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
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 must have materially affected his
settlement with the debtor."
In connection with this waiver, each party
hereto acknowledges that facts in addition to or different from
those presently known may later be discovered which relate to the
subject matter of this AGREEMENT. The PARTIES also recognize the
possib
