EXHIBIT 10.12
SETTLEMENT AGREEMENT
SETTLEMENT AGREEMENT AND RELEASE
THIS SETTLEMENT AGREEMENT AND RELEASE (the "Agreement") is entered into
as of this ___ day of February, 1997 by and among the parties to a lawsuit filed
in the United States District Court for the District of Nebraska known as XXXXXX
X. AND XXXXX X. XXXXX, ET AL. V. PREMIER CAPITAL INVESTMENT CORPORATION, ET AL.,
Case No. 4:95CV3327 (the "Lawsuit"). The parties to the Lawsuit and the parties
to this Agreement consist of the Plaintiffs as identified in Recital A below and
the Defendants as identified in Recital B below.
R E C I T A L S
A. Each of the Plaintiffs in the Lawsuit desire to compromise and
settle their claims against the Defendants and are entering into this Agreement
for such purpose. The Plaintiffs, who are all parties to this Agreement, are:
Xxxxxx X. and Xxxxx X. Xxxxx, Individually and as custodians for Xxxxx,
Xxxx, Jenefer and Xxxxx Xxxxx, UGMA;
Xxxxx X. and Xxxxx Xxx Xxxxxx, Individually;
Xxxxxx and Merriam Xxxxxxxxx, Individually;
Xxxxx X. Xxxxx, Individually and as a beneficiary;
Xxxxxxx X. Xxxxxxx, Individually;
Xxxxxx X. and Xxxxxx X. Xxxxxxxx, Individually;
Xxxxxxx X. Xxxxxxxx, Individually;
Xxxxxxx X. Xxxxxxxx, Individually;
Xxxxxxx X. and Xxxxx X. Xxxxxxxx, Individually;
Xxxx X. Xxxxxxxx, Individually;
Xxxxxxx X. Xxxxxxxx, c/o Xxxxxx X. Xxxxxxxx, Individually;
Xxxx X. Xxxxxx, Individually and as a beneficiary;
Xxxx X. and Xxxxx X. Xxxxxx, Individually;
Xxxxxx X. and Xxxxx Xxxx, Individually and as a beneficiary;
Xxxxx X. and Xxxxxxx X. Xxxxxx, Individually;
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Xxxx X. Xxxx, Individually and as a beneficiary;
Xxxxxx X. and Xxxxx X. Xxxxxxxx, Individually;
Xxxxxxx X. Xxxxx, Individually and as a beneficiary;
Xxxxxx X. Xxxxx, Individually and as a beneficiary;
Xxxxxx X. and Xxxxx X. Xxxxx, Individually;
Xxxxxx X. and Xxxxxx X. Xxxxx, Individually;
Xxxxxx X. and Xxxxxx X. Xxxxx, Individually;
Xxxxxx X. and Xxxxxxx X. Xxxxx, Individually;
X. Xxxx Xxxxx III, Individually; and
Xxxxx X. and Xxxxxxx X. Xxxxxxxxxx, Individually.
B. Each of the Defendants to the Lawsuit desire to compromise and
settle the claims of the Plaintiffs and enter into this Agreement for such
purpose. The entry by the Defendants into this Agreement is without any
admission of liability. The Defendants who are all parties to this Agreement
are:
Premier Capital Investment Corporation, a Colorado corporation;
Capital Reserve Corporation, a Colorado corporation;
Xxxxx X. Xxxxxx, Xx.;
Xxxxx X. Xxxxx;
Xxxxx X. Xxxx; and
Xxxxxx X. Xxxxx.
NOW, THEREFORE, in consideration of the agreements contained herein,
the adequacy and sufficiency of which are hereby acknowledged, the parties to
this Agreement agree as follows:
CAPITAL RESERVE CORPORATION, XXXXX X. XXXXXX, XX. AND XXXXX X. XXXXX
1. Defendants Capital Reserve Corporation ("CRC"), Xxxxx X. Xxxxxx, Xx.
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("Xxxxxx") and Xxxxx X. Xxxxx ("Xxxxx") shall pay and deliver to Xxxxxxx Xxxxxx
& Xxxxx, on behalf of the Plaintiffs, as a group, a certified check in the
amount of One Hundred Thousand Dollars ($100,000). The $100,000 payment referred
to in this P. 1 may be paid by any one or all of CRC, Xxxxxx and Xxxxx and this
Agreement shall not fail for lack of consideration in the event of any one of
CRC, Xxxxxx and Xxxxx makes the entire $100,000 payment. The payment referred to
in this P. 1 shall be paid by CRC, Xxxxxx and/or Xxxxx within ten (10) days of
their receipt of a fully executed copy of this Agreement.
2. CRC shall pay to Xxxxxxx Xxxxxx & Xxxxx on behalf of the
Plaintiffs, as a group, the sum of Eighty Thousand Dollars ($80,000) which shall
be payable at the rate of Five Thousand Dollars ($5,000) per month, the first
payment to be due the first day of the month which is ten (10) days after CRC's
receipt of a fully executed copy of this Agreement (the "Installment Payments").
Each $5,000 Installment Payment shall be due and payable on the first day of the
month and shall be paid to Plaintiffs' counsel, Xxxxxxx Xxxxxx & Xxxxx at their
offices located at 000 Xxxxxxx Xxxxxx, 000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000. No interest shall accrue or be payable on the obligations contained in
this P. 2.
3. CRC shall execute and deliver to Xxxxxxx Xxxxxx & Xxxxx on behalf
of the Plaintiffs a Consent to Entry of Judgment (attached hereto as Exhibit A,
which is hereby incorporated into this Agreement) in favor of the Plaintiffs
permitting entry of a Consent Judgment against CRC upon the terms and conditions
set forth herein. Such Consent to Entry of Judgment shall serve as a security
for the payments described in P. 2 above. The Consent to Entry of Judgment shall
be held by Xxxxxxx Xxxxxx & Xxxxx, counsel for the Plaintiffs and shall be
entered only in the event CRC fails to make, on a timely basis, any Installment
Payment provided for in P. 2 of this Agreement. An Installment Payment shall be
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considered untimely in the event it is not received by Xxxxxxx Xxxxxx & Xxxxx by
the tenth day of the month in which such Installment Payment is due. In such
event, and prior to any filing of the Consent to Entry of Judgment, the
Plaintiffs shall give ten (10) days written notice ("Notice") to CRC. The Notice
shall specify the Installment Payment which is untimely and the amount which is
due. CRC shall have ten (10) days from the date of the Notice in which to cure
the failure to make a timely payment, and in the event CRC does timely cure,
Plaintiffs shall not file the Consent to Entry of Judgment. The amount of the
Consent to Entry of Judgment at any given time shall be the full amount of the
remaining unpaid Installment Payments of P. 2. In the event of the failure of
CRC to timely make an Installment Payment and the failure of CRC to thereafter
cure an untimely payment, Plaintiffs may file the Consent to Entry of Judgment
in the United States District Court for the District of Nebraska, which shall
have jurisdiction to enter a Consent Judgment according to the terms and
conditions of the Consent to Entry of Judgment against CRC. CRC hereby waives
any objection to entry of a Consent Judgment provided, however, that prior to
entry of a the Consent Judgment, fifteen (15) days written notice of the filing
of the Consent to Entry of Judgment be provided to CRC. Upon payment of the
$80,000 in Installment Payments, Xxxxxxx Xxxxxx & Xxxxx shall return the Consent
to Entry of Judgment to counsel for CRC, Xxxx Xxxx Xxxx Xxxxxxxxxx & Xxxxxxxxx,
P.C. CRC shall have the right to accelerate any Installment Payment.
XXXXX XXXX
4. Within ten (10) days after receipt of a fully executed copy of this
Agreement, Xxxxx Xxxx ("Xxxx") shall pay and deliver to Xxxxxxx Xxxxxx & Xxxxx,
on behalf of the Plaintiffs, as a group, the sum of $10,150 as follows:
a. A certified check in the amount of $10,000; and
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b. A certificate(s) representing 55,425 shares of Class B
Common Stock (the "Class B Stock") of CRC together with a
Stock Power, duly endorsed in blank sufficient so as to permit
the transfer of such shares of Class B Stock to the
Plaintiffs.
5. Hall makes no representations and warranties regarding the value of
the Class B Stock, the ability of the Class B Stock to be converted to Class A
Common Stock (the "Class A Stock") of CRC or any other matter concerning CRC or
the Class B Stock. Hall makes the following disclosures (which are not intended
to be nor are they complete) regarding the Class B Stock:
a. The terms, conditions, rights, preferences and obligations
of the Class B Stock are governed by the Articles of
Incorporation, as amended, of CRC. Such Articles of
Incorporation, as amended, restrict the conversion of the
Class B Stock into Class A Stock; x. Xxxx has granted an
irrevocable proxy coupled with an interest to Xxxxx X. Xxxxxx,
Xx. over 29,175 shares of the Class B Stock to vote any and
all such shares of such Class B Stock standing in his name at
any and all meetings of the Shareholders or any adjournments
thereof. Such irrevocable proxy may follow the stock
certificate(s) upon transfer.
XXXXXX XXXXX
6. Xxxxxx Xxxxx ("Xxxxx") shall pay and deliver to Xxxxxxx Xxxxxx &
Xxxxx, on behalf of the Plaintiffs as a group, the sum of $10,050 as follows: x.
Xxxxx shall execute and deliver a Promissory Note in the amount of Ten Thousand
Dollars ($10,000) with 0% interest payable over sixteen (16) months at the rate
of Six Hundred Twenty Five Dollars ($625) per month, the
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first payment to be due and payable on the first day of the
month which occurs ten (10) days after Xxxxx receives a fully
executed copy of this Agreement. The Promissory Note shall be
secured by a Deed of Trust upon Xxxxx' principal residence
located at 0000 Xxxxxxxxxx Xxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000.
Xxxxx discloses to the Plaintiffs that such Deed of Trust is
not a first Deed of Trust on the property. b. Within ten (10)
days after receipt of a fully executed copy of this Agreement,
Xxxxx shall deliver to Xxxxxxx, Xxxxxx & Xxxxx, on behalf of
the Plaintiffs, 18,700 shares of Class B Stock of CRC,
together with a Stock Power, duly endorsed in blank sufficient
so as to permit the transfer of such shares of Class B Stock
to the Plaintiffs. Xxxxx makes no representations and
warranties regarding the value of the Class B Stock, the
ability of such Class B Stock to be converted to Class A Stock
or any other matter concerning CRC or the Class B Stock. Xxxxx
makes the following disclosures (which are not intended to be
nor are they complete) regarding the Class B Stock:
(i) The terms, conditions, rights, preferences and
obligations of the Class B Stock are governed by the
Articles of Incorporation, as amended, of CRC. Such
Articles of Incorporation, as amended, restrict the
conversion of the Class B Stock into Class A Stock;
(ii) Xxxxx has granted an irrevocable proxy coupled
with an interest to Xxxxx X. Xxxxxx, Xx. over 18,700
shares of the Class B Stock to vote all such shares
at any and all meetings of Shareholders or any
adjournments thereof. Such irrevocable proxy may
follow the stock certificate(s) upon transfer.
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THE PLAINTIFFS
7. The payments and Class B Stock being delivered to Xxxxxxx, Xxxxxx &
Xxxxx on behalf of the Plaintiffs, are being paid and delivered for the benefit
of the Plaintiffs as a group. The Plaintiffs shall determine among themselves
how such payments and Class B Stock are to be divided among them. Plaintiffs
shall have no claim on any of the Defendants for any asserted improper division
among the Plaintiffs of the payments and Class B Stock being paid and delivered
pursuant to P. 1 through P. 6 above.
8. Plaintiffs represent and warrant that they are represented by legal
counsel, Xxxxxxx Xxxxxx & Xxxxx. Plaintiffs represent and warrant that in
entering into this Agreement, they have not relied upon any information, either
written or oral, except what is expressly set forth in this Agreement.
Plaintiffs represent and warrant that they have had the opportunity to seek
legal advice regarding entry into this Agreement from Xxxxxxx, Xxxxxx & Xxxxx
and have, in fact, consulted with Xxxxxxx, Xxxxxx & Xxxxx regarding entry into
this Agreement and are, in fact, entering into this Agreement after consultation
with Xxxxxxx, Xxxxxx & Xxxxx and of their own free will.
9. Each Plaintiff identified in Recital A above, hereby releases and
forever discharges each of the Defendants identified in Recital B above, from
any all claims, causes of actions and demands which each such Plaintiff has or
may hereafter have relating to or arising out of any of the facts or matters
alleged in the Second Amended Complaint filed in this Lawsuit, except claims,
causes of actions and demands related to the Consent to Entry of Judgment
referred to in P. 3 and rights which the Plaintiffs receive pursuant to the
Promissory Note and the Deed of Trust referred to in P. 6 granted in favor of
the Plaintiffs by Xxxxx.
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STIPULATION FOR DISMISSAL
10. Each of the parties to this Agreement (except Defendant Xxxxx, who
shall execute the Stipulation For Dismissal With Prejudice on his own behalf)
hereby authorizes their respective legal counsel to execute a Stipulation For
Dismissal With Prejudice in the form attached to this Agreement as Exhibit B
(which Exhibit B is hereby incorporated into this Agreement) and to cause the
filing thereof with the United States District Court for the District of
Nebraska. Upon execution by all counsel, the Stipulation For Dismissal For
Prejudice shall be delivered to Xxxx Xxxx Xxxx Xxxxxxxxxx & Xxxxxxxxx, P.C. who,
upon delivery to Xxxxxxx Xxxxxx & Xxxxx of the payments referred to in P. P. 1,
4 and 6a, the delivery to Xxxxxxx Xxxxxx & Xxxxx of the Consent to Entry of
Judgment referred to P. 3, the delivery to Xxxxxxx Xxxxxx & Xxxxx of the Class B
Stock referred to in P. P. 4b and 6b and the delivery to Xxxxxxx Xxxxxx & Xxxxx
of the Promissory Note and the Deed of Trust referred to in P. 6a, may file the
Stipulation For Dismissal With Prejudice with the United States District Court
for the District of Nebraska.
MISCELLANEOUS
11. Except as required to comply with Court process or is otherwise
required by law, no party shall disclose any information about this Agreement or
any of the terms or provisions hereof, or any of the statements, negotiations or
proceedings connected herewith except (i) to their attorneys, accountants,
auditors and regulatory agencies; and (ii) to a Court of competent jurisdiction
for purposes of enforcing the terms of this Agreement.
12. All notices and other communications to be given under this
Agreement to any party shall be in writing and sent by letter or fax
transmission and shall be deemed to be duly given or made when delivered (in the
case of personal delivery), when dispatched, in the case of fax transmission,
provided that the sender has received a receipt indicating
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proper transmission and provided that a hard copy of such notice or
communication is forthwith sent by prepaid, registered, return receipt requested
mail, or ten (10) days after being deposited in the United States mail, postage
prepaid, return receipt requested, to such party at its address or fax number
specified below or such other address or fax number as such a party may
hereinafter specify for such purpose to the others by notice in writing as
follows:
In the case of notice to any or all of the Plaintiffs:
Xxxxxxx, Xxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx
000 Xxxxx 00xx Xxxxxx
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxx, Esq.
Fax No. (000) 000-0000
In the case of notice to Capital Reserve Corporation, Xxxxx X. Xxxxxx,
Xx. and/or Xxxxx X. Xxxxx:
Capital Reserve Corporation
0000 Xxxx Xxxxx Xxxxx, Xxx. 000
Xxxxxxxxx, Xxxxxxxx 00000
Fax No. (000) 000-0000
With a copy to:
Xxxx Xxxx Xxxx Xxxxxxxxxx & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxx, Xxx. 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Fax No. (000) 000-0000
In the case of notice to Xxxxx X. Xxxx:
Xxxxx X. Xxxx
0000 Xxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax No. (000) 000-0000
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With a copy to:
C. Xxxxxx Xxxx, Esq.
Xxxx & Xxxxxx
0000 Xxxxxxx Xx., Xxx. 0000
Xxxxxx, XX 00000
Fax No. (000) 000-0000
In the case of Notice to Xxxxxx Xxxxx:
Xxxxxx Xxxxx
0000 Xxxxxxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Fax No. (000) 000-0000
13. This Agreement may be executed in several counterparts, each of
which shall be an original, but all of which together constitute one and the
same Agreement.
14. This Agreement represents the entire agreement among the parties
and may only be varied or amended by written document signed by each of the
parties hereto.
THIS AGREEMENT is entered into as of the day and year written above.
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PLAINTIFF'S SIGNATURE PAGE
CERTIFICATION
The undersigned hereby certifies that he/she has received, read and
understood the Settlement Agreement and Release, has had the opportunity to and
has, in fact, discussed the Settlement Agreement and Release with his/her
counsel, Xxxxxxx Xxxxxx & Xxxxx, that the representations and warranties
contained in P. 9 of the Settlement Agreement and Release are true, correct and
accurate, that the undersigned is aware that the Settlement Agreement and
Release contains a release in favor of the Defendants from the undersigned and
that the undersigned is entering into this Settlement Agreement and Release of
his/her own free will after consultation with legal counsel.
/s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Individually
and as Custodian for Xxxxx,
Xxxx, Jenefer and Xxxxx Xxxxx, UGMA
/s/Xxxxx X. Xxxxx
Xxxxx X. Xxxxx, Individually
and as Custodian for Xxxxx,
Xxxx, Jenefer and Xxxxx Xxxxx, UGMA
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DEFENDANT'S SIGNATURE PAGE
CERTIFICATION
The undersigned hereby certifies that he/she is entering into this
Agreement upon his/her own free will intending to be bound by the provisions of
the Settlement Agreement and Release.
CAPITAL RESERVE CORPORATION
By:/s/Xxxxx X. Xxxxxx
Its:President
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Schedule of Plaintiffs and Defendants
Who Have Signed the Settlement Agreement
PLAINTIFFS
Xxxxxx X. Xxxxx, Individually and as Custodian for Xxxxx, Xxxx, Jenefer and
Xxxxx Xxxxx, UGMA
Xxxxx X. Xxxxx, Individually and as Custodian for Xxxxx, Xxxx, Jenefer and Xxxxx
Xxxxx, UGMA
Xxxxx X. Xxxxxx, Individually
Xxxxx Xxx Xxxxxx, Individually
Xxxxxx Xxxxxxxxx, Individually
Merriam Xxxxxxxxx, Individually
Xxxxx X. Xxxxx, Individually and as a beneficiary
Xxxxxxx X. Xxxxxxx, Individually
Xxxxxx X. Xxxxxxxx, Individually
Xxxxxx X. Xxxxxxxx, Individually
Xxxxxxx X. Xxxxxxxx, Individually
Xxxxx X. Xxxxxxxx, Individually
Xxxx X. Xxxxxxxx, Individually
Xxxxxxx X. Xxxxxxxx, Individually
Xxxx X. Xxxxxx, Individually and as a beneficiary
Xxxx X. Xxxxxx, Individually
Xxxxx X. Xxxxxx, Individually
Xxxxxx X. Xxxx, Individually and as a beneficiary
Xxxxx Xxxx, Individually and as a beneficiary
Xxxxx X. Xxxxxx, Individually
Xxxxxxx X. Xxxxxx, Individually
Xxxx X. Xxxx, Individually and as a beneficiary
Xxxxxx X. Xxxxxxxx, Individually
Xxxxx X. Xxxxxxxx, Individually
Xxxxxxx X. Xxxxx, Individually and as a beneficiary
Xxxxxx X. Xxxxx, Individually and as a beneficiary
Xxxxx X. Xxxxx, Individually
Xxxxxx X. Xxxxx, Individually
Xxxxxx X. Xxxxx, Individually
Xxxxxxx X. Xxxxx, Individually
X. Xxxx Xxxxx II, Individually
Xxxxx X. Xxxxxxxxxx, Individually
Xxxxxxx X. Xxxxxxxxxx, Individually
DEFENDANTS
Premier Capital Investment Corporation
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxx, Xx.
Xxxxx X. Xxxxx
Capital Reserve Corporation
Xxxxx X. Xxxx
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EXHIBIT 27
FINANCIAL DATA SCHEDULE
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