REVISED SETTLEMENT AGREEMENT
This Revised Settlement Agreement ("Agreement") is entered into on
the____________ day of October, 1997 by and between, Westmark Group Holdings,
Inc., a Delaware corporation ('WGHI') and Medical Industries of America, Inc., a
Florida corporation ('MIOA"), and is made in reference to the following:
RECITALS
WHEREAS, WGHI and MIOA (formally Heart Labs of America, Inc.) entered into
a Stock Purchase Agreement on or about November 21, 1995, together with
amendments thereto, and;
WHEREAS, WGHI and MIOA entered into a Settlement Agreement on January 23,
1997 and;
WHEREAS, WGHI and MIOA entered into a Modification to Settlement Agreement
on March 31, 1997 and;
WHEREAS, WGHI and MIOA entered into an Amendment to Modified Settlement
Agreement on June 26, 1997 and;
WHEREAS, WGHI is the owner and holder of 200,000 shares of convertible
preferred stock of MIOA with a stated value of two million dollars ($2,000,000)
and;
WHEREAS, MIOA is the owner and holder of 333,457 shares of unregistered
common stock of WGHI and;
WHEREAS, MIOA is the owner and holder of 200,000 shares of convertible
preferred stock of WGHI with a stated value of seven hundred thousand dollars
($700,000) and;
WHEREAS, the parties desire to terminate all prior settlement agreements,
modifications and amendments thereto and enter into a Revised Settlement
Agreement;
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth and other covenants and conditions contained herein, WGHI and MIOA
mutually agree as follows:
1. DEBT REPAYMENT. WGHI acknowledges an indebtedness to MIOA in the sum
of one million, eight hundred sixty-eight thousand, two hundred forty-three
dollars and sixty-seven cents ($1,868,243.67). Said indebtedness shall be
satisfied as follows:
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A. WGHI shall pay no less than twenty-five thousand dollars ($25,000) per
month commencing October 31, 1997 and continuing on the last day of each
month thereafter until June 30, 2000 at which time the entire balance of
unpaid principal and accrued interest shall be paid in full. Interest shall
accrue on the unpaid balance at 10% per annum.
B. MIOA shall be entitled to the first three hundred thousand dollars
($300,000) received by WGHI with respect to the receipt of additional
capitalization by WGHI in the minimum amount of three hundred thousand
dollars ($300,000) and maximum amount of $1.5 million, In the event of the
receipt of additional capitalization by WGHI between $1.5 million and $3
million, MIOA shall be entitled to receive thirty-three and one-third per
cent (33-1/3%) of additional capitalization above $1.5 million but less
than three million dollars ($3,000,000).
C. MIOA shall be entitled to 50% of any additional capitalization received by
WGHI in excess of three million dollars ($3,000,000) but less than four
million dollars ($4,000,000). In the event of the receipt of additional
capitalization by WGHI of four million dollars ($4,000,000) or more, the
balance of said indebtedness shall be paid in full. MIOA covenants and
agrees that in the event WGHI elects to satisfy the balance of the
indebtedness prior to June 30, 2000, WGHI shall be entitled to a discount
of 30% and MIOA agrees to accept 70% of the then-existing balance of unpaid
principal and accrued interest in full and final settlement and
satisfaction of said indebtedness.
D. MIOA shall also be entitled to 15% of the net cash flow of WGHI in excess
of operating expenses and settlement payments on a consolidated basis
during the calendar year 1997 and 20% of said net cash flow in the calendar
year 1998. Said net cash flow payments to MIOA shall not exceed the then
existing balance of said indebtedness.
E. In the event WGHI shall sell either Westmark Mortgage Corporation or Green
World Technologies, Inc.. wholly owned subsidiaries of WGHI, or in the
alternative event of a 'spin-off' of either subsidiary, MIOA shall be
entitled to receive, and WGHI agrees to pay to MIOA, 50% of the cash
proceeds received by WGHI resulting from a sale or 'spin-off. " In no event
shall said cash proceeds payable to MIOA exceed the then existing balance
of the indebtedness.
2. WGHI ADDITIONAL CAPITALIZATION. In the event WGHI receives additional
capitalization in the minimum sum of three million dollars ($3,000,000) on or
before Xxxxx 00, 0000, XXXX and MIOA agree to the following:
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A. WGHI shall endorse, assign, transfer and reconvey to MIOA, 200,000 shares
of convertible preferred MIOA stock owned by WGHI.
B. MIOA shall endorse, assign, transfer and reconvey to WGHI, 190,000 shares
of post-reverse WGHI common stock owned by MIOA.
C. 200,000 shares of WGHI convertible preferred stock owned by MIOA, with a
stated value of seven hundred thousand dollars ($700,000), will be
converted to common stock of WGHI. Thereafter, said shares of common stock
shall be sold through a private transaction.
D. In the event MIOA elects to sell all or any portion of the remaining' WGHI
common stock owned by MIOA, WGHI will have, and is hereby granted, an
option to purchase said shares of common stock at a price mutually
agreeable to the parties.
3. ANTI-DILUTION AND DEFAULT. WGHI and MIOA mutually covenant and agree
that Paragraph 1.6 of the Stock Purchase Agreement entered into by and between
the parties on November 21, 1995 as amended, is void, and is hereby deleted and
terminated in its entirety and shall be of no further force or effect. In the
event of any default with respect to the terms and conditions of the repayment
of indebtedness, WGHI shall issue to MIOA, shares of common stock of WGHI with a
value equivalent to the unpaid balance of said indebtedness and accrued
interest. The unpaid indebtedness as hereinabove set forth shall also be secured
by the preferred shares of MIOA stock owned by WGHI. In the event of default as
hereinabove set forth, said preferred shares shall be assigned. transferred and
conveyed to MIOA and WGHI shall have no further rights to conversion.
4. MUTUAL RELEASE. Subject to the performance of the terms and conditions
contained in this agreement, each party hereby forever releases and discharges
the other party and each of its heirs, officers, directors, shareholders,
employees, agents, affiliates, subsidiaries, attorneys, successors and assigns
of and from any and all claims, rights, duties, obligations, debts, liabilities,
damages, injuries, actions and causes of action of every kind and nature,
foreseen and unforeseen, contingent and actual, liquidated and unliquidated,
suspected and unsuspected, disclosed and undisclosed, whether direct or by way
of indemnity, contribution or otherwise, arising out of or related to the
aforementioned Stock Purchase Agreement, Settlement Agreement, Modification to
Settlement Agreement, Amendment to Modified Settlement Agreement, Revised
Settlement Agreement, ownership of shares of common and preferred stock as
hereinabove set forth and the business relationship by and between the parties.
5. EXCEPTIONS TO MUTUAL RELEASE. Nothing contained in this Agreement shall
operate to release or discharge either party or its successors or assigns from
any claims, rights or causes of action arising out of or relating to a breach of
any of the obligations of the parties contained in this Agreement.
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6. SURVIVAL OF MIOA WARRANT OBLIGATION. The parties acknowledge that
the aforementioned Stock Purchase Agreement, as amended, provided for the
issuance of warrants by MIOA for the benefit of WGHI shareholders and that said
warrants will not expire until November 21, 1997. MIOA covenants and agrees that
MIOA will have a continuing responsibility to the shareholders of WGHI with
respect to the terms and conditions of the Warrant Agreement contained in said
Stock Purchase Agreement. Said warrant terms and conditions shall survive the
termination of the Stock Purchase Agreement and amendments thereto.
7. NATURE OF AGREEMENT. The provisions contained in this Agreement
constitute a compromise of disputed issues. This Agreement shall not, in any
way, be construed as an admission by either party of any unlawful, wrongful or
invalid act.
8. AUTHORITY TO EXECUTE. Each party to this Agreement represents that all
necessary corporate action has been taken to authorize the execution, delivery
and performance by each party to this Agreement. This Agreement is the legal,
valid and binding obligation of each party, enforceable against each party in
accordance with its terms, subject as to enforcement only as to applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general application relating to or affecting the rights of creditors generally
and to general equitable principals. This Agreement does not violate any
agreement or contract to which either party is a party thereto.
9. ORGANIZATION, GOOD STANDING AND QUALIFICATIONS. WGHI and MIOA are
corporations duly organized, validly existing and in good standing under the
laws of the state of incorporation for each incorporation, Each party has all
the requisite corporate power and authority to own and operate its properties
and assets, and to carry on its business, to execute and deliver this Agreement
and to carry out the provisions of this Agreement. Both WGHI and MIOA are duly
qualified to transact business and are in good standing in each jurisdiction in
which the failure to so qualify would have a material and adverse effect on the
business, properties, condition (financial or otherwise) or operations of each
party to perform its obligations under this Agreement.
10. GOVERNMENTAL CONSENTS. No consent, approval, qualification, order or
authorization of or filing with any local, state or federal governmental
authority is required on the part of either WGHI or MIOA in connection with the
execution and performance of this Agreement.
11. NO VIOLATION, CONFLICT OR DEFAULT. The execution, delivery and
performance by WGHI and MIOA of this Agreement and consummation of the
transactions contemplated hereby will not result in any violation or default of
any provision of either corporations' Certificate of Incorporation or By-Laws,
any statute, law, regulation, order or decree applicable to either party or any
contract, commitment, agreement, arrangement or restriction of any kind to which
either WGHI or MIOA, is a party. WGHI has not entered into nor does WGHI
contemplate entering into any agreement that would alter or change the intent
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of this Agreement.
12. FURTHER COOPERATION. Each party hereto agrees to execute, acknowledge,
and/or deliver any and all documents reasonably necessary to carry out and
perform its obligations hereunder.
13. ENTIRE AGREEMENT. This Agreement contains the entire Agreement and
understanding between the parties as to the settlement of all claims and
supersedes and replaces all prior settlement negotiations and proposed
agreements, written and oral. The parties hereto acknowledge that no other party
or agent or attorney of any other party has made any promise, representation or
warranty whatsoever express or implied not contained in this Agreement
concerning the subject matter hereof to induce either party to enter into this
Agreement, and each party acknowledges that it has not executed this Agreement
in reliance upon any such promise, representation or warranty not contained
herein.
14. SEVERABILITY. Every provision of this Agreement is intended to be
severable. In the event any term or provision hereof is declared to be illegal
or invalid for any reason whatsoever by a tribunal of competent jurisdiction,
such illegality or invalidity shall not affect the balance of the terms and
provisions hereof, which terms and provisions shall remain binding and
enforceable.
15. NO WAIVER. The waiver, either expressed or implied, by any party hereto
of any term or condition of this Agreement, shall not constitute a
relinquishment by said party of its right to enforce the term or condition at
any later date unless this Agreement is amended in writing to so provide for an
unconditional waiver.
16. NO ASSIGNMENT. As a condition of this Agreement, the parties represent
and warrant that there has been no actual assignment or purported assignment or
other transfer of any claims or other matter or any interest which has been
released by any provision of this Agreement. The parties represent and warrant
that they are the sole owners and real-pariy-in-interest regarding their
respective claims and matters being released by this Agreement. In the event
that any representation or warranty made by any of the parties in this paragraph
is false or incorrect, it is agreed that the party making such representation or
warranty shall indemnify the other party for any and all claims, demands, causes
of action, obligations, set-offs, liabilities, damages, losses, injuries, costs,
expenses and attorneys' fees incurred by them or any of them as a result of such
a false or incorrect representation or warranty. Further, it is agreed by the
parties that the foregoing indemnity does not require the party seeking the
indemnification to have made a payment to a third party claimant as a condition
precedent to recovery of the indemnity granted pursuant to this action.
17. ADVICE OF COUNSEL. Prior to the execution of this Agreement and any
other document to which reference is made herein, each party hereto and thereto
has fully understood and carefully read all of the provisions of this Agreement.
That each party has consulted with or alternatively has had opportunity to
consult with, legal counsel of its own
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choice concerning the terms and conditions of this Agreement and any other
document to which reference is made herein, and such other opportunity to
participate in the drafting of this Agreement and such other document, and that
each such party to this Agreement and such other document is voluntarily
entering into this Agreement.
18. COUNTERPARTS. This Agreement may be executed in any number of original
counterparts, Any such counterpart, when executed shall constitute an original
of this Agreement, and all such counterparts together shall constitute one and
the same Agreement.
19. NO MODIFICATION. No waiver, modification or amendment of any term,
condition or provision of this Agreement shall be valid or have any force or
effect unless made in writing and signed by the parties against whom the waiver,
modification or amendment is asserted.
20. GOVERNING LAW. This Agreement shall be governed by and interpreted
according to the laws of the State of Florida.
21. INTERPRETATION. None of the parties hereto, nor their respective
counsel, shall be deemed the drafter of this Agreement for purposes of
construing the provisions hereof. The language in all parts of this Agreement
shall in all cases be construed according to its fair meaning, not strictly for
or against any of the parties hereto.
22. ATTORNEYS'FEES TO ENFORCE THIS AGREEMENT. In the event that any action
is commenced to seek enforcement of this Agreement or a declaration of rights
thereunder, the prevailing party in such action shall be entitled to recover its
reasonable attorneys' fees and costs incurred in connection with that action.
23. JURISDICTION AND VENUE. In the event that any action is commenced to
seek enforcement of this Agreement or a declaration of rights thereunder, the
jurisdiction and venue for any such action shall be in Palm Beach County,
Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first stated above.
WESTMARK GROUP HOLDINGS, INC. MEDICAL INDUSTRIES OF AMERICA
By: By:
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Its: Its:
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