SETTLEMENT AGREEMENT AND MUTUAL RELEASE
Effective Date: September 13, 2024
This SETTLEMENT AGREEMENT AND MUTUAL RELEASE (this "Agreement") is entered into as of September 13, 2024 (the "Effective Date"), by and among the following parties:
STONEFIELD LOGISTICS GROUP INC. ("Stonefield" or "SLG"), a corporation organized and existing under the laws of the State of Texas, with its principal office located at 4100 Commerce Street, Suite 1200, Dallas, Texas 75226;
RIDGELINE FREIGHT CARRIERS LLC ("Ridgeline" or "RFC"), a limited liability company organized and existing under the laws of the State of Oklahoma, foreign-qualified to transact business in the State of Texas, with its principal office located at 7820 South Meridian Avenue, Oklahoma City, Oklahoma 73159; and
GERALD "GERRY" BRASHEAR ("Brashear"), an individual residing at 2314 Quail Creek Drive, Edmond, Oklahoma 73034, acting in his capacity as Managing Member and sole owner of Ridgeline Freight Carriers LLC, and individually as guarantor of certain obligations under the agreements described below.
Stonefield, Ridgeline, and Brashear are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS:
A. The Agreement. On or about April 15, 2022, Stonefield (acting in the capacity of "Shipper") and Ridgeline (acting in the capacity of "Carrier") entered into that certain Dedicated Freight Services Agreement (the "DFSA"), which provided for a thirty-six (36) month term commencing on April 15, 2022 and expiring on April 14, 2025. Pursuant to the DFSA, Ridgeline committed to providing a minimum of twelve (12) dedicated Class 8 tractor-trailers, each staffed with a qualified commercial driver, for Stonefield's Texas retail distribution lanes. The DFSA included a minimum monthly revenue commitment of Three Hundred Twenty-Five Thousand Dollars ($325,000.00) per month, resulting in a total contract value of Eleven Million Seven Hundred Thousand Dollars ($11,700,000.00) over the thirty-six (36) month term. Section 14.3 of the DFSA contained a liquidated damages provision applicable upon Carrier's material default and failure to cure within thirty (30) days of written notice of such default. Section 14.5 of the DFSA provided that Gerald Brashear executed a personal, unconditional guaranty of Carrier's obligations arising under Section 14 of the DFSA, which personal guaranty was capped at Three Million Dollars ($3,000,000.00).
B. The Breach and Default. Beginning in or about July 2023, Ridgeline began failing to provide the required twelve (12) truck minimum under the DFSA, resulting in recurring shortfalls in dedicated capacity that materially impaired Stonefield's distribution operations across its Texas retail lanes. On October 18, 2023, Stonefield sent written notice of material breach to Ridgeline and to Brashear, personally, demanding cure of the defaults within thirty (30) days in accordance with the cure provisions of the DFSA. The thirty (30) day cure period expired on November 17, 2023, and neither Ridgeline nor Brashear effected a cure of the identified defaults. Ridgeline thereafter ceased all freight operations on or about December 8, 2023, abandoning its obligations under the DFSA entirely. On December 22, 2023, Stonefield's General Counsel, Diane Ostrowski, transmitted a formal demand letter to Ridgeline and Brashear seeking payment of liquidated damages and all other amounts owed under the DFSA.
C. The Litigation. On January 29, 2024, Stonefield engaged Calderwood & Harkness LLP as outside litigation counsel to pursue claims arising from Ridgeline's and Brashear's defaults under the DFSA. On February 12, 2024, Stonefield filed a Plaintiff's Original Petition in the 134th Judicial District Court of Dallas County, Texas, Cause No. DC-24-01847 (the "Litigation"), asserting claims for breach of contract against Ridgeline and for enforcement of the personal guaranty against Brashear. In the Litigation, Stonefield sought recovery of liquidated damages in the amount of One Million Three Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($1,381,250.00) under Section 14.3 of the DFSA, re-procurement damages in the amount of One Million Fifty-Six Thousand Two Hundred Fifty Dollars ($1,056,250.00) under Section 14.4 of the DFSA, pre-judgment interest, reasonable and necessary attorneys' fees, and court costs.
D. Service of Process and Default. Brashear was personally served with process on February 22, 2024, at his residence at 2314 Quail Creek Drive, Edmond, Oklahoma 73034. Ridgeline was served via substitute service through the Texas Secretary of State on February 26, 2024, its designated registered agent, Lone Star Registered Agents LLC, being non-responsive to attempts at service. Neither Ridgeline nor Brashear filed an answer, general denial, or any responsive pleading in the Litigation within the time prescribed by the Texas Rules of Civil Procedure.
E. The Default Judgment. On May 3, 2024, the Honorable Judge Lorraine Whitaker, presiding over the 134th Judicial District Court of Dallas County, Texas, signed and entered a Default Judgment in Cause No. DC-24-01847 (the "Judgment") awarding Stonefield judgment against Ridgeline and Brashear, jointly and severally, in the total amount of Two Million Five Hundred Forty-Five Thousand One Hundred Eighty-Eight Dollars and Sixty Cents ($2,545,188.60), comprising the following components:
(i) Damages in the aggregate amount of $2,437,500.00, consisting of liquidated damages of $1,381,250.00 and re-procurement damages of $1,056,250.00;
(ii) Pre-judgment interest in the amount of $87,791.10, calculated at the rate of 5.00% per annum under Texas Finance Code § 304.003 over a period of 263 days from November 17, 2023 through May 3, 2024;
(iii) Attorneys' fees in the amount of $18,650.00, awarded pursuant to the fee-shifting provision of Section 14.6 of the DFSA; and
(iv) Court costs in the amount of $1,247.50.
The Judgment further provided that post-judgment interest shall accrue at the rate of 5.00% per annum under Texas Finance Code § 304.003 from and after May 3, 2024 until paid.
F. Post-Judgment Proceedings. On May 20, 2024, Stonefield filed Abstracts of Judgment in Dallas County, Texas and Oklahoma County, Oklahoma, creating judgment liens against the real property of Brashear in both jurisdictions. On June 14, 2024, Stonefield domesticated the Judgment in the Oklahoma County District Court pursuant to the Uniform Enforcement of Foreign Judgments Act. Stonefield thereafter pursued post-judgment discovery against Brashear, including written interrogatories, requests for production of documents, and notices of deposition, seeking to identify assets available for satisfaction of the Judgment. On July 22, 2024, Stonefield filed a Motion to Compel in connection with Brashear's incomplete and untimely discovery responses, and on August 6, 2024, the Court entered an order compelling full discovery responses within ten (10) days. Stonefield retained Capstone Forensic Accounting LLC to conduct asset tracing and forensic analysis of Brashear's financial affairs. Through this process, Stonefield identified real property assets of Brashear, including his primary residence located at 2314 Quail Creek Drive, Edmond, Oklahoma 73034 (with estimated equity of approximately One Hundred Eighty Thousand Dollars ($180,000.00)) and a 42-acre ranch property located at 8900 Redbud Lane, Blanchard, Oklahoma 73010 (with estimated equity of approximately Three Hundred Forty Thousand Dollars ($340,000.00)). On September 6, 2024, Stonefield filed a Writ of Execution in Oklahoma County and recorded judgment liens against both properties.
G. Desire to Settle. The Parties now desire to fully and finally resolve all disputes, claims, demands, and causes of action arising out of or relating to the DFSA, the Judgment, the Litigation, and all related matters, on the terms and conditions set forth herein, in order to avoid the expense, burden, and uncertainty of continued collection proceedings.
NOW, THEREFORE, in consideration of the mutual covenants, promises, and releases contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the Parties, the Parties agree as follows:
ARTICLE I — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement.
1.1 "Agreement" means this Settlement Agreement and Mutual Release, including all exhibits and attachments hereto, as the same may be amended from time to time in accordance with Section 10.4.
1.2 "Agreed Order of Satisfaction" means the court order, substantially in the form attached hereto as Exhibit C, to be filed in the 134th Judicial District Court of Dallas County, Texas, Cause No. DC-24-01847, reflecting full satisfaction of the Judgment.
1.3 "Assigned Assets" has the meaning set forth in Section 2.2 of this Agreement.
1.4 "Cash Settlement Amount" means Four Hundred Twenty-Five Thousand Dollars ($425,000.00).
1.5 "DFSA" means the Dedicated Freight Services Agreement dated April 15, 2022, by and between Stonefield Logistics Group Inc., as Shipper, and Ridgeline Freight Carriers LLC, as Carrier.
1.6 "Effective Date" means September 13, 2024.
1.7 "Escrow Agent" means the title company or closing agent currently holding the proceeds from the sale of the Ranch Property.
1.8 "Judgment" means the Default Judgment entered on May 3, 2024, by the Honorable Judge Lorraine Whitaker in the 134th Judicial District Court of Dallas County, Texas, in Cause No. DC-24-01847, in the total amount of Two Million Five Hundred Forty-Five Thousand One Hundred Eighty-Eight Dollars and Sixty Cents ($2,545,188.60), together with all post-judgment interest accrued thereon.
1.9 "Litigation" means the civil action styled Stonefield Logistics Group Inc. v. Ridgeline Freight Carriers LLC and Gerald Brashear, Cause No. DC-24-01847, pending in the 134th Judicial District Court of Dallas County, Texas.
1.10 "Ranch Property" means the approximately forty-two (42) acre parcel of real property located at 8900 Redbud Lane, Blanchard, Oklahoma 73010, as more particularly described in the records of Oklahoma County, Oklahoma.
1.11 "Release of Judgment" means the instrument or instruments to be executed and filed by Stonefield releasing the judgment liens filed against Brashear's properties in Dallas County, Texas and Oklahoma County, Oklahoma, substantially in the form attached hereto as Exhibit D.
ARTICLE II — SETTLEMENT CONSIDERATION
Section 2.1 — Cash Payment.
(a) Brashear shall pay, or cause to be paid, to Stonefield the Cash Settlement Amount of Four Hundred Twenty-Five Thousand Dollars ($425,000.00) in immediately available funds by wire transfer to Stonefield's designated account. Wire transfer instructions are set forth in Exhibit A attached hereto, or as may be otherwise provided in writing by Stonefield's counsel, Calderwood & Harkness LLP, prior to the date payment is due.
(b) The Cash Settlement Amount shall be disbursed from the proceeds of the sale of Brashear's Ranch Property located at 8900 Redbud Lane, Blanchard, Oklahoma 73010, which proceeds are currently held in escrow by the Escrow Agent. Brashear hereby irrevocably instructs and directs the Escrow Agent to disburse Four Hundred Twenty-Five Thousand Dollars ($425,000.00) of such sale proceeds directly to Stonefield, or to such designee as Stonefield may specify in writing. Brashear shall execute and deliver to the Escrow Agent such additional instructions, authorizations, or documentation as the Escrow Agent may reasonably require to effectuate such disbursement.
(c) The Cash Settlement Amount shall be due and payable within five (5) business days of the Effective Date, or upon closing of the sale of the Ranch Property, whichever occurs first. Time is of the essence with respect to the payment obligations set forth in this Section 2.1.
(d) In the event that Brashear fails to make or cause to be made payment of the Cash Settlement Amount within the time period specified in Section 2.1(c), Stonefield shall retain all rights under the Judgment and this Agreement shall, at Stonefield's sole election, become null and void, and all releases granted herein shall be of no force or effect, without prejudice to Stonefield's right to enforce the Judgment and pursue all available remedies at law or in equity.
Section 2.2 — Assignment of Assets.
(a) Ridgeline and Brashear shall assign, transfer, convey, and deliver to Stonefield, or to such designee as Stonefield may specify in writing, all of Ridgeline's right, title, and interest in and to the following assets (collectively, the "Assigned Assets"):
(i) Three (3) Class 8 tractors, identified by vehicle identification number (VIN), year, make, and model on the schedule attached hereto as Exhibit B; and
(ii) Seven (7) dry van trailers, identified by VIN or serial number, year, make, and model on the schedule attached hereto as Exhibit B.
(b) The Assigned Assets have been appraised at an aggregate fair market value of approximately Two Hundred Ten Thousand Dollars ($210,000.00). The Parties acknowledge that this valuation is based upon information available as of the Effective Date and that no Party makes any warranty as to the precise fair market value of the Assigned Assets, except as otherwise expressly provided in Section 6.3.
(c) Transfer of the Assigned Assets shall be accomplished by the execution and delivery of bills of sale, certificates of title (endorsed for transfer), and such other instruments of transfer and conveyance as may be reasonably required to vest good and marketable title to the Assigned Assets in Stonefield or its designee, within ten (10) business days of the Effective Date.
(d) The Assigned Assets shall be transferred free and clear of all liens, encumbrances, security interests, claims, and charges of any kind. Ridgeline and Brashear represent and warrant that they have, or will have as of the date of transfer, good and marketable title to the Assigned Assets, and that no third party holds any lien, security interest, or other encumbrance against any of the Assigned Assets. In the event that any lien, security interest, or encumbrance exists against any Assigned Asset as of the date of transfer, Ridgeline and Brashear shall cause such lien, security interest, or encumbrance to be discharged and released at or prior to the time of transfer, at Ridgeline's and Brashear's sole cost and expense.
(e) The physical delivery location and logistics for the Assigned Assets shall be coordinated in good faith between the Parties. Unless otherwise agreed in writing, the Assigned Assets shall be delivered to Stonefield's facility located at 4100 Commerce Street, Dallas, Texas 75226, or such other location within the Dallas–Fort Worth metropolitan area as Stonefield may designate. The cost of transporting the Assigned Assets to the designated delivery location shall be borne by Ridgeline and Brashear.
Section 2.3 — Total Consideration.
The aggregate settlement consideration under this Agreement consists of the Cash Settlement Amount of Four Hundred Twenty-Five Thousand Dollars ($425,000.00), plus the Assigned Assets valued at approximately Two Hundred Ten Thousand Dollars ($210,000.00), for a total estimated value of Six Hundred Thirty-Five Thousand Dollars ($635,000.00). The Parties acknowledge and agree that this consideration is accepted by Stonefield in full and final satisfaction of the Judgment in the amount of Two Million Five Hundred Forty-Five Thousand One Hundred Eighty-Eight Dollars and Sixty Cents ($2,545,188.60), inclusive of all damages (including the liquidated damages award and the re-procurement damages award), pre-judgment interest, attorneys' fees, court costs, and any and all accrued post-judgment interest through the date of payment. Stonefield acknowledges that the settlement consideration represents a negotiated compromise and that Stonefield is accepting less than the full amount of the Judgment in order to achieve a prompt and certain resolution of the Parties' disputes.
Section 2.4 — No Further Obligation.
Upon Stonefield's receipt of both the Cash Settlement Amount in full and the Assigned Assets in the manner contemplated by Sections 2.1 and 2.2, respectively, Ridgeline and Brashear shall have no further obligation to Stonefield under or in connection with the DFSA, the Judgment, the Litigation, or any related matter, and Stonefield shall have no further claim against Ridgeline or Brashear for any amount arising out of or related to the foregoing, subject in all respects to the terms and conditions of this Agreement.
ARTICLE III — MUTUAL GENERAL RELEASE
Section 3.1 — Release by Stonefield.
Effective upon Stonefield's receipt of the Cash Settlement Amount and the Assigned Assets in full, Stonefield, on behalf of itself and its successors, assigns, affiliates, parents, subsidiaries, officers, directors, employees, agents, attorneys, and representatives, including without limitation Crestpoint Industrial Partners Fund III, LP and Crestpoint Industrial Capital LLC, hereby irrevocably and unconditionally releases and forever discharges Ridgeline and Brashear, and each of their respective heirs, personal representatives, executors, administrators, successors, assigns, affiliates, officers, members, managers, employees, agents, attorneys, and representatives, from any and all claims, demands, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, judgments, extents, executions, obligations, liabilities, damages, losses, costs, expenses, and attorneys' fees of every kind and nature whatsoever, whether at law or in equity, whether based on contract, tort, statute, or any other theory, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, fixed or contingent, matured or unmatured, accrued or unaccrued, asserted or unasserted, that Stonefield now has, has ever had, or may hereafter have against any of the foregoing released persons or entities, arising out of or in any way related to:
(a) The DFSA dated April 15, 2022, including all schedules, exhibits, amendments, and addenda thereto;
(b) The personal, unconditional guaranty executed by Brashear under Section 14.5 of the DFSA;
(c) The Litigation (Cause No. DC-24-01847, 134th Judicial District Court of Dallas County, Texas);
(d) The Judgment entered on May 3, 2024;
(e) All post-judgment collection proceedings, including without limitation the filing of abstracts of judgment, the domestication of the Judgment in Oklahoma, the filing of writs of execution, the recording of judgment liens, post-judgment discovery, and all related proceedings; and
(f) Any and all transactions, events, occurrences, acts, omissions, representations, or communications arising out of or relating to the foregoing.
Section 3.2 — Release by Ridgeline and Brashear.
Effective upon the Effective Date, Ridgeline and Brashear, individually and on behalf of their respective heirs, personal representatives, executors, administrators, successors, assigns, affiliates, officers, members, managers, employees, agents, attorneys, and representatives, hereby irrevocably and unconditionally release and forever discharge Stonefield, and its successors, assigns, affiliates, parents, and subsidiaries, including without limitation Crestpoint Industrial Partners Fund III, LP and Crestpoint Industrial Capital LLC, and its and their respective officers, directors, employees, agents, attorneys (including without limitation Calderwood & Harkness LLP and its partners, associates, of counsel, and employees), and representatives, from any and all claims, demands, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, judgments, extents, executions, obligations, liabilities, damages, losses, costs, expenses, and attorneys' fees of every kind and nature whatsoever, whether at law or in equity, whether based on contract, tort, statute, or any other theory, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, fixed or contingent, matured or unmatured, accrued or unaccrued, asserted or unasserted, that Ridgeline or Brashear now has, has ever had, or may hereafter have against any of the foregoing released persons or entities, arising out of or in any way related to:
(a) The DFSA dated April 15, 2022, including all schedules, exhibits, amendments, and addenda thereto;
(b) The Litigation (Cause No. DC-24-01847, 134th Judicial District Court of Dallas County, Texas);
(c) The Judgment entered on May 3, 2024;
(d) All post-judgment collection proceedings, including without limitation the filing of abstracts of judgment, the domestication of the Judgment in Oklahoma, the filing of writs of execution, the recording of judgment liens, post-judgment discovery, motions to compel, and all related proceedings in both Texas and Oklahoma; and
(e) Any and all transactions, events, occurrences, acts, omissions, representations, or communications arising out of or relating to the foregoing.
Section 3.3 — Scope of Release.
The releases set forth in Sections 3.1 and 3.2 are intended to be broadly construed to the maximum extent permitted by applicable law. Without limiting the generality of the foregoing, such releases shall encompass all claims of every kind and character, including but not limited to claims for breach of contract, breach of warranty, breach of the implied covenant of good faith and fair dealing, negligence, gross negligence, fraud, fraudulent inducement, negligent misrepresentation, tortious interference with contract, tortious interference with prospective business relations, conversion, trespass, unjust enrichment, quantum meruit, promissory estoppel, defamation, abuse of process, malicious prosecution, and any and all statutory claims under federal, state, or local law. The releases expressly include, and the Parties expressly assume the risk of, claims that the Parties do not currently know or suspect to exist in their favor at the time of executing this Agreement, and the Parties expressly waive any and all rights they may have under any statute, doctrine, or common-law principle that would otherwise limit the effect of a release to claims that are known or suspected to exist at the time the release is given.
ARTICLE IV — COVENANT NOT TO SUE
Section 4.1 — Covenant.
Each Party hereby covenants and agrees that it shall not, and shall cause its affiliates, successors, assigns, officers, directors, members, managers, employees, agents, attorneys, and representatives not to, directly or indirectly, commence, file, prosecute, maintain, or cause to be commenced, filed, prosecuted, or maintained, any action, suit, proceeding, complaint, charge, grievance, or claim in any court, tribunal, agency, or other forum against any other Party or any person or entity released under Article III with respect to any claim, demand, or cause of action that has been released under Article III. This covenant not to sue shall be in addition to, and not in lieu of, any defense that may be available based upon the releases granted under Article III.
Section 4.2 — Remedy for Breach.
In the event that any Party breaches the covenant not to sue set forth in Section 4.1, the breaching Party shall be liable for, and shall promptly reimburse the non-breaching Party for, all damages, costs, and expenses, including reasonable and necessary attorneys' fees and court costs, incurred by the non-breaching Party in defending against such action, suit, or proceeding. The Parties acknowledge and agree that the covenant not to sue set forth in Section 4.1 is a material inducement to the Parties to enter into this Agreement and that a breach thereof would cause irreparable harm to the non-breaching Party.
ARTICLE V — SATISFACTION OF JUDGMENT AND RELEASE OF LIENS
Section 5.1 — Agreed Order of Satisfaction.
Within five (5) business days following Stonefield's confirmed receipt of both the Cash Settlement Amount and the Assigned Assets in the manner described in Article II, the Parties shall jointly execute, or cause their respective counsel to execute, and file (or cause to be filed) an Agreed Order of Satisfaction in the 134th Judicial District Court of Dallas County, Texas, Cause No. DC-24-01847, confirming full and complete satisfaction of the Judgment. The Agreed Order of Satisfaction shall be substantially in the form attached hereto as Exhibit C. Calderwood & Harkness LLP shall prepare the Agreed Order of Satisfaction and submit it to the Court for entry. Each Party shall cooperate fully and in good faith to ensure the prompt filing and entry of the Agreed Order of Satisfaction, including executing any declarations, affidavits, or certificates that may be required by the Court.
Section 5.2 — Release of Judgment.
Concurrently with, or as promptly as practicable following, the filing of the Agreed Order of Satisfaction, Stonefield shall execute and file (or cause to be filed) a Release of Judgment, substantially in the form attached hereto as Exhibit D, in Dallas County, Texas and Oklahoma County, Oklahoma, releasing all abstracts of judgment, judgment liens, and any other encumbrances recorded or filed in connection with the Judgment against Brashear's properties, including without limitation:
(a) The residence located at 2314 Quail Creek Drive, Edmond, Oklahoma 73034; and
(b) The ranch property located at 8900 Redbud Lane, Blanchard, Oklahoma 73010, to the extent that any judgment lien against such property survives the sale of the Ranch Property and the disbursement of sale proceeds in accordance with Section 2.1.
Stonefield shall bear the costs associated with the preparation and filing of the Release of Judgment in each applicable jurisdiction.
Section 5.3 — Dismissal of Oklahoma Proceedings.
Stonefield shall take all reasonable steps to dismiss or withdraw the domesticated judgment in the Oklahoma County District Court that was filed on or about June 14, 2024, and to vacate or withdraw the Writ of Execution filed in Oklahoma County on September 6, 2024. Stonefield shall use commercially reasonable efforts to complete such dismissal, withdrawal, or vacatur within fifteen (15) business days following the filing of the Agreed Order of Satisfaction. Stonefield shall bear the costs of all such filings.
Section 5.4 — Cooperation.
Each Party agrees to execute and deliver such further instruments, documents, certificates, and agreements, and to take such further actions, as may be reasonably necessary or desirable to effectuate the purposes of this Article V, including without limitation the execution of any additional releases, satisfactions, or lien discharges that may be required by any county recorder, court clerk, or other governmental authority.
ARTICLE VI — REPRESENTATIONS AND WARRANTIES
Section 6.1 — Mutual Representations.
Each Party represents and warrants to each other Party that, as of the Effective Date:
(a) Such Party has full power and authority to enter into this Agreement and to perform all of its obligations hereunder.
(b) The execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action (in the case of Stonefield), limited liability company action (in the case of Ridgeline), or individual action (in the case of Brashear), as applicable, and no further authorization or approval is required.
(c) This Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
(d) No consent, approval, authorization, order, registration, or qualification of or with any court, governmental authority, or third party is required for the execution, delivery, or performance of this Agreement by such Party, except as otherwise expressly set forth herein or as may be required in connection with the filing of the Agreed Order of Satisfaction, the Release of Judgment, or other instruments contemplated by Article V.
(e) Such Party has been represented by, or has had the opportunity to be represented by, competent legal counsel in connection with the negotiation, preparation, and execution of this Agreement, and has entered into this Agreement voluntarily and with full knowledge of its terms and consequences.
(f) Such Party has not been induced to execute this Agreement by any representation, statement, or promise not expressly contained herein.
Section 6.2 — Stonefield's Representations.
Stonefield represents and warrants to Ridgeline and Brashear that, as of the Effective Date:
(a) Stonefield is a corporation duly organized, validly existing, and in good standing under the laws of the State of Texas, and has all requisite corporate power and authority to conduct its business as presently conducted and to enter into and perform its obligations under this Agreement.
(b) Stonefield is the holder of the Judgment and has not assigned, transferred, sold, or encumbered the Judgment or any interest therein to any third party; provided, however, that Stonefield acknowledges that its senior secured credit facility with Patriot National Bank may contain provisions requiring notification to, or coordination with, Patriot National Bank with respect to litigation recoveries, and Stonefield represents that it has complied, or will comply, with any such requirements.
(c) Upon Stonefield's receipt of the settlement consideration described in Article II, Stonefield shall have no further claims against Ridgeline or Brashear with respect to the matters released herein, and Stonefield will cause all actions and proceedings contemplated by Article V to be promptly completed.
Section 6.3 — Ridgeline's Representations.
Ridgeline represents and warrants to Stonefield that, as of the Effective Date:
(a) Ridgeline is a limited liability company duly formed and validly existing (or previously existing) under the laws of the State of Oklahoma, and Gerald Brashear is its sole member and Managing Member.
(b) Gerald Brashear, as Managing Member and sole owner, has full authority to execute this Agreement on behalf of Ridgeline and to bind Ridgeline to all of the terms and conditions hereof.
(c) The Assigned Assets described in Section 2.2 and listed on Exhibit B are owned by Ridgeline free and clear of all liens, security interests, encumbrances, mortgages, pledges, charges, and claims of any kind whatsoever, other than those that will be discharged and released at or prior to the time of delivery of the Assigned Assets to Stonefield or its designee.
(d) The list of Assigned Assets set forth in Exhibit B is accurate and complete in all material respects, including the vehicle identification numbers, years, makes, and models of all tractors and trailers included therein, and no Assigned Asset has been materially damaged, destroyed, or rendered inoperable since the date of its most recent appraisal or inspection.
Section 6.4 — Brashear's Representations.
Brashear represents and warrants to Stonefield that, as of the Effective Date:
(a) He has the legal capacity to enter into this Agreement and to perform all of his obligations hereunder, and is not subject to any legal disability, guardianship, conservatorship, or other impediment that would prevent him from executing this Agreement or performing his obligations hereunder.
(b) He is the sole member and Managing Member of Ridgeline Freight Carriers LLC and has full authority to cause Ridgeline to perform its obligations under this Agreement.
(c) The proceeds from the sale of the Ranch Property currently held in escrow by the Escrow Agent are sufficient to fund the Cash Settlement Amount of Four Hundred Twenty-Five Thousand Dollars ($425,000.00), and no prior claim, lien, or encumbrance against such proceeds has priority over the disbursement contemplated by Section 2.1.
(d) He has not transferred, conveyed, concealed, removed, or encumbered any assets, or caused or permitted any assets to be transferred, conveyed, concealed, removed, or encumbered, with the intent to hinder, delay, or defraud Stonefield or any other creditor in connection with the Judgment, the Litigation, or the collection thereof.
(e) He has disclosed all material assets as required by the post-judgment discovery orders entered by the Court in the Litigation, and his responses to post-judgment discovery were, and remain, truthful and complete in all material respects.
ARTICLE VII — TAX MATTERS
Section 7.1 — Responsibility for Taxes.
Each Party shall be solely responsible for the payment of any and all taxes, penalties, and interest that may be assessed against such Party by any federal, state, or local taxing authority arising from or related to this Agreement and the settlement consideration received or paid pursuant hereto. No Party makes any representation, warranty, or guarantee to any other Party regarding the tax treatment or tax consequences of any consideration paid, received, assigned, or transferred pursuant to this Agreement. Each Party acknowledges that it has been advised, and has had the opportunity, to consult with its own independent tax advisors regarding the tax implications of this Agreement.
Section 7.2 — Tax Reporting.
To the extent required by the Internal Revenue Code of 1986, as amended, Treasury Regulations promulgated thereunder, or any applicable state or local tax law, Stonefield may issue an IRS Form 1099 or other tax reporting document to Brashear and/or Ridgeline reflecting the settlement payments received pursuant to this Agreement. The Parties shall cooperate in good faith regarding any tax reporting matters arising from this Agreement, including the exchange of taxpayer identification numbers and such other information as may be reasonably requested.
ARTICLE VIII — CONFIDENTIALITY
Section 8.1 — Confidentiality Obligations.
The Parties agree to keep the terms and conditions of this Agreement, including without limitation the amount of the settlement consideration, strictly confidential. No Party shall disclose, publish, or disseminate the terms of this Agreement to any third party, except as follows:
(a) To such Party's attorneys, accountants, tax advisors, and financial advisors, on a need-to-know basis, provided that such persons are informed of the confidential nature of this Agreement and agree to maintain its confidentiality;
(b) As required by applicable law, regulation, court order, or subpoena, provided that the disclosing Party shall provide prompt written notice to the other Parties of any such requirement (to the extent permitted by law) so that the other Parties may seek a protective order or other appropriate remedy;
(c) To Stonefield's equity sponsor, Crestpoint Industrial Partners Fund III, LP, and its general partner, Crestpoint Industrial Capital LLC, and their respective officers, directors, partners, members, employees, and advisors, as reasonably necessary in connection with the management and oversight of their investment in Stonefield;
(d) To Stonefield's lender, Patriot National Bank, and its agents and representatives, as required under the terms and conditions of SLG's senior secured credit facility or as otherwise reasonably requested by Patriot National Bank;
(e) As necessary to enforce the terms and conditions of this Agreement in any court of competent jurisdiction; and
(f) As required in connection with financial reporting, audit requirements, or regulatory compliance obligations applicable to any Party or its affiliates.
Section 8.2 — Disclosure of Existence.
Notwithstanding the foregoing, the Parties acknowledge and agree that the existence of this Agreement and the fact that a settlement has been reached between the Parties may be disclosed publicly; provided, however, that the specific financial terms of this Agreement, including the Cash Settlement Amount, the value of the Assigned Assets, and the total settlement consideration, shall remain confidential, subject to the exceptions enumerated in Section 8.1 above.
ARTICLE IX — NO ADMISSION OF LIABILITY
Section 9.1 — No Admission.
This Agreement is entered into solely for the purpose of settling and compromising disputed claims, and to avoid the further expense, burden, risk, and uncertainty of continued litigation and collection proceedings. Nothing contained in this Agreement, and no action taken by the Parties in connection herewith, shall be construed as an admission of liability, wrongdoing, fault, or responsibility by any Party, nor shall any provision of this Agreement or fact or circumstance relating to its negotiation, execution, or performance be admissible in any proceeding as evidence of or an admission by any Party of any liability or wrongdoing of any nature. The Parties further acknowledge that the Judgment was entered by default and that neither Ridgeline nor Brashear contested or adjudicated the merits of Stonefield's claims in the Litigation.
ARTICLE X — MISCELLANEOUS PROVISIONS
Section 10.1 — Governing Law.
This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Texas, without giving effect to any choice-of-law or conflict-of-laws rules or provisions (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Texas.
Section 10.2 — Jurisdiction and Venue.
Any dispute, claim, or controversy arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation, or validity thereof, shall be subject to the exclusive jurisdiction of the state and federal courts located in Dallas County, Texas, consistent with the forum-selection clause set forth in Section 18.2 of the DFSA. Each Party hereby irrevocably submits to the personal jurisdiction of such courts and waives any objection to the laying of venue therein, including without limitation any objection based on inconvenient forum.
Section 10.3 — Entire Agreement.
This Agreement, including all exhibits attached hereto (Exhibits A, B, C, and D), constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, warranties, and communications, whether oral or written, relating to the subject matter hereof. No Party has relied on any representation, warranty, or promise not expressly set forth in this Agreement. References herein to the DFSA dated April 15, 2022, the Judgment, the Litigation, and related proceedings are for recital and contextual purposes only; the DFSA and all rights and obligations thereunder are fully and finally satisfied and discharged by this Agreement.
Section 10.4 — Amendments.
This Agreement may not be amended, modified, supplemented, or otherwise changed except by a written instrument duly executed by all Parties. No oral agreement, course of dealing, or trade usage shall operate to amend, modify, or supplement any term of this Agreement.
Section 10.5 — Waiver.
No waiver of any provision of this Agreement shall be effective unless such waiver is set forth in a written instrument signed by the Party against whom enforcement of the waiver is sought. No waiver of any provision of this Agreement shall constitute a waiver of any other provision of this Agreement, whether or not similar. No waiver of any provision of this Agreement shall constitute a continuing waiver of such provision or a waiver of any subsequent breach thereof. The failure of any Party to enforce any provision of this Agreement at any time shall not be construed as a waiver of such provision or the right to enforce it at a later time.
Section 10.6 — Severability.
If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein; provided, however, that the Parties shall negotiate in good faith to replace any such provision with a valid and enforceable provision that, to the greatest extent possible, achieves the original intent and economic effect of the invalid, illegal, or unenforceable provision.
Section 10.7 — Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, personal representatives, successors, and permitted assigns. No Party may assign its rights or delegate its obligations under this Agreement without the prior written consent of the other Parties, except that Stonefield may assign its rights hereunder to any affiliate or successor entity without the consent of Ridgeline or Brashear.
Section 10.8 — Attorneys' Fees.
In any action, suit, or proceeding to enforce the terms of this Agreement, the prevailing Party shall be entitled to recover from the non-prevailing Party its reasonable and necessary attorneys' fees, costs, and expenses incurred in connection with such action, suit, or proceeding, in addition to any other relief to which such prevailing Party may be entitled.
Section 10.9 — Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by facsimile transmission, electronic mail in portable document format (PDF), or other electronic means shall be equally effective as delivery of a manually executed counterpart and shall be deemed an original signature for all purposes.
Section 10.10 — Notices.
All notices, requests, demands, consents, and other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given and received: (a) upon delivery, if delivered by hand; (b) upon transmission, if sent by facsimile or electronic mail (with confirmation of receipt); (c) one (1) business day after deposit with a nationally recognized overnight courier service, with fees prepaid; or (d) three (3) business days after deposit in the United States mail, postage prepaid, registered or certified mail, return receipt requested, addressed as follows:
If to Stonefield:
Diane Ostrowski, General Counsel Stonefield Logistics Group Inc. 4100 Commerce Street, Suite 1200 Dallas, Texas 75226
with a copy (which shall not constitute notice) to:
Priya Anand, Partner Calderwood & Harkness LLP 2200 Ross Avenue, Suite 3600 Dallas, Texas 75201
If to Ridgeline:
Gerald Brashear, Managing Member Ridgeline Freight Carriers LLC 7820 South Meridian Avenue Oklahoma City, Oklahoma 73159
If to Brashear:
Gerald "Gerry" Brashear 2314 Quail Creek Drive Edmond, Oklahoma 73034
Any Party may change its address for purposes of this Section 10.10 by giving written notice of such change to the other Parties in accordance with the provisions of this Section.
Section 10.11 — Construction.
This Agreement has been negotiated by the Parties and their respective counsel, and the language of this Agreement shall not be construed for or against any particular Party as the drafter or author of any particular provision. The headings and captions used in this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of any provision hereof. As used in this Agreement, the singular shall include the plural and the plural shall include the singular; the word "including" shall mean "including, without limitation"; and the words "herein," "hereof," "hereunder," and similar words shall refer to this Agreement as a whole.
Section 10.12 — Further Assurances.
Each Party agrees to execute and deliver any additional documents, instruments, and agreements, and to take any additional actions, that may be reasonably necessary or desirable to carry out the intent, purposes, and terms of this Agreement, including without limitation the completion of all filings and deliveries contemplated by Articles II and V.
Section 10.13 — No Third-Party Beneficiaries.
This Agreement is intended solely for the benefit of the Parties and their respective permitted successors and assigns. Nothing contained in this Agreement, whether expressed or implied, shall confer upon any person or entity other than the Parties any right, benefit, remedy, or claim under or by reason of this Agreement; provided, however, that the persons and entities released under Sections 3.1 and 3.2 of Article III are intended third-party beneficiaries of the releases granted therein and shall be entitled to enforce such releases as if they were parties to this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties have executed this Settlement Agreement and Mutual Release as of the Effective Date first written above.
STONEFIELD LOGISTICS GROUP INC.
By: ________
Name: Marcus Ellington
Title: Chief Executive Officer
Date: ________
RIDGELINE FREIGHT CARRIERS LLC
By: ________
Name: Gerald Brashear
Title: Managing Member
Date: ________
GERALD "GERRY" BRASHEAR, Individually
________________________________________
Gerald "Gerry" Brashear
Date: ________
APPROVED AS TO FORM:
COUNSEL FOR STONEFIELD LOGISTICS GROUP INC.
By: ________
Name: Priya Anand
Title: Partner, Calderwood & Harkness LLP
Date: ________
EXHIBIT A
WIRE TRANSFER INSTRUCTIONS
The Cash Settlement Amount of Four Hundred Twenty-Five Thousand Dollars ($425,000.00) shall be remitted by wire transfer of immediately available funds to the following account:
Bank Name: Patriot National Bank
Bank Address: 1700 Pacific Avenue, Suite 100, Dallas, Texas 75201
ABA Routing Number: 111-XXX-XXX
Account Name: Stonefield Logistics Group Inc. — Operating Account
Account Number: XXXX-XXXX-XXXX