Settlement agreement: United States and Brigham Taylor and SlideBelts (PPP)

Summary

A settlement agreement among the United States (acting through the Department of Justice on behalf of the SBA), Brigham Taylor, and SlideBelts Inc., a debtor and debtor-in-possession. The United States contends that Taylor and SlideBelts made false statements about bankruptcy status in connection with PPP loan applications, and that they are liable for damages and penalties totaling $4,196,992 under FIRREA and the FCA. The agreement states that it is neither an admission of liability nor a concession by the United States, but Taylor and SlideBelts admit facts including a PPP loan application for $350,000 submitted on April 8, 2020. They agree to pay $100,000, of which $17,500 is restitution from Taylor. The attachments include an amortization schedule and a consent judgment for $2,098,496.

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Full text

SETTLEMENT AGREEMENT

This Settlement Agreement (“Agreement”) is entered into among the United States of

America, acting through the United States Department of Justice and on behalf of the United

States Small Business Administration (“SBA”) (collectively, the “United States”), Brigham

Taylor (“Taylor”), and SlideBelts Inc. (“SlideBelts”), a debtor and debtor-in-possession, through

their authorized representatives. The United States, Taylor, and SlideBelts are collectively

referred to as the “Parties.”

RECITALS

A. SlideBelts is a Delaware corporation with a principal executive office in El

Dorado Hills, California. SlideBelts manufactures and sells fashion accessories on the internet.

On August 12, 2019, SlideBelts filed a voluntary petition for bankruptcy relief under Chapter 11

of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of

California. In re: SlideBelts Inc., No. 2019-25064 (Bankr. E.D. Cal. Aug. 12, 2019). On June

30, 2020, the Bankruptcy Court dismissed SlideBelts’ Chapter 11 bankruptcy case. On August

25, 2020, SlideBelts filed another voluntary petition for bankruptcy relief, this time under

Subchapter V of Chapter 11 of the Bankruptcy Code. In re: SlideBelts, Inc., No. 20-24098-A-11

(Bankr. E.D. Cal. Aug. 25, 2020). That case is currently pending, and a bankruptcy plan has not

yet been confirmed.

B. Taylor is the President, Chief Financial Officer, and Chief Executive Officer of

SlideBelts.

C. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was

enacted on March 27, 2020, to provide emergency assistance to individuals, families, and

businesses affected by the coronavirus pandemic. Section 1102(a)(2) of the CARES Act
amended Section 7(a) of the Small Business Act, 15 U.S.C. § 631 et seq., to establish the

Paycheck Protection Program (“PPP”). 15 U.S.C. § 636(a)(36). The SBA administers the PPP

to provide relief expeditiously to small businesses experiencing economic hardship as a result of

coronavirus measures.

D. To administer the PPP, the SBA used its existing underwriting factors in the 7(a)

loan program to establish bright line rules that private lenders could evaluate quickly, such as

excluding debtors in bankruptcy. The PPP application on SBA Form 2483 asks, in Question 1,

whether the applicant is presently involved in any bankruptcy. Directly above Question 1, the

application states that, “If questions (1) or (2) below are answered ‘Yes,’ the loan will not be

approved.” In addition, on the lender’s application to the SBA to guaranty the PPP loan on SBA

Form 2484, lenders must certify that “[t]he Applicant has certified to the Lender that neither the

Applicant nor any owner is … presently involved in any bankruptcy.” Above that certification,

the Form states that, “[i]f no, the loan cannot be approved.”

E. On April 24, 2020, concurrent with Congress’ extension of additional funding for

the PPP, the SBA posted an interim final rule that provides additional information regarding a

number of eligibility requirements for the PPP, including applicants in bankruptcy. 85 Fed. Reg.

23450 (“Fourth Interim Final Rule”). Section III(4) of the Fourth Interim Final Rule states

specifically that, “[i]f the applicant or the owner of the applicant is the debtor in a bankruptcy

proceeding, either at the time it submits the application or at any time before the loan is

disbursed, the applicant is ineligible to receive a PPP loan.” 85 Fed. Reg. at 23451. The Fourth

Interim Final Rule explains that debtors in bankruptcy are ineligible because “debtors in

bankruptcy would present an unacceptably high risk of an unauthorized use of funds or non-

repayment of unforgiven loans.” Id. Moreover, the Fourth Interim Final Rule explained, “the

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Bankruptcy Code does not require any person to make a loan or a financial accommodation to a

debtor in bankruptcy.” Id.

F. The United States contends that, from approximately April 3, 2020, through at

least June 30, 2020, Taylor and SlideBelts knowingly and intentionally made false statements to

financial institutions, including to federally insured financial institutions, that SlideBelts was not

involved in a bankruptcy proceeding in order to influence those institutions to grant SlideBelts a

loan, and to influence the SBA to guarantee that loan, under the PPP of the CARES Act. In

addition, the United States contends that Taylor and SlideBelts knowingly caused a false claim

for payment, and knowingly made a false statement material to a false or fraudulent claim, to be

made to the SBA. This conduct is referred to below as the Covered Conduct.

G. The United States contends that it has certain civil claims against Taylor and

SlideBelts for violating the Financial Institutions Reform, Recovery, and Enforcement Act of

1989, 12 U.S.C. § 1833a (“FIRREA”), predicated on violations of 18 U.S.C. § 1014, 15 U.S.C. §

645(a), 18 U.S.C. § 1001, 18 U.S.C. § 1343, and 18 U.S.C. § 1344. The United States also

contends that it has claims against Taylor and SlideBelts for violating the False Claims Act, 31

U.S.C. § 3729-3733 (“FCA”). Based on these claims, the United States contends that Taylor and

SlideBelts are liable to the United States for damages and penalties totaling $4,196,992 under

FIRREA and the FCA.

H. To avoid the delay, uncertainty, inconvenience, and expense of protracted

litigation of the above claims, and in consideration of the mutual promises and obligations of this

Agreement, the Parties agree and covenant as follows:

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TERMS AND CONDITIONS

1. This Settlement Agreement is neither an admission of liability by Taylor or

SlideBelts nor a concession by the United States that its civil claims are not well founded. But

Taylor and SlideBelts admit, acknowledge, and accept responsibility for the following facts:

a. On April 3, 2020, while SlideBelts was a debtor in bankruptcy
proceedings, it submitted an application for a PPP loan for approximately $300,000 to a Credit
Union in Sacramento, California (FI-1). On April 8, 2020, SlideBelts submitted a second PPP
loan application to a federally insured financial institution in Fort Lee, New Jersey, for $350,000
(FI-2). In response to Question 1 of the SBA’s PPP application to both lenders, Taylor and
SlideBelts answered falsely that SlideBelts was not “presently involved in any bankruptcy.”

b. On April 10, 2020, a manager from FI-1 advised Taylor by email that he
had answered Question 1 incorrectly because the manager knew that SlideBelts was presently in
bankruptcy. Indeed, FI-1 was a creditor in SlideBelts’ bankruptcy proceedings. Taylor
responded that his answer was an “[o]versight,” but nonetheless argued that the question
regarding bankruptcy in the application was “an overreach” by the SBA. Days later, on April 14,
2020, Taylor emailed the manager again and reiterated that the term “bankruptcy” should not be
included in Question 1 of the PPP loan application, and asked FI-1 to approve SlideBelts’ loan.
But the manager rejected Taylor’s request, repeating that SlideBelts was definitively not eligible
for a PPP loan because it was in bankruptcy. For that reason, FI-1 declined to approve a PPP
loan to SlideBelts. Taylor answered and acknowledged the manager, “that does make sense. All
good!”

c. On April 14, 2020, three hours after FI-1 rejected SlideBelts’ application,
SlideBelts submitted a third application for a PPP loan to a federally insured financial institution
in Minneapolis, Minnesota (“FI-3”). In that application, Taylor and SlideBelts made the same
false statement for a third time that SlideBelts was not presently involved in any bankruptcy.
Taylor and SlideBelts made the false statement to influence FI-3 to grant SlideBelts a PPP loan
guaranteed by the SBA.

d. FI-2 approved SlideBelts’ PPP loan application before FI-3. Taylor
signed the loan note with FI-2 and stated falsely that SlideBelts was not in bankruptcy to
influence FI-2 to execute the note and disburse the loan proceeds to SlideBelts. Taylor knew
from his communications with FI-1 that FI-2 would not execute the note and the SBA would not
guarantee the loan if he disclosed that SlideBelts was in bankruptcy. Taylor also knew that
SlideBelts was already in default of the PPP loan because he certified that the borrower
(SlideBelts) would default on the loan if it entered bankruptcy proceedings.

e. Taylor’s false statements influenced FI-2 to execute the loan note and
disburse the $350,000 to SlideBelts, and the SBA to guarantee the loan. Had FI-2 or the SBA
known that Taylor and SlideBelts falsely stated SlideBelts’ status in bankruptcy, FI-2 would not
have approved SlideBelts’ application and the SBA would have declined to guarantee the loan.
In addition, Taylor’s and SlideBelts’ false statements caused FI-2 to submit a false claim to the

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SBA for $17,500 in loan processing fees, which the SBA paid to FI-2. Taylor’s and SlideBelts’
false statements threatened the proper functioning of the PPP because the SBA relies on lenders
like FI-2 to ensure the proper expenditure federal funds to support small businesses affected by
the COVID-19 pandemic.

f. On April 22, 2020, one day after FI-2 distributed the loan to SlideBelts,
and more than one week after FI-1 rejected SlideBelts’ PPP loan application, Taylor wrote an
email to FI-2 explaining that SlideBelts “just realized that we may not have answered [Question
1] correctly since we filled out the application quickly and wanted to bring it to your attention[.]”
Taylor did not disclose that SlideBelts was in bankruptcy until after FI-2 disbursed the loan to
SlideBelts. SlideBelts did not return the loan to FI-2 at that time.

g. On April 30, 2020, SlideBelts filed a motion in its bankruptcy court
proceedings seeking retroactive court approval of the PPP loan. SlideBelts’ motion did not
disclose to the Court that it had obtained the loan by making a false statement to FI-2 concerning
its status in bankruptcy.

h. On June 16, 2020, the SBA opposed SlideBelts’ motion seeking
retroactive court approval of the PPP loan and requested that the Court order SlideBelts to return
the loan to FI-2. FI-2 joined the SBA’s opposition. But SlideBelts did not return the loan at that
time. Instead, SlideBelts asked the Bankruptcy Court to dismiss its case so that it could refile for
bankruptcy under Subchapter V of Chapter 11 of the Bankruptcy Code, and “to apply for [PPP]
funds while the case is dismissed.”

i. On June 30, 2020, the Bankruptcy Court granted SlideBelts’ motion to
dismiss its bankruptcy case. During a hearing on the motion, the United States reiterated on the
record that it was SBA’s position that SlideBelts must return the loan to FI-2 immediately.

j. On July 8, 2020, two and a half months after receiving a PPP loan based
on false statements, and multiple requests by the SBA to return the proceeds, SlideBelts returned
the $350,000 loan to FI-2.

2. Taylor and SlideBelts agree to pay the United States the sum of one hundred

thousand dollars ($100,000) (the “Settlement Amount”), of which seventeen thousand five

hundred dollars ($17,500) constitutes restitution from Taylor, by electronic funds transfer

pursuant to written instructions to be provided by the Office of the United States Attorney for the

Eastern District of California, and in the following manner:

a. Within fourteen (14) days of the Effective Date of this Agreement, Taylor

will make a payment to the United States in the amount of thirty five thousand dollars ($35,000).

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b. Within fourteen (14) days of bankruptcy court approval of the fully

executed Settlement Agreement in In re: SlideBelts, Inc., No. 20-24098-A-11 (Bankr. E.D. Cal.

Aug. 25, 2020) under Fed. R. Bankr. P. § 9019, SlideBelts will make a payment to the United

States in the amount of ten thousand dollars ($10,000).

c. Over a period of five years, SlideBelts will pay the remaining fifty five

thousand dollars ($55,000), plus interest at 0.12% per annum, pursuant to the payment schedule

in Attachment A (the “Payments Over Time”).

d. Interest shall accrue on the unpaid settlement amount as indicated in

Attachment A.

e. Within seven (7) days from the Effective Date, SlideBelts shall seek

bankruptcy court approval of the fully executed Settlement Agreement in In re: SlideBelts, Inc.,

No. 20-24098-A-11 (Bankr. E.D. Cal. Aug. 25, 2020), consistent with Fed. R. Bankr. P. § 9019.

Time is of the essence. Provisions for compliance with the terms of the Settlement Agreement

shall also be included in any plan presented for approval to the bankruptcy court in this or any

other bankruptcy filed by SlideBelts or Taylor.

f. If SlideBelts or any of its affiliates is sold, merged, or transferred, or a

significant portion of the assets of SlideBelts or any of its affiliates is sold, merged, or transferred

into another non-affiliated entity, SlideBelts shall promptly notify the United States, and all

remaining payments owed pursuant to the Settlement Agreement shall be accelerated and

become immediately due and payable.

g. The Settlement Amount may be prepaid, in whole or in part, without

penalty or premium.

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3. Subject to the exceptions in Paragraph 4 (concerning reserved claims), Paragraph

5 (concerning disclosure of assets), and Paragraphs 11a. through d. (concerning default); and

upon the United States’ receipt of the payments set forth in Paragraphs 2.b. and 2.c., the United

States releases SlideBelts, together with its current and former parent corporations; direct and

indirect subsidiaries; brother or sister corporations; divisions, current or former corporate

owners; and the corporate successors and assigns of any of them from any civil or administrative

monetary claim the United States has for the Covered Conduct under Paragraph 3.a. through 3.d.

below. Subject to the exceptions in Paragraph 4 (concerning reserved claims), Paragraph 5

(concerning disclosure of assets), and Paragraphs 11a. through d. (concerning default); and upon

the receipt of the payment set forth in Paragraph 2.a., the United States releases Taylor from any

civil or administrative monetary claim the United States has for the Covered Conduct under

Paragraph 3.a. through 3.d. below. Together, SlideBelts and Taylor are deemed the “Released

Parties.”

a. FIRREA, 12 U.S.C. § 1833a;

b. The FCA, 31 U.S.C. §§ 3729-3733;

c. The Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812; or

d. Common law theories of breach of contract, payment by mistake, unjust

enrichment, and fraud.

4. Notwithstanding the releases given in Paragraph 3 of this Agreement, or any other

term of this Agreement, the following claims and rights of the United States are specifically

reserved and are not released:

a. Any liability arising under Title 26, U.S. Code (Internal Revenue Code);

b. Any criminal liability;

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c. Except as explicitly stated in the Agreement, any administrative liability

or enforcement right, including the suspension and debarment rights of any federal agency;

d. Any liability to the United States (or its agencies) for any conduct other

than the Covered Conduct;

e. Any liability based upon obligations created by this Agreement; and

f. Any liability of individuals except Taylor.

5. The Released Parties have provided sworn financial disclosure statements and

supporting documents (“Financial Statements”) to the United States and the United States has

relied on the accuracy and completeness of those Financial Statements in reaching this

Agreement. The Released Parties warrant that the Financial Statements are complete, accurate,

and current as of the Effective Date of this Agreement. If the United States learns of asset(s) in

which the Released Parties had an interest of any kind as of the Effective Date of this Agreement

(including, but not limited to, promises by insurers or other third parties to satisfy the Released

Parties’ obligations under this Agreement) that were not disclosed in the Financial Statements, or

if the United States learns of any false statement or misrepresentation by the Released Parties on,

or in connection with, the Financial Statements, and if such nondisclosure, false statement, or

misrepresentation changes the estimated net worth set forth in the Financial Statements by ten

percent (10%) or more, the United States may at its option: (a) rescind this Agreement and file

suit based on the Covered Conduct or (b) collect the full Settlement Amount in accordance with

this Agreement plus one hundred percent (100%) of the net value of the Released Parties’

previously undisclosed assets. The Released Parties agree not to contest any collection action

undertaken by the United States pursuant to this provision, and agree that they will immediately

pay the United States the greater of (i) a ten percent (10%) surcharge of the amount collected in

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the collection action, as allowed by 28 U.S.C. § 3011(a), or (ii) the United States’ reasonable

attorneys’ fees and expenses incurred in such an action. In the event that the United States,

pursuant to this paragraph rescinds this Agreement, the Released Parties waive and agree not to

plead, argue, or otherwise raise any defenses under the theories of statute of limitations, laches,

estoppel, or similar theories, to any civil or administrative claims that (a) are filed by the United

States within 120 calendar days of written notification to the Released Parties that this

Agreement has been rescinded, and (b) relate to the Covered Conduct, except to the extent these

defenses were available on the Effective Date of this Agreement.

6. The Released Parties waive and shall not assert any defenses the Released Parties

may have to any criminal prosecution or administrative action relating to the Covered Conduct

that may be based in whole or in part on a contention that, under the Double Jeopardy Clause in

the Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth

Amendment of the Constitution, this Agreement bars a remedy sought in such criminal

prosecution or administrative action.

7. The Released Parties fully and finally release the United States, its agencies,

officers, agents, employees, and servants, from any claims (including attorneys’ fees, costs, and

expenses of every kind and however denominated) that the Released Parties have asserted, could

have asserted, or may assert in the future against the United States, its agencies, officers, agents,

employees, and servants, related to the Covered Conduct and the United States’ investigation and

prosecution thereof. The Released Parties hereby expressly waive all rights they may have by

virtue of Section 1542 of the California Civil Code, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE

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MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR OR RELEASED PARTY.

8. Unallowable Costs Defined: All costs (as defined in the Federal Acquisition

Regulation, 48 C.F.R. § 31.205-47) incurred by or on behalf of the Released Parties and their

present or former officers, directors, employees, shareholders, and agents in connection with:

a. the matters covered by this Agreement;

b. the United States’ civil investigation of the matters covered by this

Agreement;

c. the Released Parties’ investigation, defense, and corrective actions

undertaken in response to the United States’ civil investigation in connection with the matters

covered by this Agreement (including attorneys’ fees);

d. the negotiation and performance of this Agreement; and

e. the payment the Released Parties make to the United States pursuant to

this Agreement are unallowable costs for government contracting purposes (hereinafter referred

to as “Unallowable Costs”).

9. Future Treatment of Unallowable Costs: Unallowable Costs will be separately

determined and accounted for by the Released Parties, and the Released Parties shall not charge

such Unallowable Costs directly or indirectly to any contract with the United States.

10. Treatment of Unallowable Costs Previously Submitted for Payment: Within 90

days of the Effective Date of this Agreement, the Released Parties shall identify and repay by

adjustment to future claims for payment or otherwise any Unallowable Costs included in

payments previously sought by the Released Parties or any of their subsidiaries or affiliates from

the United States. The Released Parties agree that the United States, at a minimum, shall be

entitled to recoup from the Released Parties any overpayment plus applicable interest and

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penalties as a result of the inclusion of such Unallowable Costs on previously-submitted requests

for payment. The United States, including the Department of Justice and/or the affected

agencies, reserves its rights to audit, examine, or re-examine the Released Parties’ books and

records and to disagree with any calculations submitted by the Released Parties or any of their

subsidiaries or affiliates regarding any Unallowable Costs included in payments previously

sought by the Released Parties, or the effect of any such Unallowable Costs on the amount of

such payments.

11. The United States’ claim of $4,196,992 against the Released Parties, and the

Settlement Amount, are non-dischargeable, non-subordinated debts under 11 U.S.C. § 523(a)(2),

11 U.S.C. § 1141(d)(6)(A), and 11 U.S.C. § 1192. The Settlement Amount of $100,000

represents the amount the United States is willing to accept in compromise of its civil claims

arising from the Covered Conduct due solely to the Released Parties’ financial condition as

reflected in the Financial Statements referenced in Paragraph 5.

a. In the event that the Released Parties fail to make any payments as set

forth in Paragraph 2 above, the Released Parties shall be in Default of their respective payment

obligations under Paragraph 2 (“Default”). Taylor is in Default only if he fails to make payment

under Paragraph 2.a., and SlideBelts is in Default only if it fails to make payments under

Paragraph 2.b. or 2.c. The United States will provide a written Notice of Default, and the

Released Parties shall have an opportunity to cure such Default within thirty (30) calendar days

from the date of receipt of the Notice of Default by making the payment due under the payment

schedule and paying any additional interest accruing under the Settlement Agreement up to the

date of payment. Notice of Default will be delivered to the Released Parties, or to such other

representative as the Released Parties shall designate in advance in writing. If the Released

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Parties fail to cure the Default within thirty (30) calendar days of receiving the Notice of Default

and in the absence of an agreement with the United States to a modified payment schedule

(“Uncured Default”), the remaining unpaid balance of the Settlement Amount shall become

immediately due and payable, and interest on the remaining unpaid balance shall thereafter

accrue at the rate of 12% per annum, compounded daily from the date of Default, on the

remaining unpaid total (principal and interest balance).

b. In the event of Uncured Default, the Released Parties agree that the United

States, at its sole discretion, may (i) retain any payments previously made, rescind this

Agreement and bring any civil and/or administrative claim, action, or proceeding against the

Released Parties for the claims that would otherwise be covered by the releases provided in

Paragraph 3 above, with any recovery reduced by the amount of any payments previously made

by the Released Parties to the United States under this Agreement; (ii) take any action to enforce

this Agreement in a new action; (iii) offset the remaining unpaid balance from any amounts due

and owing to the Released Parties and/or affiliated companies by any department, agency, or

agent of the United States at the time of Default or subsequently; and/or (iv) exercise any other

right granted by law, or under the terms of this Agreement, or recognizable at common law or in

equity. In addition, in the event of an Uncured Default by SlideBelts, SlideBelts agrees that the

United States may take action to collect on the consent judgment in Attachment B.

c. In the event of an Uncured Default, relief from an automatic bankruptcy

stay may be provided without further hearing upon the filing of an affidavit of default by the

United States and the entry of the proposed order by the bankruptcy court. The United States

may then proceed with any state court remedies against the collateral, including sending any

required notice to the Released Parties. This ex parte provision shall be effective in SlideBelts’

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current bankruptcy proceedings (In re: SlideBelts, Inc., No. 20-24098-A-11 (Bankr. E.D. Cal.

Aug. 25, 2020)), or in any future filing by the Released Parties or by any other person or entity

with an interest in the subject property, and shall not operate as an automatic stay against the

United States except upon separate order of the court. The Parties agree that the Federal Rule of

Bankruptcy Procedure 4001(a)(3) stay is not applicable to any order granting relief for Uncured

Default on this Settlement Agreement.

d. The United States shall be entitled to any other rights granted by law or in

equity by reason of Uncured Default, including referral of this matter for private collection. In

the event the United States pursues a collection action, the Released Parties agree immediately to

pay the United States the greater of (i) a ten-percent (10%) surcharge of the amount collected, as

allowed by 28 U.S.C. § 3011(a), or (ii) the United States’ reasonable attorneys’ fees and

expenses incurred in such an action. In the event that the United States opts to rescind this

Agreement pursuant to this paragraph, the Released Parties waive and agree not to plead, argue,

or otherwise raise any defenses of statute of limitations, laches, estoppel or similar theories, to

any civil or administrative claims that are (i) filed by the United States against the Released

Parties within 120 days of written notification that this Agreement has been rescinded, and (ii)

relate to the Covered Conduct, except to the extent these defenses were available on the Effective

Date of this Agreement. The Released Parties agree not to contest any offset, recoupment,

and/or collection action undertaken by the United States pursuant to this paragraph, either

administratively or in any state or federal court, except on the grounds of actual payment to the

United States.

12. In exchange for valuable consideration provided in this Agreement, Taylor

acknowledges the following:

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a. Taylor has reviewed his financial situation and warrants that he is solvent

within the meaning of 11 U.S.C. §§ 547(b)(3) and 548(a)(1)(B)(ii)(I) and shall remain solvent

following payment to the United States of the amount in Paragraph 2.a.

b. In evaluating whether to execute this Agreement, the Parties intend that

the mutual promises, covenants, and obligations set forth herein constitute a contemporaneous

exchange for new value given to Taylor, within the meaning of 11 U.S.C. § 547(c)(1), and the

Parties conclude that these mutual promises, covenants, and obligations do, in fact, constitute

such a contemporaneous exchange.

c. The mutual promises, covenants, and obligations set forth herein are

intended by the Parties to, and do in fact, constitute a reasonably equivalent exchange of value.

d. The Parties do not intend to hinder, delay, or defraud any entity to which

Taylor was or became indebted to on or after the date of any transfer contemplated in this

Agreement, within the meaning of 11 U.S.C. § 548(a)(1).

e. If Taylor’s obligations under this Agreement are avoided for any reason

(including but not limited to, through the exercise of a trustee’s avoidance powers under the

Bankruptcy Code) or if, before the amount in Paragraph 2.a. is paid in full, Taylor or a third

party seeking any order for relief of Taylor’s debts, or to adjudicate Taylor as bankrupt or

insolvent; or seeking appointment of a receiver, trustee, custodian, or other similar official for

Taylor or for all or any substantial part of Taylor’s assets,

(i) the United States may bring any civil and/or administrative claim,

action, or proceeding against Taylor for the claims that would otherwise be covered by the

releases provided in Paragraph 3 above; and

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(ii) the United States has an undisputed, non-contingent, non-

dischargeable, non-subordinated, and liquidated allowed claim against the Released Parties in

the amount of $4,196,992, less any payments received pursuant to this Agreement, provided,

however, that such payments are not otherwise avoided and recovered from the United States by

the Released Parties, a receiver, trustee, custodian, or other similar official for the Released

Parties.

13. The Released Parties agree that any civil and/or administrative claim, action, or

proceeding brought by the United States under Paragraph 12.e. is not subject to an “automatic

stay” pursuant to 11 U.S.C. § 362(a) because it would be an exercise of the United States’ police

and regulatory power. The Released Parties shall not argue or otherwise contend that the United

States’ claim, action, or proceeding is subject to an automatic stay and, to the extent necessary,

consents to relief from the automatic stay for cause under 11 U.S.C. § 362(d)(1). The Released

Parties waive and shall not plead, argue, or otherwise raise any defenses under the theories of

statute of limitations, laches, estoppel, or similar theories, to any such civil or administrative

claim, action, or proceeding brought by the United States within 120 days of written notification

to the Released Parties that the releases have been rescinded pursuant to this paragraph, except to

the extent such defenses were available on the Effective Date of the Agreement.

14. This Agreement is intended to be for the benefit of the Parties only.

15. Each Party shall bear its own legal and other costs incurred in connection with

this matter, including those incurred in the preparation and performance of this Agreement.

16. Each Party and signatory to this Agreement represents that it freely and

voluntarily enters into this Agreement without any degree of duress or compulsion.

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17. This Agreement is governed by the laws of the United States. The exclusive

venue for any dispute relating to this Agreement is the United States District Court for the

Eastern District of California. For purposes of construing this Agreement, this Agreement shall

be deemed to have been drafted by all Parties to this Agreement and shall not, therefore, be

construed against any Party for that reason in any subsequent dispute.

18. This Agreement constitutes the complete agreement between the Parties. This

Agreement may not be amended except by written consent of the Parties. Forbearance by the

United States from pursuing any remedy or relief available to it under this Agreement shall not

constitute a waiver of rights under this Agreement.

19. The undersigned counsel represent and warrant that they are fully authorized to

execute this Agreement on behalf of the persons and entities indicated below.

20. This Agreement may be executed in counterparts, each of which constitutes an

original and all of which constitute one and the same Agreement.

21. This Agreement is binding on the Released Parties’ successors, transferees, heirs,

and assigns.

22. All Parties consent to the United States’ disclosure of this Agreement, and

information about this Agreement, to the public.

23. This Agreement is effective on the date of signature of the last signatory to the

Agreement (the “Effective Date”). Facsimiles of signatures shall constitute acceptable, binding

signatures for purposes of this Agreement.

16
ATTACHMENT A

SlideBelts Inc. Amortization Schedule

Payment Date Payment Interest Principal Balance
Beginning Balance $55,000.00
1 4/5/2021 $2,500.00 $0.00 $2,500.00 52,500.00
2 7/5/2021 $2,515.75 $15.75 $2,500.00 50,000.00
3 10/5/2021 $2,515.00 $15.00 $2,500.00 47,500.00
4 1/5/2022 $2,514.25 $14.25 $2,500.00 45,000.00
5 4/5/2022 $2,513.50 $13.50 $2,500.00 42,500.00
6 7/5/2022 $2,512.75 $12.75 $2,500.00 40,000.00
7 10/5/2022 $2,512.00 $12.00 $2,500.00 37,500.00
8 1/5/2023 $2,511.25 $11.25 $2,500.00 35,000.00
9 4/5/2023 $2,510.50 $10.50 $2,500.00 32,500.00
10 7/5/2023 $2,509.75 $9.75 $2,500.00 30,000.00
11 10/5/2023 $2,509.00 $9.00 $2,500.00 27,500.00
12 1/5/2024 $2,508.25 $8.25 $2,500.00 25,000.00
13 4/5/2024 $2,507.50 $7.50 $2,500.00 22,500.00
14 7/5/2024 $2,506.75 $6.75 $2,500.00 20,000.00
15 10/5/2024 $2,506.00 $6.00 $2,500.00 17,500.00
16 1/5/2025 $2,505.25 $5.25 $2,500.00 15,000.00
17 4/5/2025 $3,754.50 $4.50 $3,750.00 11,250.00
18 7/5/2025 $3,753.38 $3.38 $3,750.00 7,500.00
19 10/5/2025 $3,752.25 $2.25 $3,750.00 3,750.00
20 1/5/2026 $3,751.13 $1.13 $3,750.00 0.00
Total $55,168.75 $168.75 $55,000.00
Amortization schedule to pay $55,000 in five years at 0.12 percent annual interest
rate with quarterly payments beginning April 5, 2021. Quarterly payments of $2,500
plus interest for the first four years and $3,750 plus interest for the fifth year.
ATTACHMENT B

1 McGREGOR W. SCOTT
United States Attorney
2 MATTHEW R. BELZ
Assistant United States Attorney
3 501 I Street, Suite 10-100
Sacramento, CA 95814
4 Telephone: (916) 554-2758
Facsimile: (916) 554-2900
5

6 Attorneys for the United States

7 IN THE UNITED STATES DISTRICT COURT

8 EASTERN DISTRICT OF CALIFORNIA

9 UNITED STATES OF AMERICA,
CONSENT JUDGMENT
10 Plaintiff,

11 vs.

12 SLIDEBELTS INC.,

13 Defendant.

15 WHEREAS, on January 12, 2021, Plaintiff the United States, Defendant SlideBelts Inc.

16 (“SlideBelts”), and Brigham Taylor (“Taylor”) (together, the “Parties”), entered into a Settlement

17 Agreement to settle the United States’ civil claims against SlideBelts and Taylor for violating the

18 Financial Institutions Reform, Recovery, and Enforcement Act of 1989, 12 U.S.C. § 1833a, and the

19 False Claims Act, 31 U.S.C. § 3729-3733 (attached hereto as Exhibit A);

20 WHEREAS, as part of that Settlement Agreement, the parties agreed that, if SlideBelts failed to

21 cure a default of its payment obligations under the Settlement Agreement, SlideBelts would consent to

22 the entry of judgment against it in the amount of the United States’ full claim against it, $2,098,496;

23 WHEREAS, SlideBelts has failed to cure a default of its payment obligations under the

24 Settlement Agreement;

25 Upon consent of plaintiff the United States of America and defendant SlideBelts Inc., it is

26 hereby ORDERED, ADJUDGED, AND DECREED that: plaintiff the United States of America is

27 awarded judgment in the sum of $2,098,496, as against defendant SlideBelts Inc. for violating the

File and source

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Our copy: slidebelts-brigham-taylor-settlement-agreement.pdf
Original: No public link identified.