Document:

Exhibit 10.8

EXHIBIT 10.8

     KATELIN ENTERPRISES, INC. 

ADMINISTRATIVE SERVICES CONTRA 

This agreement is made on April 7, 2008 by and between Cardtrend International Inc., a Nevada corporation (“Cardtrend”) with its principal offices at 800 5th Avenue, Ste.4100, Seattle, WA. 98104 and KateLin Enterprises, Inc. (“Provider”) with an address at 1904 W. Valley Blvd, Alhambra, CA 91803, 

Witnesseth 

WHEREAS, Cardtrend requires assistance in the areas of secretarial, treasury and administrative supports to conduct its business activities in the United States of America; 

WHEREAS, Provider has substantial administrative skills and business experiences in the United States of America business development, and desires to act as a service provider to provide the services as stated above and more specifically in Section 3 below; 

NOW, THEREFORE, in consideration of the premise and the mutual promises and covenants contained herein and subject specifically to the conditions hereof, and intending to be legally bound thereby, the parties agree as follows: 

1. Certain Definitions - When used in this Agreement, the following terms shall have the meanings set forth below: 1.1 Affiliate - any persons or entities controlled by a party. 

1.2 Cardtrend Suppliers - the suppliers of services to Cardtrend. 

1.3 Contact Person - the person who shall be primarily responsible for carrying out the duties of the parties hereunder. Cardtrend and Provider shall each appoint a Contact Person to be responsible for their respective duties.

1.4 Extraordinary Expenses - expenses that are beyond those expenses that are usual, regular, or customary in the conduct of in-house activities in fulfillment of the scope of this agreement.

1.5 Equity - cash, securities or liquid assets, specifically excluding real property. 

1.6 Payment or Payable in kind - distribution of the proceeds of a transaction in the same type and form as was given as valuable consideration for the transaction.

2. Contact Persons. The Contact Person for Cardtrend is King K. Ng, President & Chief Executive Officer. The Contact Person for Provider is Katherine Yoke Lin Tung (“Tung”). Provider shall not replace Tung with another person without the consent of Cardtrend in Cardtrend’s absolute discretion. In the event that Cardtrend’s consent is not given for the replacement of the Provider’s Contact Person within thirty (30) days from the date of receipt of a notice in writing from the Provider, either party shall be entitled to terminate this Agreement by giving a notice in writing to the other party thirty (30) days prior to the date of termination of this Agreement. 

3. Services to be Rendered by Provider. The services to be rendered, on a best efforts basis, by Provider are as follows: 

3.1 Secretarial & Administrative Services. Provider shall provide normal secretarial and administrative services to Cardstrend and cause Tung to be appointed as Secretary and Treasurer of Cardtrend during the term of this Agreement. As the Secretary and Treasurer of Cardtrend, Tung shall be deemed an officer of Cardtrend and shall have the authority to sign on behalf of Cardtrend on business documents relating to filing of forms to the Security and Exchange Commission of the United State of America and any other Government authority in the United States of America. 

3.2 Treasury Services. Upon Tung being appointed as Secretary and Treasurer of Cardtrend, Cardtrend shall authorize Tung, and Provider shall cause Tung to agree, to be a signatory for Cardtrend’s bank account(s) in the United States of America for the purpose of effecting payments to Suppliers and remitting money to Affiliate(s) and/or other person(s) as may be informed by the Contact Person of Cardtrend from time to time during the term of this Agreement. Provider and Tung shall have access to information on the businesses, Provider and Tung shall keep all such information confidential.

3.3 Handling of Cardtrend’s Suppliers and Bankers. Provider will assist in the identifications, negotiations and discussions with Cardtrend’s Suppliers and bankers, including other professional service providers in the United States of America. 

3.4 Additional Duties. Cardtrend and Provider shall mutually agree upon any additional duties, which Provider may provide for addition compensation payable by Cardtrend under this Agreement. 

3.5 Best
Efforts. Provider shall devote such time and best efforts to the affairs of Cardtrend as are reasonable and adequate to render the services contemplated by this
agreement.  Provider is not responsible for the performance of any services other than those specified in SubSections 3.1, 3.2 and 3.3, which may be rendered hereunder without Cardtrend providing the necessary information in writing prior thereto.
It is understood that a portion of the compensation to be paid hereunder is being paid hereunder by Cardtrend to have Provider remain available to provide such other services on an as-needed basis. 

4. Compensation to Provider. 

4.1 Monthly Fee. Cardtrend shall pay Provider a monthly fee of US$2,000 or part thereof proportionate to the number of days services have been rendered, including
Saturdays and Sundays, payable within seven (7) days from the end of the month that the Services have been rendered. In lieu of cash payment for the monthly fee, Cardtrend shall be entitled to settle any fee that may remain outstanding for more than
one (1) month (“Debt”) by the issuance to the Provider or Tung (as may be elected by the Provider) free trading S8 shares of its common stock through the granting of an option with immediate vesting of all the shares required to settle the
Debt in full or in part at an exercise price equals to the average of the closing prices of the common stock of Cardtrend for five consecutive trading days prior to the date of settling the Debt. 

4.2 Grant of options. Cardtrend shall grant to Provider or Tung (as may be elected by Provider), at the signing of this contract, stock option under its 2007 Plan to
purchase One Hundred Thousand (100,000) fully registered free trading shares at a price of $0.05 per share, which will vest at a rate of Twenty Five Thousand (25,000) shares at the end of every three months from April 7, 2008, with first vesting
on July 6, 2008 and last vesting on April 6, 2009. Provider or Tung (if Provider so elects) shall execute a standard option agreement of Cardtrend upon the execution of this Agreement. 

4.3 Additional Fees. Cardtrend and Provider shall mutually agree upon any additional fees, which Cardtrend may pay in the future for services rendered by Provider under this Agreement. 

4. 4 Reimbursement of Expenses. Extraordinary expenses (defined as expenses above US$100 per transaction and other than recurring nature which has been approved once before) shall be submitted by Provider to Cardtrend for
approval prior to expenditure and that such expenses and all incidental expenses (defined as expenses with a value of US$100 or less) incurred by Provider on behalf of Cardtrend shall be reimbursed by Cardtrend within thirty (30) days of receipt
of Provider’s request for payment. 

5. Indemnification. Cardtrend agrees to indemnify and hold harmless Provider and its agents against any and all liability, loss and costs, expenses or damages, including but not limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever or howsoever caused by reason of any injury (whether to body, property, personal or business character or reputation) sustained by any
person or to any person or property by reason of any act, neglect, default or omission, or any untrue or alleged untrue statement of a material fact, or any misrepresentation of any material fact or any breach of any material warranty or covenant as
Cardtrend or any of its agents, employees, or other representatives arising out of, or in relation to, this Agreement. Nothing herein is intended to nor shall it relieve either party from liability for its own act, omission or negligence. All
remedies provided by law, or in equity shall be cumulative and not in the alternative. 

 Provider agrees to indemnify and hold harmless Cardtrend, each of its officers, directors,
employees and each person, if any, who controls Cardtrend  against any and all liability, loss and costs, expenses or damages, including but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever or howsoever caused by reason of any injury (whether to body, property, personal or business character or reputation) sustained by any person or to any person or property by
reason of any act, neglect, default or omission, or any untrue or alleged untrue statement of a material fact, or any misrepresentation of any material fact or any breach of any material warranty or covenant as Provider or any of its agents,
employees, or other representatives arising out of, or in relation to, this Agreement.  Nothing herein is intended to nor shall it relieve either party from liability for its own act, omission or negligence. All remedies provided by law, or in
equity shall be cumulative and not in the alternative. 

6. Cardtrend’s And Provider’s Representations. Each party hereby represents, covenants and warrants to the other party as follows: 

6.1 Authorization.  Each party and its signatory herein have full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby.

6.2 No Violation. Neither the execution nor delivery of this Agreement nor the consummation of the transactions contemplated hereby will violate any provision of the charter or by-laws of each party, or violate any terms of provision of any other
Agreement or any statute or law. 

6.3 Litigation.  There is no action, suit, inquiry, proceeding or investigation by or before any court or governmental or other regulatory or administrative agency or
commission pending or, to the best knowledge of each party threatened against or invoking each party,   or which questions or challenges the validity of this Agreement and its subject matter; and each party does not know or have any reason to know
of any valid basis for any such action, proceeding or investigation. 

6.4 Consents.
No consent of any person, other than the Board of Directors (or managing partner(s)) of each party, is necessary to the consummation of the transactions contemplated
hereby, including, without limitation, consents from parties to loans, contracts, lease or other Agreements and consents from governmental agencies, whether federal, state, or local. 

6.5 Each
Party’s Reliance. Each party has and will rely upon the documents; instruments and written information furnished to the other party by each party's officers or designated employees. All representations and statements provided herein about each party to
the other party are true and complete and accurate to the best of each party’s knowledge. Each party agrees to indemnify, hold harmless, and defend the other party, at its expense for any proceeding or suit which may raise out of any inaccuracy
or incompleteness of any such material or written information supplied to the other party. 

7. Confidentiality.  

7.1 Provider agrees to provide reasonable security measures to keep information confidential where
release may be detrimental to Cardtrend’s business interests. Provider shall require its employees, agents, affiliates, other licensees, and others who will have access to the information through Provider, to first enter appropriate
non-disclosure agreements requiring the confidentiality contemplated by this Agreement in perpetuity. 

7.2 Provider will not, either during its engagement by Cardtrend pursuant to this Agreement or at
any time thereafter, disclose, use or make known for its or another’s benefit, any confidential information, knowledge, or data of Cardtrend  or any of its affiliates in any way acquired or used by Provider during its engagement by Cardtrend.
Confidential information, knowledge or data of Cardtrend and its affiliates shall not include any information, which is, or becomes generally available to the public. 

8. Miscellaneous Provisions. 

8.1 Amendment
and Modification.  This Agreement may be amended, modified and supplemented only by
written agreement of Provider and Cardtrend. 

8.2 Waiver of
Compliance.  Any failure of Provider, on the one hand, or Cardtrend, on the other,
to comply with any obligation, agreement, or condition herein may be expressly waived in writing, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. 

8.3 Expenses: Transfer Taxes, Etc. Whether or not the transaction(s), if any, contemplated by this Agreement shall be consummated, Provider agrees that all fees and expenses incurred by Provider in connection with this Agreement
shall be borne by Provider and Cardtrend agrees that all fees and expenses incurred by Cardtrend in connection with this Agreement shall be borne by Cardtrend, including, without limitation as to Provider or Cardtrend, all fees of counsel and
accountants. 

8.4 Compliance
with Regulatory Agencies. Each party agrees that all actions, direct or indirect, taken
by it and its respective agents, employees and affiliates in connection with this Agreement and any financing or underwriting hereunder shall conform to all applicable Federal and State securities laws. 

8.5 Notices.
Any notices to be given hereunder by any party to the other may be effected by personal delivery in writing or in by mail, registered or certified, postage prepaid with
return receipt requested. Mailed notices shall be addressed to the “Contact Person” at the addresses appearing in the introductory paragraph of this Agreement, but any party may change his address by written notice in accordance with this
subsection. Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of five (5) days after mailing. 

8.6 Assignment. This agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but neither this Agreement nor any right, interest or
obligations hereunder will be assigned by any of the parties hereto without the prior written consent of the other parties, except by operation of law. 

8.7 Delegation. Neither party shall delegate the performance of its duties under this agreement without the prior written consent of the other party.

8.8 Publicity.
Neither Provider nor Cardtrend shall make or issue, or cause to be made or issued, any announcement or written statement concerning this Agreement or the transaction
contemplated hereby for dissemination to the general public without the prior consent of the other party. This provision shall not apply, however, to any announcement or written statement required to be made by law or the regulations of any Federal
or State governmental agency, except that the party concerning the timing and consent of such announcement before such announcement is made. 

8.9 Governing Law. This Agreement and the legal relations among the parties hereto shall be governed by and construed in accordance with the laws of Nevada, United States of America, without regard to its conflict of law doctrine. 

8.10 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. 

8.11 Headings.
The heading of the sections of this Agreement are inserted for convenience only and shall not constitute a part hereto or affect in any way the meaning or
interpretation of this Agreement. 

8.12 Entire
Agreement.  This Agreement, including any Exhibits hereto (if any), and the other documents and certificates delivered pursuant to the terms hereto, sets forth the
entire Agreement and understanding of the parties hereto in respect of the subject matter contained herein, and supersedes all prior agreements, promise, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto. 

8.13 Third
Parties.  Except as specifically set forth or referred to herein, nothing herein expressed or implied is intended or shall be construed to confer upon or give to any
person or corporation other than the parties hereto and their successors or assigns, any rights or remedies under or by reason of this Agreement. 

8.14 Attorneys’ Fees and Costs. If any action is necessary to enforce and collect upon the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys’ fees and costs, in addition to any other relief to which that party may be entitled. This provision shall be construed as applicable to the entire Agreement. 

8.15 Survivability. If any part of this Agreement is found, or deemed by a court of competent jurisdiction to be invalid or unenforceable, that part shall
be severable from the remainder of the Agreement. 

8.16 Further
Assurances.  Each of the parties agrees that it shall from time-to-time take such actions and execute such additional instruments as may be reasonably necessary or
convenient to implement and carry out the intent and purpose of this Agreement. 

8.17 Right to
Data After Termination.  After termination of this Agreement, Provider shall, within thirty (30) days from the date of termination of this Agreement, save and unless
not required by Cardtrend, destroy and/or return to Cardtrend, as may be determined by Cardtrend, all documents (including copies in electronic form or papers) relating to Cardtrend and its Affiliates, and Cardtrend shall bear all the costs relating
to the return and/or destruction of such documents. 

8.18 Relationship of the Parties. Nothing contained in this Agreement shall be deemed to constitute either party to become the partner of the other, the
agent or legal representative of the other, nor create any fiduciary relationship between them, except as otherwise expressly provided herein. It is not the intention of the parties to create nor shall this Agreement be construed to create any
commercial relationship or other partnership. Neither party shall have any authority to act for or to assume any obligation or responsibility on behalf of the other party, except as otherwise expressly provided herein. The rights, duties,
obligations and liabilities of the parties shall be separate, not joint or collective. Each party shall be responsible only for its obligations as herein set out and shall be liable only for its share of the costs and expenses as provided herein.

8.19 No Authority to Obligate Cardtrend. Without the consent of the Board of Directors of Cardtrend, Provider shall have no authority to take, nor shall it take, any action committing or obligating Cardtrend in any manner, and it shall
not represent himself to others as having such authority. 

9. Arbitration. With respect to the arbitration of any dispute, the parties hereby acknowledge that:  A. Arbitration is final and binding on the parties. 

 B. The parties are
waiving their rights to seek remedy in court, including their rights to Jury trial. 

 C. The arbitrators’
award is not required to include factual findings or legal reasoning and any party’s right of appeal or to seek modification of ruling by the arbitrators is strictly limited. 

 D. The panel of
arbitrators shall consist of three, one each to be nominated by each party and the other one who shall be the chairman of the arbitration panel shall be nominated by any party or any of the arbitrators but shall be agreed upon by both parties.

 E. This arbitration
clause is specifically intended to include any and all statutory claims which might be asserted by any party.

 F. All disputes,
controversies, or differences between Cardtrend, Provider, or any of their officers, directors, legal representatives, attorneys, accountants, agents, employees, any customers, Suppliers, any person or entity, arising out of, in connection with, or
as a result of this Agreement, shall be resolved through arbitration rather than through litigation. 

 G. The parties hereby
agree to submit the dispute for resolution within Ten (10) days after receiving a written request to do so from the other party. 

 H. If any party fails to
submit the dispute to arbitration on request, then the requesting party may commence an arbitration proceeding, but is under no obligation to do so.  

     I. Any hearing schedule after arbitration is initiated shall take
place in a city that may be agreed upon by both parties, and if no agreement is reached within seven (7) days from the date of such arbitration initiation date, the hearing schedule shall take place in Hong Kong. 

 J. If any party shall
institute any court proceeding in an effort to resist arbitration and be unsuccessful in resisting arbitration or shall unsuccessful in contest the jurisdiction of any arbitration forum, over any matter which is the subject of this Agreement, the
prevailing party shall be entitled to recover from the losing party its legal fees and any out-of-pocket expenses incurred in connection with the defense of such legal proceedings or its efforts to enforce its rights to arbitration as provided for
herein. 

 K. Each party shall sign any required or applicable paperwork at the time any dispute is
submitted for arbitration.. 

The parties shall accept the decision of any award as being final and conclusive and agree to abide thereby. 

Any decision may be filed with any court as a basis for judgment and execution for collection. 

10. Term of Agreement and Termination. This Agreement shall be effective from April 7, 2008 and shall continue for one year, after which time this Agreement shall be terminated. 

The parties hereto have caused this Agreement to be duly executed, all as of the day and year first above written. 

	Cardtrend:  	Cardtrend International Inc.  
	  
	By:  	KING K. NG  
	  	King K. Ng, Chief Executive Officer & President  
	Provider:  	KateLin Enterprises, Inc.  
	  
	By:  	KATHERINE YOKE-LIN TUNG  
	  	Katherine Yoke-Lin Tung, Principal OfficerExhibit 10.3

 

 

 

 

 

 

EXHIBIT 10.3

SETTLEMENT AGREEMENT AND
MUTUAL RELEASES

This Settlement
Agreement and Mutual Releases (the “Agreement”) is dated as of January 30, 2008,
by and between CitiMortgage, Inc. (“CMI”), and First Preference Mortgage
Corporation (“FPMC”) and David W. Mann (“Mann”).

Recitals

A.         On
August 28, 2006, CMI commenced an action against FPMC, Citizens Mortgage Corporation
(“Citizens”), and Mann in the United States District Court for the Eastern
District of Missouri, Eastern Division, styled CitiMortgage, Inc. v. First
Preference Mortgage Corporation, et al., Cause No. 4:06CV01296 ERW (the “Lawsuit”). 
On September 9, 2007, the court dismissed Citizens as a defendant from the
Lawsuit finding it did not have personal jurisdiction over Citizens.  On
October 26, 2007, CMI filed its First Amended Complaint in which CMI has
asserted breach of contract claims (Counts I-III) and a fraudulent transfer
claim (Count IV).

B.         FPMC
and Mann have denied all of the material allegations of CMI’s First Amended
Complaint, and have denied all liability to CMI.

C.         CMI,
FPMC, and Mann participated in a mediation on January 30, 2008, and at the
conclusion of which all three signed a settlement term sheet.  Since then, the
parties have resolved the open items noted in that term sheet, and now wish to
document their full and final settlement agreement.  The parties intend this settlement
to resolve any and all claims CMI and/or any predecessor or affiliate of CMI
mentioned in the Lawsuit may have against FPMC, Mann, and/or any of their affiliates
and related parties mentioned in the Lawsuit, including, but not limited to,
Citizens, Citizens State Bank, RAM Security Holdings GP, Inc., RAM Security
Holdings, Ltd., Bluebonnet Investments, Ltd., JRPM Investments, Ltd., First
Financial Corp., and Security Bancshares, Inc., and all present and former officers,
directors, parents, subsidiaries, and affiliates of these entities, arising out
of or concerning the facts pleaded in the Lawsuit, which claims include any and
all potential or actual disputes and differences existing between them related
to the claims asserted or facts alleged in the Lawsuit.

D.        The
parties enter into this Agreement without admitting any liability (and which liability
they expressly deny), except as expressly set forth in Paragraph 3, and the
parties enter into this Agreement solely to avoid the uncertainty and expense
of further litigation.

NOW, THEREFORE, in
consideration of the premises, mutual promises, covenants, and agreements
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which the parties hereby acknowledge, the parties
covenant and agree as follows:

 

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1.        
Recitals
Incorporated. 
The parties incorporate Recitals A through D above and make them a part of the
Agreement.   

2.        
No
Assignment of Claims. 
Each party hereby represents and warrants that the claims and causes of action it
or he are settling and releasing are ones for which it or he are the sole owner,
and that it or he has not transferred or assigned, and (except as specifically
contemplated in Paragraph 4, below) will not transfer or assign, the claims or
causes of action to any other person or entity.  In the event that claims are
made against any party by or on behalf of a transferee or assignee of a claim or
cause of action settled under this Agreement, then the party that transferred or
assigned any such claim or cause of action, whether before or after the date of
this Agreement, shall indemnify and hold the non-breaching party harmless from
any and all claims, including, but not limited to, actual attorneys’ fees and
costs incurred in the defense of any such transferred or assigned claim.

3.        
Consent
Judgment as to FPMC. 
FPMC shall consent to the entry of judgment in favor of CMI in the amount of
Two Million Five Hundred Thousand Dollars and No Cents ($2,500,000), by filing
the consent pleading attached to this Agreement as Exhibit 1 immediately
after all of the parties have signed this Agreement.

CMI covenants and agrees
that it will not take any action to enforce or execute on the consent judgment
entered against FPMC, unless and until such time as there has occurred a
default in the payment obligations set forth in Paragraph 9 or otherwise
arising under this Agreement.

4.        
Assignment
of Consent Judgment to David W. Mann.  Upon the Court’s entry of the judgment against
FPMC and CMI’s receipt of the final payment for which paragraph 9 of this
Agreement provides, whichever occurs later, and in exchange for part of the
consideration for which this Agreement provides, CMI will assign the judgment
against FPMC to David W. Mann by executing the form of Assignment attached to
this Agreement as Exhibit 2, filing the Assignment with the Court in the
Lawsuit, and delivering the original executed Assignment to David W. Mann, c/o Thomas
Douglass, Thompson Coburn LLP, One US Bank Plaza, St. Louis, Missouri 63101.  David
W. Mann’s ability (or inability) to collect on all or any part of this judgment
shall have no effect on any obligation for which this Agreement provides.

5.        
Dismissal
of the Lawsuit. 
CMI, FPMC and Mann shall jointly move the Court to stay any further proceedings
in the Lawsuit until such time as the payments prescribed in Paragraph 9 of
this Agreement have been made and the releases described in Paragraphs 6, 7 and 8
below have become effective.  This joint motion shall be in the form attached
to this Agreement as Exhibit 3 and shall be filed immediately after all of
the parties have signed this Agreement.  If and when the final payment prescribed
in Paragraph 9 has been made and the mutual releases have become effective, CMI
and Mann shall jointly move to dismiss the Lawsuit, with prejudice, each side
to bear its or his own attorneys’ fees and costs.  

 

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6.        
Release
of Claims by CMI. 
Subject to the satisfaction of  the conditions set forth in this paragraph, CMI
releases and forever discharges Mann and FPMC, and all of their parent
corporations, subsidiaries, affiliates and related entities, including, but not
limited to, Citizens, Citizens State Bank, RAM Security Holdings GP, Inc., RAM
Security Holdings, Ltd., Bluebonnet Investments, Ltd., JRPM Investments, Ltd., First
Financial Corp. or Security Bancshares, Inc., and their respective present and
former insurers, representatives, officers, directors, shareholders, partners, agents,
employees, predecessors, heirs, successors, and assigns, from any and all
claims, damages, demands, actions, or causes of action, whether known or
unknown, at law or in equity, whether arising under the common law or any
statute of the United States or any state, arising out of or related in any way
to the claims or allegations that CMI made or could have made in the Lawsuit,
including all claims for actual, incidental, consequential, statutory, or
punitive damages or attorneys’ fees of any kind.   

This release will only be effective ninety‐one
(91) days after CMI has received the final payment described in Paragraph 9.  If
during that ninety‐one (91) day period, Mann, or any person or entity
that has made some or any portion of any payment (whether the initial or final
installment) files a bankruptcy petition or there is a bankruptcy petition
filed against him, her or it, and at the end of that ninety‐one (91) day period
the bankruptcy court has not dismissed the petition with prejudice, then this
release will not take effect until such time as there is no longer any ability
to challenge the payment as some manner of voidable transfer under
Sections 544, 547, 548 or 550 of the United States Bankruptcy Code, 11
U.S.C. §§ 101, et seq.

 

The parties also agree
that this release will only be effective if, during that same ninety‐one
(91) day period, there is no bankruptcy petition filed by or against FPMC, or at
the end of which period the bankruptcy court has dismissed any such petition
with prejudice.  If during that ninety‐one (91) day period, FPMC files a
bankruptcy petition or there is a bankruptcy petition filed against it, and at
the end of which period the bankruptcy court has not dismissed that petition
with prejudice, then this release will not take effect until such time as there
is no longer any ability to challenge the judgment as some manner of voidable
transfer under Sections 544, 547, 548 or 550 of the United States
Bankruptcy Code, 11 U.S.C. §§ 101, et seq.

Further, the parties
agree that this release will only be effective if, during that same ninety-one
day time period, there has been no determination by a court or arbitrator that Mann
or First Preference and/or its officers and directors, insider shareholders or
others, engaged in any fraudulent or other transfers of his or its assets for
the purpose of evading Mann or First Preference’s obligations to CitiMortgage
or to any other of his or its creditors.

The parties contemplate
that the consent judgment to which Paragraphs 3 and 4 refer will have been entered
and assigned prior to the effective date of these releases, and agree that in any
and all events, the releases set forth in this Paragraph 6 shall not
operate to satisfy, release or discharge that judgment against FPMC.  

 

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7.         
Release
of Claims by FPMC. 
Subject to the satisfaction of  the conditions set forth in this paragraph, FPMC
releases and forever discharges CMI and its predecessors, affiliates, successors,
and assigns, and their respective insurers, representatives, agents, officers,
directors, and employees, from any and all claims, damages, demands, actions,
or causes of action, whether known or unknown, at law or in equity, whether
arising under the common law or any statute of the United States or any state,
arising out of or related in any way to the claims or allegations that were made
in the Lawsuit, including all claims for actual, incidental, consequential,
statutory, or punitive damages or attorneys’ fees of any kind.  This release
will be effective at such time as the Release of Claims by CMI set forth in Paragraph
6 becomes effective.

8.          
Release
of Claims by Mann. 
Subject to the satisfaction of  the conditions set forth in this paragraph, Mann
releases and forever discharges CMI and its predecessors, affiliates, successors,
and assigns, and their respective insurers, representatives,  agents, officers,
directors, and employees, from any and all claims, damages, demands, actions,
or causes of action, whether known or unknown, at law or in equity, whether
arising under the common law or any statute of the United States or any state,
arising out of or related in any way to the claims or allegations that were made
in the Lawsuit, including all claims for actual, incidental, consequential,
statutory, or punitive damages or attorneys’ fees of any kind.  This release
will be effective at such time as the Release of Claims by CMI set forth in
Paragraph 6 becomes effective.   

9.          
Payments
to CMI. 
Mann shall pay or cause to be paid to CMI the sum of Six Hundred Thousand
Dollars and No Cents ($600,000).  Those payments shall be made by wire transfer
in two installments.  The first payment shall be made (a) in the amount of Three
Hundred Thousand Dollars and No Cents ($300,000), and (b) such that CMI receives
that payment no later than the close of the fed funds wire on March 31, 2008.  The
second and final payment shall be made (a) in the amount of Three Hundred Thousand
Dollars and No Cents ($300,000) and (b) such that CMI receives that payment no
later than the close of the fed funds wire on July 31, 2008.  No interest shall
accrue on these amounts for any period prior to the dates set forth in this
Paragraph.   

Each payment shall be
wired to CMI using the following wire transfer instructions:

		

Wire the funds to:        
 

				Citibank, N.A.
	

 

				New
  York, NY
	

 

				ABA# 021000089
	

 

				 
	

Credit:                         
 

				CitiMortgage,
Inc.
	

 

				1000 Technology Dr  
	

 

				O’Fallon, MO
63368-2239
	

 

				 
	

 

				Account #00020239
	

 

				 
	

Attention:                     
 

				Henry Prozorowski

 

 

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10.       
Additional
Remedies Available to CMI in the Event of a Default.  The parties do not
intend this Agreement to be a novation.  If and in the event the payments for
which paragraph 9 calls are not timely made, then, without any requirement of
notice or any other action by CMI, CMI may proceed with an action for breach of
this Agreement or pursue its original claims, the choice of which shall be at
CMI’s sole election.

If and in the event of a
default under this Agreement, any and all amounts due CMI shall bear interest
at the rate of twelve percent (12%) per annum from the date of default.

11.       
Covenant
Not to Sue. 
CMI covenants not to file or refile suit against FPMC, Mann, and/or any
affiliates and related parties of either one of them referred to in the Lawsuit
or described in Paragraph 6, above, including, but not limited to, Citizens,
Citizens State Bank, RAM Security Holdings GP, Inc., RAM Security Holdings,
Ltd., Bluebonnet Investments, Ltd., JRPM Investments, Ltd., First Financial
Corp., and Security Bancshares, Inc., and all of their respective, present and
former insurers, representatives, officers, directors, shareholders, partners, agents,
employees, predecessors, successors, and assigns, on any claim that it has agreed
to release pursuant to Paragraph 6, so long as there are no defaults in the
payment obligations set forth in Paragraph 9 or otherwise arising under this
Agreement.  

12.       
Parties
to Bear Their Own Attorneys’ Fees and Costs.  CMI agrees that it will not seek
reimbursement from FPMC or Mann for attorneys’ fees, taxable costs or expenses
incurred in the Lawsuit, except as Paragraph 10 provides.  FPMC and Mann agree
that they will not seek reimbursement from CMI for attorneys’ fees, taxable
costs or expenses incurred in the Lawsuit, except as they may be able to make
such a claim under Paragraph 10.  

13.       
Modifications.  No modification of
this Agreement shall be binding upon any of the parties hereto, unless it has
been agreed to by the parties in a writing signed by each of them and is
expressly identified as an amendment to this Agreement.   

14.       
Representations
and Warranties.

To induce each other to
enter into this Agreement, CMI, FPMC and Mann each represent and warrant as
follows:

(a)        That
no statements or representations made by or on behalf of any of the parties to
this Agreement, or by any third party, except as may be specifically recited in
this Agreement, have influenced, induced or caused the parties to make this
settlement and to execute this Agreement.

(b)        That
this Agreement contains the entire agreement between CMI, FPMC and Mann with
respect to the settlement of the matters to which it refers, and there do not
exist any other written or oral terms or agreements except for those contained
or expressly identified in this Agreement.

(c)        That only representations contained in this
Agreement, and no others, shall be admissible to establish the execution or
inducement of this Agreement.

(d)        That each of the undersigned has read and
understands this Agreement in its entirety.

 

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(e)        That each of the undersigned has been represented
by and has consulted with counsel of his or its choosing in connection with the
negotiation, drafting and execution of this Agreement.

(f)         That each of the undersigned is authorized and
has obtained all necessary authorization to sign this Agreement in the capacity
and manner set forth below.

15.       
Confidentiality.  Except as may be
necessary for any of the parties, or their parents, subsidiaries, affiliates,
or related parties, to comply with any required Securities and Exchange
disclosure requirement or to comply with the tax laws of any jurisdiction to
which such party is subject, the undersigned agree that they shall maintain
this Agreement and each of its terms in confidence, and shall not voluntarily
disclose this Agreement or any of its terms to any person not a party hereto. 
The undersigned shall direct and require their agents (including their attorneys),
and, where applicable, family, to likewise maintain this Agreement and each of
its terms in confidence, and prohibit their agents and family from voluntarily
disclosing this Agreement or any of its terms to any person not a party
hereto.  Any party who is requested to disclose this Agreement or its terms to
any person not a party to this Agreement, and who determines that disclosure is
required by law shall notify the other parties as expeditiously as practical
under the circumstances of that determination and the person(s) to whom the
disclosure is to be made and the circumstances which require the disclosure. 
Such notice shall be reasonably calculated to give the other party as much
notice as is practical under the circumstances of the imminence of disclosure
and the opportunity to lodge any available objections to disclosure.  The parties
may disclose the amount of the payment hereunder to tax preparers, if
necessary, but that such tax preparer shall first be told of and agree to be
bound by the terms of this Agreement, and to keep such information confidential
except as the dollar amounts may be included as part of any required income or
other tax filing.

16.       No
Third Party Beneficiaries.  The parties to this Agreement have entered into this
Agreement solely for their own benefit and to advance their respective separate
and individual interests, and do not intend it to benefit any third parties or
persons not a party to this Agreement (other than as specifically set forth in
paragraphs 6, 7, 8, 10 and 11).

17.       Governing
Law. 
This Agreement will be governed by, and interpreted and construed in accordance
with, the laws of the State of Missouri.

18.       Binding
Effect. 
This Agreement will be binding on each of the parties, and its or their
respective principals, agents, attorneys, heirs, successors and assigns, as
applicable.

19.       Attorneys’
Fees in the Event of a Breach.  In the event any party breaches this
Agreement, and one of the other parties brings an action to enforce the
Agreement, the prevailing party will be entitled to recover, in addition to its
actual damages and consequential damages, if any, all of its reasonable
attorneys’ fees, expenses and costs incurred in enforcing its rights and
remedies under this Agreement.

 

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20.       Counterparts.  The parties may
execute this Agreement in counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF
CitiMortgage, Inc, First Preference Mortgage Corporation, and David W. Mann
have executed this Settlement Agreement and Mutual Release:   

	

CITIMORTGAGE,
INC.

			 
	

 

			 
	

BY: 
/s/ Eric Randolph                                                 
 

			DATE:  3/24/08
	

 

			 
	

TITLE: 
Senior Vice President                          

			 
	

 

			 
	

 

			 
	

 

			 
	

FIRST
PREFERENCE MORTGAGE CORPORATION

			 
	

 

			 
	

BY: 
/s/ David W. Mann                                                          
 

			DATE:  3/25/08
	

 

			 
	

TITLE: 
President                                                         

			 
	

 

			 
	

 

			 
	

/s/
David W. Mann                                                                  
 

			DATE:  3/25/08
	

DAVID
W. MANN{N1794585.1}4674546.1

			 

 

 

 

 

 

 

 

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