Exhibit 10.41 Promissory Note and Settlement Agreement with Xxxx Xxxxx
SETTLEMENT AGREEMENT
The parties to this agreement are Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, American
Resources and Development Company ("ARDCO"), Print Works, Inc. ("PWI") (which
parties shall be collectively hereinafter referred to as the defendants) and
Xxxx Xxxxx and Xxxxx Xxxxx (collectively hereinafter referred to as "Xxxxx").
This agreement is effective as of May 2, 2001.
WHEREAS, there is a pending lawsuit in the Circuit Court of the State of Oregon
for the County of Multnomah entitled: Xxxx and Xxxxx Xxxxx V. Xxxx Xxxxxx et at,
Xxxxxxxxx Xxxxxx Xxxxxxx Xxxxx Xxxx Xx.0000-00000;
WHEREAS, this agreement is conditioned upon obtaining court approval of this
settlement; and
WHEREAS, the parties have decided to resolve all claims in accordance with the
terms and conditions set forth herein.
IT IS HEREBY AGREED AS FOLLOWS:
I. Payment. The defendants hereby jointly and severally agree to pay Xxxxx ONE
HUNDRED THOUSAND DOLLARS ($100,000.00) paid as follows:
a. THREE THOUSAND DOLLARS ($3,000.00) per month commencing on
July 1, 2001, and the first of each month thereafter for a period of 12
months;
b. FIVE THOUSAND DOLLARS ($5,000.00) per month commencing on
July 1, 2002, and the first of each month thereafter for a period of 11
months; and
c. NINE THOUSAND DOLLARS ($9,000.00) as a final payment due on July 1,
2003.
PAGE 1 - SETTLEMENT AGREEMENT
No interest shall be payable on this amount unless defendants fail to make the
monthly payments. Defendants shall not be deemed to have failed to make a
payment unless they have been given notice of the missed payment and ten
additional days to cure the nonpayment. If defendants do not cure any nonpayment
within the ten-day cure period, then they shall be deemed to have defaulted. In
the event of default, all remaining payments are accelerated and will become due
and payable. In addition, interest on the accelerated balance due shall be
payable from May 3, 2001 at the rate provided for judgments in Oregon.
2. Tender of Xxxxx Shares. Xxxxx hereby tenders all of their PWI stock to the
defendants or their designee, together with a guarantee stock power in the form
attached as Exhibit "A," and agrees to execute any and all documents necessary
to effect such transfer. Said documents shall be prepared by the defendants.
3. Warranty of Financial Condition. As an inducement to entering into this
Settlement Agreement, Xxxxx has relied upon the current income and balance
sheets of PWI, ARDCO and Xxxx and Xxxx Xxxxxx. A copy of said financial
statements are attached hereto as Exhibit "B" and herein incorporated by
reference. The defendants and each of them hereby warrant and represent that to
the best of their knowledge said statements are accurate and contain no material
misrepresentations or omissions.
4. Execution of Promissory Note and Confession of Judgment. Defendants, and each
of them, shall sign a promissory note (Exhibit "C") and a Confession of Judgment
(Exhibit "D"). Xxxxx covenants and promises not to file said Confessions of
Judgment and/or not to transfer the promissory notes, except in the event of an
untimely and uncured payment as
PAGE 2 - SETTLEMENT AGREEMENT
As provided for herein. If defendants fail to make the payments in a timely
fashion as described in paragraph 1 above, the remaining principal owed shall
become immediately due and payable in its entirety with interest on said unpaid
balance to accrue at the statutory rate of nine percent (9%) per annum from May
2, 2001. Defendants shall have an opportunity to cure any nonpayment within ten
(10) days of a written notice of nonpayment. If defendants timely cure any
nonpayment, the remaining unpaid principal shall not be accelerated and there
shall be no interest owed (if defendants thereafter continue to make timely
payments). If defendants fail to timely cure any nonpayment, Xxxxx may file the
Confessions of Judgment and commence enforcement of those judgments and/or sell
or transfer any or all of the promissory notes without further notice.
In the event that the confession to judgment is entered in any circuit court,
based upon one or more confessions of judgment provided pursuant to this
Section, within ten days thereafter, plaintiffs, and each of them, shall cause
to be filed in each court wherein the confession of judgment is entered a
partial satisfaction of judgment, crediting defendants, and each of them, with
all amounts credited against the judgment up to the time of entry of judgment on
the confession of judgment. Thereafter, plaintiffs, and each of them, no less
frequently than quarterly, shall file additional partial satisfactions of
judgment in each county in which the confession of judgment has been entered, to
reflect all payments received during the previous quarter. Further, when the
judgment is paid off (whether by one defendant or more), plaintiffs agree to
file within ten days satisfactions of judgment in each jurisdiction where the
confession of judgment was filed by them or on their behalf.
PAGE 3 - SETTLEMENT AGREEMENT
Plaintiffs, and each of them, should keep a log of all payments received and
credited against the promissory note and confession of judgment, indicating the
date the payment was received and balance due after crediting each payment.
Within ten days of receipt of a written request for a copy of the log,
plaintiffs, and each of them, shall provide a true copy of the log, together
with a statement of the payoff balance, including a per diem rate."
5. Court Approval. Court approval is required for settlement of the derivative
claims. This Settlement Agreement is conditioned upon obtaining approval to
settle such claims. The parties agree to cooperate in obtaining such court
approval, including, but not limited to, execution of documents and
participating in any court appearance(s). The parties agree to maintain the
confidential nature of this settlement in the approval process, including having
the court seal the settlement portion of this case if necessary.
6. Mutual Releases. Effective upon court approval, the parties hereby agree to
the following:
a. The Langes, and each of them, hereby release and forever discharge
Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, ARDCO and PWI, all of their employees,
officers, directors, shareholders, agents, attorneys, insurers, and all their
successors in interest, assigns and all those acting for or on behalf of them
from: any and all claims, causes of action, counterclaims, debts, or damages of
every kind and nature whatsoever that the Langes now have or claim to have had,
including, but not limited to, all such claims that were or could have been
asserted in the lawsuit, except for the rights, duties and obligations arising
under this agreement.
PAGE 4 -SETTLEMENT AGREEMENT
b. The defendants, and each of them, hereby release and forever
discharge Xxxxx, all of their employees, agents, attorneys, insurers, and all
their successors in interest, assigns and all those acting for or on behalf of
them from: any and all claims, causes of action, counterclaims, debts, or
damages of every kind and nature whatsoever that the defendants now have or
claim to have had, including, but not limited to, all such claims that were or
could have been asserted in the lawsuit, except for the rights, duties and
obligations arising under this agreement.
7. Dismissal of Lawsuit. Effective upon the court's approval of this settlement,
the parties hereby agree to execute all documents necessary for the dismissal of
the lawsuit, and claims or counterclaims, with prejudice and without costs or
attorneys' fees to any party.
8. Confidentiality. The terms of this agreement are confidential and shall not
be revealed, except, however the parties may reveal these terms to their
respective lawyers, tax advisors, and spouses, with instruction to comply with
this provision, and the parties may reveal the terms of this agreement in
connection with obtaining court approval of this settlement, or in response to
other valid legal process.
9. Notices. Any notice required under this agreement shall be made by First
Class U.S. Mail and facsimile to the counsel representing the parties, as
indicated below:
Xxxxxxxxxxx X. Xxxx, Esq. Xxxxxxx X. Xxxxxxxx, Esq.
Xxxx Xxxxxx, LLP Black Xxxxxxxxxx LLP
0000 X.X. Xxxxxx Xxxxxx 0000 Xxx Xxxxx
Xxxxxxxx, Xxxxxx 00000 000 X.X. Xxxxxxxx
Telephone: (000) 000-0000 Xxxxxxxx, Xxxxxx 00000-0000
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
Counsel for Plaintiffs Xxxx and Facsimile: (000) 000-0000
Xxxxx Xxxxx Counsel for Defendant Print
Works, Inc.
Xxxxxxx X. Xxxxx, Esq.
Abbott, Davis, Xxxxxxxx, et at
1900 Xxxxx Fargo Center
0000 X.X. Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Counsel for Defendants Xxxx and Xxxx Xxxxxx, and ARDCO
10. Miscellaneous Provisions.
a. This agreement is made and entered into for the purpose of settling
and compromising disputed claims and is not, and shall not be construed as, an
admission of any sort by any party, all of whom expressly deny and liability.
b. This agreement and mutual releases provided in paragraph 6 are
binding upon and shall inure to the benefit of the parties and their respective
heirs, administrators, executors, trustees, legal representatives, corporate
parents, corporate subsidiaries, corporate affiliates, business entities,
successors, predecessors, assigns, directors, officers, partners, attorneys,
agents, employees, insurers and transferees.
c. Each of the parties to this agreement has read this agreement and
understands that they have been represented and advised by independent counsel
throughout all negotiations that preceded the execution of this agreement.
d. No amendments, modifications or supplements to this agreement may be
made other than by a writing signed by all the parties hereto.
e. Except as otherwise expressly provided in this agreement, each party
hereto will bear his or its own expenses in connection with the preparation,
execution and performance of this agreement.
f. The exhibits reference in this agreement are a part of this
agreement as if fully set forth herein.
g. This agreement shall be construed in accordance with and by the laws
of the state of Oregon.
h. This agreement constitutes the entire agreement and understanding
the parties with respect to its subject matter and supersedes all prior
understandings, written or oral, among the parties with respect to this subject.
i. The parties further agree that, if there is a breach of any
provision of this agreement, the prevailing party will be entitled to recover
costs, disbursements, reasonable attorney's fees, expert witness fees, and any
other fee or cost incurred including pre-filing fees and costs that are incurred
as a result of the breach.
APPROVED AS TO FORM:
/s/ Xxxx Xxxxx
/s/ Xxxxx Xxxxx
/s/ Xxxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxx
/s/ B. Xxxxxx Xxxxxxxxx
President, American Resources & Development
/s/ Xxxxxxx X. Xxxxxx
President, Print Works, Inc.
Exhibit A
ASSIGNMENT OF STOCK
For Value Received, Xxxx X. Xxxxx and Xxxxx X. Xxxxx, hereby sell, assign and
transfer unto ___________________, Seven Thousand Six Hundred (7,600) their
jointly held shares of common stock ("Shares") of Print Works, Inc. (the
"Corporation") standing in their names on the books of the Corporation,
represented by Certificate No. 37 ("Stock"), and do hereby irrevocably
constitute and appoint Black Xxxxxxxxxx LLP, attorneys to transfer the Stock on
the books of the Corporation with full power of substitution in the Shares.
Effective May 2, 2001.
/s/ Xxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
PROMISSORY NOTE
$100,000
MADE BY: PRNT WORKS, INC.
AMERICAN RESOURCES & DEVELOPMENT CO.
XXXXXXX X. XXXXXX
XXXX X. XXXXXX ("Makers")
PAYABLE TO: XXXX XXXXX
XXXXX XXXXX ("Payees")
DATE: May 2, 2001
For value received, the undersigned Makers jointly and severally
promise to pay to the order of Payees the principal sum of One Hundred Thousand
and No/l00 Dollars ($100,000) paid as follows:
1. $3,000 per month commencing on July 1, 2001, and the first
day of each month thereafter for a period of 12 months;
2. $5,000 per month commencing on July 1, 2002, and the first
day of each month thereafter for a period of 11 months; and
3. $9,000 as a final payment due on July 1,2003.
No interest shall accrue on the unpaid and outstanding principal
balance of this Note unless Makers fail to make the monthly payments as provided
herein above.
If Makers fails to make the monthly payment on or before the date
indicated, Payees shall deliver to Makers a notice of missed payment ("Notice").
Upon delivery of Notice, Makers shall have ten days from the postmarked date of
the Notice to cure the nonpayment. Makers shall not be deemed to have failed to
make payment unless Notice is received by Makers. If Makers do not cure the
nonpayment within the ten-day cure period, then Makers shall be deemed to have
defaulted. In the event of a default, all remaining principal owed shall become
immediately due and payable in its entirety. Interest on the unpaid balance
shall accrue as of May 2, 2001 at the statutory rate of nine percent (9%) per
annum or the applicable rate provided for judgments in Oregon at the time of
default. If Makers timely cure any nonpayment, the remaining unpaid principal
shall not be accelerated and there shall be no interest owed.
Makers shall make all payments hereunder to Payees in lawful money of
the United States and in immediately available funds.
Failure at any time to exercise any of the rights of Payees hereunder
shall not constitute a waiver of such rights and shall not be a bar to the
exercise of any of such rights at a later date. In the event of commencement of
suit to enforce payment of this Note, the prevailing party shall be entitled to
receive the costs of collection, including reasonable attorneys' fees and court
costs.
Nothing contained in this Note shall be deemed to require the payment
of interest or other charges by Makers or any other person in excess of the
amount which the Payees may lawfully charge under the applicable usury laws. In
the event that Payees shall collect monies that are deemed to constitute
interest, which would increase the effective interest rate to a rate in excess
of that permitted to be charged by applicable law, all such sums deemed to
constitute interest in excess of the legal rate shall be credited against the
principal balance of this Note ten outstanding, and any excess shall be returned
to Makers.
IN WITNESS WHEREOF, the undersigned have caused this Promissory Note to
be duly executed as of the date written above.
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
President, Print Works, Inc.
/s/ B. Xxxxxx Xxxxxxxxx
---------------------------------
President, AMERICAN RESOURCES & DEVELOPMENT CO.
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
/s/ Xxxx X. Xxxxxx
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