and warrants that she is
authorized to sign this Agreement on her own behalf as an
individual and on behalf of her martial community.
1.9 Xxxxxxx X. Xxxxxx represents and warrants that he
is not the President of Quadrillion Sciences, Inc.
("Quadrillion"); however, he is authorized to execute this
Agreement on behalf of Quadrillion and to bind Quadrillion
in every respect as to this Agreement.
1.10 Quadrillion represents and warrants that it is
duly incorporated and, although it may not be in good
standing in the State of Nevada, that all corporate
resolutions and other actions required to authorize Xxxx
Xxxxxx to execute this Agreement and bind Quadrillion to the
terms and provisions of this Agreement have been taken by
Quadrillion and its principals.
1.11 The Xxxxxx Group collectively and the parties
individually warrant and represent that no assignment,
transfer or hypothecation of any claims or equity security
interests to be transferred hereunder, other than by
operation of law to the Trustee, has been made by any or all
of them to a party not included in this Agreement.
1.12 The Xxxxxx Group, individually and collectively,
represent and warrant to be the owner(s) of any and all
claims and interests that they have asserted during the
Bankruptcy Case and the State Court litigation initiated by
the Xxxxxx Group against Diagnostic, Marathon, Xxxxxxxx,
Xxxxxxxx Electric, GSWCCI, GSWCCII and any other parties to
this Agreement.
1.13 The Xxxxxx Group has obtained an agreement from
Xxxxx to withdraw his pending objections to the Diagnostic
Chapter 11 Plan of Reorganization, and to withdraw his Proof
of Claim and seek no payment either in cash or stock out of
the Diagnostic Bankruptcy Estate or from Diagnostic
International on account of said claim or any other claim he
may now hold or obtain from any member of the Xxxxxx Group;
1.14 The Parties hereto desire and intend to settle and
compromise all claims as and against each other about which
they may now have knowledge or gain knowledge in the future
on behalf of themselves, their successors and assigns, and
to waive and release forever any such claims in exchange for
the consideration to each of them as set forth below.
1.15 The parties hereto have disclosed to each other
through the mechanism of this Agreement all claims, rights,
title, causes of action or equity security interests that
each of them may hold against or in all of the other parties
to this Agreement.
III. Agreements.
In consideration of execution of this Agreement and the
performance of the agreements and covenants contained
herein, the Parties agree as follows:
A. Diagnostic:
(1) Diagnostic and any agent, affiliate and subsidiary
hereby release, waive, give up and forever discharge each
member of the Xxxxxx Group and any of their respective
successors, assigns, agents, principals, related persons,
directors, officers, employees, attorneys, accountants,
subsidiaries and affiliates, from any and all claims,
liabilities, obligations, controversies, defenses,
recoupments, offsets, damages, causes of action, suits,
demands, debts, costs and expenses of any nature whatsoever,
known or unknown or discovered in the future, arising prior
to the date of the execution of this Agreement;
(2) Agrees to modify its pending Plan to provide
as follows:
(a) Creation of a new subsidiary corporation
the stock in which will be owned in majority part by the
members of the Xxxxxx Group and a minority of the stock of
which will be owned by the current shareholders of
Diagnostic, with the exception of Xxxxxxxx, Marathon,
Quantum, Xxxxxxxx Electric, and Monarch Investments, Inc.,
and all stock in said subsidiary to be distributed to the
members of the Xxxxxx Group and the current shareholders of
Diagnostic shall be distributed to said persons upon
confirmation, pursuant to 11 U.S.C. 1145;
(b) Payment to the Trustee in the Xxxxxx
Bankruptcy, in the amount of $23,000.00 in Class 4 of the
Plan as payment in full for all of the claims and stock in
Diagnostic to be obtained by the Xxxxxx Bankruptcy Estate
through operation of this Agreement with said payment to be
made by Diagnostic on the 11th day following the execution
by the Bankruptcy Court of an Order confirming the Plan as
modified to incorporate the terms of this Agreement;
(c) Creation of a new Class 7 for Xxxxxxxx
as the holder of certain equity security interests to be
obtained by him from the Xxxxxx Group through the operation
of this Agreement and further provide for the issuance of
Xxxxxxxx of 100,000 Diagnostic Units, upon confirmation of
the Plan as part of Xxxxxxxx'x treatment under the Plan;
(d) Modify the treatment of Marathon in
Class 1 of the Plan to provide as follows: Marathon shall
receive 440,000 Diagnostic Units, 580,000 GSWCF Units,
300,000 XXYY Units and 300,000 AABB Units in exchange for
its secured claim in the Diagnostic Bankruptcy, as defined
in the Plan;
(e) Modify the treatment of Quantum in Class
2 of Diagnostic's Plan of Reorganization to provide that
Quantum shall receive 70,000 Diagnostic Units, 200,000 GSWCF
Units, 480,000 XXYY Units and 480,000 ASBB Units in exchange
for its secured claim in the Diagnostic Bankruptcy Case;
(f) Creation of a new subsidiary corporation
to be identified in the Modified Plan of Reorganization as
DII Sub and further provide for the issuance of 200,000
shares of stock in DII Sub to the existing shareholders of
Diagnostic with the exception of any member of the Xxxxxx
Group and the issuance of 800,000 shares of stock in DII Sub
to Diagnostic, as defined in the Plan;
(g) Modify the treatment of the Equity
Security Holders in Class 6 of the Plan to provide that the
current Equity Security Holders of Diagnostic, with the
exception of any member of the Xxxxxx Group, their
successors and assigns, shall receive 250,000 Diagnostic
Units, 100,000 GSWCF Units, 130,000 XXYY Units and 120,000
AABB Units, 2,450,000 Units of Xxxxxx Corporation and
200,000 Units of DII Sub, as defined in the Plan;
(h) Provide for an increase in the number of
shares of preferred stock to be issued to Marathon to an
aggregate of 40,000 shares of such stock;
(3) Release and waive all claims for avoidance
actions that it and the Bankruptcy Estate may hold against
Marathon and Quantum in exchange for their performance on
their undertakings set forth below in Sections (E) and (F).
(4) Release and waive all claims known or unknown
that it may possess against Xxxxx;
(B) The Xxxxxx Group:
(1) Each member of the Xxxxxx Group; that is,
Xxxx Xxxxxx, Xxxxxx Xxxxxx, X.X. Xxxxxxx, as the Trustee for
the Xxxxxx Trust and on behalf of the Xxxxxx Trust, Midas,
Black Diamond, Quadrillion, and any agent, affiliate, and
subsidiary of, or person or entity related to or controlled
by, the Xxxxxx Group, hereby release, waive and give up and
forever discharge Diagnostic, Xxxxxxxx Electric Company,
Inc., Xxx Xxxxxxxx, all members of Xxx Xxxxxxxx'x family,
the Trustee of the Xxxxxxx Xxxxxx Bankruptcy Case, Marathon,
Quantum, and any of their respective successors, assigns,
agents, principals, related persons, directors, officers,
employees, attorneys, accountants, subsidiaries and
affiliates, from any and all claims, liabilities,
obligations, controversies, defenses, recoupments, offsets,
damages, causes of action, suits, demands, debts, costs and
expenses of any nature whatsoever, known or unknown or
discovered in the future, arising prior to the date of the
execution of this Agreement. Each member of the Xxxxxx
Group, which includes any agent, affiliate, and subsidiary
of, or person or entity related to or controlled by, the
Xxxxxx Group, shall covenant not to promote, instigate, or
otherwise cause a third party to bring a cause of action
against the released parties herein, or support such a cause
of action. The Xxxxxx Group shall be liable for any damages
incurred by the released parties as a result of any cause of
action promoted, instigated, or otherwise caused or
supported by the Xxxxxx Group including the released parties
attorney's fees and costs incurred in defending said action.
(2) Agreement to purchase, acquire, pay, settle
or resolve the claims of Xxxxxxx Xxxxx asserted as against
Diagnostic in the Diagnostic Chapter 11 Bankruptcy Case and
to indemnify and hold harmless Diagnostic against any such
claims asserted by Xxxxxxx Xxxxx following confirmation of
the Diagnostic Chapter 11 Plan of Reorganization, to require
that Xxxxxxx Xxxxx withdraw his pending Objection to
confirmation of the Diagnostic Chapter 11 Plan of
Reorganization and to take all steps that Xxxxxxx Xxxxx not
assert any further or additional objections to confirmation
of the Diagnostic Chapter 11 Plan of Reorganization and to
indemnify and hold Diagnostic harmless against any such
claims;
(3) Xxxxxxx Xxxxxx agrees to pay the sum of
$12,000.00 in cash to Xxxxxxx Xxxxxx Trustee on the 11th day
following the execution by the Bankruptcy Judge of an Order
confirming Diagnostic's Plan as modified to incorporate the
terms of this Agreement.
(4) Xxxxxx Xxxxxx, aka Xxxxxx Xxxxxxx, agrees to
transfer all equity interests of Diagnostic registered in
her name as of the date of the execution of this Agreement
and all claims she has alleged to hold against Diagnostic to
Xxx Xxxxxxxx on or before the 11th day following the
execution by the Bankruptcy Court in the Diagnostic Case of
an Order confirming the Plan as modified to incorporate the
terms of this Agreement;
(5) Midas and every other member of the Xxxxxx
group agree to transfer all equity interests they own in
GSWCCI and GSWCCII, or which were issued by GSWCCI and
GSWCCII, or were to be issued into the name of Midas and/or
any other member of the Xxxxxx Group to Xxx Xxxxxxxx on or
before the 11th day following the execution by the
Bankruptcy Court in the Diagnostic Case of an Order
confirming the Plan as modified to incorporate the terms of
this Agreement;
(6) Black Diamond, Midas, X.X. Xxxxxxx on behalf
of the Xxxxxx Trust and Xxxxxxx Xxxxxx agree to transfer and
take all steps necessary to accomplish such transfer of all
equity security interests in Diagnostic owned by them or
registered in their names or which they have alleged in
Bankruptcy Case to be owned by them to Xxxx Xxxxxx as the
Xxxxxxx Xxxxxx Chapter 7 Trustee on or before the 11th day
following the execution by the Bankruptcy Court in the
Diagnostic Case of an Order confirming the Plan as modified
to incorporate the terms of this Agreement.
(7) The Xxxxxx Group will take all steps
necessary to obtain the dismissal with prejudice of:
(a) The Complaint in Bankruptcy Adversary
No. 98-77;
(b) All Complaints and counterclaims filed
by them in State Court against Diagnostic with prejudice.
(8) The Xxxxxx Group will withdraw their Motion
to Appoint a Trustee on or before the 11th day following the
entry by the Bankruptcy Court of an Order confirming the
Plan as modified by the incorporation of the terms of this
Agreement.
(9) Each of the members of the Xxxxxx Group
agrees that he, she and/or it will not use the names Aerobic
Life or Aerobic Life Industries for any purpose at any time
and will not permit any of their successors or assigns from
doing so pursuant to the terms of the Order issued by Judge
Xxxxxx Xxxxxxxx in the State Court litigation filed by the
Xxxxxx Group.
(10) The Xxxxxx Group agrees to turnover to
Xxxxxxxx all corporate books and records of GSWCCI and
GSWCCII in their possession or control on the 11th day
following the execution by the Bankruptcy Court of an Order
confirming the Plan, as modified to incorporate the terms of
this Agreement.
(C) Xxxx Xxxxxx as the Xxxxxxx Xxxxxx Chapter 7
Trustee.
(1) Agrees to fully waive and release all claims
and causes of action about which he now has knowledge or may
acquire knowledge in the future against Xxxxxxx Xxxxxx,
Xxxxxx Xxxxxx, the Xxxxxx Trust, Midas and Black Diamond and
to all assets of the Xxxxxx Group with the exception of the
stock in Diagnostic to be transferred to him by certain
members of the Xxxxxx Group pursuant to the terms of this
Agreement.
(2) Agrees to transfer all claims of Midas and
Black Diamond against Diagnostic that were and are property
of the Xxxxxxx Xxxxxx Chapter 7 Bankruptcy Estate to
Xxxxxxxx and further agrees to transfer all equity security
interests in Diagnostic owned by or registered in the name
of Black Diamond and Midas that are to be transferred to and
acquired by him pursuant to the terms of this Agreement, to
Xxx Xxxxxxxx;
(3) Agrees to transfer all claims of Xxxxxxx
Xxxxxx and the Xxxxxx Trust against Diagnostic that were and
are property of the Xxxxxxx Xxxxxx Chapter 7 Bankruptcy
Estate and further agrees to transfer all equity security
interests in Diagnostic owned by or registered in the name
of X.X. Xxxxxxx, as the Trustee for the Xxxxxx Trust, and
Xxxxxxx Xxxxxx, that are to be transferred to and acquired
by him pursuant to the terms of this Agreement, to
Diagnostic;
(4) Upon receipt of the $12,000.00 payment
required by Section B(3) above agrees to dismiss with
prejudice Adversary NO. 98-475;
(D) Xxxx Xxxxxxxx and Xxxxxxxx Electric Company.
(1) Xxxxxxxx and Xxxxxxxx Electric agree to
satisfy the judgments they now hold against Xxxx Xxxxxx and
Xxxxxx Xxxxxx and their community property in exchange for
Xxxxxx Group's performance upon the terms of this Agreement,
execute a Satisfaction of Judgment in favor of Xxxx and
Xxxxxx Xxxxxx on the 11th day following the execution by the
Bankruptcy Court of an Order confirming the Plan as modified
to incorporate the terms of this Agreement and hereby
specifically further agree to waive and release all claims
and causes of action against Xxxx Xxxxxx, Xxxxxx Xxxxxx,
X.X. Xxxxxxx as the Trustee of the Xxxxxx Family Trust,
Black Diamond and Midas, however no satisfaction of judgment
or release shall be granted unless the modified Diagnostic
Plan of Reorganization contemplated herein is confirmed;
(2) Xxxxxxxx and Xxxxxxxx Electric hereby
release, waive and give up, and forever discharge
Diagnostic, Xxxx Xxxxxx as the Chapter 7 Trustee of the
Xxxxxxx X. Xxxxxx Bankruptcy Case, Marathon, Quantum, the
Xxxxxx Group and any of their respective successors,
assigns, agents, principals, related persons, directors,
officers, employees, attorneys, accountants, subsidiaries
and affiliates, from any and all claims, liabilities,
obligations, controversies, defenses, recoupments, offsets,
damages, causes of action, suits, demands, debts, costs and
expenses of any nature whatsoever, known or unknown or
discovered in the future, arising prior to the date of the
execution of this Agreement. Xxxxxxxx and Xxxxxxxx Electric
and any agent, affiliate and subsidiary of Xxxxxxxx and
Xxxxxxxx Electric shall covenant not to promote, instigate,
or otherwise cause a third party to bring a cause of action
against the released parties herein, or support such a cause
of action. Xxxxxxxx and Xxxxxxxx Electric and any agent,
affiliate and subsidiary of Xxxxxxxx and Xxxxxxxx Electric
shall be liable for any damages incurred by the released
parties as a result of any cause of action promoted,
instigated, or otherwise caused or supported by Xxxxxxxx and
Xxxxxxxx Electric and any agent, affiliate and subsidiary of
Xxxxxxxx and Xxxxxxxx Electric, including the released
parties attorney's fees and costs incurred in defending said
action.
(3) Xxxxxxxx agrees that on the eleventh (11th) day
following the date on which the Bankruptcy Court in the
Diagnostic Chapter 11 Bankruptcy Case executes the Order
Confirming Diagnostic's Modified Chapter 11 Plan or
Reorganization to transfer to and on account of the Xxxxxxx
Xxxxxx Chapter 7 Trustee, $10,000.00 cash and on the
thirtieth (30th) day following that date to pay to the
Xxxxxxx Xxxxxx Chapter 7 Trustee, an additional $1,000.00
cash, and finally, to pay on the sixtieth (60th) day
following that date of the original payment an additional
amount of $1,000.00 cash;
(4) Xxxxxxxx further agrees to transfer to
Diagnostic in exchange for 100,000 Diagnostic Units all of
the equity security interests in Diagnostic and all of the
claims against Diagnostic that he acquires pursuant to the
terms of this Agreement from Xxxxxx Xxxxxx, Midas and Black
Diamond and to further transfer to Diagnostic the stock in
Great Southwest Chili Company, Inc., he will acquire under
the terms of this agreement from Midas. This transfer shall
not include any equity security interest in Diagnostic that
Xxxxxxxx had acquired prior to, and independent of, this
Agreement;
(E) Marathon.
In exchange for and conditioned upon Diagnostic taking
all of the actions set forth above in Section III(A), and
conditioned upon each and every representation and warranty
set forth by the Parties in the Xxxxxx Group herein,
Marathon will vote in favor of a modified Plan that provides
for the following distributions of securities in full
satisfaction of Marathon's secured claim: 440,000
Diagnostic Units, 580,000 GSWCF Units, 300,000 XXYY Units
and 300,000 AABB Units and to vote in favor of the
Diagnostic Chapter 11 Plan of Reorganization;
(F) Quantum.
Agrees to accept, in exchange for Diagnostic taking all
of the actions set forth above in Section III(A), which will
permit Diagnostic to expeditiously confirm its pending
Chapter 11 Plan of Reorganization and bring substantial
value to Quantum, and Diagnostic agreeing to settle and
compromise Diagnostic's potential avoidance action against
Quantum with respect to Quantum's security interest, the
following distributions of securities through the modified
Diagnostic Plan of Reorganization in full satisfaction of
Quantum's secured claim: 70,000 Diagnostic Units, 200,000
GSWCF Units, 480,000 XXYY Units and 480,000 AABB Units and
to vote in favor of the Diagnostic Chapter 11 Plan of
Reorganization;
(G) Xxxxxxx Xxxxx.
Agrees to withdraw his Proof of Claim filed in the
Diagnostic Chapter 11 Bankruptcy case and his objections to
the Plan as modified pursuant to the terms of this Agreement
and to further release and waive all claims known or unknown
that he may now possess against Diagnostic;
(H) All Parties.
(1) That in addition to any agreements set forth
above and except as specifically provided for above, each of
the parties hereby expressly waive and release all claims
that which they may now have knowledge or acquire knowledge
in the future arising prior to the date of the execution of
this Agreement as against each of the other parties hereto
in exchange for the mutual covenants and undertakings set
forth herein and the performance by each of the parties of
their respective undertakings set forth herein;
(2) Except where Xxxxx 00, Xxxxxx Xxxxxx Code,
the Federal Rules of Bankruptcy Procedure and the Bankruptcy
Code and Bankruptcy Rules, as interpreted by the Ninth
Circuit Court of Appeals, may otherwise require, this
Agreement and each party's performance thereof shall be
governed by the laws of the State of Arizona;
(3) The Bankruptcy Court for the Federal District
of Arizona shall have jurisdiction and venue to enforce the
terms of this Agreement;
(4) The Parties warrant and represent that they
are represented by and have consulted with his, her or its
respective legal counsel concerning this Agreement, that
they have read this Agreement, including the exhibits
hereto, in full, and that counsel has fully advised them as
to the contents and legal binding nature of this Agreement.
(5) Each of the parties hereto acknowledges that
it has and will receive valuable consideration in exchange
for its respective undertakings and agreements set forth
above;
(6) The parties hereto explicitly agree to
cooperate with each of the other parties hereto to take the
necessary steps and execute all documentation and agreements
necessary in Diagnostic's sole judgment to be necessary to
effectuate the terms of this Agreement including obtaining
confirmation of a modified Plan or Reorganization to be
filed with the Bankruptcy Court in Bankruptcy Court;
(7) Each of the parties hereto agrees that
although the terms of such a Modified Plan of Reorganization
would modify their respective treatment and distributions to
them as provided in Diagnostic's original Chapter 11 Plan of
Reorganization they specifically agree and consent to said
modified treatment and acknowledge and agree that said
modified treatment places them in a better position; that
is, the resulting distribution to them of property having a
value of greater than they would have received under the
current pending Plan of Reorganization, and further agree to
support the Modified Plan of Reorganization and take all
necessary steps to assist Diagnostic in obtaining
confirmation of said Modified Plan of Reorganization
including, if necessary, voting in favor of confirmation of
said Modified Plan of Reorganization and not filing any
Objections or any other form of opposition to confirmation
of said modified Plan of Reorganization;
(8) This Agreement together with all exhibits and
documents necessary to effectuate the terms of this
Agreement comprises the entire agreement of the parties
hereto.
(9) All parties agree to cooperate in obtaining
approval of this Agreement by the Bankruptcy Court and
enforcement is specifically conditioned upon approval by the
Bankruptcy Court.
(10) All parties anticipate that Xxxxxx Xxxxxx
will dismiss her Chapter 13 Bankruptcy case and that in the
event that this Agreement is approved by the Bankruptcy
Court in the Diagnostic case and the Bankruptcy Court in the
Xxxx Xxxxxx Bankruptcy Case, it is the intention of Xxxxxx
Xxxxxx to seek dismissal in her Chapter 13 case and the
parties hereby agree not to interfere in the dismissal of
that Chapter 13 case.
(11) All parties agree that should he, she or it
fail to perform upon any of his, her or its undertakings as
required by the terms of this Agreement, that party who has
failed to so perform shall indemnify all other parties to
this Agreement and pay all legal fees and costs incurred by
all other parties to enforce this Agreement or as a
consequence of said failure to perform;
(12) This Agreement shall not be effective until the
following conditions have been met:
(a) The Bankruptcy Court has approved the
Agreement;
(b) All Parties have executed the Agreement;
(c) The confirmation of the Plan with the
modifications set forth in this Agreement without any
further changes or modifications to said Plan; and
(d) The Order confirming Diagnostic's Plan being
rendered a final, unappealable Order without any appeal
pending.
(13) This Agreement may be signed in counterparts.
DATED this _____ day of May, 1999.
DIAGNOSTIC INTERNATIONAL
By:____________________________
Xxxxx Xxxxxx, President
_______________________________
Xxxxxxxxxxx X. Xxxx, Attorney
For Diagnostic International
_______________________________
Xxxxx X. Xxx, Esq., Counsel
for
Xxxx Xxxxxx, Chapter 7 Trustee
in the
Xxxxxxx Xxxxxx Bankruptcy Case
______________________________
_
Xxxx Xxxxxx, Chapter 7 Trustee
______________________________
_
Xxxxxxx X. Xxxxxx
______________________________
_
Xxxxxx Xxxxxx
______________________________
_
X.X. Xxxxxxx, Trustee of the
Xxxxxx
Trust
MIDAS CORPORATION
By:___________________________
_
___________________,
President
BLACK DIAMOND MINING
CORPORATION
______________________________
_
_____________________,
President
______________________________
Xxxxx X. XxXxxxx, Esq.,
Counsel for
Xxxxxxx Xxxxxx, Xxxxxx Xxxxxx
and
Midas Corporation
______________________________
Xxxx X. X'Xxxxxx, Esq.,
Counsel
For Quantum Incorporated
______________________________
Xxx Hoftbauer,
Attorney for Xxxxxx Xxxxxx,
Chapter 13 Trustee
______________________________
Xxxxxxx Xxxxx
______________________________
Xxx Xxxxxxxx
______________________________
Xxxx X. Xxxxxx, Esq.
Counsel for Xxx Xxxxxxxx
MARATHON INVESTMENTS
CORPORATION, a Texas
corporation
By:___________________________
Xxx Xxxxx
Approved as to Form and
Content
______________________________
Xxxxxxxx X. Xxxxxx
Counsel for Marathon
