SETTLEMENT AGREEMENT
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THIS SETTLEMENT AGREEMENT entered into this 14th day of November, 1997, by
and between U.S. PAWN, INC., a Colorado corporation ("USP"), U.S. PAWN, NEVADA,
INC., a Colorado corporation and wholly-owned subsidiary of USP ("USPN"),
BOBBY'S PAWNSHOP, INC., d/b/a Bobby's Jewelry & Loan, a Nevada corporation and
wholly-owned subsidiary of USPN ("BOBBY'S"), PAWNBROKER, INC. d/b/a QUICK
BILL'S, Nevada corporation ("PAWNBROKER"), XXX X. YORK, an individual residing
in Xxxxx County, Nevada ("DWH"), with reference to the following:
RECITALS
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WHEREAS, on or about December 9, 1996, USP entered into a letter of intent
with RMY and DWH with regard to the purchase and acquisition of PAWNBROKER and
the extension of offers of employment to RMY, DWH and their respective spouses
upon completion of the acquisition; and
WHEREAS, on or about December 10, 1996, USP entered into a letter of intent
with RMY and Xx. Xxxxxx X. Xxxx, Xx. for the purchase and acquisition of BOBBY'S
and the extension of an offer of employment to RMY; and
WHEREAS, the respective parties installed USP'S custom computers and
software at BOBBY'S and PAWNBROKER'S respective pawn shop locations; and
WHEREAS, on April 11, 0000, XXXX, XXX and Mr. Lord executed a Stock
Purchase Agreement for the acquisition of BOBBY'S, and held the closing for such
transaction on that same date; in accordance with the Stock Purchase Agreement,
USPN and BOBBY'S entered into an Employment and Non-Compete Agreement with RMY
wherein RMY was employed as the Vice- President-Bobby's of USPN and BOBBY'S;
WHEREAS, at the same time as the closing of the BOBBY'S transaction, USPN
withheld the sum of Twenty Thousand Dollars ($20,000.00) ("Escrow Funds") from
RMY'S share of the sales proceeds as collateral for the computer hardware and
software installed at the PAWNBROKER shop location; and
WHEREAS, subsequent to the closing of the BOBBY'S transaction, and during
the course of negotiating the terms of the Agreement and Plan of Merger for the
acquisition of PAWNBROKER, a dispute arose between the parties regarding USPN'S
purchase of PAWNBROKER and USPN'S desire to terminate the services of RMY under
the Employment and Non-Compete Agreement referenced above pursuant to
allegations of "just cause" therein; and
WHEREAS, RMY has expressly denied the above allegations of "just cause" for
termination under the Employment and Non-Compete Agreement and RMY and DWH have
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further informed USP that they have incurred specific damages in reliance on the
letter of intent to acquire PAWNBROKER and material changes made to the
PAWNBROKER pawn shop operations in anticipation of the completion of such
acquisition; and
WHEREAS, the parties to this Settlement Agreement wish to resolve for all
times their differences concerning such matters and any claims or causes of
action regarding the same.
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and conditions set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties agree as follows:
1. SETTLEMENT FUNDS. USP shall pay to RMY and DWH the sum of Two Hundred
Twenty Thousand Dollars ($220,000.00) as follows: USP and USPN shall jointly
execute a promissary note in the principal amount of $220,000.00, payable to RMY
or Xxxxxxxx X. York, with interest of eight percent (8%) per annum; accrued
interest on the note principal shall be paid monthly on the fifteenth (15th) day
of each month, beginning on December 15, 1997; USP and/or USPN shall make
principal payments in the amount of Fifty Thousand Dollars ($50,000.00) on each
of November 15, 1997, February 15, 1998, May 15, 1998, August 15, 1998, and
payment of the remaining balance of the principal shall be due and payable on
November 1, 1998. The promissary note shall be substantially in the form of the
promissary note attached hereto as Exhibit "A" and incorporated herein by
reference. All payments of principal and interest herein shall be tendered by
wire transfer pursuant to the wire instructions that may be provided at a later
date. RMY and DWH shall allocate the settlement funds between themselves, in
their sole discretion according to the respective interests of each in the
BOBBY'S transaction (and the employment agreement therein) and the PAWNBROKER
transaction.
2. COMPUTER HARDWARE AND SOFTWARE. PAWNBROKER shall purchase the computer
hardware and software ("computer system") installed at the PAWNBROKER pawn shop
location for the purchase price of Twenty Thousand Dollars ($20,000.00). Said
purchase price shall be paid by USP retaining the Escrow Funds referenced in the
Recitals above, as full and final payment for such system. USP shall promptly
deliver to PAWNBROKER a xxxx of sale for the computer system, together with any
and all operating manuals, registration materials, or other documentation on the
computer system in USP'S, USPN'S, and/or BOBBY'S possession.
A. From the time that this Agreement is initially signed by any party
until USP has delivered the above-referenced xxxx of sale and required
documentation, USP shall pay any and all monthly service fees with Vertical
Computer Systems, Inc. (approximately $110 per month) incurred by
PAWNBROKER, RMY or DWH for the use or operation of the computer system.
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B. The parties acknowledge and state that the computer system as
tendered has been modified and configured to conform with USP and/or USPN'S
operational systems and procedures, and that the some cost will be
necessarily incurred to remove such modifications and configurations. USP
agrees to pay PAWNBROKER the total sum of One Thousand Five Hundred Dollars
($1,500.00) as full and complete consideration for any configurations. Such
consideration shall be tendered on or before November 17, 1997 by wire
transfer, simultaneously with, but in addition to, the funds to be wire
transferred in Section 1 above. PAWNBROKER, RMY and DWH acknowledge and
agree that any cost of re-modifying or re-configuring the computer system,
or any cost of training on such computer system, over and above the
consideration paid by USP herein shall be their sole responsibility.
3. EMPLOYMENT OF RMY. Upon execution of the Xxxxxxxxxx Xxxxxxxxx, XXX
shall tender, in written form, his resignation from employment with
USPN and BOBBY'S. Upon receipt of RMY'S resignation, USPN and/or
BOBBY'S shall promptly pay to RMY any and all compensation and
benefits accrued to RMY through the date of his resignation as
determined under the terms of the Employment and Non-Compete Agreement
executed on or about April 11, 1997. Upon payment of the accrued
compensation and benefits to RMY, the Employment and Non- Compete
Agreement shall be immediately cancelled and the parties to such
agreement shall be thereafter released from any obligations or
conditions contained therein.
4. INDEMNIFICATION OF PARTIES.
A. Except as provided in the subparagraph immediately below, USP, USPN
and BOBBY'S agree to indemnify RMY, and his heirs, assigns, agents, and
successors, from any and all liability, demands, claims, actions or causes
of action, assessments, losses, fines, penalties, costs, damages, and
expenses, including reasonable attorney's fees, costs and disbursements
(collectively "Damages") which arise out of or are connected with the
operations or transactions of USP, USPN, AND BOBBY'S that occurred on or
after April 11, 1997 ( the closing date of the BOBBY'S transactions),
including but not limited to the Lease and Lease Amendment existing between
BOBBY'S and the Welt Family Trust, and the Sublease Agreement existing
between BOBBY'S and Xx. Xxxxxxx Xxxxxxxxx d/b/a AAAACE Jewelry.
B. Notwithstanding the subparagraph immediately above, USP, USPN and
BOBBY'S shall not be required to indemnify, and shall not be responsible
to, RMY, or his heirs, assigns, agents, and successors, for any Damages
sustained or incurred by RMY as a result of (i) any alleged criminal
activity committed by him during his tenure as an employee of USPN and/or
BOBBY'S, and for which RMY is convicted by a court of law; (ii) any civil
liability due to RMY'S intentional malicious or fraudulent acts within the
scope of his employment with USPN and BOBBY'S; and (iii) any civil
liability due to the extent that such Damages were not caused by the acts,
errors, omissions, or involvement, direct or indirect, intentional or
otherwise, of any other employee, agent, principal, or representative of
USP, USPN, and/or BOBBY'S.
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5. MUTUAL RELEASES. Except as herein provided, each respective party, for
himself and his respective heirs, successors, assigns, legal representatives,
officers, directors, stockholders, employees, agents, and affiliates, does
hereby release and discharge the other parties, and their respective heirs,
successors, assigns, legal representatives, officers, directors, stockholders,
employees, agents, and affiliates, from any and all liability now existing or
which may hereafter accrue, contingent or otherwise, from any and all claims,
demands, rights, causes of action, or other liability, whether known or unknown,
suspected or unsuspected, which he may have against the other parties involving
or in any way related to any and every claim alleged in the above-described
disputes, including any claims that may exist as a result of the letters of
intent referenced in the Recitals above. It is understood by the parties that
the facts in respect of which this agreement is made may subsequently prove to
be other than or different from the facts now known by any party or believed by
any party to be true, as set out in this agreement. Each of the parties
expressly accepts and assumes the risk of the facts proving to be so different,
and each of the parties agrees that all the terms of this agreement shall be in
all respects effective and not subject to termination or rescission by any such
difference in facts. Notwithstanding the above release and discharge, in the
event of a breach of this Settlement Agreement, each party reserves its rights
to all claims and causes of action arising from the above-described disputes and
to present the facts and circumstances of such disputes as evidence of
reasonableness or bad faith in any collateral proceeding. To the extent
applicable to any individual party, the mutual releases under this section shall
include a release of any marital or community property right that the spouse of
any married party may have in the claims and disputes settled by the terms of
this Agreement.
6. NON-DISPARAGEMENT OF RESPECTIVE PARTIES. Each party shall refrain from
making any false, misleading, ambiguous, slanderous, obscene, profane, vulgar,
repulsive or offensive statement or announcement to any person regarding any
other party to this Agreement, and shall further refrain from making any comment
or statement that is intended to or shall defame or disparage any other party to
this Agreement, or such party's business, products, services, officers,
directors, employees, or shareholders.
7. ADDITIONAL DOCUMENTS. From time to time, as and when reasonably
requested by a party hereto, each of the parties shall execute and deliver or
cause to be executed and delivered such other instruments and documents as may
be required, necessary or desirable in order to carry out the terms and
conditions of this Settlement Agreement. It is the stated intention of the
parties to this Settlement Agreement to settle in good faith, and each party
hereto agrees to use its best efforts to take, or cause to be taken, all actions
that may reasonably be required in order to effectuate the completion of this
Agreement.
8. NO ADMISSION OF LIABILITY. Each party recognizes and understands that no
party admits liability of any sort or to any extent by virtue of any
consideration given to another party pursuant to this Settlement Agreement, but,
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rather, recognizes and agrees that this Settlement Agreement has been entered
into for the sole purpose of compromising and settling the disputed claims,
discharging and terminating all claims of the parties, and avoiding the costs
and commitments of a formal court or arbitration proceeding. Accordingly, it is
expressly understood and agreed, as a condition hereof, that this agreement
shall not constitute or be construed to be an admission on the part of any party
hereto or as evidencing or indicating in any degree an admission of the truth or
correctness of any claims asserted.
9. NOTICES. Any notices permitted or required under this Agreement shall be
deemed given upon the date of personal delivery or 48 hours after deposit in the
United States mail, postage fully prepaid, return receipt requested, addressed
as follows:
TO USP, USPN, and/or
BOBBY'S: U.S. Pawn Nevada, Inc.
U.S. Pawn, Inc. c/o U.S. Pawn, Inc.
0000 Xxxxxx Xxxx. 0000 Xxxxxx xxxx.
Xxxxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxx Xxxxx Attn: Xxxxxxx X. Xxx Xxxxx
Bobby's Pawnshop, Inc
c/o U.S. Pawn, Inc.
0000 Xxxxxx Xxxx.
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxx Xxxxx
With Copy to: Xxxxx X. Xxxxxx, Esq.
Xxxxxxxxxx Hyatt Xxxxxx & Xxxxxxxxxx, P.C.
000 00XX Xxxxxx, Xxxxxx-Xxxxxx Xxxxx
Xxxxxx, XX 00000-0000
and
Xxxxx Xxxxxx, Esq.
0000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
TO RMY, DWH and/or
PAWNBROKER:
Xxx X. York Xxxxxx Xxxxxxx Xxxxxx Pawnbroker, Inc.
000 X. Xxxxxxx Xxx. 000 X. Xxxxxxx Xxx. 000 X. Xxxxxxx Xxx.
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attn: Xxx York or
Xxxxxx Xxxxxxx Xxxxxx
With copy to: S. Xxxxx Xxxxx II, Esq.
Xxxxx X. Xxxx Professional Law Corporation
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
or at any other address as any party may, from time to time, designate by notice
given in compliance with this section.
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10. WAIVER. Failure of either party at any time to require performance of
any provision of this Agreement shall not limit the party's right to enforce the
provision, nor shall any waiver of any breach of any provision be a waiver of
any succeeding breach of any provision or a waiver of the provision itself for
any other provision.
11. ARBITRATION. If at any time during the term of this Settlement
Agreement any dispute, difference, or disagreement shall arise upon or in
respect of the Settlement Agreement, and the meaning and construction hereof,
every such dispute, difference, and disagreement shall be referred to a single
arbiter agreed upon by the parties, or if no single arbiter can be agreed upon,
an arbiter or arbiters shall be selected in accordance with the rules of the
American Arbitration Association and such dispute, difference, or disagreement
shall be settled by arbitration in accordance with the then prevailing
commercial rules of the American Arbitration Association, and judgement upon the
award rendered by the arbiter may be entered in any court having jurisdiction
thereof.
12. ATTORNEY'S FEES. In the event an arbitration, suit or action is brought
by any party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorney's fees to be fixed by the arbitrator, trial court, and/or
appellate court.
13. CONSTRUCTION. This Settlement Agreement or any section thereof shall
not be construed against any party due to the fact that said Settlement
Agreement or any section thereof was drafted by said party. The recitals at the
beginning of this agreement are intended to be covenants of the parties and are
a material part of this agreement and binding on the parties. All article,
section and paragraph titles or captions contained in this Settlement Agreement
are for convenience only and shall not be deemed part of the context nor affect
the interpretation of this Settlement Agreement. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular or
plural as the identity of the party or parties may require.
14. ENTIRE AGREEMENT. This Settlement Agreement contains the entire
understanding between and among the parties and supercedes and replaces any
prior understandings and written or oral agreements among them respecting the
subject matter of this Settlement Agreement.
15. BINDING AGREEMENT. The terms, conditions, covenants and agreements
contained herein shall inure tot he benefit of and be binding upon the parties
hereto and their repective executors, administrators, assigns and legal
representatives.
16. SEVERABILITY. If any provision of this Settlement Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
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17. GOVERNING LAW AND VENUE. The parties agree that jurisdiction and venue
of any dispute concerning this Settlement Agreement shall exist in Xxxxx County,
Nevada, and that this Settlement Agreement shall be construed under the laws of
the State of Nevada.
18. REPRESENTATION. Each party covenants and warrants to each other party
that each has had the benefit of legal representation and fully understands the
nature of this Settlement Agreement; and further waives any right, statutory or
otherwise, to dispute the scope of this Settlement Agreement on a basis that it
may extend to facts or claims of which such party is not actually aware.
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19. COUNTERPARTS. This Settlement Agreement may be executed in
counterparts, each of which will be deemed an original document, but all of
which will constitute a single document. This document shall not be binding on
or constitute evidence of a settlement agreement between the parties until such
time as an identical counterpart of this document has been executed by each
party and a copy thereof delivered to each party of this Settlement Agreement.
IN WITNESS WHEREOF, the parties hereby signify their agreement by their
signatures below.
U.S. PAWN, INC. U.S. PAWN NEVADA, INC.
By:/S/ Xxxxxxx X. Xxx Xxxxx By:/S/ Xxxxxxx X. Xxx Xxxxx
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Xxxxxxx X. Xxx Xxxxx Xxxxxxx X. Xxx Xxxxx
Chief Executive Officer Chief Executive Officer
BOBBY'S PAWNSHOP, INC.
d/b/a Bobby's Jewelry & Loan
By:/S/ Xxxxxxx X. Xxx Xxxxx
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Xxxxxxx X. Xxx Xxxxx
Chief Executive Officer
XXX X. YORK XXXXXX XXXXXXX XXXXXX PAWNBROKER, INC. d/b/a
QUICK BILL'S
/S/ Xxx X. York /S/ Xxxxxx Xxxxxxx Xxxxxx By: /S/ Xxxxxx Xxxxxxx Xxxxxx
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Xxxxxx Xxxxxxx Xxxxxx
President
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