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CONFIDENTIAL
SETTLEMENT AND GENERAL RELEASE AGREEMENT
This Settlement and General Release Agreement
("AGREEMENT") is entered into by and between CLIFFORD L. STRAND
("STRAND"), SECURED DIVERSIFIED INVESTMENT, LTD. ("SDP') and JAN
WALLACE ("WALLACE") referred to jointly as the "PARTIES" as of the
date this AGREEMENT is signed, with reference to the following
terms:
RECITALS
A. On or about
January 13, 2006, Alliance Title Company filed an lnterpleader
lawsuit Case Number 06CC02129 in the Orange County Superior Court,
Department C11 against STRAND, WILLIAM S. BIDDLE ("BIDDLE"), GERNOT
TROLF ("TROLF"), NATIONWIDE COMMERICAL BROKERS ("NATIONWIDE"), SDI
and others and as result, deposited with the Court the funds in the
amount of $267,000.00.
On or about January 20, 2006, STRAND, BIDDLE,
TROLF and NATIONWIDE filed a separate lawsuit Case Number 06CC02350
in the Orange County Superior Court, Department C11 against SDI and
one of its officers WALLACE along with others for Fraud and
Misrepresentation, Negligent Misrepresentation, Breach of Contract,
Breach of the Covenant of Good Faith and Fair Dealing, Conversion,
Commons Counts, Money had and received and Declaratory Relief. On
or about March 15, 2006 SDI filed a cross-complaint against the
Plaintiffs along with others for Breach of Contract, Breach of
Fiduciary Duty, Negligent Supervision, Civil Conspiracy,
Intentional Interference with Economic Relations; Negligent
Interference with Economic Relations; Breach of Oral Agreement,
Breach of Employment Contract; Breach of Directors/Officers'
Fiduciary Duty; Fraud and Intentional Misrepresentation and
Declaratory Relief .
B. On or about
March 10, 2006, STRAND BIDDLE, TROLF along with another
shareholder, filed a lawsuit against SDI for declaratory relief
under Corporation Code Section 2115, Case Number 06CC03959, filed
in the Orange County Superior
Court, Department C11. Both litigations shall be referred
to as the
"ACTIONS".
C. STRAND
filed a complaint with the Securities and Exchange Commission of
the United States of America ("SEC") in regard to his objections to
the June 2, 2006 SDI shareholder meeting which he has not taken nor
does he intend to any further action on.
D. On or about
September 19, 2006 DIDDLE, TROLF and NATIONWIDE entered into a
settlement agreement with SDI and WALLACE which is incorporated
herein by reference. In addition BIDDLE, TROLF and NATIONWIDE
dismissed, with prejudice, their claims in the ACTIONS against SDI
and WALLACE. SDI and WALLACE dismissed, with prejudice, their
claims in the ACTIONS against BIDDLE, TROLF and
NATIONWIDE.
E. The parties
expressly acknowledge that they have no personal
knowledge of any liability, fraud or wrongdoing
on the part of any other party, its agents, officers, directors,
stockholders, employees, successors, assigns, insurers and
attorneys with respect to any claims in the ACTIONS, or with
respect to any other matters relating to it. No provision hereof or
of any related document shall be construed as an admission or
concession of liability or fraud or of any wrongdoing or of any
preexisting liability. However, in order to fully
and forever resolve these matters,
and with the understanding that this AGREEMENT does not constitute
an admission by any party of any wrongdoing or of any lack of merit
relating to any claims referred to herein, STRAND, SDI, and WALLACE
enter into this AGREEMENT.
AGREEMENT
1. In
consideration for the promises set forth herein, the PARTIES agree
as follows:
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a.
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The PARTIES agree that (1) upon execution by
STRAND and his attorney of this AGREEMENT, (2) upon execution of a
stipulation and order of disbursement and requests for dismissal
with prejudice in the above ACTIONS attached hereto as Exhibit A
and incorporated herein by reference, and (3) upon execution by
STRAND Irrevocable Proxy attached hereto as Exhibit B and
incorporated herein by reference, The PARTIES shall file with the
Orange County Superior Court a stipulation and order of
disbursement as follows and for the benefit of: $80,000 to STRAND
and the remainder to SDI; in addition the PARTIES shall also file
the requests for dismissal. The payments shall be in one lump sum
with no payroll or other taxes deducted.
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b.
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SDI makes no representations or warranties
regarding the tax effect of the settlement proceeds as directed by
this AGREEMENT. Further, STRAND agrees to defend and/or indemnify
SDI with respect to any liability created by STRAND'S payment or
non-payment of taxes with respect to the settlement sum.
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2. STRAND, as
the first party, and SDI and WALLACE as a second party, on their
own behalf and on behalf of their respective dependents,
successors, heirs, executors, administrators and assigns, and each
of them, hereby fully and forever releases and discharges each
other, and any parent companies, any subsidiaries, any predecessors
in interest, any successors in interest, any companies associated
as a result of an asset purchase or any affiliated companies or
organizations, as well as their agents, officers, directors,
stockholders, employees, successors, assigns, insurers and
attorneys, and each of them, of and from any and all claims,
rights, actions, causes of action, obligations, debts, interest,
damages, charges, losses, debts, penalties, forfeitures,
liabilities, costs, attorneys' fees, and demands of any nature,
whether in law or in equity, arising out of or relating to any acts
or omissions that took place prior to the date of this AGREEMENT,
including without limitation, any matters relating in any way to
the ACTIONS and/or any matters relating to or contained in or which
could have been contained in the ACTIONS and/or any claims under
other Federal or State statute, law or regulation.
3. It is the
intention of the PARTIES hereto that this AGREEMENT shall be
effective as a full and final accord and satisfaction and release
of each and every released matter, including all unknown and/or
unsuspected claims. Accordingly, the
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PARTIES hereby waive and relinquish any and all
rights or benefits that any party may have under the provisions of
Section 1542 of the California Civil Code, which reads as
follows:
"A general release does not extend
to claims which the creditor does not know or suspect to exist in
its favor
at the time of executing the release, which if
known by him
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