SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the "Agreement") is made and entered into as
of this 9th day of July, 1999, by and between INDUSTRIAL STATE BANK, a Kansas
state bank (the "Bank"), and XXXXXX X. XXXXXXX and XXXXXXX X. XXXXXXX, two (2)
individuals (the "Janovecs"), and AMERIRESOURCE TECHNOLOGIES, INC., a Delaware
corporation ("ARET" and ARET and the Janovecs hereinafter collectively referred
to as the "Settling Defendants");
WITNESSETH:
WHEREAS, on or about November 24, 1998, Bank commenced an action
against ARET in Case No.98-C-14923, captioned Industrial State Bank v.
AmeriResource Technologies, Inc., in the District Court of Xxxxxxx County,
Kansas, Civil Court Department (the "ARET Action"); and
WHEREAS, on or about November 24, 1998, Bank commenced an action
against the Janovecs in Case No.98-C-14924, captioned Industrial State Bank v.
Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx, in the District Court of Xxxxxxx
County, Kansas, Civil Court Department (the "Xxxxxxx Action" and the ARET Action
and the Xxxxxxx Action hereinafter collectively referred to as the "Actions");
and
WHEREAS, at this time, Bank and the Settling Defendants wish to settle
such claims and to resolve any issues between the parties pursuant to the terms
hereof.
NOW, THEREFORE, in consideration of the premises, covenants and
agreements hereinafter set forth, and intending to be legally bound, the parties
hereto agree as follows:
1. Payment of Settlement Amount; Transfer of Preferred Stock. The
Janovecs and ARET shall tender the sum of One Hundred Thousand Dollars
($100,000.00) (the "First Payment") on or before July 16, 1999 by wire transfer
in immediately available funds to Bank and shall tender the sum of One Hundred
Thousand Dollars ($100,000.00) (the "Second Payment" and the First Payment and
the Second Payment hereinafter collectively referred to as the "Settlement
Amount") on or before August 30, 1999 by wire transfer in immediately available
funds to Bank. On or before the date of the payment of the First Payment, Xxxxxx
X. Xxxxxxx shall cooperate with Bank to cause, and shall cause, the 2,760,000
shares of preferred stock of ARET, pledged as collateral by the Janovecs, to be
converted into the common stock of ARET and transferred into the name of Bank or
its nominee (the "Stock Transfer").
2. Representations and Warranties of Bank. Bank represents and warrants
as follows:
(a) Authority; No Conflict. Bank has the power to execute and
deliver this Agreement. The execution, delivery and performance of this
Agreement will not violate or breach any provision of any mortgage, trust,
indenture, lien, lease, agreement, instrument, order, judgment, law, statute,
regulation, ordinance, decree or other restriction of any kind or character to
which Bank is subject. This Agreement has been duly authorized, executed and
delivered by Bank and is valid, binding and enforceable against it in accordance
with its terms.
(b) No Transfer. Bank has not sold, conveyed, transferred
or assigned to any other person
15
or entity any Claim (as that term is defined in Section 4(a) below) against any
of the Settling Defendants, nor any rights in or to any matter, released herein.
3. Representations and Warranties of Settling Defendants. Each of the
Settling Defendants represents and warrants as follows:
(a) Authority; No Conflict; Enforceability. ARET has the power
to execute and deliver this Agreement. The execution, delivery and performance
of this Agreement will not violate or breach any provision of any mortgage,
trust, indenture, lien, lease, agreement, instrument, order, judgment, law,
statute, regulation, ordinance, decree or other restriction of any kind or
character to which ARET is subject. This Agreement has been duly authorized,
executed and delivered by ARET and is valid, binding and enforceable against it
in accordance with its terms. This Agreement has been duly executed and
delivered by the Janovecs and will be valid, binding and enforceable against
them in accordance with its terms.
(b) No Transfer. Neither the Janovecs nor ARET has sold,
conveyed, transferred or assigned to any other person or entity any Claim (as
that term is defined in Section 4(a) below) against Bank, nor any rights in or
to any matter, released herein.
4. Release of Settling Defendants.
(a) Release and Discharge. Upon the payment of the Settlement
Amount and the Stock Transfer, Bank, on behalf of itself, and its affiliates,
directors, officers, constituents, agents, servants, employees, representatives
and attorneys, and the predecessors, successors and assigns of each of them, and
all persons claiming through and under them, and each of them jointly and
severally (collectively, the "Releasing Bank Parties"), do hereby release,
acquit, remise, forgive and forever discharge the Settling Defendants, and their
respective directors, officers, constituents, agents, servants, employees,
successors, assigns, representatives and attorneys from and against any and all
matters, events, conditions, indebtedness, suits, demands, representations,
agreements, debts, obligations, liabilities, damages, claims, actions, and
causes of action of any nature whatsoever (any such matter being referred to
herein a "Claim"), whether known or unknown, arising out of or related to or in
connection with any actions, failures to act, events, occurrences, facts or
allegations, or any combination thereof, including, without limitation, all
claims which were or could have been alleged in the Actions.
(b) Nature of Release and Discharge. Bank, on behalf of itself
and each of the Releasing Bank Parties, expressly understands and acknowledges
that the releases set forth herein include all matters liquidated, unliquidated,
known, apparent, concealed, mature or immature.
(c) Operation of Release. The releases set forth herein shall
operate against each of Bank and the other Releasing Bank Parties in all
capacities of each such party, whether the claims are direct, indirect,
derivative or otherwise.
(d) No Support of Released Claim. Bank, in any capacity
whatsoever, shall not bring or support any claim settled or released herein
against any of the Settling Defendants.
5. Release of Bank.
16
(a) Release and Discharge. Upon the payment of the Settlement
Amount and the Stock Transfer, the Settling Defendants, on behalf of themselves
and their respective affiliates, directors, officers, constituents, agents,
servants, employees, representatives and attorneys, and the predecessors,
successors and assigns of each of them, and all persons claiming through and
under them, and each of them jointly and severally (collectively, the "Releasing
Defendant Parties"), do hereby release, acquit, remise, forgive and forever
discharge Bank, its directors, officers, constituents, agents, servants,
employees, successors, assigns, representatives and attorneys from and against
any and all Claims, whether known or unknown, arising out of or related to or in
connection with any actions, failures to act, events, occurrences, facts or
allegations, or any combination thereof, including, without limitation, all
claims which were or could have been alleged in the Actions.
(b) Nature of Release and Discharge. The Settling Defendants,
on behalf of themselves and each of the Releasing Defendant Parties, expressly
understand and acknowledge that the releases set forth herein include all
matters liquidated, unliquidated, known, apparent, concealed, mature or
immature.
(c) Operation of Release. The releases set forth herein shall
operate against each of the Settling Defendants and the other Releasing
Defendant Parties in all capacities of each such party, whether the claims are
direct, indirect, derivative or otherwise.
(d) No Support of Released Claim. Each of the Settling
Defendants, in any capacity whatsoever, shall not bring or support any claim
settled or released herein against Bank.
6. Dismissal of Actions. Upon the payment of the Settlement Amount and
the Stock Transfer, Bank shall file the Joint Motions for Dismissal With
Prejudice, attached hereto as Exhibit A, and the Orders of Dismissal With
Prejudice, attached hereto as Exhibit B, pursuant to which the Actions shall be
dismissed with prejudice. Bank and the Settling Defendants agree that the
dismissal with prejudice pursuant to this Section shall provide that each party
is to bear its, his or her own respective costs.
7. No Admission. Each of the parties to this Agreement acknowledges
its, his or her understanding that this Agreement and release is a compromise of
disputed claims, and that each party does not admit liability of any nature or
kind with respect to any claims asserted by any of the other parties.
8. Third Party Beneficiaries. This Agreement is not intended to, and
shall not, confer upon any person other than the parties hereto any rights or
remedies hereunder.
9. Further Assurances. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement.
10 Negotiated Transaction. The provisions of this Agreement were
negotiated by the parties hereto and said Agreement shall be deemed to have been
jointly drafted by the parties hereto.
11. Legal Counsel. Each party represents and warrants that it, he
or she has consulted with and has been advised by legal counsel regarding this
Agreement.
17
12. Nature of Claims and Debts. Bank and the Settling Defendants
acknowledge that the claims that are the subject of the settlement set forth in
this Agreement consist of contested and disputed claims between the parties and
that Bank and the Settling Defendants respectively dispute the claims of the
other party or parties. Bank represents and acknowledges that the debts alleged
to be due and owing to it by the Settling Defendants constitute contested
liabilities and disputed debts of the Settling Defendants. Bank further
represents that the principal amount of the alleged indebtedness of the Janovecs
is $2,941,058.20 and the principal amount of the alleged indebtedness of ARET is
$1,071,214.15. Bank represents that it is its position that it must file
Internal Revenue Service Form 1099-C with respect to the principal amounts of
the indebtedness that it alleges are owed to it by the Settling Defendants even
though the foregoing debts constitute contested liabilities and disputed debts.
Bank shall take such actions, execute such documents and take such further steps
as reasonably requested by the Settling Defendants to assist the Settling
Defendants in any actions, inquiries or proceedings which may be made or
instituted by the Internal Revenue Service with regard to the treatment of this
Agreement.
13. Payment of Expenses. Each of the parties hereto shall pay its, his
or her own out-of-pocket costs and expenses with regard to the preparation,
delivery and execution of this Agreement. Any party hereto shall have the right
to maintain an action in any court of competent jurisdiction to enforce and/or
to recover damages for a breach of the rights and/or obligations created by, or
provided pursuant to, this Agreement. If such court action is successful, the
prevailing party shall be reimbursed by the other party or parties for all fees
and expenses (including attorneys' fees) actually and reasonably incurred in
connection with such action (including, without limitation, the investigation,
defense, settlement or appeal of such action).
14. Assignment. This Agreement and the rights and obligations hereunder
shall not be assigned by any party, without the prior written consent of the
other parties hereto, and any attempted assignment without such written consent
shall be null and void and without legal effect.
15. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.
16. Governing Law and Choice of Law. This Agreement and all rights
hereunder shall be governed by, and construed in accordance with, the laws of
the State of Kansas.
17. Headings. The headings in this Agreement are for convenience only
and in no way define, limit or describe the scope or intent of any provisions,
sections or subsections of this Agreement.
18. Entire Agreement. This Agreement and all other pleadings to be
executed and delivered in connection herewith embody the entire agreement and
understanding between the parties hereto and supersede all prior agreements and
understandings relating to the subject matter hereof and thereof.
18
19. No Inducement. Each party hereto represents and warrants to the
other party that it, he or she is relying upon no facts or information obtained
from any other party hereto in entering into this Agreement, that there is no
inducement for this Agreement other than as set forth herein, and that such
warranting party has conducted, or has had the opportunity to conduct, its, his
or her own investigation into facts and circumstances surrounding all matters
set forth herein and is satisfied with the results and the extent of its, his or
her investigation.
20. Amendments. No amendment or modification of any of the provisions
hereof shall be of any force or effect unless contained in writing and signed by
Bank and each of the Settling Defendants.
21. Notices. All notices required hereunder or pertaining hereto shall
be in writing and may be delivered by any means, including, but not limited to,
delivery by personal delivery, first class registered or certified mail, postage
prepaid, return receipt requested, by a nationally recognized overnight
commercial courier service with charges prepaid, or by facsimile transmission.
Notices shall be deemed received upon actual receipt. In addition, notices shall
be deemed to have been received upon any of the following: (a) delivery, (b) one
attempted but failed delivery to the address of record during business hours,
(c) refusal to accept delivery as shown on the United States Postal Service
return receipt or similar advice from the applicable courier service, or (d)
electronic confirmation of the facsimile transmission. Notices shall be directed
to the addresses set forth below:
If to Bank Industrial State Bank.
32nd and Strong
X.X. Xxx 0000
Xxxxxx Xxxx, Xxxxxx 00000
Attention: President
Fax: (000) 000-0000
with a copy to: Xxxxx X. Xxxxx, Esq.
Xxxxx & Xxxxx, Chartered
11000 King, Suite 200
P. O. Xxx 00000
Xxxxxxxx Xxxx, Xxxxxx 00000-0000
Fax: (000) 000-0000
If to Settling Defendants: Xxxxxx X. Xxxxxxx
AmeriResource Technologies, Inc.
0000 Xxxxx Xx Xxxxx
Xxxxxxxx Xxxx, Xxxxxx 00000
Fax: (000) 000-0000
19
with a copy to: Xxxxxxx X. Xxxxx, Esq.
Craft Xxxxxxx & Xxxxx, L.L.C.
1100 One Main Plaza
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Any party may change its or their address for purposes of this Agreement by
giving notice of such change in accordance with this Section, provided that such
an address change shall not be effective until two (2) business days after
notice of the change is deemed to have been received.
22. Execution by Facsimile. If a party signs this Agreement and
transmits a facsimile transmission of the signature page to the other party, the
party who receives the transmission may rely upon the facsimile transmission as
a signed original of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
INDUSTRIAL STATE BANK
By:
Name:
Title:
XXXXXX X. XXXXXXX
XXXXXXX X. XXXXXXX
AMERIRESOURCE TECHNOLOGIES, INC.
By:
Name: Xxxxxx X. Xxxxxxx
Title: President
20
APPROVED AND AGREED TO:
XXXXX & XXXXX, CHARTERED
Xxxxx X. Xxxxx
11000 King, Suite 200
P. O. Xxx 00000
Xxxxxxxx Xxxx, Xxxxxx 00000-0000
Fax: (000) 000-0000
Attorneys for Bank
CRAFT XXXXXXX & XXXXX, L.L.C.
Xxxxxxx X. Xxxxx
1100 One Main Plaza
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attorneys for Settling Defendants
21
