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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) NOVEMBER 30, 1996
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CROWN NORTHCORP, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-22936 22-3172740
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1251 DUBLIN ROAD, COLUMBUS, OHIO 43215
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (614) 488-1169
-----------------------------
NOT APPLICABLE
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report.)
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ITEM 5. OTHER EVENTS
Prior to 1996, Crown NorthCorp, Inc. (the "Company") derived most of its
revenues from public-sector contracts, primarily with the Federal Deposit
Insurance Corporation ("FDIC") and the Resolution Trust Corporation ("RTC").
Under the terms of its contracts with the Company, the RTC retained a portion of
earned disposition fees (between 10% and 15% depending on the contract) pending
expiration or termination of the contracts. The purpose of the retention was to
provide a fund against which the RTC may recover costs attributable to assets
that remained unsold at the time of contract expiration or termination. If the
retainage exceeds such costs, the excess is to be remitted back to the Company.
The Company, however, has no obligation to reimburse the RTC for such costs
exceeding the retention. The statutory authority of the RTC expired December 31,
1995 and its remaining operations were assigned to the FDIC.
Pursuant to a Settlement and Release Agreement (the "Agreement") effective
November 22, 1996 between the FDIC and Crown Revenue Services, Inc., a wholly
owned subsidiary of the Company ("Crown"), the Company received from the FDIC
the sum of $2,299,857.52, which is net of $200,000 held in escrow pending the
resolution of certain issues set forth in the Agreement, in settlement of issues
arising out of six contracts between Crown and the RTC. Subsequently, the
Company distributed the sum of $719,633.38 to affiliates of Ronald E. Roark,
Chairman and Chief Executive Officer of the Company and the former owner of
Crown, pursuant to the terms of a certain retainage sharing agreement entered
into July 31, 1994 in connection with the Company's acquisition of Crown (the
"Sharing Agreement"). Additionally, pursuant to a similar settlement and release
agreement effective November 15, 1996 among the FDIC, Crown and an unaffiliated
third party, the Company received from the FDIC the sum of $111,464.36 in
settlement of issues arising out of the seventh and final contract between Crown
and the RTC. This latter settlement is not subject to the Sharing Agreement.
The Company, which was formerly known as NorthCorp Realty Advisors, Inc.
("NorthCorp"), continues to negotiate with the FDIC with respect to retainage
revenues attributable to contracts originally entered into between NorthCorp and
the RTC. Similarly to Crown, on July 31, 1994 NorthCorp entered into a retainage
sharing agreement with its former owner with respect to the NorthCorp contracts.
Management anticipates a resolution of the NorthCorp contracts in the first
quarter of 1997. There can be no assurance as to the outcome of these
negotiations.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(a) Financial Statements
None
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(b) Pro Forma Financial Information
None
(c) Exhibits
1. Settlement and Release Agreement effective as of November 22, 1996
by and between the Federal Deposit Insurance Corporation (acting in various
capacities itemized in the Agreement) and Crown Revenue Services, Inc.
2. Settlement and Release Agreement effective as of November 15, 1996
by and among the Federal Deposit Insurance Corporation (acting in various
capacities itemized in the Agreement), Greenthal/Harlan Realty Services, Co. and
Crown Revenue Services, Inc.
3. Settlement and Distribution Agreement by and among Crown Revenue
Services, Inc., Culloden of Ohio, Inc. and REE, Inc. entered into as of November
30, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
CROWN NORTHCORP, INC.
By: /s/ Stephen W. Brown
----------------------------
Stephen W. Brown
Secretary
Date: December 16, 1996
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INDEX TO EXHIBITS
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1. Settlement and Release Agreement effective as of November 22, 1996
by and between the Federal Deposit Insurance Corporation (acting in various
capacities itemized in the Agreement) and Crown Revenue Services, Inc.
2. Settlement and Release Agreement effective as of November 15, 1996
by and among the Federal Deposit Insurance Corporation (acting in various
capacities itemized in the Agreement), Greenthal/Harlan Realty Services, Co. and
Crown Revenue Services, Inc.
3. Settlement and Distribution Agreement by and among Crown Revenue
Services, Inc., Culloden of Ohio, Inc. and REE, Inc. entered into as of November
30, 1996.
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EXHIBIT 1
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SETTLEMENT AND RELEASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 25th day of November,
1996, to be effective as of the 22nd day of November, 1996, ("Effective Date")
by, between and among the Federal Deposit Insurance Corporation, acting as
receiver for the institutions designated in the SAMDA as hereinafter defined or
as exclusive manager of the FSLIC Resolution Fund (the "FRF") or in its
corporate capacity, as the case may be (the "FDIC" shall mean the FDIC in any
of the capacities identified above unless otherwise stated), and Crown Revenue
Services, Inc., a Corporation formed under the laws of the State of Ohio, with
its principal place of business located at 1251 Dublin Road, Columbus, Ohio,
43715, which entity was labeled as Crown Revenue Service, Inc. in the
assumption agreement hereinafter described, ("Contractor").
WITNESSETH:
WHEREAS, by operation of law on December 31, 1995, the Resolution Trust
Corporation (the "RTC") terminated and the FDIC succeeded the RTC as receiver
for the institutions designated in the SAMDA; and
WHEREAS, by operation of law on December 31, 1995, the RTC terminated
and the FRF assumed all of the liabilities and obtained all of the assets of
the RTC which were held in RTC's corporate capacity at that time; and
WHEREAS, the RTC, as receiver or conservator, and Contractor entered
into six (6) Asset Management and Disposition Agreements, as amended,
(####-##-####, ####-##-####, ####-##-####, #731-90-
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1505, ####-##-####, and ####-##-####) (collectively the "SAMDA") pursuant to
which Contractor agreed to perform certain asset management and disposition
services on behalf of the RTC; and
WHEREAS, the SAMDA have expired or terminated; and
WHEREAS, Contractor has invoiced or made claims or demands for various
disposition fees, management fees, costs, setoffs, retentions and interest
associated with the SAMDA (the "Disputed Contractor Claims"); and
WHEREAS, the FDIC has contested the validity of the Disputed Contractor
Claims, including amounts, methods of calculation, and contractual and
equitable grounds for recovery; and
WHEREAS, the FDIC has known claims against and disputes with Contractor;
and
WHEREAS, Contractor has contested the validity of the FDIC's known
claims and disputes, including amounts, methods of calculation, and contractual
and equitable grounds for recovery; and
WHEREAS, in order to amicably resolve the Disputed Contractor Claims
and the known claims of and disputes with the FDIC, but without admissions of
liability by any of the parties, the parties desire to settle this matter on
the terms hereinafter provided;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the FDIC and Contractor, intending to be legally bound, agree as
follows:
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ARTICLE I
COMPROMISE TRANSACTION
1.1 Compromise Amount. Subject to the retention of the reserve
amount of $200,000.00 provided in Section 3.1(h) below the FDIC as receiver or
as manager of the FRF, as the case may be, shall pay to Contractor within a
reasonable time following execution of this Agreement by both parties (the
"Execution Date"), the sum of Two Million Four Hundred Ninety-Nine Thousand
Eight Hundred Fifty-Seven Dollars and 52 Cents ($2,499,857.52) ("the Compromise
Amount") which upon payment shall constitute full settlement, all as more fully
described below, of all claims relating to the SAMDA by Contractor against the
FDIC, including without limitation, the Disputed Contractor Claims, except for
any obligation of the FDIC as Receiver or as manager of the FRF, as the case
may be, to provide indemnification to the Contractor under Article XIV of the
SAMDA, provided, however, that Contractor shall have no right to submit or
recover all or any portion of the Disputed Contractor Claims under said Article
XIV of the SAMDA.
1.2 Indemnification Under Article XIV. In addition, the FDIC
agrees that any new indemnification matters shall be processed in accordance
with the indemnification procedure provided in the SAMDA, it being clearly
understood, however, that the FDIC will, except in clearly inappropriate
situations, provide a defense and pay directly the associated fees and expenses
subject to a reservation of rights agreement or undertaking as provided by the
SAMDA and in accordance with 93-SAM-231 as modified by 95-SAM-265,
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both as attached hereto as Exhibit "A". The FDIC further agrees that with
regard to matters that would have been covered by a property owner's insurance
policy but for RTC's decision to self-insure, FDIC shall provide the same level
of protection to Contractor as would have been provided under such owner's
policy if Contractor had been named as an additional insured.
1.3 Contractor Waiver. Upon payment of the Compromise Amount,
Contractor waives any and all claims it may have to, and assigns to the FDIC,
all funds held by the FDIC pursuant to, or in connection with, the SAMDA,
including without limitation any funds held under Article XI of the SAMDA.
1.4 Manner of Payment. FDIC will transfer the above mentioned
settlement amounts to the Contractor via separate wire transfers of the net
amount due to the Contractor. FDIC shall not be responsible for delay in such
transfers.
ARTICLE II
REPRESENTATIONS
2.1 Representations by Contractor. Contractor represents and
warrants to the FDIC that:
(a) Contractor has full and complete authority to enter into this
Agreement and to carry out the transactions contemplated hereby. Each person
signing on behalf of Contractor has full authority to bind Contractor. All
actions required to be taken by Contractor under and pursuant to the terms of
this Agreement have been duly authorized to the extent required by law; such
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authorization is in full force and effect and such actions will not conflict
with, or constitute a default under, the provisions of any instrument to which
Contractor is now a party or by which any of Contractor's properties or assets
may be bound or affected.
(b) This Agreement constitutes the valid and binding obligation of
Contractor, enforceable against Contractor in accordance with its terms, except
to the extent limited by applicable provisions of bankruptcy, reorganization,
insolvency, moratorium or other similar laws of general application relating to
or affecting the enforcement of creditors' rights generally.
(c) By signature below, Contractor affirms that it is not insolvent or
bankrupt and has not committed any act of bankruptcy. Contractor further
affirms that it has not made any general assignment for the benefit of
Contractor's creditors, and no proceeding seeking (i) relief under any
bankruptcy or insolvency law, (ii) the rearrangement or readjustment of debt,
(iii) the appointment of a receiver, custodian, liquidator or trustee to take
possession of substantially all of the assets, or (iv) the liquidation of
Contractor has been commenced or is threatened against or with respect to
Contractor.
(d) As of the Execution Date, to the knowledge of Contractor, there
are no suits or proceedings by or before any court, commission, board or other
governmental body pending, or to the knowledge of Contractor threatened, which
involve or affect the validity or enforceability of the SAMDA or this Agreement.
(e) Contractor has not assigned or pledged, directly or by
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operation of law, to any other individual, firm, partnership, corporation,
trust or any other entity any right, title or interest in any claims or
disputes being released hereby.
(f) As of the Execution Date, to the knowledge of Contractor,
Contractor acknowledges that it is not aware of any claims of Contractor, or
any party directly or indirectly affiliated with Contractor, against, demands
of, or invoices to the RTC or the FDIC regarding the SAMDA or this Agreement,
of which Contractor has not already notified the RTC or the FDIC in writing.
(g) The representations of Contractor with respect to each of the
agreements listed for inclusion in the SAMDA shall be effective from the
effective date of each such agreement:
2.2 REPRESENTATIONS BY THE FDIC.
(a) The FDIC represents and warrants to Contractor that, upon
execution by an authorized individual, acting in conformity with his or her
delegated authority, this Agreement shall constitute a legal, valid and binding
agreement of the FDIC enforceable in accordance with its terms, except to the
extent limited by law.
(b) The FDIC represents and warrants to Contractor that the person
signing on behalf of the FDIC is an authorized individual who has full
authority to bind the FDIC.
(c) The FDIC represents and warrants to Contractor that the FDIC has
not assigned or pledged, directly or by operation of law, to any individual,
firm, partnership, corporation, trust, or any other entity any right, title or
interest in any claims or disputes being released hereby.
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(d) As of the Execution Date and except as to the Surviving Issues, to
the personal knowledge of the FDIC, the FDIC acknowledges that it is not aware
of any claims of the FDIC against or demands of the Contractor regarding the
SAMDA or this Agreement, of which the FDIC has not already notified Contractor.
For the purposes of this Section 2.2 (d), "the personal knowledge of the FDIC"
shall mean the personal knowledge of those people employed by the FDIC who, as
of the Execution Date, are assigned to the FDIC's Division of Administration
Acquisition Services Branch SAMDA Closeout Section.
ARTICLE III
COMPROMISE AND RELEASE
3.1 RELEASE BY CONTRACTOR.
(a) After execution hereof and upon payment of the Compromise Amount,
Contractor for itself and its successors and assigns or any person or entity
claiming through or under it, does hereby remise, release and forever discharge
the FDIC its employees, officers, directors, and agents and their respective
successors and assigns, and any subsidiaries, and any subsidiary officers,
directors, employees, consultants, agents and other representatives,
(collectively, the "FDIC Released Parties"), of and from all manner of actions,
causes of action, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialities, covenants, conditions, contracts, controversies,
agreements, promises, trespasses, damages, judgments, executions, claims,
liabilities, responsibilities and demands whatsoever, at law or in equity, which
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the Released Contractor Parties (as hereinafter defined) ever had, now have, or
may hereafter have, whether known or hereafter discovered, against the FDIC
Released Parties, and their successors and assigns, evidenced by, arising out
of, in connection with, or in any manner relating to, the SAMDA, including the
Disputed Contractor Claims, except that this release shall not release the FDIC
Released Parties from any obligation under this Agreement or under Article XIV
of the SAMDA. This provision shall survive the execution, delivery and
consummation of this Agreement.
(b) Contractor acknowledges and agrees that the FDIC does not purport
to have the ability to release Contractor from, and that this Settlement and
Release Agreement does not apply to and shall have no bearing upon,
administrative or judicial proceedings or actions or claims, including, but not
limited to, any action or proceeding under the False Claims Act, 31 U.S.C.
Section 3729, et seq., which may be brought by any governmental agencies,
including the Office of the Inspector General and the Department of Justice.
Contractor additionally acknowledges and agrees that they may not use or assert
this Settlement and Release Agreement as a defense in any administrative or
judicial proceedings or actions or claims brought by any governmental agency
other than the FDIC relating to any Task Orders or to any other contract
between Contractor and the FDIC, in any of its capacities. By this
acknowledgment and agreement, Contractor agrees, INTER ALIA, to not plead or
argue or claim that the existence or terms of this Settlement and Release
Agreement constitute(s) evidence and/or include(s) any admission,
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ratification, or failure to mitigate damages by any governmental agency, or
that the existence or terms of this Settlement and Release Agreement estop(s)
any governmental agency, excluding the FDIC, from constituting or bringing any
administrative or judicial proceeding or action or claim. Nothing in this
Settlement and Release Agreement shall be deemed to preclude or in any way
limit or restrict any action or claim by any entity or governmental agency
other than the FDIC or its successors including but not limited to, the
Department of Justice or the Office of Inspector General.
(c) The parties hereto acknowledge that except as explicitly stated
herein, this Agreement does not relieve them from, or in any way reduce or
affect, the parties' respective obligations to comply with and honor those
obligations which, pursuant to the terms of the SAMDA, survive expiration of
the SAMDA.
(d) Contractor further acknowledges that, except with regard to
Known Claims, this Agreement shall in no way affect or diminish the FDIC's
rights under the SAMDA or otherwise to claim or assert in any administrative or
judicial proceeding, including, without limitation, for any pending or future
matters, any acts or omissions by or on behalf of Contractor, its officers,
directors, partners, consultants, representatives, employees or agents which
create or may create or give rise to an obligation of Contractor to indemnify
the FDIC or which may relieve the FDIC of indemnification obligations under the
provisions of the SAMDA and assert and obtain recovery for any legally
sustainable findings against Contractor in
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the Property Management Expiration Reviews listed on Exhibit "B" attached
hereto and made a part hereof. The obligations and rights described in
Subsections 3.1(b), 3.1(c), and 3.1(d) hereof may be referred to collectively
as the "Surviving Issues."
(e) Notwithstanding any other provisions of this Agreement,
Contractor acknowledge that no claims that arise out of or are related to the
SAMDA can be asserted in a manner that obligates the Bank Insurance Fund as
established in 12 USC Section 1821(a)(5).
(f) The parties acknowledge and agree that Agreements ####-##-####
and ####-##-#### cited above are meant to include Agreements incorporating the
additional suffices of -0258 and -0255 as were appended to such Agreements by
the Kansas City office of the FDIC from time to time.
(g) The parties acknowledge and agree that open issues remain
unresolved with respect to the subsidiary SAMA (Modification #15) associated
with Agreement ####-##-#### cited above, no settlement provisions contained in
this Agreement shall apply and such SAMA shall not be settled between the
parties until after the completion of a performance audit on same by the Office
of Inspector General. Nothing contained in this Agreement shall in any way limit
the parties with respect to any claims by either party with respect to the SAMA
(Modification #15).
(h) The parties acknowledge and agree that the sum of Two Hundred
Thousand Dollars ($200,000.00) shall be deducted from the gross settlement
amount set forth hereinabove and held by FDIC as a reserve pending the
completion of said audit and the resolution
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of all issues relating to that SAMA.
3.2 Release by the FDIC. Except for the Surviving Issues, and any
issues involving the SAMA cited above, the FDIC for itself and its successors
and assigns and any person or entity claiming through or under it, does hereby
remise, release and forever discharge Contractor, its partners, employees,
officers, directors and agents, subsidiaries, officers, directors, employees,
partners, consultants, agents and representatives and their respective
successors and assigns (collectively, the "Released Contractor Parties"), of
and from all known manner of actions, causes of action, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties, convenants,
conditions, contracts, controversies, agreements, promises, trespasses,
damages, judgments, executions, claims, liabilities, responsibilities and
demands whatsoever, at law or in equity which the FDIC Released Parties ever
had or now have against the Released Contractor Parties, and their successors
and assigns, evidenced by or arising out of the SAMDA (individually a "Claim",
collectively "the Known Claims"). Without limiting the generality of the
foregoing, a Claim shall be considered "Known" if (i) the FDIC or the RTC has
given notice to Contractor of the existence or possible existence of such Claim
by the FDIC or the RTC against Contractor (such notice can include informal
correspondence or other communications from RTC or the FDIC to Contractor),
(ii) the Claim is set forth as a finding in an audit report, alert memorandum,
or other writing prepared and delivered to the FDIC or the RTC prior to the
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Effective Date hereof, (iii) the Claim is related to calculations of Management
Fees, Disposition Fees, Incentive Fees, Portfolio Management Fees or Transfer
Fees, (iv) the Claim is identified on Exhibit "C" attached hereto and made a
part hereof or related to the writings referred to on Exhibit "C", or (v) the
Claim is substantially related or similar to other "Known Claims". This
provision shall survive the execution, delivery and consummation of this
Agreement.
ARTICLE IV
AGREEMENT NOT AN ADMISSION
4.1 The parties hereto acknowledge that the payment of the Compromise
Amount and the parties' acceptance of the releases is not an admission of
liability of any sort by either party in connection with the Disputed
Contractor Claims or the Known Claims, and that the payment of the Compromise
Amount and the exchange of releases have been made solely to terminate further
controversy and claims respecting the Disputed Contractor Claims and the Known
Claims.
ARTICLE V
GOVERNING LAW
5.1 Governing Law. This Agreement, all the documents executed in
connection herewith, and the rights and obligations of the parties hereunder
and thereunder, shall be governed by, and construed and interpreted in
accordance with, federal statutory or common law; provided, however, that if
there is no applicable rule or precedent under federal law, and insofar as it
would not
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frustrate the purpose of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended, or any provision of this Agreement, the
laws of the District of Columbia shall govern.
ARTICLE VI
JURISDICTION
6.1 Jurisdiction. Any legal action, suit, or proceeding arising out of
or relating to this Agreement, or the transactions contemplated hereby, may be
instituted in any federal court located in the District of Columbia, and
Contractor agrees not to assert, by way of motion, as a defense, or otherwise,
in any such action, suit or proceeding, any defense or claim that it is not
subject personally to the jurisdiction of such court, that Contractor's
property is exempt or immune from attachment or execution, that the action,
suit or proceeding is brought in an inconvenient forum, that the venue of the
action, suit or proceeding is improper or that this Agreement or the subject
matter hereof or thereof may not be enforced in or by such court. Contractor
further irrevocably submits to the jurisdiction of any such court in any such
action, suit or proceeding.
ARTICLE VII
MISCELLANEOUS
7.1 Entirety. This instrument constitutes the entire agreement between
Contractor and the FDIC relating to the SAMDA and supersedes any prior
understandings or written or oral agreements between each Contractor and the
FDIC respecting the
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compromise and settlement contained herein. No variations, amendments,
modifications or changes herein or hereof shall be binding upon the FDIC unless
set forth in a document duly and fully executed by Contractor and the FDIC.
7.2 Captions. The titles and headings of the Articles, Sections and
Paragraphs in this Agreement have been included only for convenience and
reference, and shall not be construed to extend, limit, describe or define the
substance of any Article, Section or Paragraph contained herein.
7.3 Successors and Assigns. This Agreement shall be binding upon, and
inure to the benefit of, the FDIC and Contractor and their respective
successors and assigns, except that the provisions of Section 1.2 of this
Agreement shall not inure to the benefit of any insurance carrier because the
Contractor is not indemnified by the FDIC for claims that are covered by
insurance.
7.4 Partial Invalidity. The invalidity or unenforceability in any
particular circumstance of any provision of this Agreement shall not extend
beyond such provision or such circumstance, and no other provision of this
Agreement shall be affected thereby.
7.5 Execution of Instruments. Contractor and the FDIC covenant and
agree to execute such other and further instruments and documents as are or may
become necessary or convenient to effectuate and carry out the purpose of this
Agreement.
7.6 Survival. The representations, warranties, convenants, and
releases made or given herein shall survive the execution and
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delivery hereof.
7.7 Gender, Number and Status. Whenever used herein, the singular
number shall include the plural and the plural the singular, and the use of any
gender shall include all genders.
IN WITNESS WHEREOF, each party has caused this instrument to be signed
on its behalf by its duly authorized agent.
Witness as to the FDIC: FEDERAL DEPOSIT INSURANCE
CORPORATION AS RECEIVER OF THE
VARIOUS INSTITUTIONS DESIGNATED IN
THE SAMDA
__________________________________ By:_______________________________
Date
Name:_____________________________ Name:_____________________________
Warranted Contracting Officer
Witness as to the FDIC: FEDERAL DEPOSIT INSURANCE
CORPORATION AS MANAGER OF THE FSLIC
RESOLUTION FUND
__________________________________ By:_______________________________
Date
Name:_____________________________ Name:_____________________________
Warranted Contracting Officer
Witness as to the FDIC: FEDERAL DEPOSIT INSURANCE
CORPORATION IN ITS CORPORATE
CAPACITY
__________________________________ By:_______________________________
Date
Name:_____________________________ Name:_____________________________
Warranted Contracting Officer
Witness as to Contractor: Crown Revenue Services, Inc., An
Ohio CORPORATION
/s/ Archer B. Brown /s/ Ronald E. (illegible) 11/25/96
__________________________________ By:_______________________________
Date
Archer B. Brown Ronald E. (illegible)
Name:_____________________________ Name:_____________________________
President
Title:____________________________
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Exhibit A
((INSERT 2 SAMDA INTERPRETATIONS))
Exhibit B
As to Contractor
Exhibit C
As to Contractor:
Agreement ####-##-#### (Subsidiary SAMA)
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EXHIBIT 2
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SETTLEMENT AND RELEASE AGREEMENT
THIS AGREEMENT is made and entered into as of the ______________ day of
November, 1996, to be effective as of the 15th day of November, 1996,
("Effective Date") by, between and among the Federal Deposit Insurance
Corporation, acting as receiver for the institutions designated in the SAMDA as
hereinafter defined or as exclusive manager of the FSLIC Resolution Fund (the
"FRF") or in its corporate capacity, as the case may be (the "FDIC" shall mean
the FDIC in any of the capacities identified above unless otherwise stated),
and Greenthal/Harlan Realty Services Co., a Joint Venture formed under the laws
of the State of New York with its principal place of business located in the
State of New York, and Crown Revenue Services, Inc., a Corporation formed under
the laws of the State of Ohio, with its principal place of business located at
1251 Dublin Road, Columbus, Ohio 43715, which entity was labeled as Crown
Revenue Service, Inc. in the assumption agreement hereinafter described, (each
individually "Contractor" and collectively "Contractors").
WITNESSETH:
WHEREAS, by operation of law on December 31, 1995, the Resolution Trust
Corporation (the "RTC" terminated and the FDIC succeeded the RTC as receiver
for the institutions designated in the SAMDA; and
WHEREAS, by operation of law on December 31, 1995, the RTC terminated
and the FRF assumed all of the liabilities and obtained
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all of the assets of the RTC which were held in RTC's corporate capacity at
that time; and
WHEREAS, the RTC, as receiver or conservator, and Contractor entered
into that certain Asset Management and Disposition Agreement numbered
###-##-####, as amended, effective as of July 13, 1992, (the "SAMDA") pursuant
to which Contractors agreed to perform certain asset management and disposition
services on behalf of the RTC; and
WHEREAS, the SAMDA has expired or terminated; and
WHEREAS, Contractors have invoiced or made claims or demands for
various disposition fees, management fees, costs, setoffs, retentions and
interest associated with the SAMDA (the "Disputed Contractor Claims"); and
WHEREAS, the FDIC has contested the validity of the Disputed Contractor
Claims, including amounts, methods of calculation, and contractual and equitable
grounds for recovery; and
WHEREAS, the FDIC has known claims against and disputes with
Contractors; and
WHEREAS, Contractors have contested the validity of the FDIC's known
claims and disputes, including amounts, methods of calculation, and contractual
and equitable grounds for recovery; and
WHEREAS, in order to amicably resolve the Disputed Contractor Claims
and the known claims of and disputes with the FDIC, but without admissions of
liability by any of the parties, the parties desire to settle this matter on
the terms hereinafter provided;
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NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the FDIC and Contractors, intending to be legally bound, agree as
follows:
ARTICLE I
COMPROMISE TRANSACTION
1.1 Compromise Amount. The FDIC as receiver or as manager of the FRF,
as the case may be, shall pay to Contractors within a reasonable time following
execution of this Agreement by both parties (the "Execution Date"), the sum of
THREE HUNDRED EIGHTY-SEVEN THOUSAND NINE HUNDRED SEVENTY-THREE DOLLARS AND 71
CENTS ($387,973.71) (the "Compromise Amount") which upon payment shall
constitute full settlement, all as more fully described below, of all claims
relating to the SAMDA by Contractors against the FDIC, including without
limitation, the Disputed Contractor Claims, except for any obligation of the
FDIC as Receiver or as manager of the FRF, as the case may be, to provide
indemnification to the Contractors under Article XIV of the SAMDA, provided,
however, that Contractors shall have no right to submit or recover all or any
portion of the Disputed Contractor Claims under said Article XIV of the SAMDA.
The Compromise Amount shall be apportioned among the Contractors as follows:
Contractor: Amount:
Greenthal/Harlan Realty Services Co. $276,508.95
Crown Revenue Services, Inc. $111,464.36
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<PAGE> 5
1.2 Indemnification Under Article XIV. In addition, the FDIC agrees
that any new indemnification matters shall be processed in accordance with the
indemnification procedure provided in the SAMDA, it being clearly understood,
however, that the FDIC will, except in clearly inappropriate situations,
provide a defense and pay directly the associated fees and expenses subject to
a reservation of rights agreement or undertaking as provided by the SAMDA and
in accordance with 93-SAM-231 as modified by 95-SAM-265, both as attached hereto
as Exhibit "A". The FDIC further agrees that with regard to matters that would
have been covered by a property owner's insurance policy but for RTC's decision
to self-insure, FDIC shall provide the same level of protection to Contractors
as would have been provided under such owner's policy if Contractors were named
as an additional insured.
1.3. Contractor Waiver. Upon payment of the Compromise Amount,
Contractors waive any and all claims each may have to, and assign to the FDIC,
all funds held by the FDIC pursuant to, or in connection with, the SAMDA,
including without limitation any funds held under Article XI of the SAMDA.
1.4. Manner of Payment. FDIC will transfer the above mentioned
settlement amounts to the Contractors via separate wire transfers of the net
amount due each of the Contractors, and shall make a good faith attempt to
achieve such transfer on or about November 15, 1996. FDIC shall not be
responsible for delay in such transfers.
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<PAGE> 6
ARTICLE II
REPRESENTATIONS
2.1 Representations by Contractor. Contractors represent and warrant to
the FDIC that:
(a) Each Contractor has full and complete authority to enter into this
Agreement and to carry out the transactions contemplated hereby. Each person
signing on behalf of each Contractor has full authority to bind said
Contractor. All actions required to be taken by Contractor under and pursuant
to the terms of this Agreement have been duly authorized to the extent required
by law; such authorization is in full force and effect and such actions will
not conflict with, or constitute a default under, the provisions of any
instrument to which Contractor is now a party or by which any of Contractor's
properties or assets may be bound or affected.
(b) This Agreement constitutes the valid and binding obligation of
Contractors, enforceable against Contractors jointly and severally in
accordance with its terms, except to the extent limited by applicable
provisions of bankruptcy, reorganization, insolvency, moratorium or other
similar laws of general application relating to or affecting the enforcement of
creditors' rights generally.
(c) By signature below, each Contractor affirms for itself that it is
not insolvent or bankrupt and has not committed any act of bankruptcy. Each
Contractor further affirms for itself that it has not made any general
assignment for the benefit of said
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<PAGE> 7
Contractor's creditors, and no proceeding seeking (i) relief under any
bankruptcy or insolvency law, (ii) the rearrangement or readjustment of debt,
(iii) the appointment of a receiver, custodian, liquidator or trustee to take
possession of substantially all of the assets, or (iv) the liquidation of
Contractor has been commenced or is threatened against or with respect to said
Contractor.
(d) As of the Execution Date, to the knowledge of Contractors, there
are no suits or proceedings by or before any court, commission, board or other
governmental body pending, or to the knowledge of Contractors threatened, which
involve or affect the validity or enforceability of the SAMDA or this Agreement.
(e) Each Contractor has not assigned or pledged, directly or by
operation of law, to any other individual, firm, partnership, corporation, trust
or any other entity any right, title or interest in any claims or disputes being
released hereby.
(f) As of the Execution Date, to the knowledge of each Contractor, said
Contractor acknowledges that it is not aware of any claims of Contractor, or
any party directly or indirectly affiliated with Contractor, against, demands
of, or invoices to the RTC or the FDIC regarding the SAMDA or this Agreement,
of which Contractor has not already notified the RTC or the FDIC in writing.
(g) The representations of Contractor Greenthal/Harlan Realty Services
Co. shall be effective from the effective date of the Contract, July 13, 1992,
through the expiration date of the Contract, July 12, 1995. The representations
of Contractor Crown
6
<PAGE> 8
Revenue Services, Inc. shall be effective from the effective date of the
assignment of the Contract from Greenthal/Harlan Realty Services Co. to Crown
Revenue Service, Inc., December 1, 1994, through the expiration date of the
Contract, July 12, 1995.
2.2 Representations by the FDIC.
(a) The FDIC represents and warrants to Contractors that, upon
execution by an authorized individual, acting in conformity with his or her
delegated authority, this Agreement shall constitute a legal, valid and binding
agreement of the FDIC enforceable in accordance with its terms, except to the
extent limited by law.
(b) The FDIC represents and warrants to Contractors that the person
signing on behalf of the FDIC is an authorized individual who has full
authority to bind the FDIC.
(c) The FDIC represents and warrants to Contractors that the FDIC has
not assigned or pledged, directly or by operation of law, to any individual,
firm, partnership, corporation, trust, or any other entity any right, title or
interest in any claims or disputes being released hereby.
(d) As of the Execution Date and except as to the Surviving Issues, to
the personal knowledge of the FDIC, the FDIC acknowledges that it is not aware
of any claims of the FDIC against or demands of the Contractors regarding the
SAMDA or this Agreement, of which the FDIC has not already notified Contractor.
For the purposes of this Section 2.2 (d), "the personal knowledge of the FDIC"
shall mean the personal knowledge of those people
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<PAGE> 9
employed by the FDIC who, as of the Execution Date, are assigned to the FDIC's
Division of Administration Acquisition Services Branch SAMDA Closeout Section.
ARTICLE III
COMPROMISE AND RELEASE
3.1 Release by Contractor.
(a) After execution hereof and upon payment of the Compromise Amount,
each Contractor for itself and its successors and assigns or any person or
entity claiming through or under it, does hereby remise, release and forever
discharge the FDIC its employees, officers, directors, and agents and their
respective successors and assigns, and any subsidiaries, and any subsidiary
officers, directors, employees, consultants, agents and other representatives,
(collectively, the "FDIC Released Parties"), of and from all manner of actions,
causes of action, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, conditions, contracts, controversies,
agreements, promises, trespasses, damages, judgments, executions, claims,
liabilities, responsibilities and demands whatsoever, at law or in equity,
which the Released Contractor Parties (as hereinafter defined) ever had, now
have, or may hereafter have, whether known or hereafter discovered, against the
FDIC Released Parties, and their successors and assigns, evidenced by, arising
out of, in connection with, or in any manner relating to, the SAMDA, including
the Disputed Contractor Claims, except that this release shall not release the
FDIC Released Parties from any obligation under this
8
<PAGE> 10
Agreement or under Article XIV of the SAMDA. This provision shall survive the
execution, delivery and consummation of this Agreement.
(b) Each Contractor acknowledges and agrees that the FDIC does not
purport to have the ability to release Contractors from, and that this
Settlement and Release Agreement does not apply to and shall have no bearing
upon, administrative or judicial proceedings or actions or claims, including,
but not limited to, any action or proceeding under the False Claims Act, 31
U.S.C. Section 3729, et seq., which may be brought by any governmental agencies,
including the Office of the Inspector General and the Department of Justice.
Contractor additionally acknowledges and agrees that they may not use or assert
this Settlement and Release Agreement as a defense in any administrative or
judicial proceedings or actions or claims brought by any governmental agency
other than the FDIC relating to any Task Orders or to any other contract between
Contractor and the FDIC, in any of its capacities. By this acknowledgement and
agreement, Contractors agree, inter alia, to not plead or argue or claim that
the existence or terms of this Settlement and Release Agreement constitute(s)
evidence and/or include(s) any admission, ratification, or failure to mitigate
damages by any governmental agency, or that the existence or terms of this
Settlement and Release Agreement estop(s) any governmental agency, excluding the
FDIC, from constituting or bringing any administrative or judicial proceeding or
action or claim. Nothing in this Settlement and Release Agreement shall be
deemed to preclude or in any way limit or restrict any action or claim by any
9
<PAGE> 11
entity or governmental agency other than the FDIC or its successors including
but not limited to, the Department of Justice or the Office of Inspector
General.
(c) The parties hereto acknowledge that except as explicitly stated
herein, this Agreement does not relieve them from, or in any way reduce or
affect, the parties' respective obligations to comply with and honor those
obligations which, pursuant to the terms of the SAMDA, survive expiration of
the SAMDA.
(d) Contractors further acknowledge that, except with regard to Known
Claims, this Agreement shall in no way affect or diminish the FDIC's rights
under the SAMDA or otherwise to claim or assert in any administrative or
judicial proceeding, including, without limitation, for any pending or future
matters, any acts or omissions by or on behalf of Contractor, its
officers, directors, partners, consultants, representatives, employees or agents
which create or may create or give rise to an obligation of Contractor to
indemnify the FDIC or which may relieve the FDIC of indemnification obligations
under the provisions of the SAMDA and assert and obtain recovery for any
legally sustainable findings against Contractor in the Property Management
Expiration Reviews listed on Exhibit "B" attached hereto and made a part
hereof. The obligations and rights described in Subsections 3.1(b), 3.1(c), and
3.1(d) hereof may be referred to collectively as the "Surviving Issues."
(e) Notwithstanding any other provisions of this Agreement, Contractors
acknowledge that no claims that arise out of or are related to the SAMDA can be
asserted in a manner that obligates the
10
<PAGE> 12
Bank Insurance Fund as established in 12 USC Section 1821(a)(5).
3.2 Release by the FDIC. Except for the Surviving Issues, the FDIC for
itself and its successors and assigns and any person or entity claiming through
or under it, does hereby remise, release and forever discharge Contractors, its
partners, employees, officers, directors and agents, subsidiaries, officers,
directors, employees, partners, consultants, agents and representatives and
their respective successors and assigns (collectively, the "Released Contractor
Parties"), of and from all known manner of actions, causes of action,
suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, conditions, contracts, controversies, agreements,
promises, trespasses, damages, judgments, executions, claims, liabilities,
responsibilities and demands whatsoever, at law or in equity which the FDIC
Released Parties ever had or now have against the Released Contractor Parties,
and their successors and assigns, evidenced by or arising out of the SAMDA
(individually a "Claim", collectively "the Known Claims"). Without limiting the
generality of the foregoing, a Claim shall be considered "Known" if (i) the
FDIC or the RTC has given notice to Contractor of the existence or possible
existence of such Claim by the FDIC or the RTC against Contractor (such notice
can include informal correspondence or other communications from RTC or the
FDIC to Contractor), (ii) the Claim is set forth as a finding in an audit
report, alert memorandum, or other writing prepared and delivered to the FDIC
or the RTC prior to the Effective Date hereof, (iii) the Claim is related to
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<PAGE> 13
calculations of Management Fees, Disposition Fees, Incentive Fees, Portfolio
Management Fees or Transfer Fees, (iv) the Claim is identified on Exhibit "C"
attached hereto and made a part hereof or related to the writings referred to
on Exhibit "C", or (v) the Claim is substantially related or similar to other
"Known Claims". This provision shall survive the execution, delivery and
consummation of this Agreement.
ARTICLE IV
AGREEMENT NOT AN ADMISSION
4.1 The parties hereto acknowledge that the payment of the Compromise
Amount and the parties' acceptance of the releases is not an admission of
liability of any sort by either party in connection with the Disputed Contractor
Claims or the Known Claims, and that the payment of the Compromise Amount and
the exchange of releases have been made solely to terminate further controversy
and claims respecting the Disputed Contractor Claims and the Known Claims.
ARTICLE V
GOVERNING LAW
5.1 Governing Law. This Agreement, all the documents executed in
connection herewith, and the rights and obligations of the parties hereunder
and thereunder, shall be governed by, and construed and interpreted in
accordance with, federal statutory or common law; provided, however, that if
there is no applicable rule or precedent under federal law, and insofar as it
would not frustrate the purpose of the Financial Institutions Reform,
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<PAGE> 14
Recovery and Enforcement Act of 1989, as amended, or any provision of this
Agreement, the laws of the District of Columbia shall govern.
ARTICLE VI
JURISDICTION
6.1 Jurisdiction. Any legal action, suit, or proceeding arising out
of or relating to this Agreement, or the transactions contemplated hereby, may
be instituted in any federal court located in the District of Columbia, and
Contractor agrees not to assert, by way of motion, as a defense, or otherwise,
in any such action, suit or proceeding, any defense or claim that it is not
subject personally to the jurisdiction of such court, that Contractors's
property is exempt or immune from attachment or execution, that the action,
suit or proceeding is brought in an inconvenient forum, that the venue of the
action, suit or proceeding is improper or that this Agreement or the subject
matter hereof or thereof may not be enforced in or by such court. Each
Contractor further irrevocably submits to the jurisdiction of any such court in
any such action, suit or proceeding.
ARTICLE VII
MISCELLANEOUS
7.1 Entirety. This instrument constitutes the entire agreement
between Contractors and the FDIC relating to the SAMDA and supersedes any prior
understandings or written or oral agreements between each Contractor and the
FDIC respecting the compromise and settlement contained herein. No variations,
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<PAGE> 15
amendments, modifications or changes herein or hereof shall be binding upon the
FDIC unless set forth in a document duly and fully executed by Contractors and
the FDIC.
7.2 Captions. The titles and headings of the Articles, Sections and
Paragraphs in this Agreement have been included only for convenience and
reference, and shall not be construed to extend, limit, describe or define the
substance of any Article, Section or Paragraph contained herein.
7.3 Successors and Assigns. This Agreement shall be binding upon,
and inure to the benefit of, the FDIC and Contractors and their respective
successors and assigns, except that the provisions of Section 1.2 of this
Agreement shall not inure to the benefit of any insurance carrier because the
Contractor is not indemnified by the FDIC for claims that are covered by
insurance.
7.4 Partial Invalidity. The invalidity or unenforceability in any
particular circumstance of any provision of this Agreement shall not extend
beyond such provision or such circumstance, and no other provision of this
Agreement shall be affected thereby.
7.5 Execution of Instruments. Contractors and the FDIC covenant
and agree to execute such other and further instruments and documents as are or
may become necessary or convenient to effectuate and carry out the purpose of
this Agreement.
7.6 Survival. The representations, warranties, covenants, and
releases made or given herein shall survive the execution and delivery hereof.
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<PAGE> 16
7.7 Gender, Number and Status. Whenever used herein, the singular
number shall include the plural and the plural the singular, and the use of any
gender shall include all genders.
IN WITNESS WHEREOF, each party has caused this instrument to be signed
on its behalf by its duly authorized agent.
Witness as to the FDIC: FEDERAL DEPOSIT INSURANCE
CORPORATION AS RECEIVER OF THE
VARIOUS INSTITUTIONS DESIGNATED IN
THE SAMDA
- ------------------------------ By: _____________________________
Date
Name:_________________________ Name: ___________________________
Warranted Contracting
Officer
Witness as to the FDIC: FEDERAL DEPOSIT INSURANCE
CORPORATION AS MANAGER OF THE FSLIC
RESOLUTION FUND
- ------------------------------ By: _____________________________
Date
Name:_________________________ Name: ___________________________
Warranted Contracting
Officer
Witness as to the FDIC: FEDERAL DEPOSIT INSURANCE
CORPORATION IN ITS CORPORATE
CAPACITY
- ------------------------------ By: _____________________________
Date
Name:_________________________ Name: ___________________________
Warranted Contracting
Officer
Witness as to Contractor: GREENTHAL/HARLAN REALTY SERVICES
CO., A JOINT VENTURE
- ------------------------------ By: _____________________________
Date
Name:_________________________ Name: ___________________________
Title: __________________________
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<PAGE> 17
Witness as to Contractor: CROWN REVENUE SERVICES, INC., AN
OHIO CORPORATION
/s/ NANCY SEKELLA
- ------------------------------ By: /s/ RONALD E. ROARK 11/14/96
Name: Nancy Sekella -----------------------------
Date
Name: Ronald E. Roark
---------------------------
Title: President
--------------------------
16
<PAGE> 18
EXHIBIT B
As to Contractor Greenthal/Harlan Realty Services Co.:
As to Contractor Crown Revenue Services, Inc.:
NONE
EXHIBIT C
As to Contractor Greenthal/Harlan Realty Services Co.:
As to Contractor Crown Revenue Services, Inc.:
NONE
17
<PAGE> 1
EXHIBIT 3
<PAGE> 2
SETTLEMENT AND DISTRIBUTION AGREEMENT
THIS SETTLEMENT AND DISTRIBUTION AGREEMENT (this "Agreement") is made
and entered into as of November 30, 1996 (the "Effective Date") by and among
Crown Revenue Services, Inc. ("Crown"), Culloden of Ohio, Inc., formerly known
as R.E. Roark Companies, Inc. ("Roark") and REE, Inc., an Ohio corporation and
an affiliate of Roark ("REE").
BACKGROUND INFORMATION
A. Crown and Roark have entered into a certain Retainage Sharing
Agreement dated as of July 31, 1994 (the "RSA"). All capitalized terms not
specifically defined herein have the meanings ascribed to them in the RSA.
B. Crown and the Federal Deposit Insurance Corporation, as successor to
the RTC, have entered into a certain Settlement and Release Agreement (the "RTC
Settlement") whereby, on or about the Effective Date, Crown is receiving from
the FDIC, in full and final settlement of all issues surrounding the Managed
Assets, Retainages in the amount of $2,499,857.52, less $200,000 (the "Escrowed
Funds") held in escrow pending the resolution of certain issues set forth in
the RTC Settlement.
C. The parties hereto want to enter into this Agreement to effect the
distribution of the Retainage Payment as contemplated by the RSA.
THEREFORE, the parties agree as follows:
STATEMENT OF AGREEMENT
1. Pursuant to the RSA crown, on the one hand, and Roark and REE, on
the other hand, are each entitled to fifty percent (50%) of Retainages which
accrued on or before July 31, 1994 and Crown is entitled to one hundred percent
(100%) of Retainages which accrued after July 31, 1994.
<PAGE> 3
2. Crown is hereby distributing the Retainage Payment as follows:
<TABLE>
<CAPTION>
<S> <C>
RECIPIENT PAYMENT
Crown $1,585,847.88
Roark $660,079.25
REE $53,930.39
Crown The Escrowed Funds, when and as received
</TABLE>
3. Crown hereby acknowledges receipt of the sums set forth in
Paragraph 2. Crown further acknowledges and agrees that said receipt, together
with the execution and delivery on the Effective Date of another agreement
among the parties hereto, constitutes a full and final settlement of any and
all sums due and owing or matters arising under or related to the RSA. Crown,
for and on behalf of itself and its successors, assigns and affiliates, hereby
releases and forever discharges Roark and REE, and their respective officers,
directors, employees, agents, successors, assigns and affiliates, of and from
any and all accountings, actions, claims, contracts, demands, executions,
liabilities or responsibilities, at law or in equity which Crown ever had or
now has arising under or related to the RSA.
4. Roark and REE hereby acknowledge receipt of the sums set forth in
Paragraph 2. Roark and REE further acknowledge and agree that said receipt,
together with the execution and delivery on the Effective Date of another
agreement among the parties hereto, constitutes a full and final settlement of
any and all sums due and owing or matters arising under or related to the RSA.
Roark and REE, for and on behalf of themselves and their respective successors,
assigns and affiliates, hereby release and forever discharge Crown, its
officers, directors, employees, agents, successors, assigns and affiliates, of
and from any and all accountings, actions, claims, contracts, demands,
executions, liabilities or responsibilities, at law or in equity which either
Roark or REE ever had or now has arising under or related to the RSA. Without
limiting the generality of the foregoing, Roark and REE hereby disclaim
2
<PAGE> 4
any right, title or interest in or to the Escrowed Funds.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
Effective Date.
CROWN REVENUE SERVICES, INC.
By: /s/ Stephen W. Brown
---------------------------------
Name: Stephen W. Brown
Title: Secretary
CULLODEN OF OHIO, INC., f.k.a. R.E. ROARK
COMPANIES, INC.
By: /s/ Ronald E. Roark
---------------------------------
Name: Ronald E. Roark
Title: President
REE, INC.
By: /s/ Ronald E. Roark
---------------------------------
Name: Ronald E. Roark
Title: President
3
