SECOND AMENDMENT TO CONSULTING AGREEMENT
This Second Amendment to Consultant Agreement ("Second Amendment") is entered
into by and between WESTMARK GROUP HOLDINGS, INC., a Delaware corporation, and
WESTMARK MORTGAGE CORPORATION, a California corporation (hereinafter
collectively "Westmark") and XXXXX X. XXXXXXXX, ESQ. ("Xxxxxxxx"), and is made
in reference to the following:
WHEREAS, Westmark Group Holdings, Inc. and Xxxxxxxx entered into a
Consulting Agreement on January 24, 1996 and a subsequent Amendment on February
4, 1997, and;
WHEREAS, Westmark Mortgage Corporation desires to adopt, ratify,
approve and confirm said Consulting Agreement as amended, and;
WHEREAS, Westmark and Xxxxxxxx desire to further amend said Consulting
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained therein, said Consulting Agreement is hereby amended and modified in
the following respects:
1. Term: The term of this Consulting Agreement shall be extended and
continue to and including April 24, 2000, subject to termination as hereinafter
set forth.
2. Termination Without Cause: This Agreement is a guaranteed contract
and is not subject to termination by Westmark other than for cause as set forth
hereinafter. Termination by Westmark for any reason other than for cause,
including but not limited to termination due to insolvency, bankruptcy,
liquidation or winding down of operation shall be deemed to be termination
without cause for the purpose of this Agreement. In the event of termination by
Westmark, without cause, prior to the end of the term of this Consulting
Agreement, Xxxxxxxx shall be entitled to a lump sum payment equal to the monthly
compensation provided for in this Agreement as amended multiplied by the number
of months remaining in the term of this Agreement or any extension thereof
together with all benefits, reimbursements or other rights to which Xxxxxxxx
has become entitled,
3. Termination for Cause: Westmark reserves the right to terminate this
agreement if Xxxxxxxx willfully breaches or willfully neglects the duties which
he is required to perform under the terms of this agreement. Westmark shall not
terminate this agreement pursuant to the foregoing unless Westmark shall first
deliver to Xxxxxxxx a notice which specifically identifies such breach or
neglect and Xxxxxxxx shall have cured the same within 30 days after receipt of
the written notice. Westmark shall further have the right to terminate Xxxxxxxx
if Xxxxxxxx commits acts of dishonesty, fraud or misrepresentation that would
prevent the effective performance of Xxxxxxxx'x duties. This agreement shall
further terminate immediately on the occurrence of any of the following events:
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A. The death of Xxxxxxxx;
X. Xxxxxxxx becomes permanently disabled because of sickness, physical
or mental disability or any other reason so that Xxxxxxxx shall be
unable to complete duties under this agreement. "Permanently disabled"
shall mean any disability that continues for 180 days in any twelve
month period, certified by a licensed physician mutually agreed upon by
Westmark and Xxxxxxxx.
Westmark may at its option terminate this agreement for the reasons
stated in this section by giving written notice of termination to Xxxxxxxx
without prejudice to any other remedy to which Westmark may be entitled either
at law, in equity, or under this agreement. The notice of termination required
by this section shall specify the ground for the termination and shall be
supported by statement of all relevant facts. In the event of termination for
cause by Westmark, Coolidge shall be entitled to compensation or benefits earned
up to and including the date of termination. In the event a court of competent
jurisdiction determines that Xxxxxxxx was wrongfully terminated, said
termination shall be deemed to have been without cause and Westmark shall pay to
executive all compensation and benefits provided for termination without cause
as set forth hereinafter, together with Xxxxxxxx'x reasonable attorney's fees,
expert fees and court costs.
4. Change of Control: In the event of a change of control as set forth
below, while Xxxxxxxx is under contract to Westmark, and in the further event
Xxxxxxxx'x contract is terminated without cause, as defined herein above,
Westmark shall pay to Xxxxxxxx a lump sum payment equal to the monthly
compensation provided for in this agreement as amended multiplied by the number
of months remaining in the term of this agreement or any extension thereof,
together with all benefits, reimbursements or other rights to which Xxxxxxxx has
become entitled. Change of control shall be defined as follows:
A. Any "person," including a "group" as determined in accordance with
Section 13 (d) (3) of the Securities Exchange Act of 1934 (the "Exchange
Act"), becomes, in a single transaction or series of transactions, the
beneficial owner, directly or indirectly, of securities representing a
Control Percentage (as hereinafter defined) of the combined voting power
of the then outstanding securities of the corporation not including a
transaction caused by or resulting from the affirmative vote of a
majority of the current members of the Board of Directors of Westmark
Group Holdings, Inc. (subject to Paragraph 4, B);
B. The membership of the board of directors as it exists at the time of
this Agreement changes such that the current members of the board no
longer constitute a majority of the board of directors not including a
change caused by or resulting from any current board member's death or
resignation pursuant to Paragraph 5, B hereinafter, or the affirmative
vote
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of a majority of the current members of the Board of Directors of
Westmark Group Holdings, Inc.,
C. The corporation is merged or consolidated with other corporations in
a single transaction or series of transactions and as a result of such
merger or consolidation a Control Percentage of the outstanding voting
securities of the surviving or resulting corporation shall no longer be
owned in the aggregate by the stockholders who owned stock in the
corporation as of the date prior to the merger or consolidation not
including a merger or consolidation caused by or resulting from the
affirmative vote of a majority of the current members of the Board of
Directors of Westmark Group Holdings, Inc. (subject to Paragraph 4, B).
The term "Control Percentage" shall mean at least 35% in the event the
applicable securities are registered under the Securities Exchange Act
of 1934, as amended ("Exchange Act"), or at least 35% in the event the
applicable securities are not registered are not registered under the
Exchange Act.
D. The corporation transfers all of its assets and or stock to another
corporation or to any other person or entity, including but not limited
to the transfer of the mortgage operations through a sale of assets or
stock, spin-off, divestiture or initial public offering not including a
transfer of assets or stock caused by or resulting from the affirmative
vote of a majority of the current members of the Board of Directors of
Westmark Group Holdings, Inc. (subject to Paragraph 4, B).
E. In the event of a change of control as set forth above, and Xxxxxxxx
is requested to remain with the surviving or successor corporation or
business, with the same compensation and commensurate duties as
previously retained by Xxxxxxxx subject to the same terms and conditions
of this agreement, and Xxxxxxxx rejects such request for continuing
employment, said Xxxxxxxx shall be entitled to a lump sum severance
payment equal to the compensation provided hereinabove in Paragraph 3
regarding termination without cause. Provided, however, that Xxxxxxxx
shall not reject such request for continuing employment without a
reasonable basis.
5. Termination by Xxxxxxxx: Xxxxxxxx may terminate his employment for
"good reason" upon the occurrence of any one or more of the following:
A. Termination for "Good Reason": Xxxxxxxx may terminate his employment
for "Good Reason" if:
(i) He is assigned, without his express written consent, any duties
inconsistent with his positions, duties, responsibilities, or
status
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with Westmark as of the date hereof, or a change in his reporting
responsibilities or titles in effect as of the date hereof;
(ii) His compensation is reduced;
(iii) Westmark shall file a petition in bankruptcy or re-organization
under the federal bankruptcy statutes or an involuntary petition is
filed against Westmark and not removed or withdrawn within sixty
(60) days, or Westmark does not pay any salary or expense due
hereunder and then fails either to pay such amount within thirty
(30) days after written notice from Xxxxxxxx, or to contest in good
faith such notice. Further, if such contest is not resolved within
sixty (60) days, the dispute shall be submitted to arbitration
pursuant to the then existing rules of the American Arbitration
Association; or
(iv) Westmark commits any material breach of this agreement, which
breach is not cured by Westmark within thirty (30) days of written
notice of said breach from Xxxxxxxx.
(v) In the event Xxxxxxxx terminates his employment for good reason
as hereinabove set forth, Xxxxxxxx shall be entitled to a lump sum
payment equal to the monthly compensation provided for in this
agreement multiplied by the number of months remaining in the term
of this agreement or any extension thereof, together with all
benefits, reimbursements or other rights to which Xxxxxxxx has
become entitled.
B. Voluntary Termination By Xxxxxxxx: Xxxxxxxx shall have the right to
terminate this agreement for any reason other than change of control or
good reason as set forth hereinabove, upon sixty (60) days written
notice to Westmark. In the event of voluntary termination by Xxxxxxxx
other than for good reason or change of control, Xxxxxxxx shall be
entitled to any compensation or benefits due and owing to Xxxxxxxx up
to the date of termination.
6. Vacation: Xxxxxxxx shall be entitled to four (4) weeks paid vacation
per year subject to the policies and procedures of Employer. Unused accrued
vacation time may, be carried forward to subsequent years and/or paid in full
upon termination of this agreement.
7. Stock Options: Immediately upon the execution of this Agreement,
Westmark and Xxxxxxxx shall enter into a Stock Option Agreement, pursuant to
which Westmark shall issue options to Xxxxxxxx to acquire 400,000 shares of the
common stock of Westmark Group Holdings, Inc. Said options shall vest
immediately at an exercise price of $1.00. Said vested
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options may be exercised on or after the following dates:
100,000 shares on March 31, 1998
50,000 shares on October 31, 1998
100,000 shares on March 31, 1999
50,000 shares on October 31, 1999
100,000 shares on March 31, 2000
In the event of a sale, divestiture, spin-off or transfer of all or
substantially all of the assets or stock of Westmark Mortgage Corporation, all
options granted hereunder to Executive shall immediately become exercisable.
Provided, however, that no option shall be exercisable after the expiration of
ten years from the date said option was granted.
8. WestMark Mortgage Corporation: Westmark Mortgage Corporation does
hereby adopt, ratify, approve and confirm the terms and conditions of the
aforementioned Consulting Agreement and all amendments thereto, and agrees to
be bound thereby.
Except as hereinabove amended or modified, said Agreement shall continue
in full force and effect.
Dated: 8-27-97 Dated: 8-27-97
/s/ Xxxx Xxxxxxxxxx /s/ Xxxxx X. Xxxxxxxx, Esq.
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WESTMARK GROUP HOLDINGS, INC. XXXXX X. XXXXXXXX, ESQ.
By: /s/ Xxxx Xxxxxxxxxx
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Its: C.E.O.
________________________________
WESTMARK MORTGAGE CORPORATION
By: /s/ Xxxxxx Story 2
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Its: President
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