FIRST ADDENDUM TO
AGREEMENT OF SETTLEMENT AND COWRONHSE
This First Addendum to Agreement of Settlement and Compron-dse (the
"Addendum') is entered into this 26th day of March, 1996, by and between
Westmark Group Holdings, Inc., formerly Network Financial Services Inc., a
Colorado corporation with offices at 000 Xxxxxxxxx Xxxxx Xxxxxx, #0, Xxxxxx
Xxxxx, Xxxxxxx 00000 ("Company'), and Xxxxxx Xxxx, Nemerovski, Canady, Xxxx &
Rabkin, a Professional Corporation with offices at 0 Xxxxxxxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxxxxxxx, XX 00000 ('Xxxxxx Xxxx').
WHEREAS, the Company and Xxxxxx Xxxx have heretofore entered into an
Agreement of Settlement and Compron-dse dated September 19, 1994 (the
"Settlement Agreement"); and
WHEREAS, the Company has not performed its obligations under the
Settlement Agreement, and is in default under the Settlement Agreement;
WHEREAS, Xxxxxx Xxxx has given Company notice of such default, and has
exercised its rights under paragraph 9 of the Settlement Agreement to accelerate
all amounts due under the Settlement Agreement; and
WHEREAS, the spreadsheet attached hereto as Exhibit "A" states the amount
that is due and payable to Xxxxxx Xxxx under the Settlement Agreement as of the
date hereof;
WHEREAS, the parties wish to supplement the Settlement Agreement with the
terms set forth herein, to provide Company with an alternative means of
fulfilling its obligations under the Settlement Agreement;
NOW, THEREFORE, the parties agree as follows-.
1. ALTERNATIVE PERFORMANCE UNDER THE SETTLEMENT AGREEMENT. a. Company will
make the following payments to Xxxxxx Xxxx, which payments will be
received by Xxxxxx Xxxx by the dates shown:
Date Payment Due
1996 $10,000 April 5,
1996 $10,000 May 3, 1996
$10,000 June 5,
1996 $10,000 July 5,
$10,000 August 5,
1996 $10,000 September 5, 1996
$10,000 October 4, 1996
$10,000 November 5, 1996
$10,000 December 5, 1996
$10,000 January 3, 1997
TOTAL: $100,000
b. Company may satisfy its obligation to make the payments due on December
5,1996 and January 3, 1997 (the 'Final Payments'), in whole or in part, by
thefollowing alternative procedure. Company may issue to Xxxxxx Xxxx shares of
the Company's Common Stock. Provided that Xxxxxx Xxxx concludes that the resale
of such shares by Xxxxxx Xxxx has either been registered or qualified under
applicable state or federal securities laws and regulations or that such resale
is exempt therefrom, Xxxxxx Xxxx will in good faith attempt to sell such shares
on the open market through a broker-dealer or market maker acceptable to
Company. Xxxxxx Xxxx will cooperate with Company in connection with the
Company's preparation and filing of any registration statement covering such
shares. If the registration statement covering such shares pertains to the
resale of such shares by Xxxxxx Xxxx (as distinguished from the issuance of such
shares by the Company to Xxxxxx Xxxx), Xxxxxx Xxxx will have the right to
approve of the structure of the offering and to review and approve the
registration statement filed by Company. Company's obligation to make the Final
Payments win be reduced, dollar for dollar, by any cash proceeds, net of
brokerage commissions and other costs, actually received by Xxxxxx Xxxx from the
sale of shares of the Company's stock issued pursuant to this paragraph on or
prior to the respective payment dates for such Final Payments. Company will
defend, indemnify, and hold Xxxxxx Xxxx and its directors, officers, and
employees xxxx-xxxx from and against any claims, liabilities, damages, or costs
(including reasonable attorney's fees and costs of suit) arising out of any
claim that the sale of such shares by Xxxxxx Xxxx violated any state or federal
securities laws, or that the registration statement or prospectus prepared by
Company relating to shares so sold was materially untrue or on-dtted to state
facts necessary to make the facts stated therein not misleading.
2. NO GRACE PERIOD. There will be no grace period with respect to the
payments set forth above. In all cases, Company will ensure that Xxxxxx Xxxx is
in possession of good funds in the amounts shown by the dates shown. If Xxxxxx
Xxxx shall not have actually received good funds for any payment by the due date
shown, a default shall exist under this Addendum, and Xxxxxx Xxxx may pursue any
and all remedies available to it under the Settlement Agreement and as
contemplated herein.
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3. SATISFACTION OF OBLIGATIONS UNDER SETTLEMENT AGIEE@. Upon timely
payment of all amounts set forth in paragraph 1, Company will be deemed to have
satisfied all of its obligations under the Settlement Agreement and this
Addendum.
4. CONFESSION OF JUDGM@. Concurrently with execution and delivery of this
Addendum, Company will execute and deliver to Xxxxxx Xxxx a Confession of
Judgment Statement in the form attached hereto AS Exhibit "B.' Company agrees
that in the event Company fails to make any of the payments required in
paragraph 1 hereof, Xxxxxx Xxxx may without further notice to Company file such
Confession of judgment Statement in a court of appropriate jurisdiction and
cause judgment to be entered thereon. For purposes of the entry of such
judgment, Company hereby consents to the jurisdiction of the Superior Court in
and for the City and County of San Francisco.
5. NO WAIVER. Xxxxxx Xxxx is entering into this Addendum solely as a
financial accommodation to the Company. In doing so, Xxxxxx Xxxx is not waiving
or excusing any of Company's obligations or defaults under the Settlement
Agreement.
6. COUNTERL2ARTS. TNs Addendum may be signed by the parties in several
counterparts, each of which will constitute an original, but all of which
together will constitute one and the same instrument.
7. RATIFICATION OF SETTLEMENT AGREEMENT. The Settlement Agreement is
ratified and affirmed in all respects.
WESTMARK GROUP HOLDINGS, INC., formerly HOWARD, RICE,
NENffiROVSIU, NETWORK FINANCIAL SERVICES, INC.
XXXXXX, XXXX & XXXXXX
A Professional Corporation
By: /s/ By: /s/
Title: President Title:
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