SETTLEMENT AGREEMENT AND GENERAL RELEASE
This
Settlement Agreement and General Release (“Agreement”) is entered into as of
this 16th day of April, 2008 (hereinafter "Settlement Date") by and among the
following settling parties ("Settling Parties"):
1. |
Plaintiff
AMERIWEST ENERGY CORP. fka SOUTH SEA ENERGY CORP. fka XXXXXX VENTURES,
INC. and any and all parents, subsidiaries, affiliates, officers,
directors, owners, shareholders, divisions, employees, predecessor
corporations, successor corporations, related corporations employees,
agents, administrators, attorneys, insurance carriers, reinsurance
carriers, partners, joint venturers, dba’s, associates, trustees,
beneficiaries, executors, heirs, and each of them, jointly and severally
(hereinafter collectively referred to as
"Ameriwest");
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2. |
Defendant
XXXXXX FINANCIAL SERVICES CANADA. and any and all parents, subsidiaries,
affiliates, officers, directors, owners, shareholders, divisions,
employees, predecessor corporations, successor corporations, related
corporations employees, agents, administrators, attorneys, insurance
carriers, reinsurance carriers, partners, joint venturers, dba’s,
associates, trustees, beneficiaries, executors, heirs, and each of
them,
jointly and severally (hereinafter collectively referred to as
"Xxxxxx”);
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3. |
Defendant
XXXXXX FINANCIAL SERVICES, INC. and any and all parents, subsidiaries,
affiliates, officers, directors, owners, shareholders, divisions,
employees, predecessor corporations, successor corporations, related
corporations employees, agents, administrators, attorneys, insurance
carriers, reinsurance carriers, partners, joint venturers, dba’s,
associates, trustees, beneficiaries, executors, heirs, and each of
them,
jointly and severally (hereinafter collectively referred to as
"PFSI”);
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4. |
Defendant
FORDHAM FINANCIAL MANAGEMENT, INC. and any and all parents, subsidiaries,
affiliates, officers, directors, owners, shareholders, divisions,
employees, predecessor corporations, successor corporations, related
corporations employees, agents, administrators, attorneys, insurance
carriers, reinsurance carriers, partners, joint venturers, dba’s,
associates, trustees, beneficiaries, executors, heirs, and each of
them,
jointly and severally (hereinafter collectively referred to as "Fordham”);
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5. |
Defendant
FIRST CLEARING, LLC and any and all parents, subsidiaries, affiliates,
officers, directors, owners, shareholders, divisions, employees,
predecessor corporations, successor corporations, related corporations
employees, agents, administrators, attorneys, insurance carriers,
reinsurance carriers, partners, joint venturers, dba’s, associates,
trustees, beneficiaries, executors, heirs, and each of them, jointly
and
severally (hereinafter collectively referred to as "First Clearing”).
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1.
Background
& Purpose
1.1
There
is
now pending in the Second Judicial District Court, Washoe County, Nevada a
lawsuit entitled Ameriwest
Energy Corp. x. Xxxxxx Financial Services Canada, et al.,
Case
Number CV0702229 (the "Action"). The Action was commenced against Xxxxxx, PFSI,
Fordham, First Clearing and various other parties that Ameriwest believes
inadvertently delivered or received fictitously created shares of Ameriwest
stock. The operative complaint of Plaintiff includes causes of action for
declaratory relief and preliminary and permanent injunction.
1.2
On
or
about May 4, 2007, Ameriwest filed a form 8-K making a public disclosure and
announcement of a 3.6 to 1 forward stock split. On or about May 14, 2007,
Ameriwest’s Transfer Agent, Empire Stock Transfer, filed a transfer agent
verification form with NASDAQ verifying the 3.6 to 1 forward stock split and
issued post-split shares. On June 18, 2007 and June 19, 2007, Xxxxxx purchased
85,000 post-split shares in open market transactions that originated or was
first sold by Fordham. Nevertheless, Xxxxxx ultimately received a total of
306,000 shares as a result of a second 3.6 to 1 stock split announced by the
Depository Trust Company (“DTC”) and effected by Fordham. Xxxxxx is currently
holding 221,000 shares of fictitious “double split” stock of Ameriwest with
CUSIP no. 000000000 in a suspense account (the “Shares”).
1.3
On
December 31, 2007, First Clearing obtained a Temporary Restraining Order
enjoining and restraining Xxxxxx, PI Financial Corporation, Xxxxxxx Securities,
Inc. and PFSI from submitting buy-in orders or engaging in trades, transfers
or
any other transactions in Ameriwest stock, and to cancel and not execute any
pending buy-in orders for Ameriwest stock. Additionally, on January 17, 2008,
First Clearing obtained a Preliminary Injunction enjoining and restraining
PI
Financial Corporation and Xxxxxxx Securities, Inc. from submitting buy-in orders
or engaging in trades, transfers or any other transactions in Ameriwest stock
and to cancel and not execute any pending buy-in orders for Ameriwest stock.
Both such orders referred to herein as the “Orders.”
1.4
It
is the
intent of the Settling Parties to avoid the cost and expense of further
litigation among them as it relates to the Action. The Settling Parties dispute
all of the allegations made against them by the other, whether alleged or not,
and deny that they have any liability towards the other. The Settling Parties
have agreed to settle any and all disputes and claims which do or may exist
between them, or may exist in the future, arising from, based upon or related
to
the facts, circumstances or conditions as they relate to the Action, on the
terms and conditions set forth below.
2.
Settlement
Terms
In
consideration of the mutual releases and agreements contained herein, the
Settling Parties have agreed to settle the Action and any and all disputes
between them as follows:
2.1
Fordham
represents and warrants that it has the legal right to receive the
Shares.
2.2
Xxxxxx
agrees and covenants to effect a “free delivery” of the Shares to Fordham’s
clearing house, First Clearing for credit to Fordham’s account.
2.3
Xxxxxx
hereby
releases
any
claim of
right,
title or interest in
or to
the
Shares.
2.4
Fordham
agrees and covenants it will return and deliver the Shares to those of its
clients who have a legal claim to ownership of the Shares.
2.5
Fordham
shall indemnify, defend and hold Plaintiff Ameriwest and Xxxxxx and each of
their officers, directors, agents, attorneys and accountants (“Indemnified
Parties”), harmless from and against any expense, loss, damage or liability
incurred or connected with, or any claim, suit, demand, loss, judgment,
liability, cost or expense (including reasonable attorneys' fees) arising from
or related to, the Shares or any act or omission made by Indemnified Parties
in
furtherance of delivery and transfer of the Shares to Fordham, provided that
the
same were not the result of fraud, gross negligence, or intentional misconduct
on the part of the Indemnified Parties against whom a claim is
asserted.
2.6
First
Clearing waives any rights it may have under the Orders with respect to the
transactions contemplated by this Agreement.
2.7
Ameriwest
represents that it has presented this Agreement to the Depository Trust Company
(“DTC”) for review and Ameriwest has received no indication that DTC will not
follow the parties’ instructions to effect the “free delivery” of the Shares as
contemplated hereunder.
2.8
Plaintiff
Ameriwest shall file a dismissal with
prejudice of
its
Complaint in the Action as to Fordham, First Clearing, PFSI and Xxxxxx
only,
and
each and every cause of action asserted therein against Fordham, First Clearing,
PFSI and Xxxxxx only,
within
five (5) days after delivery of the Shares
as set
forth in Section 2.2 above.
2.9
Defendant
First Clearing shall file a dismissal with
prejudice of
any
Cross-Complaints in the Action as to Xxxxxx and PFSI, and each and every cause
of action asserted therein against Xxxxxx and PFSI, within five (5) days after
delivery of the Shares
as set
forth in Section 2.2 above.
3.
Mutual
Release
3.1
The
Settling Parties represent that they have the legal authority to enter into
this
Agreement and to give the following releases with respect to the Action. The
Settling Parties specifically warrant that they have the authority to release
all claims and execute this Agreement and enter into the settlement which is
the
subject of this Agreement.
3.2
a.
In
consideration for the agreements set forth herein, and with respect specifically
to the Shares, Ameriwest, Fordham, PFSI and Xxxxxx, and each of their respective
assigns, heirs and beneficiaries, hereinafter forever release and discharge
each
other party and their respective assigns, heirs and beneficiaries, and each
of
them, from and against any and all claims, demands, controversies, causes of
action, obligations, liabilities, costs, expenses, attorneys' fees, expert
fees
and damages of whatever character, nature and kind in law or in equity, past,
present or future, known or unknown, suspected or unsuspected, from the
beginning of time to the present, arising from, relating to or in connection
with the Action or the allegations, facts and circumstances set forth therein.
b.
In
consideration for the agreements set forth herein, and with respect specifically
to the Shares, Ameriwest, First Clearing, PFSI and Xxxxxx, and each of their
respective assigns, heirs and beneficiaries, hereinafter forever release and
discharge each other party and their respective assigns, heirs and
beneficiaries, and each of them, from and against any and all claims, demands,
controversies, causes of action, obligations, liabilities, costs, expenses,
attorneys' fees, expert fees and damages of whatever character, nature and
kind
in law or in equity, past, present or future, known or unknown, suspected or
unsuspected, from the beginning of time to the present, arising from, relating
to or in connection with the Action or the allegations, facts and circumstances
set forth therein.
3.3
The
releases provided in the section shall be effective as a bar to all claims,
demands, controversies, causes of action, liabilities, costs, expenses,
attorneys' fees, and damages of whatever character, nature or kind, known or
unknown, suspected or unsuspected, as well as those specified to be so barred
and set forth in this Section 3 entitled "Mutual Release." It is the specific
intention of all Settling Parties that the releases shall apply to these
Settling Parties as well as to all firms, corporations, entities, employees,
partners, agents, divisions, shareholders, directors and affiliates of the
Settling Parties. The parties to this Agreement specifically intend to avoid
the
result/decision reached by the Nevada Supreme Court in Xxxx
x. General Motors Corporation,
111
Nev. 1431 (1995).
3.4
Settling
Parties specifically understand and acknowledge that the releases referenced
above have been separately bargained for and expressly consented to and that
this Agreement will be given full force and effect in accordance with each
and
all of the terms and provisions, including those terms and provisions relating
to known and unknown claims.
3.5
Covenant
Not to Xxx.
Each
party agrees to refrain from initiating, prosecuting or maintaining (or causing
or assisting in the initiation, prosecution or maintenance of) any action,
suit,
claim or administrative proceeding against the other party to this Agreement
based on any claim released pursuant to Section 3.2 above, and each further
agrees not to file any complaints, petitions, motions or other proceedings
with
respect thereto. Ameriwest, Xxxxxx, PFSI, First Clearing and Fordham represent
and warrant that neither has filed any such complaints, petitions, motions,
or
other proceedings.
4.
Confidentiality
4.1
Neither
party to this Agreement shall disclose either the fact of this Agreement’s
existence or the terms of this Agreement to any third parties including, without
limitation, the media, or make any public statement in regard thereto except
as
follows:
a.
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To
the extent required to comply with applicable law, including securities
laws, and due legal process, but only provided that at least three
(3)
business days prior to any contemplated disclosure, the disclosing
party
notify the other party to the effect that such disclosure is being
required under applicable law or by due legal
process;
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b. |
After
notice to, and with the prior written consent of, the other
party;
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c.
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To
legal counsel and accountants, so long as such individuals agree
to
maintain the confidentiality of the
Agreement.
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4.2
Except
as
required in connection with further judicial proceedings necessary to effectuate
this Agreement, or in connection with confidentially securing the confidential
advice of financial advisors (who shall be made aware of, and instructed and
agree to comply with, the terms of this confidentiality provision as stated
above), the Settling Parties shall not, and shall instruct their counsel not
to,
disclose to any other person or entity any of the terms or conditions of this
Agreement, nor any terms thereof, nor estimate or characterize the amount of
the
settlement embodied in this Agreement, or any part or portion thereof.
4.3
In
the
event that the Settling Parties, or their attorneys of record, receive inquiries
made about the claims made in the Action or about the status of the civil action
or the settlement, their response shall be limited to the following: “This claim
has been resolved and dismissed by mutual agreement of the
parties.”
5.
Miscellaneous
Provisions
5.1
Entire
Agreement.
This
Agreement constitutes the full and entire agreement between the parties hereto
and each such party acknowledges that there is no other agreement, oral and/or
written, between the parties hereto, except that, Fordham and First Clearing’s
rights and obligations between and towards one another are governed by separate
agreements between Fordham and First Clearing. This Agreement may be amended
only by a written instrument signed by all parties hereto. This is an integrated
agreement and this writing is intended as a complete and exclusive statement
of
the terms of the parties' agreement with respect to the subject matter
hereof.
5.2
Construction.
The
parties to this Agreement, and each of them, acknowledge that (1) this Agreement
and its reduction in final written form are a result of good faith negotiations
between the parties through their respective attorneys, (2) the parties and
their attorneys have reviewed and examined this Agreement before execution
by
said parties or any of them, and (3) any statutory rule of construction,
including that ambiguities are to be construed against the drafting party,
will
not be employed in the interpretation of this Agreement.
5.3
Attorneys
Fees.
Except
as between Fordham and First Clearing (whose rights are governed by a separate
agreement between Fordham and First Clearing), each party to this Agreement
will
bear its own attorneys' fees, expert fees and costs in connection with the
prosecution, settlement and/or defense of this Action, provided however, that
in
the event that a party is required to enforce the terms of this Agreement
against a party who is alleged to have breached this Agreement, the prevailing
party shall be entitled to recover its attorney's fees and costs incurred in
enforcing this Agreement.
5.4
Severability.
The
paragraph headings are for reference only and do not affect the interpretation
of any paragraph hereof. If any provision of this Agreement is held to be
illegal or invalid by a court of competent jurisdiction, such provision will
be
deemed to be severed and deleted and neither such provision nor severance and
deletion will affect the validity of the remaining provisions.
5.5
Counterparts.
This
Agreement may be executed in counterparts and when executed by all parties
will
be binding upon all signatories hereto, notwithstanding that the original
signatures do not appear on the same copy of the document. A facsimile copy
may
be deemed an original. In addition to the foregoing, all parties to this
Agreement agree to cooperate with each other in executing all appropriate
documents which must be executed in order to fulfill the intent of the parties
pursuant to the terms of this Agreement.
5.6
Representation
of Authority. Each
of
the parties hereto represents and warrants that he, she and/or it has not
heretofore assigned or transferred or purported to assign or transfer to anyone
any claim, demand, action or cause of action based upon, arising out of, or
in
any way related to any of the matters or things released herein other than
as
provided herein. Each individual signing this Agreement acknowledges that he
or
she has the full authority to enter into this Agreement and bind such individual
party or entity to the terms of this Agreement.
5.7
Waiver.
No
breach of any provision hereof can be waived unless in writing. Waiver of any
one breach shall not be deemed to be a waiver of any other breach of the same
or
any other provision hereof.
5.8
Investigation.
The
Parties hereto acknowledge and represent that each has conducted such
investigation of the facts and the law pertaining to the matters released hereby
as they deem necessary, and that in entering into this Agreement, they have
not
relied on any statement, promise or representation of any other Party or any
representative of such other Party.
5.9
Amendment. The
provisions of this Agreement may be modified at any time by agreement of the
Parties. Any such agreement hereafter made shall be ineffective to modify this
Agreement in any respect unless in writing and signed by the Party against
whom
enforcement of the modification or discharge is sought.
5.10
Succession.
This
Agreement shall be binding upon and for the benefit of the Parties and their
respective predecessors, successors, owners, members, heirs, devisees,
executors, affiliates, representatives, assigns, officers, directors,
shareholders, partners, attorneys, agents and employees wherever the context
requires or admits.
5.11
Representation
by Counsel.
This
Agreement has been carefully read by all Parties and the contents hereof are
known and understood by all Parties. The Parties have each received independent
legal advice from attorneys of their choice with respect to the preparation,
review and advisability of executing this Agreement. Prior to the execution
of
this Agreement by each Party, the Party’s attorney has reviewed the Agreement
and each Party acknowledges that they have executed this Agreement after
independent investigation and without fraud, duress or undue
influence.
5.12
Governing
Law.
The
rights and obligations of the Parties
and the interpretation and performance of this Agreement shall be governed
by
the law of the State of Nevada excluding its conflict of laws
rules.
5.13
Cooperation.
The
Parties each agree on behalf of themselves, their respective predecessors,
successors, owners, members, heirs, devisees, executors, affiliates, related
entities, representatives, assigns, officers, directors, shareholders, partners,
attorneys, agents and employees, to execute all documents necessary to fulfill
the terms of this Agreement.
5.14
Notice.
Any
notice required to be provided as stated in this Agreement shall be via U.S.
mail, certified, return receipt requested, and sent to:
AMERIWEST
c/o
Xxxx
X. Xxx, Esq.
Xxxxxxxxx
Genshlea Chediak, A Law Corporation
000
Xxxxxxx Xxxx, 00xx
Xxxxx
Xxxxxxxxxx,
XX 00000
Fax
No.
(000) 000-0000
XXXXXX
AND PFSI
c/o
Xxxxx
Xxxxx, Esq.
Xxxxx
& XxXxxxxx LLP
0000
Xxxxxxxx Xxxx Xxxxxx
Xxxxxx,
Xxxxx 00000
Fax
No.
(000) 000-0000
FIRST
CLEARING
c/o
Xxxxxxxxxxx Xxxx
Jolley
Urga Xxxxx Woodbury & Xxxxxxxx
3800
Xxxxxx Xxxxxx Parkway
Xxxxxxxxx
Xxxxx
Xxxxx
Xxxxx Xxxxx
Xxx
Xxxxx, Xxxxxx 00000
Fax
No.
(000) 000-0000
FORDHAM
Attn:
Xxxx Xxxxx
00
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax
No.
(000) 000-0000
5.15
Each
of
the parties to this Agreement represent and declare that they have read this
Agreement carefully and know the contents thereof and that they signed the
Agreement freely and voluntarily.
AMERIWEST ENERGY CORPORATION | |
Dated: ___________________, 2008 | By: ___________________________________ |
Print Name: _____________________________ | |
Title: __________________________________ |
STATE OF | ) |
) ss. | |
COUNTY OF __________ | ) |
On
______________________before me, __________________________ a Notary Public,
personally appeared ______________________________, personally known to me
(or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) (is/are) subscribed to the within instrument, and acknowledged to me
that (he/she/they) executed the same in (his/her/their) authorized
capacit(-y/-ies), and that by (his/her/their) signature(s) on the instrument
the
person(s), or the entity upon behalf of which the person(s) acted, executed
the
instrument.
WITNESS
my hand and official seal.
_______________________________ | |
Notary Public |
XXXXXX FINANCIAL SERVICES CANADA | |
Dated: ___________________, 2008 | By: ___________________________________ |
Print Name: _____________________________ | |
Title: __________________________________ |
JUDICIAL DISTRICT | ) |
) ss. | |
OF MONTREAL | ) |
On
______________________before me, __________________________ a Commissioner
of
Oaths (i.e., Notary Public), personally appeared ______________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) (is/are) subscribed to the within instrument,
and acknowledged to me that (he/she/they) executed the same in (his/her/their)
authorized capacit(-y/-ies), and that by (his/her/their) signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS
my hand and official seal.
_______________________________ | |
Notary Public |
XXXXXX FINANCIAL SERVICES, INC. | |
Dated: ___________________, 2008 | By: ___________________________________ |
Print Name: _____________________________ | |
Title: __________________________________ |
STATE OF | ) |
) ss. | |
COUNTY OF __________ | ) |
On
______________________before me, __________________________ a Notary Public,
personally appeared ______________________________, personally known to me
(or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) (is/are) subscribed to the within instrument, and acknowledged to me
that (he/she/they) executed the same in (his/her/their) authorized
capacit(-y/-ies), and that by (his/her/their) signature(s) on the instrument
the
person(s), or the entity upon behalf of which the person(s) acted, executed
the
instrument.
WITNESS
my hand and official seal.
_______________________________ | |
Notary Public |
FIRST CLEARING, LLC | |
Dated: ___________________, 2008 | By: ___________________________________ |
Print Name: _____________________________ | |
Title: __________________________________ |
STATE OF | ) |
) ss. | |
COUNTY OF __________ | ) |
On
______________________before me, __________________________ a Notary Public,
personally appeared ______________________________, personally known to me
(or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) (is/are) subscribed to the within instrument, and acknowledged to me
that (he/she/they) executed the same in (his/her/their) authorized
capacit(-y/-ies), and that by (his/her/their) signature(s) on the instrument
the
person(s), or the entity upon behalf of which the person(s) acted, executed
the
instrument.
WITNESS
my hand and official seal.
_______________________________ | |
Notary Public |
FORDHAM FINANCIAL MANAGEMENT, INC. | |
Dated: ___________________, 2008 | By: ___________________________________ |
Print Name: _____________________________ | |
Title: __________________________________ |
STATE OF | ) |
) ss. | |
COUNTY OF __________ | ) |
On
______________________before me, __________________________ a Notary Public,
personally appeared ______________________________, personally known to me
(or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) (is/are) subscribed to the within instrument, and acknowledged to me
that (he/she/they) executed the same in (his/her/their) authorized
capacit(-y/-ies), and that by (his/her/their) signature(s) on the instrument
the
person(s), or the entity upon behalf of which the person(s) acted, executed
the
instrument.
WITNESS
my hand and official seal.
_______________________________ | |
Notary Public |
APPROVED
AS TO FORM AND CONTENT:
Dated: ___________________, 2008 | XXXXXXXXX GENSHLEA CHEDIAK |
law
corporation
|
|
By:_____________________________________ | |
XXXXX XXXXXXX | |
Counsel for PLAINTIFF | |
Dated: ___________________, 2008 | XXXXX & XXXXXXXX, LLP |
By:_____________________________________ | |
XXXXX XXXXX | |
Counsel for XXXXXX FINANCIAL SERVICES CANADA AND XXXXXX FINANCIAL SERVICES, INC. | |
Dated: ___________________, 2008 | JOLLEY URGA XXXXX XXXXXXXX & XXXXXXXX |
By:_____________________________________ | |
XXXXXXXXXXX XXXX | |
Counsel for FIRST CLEARING, LLC |