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<br />42. <br /> <br />Settlement Agreement <br /> <br />Section 1. Parties. <br />This agreement is between the City of San Marcos (the "City"), a Texas <br />municipal corporation, and Jeff Jorgensen (the "Guarantor"), an individual. <br /> <br />Section 2. Background and Purpose. <br />A. The Guarantor incorporated X-Squeeze Me! Juice, Inc. (X-Squeeze Me") in <br />1996 to process and distribute fresh fruit juices in the San Marcos and Austin area. X- <br />Squeeze Me borrowed $40,000 (the "Loan") from the City as part of an Economic <br />Development Agreement between the City and X-Squeeze Me dated October 15, 1996. <br />The Guarantor, together with James T. Dotie and Jamine K. Dotie, guaranteed the <br />repayment of the Loan. Another company, Doctor Dreams Juice Machine, Inc. ("Doctor <br />Dreams"), subsequently took over the business from X-Squeeze Me, and made interest- <br />only payments on the Loan, but failed to make any payments on the principal of the <br />Loan. The Guarantor filed suit against Doctor Dreams and the City in April, 1999, Cause <br />No. 6112-C, pending in the County Court-at-Law in Hays County, Texas, seeking a <br />declaration that Doctor Dreams had assumed X-Squeeze Me's debts, including the Loan. <br />The City filed an answer and counterclaim, denying that the City had approved of the sale <br />of the business to Doctor Dreams, and seeking to recover on the Loan. <br />B. The purpose for this Agreement is to resolve the dispute over the Loan that <br />exists between the City and the Guarantor, and to dismiss the City from the lawsuit <br />presently pending between the parties. Guarantor, however, does not intend to release <br />any rights he or X -Squeeze Me has against Doctor Dreams. <br /> <br />Section 3. Agreements by the Guarantor. <br />The Guarantor agrees as follows: <br />A. To repay to the City the full principal amount of the Loan ($40,000), as <br />follows: <br />1. By selling the remammg assets of X-Squeeze Me in accordance with the <br />separate letter agreement between the City and the Guarantor dated October 26, <br />2000, and paying all of the proceeds of the sale to the City. <br /> <br />Jorgensen settlement K.doc <br />