SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the "Agreement") is entered into the 26 day
of June, 1996 among the following parties (collectively referred to herein as
the "Parties"):
1. Utah Resources International, Inc., a Utah corporation ("URI").
2. Xxxx X. Xxxxxx, Xx. ("XX Xxxxxx").
3. Xxxxx X. Xxxxxx ("XX Xxxxxx").
4. Inter-Mountain Capital Corp. ("Inter-Mountain").
5. Xxxx Xxxx ("Fife").
R E C I T A L S :
A. The Parties are involved in various disputes and controversies
involving the operation, management, ownership of and business activities of
URI, including, but not limited to, matters which are the subject of the State
Action and the Federal Action (collectively, the "Pending Litigation").
B. A shareholders derivative action captioned as XXXXXX XXXX, ET AL. V.
XXXX X. XXXXXX, XX. ET AL., was filed as Civil Number C-87-1632 in the Third
Judicial District Court of Salt Lake County, Utah (the "State Action").
C. A settlement agreement was entered into in the State Action on
April 6, 1993 (the "1993 Settlement Agreement").
D. Subsequently, URI brought an action to enforce the 1993 Settlement
Agreement in the State Action which resulted in certain findings of fact and
conclusions of law and an order enforcing the Settlement Agreement entered by
Judge Xxxxxxx X. Xxxxxx on October 4, 1995 (the "Xxxxxx Order"). The Xxxxxx
Order has been appealed by XX Xxxxxx and XX Xxxxxx and cross-appealed by URI.
E. An Order to Show Cause has been filed in the First State Court Action
by URI against XX Xxxxxx, XX Xxxxxx, and others, which is pending.
F. A shareholders derivative action captioned as UTAH RESOURCES
INTERNATIONAL, INC. V. XXXX X. XXXXX, ET AL., was filed as Case Number 2:96 CV
427C in the United States District Court for the District of Utah, Central
Division (the "Federal Action"), which is pending.
G. On April 5, 1996 URI entered into a letter of intent with IMC to sell
a controlling interest in URI to IMC upon terms and conditions set forth therein
(the "IMC Letter of Intent"). The IMC Letter of Intent is modified pursuant to
the terms and conditions of this Agreement. Fife is the sole shareholder of
IMC.
H. The Parties believe this Agreement is fair to and in the best interest
of URI and all shareholders of URI.
I. The Parties have agreed to compromise and settle all of their disputes
and claims known or unknown, now existing or hereafter accruing, including, but
not limited to, those which are the subject of the Pending Litigation, upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Parties agree as follows:
1. Unless otherwise provided, the following events shall occur at Closing
(as defined herein):
a. The Parties agree they will use best efforts following the
Closing to petition the Court in the State Action to terminate the
1993 Settlement Agreement. Pending such termination, the Parties
agree the 1993 Settlement Agreement and the Xxxxxx Order shall
continue in accordance with their respective terms and provisions.
b. The closing of the transactions contemplated herein
("Closing") shall occur at the offices of Xxxxxxxx & Sheen in Salt
Lake City, Utah, no later than 10 days from the date of this
Agreement.
c. Except for those matters specifically set forth in this
Agreement which create continuing future rights and obligations of the
Parties, the Parties hereto, and each of them, for themselves, their
respective predecessors, subsidiaries, controlled and affiliated
corporations and entities, past and present, as well as the respective
directors, officers, stockholders, partners, agents, attorneys,
servants, and employees, past and present, and affiliates or nominees
of parties (as defined under the Securities Act of 1933), heirs,
assigns, predecessors and successors in interest, and each of them,
effective upon execution of this Agreement, hereby acknowledge full
and complete satisfaction of, and do hereby release and discharge and
covenant not to xxx the other of them, including their respective
heirs, assigns and successors in interest, parents, predecessors,
subsidiaries, controlled and affiliated corporations and entities,
past and present, as well as the respective directors, officers,
stockholders, partners, agents, attorneys, servants, and employees,
past and present, and affiliates or nominees of parties (as defined
under the Securities Act of 1933), and each of them, from any and all
claims, demands, and causes or sources of action of whatever kind or
nature, known or unknown, suspected or unsuspected, including all
rights of and claims for contribution and indemnification, and
judgments, which any of them now owns or holds or has at any time
heretofore owned or held through the date of the execution of this
Agreement against any of the other of them, including, but not limited
to, those which: (i) are or could have been alleged or set forth in
any of the pleadings, any interlocutory or final orders, rulings,
file, or papers in the Pending Litigation; or (ii) arising out of, or
are related to, or are in any way connected directly or indirectly
with any transactions, occurrences, acts or omissions set forth, or
facts alleged, in the papers on file in the Pending Litigation. This
provision shall receive the broadest possible interpretation as a
general and complete release.
d. The Parties agree that XX Xxxxxx shall recover from URI the
total amount of the monetary judgment collected from him by URI
pursuant to the Xxxxxx Order and that all amounts covered by the Order
Re: Stay of Execution and Acceptance of Undertaking under the Xxxxxx
Order shall be released.
e. The Parties agree that XX Xxxxxx shall be appointed "Founder
and Chairman Emeritus" of URI, and that an acceptable job description
shall be
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established for XX Xxxxxx, and the Parties shall take all actions necessary
to maintain XX Xxxxxx in his position for the rest of his life.
f. The Parties agree that XX Xxxxxx, beginning as soon as
practicable but no later than one year after the date hereof, shall be
compensated for services he shall thereafter perform for URI, in
amounts agreed upon between XX Xxxxxx and the Company and Fife,
established through good faith negotiations and in consultation with
Xx. Xxxxx X. Xxxxx, or someone of similar expertise, taking into
account Xx. Xxxxxx'x duties, the Company's then financial condition
and future prospects, and all other factors deemed appropriate.
g. XX Xxxxxx covenants and agrees to use his best efforts to
resolve all remaining disputes of whatever kind or nature, known or
unknown, suspected or unsuspected, including claims on accounts,
between Xxxxxx Gas Oil Co. and URI.
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES.
a. The corporate Parties, URI, and IMC represent and warrant
that they are validly existing and in good standing in the state of
their organization and have the full legal right, power and authority
to execute and deliver this Agreement and to carry out all
transactions contemplated herein. Each individual signing this
Agreement on behalf of a corporation, partnership, trust, or other
entity, represents and warrants that he or she has the authority to do
so.
b. All Parties represent and warrant that they have negotiated
at arms-length with a view to arriving at a fair and equitable
settlement of their differences.
c. All Parties represent and warrant that, to the best of their
belief, the terms of this Agreement are fair to and in the best
interests of URI and its shareholders.
d. All Parties covenant that no actions of any kind shall be
undertaken by the Parties to affirmatively prosecute the Pending
Litigation, nor will the Parties instigate any new legal proceedings
against any of the other Parties.
3. This Agreement has been freely and voluntarily executed by all Parties
hereto after having been apprised of all relevant information and having been
represented by counsel. No party hereto has relied upon any inducements,
promises or representations made by any other party or other party's attorney,
other than those specifically set out in this Agreement, which constitutes the
entire, integrated understanding among the Parties.
4. Each party agrees to perform such other further acts and to execute
and deliver such further documents as may be necessary to effectuate the
purposes of this Agreement.
5. The Parties hereto, and each of them, acknowledge that this Agreement
is the compromise and settlement of the claims and demands which are denied and
contested and nothing contained herein shall be construed as an admission of
their validity or invalidity against the interests of the Parties hereto, or any
of them, except that this disclaimer does not affect the validity or
truthfulness of the affirmative statements, admissions, affidavits, filings,
notices, and writings made and agreed to be made under the terms of this
Agreement.
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6. Except as to continuing covenants and obligations set forth in the
1993 Settlement Agreement and the Xxxxxx Order, all claims, rights, causes of
action, or defenses of the Parties raised in the Pending Litigation are herewith
merged into and fully resolved as a part of this Agreement.
7. All Parties to this Agreement have read and fully comprehend and
understand the terms and provisions of this Agreement and of the ancillary
exhibits and documents incorporated herein. All Parties have been advised by
legal counsel who presently represent them in connection with this settlement as
to the content, meaning and execution of this Agreement. All Parties to this
Agreement have voluntarily and without coercion signed the same and understand
and agree to each and every paragraph hereof.
8. Each of the Parties hereto individually covenants and agrees that he
or she will not directly or indirectly attempt in any way to defeat or interfere
with any of the goals or intentions of this Agreement at any time after the date
hereof nor shall any Party hereto solicit or seek to solicit any person to
challenge any provision hereof or to file suit comparable to any suit dismissed
hereunder. This covenant of good faith shall be central to this Agreement and
any Party damaged by a breach thereof shall be entitled to all remedies
available at law or in equity as well as a recovery of reasonable attorney's
fees and costs.
9. GENERAL PROVISIONS.
a. BINDING AGREEMENT. This Agreement shall be binding upon and
shall inure to the benefit of the heirs, legal representatives,
successors and assigns, as applicable, of the respective parties
hereto, and any entities resulting from the reorganization,
consolidation or merger of any party hereto.
b. HEADINGS. The headings used in this Agreement are inserted
for reference purposes only and shall not be deemed to limit or affect
in any way the meaning or interpretation of any of the terms or
provisions of this Agreement.
c. COUNTERPARTS. This Agreement may be signed upon any number
of counterparts with the same effect as if the signature to any
counterpart were upon the same instrument.
d. ENTIRE AGREEMENT. This Agreement, together with the
exhibits and schedules hereto (which are incorporated herein by this
reference), constitutes the entire agreement and understanding between
and among the parties with respect to the subject matter hereof and
shall supersede any prior agreements and understandings among the
parties with respect to such subject matter.
e. SEVERABILITY. The provisions of this Agreement are
severable, and should any provision hereof be found to be void,
voidable or unenforceable, such void, voidable or unenforceable
provision shall not affect any other portion or provision of this
Agreement.
f. WAIVER. Any waiver by any party hereto of any breach of any
kind or character whatsoever by any other party, whether such waiver
be direct or implied, shall not be construed as a continuing waiver or
consent to any subsequent breach of this Agreement on the part of the
other party.
g. MODIFICATION. This Agreement may not be modified except by
an instrument in writing signed by the parties hereto.
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h. GOVERNING LAW. This Agreement shall be interpreted,
construed and enforced according to the laws of the State of Utah.
i. ATTORNEY'S FEES. In the event any action or proceeding is
brought by any Party against any other Party under this Agreement, the
prevailing party shall be entitled to recover attorney's fees and
costs in such amount as the court may adjudge reasonable.
j. NOTICE. All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing
and shall be considered as properly given when personally served or
deposited in the United States mail, postage prepaid, registered or
certified, with return receipt requested, or by prepaid telegram,
telecopy or deposited with a recognized courier for overnight
delivery. Notice given in any such manner shall be effective when
received or three (3) days after mailing or sending. The addresses of
the parties shall be as set forth on Schedule 9.j. attached hereto.
Each Party shall have the right to change its address for purposes of this
section to any other location within the continental United States by giving
thirty (30) days' notice to the other Parties in the manner set forth in this
section.
10. In the event that Closing does not occur for any reason, the term of
the 1993 Settlement Agreement shall be extended by the number of days elapsing
between the date hereof and the date of the event causing the failure to close.
DATED the date and year first set forth above.
URI:
Utah Resources
International, Inc.,
a Utah corporation
By: /s/
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Its:
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XX XXXXXX:
/s/ Xxxx X. Xxxxxx, Xx.
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Xxxx X. Xxxxxx, Xx.
XX XXXXXX:
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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INTER-MOUNTAIN CAPITAL CORP., a
Delaware corporation
By: /s/ Xxxx Xxxx
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Its: Xxxx Xxxx, President
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FIFE:
/s/ Xxxx Xxxx
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Xxxx Xxxx
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