EXHIBIT 10.12
                              SETTLEMENT AGREEMENT


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                        SETTLEMENT AGREEMENT AND RELEASE

         THIS SETTLEMENT AGREEMENT AND RELEASE (the "Agreement") is entered into
as of this ___ day of February, 1997 by and among the parties to a lawsuit filed
in the United States District Court for the District of Nebraska known as CURTIS
A. AND VICKI P. BROMM, ET AL. V. PREMIER CAPITAL INVESTMENT CORPORATION, ET AL.,
Case No. 4:95CV3327 (the "Lawsuit").  The parties to the Lawsuit and the parties
to this Agreement consist of the Plaintiffs as identified in Recital A below and
the Defendants as identified in Recital B below.

                                 R E C I T A L S

         A. Each of the  Plaintiffs  in the  Lawsuit  desire to  compromise  and
settle their claims  against the Defendants and are entering into this Agreement
for such purpose. The Plaintiffs, who are all parties to this Agreement, are:

         Curtis A. and Vicki P. Bromm, Individually and as custodians for Jolin,
         Jina, Jenefer and Jaron Bromm, UGMA;

         James P. and Linda Kay Bryant, Individually;

         Harold and Merriam Cooperman, Individually;

         Roger W. Evans, Individually and as a beneficiary;

         Richard W. Everett, Individually;

         Albert J. and Bessie B. Fritzler, Individually;

         Beverly A. Fritzler, Individually;

         Douglas E. Fritzler, Individually;

         Douglas E. and Karen E. Fritzler, Individually;

         Leon E. Fritzler, Individually;

         William E. Fritzler, c/o Albert J. Fritzler, Individually;

         Dale C. Hanson, Individually and as a beneficiary;

         Greg A. and Karen M. Latham, Individually;

         Merton B. and Sally Oden, Individually and as a beneficiary;

         Lexie T. and Beverly J. Ramsey, Individually;

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         Lyle L. Shaw, Individually and as a beneficiary;

         Thomas H. and Aleta M. Stephens, Individually;

         William G. Vaske, Individually and as a beneficiary;

         Jerald H. Volin, Individually and as a beneficiary;

         Jerald H. and Laura R. Volin, Individually;

         Jerald H. and Ronald A. Volin, Individually;

         Jerald H. and Steven J. Volin, Individually;

         Jerald H. and Marilyn R. Volin, Individually;

         F. Pace Woods III, Individually; and

         James L. and Beverly J. Ziegenbein, Individually.

         B. Each of the  Defendants  to the  Lawsuit  desire to  compromise  and
settle  the claims of the  Plaintiffs  and enter  into this  Agreement  for such
purpose.  The  entry by the  Defendants  into  this  Agreement  is  without  any
admission of liability.  The  Defendants  who are all parties to this  Agreement
are:

         Premier Capital Investment Corporation, a Colorado corporation;

         Capital Reserve Corporation, a Colorado corporation;

         Ralph W. Newton, Jr.;

         Linda M. Opfer;

         Henry W. Hall; and

         Philip A. Bates.

         NOW,  THEREFORE,  in consideration of the agreements  contained herein,
the adequacy and  sufficiency of which are hereby  acknowledged,  the parties to
this Agreement agree as follows:

      CAPITAL RESERVE CORPORATION, RALPH W. NEWTON, JR. AND LINDA M. OPFER

         1. Defendants Capital Reserve Corporation ("CRC"), Ralph W. Newton, Jr.

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("Newton") and Linda M. Opfer  ("Opfer") shall pay and deliver to Harding Shultz

& Downs,  on behalf of the  Plaintiffs,  as a group,  a  certified  check in the

amount of One Hundred Thousand Dollars ($100,000). The $100,000 payment referred

to in this P. 1 may be paid by any one or all of CRC,  Newton and Opfer and this

Agreement  shall not fail for lack of  consideration  in the event of any one of

CRC, Newton and Opfer makes the entire $100,000 payment. The payment referred to

in this P. 1 shall be paid by CRC,  Newton  and/or Opfer within ten (10) days of

their receipt of a fully executed copy of this Agreement.

          2.  CRC  shall  pay  to  Harding  Shultz  &  Downs  on  behalf  of the

Plaintiffs, as a group, the sum of Eighty Thousand Dollars ($80,000) which shall

be payable at the rate of Five Thousand  Dollars  ($5,000) per month,  the first

payment to be due the first day of the month  which is ten (10) days after CRC's

receipt of a fully executed copy of this Agreement (the "Installment Payments").

Each $5,000 Installment Payment shall be due and payable on the first day of the

month and shall be paid to Plaintiffs' counsel,  Harding Shultz & Downs at their

offices located at 800 Lincoln Square, 121 South 13th Street, Lincoln,  Nebraska

68501.  No interest shall accrue or be payable on the  obligations  contained in

this P. 2.

          3. CRC shall  execute and deliver to Harding  Shultz & Downs on behalf

of the Plaintiffs a Consent to Entry of Judgment  (attached hereto as Exhibit A,

which is hereby  incorporated  into this  Agreement) in favor of the  Plaintiffs

permitting entry of a Consent Judgment against CRC upon the terms and conditions

set forth  herein.  Such Consent to Entry of Judgment  shall serve as a security

for the payments described in P. 2 above. The Consent to Entry of Judgment shall

be held by  Harding  Shultz & Downs,  counsel  for the  Plaintiffs  and shall be

entered only in the event CRC fails to make, on a timely basis,  any Installment

Payment provided for in P. 2 of this Agreement. An Installment Payment shall be


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considered untimely in the event it is not received by Harding Shultz & Downs by

the tenth day of the month in which such  Installment  Payment  is due.  In such

event,  and  prior to any  filing  of the  Consent  to Entry  of  Judgment,  the

Plaintiffs shall give ten (10) days written notice ("Notice") to CRC. The Notice

shall specify the Installment  Payment which is untimely and the amount which is

due.  CRC shall  have ten (10) days from the date of the Notice in which to cure

the failure to make a timely  payment,  and in the event CRC does  timely  cure,

Plaintiffs  shall not file the Consent to Entry of  Judgment.  The amount of the

Consent to Entry of  Judgment  at any given time shall be the full amount of the

remaining  unpaid  Installment  Payments of P. 2. In the event of the failure of

CRC to timely make an  Installment  Payment and the failure of CRC to thereafter

cure an untimely  payment,  Plaintiffs may file the Consent to Entry of Judgment

in the United States  District  Court for the District of Nebraska,  which shall

have  jurisdiction  to enter a  Consent  Judgment  according  to the  terms  and

conditions  of the Consent to Entry of Judgment  against CRC. CRC hereby  waives

any objection to entry of a Consent Judgment  provided,  however,  that prior to

entry of a the Consent Judgment,  fifteen (15) days written notice of the filing

of the Consent to Entry of Judgment  be  provided  to CRC.  Upon  payment of the

$80,000 in Installment Payments, Harding Shultz & Downs shall return the Consent

to Entry of Judgment to counsel for CRC, Dill Dill Carr  Stonbraker & Hutchings,

P.C. CRC shall have the right to accelerate any Installment Payment.

                                   HENRY HALL

          4. Within ten (10) days after receipt of a fully executed copy of this

Agreement,  Henry Hall ("Hall") shall pay and deliver to Harding Shultz & Downs,

on behalf of the Plaintiffs, as a group, the sum of $10,150 as follows:

                  a.       A certified check in the amount of $10,000; and

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                  b. A  certificate(s)  representing  55,425  shares  of Class B

                  Common  Stock  (the  "Class B Stock") of CRC  together  with a

                  Stock Power, duly endorsed in blank sufficient so as to permit

                  the   transfer  of  such  shares  of  Class  B  Stock  to  the

                  Plaintiffs.

          5. Hall makes no representations and warranties regarding the value of

the Class B Stock,  the ability of the Class B Stock to be  converted to Class A

Common Stock (the "Class A Stock") of CRC or any other matter  concerning CRC or

the Class B Stock. Hall makes the following  disclosures (which are not intended

to be nor are they complete) regarding the Class B Stock:

                  a. The terms, conditions,  rights, preferences and obligations

                  of  the  Class  B  Stock  are  governed  by  the  Articles  of

                  Incorporation,   as  amended,   of  CRC.   Such   Articles  of

                  Incorporation,  as amended,  restrict  the  conversion  of the

                  Class B Stock  into  Class A Stock;  b.  Hall has  granted  an

                  irrevocable proxy coupled with an interest to Ralph W. Newton,

                  Jr.  over  29,175  shares of the Class B Stock to vote any and

                  all such shares of such Class B Stock  standing in his name at

                  any and all meetings of the  Shareholders or any  adjournments

                  thereof.   Such   irrevocable   proxy  may  follow  the  stock

                  certificate(s) upon transfer.

                                  PHILIP BATES

         6. Philip  Bates  ("Bates")  shall pay and deliver to Harding  Shultz &

Downs, on behalf of the Plaintiffs as a group, the sum of $10,050 as follows: a.

Bates shall execute and deliver a Promissory  Note in the amount of Ten Thousand

Dollars  ($10,000) with 0% interest payable over sixteen (16) months at the rate

of Six Hundred Twenty Five Dollars ($625) per month, the


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                  first  payment  to be due and  payable on the first day of the

                  month which occurs ten (10) days after Bates  receives a fully

                  executed copy of this Agreement.  The Promissory Note shall be

                  secured by a Deed of Trust  upon  Bates'  principal  residence

                  located at 3254 Pepperwood Lane, Fort Collins, Colorado 80525.

                  Bates  discloses to the Plaintiffs  that such Deed of Trust is

                  not a first Deed of Trust on the property.  b. Within ten (10)

                  days after receipt of a fully executed copy of this Agreement,

                  Bates shall deliver to Harding,  Shultz & Downs,  on behalf of

                  the  Plaintiffs,  18,700  shares  of  Class  B  Stock  of CRC,

                  together with a Stock Power, duly endorsed in blank sufficient

                  so as to permit the  transfer  of such shares of Class B Stock

                  to  the  Plaintiffs.   Bates  makes  no  representations   and

                  warranties  regarding  the  value of the  Class B  Stock,  the

                  ability of such Class B Stock to be converted to Class A Stock

                  or any other matter concerning CRC or the Class B Stock. Bates

                  makes the following  disclosures (which are not intended to be

                  nor are they complete) regarding the Class B Stock:

                           (i) The terms,  conditions,  rights,  preferences and

                           obligations  of the Class B Stock are governed by the

                           Articles of Incorporation,  as amended,  of CRC. Such

                           Articles of Incorporation,  as amended,  restrict the

                           conversion  of the Class B Stock  into Class A Stock;

                           (ii) Bates has granted an  irrevocable  proxy coupled

                           with an interest to Ralph W. Newton,  Jr. over 18,700

                           shares of the  Class B Stock to vote all such  shares

                           at  any  and  all  meetings  of  Shareholders  or any

                           adjournments  thereof.  Such  irrevocable  proxy  may

                           follow the stock certificate(s) upon transfer.


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                                 THE PLAINTIFFS

         7. The payments and Class B Stock being delivered to Harding, Shultz &

Downs on behalf of the Plaintiffs,  are being paid and delivered for the benefit

of the Plaintiffs as a group.  The Plaintiffs  shall determine among  themselves

how such  payments  and Class B Stock are to be divided  among them.  Plaintiffs

shall have no claim on any of the Defendants for any asserted  improper division

among the  Plaintiffs of the payments and Class B Stock being paid and delivered

pursuant to P. 1 through P. 6 above.

          8. Plaintiffs represent and warrant that they are represented by legal

counsel,  Harding  Shultz & Downs.  Plaintiffs  represent  and  warrant  that in

entering into this Agreement, they have not relied upon any information,  either

written  or  oral,  except  what is  expressly  set  forth  in  this  Agreement.

Plaintiffs  represent  and warrant  that they have had the  opportunity  to seek

legal advice  regarding  entry into this Agreement from Harding,  Shultz & Downs

and have, in fact,  consulted with Harding,  Shultz & Downs regarding entry into

this Agreement and are, in fact, entering into this Agreement after consultation

with Harding, Shultz & Downs and of their own free will.

          9. Each Plaintiff  identified in Recital A above,  hereby releases and

forever  discharges each of the Defendants  identified in Recital B above,  from

any all claims,  causes of actions and demands which each such  Plaintiff has or

may  hereafter  have  relating  to or arising out of any of the facts or matters

alleged in the Second Amended  Complaint  filed in this Lawsuit,  except claims,

causes of  actions  and  demands  related to the  Consent  to Entry of  Judgment

referred  to in P. 3 and rights  which the  Plaintiffs  receive  pursuant to the

Promissory  Note and the Deed of Trust  referred  to in P. 6 granted in favor of

the Plaintiffs by Bates.


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                            STIPULATION FOR DISMISSAL

         10. Each of the parties to this Agreement  (except Defendant Bates, who

shall execute the  Stipulation  For Dismissal  With Prejudice on his own behalf)

hereby  authorizes  their  respective legal counsel to execute a Stipulation For

Dismissal  With  Prejudice in the form  attached to this  Agreement as Exhibit B

(which Exhibit B is hereby  incorporated  into this  Agreement) and to cause the

filing  thereof  with the  United  States  District  Court for the  District  of

Nebraska.  Upon  execution by all counsel,  the  Stipulation  For  Dismissal For

Prejudice shall be delivered to Dill Dill Carr Stonbraker & Hutchings, P.C. who,

upon delivery to Harding Shultz & Downs of the payments  referred to in P. P. 1,

4 and 6a,  the  delivery  to Harding  Shultz & Downs of the  Consent to Entry of

Judgment referred to P. 3, the delivery to Harding Shultz & Downs of the Class B

Stock  referred to in P. P. 4b and 6b and the delivery to Harding Shultz & Downs

of the Promissory  Note and the Deed of Trust referred to in P. 6a, may file the

Stipulation  For Dismissal With Prejudice with the United States  District Court

for the District of Nebraska.

                                  MISCELLANEOUS

         11.  Except as required to comply  with Court  process or is  otherwise

required by law, no party shall disclose any information about this Agreement or

any of the terms or provisions hereof, or any of the statements, negotiations or

proceedings  connected  herewith  except  (i) to their  attorneys,  accountants,

auditors and regulatory agencies;  and (ii) to a Court of competent jurisdiction

for purposes of enforcing the terms of this Agreement.

         12.  All  notices  and  other  communications  to be given  under  this

Agreement  to  any  party  shall  be in  writing  and  sent  by  letter  or  fax

transmission and shall be deemed to be duly given or made when delivered (in the

case of personal  delivery),  when dispatched,  in the case of fax transmission,

provided that the sender has received a receipt indicating


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proper   transmission   and  provided  that  a  hard  copy  of  such  notice  or

communication is forthwith sent by prepaid, registered, return receipt requested

mail, or ten (10) days after being deposited in the United States mail,  postage

prepaid,  return receipt  requested,  to such party at its address or fax number

specified  below  or such  other  address  or fax  number  as  such a party  may

hereinafter  specify  for such  purpose  to the  others by notice in  writing as

follows:

         In the case of notice to any or all of the Plaintiffs:

                  Harding, Shultz & Downs
                  800 Lincoln Square
                  121 South 13th Street
                  P.O. Box 82028
                  Lincoln, Nebraska 68501
                  Attention: Tim Engler, Esq.
                  Fax No. (402) 434-3030

         In the case of notice to Capital Reserve Corporation,  Ralph W. Newton,
Jr. and/or Linda M. Opfer:

                  Capital Reserve Corporation
                  7860 East Berry Place, Ste. 215
                  Englewood, Colorado 80111
                  Fax No. (303) 220-5635

         With a copy to:

                  Dill Dill Carr Stonbraker & Hutchings, P.C.
                  455 Sherman Street, Ste. 300
                  Denver, Colorado  80203
                  Attention:  John A. Hutchings, Esq.
                  Fax No. (303) 777-3823

         In the case of notice to Henry W. Hall:

                  Henry W. Hall
                  1265 South Park Drive
                  Monument, Colorado  80132
                  Fax No. (719) 574-5888



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         With a copy to:

                  C. Garald Sims, Esq.
                  Sims & Boster
                  1775 Sherman St., Ste. 2015
                  Denver, CO  80203
                  Fax No. (303) 830-0926

         In the case of Notice to Philip Bates:

                  Philip Bates
                  3254 Pepperwood Lane
                  Fort Collins, CO  80525
                  Fax No. (970) 206-9880

         13. This  Agreement  may be executed in several  counterparts,  each of
which shall be an original,  but all of which  together  constitute  one and the
same Agreement.

         14. This Agreement  represents the entire  agreement  among the parties
and may only be varied or  amended  by  written  document  signed by each of the
parties hereto.

         THIS AGREEMENT is entered into as of the day and year written above.


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                           PLAINTIFF'S SIGNATURE PAGE
                                  CERTIFICATION


         The  undersigned  hereby  certifies that he/she has received,  read and
understood the Settlement  Agreement and Release, has had the opportunity to and
has, in fact,  discussed  the  Settlement  Agreement  and Release  with  his/her
counsel,  Harding  Shultz  &  Downs,  that the  representations  and  warranties
contained in P. 9 of the Settlement  Agreement and Release are true, correct and
accurate,  that the  undersigned  is aware  that the  Settlement  Agreement  and
Release  contains a release in favor of the Defendants  from the undersigned and
that the undersigned is entering into this  Settlement  Agreement and Release of
his/her own free will after consultation with legal counsel.



                               /s/Curtis A. Bromm
                                     Curtis A. Bromm, Individually
                                     and as Custodian for Jolin,
                                     Jina, Jenefer and Jaron Bromm, UGMA


                                /s/Vicki P. Bromm
                                     Vicki P. Bromm, Individually
                                     and as Custodian for Jolin,
                                     Jina, Jenefer and Jaron Bromm, UGMA



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                           DEFENDANT'S SIGNATURE PAGE
                                  CERTIFICATION

         The  undersigned  hereby  certifies  that he/she is entering  into this

Agreement  upon his/her own free will intending to be bound by the provisions of

the Settlement Agreement and Release.

                              CAPITAL RESERVE CORPORATION

                              By:/s/Ralph W. Newton

                              Its:President



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                      Schedule of Plaintiffs and Defendants
                    Who Have Signed the Settlement Agreement

PLAINTIFFS
Curtis A. Bromm,  Individually  and as Custodian  for Jolin,  Jina,  Jenefer and
Jaron Bromm, UGMA
Vicki P. Bromm, Individually and as Custodian for Jolin, Jina, Jenefer and Jaron
Bromm, UGMA
James F. Bryant, Individually
Linda Kay Bryant, Individually
Harold Cooperman, Individually
Merriam Cooperman, Individually
Roger W. Evans, Individually and as a beneficiary
Richard W. Everett, Individually
Albert J. Fritzler, Individually
Bessie B. Fritzler, Individually
Douglas E. Fritzler, Individually
Karen E. Fritzler, Individually
Leon E. Fritzler, Individually
William E. Fritzler, Individually
Dale C. Hanson, Individually and as a beneficiary
Greg A. Latham, Individually
Karen M. Latham, Individually
Merton B. Oden, Individually and as a beneficiary
Sally Oden, Individually and as a beneficiary
Lexie T. Ramsey, Individually
Beverly J. Ramsey, Individually
Lyle L. Shaw, Individually and as a beneficiary
Thomas H. Stephens, Individually
Aleta M. Stephens, Individually
William G. Vaske, Individually and as a beneficiary
Jerold H. Volin, Individually and as a beneficiary
Laura R. Volin, Individually
Ronald A. Volin, Individually
Steven J. Volin, Individually
Marilyn R. Volin, Individually
F. Pace Woods II, Individually
James E. Ziegenbein, Individually
Beverly J. Ziegenbien, Individually

DEFENDANTS
Premier Capital Investment Corporation
Philip A. Bates
Ralph W. Newton, Jr.
Linda M. Opfer
Capital Reserve Corporation
Henry W. Hall

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                                   EXHIBIT 27
                             FINANCIAL DATA SCHEDULE

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