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SETTLEMENT AGREEMENT

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This Settlement Agreement ("Settlement Agreement") is made and entered into this __ day of December, 2009 ("Effective Date") by and between The Board of County Commissioners of Butler County, Ohio ("County") and Resolutions; Community Solutions, Inc. ("RCS").

WHEREAS, on February 6, 1997, County entered into an Agreement (the" 1997 Agreement") with Drug and Alcohol Resolutions, Inc. ("DAR") nlk/a Resolution; Community Solutions, Inc. to provide services in connection with the operation of a 241-bed correctional complex consisting of two incarceration facilities, a minimum security jail (the "MSJ'l) located at 442 South Second Street in Hamilton, Ohio and a minimum security misdemeanant jail (the "MSMJ") located at 434 South Second Street in Hamilton, Ohio; and

WHEREAS, the 1997 Agreement provided that the Butler County Sheriff (" Sheriff') would be responsible for maintaining security at the MSJ and the MSMJ while DAR would provide certain services at the MSJ and the MSMJ as are more fully described in the 1997 Agreement; and

WHEREAS, the 1997 Agreement provided that DAR would be compensated for services at per capita per diem rates which were initially specified in the 1997 Agreement, and which would be adjusted by agreement of the parties; and

WHEREAS, the 1997 Agreement was to terminate on February 6, 2007; and

WHEREAS, pursuant to that certain Ground Lease ("Lease") dated November 4, 1994, DAR leased to County the property where the MSMJ was constructed; and

WHEREAS, on February 24,2000, County and DAR entered into a First Amendment ("First Amendment") to the 1997 Agreement which extended the 1997 Agreement to the Butler County Correctional Center ("BCCC"), located at 705 Hanover Street in Hamilton, Ohio, which was then under construction, so that DAR would also provide services at the BCCe at the per capita per diem rates set forth in the First Amendment; and

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WHEREAS, on Aprin~2U(}3:_County ana-KCSlas tlie successor to DA1~,) enterea into a Second Amendment (" Second Amendment") to the 1997 Agreement which modified the per capita per diem rates of compensation for the services provided by RCS and extended the term of the 1997 Agreement an additional six years until February 6,2013; and

WHEREAS, on November 9, 2006, County and RCS entered into a Third Amendment ("Third Amendment") to the 1997 Agreement which provided that upon the renovation and rehabilitation of the former Butler County Jail ("Old Jail") located at 1.23 Court Street, in Hamilton, Ohio, RCS would provide the services described in the 1997 Agreement at the Old Jail; and

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WHEREAS, on or about September 20, 2007, Countyand RCS entered into a Fourth

Amendment ("Fourth Amendment") to the 1997 Agreement which modified the per capita per diem rates of compensation for the services provided by RCS, effective July 1, 2007, and continuing through June 30, 2009; and

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WHEREAS, on February 19, 2009, County adopted its Resolution No. 09-02-0304, to approve the execution of a "Fifth Amendment" of the 1997 Agreement to reduce the per capita per diem rates of compensation to RCS for services, effective February 1,2009, and continuing through December 31, 2011, but no written amendment to the 1997 Agreement was signed memorializing the reduced rates; and

WHEREAS, the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment are collectively hereinafter referred to as the "Amendments"; and

WHEREAS, the 1997 Agreement, as amended by the Amendments, is hereinafter referred to as the "Agreement"; and

WHEREAS, the MSMJ, the BCCC and the Old Jail are collectively hereinafter referred to as the "Facilities"; and

WHEREAS, certain disputes have arisen between County and RCS regarding the Agreement, monies owed to Res and various other issues, which disputes County and RCS desire to fully resolve and settle as set forth in this Settlement Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Settlement Agreement, County and RCS agree as follows:

SECTION 1: County contends that the Agreement is void due to lack of compliance with the requirements of Ohio law regarding competitive bidding which County claims could entitle County to recover monies previously paid to RCS under the Agreement. Due to its claim that the

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award a new contract, for all or part of the services provided at the Facilities under the Agreement.

RCS contends that the Agreement is enforceable, that RCS is legally entitled to retain all monies

paid by County under the Agreement and that the award by County of a new contract to provide

services at the Facilities prior to February 6,2013, would be a breach of the Agreement by Count)' .

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In order to avoid the time, expense and uncertainty oflitigating this matter, County and RCS agree to

resolve this dispute ("Dispute #1 ") as follows:

(a) Pursuant to R. C. §3 07.86 County has published multiple invitations for bids ("Bids" or individually a "Bid") for one or more of the services provided by RCS under the Agreement. County agrees that RCS shall have the right to submit one or more Bids in response to the invitations for Bids.

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.: (b)

(c)

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To ensure continuity of services necessary for the safety, health and welfare of prisoners incarcerated at the Facilities, County and RCS each covenant and agree to operate the Facilities upon the same terms and conditions as set forth in the Lease and the Agreement, as modified by this Settlement Agreement, until the Termination Date (as that term is hereinafter defined). The Agreement, as modified by this Settlement Agreement, is hereinafter referred to as the "Current Operating Arrangement".

As additional consideration for County and RCS to sign this Settlement Agreement and as an inducement for each of County and RCS to perform its obligations under the Current Operating Arrangement, County and RCS covenant and agree and each absolutely and unconditionally guarantees that each will fully perform its obligations under the Current Operating Arrangement.

(d) Either County or RCS may terminate the Current Operating Arrangement and the Agreement on the date (the "Termination Date") set forth in a written

" notice of termination (,'Notice"), which Notice must be delivered to the other party at least sixty (60) days before the Termination Date set forth in the Notice.

( e) County shall pay RCS for services provided at the Facilities by RCS between October 1, 2009, and the Effective Date at the rates provided for in the Agreement. All sums paid to RCS by County pursuant to the terms of the Agreement shall be retained by RCS as its own, free and clear of any and all claims of County.

(f) Commencing on the Effective Date and continuing through the Termination Date, RCS will provide to County those services that are being performed by ReS at the Facilities as of the Effective Date (the "Services").

Date, County will pay RCS a fee (the "Fee") each month for Services at the following rates:

Number of Inmates

- ---_------ - -- - -

At the Facilities

Per Diem Rate

1-500 501-900 over 900

$13.41 $.12.21 $11.79

County will remit payment to Res promptly each month for Services provided in the preceding month, as provided for in SECTION 7 of this Settlement Agreement. All sums paid to RCS pursuant to the provisions of

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this .subsection shall be retained by RCS as its own, free and clear of any

claims from County, .

(h) Pursuant to the requirement or'R,C, §341.20, Sheriffhereby consents to RCS performing Services at the Facilities pursuant to the Current Operating Arrangement.

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(i) On the Effective Date, County will pay to RCS the sum of Thirty-One Thousand Two Hundred Twenty-One and 00/100 ($31,221.00) Dollars, which sum: (i) County and RCS agree is the balance owed to RCS for services rendered by RCS during the month of July, 2009 under the Agreement; and (ii) RCS shall retain as its own, free and clear of any and all claims from County.

SECTION 2: RCS contends, and County disputes, that County owes RCS money for utility expenses and services provided to County at the Facilities prior to the Effective Date. In part this dispute includes a contention by County that RCS owes County money for utility expenses paid by County for the Facilities and the MSJ between July 1, 2007 and Januruy30, 2009, because the Fourth Amendment does not state that County was assuming responsibility for those utility charges on July 1,2007. RCS disputes County's contention regarding County's obligations to pay those utility charges. In order to avoid the time, expense and uncertainty of litigating this matter, County and RCS agree to resolve this dispute ("Dispute #2") as follows:

(a) County will keep as its own, free and clear of any and all claims ofRCS, the sum of One Hundred Eighty Thousand and 00/100 ($180,000.00) Dollars, which County withheld from RCS's January, 2009 billing for services under the Agreement.

(b) On the Effective Date, County will pay to RCS the sum of One Hundred Twenty-Seven Thousand Nine Hundred Forty-Four and 85/1 00 ($127,944.85) Dollars, which sum: (i) County and RCS agree is a full and complete

- - -----~~--------- - --- ~setUemenrof theirresl?ecTiVe c1aiiiisrelating-toutiliti eX-Qenses j2aidhy either-----~---~-

of them for the period of July, 2007 through July, 2009 for the Facilities and

the MSJ; and (ii) shall be retained by RCS as its own, free and clear of any

and all claims of County.

( c) Beginning on August 1, 2009, and continuing through the Termination Date: (i) County will be solely responsible for paying for all utility services consumed at the Facilities; and (ii) RCS will be solely responsible for paying for all utility services consumed at the MSJ.

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SECTION 3: RCS contends that County owes RCS money for construction work (the "Work") performed by RCS at the Old Jail. County disputes the amount that RCS contends is owed to RCS for the Work due primarily to RCS's alleged failure to comply with competitive bidding and prevailing wage laws, which County also claims could entitle County.to recover monies already paid

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In the event that County decides to replace the Current Generator within six (6) months after the Effective Date, RCS will reimburse County for its cost to replace the Current Generator, not to exceed Thirty Four Thousand Five Hundred and 00/100 ($34,500.00) Dollars (the "Reimbursement"), within thirty (30) days after County provides RCS with written documentation that a new, replacement, back-up generator has been installed at the Old Jail.

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to .: RCS for th.€ Work. County further disputes the fitness of the back-up generator (the "Current Generator") installed at the Old J ail by RCS as part ofthe Work. In order to avoid the time, expense and uncertainty oflitigating this matter, County and RCS agree to resolve this dispute ("Dispute #3") as follows:

(a) R<;:;S shall retain as its own, free and clear of any and all claims of County, all sums previously paid to RCS in connection with the Work.

(b) RCS hereby releases and discharges County from any obligation to pay, and waives any claim under, a certain invoice dated May 22, 2008, in the amount of One Hundred Eighty One Thousand Eight Hundred Eighty-One and 33/100 ($181,881.33) Dollars for a portion of the Work.

(c)

(d) County will retain the Reimbursement as its own, free and clear of any and all claims ofRCS.

(e) In connection with the replacement of the Current Generator, RCS shall, at its own cost and expense, remove the Current Generator form the Old Jail within thirty (30) days following receipt of written notice from County to remove the Current Generator.

(f) At the time that the Reimbursement is paid to County, County will deliver to RCS a fully executed Bill of Sale (in a form acceptable to RCS) which transfers title to the Current Generator to RCS for no consideration other than

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(g) County waives and releases RCS from, any and all claims against RCS in connection with the design, installation and operation of the Current Qenera.tor. _

SECTION 4: Res contends that RCS owns all of the bedding, tools and equipment located at the Facilities. County disputes this claim by RCS. In order to avoid the time, expense and uncertainty oflitigating this matter, County and ReS agree to resolve this dispute ("Dispute #4") as follows:

(a) RCS shall retain as its own, free and clear of any and all claims of County, all of the tools and equipment set forth on the list of equipment (collectively, the "Retained Equipment") delivered by ReS to the Butler County Prosecuting

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Attorney in connection with the negotiations concerning the Disputes (as that term is hereinafter defined) which are the .subject matter of the Settlement Agreement.

(b)

County shall retain as its own, free and clear of any and all claims ofRCS, all other equipment, tools, bedding and personal property located at the Facilities except for the Retained Equipment.

(c)

RCS shall have the right, for a period of fifteen (15) days following the Termination Date, to enter the Facilities to remove the Retained Equipment.

(d)

County aclrnowledges and agrees that the list ("List") of Retained Equipment is the proprietary and confidential information of RCS. County further covenants and agrees that: (i) no listing or other itemization of the Retained Equipment will be used in any bid specification for any services at any of the Facilities; and (ii) the List will not be disclosed, except as required by law.

SECTION'S: For purposes of this Settlement Agreement, Dispute#l, Dispute #2, Dispute #3 and Dispute #4 are collectively referred to as the "Disputes".

SECTION 6: As an inducement for RCS to sign this Settlement Agreement and to perform its obligations under the Current Operating Arrangement, County warrants and represents to RCS that County will not disqualify any Bid submitted by RCS to provide services at any ofthe Facilities on the basis that either RCS or DAR: (a) failed to faithfully perform any contract with County; or (b) is in arrears or in default regarding any debt or contract with County.

SECTION 7: Each month RCS shall bill County for Services rendered pursuant to the Current Operating Arrangement during the prior month through the Termination Date. Payment of each bill submitted by RCS shall be due to RCS, without demand, notice, setoff or deduction on or before the thirtieth (30th) day following the date the bill is delivered by RCS to the Sheriff.

~~~~---~SEeTI(JM-8:-In-t1re-event-(Jfa-c~(Jnfl.i"cthetween-the·telms-ofthis-Settlement~.A:greement·and-----I the terms of the Agreement, the terms of this Settlement Agreement shall control.

SECTION 9: County makes the following warranties and representations to RCS as an inducemenrtor RCSto sign-thisSettlement.A:greementandperform its duties and obligations under this Settlement Agreement:

(a) Subject to the approval of the COUli of Common Pleas as provided for in SECTION 17 of this Settlement Agreement,' the execution, delivery and performance of this Settlement Agreement have been properly authorized by all appropriate actions of County. Provided that this Settlement Agreement is the legal, valid and binding obligation of ReS, enforceable against ReS in accordance with its terms, this Settlement Agreement is the legal, valid and

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(a) '.

The execution, delivery and performance of this Settlement Agreement have been properly authorized by all appropriate actions ofRCS. Providing that this Settlement Agreement is the legal, valid and binding obligation of County, enforceable against County in accordance with its terms, this Settlement Agreement is the legal, valid and binding obligation of RCS, enforceable against RCS in accordance with its terms.

. binding obligation of County, enforceable against County in accordance with its terms.

(b) The performance by County of its duties and obligations under this Settlement Agreement will not violate any applicable law or regulation or any agr,~ement to which County is a party or by which County is bound.

( c) County has received no notice of any pending or threatened claim, litigation, or other legal proceeding involving or affecting the validity or enforceability of this Settlement Agreement or the performance by County of its duties and obligations under this Settlement Agreement.

SECTION 10: RCS makes the following warranties and representations to County as an inducement for County to sign this Settlement Agreement and perform its duties and obligations under this Settlement Agreement:

(b)

The performance by RCS of its duties and obligations under this Settlement Agreement will not violate any applicable regulation or any agreement to which RCS is a party or by which RCS is bound.

( c) RCS has received no notice of any pending or threatened claim, litigation, or other legal proceeding involving or affecting the validity and enforceability of this Settlement Agreement or the performance by RCS of its duties and

------------------~obligations-under-this Settlement.Agreement.c..c.c.L. ----~------~---.-~--- _

SECTION 11: Except for those obligations ofRCS and County which by their terms end on the Termination Date, each of the other provisions of this Settlement Agreement shall survive the termination of th~G1.l1Tel1t()pe~Ettillg Arrap.gement.

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SECTION 12: Nothing in this Settlement Agreement shall be deemed as an admission of liability by either County or RCS with respect to any of the acts or events described in this Settlement Agreement.

SECTION 13: As an inducement for County to execute and deliver this Settlement Agreement, RCS hereby releases and forever discharges County, its employees, agents, successors and assigns, from any and all claims, demands, obligations, actions, causes of action, damages, costs and expenses of any nature whatsoever, whether based in tort, contract or any- other theory of recovery, which RCS now has or which may hereafter accrue or be acquired, based upon anyof'the

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claims described in the Disputes, or anyone or more of them. The provisions of the preceding sentence shall not be construed to release County from its duty to fully and faithfully perf ann all of its obligations under this Settlement Agreement, nor to release any claims of, or to be binding upon, any person or entity who is not a party to this Settlement Agreement.

As a further inducement for County to execute and deliver this Settlement Agreement, RCS covenants and agrees to forgo bringing any action of any kind, or instituting any proceeding of any nature, or causing or inducing any other person or persons to bring any action or institute any proceeding of any nature or kind, against County to contest the validity or enforceability of: ( a) this Settlement Agreement; or (b) County's duties or obligations with respect to either the Agreement or the Current Operating Arrangement, or both.

SECTION 14: As an inducement for RCS to execute and deliver this Settlement Agreement, County hereby releases and forever discharges RCS, its officers, directors, employees, agents, successors and assigns, from any and all claims, demands, obligations, actions, causes of action, damages, costs and expenses of any nature whatsoever, whether based in tort, contract or any other theory of recovery, which County now has or which may hereafter accrue or be acquired, based upon any of the claims described in the Disputes, or anyone or more of them. The parties expressly agree that any claim by County against RCS for reimbursement or contribution as a result of any liability determined to be owed by County to Preferred Fire Protection, or its successors or assigns, arising out of or relating to County's contract with Preferred Fire Protection for the installation of a fire suppression system at the Old Jail is not based upon any of the claims described in the Disputes. The provisions ofthe preceding sentence shall not be construed to release RCS from its duty to fully and faithfully perform all of its obligations under this Settlement Agreement, nor to release any claims of, or to be binding upon, any person or entity who is not a party to this Settlement Agreement.

As a further inducement for RCS to execute and deliver this Settlement Agreement, County covenants and agrees to forgo bringing any action of any kind, or instituting any proceeding of any nature, or causing or inducing any other person or persons to bring any action or institute any

_____ _ proceeding of any nature or kind against RCS to contest the validity or enforceability of: (a) this

~~~_-_--_-- S~etiiement.Agr"eemeni;_Qr=(h)_RCS~s=d].liIes~o_r_oJij{gatiuns=wjiliresp-ect t_o__:_eltheiihiAiriem~n£o_i th""'e-=--=--=-- __ ~ Current Operating Arrangement, or both.

SECTION 15: The Lease is incorporated into this Settlement Agreement by reference and ratifiedandaffinned in itscentiretybyCountyandRCS.Nothing in this Settlement Agreement shall be: (a) deemed to be an admission by County that it is in default under the Lease; (b) a waiver of any current or future claim byRCS that County has breached the Lease; (c) a waiverbyRCS of its rights arising out of a breach of the Lease by County; or (d) deemed to be a modification or waiver of any of the duties or obligations of County or RCS under the Lease. It is acknowledged and agreed that any disputes or controversies regarding the Lease or the duties and obligations ofRCS or County under the Lease remains unaffected by this Settlement Agreement.

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SECTION 16: County and RCS agree to cooperate fully in the implementation of this Settlement Agreement, and to take all additional actions (including without limitation the execution of supplementary documents) which may be necessary or appropriate to give full force and effect to its terms and intent.

SECTION 17: It is understood and agreed that: (a) pursuant to R.C. §307.561, County and RCS will be seeking the approval by the Court of Common Pleas of Butler County, Ohio (the "Court") ofthe terms and conditions of this Settlement Agreement; and (b) the duties and obligations of County and RCS as set forth in this Settlement Agreement are subject to receiving such Court approvaL County shall prepare the Court documents (in form and substance acceptable to RCS) for execution by RCS and any other necessary persons and shall file the documents and schedule a hearing at the earliest practicable time to obtain such approval. RCS agrees to cooperate with County's reasonable requests in order to obtain Court approval of this Settlement Agreement.

In the event that approval of the Court should not be granted, then either County or RCS shall have the right to terminate this Settlement Agreement by delivering a written notice of termination to the other within ten (1 0) days following the date the Court's order becomes final and not subject to any appeal.

SECTION 18: This Settlement Agreement, together with the Fiscal Officer's Certificate attached to it, the Agreement, the Lease and the Court proceedings described in SECTION 17 of this Settlement Agreement, constitute the entire agreement of County and RCS on the subjects described in the Settlement Agreement and may not be modified except in a writing signed by the authorized representatives of County and an authorized representative ofRCS in accordance with law.

SECTION 19: All notices required or permitted under this Settlement Agreement shall be in writing and shall be sent, given or delivered by any of the following methods: (a) by personal delivery; or (b) by overnight courier. All notices shall be addressed as follows (or at such address for

-- - a-party as shall be specified upon like-notice): -~- -~----------~-- - - --- - -~--- ----- ---~~--

If to County:

The Board of County Commissioners 315 High Street

Hamilton, Ohio 45011

- - -Attn:CbUl1tyAdministtator

lfto RCS:

Resolutions; Community Solutions, Inc. 620 Eaton A venue

Hamilton, Ohio 45013

Attn: Jean Glowka

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Any notice by overnight courier service shall be deemed to be given, delivered or received one (1) day after deposited with the overnight courier service.

SECTION 20: This Settlement Agreement shall be construed in accordance with the laws of the State of Ohio, and any, action arising out of, or related to, this Settlement Agreement may only be commenced in the Court of Common Pleas of Butler County, Ohio. Except as set forth in this Settlement Agreement, neither party may assign any of its rights, nor delegate any of its duties under this Settlement Agreement without the express written consent of the other party.

SECTION 21: For purposes of this Settlement Agreement, the term "Effective Date" shall be the date that the Court approves this Settlement Agreement, which date shall be set forth in the first paragraph of this Settlement Agreement.

[SIGNATURE PAGE TO FOLLOW]

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This Settlement Agreement has been executed on behalf of the Board of County Commissioners by its duly authorized representatives in accordance with its Resolution No. _______ , and on behalf of Resolutions: Community Solutions, Inc. by its duly authorized representative pursuant to the express action of its Board of Directors.

BOARD OF COUNTY COMMISSIONERS OF BUTLER COUNTY, OHIO

By: _

Donald 1. Dixon, President

By: _

Gregory V. Jolivette, Vice President

By: _

Charles R. Funnon, Commissioner

RESOLUTIONS: COMMUNITY SOLUTIONS, INC.

By: _

CONSENT:

·~~~--Richard-K_;_Jones:--------------------------------!

Butler County Sheriff

APPROVED AS TO FORM ONLY:

Assistant Prosecuting Attorney

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' .. FISCAL OFFICER'S CERTIFIC~TE

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Dated: December __ , 2009

Roger Reynolds, CPA Butler County Auditor

The undersigned certifies that the money required to meet the obligations of the Board of County Commissioners of Butler County, Ohio under the foregoing Settlement Agreement has been lawfully appropriated by the Board of County Commissioners of Butler County, Ohio for such purpose and is in the treasury or in the process of collection to the credit of an appropriate fund, free from any previous encumbrances. This Certificate is given in compliance with Section 5705.41 of the Ohio Revised Code.

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