SETTLEMENT AGREEMENT
THIS AGREEMENT is entered into on this 25th day of November, 1997,
by and between CHARTWELL INTERNATIONAL, Inc. (hereafter "Chartwell") and
POWAY PARTNERS, A California general partnership (hereafter "Poway").
WHEREAS Poway and Xxxxxx Xxxxxxxx have filed a lawsuit against Chartwell,
Xxxxxx Xxxxx, Xxxxx Xxxxxxxx and Does 1-100 inclusive in Los Angeles Superior
Court, Case No. BC172423 on or about June 6, 1997; and
WHEREAS Chartwell, Xxxxxx Xxxxx, Xxxxx Xxxxxxxx and Does 1-100 have denied
the allegations set forth in said lawsuit; and
WHEREAS each party is desirous of avoiding protracted litigation and the
costs appurtenant thereto, and
WHEREAS the parties have attempted to settle their differences without
admission of liability or wrongdoing by any party to the lawsuit;
NOW THEREFORE, Poway and Chartwell, for themselves and on behalf of all
parties named in said lawsuit, for good and valuable consideration of the
promises set forth herein, hereby agree as follows:
1. CASH. The following items shall be paid from proceeds of the sale of
Chartwell International, Inc. free trading stock:
Consulting fees to Poway: $33,000.00
Legal fees to Xxxxxx X. Xxxxxx Xx. $20,000.00
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TOTAL PROCEEDS $53,000.00
Said proceeds to be obtained as spelled out by the procedure detailed on
Exhibit "A", and shall be carried out as expeditiously as possible, but in
any event, within 10 business days from the receipt by Centex Securities of
the unlegended stock certificate for 600,000 shares as outlined in Exhibit
"A". Each party shall act in good faith and use due diligence in promptly
performing their obligations as set forth in Exhibit "A".
2. STOCK.
a) $50,000.00 in Chartwell International, Inc. Restricted Common
Stock shall be delivered to Poway within 10 business days of execution of the
final settlement agreement. The number of shares to be issued shall be
determined based on the average of the Bid and Ask price as of the closing on
the date of the final settlement. Chartwell shall have the right to
repurchase all shares delivered to Poway within 12 months of the date of the
final settlement agreement for the price of $75,000.00.
b) $75,000.00 cash equivalent in Sportstar Marketing, Inc. common
stock shall be delivered by Chartwell to Poway. All said stock to be issued
with piggyback rights for the holder, subject to approval by the underwriter.
The price for said common stock shall be determined based on the average
between the Bid and Ask at the close of the first day of trading. Chartwell
shall deliver said stock to Poway within 10 business days of the close of the
1st day of trading on Sportstar Marketing, Inc.
3. PROMISSORY NOTE. $3,200.00, together with accrued interest on the
$50,000.00 note estimated at $3,500.00, shall be added to the principal
balance of the existing 2nd mortgage held by Poway. This modification to the
terms of the Note shall also reflect that in the event that Chartwell is able
to secure re-financing of the existing 1st mortgage on more favorable terms,
Poway hereby agrees to subordinate its mortgage to a new 1st mortgage in an
amount not to exceed the remaining principal balance of the existing 1st
mortgage at the time of such refinance and at an interest rate not to exceed
12.00%, at no cost to Poway. Poway agrees to cooperate with any such
refinancing or recasting of senior debt by Chartwell, so long as its priority
position is not jeopardized or in any way negatively affected.
4. REAL ESTATE LOTS.
a) Within 90 days of completion and full County approval of the
Final Map and platting of all lots, Chartwell shall convey title by special
warranty deed, free of all encumbrances to Poway of lots equivalent in value
to $250,000.00. Value to be determined by independent MAI appraiser. Said
appraiser to be selected as follows: Chartwell and Poway to each select an
appraiser. Those appraisers shall then select the independent MAI appraiser,
who shall be familiar with properties in the area of the subject property.
The lot or lots to be conveyed by Chartwell to Poway or its designated
representative shall be by random selection. Upon conveyance of the lots,
Poway or its representatives shall have no further interest in any
development proceeds arising from the remaining property owned by Chartwell
and/or its assignees.
b) The obligation to convey lots to Poway as described in 4(a) shall
be cross collateralized by the following stock option:
c) STOCK OPTION. Chartwell shall grant to Poway an option to
purchase sufficient shares from its holdings in Sportstar Marketing, Inc.
restricted common stock such that the discount from the market price (which
shall be determined as the average of the Bid and Ask price of Sportstar
stock on the close of the 1st day of trading) multiplied by the number of
shares granted, is equivalent to $250,000.00 as of the end of the first day
of trading of Sportstar Marketing, Inc. This option shall commence at the end
of 90 days from the completion and full approval by San Diego County of the
Final Map and platting of all lots, or 2 years, whichever is less
("Commencement date"). The option period shall run for two years from the
Commencement date, after which all rights of Poway shall terminate. It is
understood by all parties that the option agreement is for
cross-collateralization purposes only, and Poway shall be entitled to
exercise on the option agreement only if Chartwell fails to perform pursuant
to the terms of paragraph 4(a) above. Chartwell makes no warranties to Poway,
its officers, agents or employees, either express or implied, that the value
of the stock options at the time of option
commencement or any period thereafter will be equal to $250,000.00. Chartwell
shall retain the sole right to repurchase all options granted to Poway,
whether or not the option period has commenced, for the sum of $300,000.00,
payable by cash or cashier's check.
5. RELEASE AND INDEMNITY PROVISIONS. Each party, upon execution of the final
settlement agreement, hereby agrees to execute contemporaneously a complete
release, discharge, indemnity and hold harmless agreement in compliance with
C.C.P. Section 1542 whereby each party agrees to indemnify, discharge,
release and hold harmless the other party or parties from all past, present
or future claims arising from the initial purchase transaction, and to
dismiss all pending claims or counterclaims currently pending before any
court of law in any jurisdiction. The agreement contemplated by this
paragraph shall inure to the heirs, successors, devisees or assigns of all
parties.
6. PROHIBITION AGAINST RECORDING. This settlement agreement shall remain
strictly confidential between the parties. Recordation of the Settlement
Agreement by either party shall render the agreement, together with all
release and indemnity provisions, null and void.
7. ACCEPTANCE. If this settlement proposal is not executed by all parties by
November 25, 1997 at 5:00p.m. PST, then this offer is terminated.
Agreed to this 25 day of November, 1997.
CHARTWELL INTERNATIONAL, INC. POWAY PARTNERS
/s/ Xxxxxx Xxxxx /s/ Xxxxxx Xxxxxxxx
--------------------------------------- ------------------------------
Dr. Xxxxxx Xxxxx, Chairman of the Board Xxxxx Xxxxxxxx
EXIBIT A
Legal procedure for sale of stock:
1. Morizano/Poway Partners ("Designee") to overnight Morizano's Chartwell
Preferred Share Certificate along with an SEC legal opinion regarding
the authority to convert shares into 600,000 common and to remove the
restrictive legend. This Certificate should be sent to Oxford
Transfer & Registrar ("OTR"):
Xx. Xxxx Xxxxxxx
Oxford Transfer & Registrar
000 XX Xxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
(000)000-0000
2. Simultaneously, Chartwell will forward a letter requesting that 600,000
shares of common stock be issued in Designee's name and the restrictive
legend released.
3. Any excess stock or proceeds received by Designee over and above cash
requirement per the settlement agreement will be immediately returned
to Chartwell upon payment in full to Designee.
4. Simultaneously, Xx. Xxx Xxxxxxxxx of Centex Securities will be
contacting Xxxxxx Xxxxxx regarding establishing an account for
Designee for purposes of liquidating the stock. Mr. Chincholl can
be reached at the following location:
Xx. Xxx Xxxxxxxxx
Centex Securities
00000 X. Xxxxx Xxxxxx
Xxxxxx, XX 00000
(000) 000-0000
5. This process to sell the Chartwell stock is a condition subsequent
to the full release of pending litigation.
LOAN MODIFICATION AGREEMENT
AND
SUBORDINATION AGREEMENT
THIS Loan Modification Agreement is entered into this 11th day of
December, 1997 by and between POWAY PARTNERS, a California General
Partnership (hereinafter "Lender") and CHARTWELL INTERNATIONAL, INC., a
Nevada corporation (hereinafter "Borrower").
WHEREAS Borrower, on November 10, 1994, executed a Promissory Note in
favor of Lender in the original amount of Fifty Thousand and 00/100 Dollars
($50,000.00), payable at the annual rate of 12.000 per cent interest, with
monthly payments of $500.00, or more, commencing on December 15, 1994; and
WHEREAS Borrower secured this Promissory Note with a Deed of Trust dated
November 10, 1994 and recorded November 15, 1994 in the official records of
the San Diego County, California Recorder's Office at Reception No.
1994-0658932_ in favor of CB Service Corporation, a California corporation,
as Trustee for Lender and encumbering that certain property owned by Borrower
which is located in the County of San Diego, State of California and which is
legally described as follows:
See ATTACHED EXHIBIT "A"
AND WHEREAS Borrower and Lender are desirous of modifying the terms and
conditions of said Promissory Note and Deed of Trust,
NOW THEREFORE, Borrower and Lender, for and in consideration of the sum
of Ten Dollars and other valuable consideration, paid to Lender, the receipt
of which is hereby acknowledged, do hereby covenant and agree as follows:
1. The principal balance on said Promissory Note shall be modified to be
$57,200.00, as of the date set forth above.
2. Payments on said Promissory Note shall be modified to be $572.00 per
month, with the 1st payment due one month from the date of this agreement and
all subsequent payments due on the same day of each month, until this Note is
paid in full.
3. Execution of this Loan Modification Agreement shall be prima facie
evidence that the Promissory Note referenced herein is cm-rent and in good
standing as of the date of the execution of this Agreement by both Lender and
Borrower.
4. Lender hereby agrees that the Subordination Agreement, attached hereto as
Exhibit "B" and executed by Lender, shall be integrated into and deemed an
integral part of both the Promissory Note and the Deed of Trust referenced
herein, as of the date of execution of this Agreement, and that the execution
of said Subordination Agreement attached to this Agreement
shall not affect the current statutory priority of Lender's interest in any
property secured by said Deed of Trust, nor be deemed a release of any rights
of Lender in or to said Deed of Trust.
Lender and Borrower have agreed to and acknowledged the above
modifications, as evidenced by their respective signatures below.
POWAY PARTNERS, A CALIFORNIA GENERAL PARTNERSHIP
BY: /s/ Xxxxxx Xxxxxxxx
-------------------------- ------------------------------
-------------------------- ------------------------------
CHART INTERNATIONAL, INC., A NEVADA CORPORATION
BY: /s/ Xxxxxx X Xxxxx
--------------------------
Xx. Xxxxxx X. Xxxxx, President
STATE OF CALIFORNIA
COUNTY OF Los Angeles
On 12-11-97, before me XXXXX XXXXXX XXXXX, a Notary Public in and for
said State, personally appeared Xxxxxx Xxxxxxxx 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 capacity(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 SEAL - XXXXX XXXXXX XXXXX
Signature: /s/ Xxxxx Xxxxxx-Xxxxx COMM. # 1051326
NOTARY PUBUC - CALIFORNIA
--------------------------------- LOS ANGELES COUNTY
NAME (TYPED OR PRINTED) My commission expires: Feb. 13, 1999
My commission expires: 0-00-00
XXXXX XX XXXXXXXX
XXXXXX XX XXXXXXXX
Xx 12/8/97, before me Xxx XxXxxxxx Notary Public in and for said State,
personally appeared Xx. Xxxxxx X. Xxxxx as President of Chartwell
International, Inc. personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that she executed the same in her
authorized capacity and that by her signature on the instrument, the person
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
NOTARY SEAL - XXX XXXXXXXX
Signature: /s/ Xxx XxXxxxxx COMM. # 1051326
NOTARY PUBUC
--------------------------------- STATE OF COLORADO
NAME (TYPED OR PRINTED) My commission expires: 08/25/2001
My commission expires: 8-25-2001
EXIBIT "B"
SUBORDINATION AGREEMENT
WHEREAS CHARTWELL INTERNATIONAL, INC. a Nevada corporation executed
a Deed of Trust dated November 10, 1994 to CB Service Corporation, Trustee,
secured by a Promissory Note in the amount of $50,000.00, and recorded
November 15, 1994, at Reception No. 1994-0658932 of the records of San Diego
County, California, for the use of POWAY PARTNERS, a California General
Partnership, which Deed of Trust is a lien against the property described
therein; and
WHEREAS, CHARTWELL INTERNATIONAL, INC., the owner of said property,
and POWAY PARTNERS have agreed that certain subordination provisions be
incorporated into said Deed of Trust pursuant to the Loan Modification
Agreement of which this Subordination Agreement is a part;
NOW THEREFORE, CHARTWELL INTERNATIONAL, Inc. and POWAY PARTNERS for
the good and valuable consideration referenced within the Loan Modification
Agreement, hereby incorporate into said Deed of Trust the following
Subordination Agreement provision:
POWAY PARTNERS, Inc. hereby agree to subordinate this Deed of Trust to any
new Deed of Trust which shall replace the existing 1st Deed of Trust
encumbering the property, so long as the amount of the new Deed of Trust does
not exceed the then current principal balance of the existing 1st Deed of
Trust, of $400,000.00 and rate not to exceed 12% and so long as the loan
proceeds of any new Deed of Trust are used solely to satisfy in full the
outstanding principal balance, plus all accrued interest and late charges, if
any, then owed on said existing 1st Deed of Trust. Further, it shall be a
condition precedent to any obligation by POWAY PARTNERS under this
Subordination Agreement that all obligations by CHARTWELL INTERNATIONAL, Inc.
to POWAY PARTNERS shall be current and not be in default.
POWAY PARTNERS and CHARTWELL INTERNATIONAL, INC. hereby further
agree that this subordination provision shall be exercised by providing to
POWAY PARTNERS in writing, a Request for Subordination, no later than 30 days
prior to the date said subordination shall occur, and to provide to POWAY
copies of any Note and Deed of Trust to which POWAY PARTNERS shall
subordinate.
Upon receipt of said Request for Subordination, POWAY PARTNERS
agrees to promptly execute all documents and instruments necessary or
required to effectuate such subordination; provided however, that in no event
shall the priority of the Deed of Trust held by POWAY PARTNERS be diminished
beyond a 2nd lien position by virtue of said subordination. POWAY PARTNERS,
Inc. shall not be liable for any cost or expense as a result of any
subordination requested by CHARTWELL INTERNATIONAL, Inc.
This Subordination Agreement shall inure to the heirs, successors,
devisees and assigns of both POWAY PARTNERS and CHARTWELL INTERNATIONAL, INC.
Dated this 11th day of December, 1997.
POWAY PARTNERS
BY: /s/ Xxxxxx Xxxxxxxx
--------------------------
-------------------------- ------------------------------
STATE OF CALIFORNIA
COUNTY OF Los Angeles
On 12-11-97, before me XXXXX XXXXXX XXXXX, a Notary Public in and for said
State, personally appeared Xxxxxx Xxxxxxxx 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 capacity(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 SEAL - XXXXX XXXXXX XXXXX
Signature: /s/ Xxxxx Xxxxxx-Xxxxx COMM. # 1051326
NOTARY PUBUC - CALIFORNIA
--------------------------------- LOS ANGELES COUNTY
NAME (TYPED OR PRINTED) My commission expires: Feb. 13, 1999
My commission expires: 2-13-99
SETTLEMENT AGREEMENT
AND MUTUAL GENERAL RELEASE OF ALL CLAIMS
This Settlement Agreement and Mutual General Release of All Claims
is entered into effective December 11, 1997 by POWAY PARTNERS, a California
General Partnership, and XXXXXX XXXXXXXX on the one hand, and CHARTWELL
INTERNATIONAL, INC., a Nevada Corporation, XXXXXX XXXXX, XXXXX XXXXXXXX AND
DOES 1-100, on the other hand, both of whom are hereinafter collectively
referred to as all the "Parties."
RECITALS
Certain disputes have arisen between the parties in connection with
the claims set forth in that certain Complaint and Demurrer filed on June 6,
1997 in Los Angeles County, California Superior Court, Case No. BC172423 (the
"Lawsuit"). It is the intention of the parties to settle all disputes between
POWAY PARTNERS and XXXXXX MORIZANO a/k/a XXXXXX XXXXXXXX, on the one hand,
and CHARTWELL INTERNATIONAL, INC., XXXXXX XXXXX, XXXXX XXXXXXXX AND DOES
1-100 on the other hand.
1. SETTLEMENT TERMS
The Parties hereby agree to execute all documents and perform all
actions as set forth and described in that particular document titled
"Settlement Agreement" dated November 25, 1997, a signed copy of which is
attached hereto and incorporated into this document.
When the above terms are performed by all Parties no later than
DECEMBER 19, 1997, each Party will be in full settlement of any and all
claims it has against each and every other Party named in the Complaint set
forth above.
2. WHAT HAPPENS IN THE EVENT OF A DEFAULT
If any Party fails to timely perform its obligations pursuant to the
settlement terms set forth in the Settlement Agreement attached hereto, then
this Settlement Agreement and Mutual Release of All Claims shall be null and
void and each Party shall be entitled to pursue all legal remedies available
to it.
3. DISMISSAL OF THE COMPLAINT AS TO DEFENDANTS
Within 24 hours after receipt by Morizono or his counsel of
$53,000.00 in cashier's check or certified funds, pursuant to Paragraph 1 of
the Settlement Agreement, counsel for POWAY PARTNERS and XXXXXX XXXXXXXX
shall forthwith file a Request for Dismissal with Prejudice of all claims as
to each and very Defendant in the Lawsuit. Each Party shall bear its own
attorneys' fee and costs relating to the lawsuit, except as may be provided
for in the Settlement Agreement.
4. MUTUAL GENERAL RELEASE
POWAY PARTNERS hereby releases CHARTWELL INTERNATIONAL, INC., XXXXXX
XXXXX, XXXXX XXXXXXXX and DOES 1-100 from any and all claims, actions, causes
of action, cross-complaints, demands and obligations of any kind whatsoever
("Claims"), whether known or unknown, suspected or unsuspected, fixed or
contingent, which each party
now has or may hereafter have, arising in or which could have arisen in the
above mentioned dispute.
CHARTWELL INTERNATIONAL, Inc., XXXXXX XXXXX, XXXXX XXXXXXXX and DOES
1-100 do hereby release POWAY PARTNERS from any and all claims, actions,
causes of action, cross-complaints, demands and obligations of any kind
whatsoever ("Claims"), whether known or unknown, suspected or unsuspected,
fixed or contingent, which each party now has or may hereafter have, arising
in or which could have arisen in the above mentioned dispute.
The signatories hereto hereby agree that they will forever refrain
and forebear from commencing or prosecuting any lawsuit or proceeding against
each other arising in or out of or which could have arisen in or out of the
above mentioned dispute(s).
5. NO ADMISSION OF LIABILITY
Each of the signatories hereto understands and agrees that neither
the payment of any sum of money nor the execution of this agreement or any
document related thereto, shall constitute or be construed as an admission of
any liability whatsoever in these matters.
6. ATTORNEYS FEES PROVISION
If legal action is taken to remedy a breach of this agreement, then
the party prevailing in said legal action shall be awarded its attorney's
fees and costs.
7. CALIFORNIA LAW GOVERNS
California law shall govern this Settlement Agreement and Mutual
General Release of All Claims. Each of the parties was represented by
counsel who participated in the preparation
of the Agreement and, in the event of any claim arising from a breach, its
language shall not be construed against or in favor of any party.
8. REPRESENTATIVES, SUCCESSORS, HEIRS AND ASSIGNS
This Settlement Agreement and Mutual General Release of All Claims
shall be binding upon and inure to the benefit of the parties and their
representatives, successors, heirs and assigns.
9. LEGAL CAPACITY TO EXECUTE THE AGREEMENT
Each party warrants that he/she has not assigned the claims covered
by this Settlement Agreement and Mutual General Release of All Claims and has
the legal capacity to execute this Agreement.
10. COMPLETE AGREEMENT
This Settlement Agreement and Mutual General Release of All Claims
contains the entire agreement and understanding between the signatories
hereto regarding the subject matter. This Settlement Agreement and Mutual
General Release of All Claims replaces all prior negotiations and proposed
agreements, whether written or oral. Each of the signatories hereto
acknowledges that no other signatory hereto has made any promise,
representation or warranty whatsoever, express or implied, not contained
herein, concerning the subject matter hereof, to induce him to execute this
Settlement Agreement. Each of the signatories hereto further acknowledges
that each signatory hereto has not executed this Settlement Agreement and
Mutual General Release of All Claims in reliance upon any promise,
representation or warranty not expressly set forth
herein. Each of the Parties represents that he or she has conferred with an
attorney of his or her own choosing who has advised the party with respect to
this Settlement Agreement and Mutual General Release of All Claims, and that
no party has relied on the representations of any other party in deciding to
enter into this Settlement Agreement and Mutual General Release of All Claims.
11. COUNTERPARTS
This Settlement Agreement and Mutual General Release of All Claims
may be executed in duplicate counterparts, each of which shall be deemed an
original agreement and all of which shall constitute and agreement to be
effective as of the date of signing.
AGREED TO AND ACCEPTED BY:
POWAY PARTNERS, a California General Partnership
BY: /s/ Xxxxxx Xxxxxxxx
--------------------------
XXXXXX XXXXXXXX
/s/ Xxxxxx Xxxxxxxx
-----------------------------
CHARTWELL INTERNATIONAL, INC. a Nevada corporation
BY: /s/ Xxxxxx X. Xxxxx
--------------------------
XXXXXX XXXXX
/s/ Xxxxxx X. Xxxxx
-----------------------------
XXXXX FLUCKMAN
-----------------------------
State of California
County Los Angeles
On 12-11-97 before me Xxxxx Xxxxxx Xxxxx
-------- -----------------------------------------------------
(Name/title of officer-i.e."Xxxx Xxx, Notary Public")
Personally appeared Xxxxxx Xxxxxxxx
----------------------
(Name(s) of Signer(s))
personally known to me -or- X 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 capacity(ies),
and that by his/her/their
signature(s) on the
NOTARY SEAL - XXXXX XXXXXX XXXXX instrument the person(s),
COMM. # 1051326 or the entity upon behalf
NOTARY PUBUC - CALIFORNIA of which the person(s)
LOS ANGELES COUNTY acted, executed the
My commission expires: Feb. 13, 1999 instrument.
Witness my hand and official seal.
/s/ Xxxxx Xxxxxx Xxxxx
-----------------------------------
ATTENTION NOTARY
The information requested below and in the column to the right is OPTIONAL.
Recording of this document is not required by law and is also optional. It
could, however, prevent fraudulent attachment of this certificate to any
Officer(s) unauthorized document.
THIS CERTIFICATE Title or Type of document
MUST BE ATTACHED ----------------------
TO THE DOCUMENT Number of Pages Date of Document
DESCRIBED AT RIGHT ---- -----------
Signer(s) Other Than Named Above
---------------
Right thumbprint (optional)
Capacity Clamed by signer(s)
Individual(s)
Corporate
-----------
Officer(s)
----------
Partner(s) Limited
General
Attorney in Fact
Trustee (s)
Guardian/Conservator
other
-------------------------
----------------------------------
Signer is Representing:
(Name of Person(s) or Entity(ies)
----------------------------------
----------------------------------
Right thumbprint (optional)
Capacity Clamed by signer(s)
Individual(s)
Corporate
-----------
Officer(s)
----------
Partner(s) Limited
General
Attorney in Fact
Trustee (s)
Guardian/Conservator
other
-------------------------
----------------------------------
Signer is Representing:
(Name of Person(s) or Entity(ies)
