Johnson - BK Chapter 7 Asset Doc 63-1 Filed 01 Apr 1313

Case 11-20679
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EXHIBIT 1 Settlement Agreement
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SETTLEMENT AGREEMENT This Settlement Agreement (the Agreement) is made and entered into this 20th day of March, 2013, (the Effective Date) by and between Ina Newman, an individual residing in Salt Lake County, State of Utah, formerly Ina Johnson, hereinafter referred to as Newman; Neldon Johnson, an individual residing in Millard County, State of Utah, hereinafter referred to as Johnson; International Automated Systems, Inc., a Utah Corporation, with principal offices in Utah County, State of Utah, hereinafter referred to as IAS; Glenda Johnson, an individual residing in Millard County, State of Utah; and Johnsons and Newmans children: LaGrand Johnson, Randale Johnson, Donnel Johnson, and Brenda Smith. BACKGROUND 1. On or about July 20, 2000, Newman filed a petition for divorce in Fourth District Court in and for Utah County, State of Utah, Case No. 004401468 DA, hereinafter referred to as the Divorce Action, whereby she sought a divorce from Johnson to whom she alleged she was then married, she sought a division of marital property and she sought other remedies as set forth in the petition. 2. On or about June 6, 2001, a Bifurcated Decree of Divorce (Bifurcated Decree) was entered, a copy of which is attached as Exhibit A, granting the parties a divorce and making certain temporary orders relating to the parties. 3. On or about May 29, 2001, an oral stipulation (Divorce Stipulation), as evidenced by the Minute Entry attached as Exhibit B, was entered into by Newman and Johnson, which oral stipulation was subsequently memorialized by the Amended Findings of Fact and Conclusions of Law, included in the attached Exhibit B, entered by the Court on or about June 27, 2001, and by the Amended Decree of Divorce attached as Exhibit C, which purportedly resolved all remaining disputes between the parties relating to the Divorce Action. 4. On or about June 27, 2001, an Amended Decree of Divorce, a copy of which is attached as Exhibit C, hereinafter referred to as the Amended Decree, was entered based upon the Divorce Stipulation. 5. Subsequent to the entering of the Amended Decree a number of disputes have arisen between Newman and Johnson regarding the intent of the parties in stipulating to the entry of the Amended Decree and in regard to the meaning and interpretation of the provisions of the stipulation and the Amended Decree. In particular, disputes have arisen between the parties regarding the intent of the parties and the interpretation of the terms and provisions of the Amended Decree relating to the division of real property and the trust deed, hereinafter referred to as the Divorce Trust Deed, a copy of which is attached as Exhibit D, identified in the Amended Decree for the Salem, Utah, property, hereinafter referred to as the Salem Property. Newman, also, on or about October 9, 2002, recorded a document denoted as a CLAIM OF Page1of14
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LIEN, hereinafter referred to as the Newman Lien, a copy of which is attached as Exhibit E, for the Salem Property, which document was recorded as Entry No. 119290:2002 in the official records of the Utah County Recorder. 6. Johnson also filed a motion to vacate the Amended Decree of Divorce and all other orders entered in the divorce action based upon the assertion that Johnson and Newman were never married. That matter was the subject of various proceedings which ultimately resulted in the Utah Supreme Court affirming the Amended Decree of Divorce. 7. On or about January 11, 2011, Johnson filed a petition with the United States Bankruptcy Court for the District of Utah, Case No. 11-20679, hereinafter referred to as the Johnson Bankruptcy, seeking a discharge under Chapter 7 of the Bankruptcy Code. Johnson has sought to have all his remaining obligations to Newman under the Amended Decree discharged based upon his claim that since Johnson and Newman were never married, neither 11 U.S.C. 523(a)(5) nor 523(a)(15) were applicable because the debt was not a domestic support obligation and Newman was not a spouse, former spouse, or child, and any remaining obligations under the Amended Decree are dischargeable. Johnson filed an adversary proceeding with the United States Bankruptcy Court for the District of Utah, Case No. 11-02395, hereinafter referred to as the Johnson Adversary Case, wherein he seeks a declaration of dischargeability of his remaining obligations under the Amended Decree, as well as other relief requested in his adversary complaint in the Johnson Adversary Case. Likewise, Newman filed an adversary proceeding with the United States Bankruptcy Court for the District of Utah, Case No. 11-02393, hereinafter referred to as the Newman Adversary Case, wherein she seeks a declaration of nondischargeability of Johnsons remaining obligations under the Amended Decree under 11 U.S.C. 523, and a general denial of discharge under 11 U.S.C. 727, as well as other relief requested in her adversary complaint in the Newman Adversary Case. The Johnson Adversary Case has been consolidated into the Newman Adversary Case, and the Johnson Adversary Case and the Newman Adversary Case are hereinafter referred to collectively as the Consolidated Adversary Case. 8. On or about July 7, 2010, Newman filed a lawsuit in the Fourth Judicial District Court, in and for Utah County, State of Utah, Case No. 100402314, hereinafter referred to as the Newman IAS Lawsuit, against Johnson, IAS and Glenda Johnson, wherein Newman alleged, among other things, that certain parcels of real property located in Millard County, State of Utah, hereinafter referred to as the Millard Property, which had been deeded by Johnson to IAS or Glenda Johnson, were fraudulent conveyances as defined by Utah Code Ann. 25-6-1 et seq, or other applicable law, and were an attempt by Johnson to defraud his creditors, including Newman, and therefore that Johnson was the owner of this Property and not IAS or Glenda Johnson. The Newman IAS Lawsuit was stayed by the Johnson Bankruptcy. On or about July 28, 2011, IAS initiated an adversary proceeding in the Johnson Bankruptcy, Case No. 11-02548, hereinafter referred to as the IAS Adversary Case, seeking a declaration of the Bankruptcy Court that IAS is the sole owner of the Millard Property, as well as other relief requested in its adversary complaint filed in the IAS Adversary Case. Page2of14
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9. On or about July 29, 2009, IAS and Johnson filed a lawsuit in Third District Court, Salt Lake County, State of Utah, Case No. 090912428, against Newman, Donnel Johnson and Brenda Smith, hereinafter referred to as the U-Check Lawsuit, which lawsuit has been dismissed without prejudice. 10. Newman, Johnson and IAS agree that the numerous disputes in the Divorce Action, the Johnson Bankruptcy, the Consolidated Adversary Case, the Newman IAS Lawsuit, the IAS Adversary Case, the U-Check Lawsuit, and the IAS shareholder actions have lead to considerable discord between Newman, Johnson, their children, IAS, and others and has resulted in substantial, ongoing and ever-increasing legal fees, court costs and loss of productivity for Newman, Johnson, IAS and others. 11. On or about June 3, 1999, Johnson and Newman, as Trustors, executed a Trust Deed, hereinafter referred to as the Salem Trust Deed, a copy of which is attached as Exhibit F, to METRO NATIONAL TITLE, Trustee, and ZIONS FIRST NATIONAL BANK, Beneficiary, which was recorded as Entry No. 66323, on June 4, 1999, in Book 5112, Pages 209217 of Official Records in the County Recorders office of Utah County, Utah, for the Salem Property, which is described in Exhibit A of the Salem Trust Deed. On or about the 7th day of July, 2011, IAS, in exchange for consideration paid, received an assignment from Zions Bank of the Salem Trust Deed, which assignment was recorded on July 11, 2011, as Entry No. 49568:2011, in the official records of the Utah County Recorder. 12. Johnson has claimed review, appeal and other rights which he had intended to fully exhaust if the parties had not entered into this Agreement. 13. Newman, Johnson, their children, IAS and Glenda Johnson now desire to enter into an agreement whereby all of the disputes related to the Divorce Action, the Johnson Bankruptcy, the Consolidated Adversary Case, the Newman IAS Lawsuit, the IAS Adversary Case, the U-Check Lawsuit, and the IAS shareholder actions, as well as all other disputes existing between Newman, Johnson, their children, IAS and Glenda Johnson may be resolved, thereby eliminating further attorney fees, court costs, and loss of productivity of the persons involved, and thereby promoting an improvement of the discord between the persons involved. AGREEMENT NOW, THEREFORE, in consideration for the mutual agreements, promises, and covenants stated herein, the parties hereto agree as follows: 1. Bankruptcy Court Approval. The releases and obligations of this Agreement are contingent upon Johnson obtaining approval of this Agreement by the Bankruptcy Court, and any claim to the Salem Property being abandoned by Johnsons bankruptcy estate. Johnson shall be responsible for seeking the necessary approvals from the Bankruptcy Court and the Trustee. Page3of14
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Newman shall fully cooperate with Johnson in obtaining the necessary Court and Trustee approvals, including executing necessary stipulations, joint motions and other documents that may be required by the Court or the Trustee, and Newmans counsel shall attend all hearings before the Court related to obtaining such Court approvals. 2. Salem Property. Within thirty (30) days of entry of a final, non-appealable order of the Bankruptcy Court in the Johnson Bankruptcy approving this Agreement and abandoning any interest or claim to the Salem Property as an asset of the Johnson Bankruptcy estate, at the Closing described below, Johnson shall convey to Newman or an entity designated by her, by General Warranty Deed in the form attached as Exhibit G, a fifty percent (50%) undivided interest in the real property located at 326 N. SR 198, Salem, UT 84660, hereinafter referred to as the Salem Property, which generally comprises a commercial building situated on approximately two (2) acres of land, which was formerly used for the operation of a self-service grocery store under the name of U-Check, the Salem Property being more particularly described in Exhibit A of the Salem Trust Deed. Johnson shall also execute, at Closing, a Quit Claim Deed, in the form attached as Exhibit H, for the Salem Property, thereby conveying any and all other interest he might have in the Salem Property, if any, other than the fifty percent (50%) undivided interest conveyed by the General Warranty Deed. Johnson and Newman acknowledge that the extent of Johnsons and Newmans respective interests in the Salem Property have been in dispute between Johnson and Newman, but that Johnson agrees that he shall convey at the Closing described hereinafter (the Closing), by the General Warranty Deed and the Quit Claim Deed, the entirety of his interest in the Salem Property, free and clear of all taxes, liens, IAS interest in the Salem Property, or any other encumbrances, except for the Divorce Trust Deed and the Newman Lien, to Newman or an entity designated by her. Newman shall cause the Divorce Trust Deed and the Newman Lien to be removed from the Salem Property at Closing. Newman shall be responsible for property taxes accruing on the Salem Property for the year 2013 and thereafter. 3. Escrow Account. Within thirty (30) days of entry of a final, non-appealable order of the Bankruptcy Court in the Johnson Bankruptcy approving this Agreement and abandoning the Salem Property as an asset of the Johnson Bankruptcy estate, at the Closing described below, IAS shall cause a cashiers check in the amount of Fifty Thousand Dollars ($50,000.00), hereinafter referred to as the Escrow Deposit, to be delivered to Backman Title Company, 167 East 6100 South, Murray Utah 84107 for deposit in an escrow account, hereinafter referred to as the Escrow Account, with Backman Title Company , hereinafter referred to as the Escrow Agent, from which Escrow Account Newman shall be entitled to withdraw funds for the Salem Property for the following purposes: a. b. c. d. Property taxes Property insurance Utilities Maintenance and repairs
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e. f.
g.
Initial cleanup and/or reorganization of the Salem Property as desired by Newman to facilitate the sale or use of the Salem Property Environmental remediation and all other measures required for compliance with any and all Federal, State, or Local statutes, regulations, codes, ordinances, or other applicable law Inspection and marketing fees incurred in connection with the sale of the Salem Property
The Escrow Agent shall be authorized to release funds from the Escrow Account to Newman upon presentation of reasonable documentation of payment of costs related to the Salem Property in one of the categories identified above. Any balance in the Escrow Account at the time of closing on the sale of the Salem Property by Newman to an independent third party shall be released to Newman. Any balance remaining in the Escrow Account as of February 1, 2015, shall be released to Newman. 4. Settlement of Amended Divorce Decree Disputes. Newman hereby agrees to accept the conveyance by Johnson of his interest in the Salem Property as described in paragraph 2 above, and the deposit of the Fifty Thousand Dollar ($50,000.00) Escrow Deposit in the Escrow Account as described in paragraph 3 above, as payment in full of any and all remaining obligations of Johnson to Newman under the Amended Decree, as well as any and all remaining obligations, if any, of Johnson to Newman under the Bifurcated Decree, the Divorce Stipulation, the Divorce Trust Deed, or otherwise arising out of the Divorce Action. Newman further hereby agrees that the foregoing Salem Property interest conveyance and the Escrow Deposit constitutes payment in full and fully satisfies any and all prior judgments of any kind or amount rendered against Johnson in the Divorce Action or any proceedings related thereto. Newman further agrees to withdraw any pending request for Johnson to be found in contempt in the Divorce Action. Newman agrees that upon Johnson conveying his interest in the Salem Property and causing the Escrow Deposit identified above at the Closing, Johnson shall have no further obligation to Newman under the Amended Decree, the Bifurcated Decree, the Divorce Stipulation, the Divorce Trust Deed, or the Divorce Action, and that all such obligations shall be deemed to be fully satisfied. Johnson acknowledges and agrees that, upon completion of Closing as set forth in this Agreement, Newman shall have no further obligation to Johnson under the Amended Decree, the Bifurcated Decree, the Divorce Stipulation, or the Divorce Action, and that any such obligations shall be deemed to be fully satisfied 5. Dismissal of Newman IAS Lawsuit. Newman, Johnson, IAS and Glenda Johnson hereby agree that upon conveyance of the Salem Property and the Escrow Deposit, the Newman IAS Lawsuit shall be dismissed with prejudice with each of the parties to bear her or its own costs and attorney fees. 6. Dismissal of Adversary Proceedings. Johnson, Newman and IAS hereby agree that upon approval of this Agreement by the Bankruptcy Court and abandonment of the Salem Property as an asset of the Johnson Bankruptcy estate, the Consolidated Adversary Case and the Page5of14
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IAS Adversary Case shall be dismissed with prejudice, with each of the parties to bear their own costs and attorney fees. 7. Documents to be Executed by Newman. In addition to any documents which Newman may be required to execute pursuant to other provisions of this Agreement, Newman hereby agrees that she, her attorney, or trustee as appropriate, shall execute, at the Closing, the following documents: a. Acknowledgment of Full Satisfaction of all Amended Divorce Decree Obligations and Full Satisfaction of all Judgments for the Divorce Action in the form attached as Exhibit I. b. Stipulation for Entry of Second Amended Divorce Decree and approval as to form for a Second Amended Divorce Decree providing for the Fourth District Court to approve the settlement provided by this Agreement, in the forms attached as Exhibits J and K respectively. c. Request for Full Reconveyance for the Divorce Trust Deed, Deed of Reconveyance, and release in full of Johnson from any and all obligations under the Divorce Trust Deed and any related Trust Deed Note, in the forms attached as Exhibits L, M and N, respectively. d. Release of the Newman Lien in the form attached as Exhibit O.
e. Joint Motion and Stipulation for Dismissal of the Newman IAS Lawsuit with Prejudice, with each of the parties to bear her or its own costs and attorney fees, and approval of the Order of Dismissal with Prejudice as to form, in the forms attached as Exhibits P and Q respectively. f. Joint Motion and Stipulation for Dismissal of the Consolidated Adversary Case with Prejudice, with each of the parties to bear his or her attorney fees and costs, and approval of the Order of Dismissal with Prejudice as to form, in the forms attached as Exhibits R and S respectively. g. Joint Motion and Stipulation for Dismissal of the IAS Adversary Case with Prejudice, with each of the parties to bear his or her attorney fees and costs, and approval of the Order of Dismissal with Prejudice as to form, in the forms attached as Exhibits T and U respectively. h. Subject to entry of a final, non-appealable order of the Bankruptcy Court in the Johnson Bankruptcy abandoning the Salem property, withdrawal of Proof of Claim filed by Newman in the Johnson Bankruptcy.
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8. Documents to be Executed by Johnson. In addition to any documents which Johnson may be required to execute pursuant to other provisions of this Agreement, Johnson hereby agrees that, in addition to the Warranty Deed and the Quit Claim Deed identified above, he, or his attorney as appropriate, shall execute at the Closing, the following documents: a. Stipulation for Entry of Second Amended Divorce Decree and approval as to form for Second Amended Divorce Decree providing for the Fourth District Court to approve the settlement provided by this Agreement, in the forms attached as Exhibits J and K respectively. b. Joint Motion and Stipulation for Dismissal of the Newman IAS Lawsuit with Prejudice, with each of the parties to bear her or its own costs and attorney fees, and approval of the Order of Dismissal with Prejudice as to form, in the forms attached as Exhibits P and Q respectively. c. Joint Motion and Stipulation for Dismissal of the Consolidated Adversary Case with Prejudice, with each of the parties to bear his or her attorney fees and costs, and approval of the Order of Dismissal with Prejudice as to form, in the forms attached as Exhibits R and S respectively. d. Joint Motion and Stipulation for Dismissal of the IAS Adversary Case with Prejudice, with each of the parties to bear his or her attorney fees and costs, and approval of the Order of Dismissal with Prejudice as to form, in the forms attached as Exhibits T and U respectively. 9. Documents to be Executed by IAS. In addition to any documents which IAS may be required to execute pursuant to other provisions of this Agreement, IAS hereby agrees that it, or its attorney as appropriate, shall execute at the Closing, the following documents: a. Request for Full Reconveyance for the Salem Trust Deed, Deed of Reconveyance,for the Salem Trust Deed, full and final release of Johnson and Newman under the Salem Trust Deed and the related Trust Deed Note, and full and final release of Johnson and Newman under the related instruments, in the forms attached as Exhibits V, W, X, and Y respectively. b. Joint Motion and Stipulation for Dismissal of the Newman IAS Lawsuit with Prejudice, with each of the parties to bear her or its own costs and attorney fees, and approval of the Order of Dismissal with Prejudice as to form, in the forms attached as Exhibits P and Q respectively. c. Joint Motion and Stipulation for Dismissal of the IAS Adversary Case with Prejudice, with each of the parties to bear his or her attorney fees and costs, and
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approval of the Order of Dismissal with Prejudice as to form, in the forms attached as Exhibits T and U respectively. 10. Further Proceedings in Johnson Bankruptcy. Newman further agrees that upon the dismissal of the Consolidated Adversary Case and the IAS Adversary Case, and the filing of her Withdrawal of Proof of Claim, Johnson shall be entitled to continue with proceedings in the Bankruptcy Court as Johnson deems desirable, without any further objection by Newman, and to pursue discharge, dismissal or any other resolution deemed desirable by Johnson. Newman further agrees not to interfere with, attempt to influence, or oppose any further proceedings, motions or actions by Johnson or the Trustee in the Johnson Bankruptcy. Nothing in this provision shall prohibit Newman from cooperating with the Trustee in the Johnson Bankruptcy in response to any request made by the Trustee. 11. Salem Personal Property. Newman, Johnson and IAS agree that the personal property presently situated on the property or in the building on the Salem Property shall be divided among the parties as follows: a. All of the computers, office equipment, office furnishings and other items located in the space presently occupied by IAS in the second floor of the building shall be retained by IAS. IAS shall remove these items from the building prior to Closing. Any such personal property remaining on the Salem Property at the time of Closing shall become the property of Newman. b. All of the front end checkout equipment and systems, including but not limited to the checkout stations, scales, monitoring equipment, and computer equipment shall be retained by IAS. IAS shall remove these items from the building prior to Closing. Any such personal property remaining on the Salem Property at the time of Closing shall become the property of Newman. c. All of the machine shop equipment, tools, pipes, fittings, materials and supplies shall be retained by IAS. IAS shall remove these items from the building prior to closing. Any such personal property remaining on the Salem Property at the time of Closing shall become the property of Newman. d. Any and all equipment and components thereof relating to IAS technology shall be retained by IAS. IAS shall remove these items from the building prior to Closing. Any such personal property remaining on the Salem Property at the time of Closing shall become the property of Newman. e. Any and all personal property items that do not constitute grocery store shelving, coolers or freezers shall be retained by IAS. IAS shall remove these items from the building prior to Closing. Any such personal property remaining on the Salem Property at the time of Closing shall become the property of Newman. Page8of14
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f. All patent, trademark, trade dress, copyright and other intellectual property rights, including the U-Check trademarks, relating to the automated checkout system previously used for operation of the store at the Salem Property shall be retained by IAS or Johnson, as IAS and Johnson shall agree by separate agreement. IAS shall remove the U-Check sign, trade dress, and all other personal property not identified in subparagraph (g) below from the Salem Property prior to the Closing. Any U-Check signs or trade dress not removed from the Salem Property prior to Closing may be removed and disposed of by Newman. Any other personal property remaining on the Salem Property at the time of Closing shall become the property of Newman. g. All of the grocery store shelving, coolers and freezers and any other personal property remaining in the building thirty (30) days after entry of a final, nonappealable order of the Bankruptcy Court in the Johnson Bankruptcy approving this Agreement and abandoning the Salem Property as an asset of the Johnson Bankruptcy estate shall become the property of Newman. These are the only items of personal property relating to the Salem Property that shall become the property of Newman. 12. Salem Property Taken As Is. Newman acknowledges and agrees that she is agreeing to take and will be taking the Salem Property and the personal property identified above in subparagraph (g), As Is, without exception but subject to the removal of Johnsons and IAS personal property, and that neither Johnson nor IAS makes any representations whatsoever regarding the condition of the Salem Property or the personal property retained by Newman as described above in subparagraph (g). Newman acknowledges that unlimited access to the Salem Property was provided for a property inspector selected by Newman, and that the Salem property was inspected by the property inspector as instructed by Newman, which inspection included but was not limited to, structural, mechanical, plumbing and environmental conditions. Newman acknowledges and agrees that she is not relying on any representation from Johnson, IAS, any other party to this Agreement, or any of their representatives, officers, employees, attorneys or agents regarding the condition of the Salem Property, in entering into this Agreement. 13. Closing. The Closing shall occur at the Backman Title Company, 167 East 6100 South, Murray Utah 84107, within thirty (30) days after entry of a final, non-appealable order of the Bankruptcy Court in the Johnson Bankruptcy approving this Agreement and abandoning the Salem Property as an asset of the Johnson Bankruptcy estate, which order Johnson shall promptly seek upon execution of this Agreement. 14. General Release by Johnson. Except for the express obligations of Newman set forth in this Agreement, Johnson hereby waives and releases Newman, Donnel Johnson, and Brenda Smith from any and all obligations and from any and all claims, causes of action, potential claims, potential causes of action, known or unknown, arising out of any act or omission, whether known or unknown, against Newman, Donnel Johnson, or Brenda Smith, through and including the date of this Agreement, and to abandon and forsake any other appeal or review rights he may have. Page9of14
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15. General Release by Newman. Except for the express obligations of Johnson and IAS set forth in this Agreement, Newman hereby waives and releases Johnson, Glenda Johnson, LaGrand Johnson, Randale Johnson, and IAS, from any and all obligations and from any and all claims, causes of action, potential claims, potential causes of action, known or unknown, arising out of any act or omission, whether known or unknown, against Johnson, Glenda Johnson, LaGrand Johnson, Randale Johnson, or IAS, through and including the date of this Agreement. 16. General Release by IAS. Except for the express obligations of Newman set forth in this Agreement, IAS hereby waives and releases Newman, Donnel Johnson, and Brenda Smith from any and all obligations and from any and all claims, causes of action, potential claims, potential causes of action, known or unknown, arising out of any act or omission, whether known or unknown, against Newman, Donnel Johnson, or Brenda Smith, through and including the date of this Agreement. 17. General Release by Glenda Johnson. Except for the express obligations of Newman set forth in this Agreement, Glenda Johnson hereby waives and releases Newman, Donnel Johnson, and Brenda Smith from any and all obligations and from any and all claims, causes of action, potential claims, potential causes of action, known or unknown, arising out of any act or omission, whether known or unknown, against Newman, Donnel Johnson, or Brenda Smith, through and including the date of this Agreement. 18. General Release by Children of Johnson and Newman. Donnel Johnson, Brenda Smith, LaGrand Johnson, and Randale Johnson hereby waive and release Johnson, Newman, IAS, Glenda Johnson and each other from any and all obligations and from any and all claims, causes of action, potential claims, potential causes of action, known or unknown, arising out of any act or omission, whether known or unknown, through and including the date of this Agreement. Donnel Johnson represents and warrants that he is not in possession or control of and does not have right of access to any copies, electronic or otherwise, any of the IAS or UCheck software, or any portion thereof, which includes, but is not limited to, any software that he developed or otherwise worked on, in whole or in part, while an employee of or affiliated with IAS or U-Check. Donnel Johnson, Brenda Smith, LaGrand Johnson, and Randale Johnson each hereby acknowledges and agrees that he or she has been afforded an opportunity to obtain the advice and counsel of an attorney in regard to this Agreement; that he or she fully understands this Agreement and the nature of the releases received by and granted by him or her under this Agreement; and that he or she fully understands his or her rights and obligations under this Agreement. 19. Liquidated Damages. Should any party to this Agreement file a claim against any of the other parties to this Agreement arising before the date of this Agreement that is related to any of the claims released by this Agreement or to any of the cases dismissed by this Agreement, the defending party shall be entitled to liquidated damages in the amount of $100,000.00 per claim. Additionally, if any party to this Agreement shall file any claim against any other party to Page10of14
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this Agreement and lose such claim, the prevailing defending party shall be entitled to further liquidated damages in the amount of $100,000.00. 20. Indemnification. In further consideration of the foregoing, in the event of the breach of this Agreement by a party, the breaching party shall indemnify each of the other parties from any and all claims and damages, including attorney fees and costs, incurred due to the breach of this Agreement. 21. Representation by Johnson. Johnson represents and warrants that he has not previously conveyed his interest in or encumbered his interest in the Salem Property, except for the encumbrances that presently appear of record, and that, to the best of his knowledge, the only encumbrances on the Salem Property are the Salem Trust Deed presently owned by IAS, the disputed Divorce Trust Deed, the disputed Newman Lien, and any other miscellaneous liens and restrictions that may be of record. Johnson represents and warrants that he will not transfer any interest in the Salem Property prior to Closing. 22. Representation by Newman. Newman represents and warrants that she has not previously transferred, assigned, or encumbered the Divorce Trust Deed or any of the rights secured by the Divorce Trust Deed. 23. Representation by IAS. IAS represents and warrants that it has not previously transferred, assigned, or encumbered the Salem Trust Deed or the Trust Deed Note secured thereby. 24. General Representations and Warranties of Parties. Each of the parties represents and warrants that (a) this Agreement and all agreements, instruments and documents in this Agreement provided to be executed by any or all of the parties are duly authorized, executed and delivered by and are binding upon the applicable party; (b) each of the parties has the legal capacity and authority to enter into this Agreement and consummate the transactions contemplated in this Agreement without the consent or joinder of any other party; and ( c) neither the execution and delivery of this Agreement and the documents reference in this Agreement, nor the incurrence of any of the obligations of parties set forth in this Agreement conflicts with or results in the breach of any terms, conditions or provisions of any agreement to which any of the parties is a party. 25. Condition for this Agreement. The parties to this Agreement acknowledge and agree that this Agreement is conditional, in its entirety, on the entry of a final, non-appealable order of the Bankruptcy Court in the Johnson Bankruptcy abandoning the Salem Property as an asset of the Johnson Bankruptcy estate and approving this Agreement, which order Johnson shall promptly seek upon execution of this Agreement. In the event that Johnson is unable to obtain the entry of such final, non-appealable order within six (6) months of the Effective Date of this Agreement, this Agreement shall be null and void in its entirety.
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26. No Admission. The parties to this Agreement acknowledge that the preparation of and execution of this Agreement is in the interest of resolving the disputes between the parties and is not an admission of any matter by any party, any such admissions being hereby expressly denied. 27. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Utah. 28. Entire Agreement. This is the entire Agreement between and among the parties and this Agreement shall not be amended except by a written amendment signed by all of the parties. 29. Further Assurances. The parties agree to execute whatever documents and to take whatever action may be reasonably required from time to time to effectuate the terms and provisions of this Agreement. 30. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, administrators, executors and assigns of the parties hereto. 31. Attorneys Fees. In the event of the breach of this Agreement by either of the parties, the injured party shall be entitled to recover their costs and attorney fees incurred in enforcing this Agreement and in pursuing appropriate remedies at law or equity. 32. No Presumption Against Drafting Party. This Agreement has been drafted by both parties and is not to be construed in favor of or against any party, regardless of which party drafted or participated in the drafting of its terms. 33. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. 34. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.
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EXHIBIT A Bifurcated Decree of Divorce
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EXHIBIT B Minute Entry and Amended Findings and Conclusions
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EXHIBIT C Amended Decree of Divorce
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EXHIBIT D Divorce Trust Deed
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EXHIBIT E Newman Lien
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EXHIBIT F Salem Trust Deed
Case Case 11-20679 11-20679 Doc Doc 41-1 63-1 Filed Filed 12/09/11 04/01/13 Entered Entered 12/09/11 04/01/13 15:45:10 09:13:48 Desc Desc Exhibit Exhibit 1 (Settlement 1 Agreement) Page 1 of 9 Page 46 of 54

Johnson - BK Chapter 7 Asset Doc 63-1 Filed 01 Apr 1313

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Case 11-20679

EXHIBIT 1 Settlement Agreement

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EXHIBIT A Bifurcated Decree of Divorce

EXHIBIT B Minute Entry and Amended Findings and Conclusions

EXHIBIT C Amended Decree of Divorce

EXHIBIT D Divorce Trust Deed

EXHIBIT E Newman Lien

EXHIBIT F Salem Trust Deed

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