EXHIBIT 10.40
FIRST AMENDMENT TO
PLAN AND AGREEMENT FOR CORPORATE SEPARATION
This FIRST AMENDMENT (this "Amendment"), dated effective June 14,
1999, amends that PLAN AND AGREEMENT FOR CORPORATE SEPARATION (the
"Agreement") made effective March 31. 1999, among Capitol Communities
Corporation, a Nevada corporation (hereinafter called the Corporation)
and Charlie Corporation, a Nevada corporation (hereinafter called
"Charlie").
1. Section 2.5 of the Agreement is hereby amended to
provide as follows:
"2.5. Conveyance of Certain CPCY Shares. X. X. Xxxxxx
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("Xxxxxx") and Xxxxxx X. Xxxxxxxx ("Xxxxxxxx") each hold
16,667 shares of the common capital stock of the
Corporation. In addition, certificates for 50,000 shares of
the common capital stock of the Corporation (the "NonVestcd
Shares") are held in the name of each of Xxxxxx and Xxxxxxxx
and are not vested in either Xxxxxx or Lombard[ The
Corporation and Xxxxxx entered into a Stock Option Agreement
dated as of April 30, 1998 (the "Xxxxxx Option Agreement"),
pursuant to which Xxxxxx was given the option to acquire
shares of stock of the Corporation as provided therein,
though Xxxxxx has not exercised any rights pursuant to the
Xxxxxx Option Agreement. The Corporation and Xxxxxxxx
entered into a Stock Option Agreement dated as of April 30,
1998 (the "Xxxxxxxx Option Agreement"), pursuant to which
Xxxxxxxx was given the option to acquire shares of stock of
the Corporation as provided therein, though Xxxxxxxx has not
exercised any rights pursuant to the Xxxxxxxx Option
Agreement. Both Xxxxxxxx and Xxxxxx were employees of
Resorts or one of their subsidiaries. As of the effective
date of this Agreement, Resorts (through its subsidiary,
Capitol Club, has terminated Xxxxxxxx and Xxxxxx as its
employees pursuant to its employment agreements with
Xxxxxxxx and Xxxxxx. Therefore, the Xxxxxx Option Agreement
and the Xxxxxxxx Option Agreement have terminated by their
terms and the NonVested Shares have been forfeited to the
Corporation. Resorts and the Corporation have entered into a
Settlement Agreement and Mutual Release with each of Xxxxxx
and Xxxxxxxx, copies of which are marked Exhibits "A-1" and
"A-2" respectively (the "Settlement Agreements"). The
Corporation agrees to pay to each of Xxxxxx and Xxxxxxxx the
Initial Settlement Payment in the amount of $10,000.00 and
issue to each of Xxxxxx and Xxxxxxxx 6,666 shares of the
Corporation as provided in Section 4 of each of the
Settlement Agreements. One or before June 30, 1999, Resorts
shall reimburse to the Corporation the total sum of $10,000
of those payments made by the Corporation to Xxxxxx and
Xxxxxxxx. Resorts covenants to be solely responsible for all
other obligations to Xxxxxx and Xxxxxxxx pursuant to the
Settlement Agreements and shall indemnify the Corporation
from and such continuing obligations pursuant to the
Settlement Agreements."
FIRST AMENDMENT TO AGREEMENT FOR CORPORATE SEPARATION/PAGE 1
2. Except as set forth herein, all other terms of the Agreement are hereby
affirmed.
In witness whereof the parties have executed this Agreement the day
and year first above written.
CAPITOL COMMUNITIES CORPORATION
By: /s/ Xxxxxxx X. Xxxx
President
CHARLIE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
President
FIRST AMENDMENT TO AGREEMENT FOR CORPORATE SEPARATION/PAGE 2
