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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 Johnson’s and Newman’s 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
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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 non-
dischargeability of Johnson’s 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.
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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 209-
217 of Official Records in the County Recorder’s 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 Johnson’s bankruptcy estate. Johnson shall be
responsible for seeking the necessary approvals from the Bankruptcy Court and the Trustee.
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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 Newman’s 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 Johnson’s and Newman’s 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 cashier’s 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. Property taxes
b. Property insurance
c. Utilities
d. Maintenance and repairs
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e. Initial cleanup and/or reorganization of the Salem Property as desired by Newman
to facilitate the sale or use of the Salem Property
f. 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
g. 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
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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.
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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, 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 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 Johnson’s 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.
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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 U-
Check 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
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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. Attorney’s 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
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