EXHIBIT 10.1
[LETTERHEAD OF LECLAIR RYAN]
August 23, 2002
CONFIDENTIAL
ATTORNEY-CLIENT PRIVILEGED
FOR SETTLEMENT PURPOSES ONLY
VIA FACSIMILE and U.S. MAIL
Robert S. Frank, Esquire
Harvey & Frank
Two City Center
P.O. Box 126
Portland, Maine 04112-0126
Re: Settlement--H. William Coogan, Jr., et al. v. Firstmark Corp., et al.
Civ. Action 02-cv-165-P-H (U.S.D.C. Maine)
Dear Bob:
This letter agreement (the "Letter Agreement")will set forth the terms for
resolving the above-captioned matter that were discussed on August 22, 2002 by
Paul Anders, counsel for plaintiffs, H. William Coogan, Jr. and Susan C. Coogan,
as Trustee of the H. William Coogan Irrevocable Trust (collectively, the
"Plaintiffs") and Robert Summers, Texas counsel for John J. Gorman, Arch Aplin,
III, Charles H. Mayer and Robert J. Ellis (the "Texas Directors") and Jeff
Joyce, counsel for Firstmark Corp (the "Company"). To the extent necessary, the
Texas Directors and the Company shall be collectively referred to as the
"Defendants."
As threshold matters:
A. All communications, whether verbal or written, relating to the above
discussions and this letter agreement, are in connection with an attempt to
compromise and settle the captioned matter and, therefore, the substance of the
discussions and this letter shall be inadmissible in any proceeding currently
pending or hereafter commenced, all in accordance with Federal Rules of Evidence
408 or any counterpart rule of any applicable jurisdiction; and
B. This Letter Agreement shall be executed in separate counterparts by each
Party.
LeClair Ryan
Robert S. Frank, Esquire
August 23, 2002
Page 2
___________________________
Based on the foregoing, the Plaintiffs and Defendants agree as follows:
1. There shall be an immediate cessation of all activities, including but
not limited to pending and proposed discovery, whether initiated by the
Defendants or the Plaintiffs, or any of them, and which are associated with the
litigation currently pending in the United States District Court, District of
Maine, styled Coogan, et al. v. Firstmark Corp, et al., Civil Action
02-CV-165-P-H (the "Standstill"). In the event any of the parties fail to
perform any of the terms of the letter agreement, the Standstill shall expire
immediately.
2. The undersigned Texas Directors (Messrs. Gorman, Aplin, Mayer and
Ellis), by their execution of this Letter Agreement, hereby, resign without
qualification their respective Directorships and any and all other offices or
positions that any of them hold with Firstmark Corp. (the "Company") or any of
its subsidiaries. These resignations shall be effective immediately upon their
execution of the Letter Agreement.
3. The parties agree that on Monday, August 26, 2002, Plaintiffs will file
with the United States District Court a motion for Preliminary Injunction that
in form and substance will include the order provisions attached hereto as
Exhibit A to the Letter Agreement and by reference incorporated herein (the
"PI") and that Defendants will consent to the entry of such injunction and to
the relief set forth in Exhibit A. The final form of the preliminary injunction
shall be agreed upon by counsel for the parties prior to the submission to the
Court. In the event the parties fail to reach agreement on the final form of the
Order, Plaintiffs and Defendants shall submit separate proposed Orders, both of
which shall in any event include the provisions contained in Exhibit A.
4. On the next business day following the Substitute Annual Meeting,
plaintiffs shall file an Amended Verified Complaint, which shall not be opposed
by Defendants. The Amended Verified Complaint shall be identical to the current
Verified Complaint but shall remove the allegations contained in paragraphs 2,
33 and 37.
5. Once the Amended Verified Complaint has been filed with the District
Court in the above-named matter, plaintiffs shall file a Motion to Dismiss the
captioned matter without prejudice. Defendants shall not be required to file
answers or responses to any complaint and no defaults shall be taken before the
dismissal.
6. On Monday, August 26, 2002, Messrs. Aplin and Ellis shall issue written
instructions to their brokers to transfer the Aplin Shares and the Ellis Shares
(as defined in the PI) to the Treasury of Firstmark. A copy of these written
instructions shall be delivered by facsimile that same day to counsel for
Plaintiffs.
7. Upon the Company's receipt of confirmation that the Aplin Shares and the
Ellis
LeClair Ryan
Robert S. Frank, Esquire
August 23, 2002
Page 3
Shares respectively, have been transferred to the Company in accordance with
Paragraph 6 of the Letter Agreement, the Company agrees that within five
business days after confirmation that the Company has received such shares, it
shall pay to Mr. Ellis the sum of $75,000 and to Mr. Aplin the sum of $25,000 as
compensation for services rendered to the Company.
8. Plaintiffs do not object to the Company's payment of legal fees incurred
by all of the defendants in the defense of the captioned matter through the date
of this Letter Agreement, which currently total approximately $70,000.00.
Counsel for Firstmark agrees that it shall provide its legal bills to
plaintiffs' counsel immediately. As to these bills, the agreement set forth in
this paragraph is subject to plaintiffs' review and approval of those bills.
Sincerely,
Paul D. Anders
The foregoing, together with the Exhibit A to this Letter Agreement, is
ratified, approved and confirmed in accordance with its terms on the date set
opposite each signature as follows, each individual having due capacity to be
bound, and pursuant to due authority with respect to the Company.
THIS SECTION INTENTIONALLY LEFT BLANK
LeClair Ryan
Robert S. Frank, Esquire
August 23, 2002
Page 4
The Parties
Firstmark Corp.
Date: August 23, 2002 By: /s/ Robert J. Ellis
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Its: Secretary
Date: August 23, 2002 /s/ John J. Gorman
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John J. Gorman
Date: August 23, 2002 /s/ Arch Aplin, III
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Arch Aplin, III
Date: August 23, 2002 /s/ Charles H. Mayer
--------------------
Charles H. Mayer
Date: August 23, 2002 /s/ Robert J. Ellis
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Robert J. Ellis
The Plaintiffs
Date: August 23, 2002 /s/ H. William Coogan, Jr.
--------------------------
H. William Coogan, Jr.
Date: August 23, 2002 /s/ Susan C. Coogan
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Susan C. Coogan, Trustee
EXHIBIT A
IT IS HEREBY ORDERED AND DECREED THAT
1. A Preliminary Injunction Order shall issue immediately and with the
express consent of the parties, no security pursuant to Rule 65(c), Fed. R. Civ.
P., is necessary.
2. The Texas Directors, their employees, agents, servants, affiliates,
attorneys, representatives, and any persons under their control or acting in
concert or privity with them, are enjoined and restrained directly or indirectly
(i) from taking any action to challenge or change the record date of August 9,
2002 established for the Substitute Annual Meeting called by H. William Coogan,
Jr. (the "Substitute Annual Meeting") or the notice to the shareholders thereof;
and (ii) from taking any action to challenge or change the date of the
Substitute Annual Meeting, or any date to which the same is subsequently
adjourned.
3. Defendant Aplin, and any person holding any proxy with respect to such
shares, is hereby enjoined and restrained from voting the 25,000 common shares
of Firstmark issued to Defendant Aplin on or after July 9, 2002 (the "Aplin
Shares") at the Substitute Annual Meeting to be held September 6, 2002 and any
adjournment thereof.
4. It is hereby ordered that the Aplin Shares shall not be deemed to be
outstanding as of the close of business on August 9, 2002 for any purpose.
5. Defendant Ellis, and any person holding any proxy with respect to such
shares, is hereby enjoined and restrained from voting the 75,000 common shares
of Firstmark issued to Defendant Ellis on or after July 9, 2002 (the "Ellis
Shares") at the Substitute Annual Meeting and any adjournment thereof.
6. It is hereby ordered that the Ellis Shares shall not be deemed to be
outstanding as of the close of business on August 9, 2002 for any purpose
8. This order shall remain in force and effect until the completion of the
Substitute Annual Meeting and any adjournment thereof.
Dated: 26/th/ day of August, 2002
/s/ D. Brock Hornby
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Hon. D. Brock Hornby