SETTLEMENT AGREEMENT
EXHIBIT
10.68
This
Settlement Agreement (“Agreement”) is entered as of November
21, 2006, between STRATUS
SERVICES GROUP, INC. (“Stratus”) and STATE COMPENSATION INSURANCE FUND (“State
Fund”) with reference to the following:
A. State
Fund has asserted claims against Stratus in an action entitled State
Compensation Insurance Fund x. Xxxxxxx Services Group, Inc.,
Case
No. CV06-3025 CAS (SHx), now pending in the United States District Court
for the
Central District of California (the "Action").
B. To
avoid
the cost and uncertainty of litigation, and without the admission of any
claim,
fact or defense, the parties desire to settle the Action and all actual and
potential claims between them on the terms described below.
Now,
therefore, in consideration of the foregoing and the promises and covenants
herein, the parties agree as follows:
(c) Nature
of Agreement.
This
Agreement is a full settlement of all claims asserted in the Action or which
could have been asserted in the Action or which arise directly or indirectly
from any act, contract, breach or omission by Stratus any time prior to the
date
of this Agreement. This Agreement is not an admission of any liability, fact,
claim or defense by any party.
(d) Settlement
Payment to State Fund.
(a) Stratus
shall pay State Fund the sum of $300,000.00 in monthly installments as follows:
$4500.00 per month for twenty-four consecutive months commencing in January
2007, and $6000.00 per month for the following thirty-two consecutive months.
(b) Each
installment payment shall be sent by first class mail directly to State
Compensation Insurance Fund, Credit & Collections Department, Attention Xxxx
Xxxxxxx, X.X. Xxx 00000, Xxx Xxxxxxxxx, XX 00000.
(c) Each
installment payment shall be due on the first day of each calendar month
(“Due
Date”), beginning January 1, 2007. If any installment payment is not received
by
State Fund on or before the fifth (5th) calendar day after the Due Date,
such
payment will be considered in default. State Fund shall send written notice
of
default, via facsimile, to Stratus at the following number: 000-000-0000
or such
other facsimile number as Stratus shall designate. Upon notification, Stratus
shall have seven (7) calendar days to cure such default. If default is not
cured
by Stratus within said seven (7) day time period, State Fund may, at its
sole
discretion, enter judgment against Stratus in the sum of $2,023,419.15 minus
those payments made to State Fund between January 1, 2007 and the date of
default. Not exercising this option in the event of a default by Stratus
will
not be a waiver by State Fund of its right to do so should a future default
by
Stratus take place.
(d) Stratus
will sign a Stipulation for Entry of Judgment consistent with the provisions
in
this section, which Stipulation will be held by State Fund and will not be
filed
unless there is a default under this section.
(e) New
Insurance.
In the
event that Stratus should in the future apply for a policy of workers’
compensations and employer’s liability insurance with State Fund, issuance of
such policy will be made contingent on the payment to State Fund of
$2,023,419.15, less any and all sums previously paid to State Fund pursuant
to
this agreement. This condition precedent is in addition to all other conditions
appurtenant to issuance of such insurance policy.
(f) Release
of Claims.
(a) Except
for the obligations under this Agreement, and to the fullest extent possible
under law, State Fund fully releases and discharges Stratus and each of its
shareholders, officers, directors, employees, agents, successors, and assigns
from any and all claims alleged or which could have been alleged in the Action
and all other known and unknown existing or potential claims, rights,
liabilities, torts, damages, injuries, penalties, attorneys' fees, and causes
of
action which arise directly or indirectly from any act, breach, promise,
omission, event, insurance policy or agreement prior to the date of this
Agreement.
(b) State
Fund understands and agrees that the foregoing release extends, but is not
limited to, to all rights or claims related directly or indirectly to workers’
compensation policy number 1686667 it issued to Stratus on or about May 20,
2002.
(c) State
Fund waives all rights it may have under section 1542 of the California Civil
Code, which reads as follows: “A general release does not extend to claims which
the creditor does not know or suspect to exist in his or her favor at the
time
of executing the release, which if known by him or her must have materially
affected his settlement with the debtor.” State Fund is aware that it may learn
that the facts and circumstances surrounding the claims released hereby may
be
different from the facts and circumstances now known or believed by it to
be
true. It assumes the risk that it may discover facts and circumstances different
from its current knowledge or belief, and agrees that in such event this
Agreement nevertheless shall be in all respects effective and not subject
to
termination, rescission or modification for any reason.
(d) State
Fund represents that it has not heretofore assigned or transferred to any
person
all or part of or any interest in any claim released hereby.
(g) Dismissal
of the Action.
State
Fund and Stratus will file a stipulation for dismissal of the Action with
prejudice in its entirety immediately after this Agreement is fully executed.
(h) Counterparts.
This
Agreement may be executed in counterparts and will be deemed fully executed
when
each party has signed and transmitted a counterpart to the other. All
counterparts taken together shall constitute a single agreement. Signatures
transmitted by fax shall be deemed fully effective as original
signatures.
(i) Attorneys’
Fees.
Stratus
and State Fund shall bear their own attorney's fees and costs incurred in
connection with the Action and the claims released hereby. In any action
brought
to enforce or interpret the terms of this Agreement, the prevailing party
will
be entitled to recover all costs incurred in such action, including reasonable
attorneys’ fees, in addition to any other relief to which they may be otherwise
entitled.
(j) Entire
Agreement.
This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof and any and all prior discussions, negotiations,
commitments and understandings are merged herein.
(k) Representations
and Warranties.
The
parties represent and warrant to and agree with each other as
follows:
(a) Each
party has received independent legal advice from attorneys of its choice
with
respect to the advisability of making this settlement and the release provided
herein and with respect to the advisability of executing this
Agreement.
(b) Except
as
expressly stated in this Agreement, no party has made any statement or
representation to any other party regarding any fact, which statement or
representation is relied upon by any other party in entering into this
Agreement. In connection with the execution of this Agreement or the making
of
the settlement provided for herein, no party to this Agreement has relied
upon
any statement, representation or promise of any other party not expressly
contained herein.
(l) Waiver,
Modification and Amendment.
No
provisions of this Agreement may be waived unless in a writing signed by
all
parties. Waiver of any one provision will not be deemed a waiver of any other
provision. This Agreement may be modified or amended only by a written agreement
executed by all of the parties.
(m) Construction.
In the
event of vagueness or ambiguity, this Agreement will not be construed against
the party preparing it, but will be construed as if all parties prepared
it
jointly. Headings in this Agreement are for convenience only and do not limit
or
define any provisions. This Agreement shall be interpreted under and governed
by
the laws of California. If any provision of this Agreement is adjudged void
or
unenforceable, the same shall not affect the validity of the Agreement as
a
whole.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates
written below.
| STRATUS SERVICES GROUP, INC. | STATE COMPENSATION INSURANCE FUND | ||
| /s/ Xxxxxxx X. Xxxxxxxx | /s/ Xxxx Xxxxxxx | ||
|
|
|
||
|
Name:
Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President and CFO More Title: Stratus Services Group, Inc. Date: 12/01/06
|
Name:
Xxxx
Xxxxxxx
Title: Collections Manager More Title: State Compensation Insurance Fund Date:
11/30/06
|
