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Additionally, they have agreed that they will also be
compensated for the loss of Evergreen Typing Service
profits as a result of the breach of contract in [sic]
case giving rise to the Farmers litigation engaged in
by the corporation. They will be deferring those
profit dollars, however, until such time as the litiga-
tion has been successful. The Diamonds have also
agreed that they will not bring a separate lawsuit
against the corporation (DCI) for any breach of con-
tract that the corporation would have been responsible
for to Evergreen Typing Service.
A letter on DCI's stationery that was signed by Mr. Diamond,
addressed to the Diamonds and to ETS, and dated December 12, 1984
(December 12, 1984 letter) also made reference to the Farmers
lawsuit and stated in pertinent part:
This will confirm the corporation's agreement to extend
any and all expenses with regard to the litigation
engaged in by ourselves as against Farmers Insurance.
Since this litigation is to our mutual benefit, there
is no need to reiterate its content as we are all
parties. However [sic] the purpose of this letter is
to affirm that all litigation expenses, attorneys [sic]
fees, trial costs, etc., will be paid for by the corpo-
ration in exchange for your continued support services
throughout the litigation and your refraining from
bringing any separate [sic] litigation against the
corporation for any liabilities owed to Evergreen
Typing Service or yourselves, individually.
This will also aknowledge [sic] that our arrangement
indicated above will have no effect on your company's
recovery at time of settlement or judgement as against
Farmers Insurance, et al. Nor will the litigation
expenses extended by DCI have any offsetting effect as
against any judgement due Evergreen Typing Service or
yourselves individually as proprietors.
The minutes of a meeting of DCI, dated December 30, 1984
(December 30, 1984 minutes) and signed by the Diamonds in their
capacity as shareholders of DCI, also made reference to the
Farmers lawsuit and to certain rental payments that DCI owed the
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