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Exhibit 99.1
TERMINATION AGREEMENT
Mortgage Source, Inc., a Nevada corporation ("MS"), Xxxxxxx del Xxxxxx
("del Xxxxxx") and Xxxxx Xxxxx ("Creed"), jointly and each individually, on the
one hand, and Vestin Group, Inc., a Delaware corporation ("Vestin"), on the
other hand, hereby enter into this agreement (the "Agreement"), effective
January 10, 2001, to terminate that certain Agreement and Plan of Reorganization
("Merger Agreement") entered into between MS, del Xxxxxx and Vestin on August
31, 2000 and to settle certain claims between the parties hereto. This Agreement
shall also terminate the employment agreements between Vestin and del Xxxxxx
(the "del Xxxxxx Employment Agreement") and Vestin and Creed (the "Creed
Employment Agreement"), along with all agreements, express or implied, entered
into in conjunction with the Merger Agreement and/or the employment agreements.
WITNESSETH:
WHEREAS, the parties have agreed to terminate the Merger Agreement, the
del Xxxxxx Employment Agreement and Creed Employment Agreement upon the terms
set forth in this Agreement; and
WHEREAS, as consideration for the termination of the Merger Agreement the
del Xxxxxx Employment Agreement and the Creed Employment Agreement, Vestin shall
pay the sum of $175,000 in accordance with the terms and conditions of this
Agreement and shall transfer and relinquish to MS all of its rights to any and
all ownership of MS stock and MS, del Xxxxxx and Creed shall transfer and
relinquish to Vestin all of its rights to any and all ownership of Vestin Stock,
as defined below, and MS, del Xxxxxx and Creed shall assume all liabilities of
MS and shall indemnify, defend and hold Vestin harmless as set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, representations
and warranties hereinafter set forth, and other good and valuable consideration,
the parties intending to be legally bound, hereby agree as follows:
Vestin:
1. Shall pay collectively the sum of $175,000 to MS, del Xxxxxx and
Creed (which $175,000 shall be allocated among such parties as instructed by MS,
del Xxxxxx and Creed), with the first payments of $100,000 to be made upon
execution of this Agreement by all parties, and the second and final payment of
$75,000 to be made on or before Friday, January 19, 2001;
2. Shall cooperate and assist MS for no more than 60 days with the
licensing of MS as an Arizona Mortgage Banker, while permitting MS to continue
its affiliation with DM Mortgage Advisors, Inc. ("DM") in order for MS to make
and close single family residential loans in Arizona, all of which loans must be
approved in writing by Xxxxxxx Xxxxxxx at DM, which approval shall not be
unreasonably withheld. All such loans shall be deemed approved if not rejected
by Xxxxxxx within two (2) business days of the actual receipt by Xxxxxxx of the
complete loan package and the approval request. However, in no circumstances
shall MS be permitted to use the license of DM to engage in broker/dealer
agreements for the wholesaling of
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loans except for agreements necessary to close and sell loans currently in
process; provided, however that no such agreements (a) may contemplate or
include a repurchase obligation on the part of DM and (b) be entered into
without the prior consent of Vestin, which consent shall not be unreasonably
withheld. This Agreement is not contingent upon the success or failure of MS's
mortgage lending activities or attempts to license in Arizona;
3. And its principals, officers, directors, employees, agents,
affiliates, successors and assigns hereby release and discharge MS, Creed and
Del Xxxxxx, their shareholders, principals, officers, directors, employees,
agents, affiliates, successors and assigns from all claims, actions,
obligations and liabilities whatsoever, known or unknown, whether at law or in
equity, that may be raised by Vestin, its agents or affiliates against MS,
Creed or del Xxxxxx. This release shall not affect the indemnity, hold harmless
and other obligations of MS, Creed or del Xxxxxx contained in this Agreement;
4. Hereby relinquishes, transfers and releases all right, title and
interest in and to any and all shares, as well as any rights to purchase or
receive shares, of MS stock, and Vestin agrees to execute any and all further
documentation, if any, necessary to effectuate the return, relinquishment
and/or transfer of ownership of such shares or rights back to MS, del Xxxxxx
and/or Creed. Vestin hereby warrants and represents that no ownership or rights
whatsoever in and to MS shares have been sold, assigned or transferred in any
manner whatsoever by Vestin or anyone on its behalf. Vestin further warrants
that after the execution of this Agreement Vestin shall have no ownership
interest in MS. Ms, del Xxxxxx and/or Creed make no warranty or representation
as to the value of MS's shares of stock, and are under no obligation to
discover or disclose any facts or information, material or otherwise, that may
now or in the future influence the value of MS's shares MS, del Xxxxxx and
Creed understand and acknowledge that by virtue of this Section 4 they are
obligated to pay all outstanding liabilities and claims of MS, including but
not limited to payroll obligations;
5. Shall discontinue using MS's and any of its affiliates' names in any
manner in connection with the business operations of Vestin, and immediately
terminate all agreements wherein MS or its principals, agents and/or affiliates
are a guarantor, obligor, co-xxxxxx or co-obligor;
6. Shall cooperate with all reasonable requests, in good faith and as
necessary to carry out and give effect to this Agreement, including without
limitation, by taking any further action and executing any further
documentation.
7. Agrees not to solicit any current employees of MS for a period of one
year from the date this Agreement is executed.
Agrees, within seven (7) days of the execution of this Agreement to return
all books and records of MS in its possession and to return all equipment or
other assets of MS in Vestin's possession.
MS, del Xxxxxx and agreed, jointly and severally:
1. Hereby relinquishes, transfers and releases all right, title and
interest in and to any and all shares, as well as any rights to purchase or
receive shares, of Vestin stock, whether
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preferred or common stock (the "Westin Stock") and MS, del Xxxxxx and Creed
agree to execute any and all further documentation, if any, necessary to
effectuate the return, relinquishment and/or transfer of ownership of such
shares or rights back to Vestin. NIS, Creed and del Xxxxxx hereby warrant and
represent that no ownership or rights whatsoever in and to Vestin. Stock have
been sold, assigned or transferred in any manner whatsoever by MS, del Xxxxxx or
Creed or anyone on their behalf. MS, del Xxxxxx and Creed further warrant that
after the execution of this Agreement neither MS, del Xxxxxx, Creed nor their
affiliates or assigns shall have any ownership in Vestin, Vestin makes no
warranty or representation as to the value of Vestin Stock, and are under no
obligation to discover or disclose any facts or information, material or
otherwise, that may now or in the future influence the value of Vestin Stock;
2. Hereby agree to pay to Vestin and/or DM, at Vestin's direction all
costs, fees and expenses incurred as a result of the cooperation efforts
required of DM pursuant to this Agreement, including but not limited to the cost
of all employees of DM (other than Xxxxxxx Xxxxxxx) which costs shall include
but not be limited to salaries, commissions, withholding obligations, insurance,
benefits, and governmental obligations such as workmens compensation and taxes.
Vestin represents it will not hire additional employees for DM other than those
retained with the consent of Creed or those which are compensated directly by
Vestin or DM.
3. And their shareholders, principals, officers, directors, employees,
agents, affiliates, successors and assigns hereby release and discharge Vestin,
its subsidiaries, shareholders, principals, officers, directors, employees,
agents, affiliates, successors, assigns and attorneys (collectively, the "Westin
Group") from all claims, actions, obligations and liabilities whatsoever, known
or unknown, whether at law or in equity, that may be raised by MS, del Xxxxxx
and/or Creed, its employees, shareholders, principals, officers, directors,
agents, affiliates, successors and assigns against the Vestin Group;
4. Hereby agree to forever indemnify, defend and hold harmless all of the
Vestin Group, and to pay (i) all costs, fees and expenses as set forth in
Section 2 of MS, del Xxxxxx and Creed's obligations related to DM as set forth
in this Agreement, (ii) all costs, fees and expenses from any and all
agreements, guaranties executed by Vestin, claims, lawsuits, actions, damages,
formal or informal proceedings (whether in a Court of law, before an
administrative agency or otherwise) arising at any time against any of the
Vestin Group as a result of any and all operations and activities of Mortgage
Source, del Xxxxxx and/or Creed (including any repurchase obligations) and
further (iii) MS, del Xxxxxx and Creed, jointly and severally agree to pay all
costs, fees and expenses including legal fees and costs, and assume all
liability for defending and paying any damages, charges and fees whatsoever
arising in any and all pending or future lawsuits or claims of any nature
against MS, Creed and/or del Xxxxxx, its shareholders, officers, directors,
agents, principals, successors and/or assigns including without limitation, the
Xxxxxx Xxxxxx lawsuit, the Xxxxx Fargo lawsuit and the Xxxxx X. Xxxxxx lawsuit
in Utah.
5. Except as set forth herein with respect to DM, MS, del Xxxxxx and Creed
shall discontinue using Vestin's and any of its subsidiaries or affiliates'
names in any manner in connection with the business operations of NIS and to
immediately terminate all agreements wherein Vestin, its principals, agents
and/or affiliates are a guarantor, obligor, co-xxxxxx or co-obligor (and MS, del
Xxxxxx and Creed represent and warrant that no party or person has made any
demand of any kind on any such guaranty or obligation of Vestin); and,
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6. Shall hereafter cooperate with all reasonable requests in good faith
and as necessary to carry out and give effect to this Agreement, including
without limitation, by taking any further action and executing any further
documentation.
7. Agrees not to solicit any current employees of Vestin or its
subsidiaries or affiliates for a period of one year from the date this
Agreement is executed.
8. Agrees, within seven (7) days of the execution of this Agreement to
return all books and records of Vestin and its subsidiaries and affiliates in
their possession and to return all equipment or other assets of Vestin, its
subsidiaries and affiliates in their possession.
The parties agree that effective upon execution of this Agreement the
Merger Agreement, the del Xxxxxx Employment Agreement and the Creed Employment
Agreement are terminated, null and void and of no further force and effect.
This Agreement has been made and entered into for good and valuable
consideration, and has been reviewed by the parties respective counsel, Xxxx
Xxxxxxxxx on behalf of Vestin and Xxxx Xxxxxxxx on behalf of MS, Creed and del
Xxxxxx.
This is the only agreement between the parties, and no further writings or
statements of any of the parties, their agents, representatives or attorneys
shall be looked to in order to determine the parties' intentions.
This Agreement shall be binding upon, and inure to the benefit of, the
respective successors and assigns of the parties hereto.
The laws of Nevada shall govern this Agreement, with any dispute to be
resolved in Xxxxx County State District Court, Xxxxx County, Nevada, with the
prevailing party being entitled to an award of legal fees and costs of suit.
The parties agree that in the event of a default of any term or provision of
this Agreement by any party, the non-defaulting party shall give written notice
specifying such default to the defaulting party. Thereafter the defaulting
party shall have five (5) days after receipt of such written notice (the "Cure
Period") to cure such default, or a reasonable time thereafter if the default
cannot be cured within such five (5) day period. No suit may be brought by any
party unless the defaulting party fails to cure the default during the Cure
Period.
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This Agreement may be executed and delivered in duplicate counterparts and
by fax, and is hereby made and delivered this 10th day of January, 2001.
MORTGAGE SOURCE, INC. VESTIN GROUP, INC.
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By: Xxxxxxx del Xxxxxx, President By: Xxxxx Xxxxxxxx, CFO
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By: Xxxxx Xxxxx, Manager
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By: Xxxxx Xxxxx, Personally and
Individually
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Xxxxxxx del Xxxxxx, Personally and
Individually
