SETTLEMENT AGREEMENT
AND MUTUAL RELEASE OF ALL CLAIMS
This Settlement Agreement and Mutual Release of All Claims ("Agreement"),
dated February 22, 1996, is executed by and between Xxxxxxx Xxxxx Xxxx & Black,
LLP ("Xxxxxxx Tufts"), a California limited liability partnership, and Westmark
Group Holdings, Inc., a Colorado corporation ("Westmark"), and is made with
reference to the following:
RECITALS
WHEREAS, Westmark retained Xxxxxxx Tufts to represent it in various legal
matters beginning in 1993 and continuing into 1994, and agreed to pay Xxxxxxx
Tufts on an hourly basis for services provided; and
WHEREAS, Xxxxxxx Tufts performed legal services on behalf of Westmark and
billed it for such services on an hourly basis;
WHEREAS, Xxxxxxx Tufts resigned as counsel to Westmark in November 1994
and Westmark has informed Xxxxxxx Tufts that it is unable to pay in cash the
amounts owed to Xxxxxxx Tufts for such services and has requested that Xxxxxxx
Tufts accept the form of payment as set forth herein;
WHEREAS, the parties hereby wish to settle and to resolve any and all
disputes, debts, damages, accounts, claims and demands whatsoever between them
arising from Xxxxxxx Tufts' representation of Westmark and Xxxxxxx Tufts' claims
for payments owed by Westmark to Xxxxxxx Tufts for legal representation of
Westmark.
NOW, THEREFOR, in consideration of the terms set forth below in Sections I
through 3 of this Agreement, and the other covenants and conditions contained
herein, Xxxxxxx Tufts and Westmark mutually agree as follows.: 1 . On or before
March 31, 1996, Westmark at its own cost and expense will file with the U.S.
Securities and Exchange Commission ("SEC") a Registration Statement on Form S-1
or SBI ("Registration Statement") covering the issuance to Xxxxxxx Tufts of such
number of shares of Westmark common stock (the "Westmark Shares") as calculated
pursuant to the terms of Section 2 hereof and the stock warrant set forth in
Section 3 hereof Westmark will cause the SEC to declare the Registration
Statement effective under Section 5 of the Securities Act of 1933 on or before
June 1, 1996. The issuance of such Westmark
Shares and stock warrant shall also be qualified under the California Corporate
Securities Laws of 1968 or exempt from such qualification.
2. Immediately upon the effectiveness and qualification of the Registration
Statement, Westmark will issue to Xxxxxxx Tufts 75,000 Westmark Shares. All such
Westmark Shares shall be fully paid, nonassessable, duly authorized and validly
issued and will be free and clear of all preemptive rights, rights of first
refusal, liens, charges, restrictions, claims and encumbrances. Xxxxxxx Tufts
agrees that it will sell the Westmark Shares in an orderly manner (not to exceed
1,000 shares per day without the consent of Westmark) through the brokerage firm
designated by Westmark, or such other brokerage firm as agreed to by the
parties, The sale of the Westmark Shares by Xxxxxxx Tufts shall conclude on or
before December 31, 1996, provided that sufficient Westmark Shares are
registered and qualified under the terms of Section 1 hereof and issued by
Westmark to Xxxxxxx Tufts in sufficient time to allow Xxxxxxx, Tufts to net
$170,000 through the sale of such Shares as contemplated hereunder. Westmark
agrees that the number of Westmark Shares registered and issued to Xxxxxxx Tufts
shall equal the number necessary to net Xxxxxxx Tufts $170,000 upon the sale
thereof (after payment of all brokerage fees). Westmark agrees to register,
qualify and issue to Xxxxxxx Tufts additional Westmark Shares to the extent the
number of Westmark Shares originally registered, qualified and issued are
insufficient to net Xxxxxxx Tufts $170,000. Once Xxxxxxx Tufts has netted
$170,000, any remaining Westmark Shares will be returned to Westmark and shall
be retired.
3. Westmark shall also issue a stock warrant ("Warrant") to Xxxxxxx Tufts in the
form attached hereto as Exhibit A. The Warrant shall entitle Xxxxxxx Tufts to
purchase 3,333 Westmark Shares at an exercise price of $2.875 per share. The
Warrant shall be exercised on or before December 31, 1996 by Xxxxxxx Tufls and
the Registration Statement relating thereto shall remain effective and qualified
until such date.
4. If at any time Westmark fails to perform its obligations as set forth in
sections 1, 2, or 3 above,Westmark shall be in default of this Agreement. If
Westmark is in default at any time duringthe operation of this Agreement,
Xxxxxxx Tufts may obtain judgment by confession against Westmark in the Superior
Court of California, County of Santa Xxxxx, pursuant to the following documents:
CONFESSION OF YMGMENT STATEMENT, attached hereto as Exhibit B; ATTORNEY'S
DECLARATION IN SUPPORT OF CONFESSION OF JUDGMENT STATEMENT, attached hereto as
Exhibit C; and JUDGMENT, attached hereto as Exhibit D. An officer of Westmark
with authority to do so shall execute the CONFESSION OF J-UDGNffiNT STATEMENT in
connection with this
Agreement. An independent attorney representing Westmark, with authority to do
so, shall execute the ATTORNEY'S DECLARATION IN SUPPORT OF CONFESSION OF
JUDGMENT STATEMENT in connection with this Agreement.
5. Xxxxxxx Tufts hereby releases and forever discharges Westmark, and all of its
past, present and future attorneys, agents, insurers, successors and assigns
from any and all claims, demands, obligations or causes of action of any nature
whatsoever, whether in law or in equity, or whether for contractual,
compensatory or punitive damages, which have arisen or may arise out of
Westmark's alleged failure to pay for legal services rendered on its behalf by
Xxxxxxx Tufts, and any past, present or future partners or employees; provided,
however, that the release, set forth herein does not in any way pertain to
Westmark's obligations to Xxxxxxx Tufts set forth herein, including without
limitation the obligations set forth in sections 1, 2 or 3 hereof
6. Westmark hereby releases and forever discharges Xxxxxxx Tufts, and all of its
past, present and future partners, employees, attorneys, agents, insurers,
successors and assigns, from any and all claims, demands, obligations or causes
of action of any nature whatsoever, whether in law or in equity, or whether for
contractual, compensatory or punitive damages, which have or may arise out of
Xxxxxxx Tufts' performance of legal services on behalf of Westmark, or failure
thereof, and any and all other claims or causes of action Westmark may have
against Xxxxxxx Tufts, whether real or imaginary or known or unknown at this
time. In this regard, Westmark agrees to defend, indemnify and hold harmless
Xxxxxxx Tufts (and any partner, employee or agent thereof) from any claim, suit
or cause of action brought by any employee or agent of Westmark relating to any
legal services Xxxxxxx Tufts performed on behalf of Westmark, as referenced
herein.
7. Subject to satisfaction of the terms set forth in Sections 1, 2 and 3, all
parties hereto acknowledge that they execute and agree to this Agreement, and
accept the terms set forth herein, as a complete compromise of all matters
involving disputed issues of law and fact and fully assume, thereby, the risk
that the facts or law may be other than they believe.
8. The parties hereto acknowledge and understand that this Agreement creates new
obligations and rights between them. Except as otherwise provided for in this
Agreement, each party expressly waives and assumes the risk of any and all
claims for damages which exist as of this date, but of which it is unaware,
whether through ignorance, oversight, error, negligence or otherwise, and which,
if known to Xxxxxxx Tufts or to Westmark, would materially
affect their decision to enter into this Agreement. Each party further assumes
the risk that it may suffer damages in the future which it does not now
anticipate nor suspect. Each party waives all rights under California Civil Code
section 1542, which states as follows:
A general release does not extend to claims which the creditor does not
know or expect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with
the debtor.
9. Each party warrants and represents to the other that it has not assigned,
conveyed or transferred any of the claims or possible claims against any of the
parties hereto (or any interest therein) which are released or referred to
herein and that the releases herein are what they purport to be. In the event of
an adjudication that either party is in breach of this Section, the party in
breach agrees to indemnify and hold harmless the other party from any resulting
liability, claim, demand, damage, cost, expense and/or attomey's fees incurred
by the other party as a result of the breach
10. Xxxxxxx Tufts agrees and acknowledges that it will accept delivery of the
Westmark Shares and Warrant specified in Sections 1, 2 and 3 of this Agreement
as a full and complete compromise of matters involving disputed issues as to
Xxxxxxx Tufts. Each of Xxxxxxx Tufts and Westmark agrees and acknowledges that
neither this Agreement, nor delivery of the Westmark Shares or Warrant by
Westmark herein, or any event occurring during the negotiations for this
Agreement (nor any statement or communication made in connection therewith) by
either party, or their attorneys or representatives, shall be considered an
admission by any party of any act or omission to act, or of any responsibility
or liability for any claims, suits, actions or any facts, representations or
misrepresentations regarding any of the parties, and that no past nor present
wrongdoing on the part of either party shall be implied therefrom.
11.Each party represents and warrants that it has full authority to enter into
this Agreement and to release all of the claims, known or unknown, which are the
subject matter of the releases herein.
12. This Agreement is binding upon, and shall inure to the benefit of, each of
the parties and their respective officers, directors, investors, agents,
representatives, partners, predecessors, successors and assigns.
13. Westmark hereby represents and warrants that as of the date of its execution
of this Agreement it has sufficient shares of common stock duly autho@ and
available in order to comply with the terms of Sections 1, 2 and 3 hereof
Westmark agrees that it will reserve and keep available for issuance sufficient
shares of its conunon stock so that it can comply with its obligations set forth
in Sections 1, 2 and 3 hereof
14. This Agreement contains the entire agreement between the parties and
supersedes and replaces any and all prior or contemporaneous agreements or
understandings, whether written or oral, with regard to the matters set forth
herein. This Agreement may be amended or modified in whole or in part at any
time, but only by a written agreement executed by both parties in the same
manner as this Agreement.
15. This Agreement has been negotiated, and is entered into, in the State of
California, County of Santa Xxxxx. The validity, interpretation, construction
and enforcment of this Agreement shall be construed, interpreted and governed
pursuant to California law.
16. In entering into this Agreement, each party represents that:
(a) It has read the Agreement and has had the opportunity to consult with its
attorneys, who are the attorneys of its own choice, during the negotiation
and preparation of this Agreement,
(b) It fwly understands and is aware of the terms of this Agreement, and the
legal consequences thereof, and voluntarily accepts them; and
Its counsel has reviewed and revised, or has had the opportunity to
review and revise, this Agreement, and accordingly the normal rule
of construction, which states to the effect that any ambiguities are
to be resolved against the drafting party, shall not be emoloyed in
the interpretation of this Agreement.
17. Each party represents and warrants that no other person or entity has or has
had any interest in the claims, demands, obligations or causes of action
referred to in this Agreement. Each party further warrants and represents that
the individuals execu@g the Agreement are duly authorized by the respective
parties to bind the parties to the terms of the Agreement.
18. Failure by either party at any time to require performance of any provision
of this Agreementshall not limit the right of that party to enforce such
performance or provision at any time, norshall either party's waiver of any
breach by the other party of any provision of thi Agreement be a waiver of any
succeeding breach by that other party of that same provision, or of any other
provision of this Agreement. 19. The parties agree that any notices to be
provided pursuant to this Agreement shall be addressed to the respective parties
as follows:
XXXXXXX TUFTS COLE & BLACK, LLP
Attn: Xxxxxxx Xxxxxxxxxx, Esq.
00 xxxxx Xxxxxx Xxxxxx I Oth Floor
San Jose, California 95113
WESTMARK GROUP HOLDINGS, INC.
Attn: Norman Birmingham, President
355 NE. Xxxxx Xxxxxx Xxxxx 0
Xxxxxx Xxxxx, Xxxxxxx 00000
Each party shall notify the other party by certified mail of any change of
address or change of the person designated herein to receive notices to be
provided pursuant to this Agreement. Once a party has received notice of a
change of address or designated person, that party shall send all future notices
to be provided pursuant to this
Agreement to that address and designated person.
20. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which shall together constitute one and the same
document. It shall not be necessary, in making proof of this Agreement, to
produce or account for more than one counterpart.
IN WITNESS WEEREOF, the parties have duly executed this Agreement on
the dates set forth below.
WESTMARK GROUP HOLDINGS, INC. XXXXXXX XXXXX XXXX & BLACK, LLP
By:/s/ By:/s/
XXXXXX BIRMINGHAM Xxxxxxx Scudellarie
President
