EXHIBIT 10.28 SETTLEMENT AGREEMENT AND MUTUAL RELEASE OF ALL CLAIMS This settlement Agreement and Mutual Release of All Claims ("Agreement"), dated February , 1996, is executed by and between Westmark Group Holdings, Inc. ("WGHI"), a Colorado corporation and Mortgage Quality Management, Inc., dba Foster Ousley Conley, ("F.O.C."), a California corporation and is made with reference to the following: RECITALS WHEREAS, WGHI retained F.O.C. to represent it in various matters and to provide certain services to WGHI and; WHEREAS, F.O.C. has provided certain services to WGHI and billed WGHI for such services and; WHEREAS, WGHI has informed F.O.C. that it is unable to pay in cash the amounts owed to F.O.C. for such services and has requested that F.O.C. accept the form of payment as set forth herein and; WHEREAS, the parties hereby wish to settle and to resolve any and all disputes, debts, damages, accounts, claims and demands whatsoever between them arising from the relationship between WGHI and F.O.C. and claims for payments owed by WGHI to F.O.C.. NOW, THEREFOR, in consideration of the terms set forth below and other covenants and conditions contained herein, WGHI and F.O.C. mutually agree as follows: 1. WGHI agrees to pay to F.O.C. the sum of $2,000 on March 15, 1996, $2,000 on April 15, 1996 and $2,000 on May 15, 1996. 2. On or before March 31, 1996, WGHI at its own cost and expense will file with the U.S. Securities and Exchange Commission ("SEC") a Registration Statement on Form S-1 or SB-1 ("Registration Statement") covering the issuance to F.O.C. of such number of shares of WGHI common stock as calculated pursuant to the terms of Section 3 hereof. 3. Immediately upon the effectiveness and qualification of the Registration Statement, WGHI will issue to F.O.C., 6,000 shares. All such WGHI shares shall be fully paid, nonassessable, duly authorized and validly issued and will be free and clear of all preemptive rights, rights of first refusal, liens, charges, restrictions, claims and encumbrances. WGHI will cause the sale of the F.O.C. shares in an orderly manner through a brokerage firm designated by WGHI. WGHI agrees that a sufficient number of WGHI shares 1 registered in the name of F.O.C. shall be sold each month commencing June, 1996 to net $2,304 per month payable to F.O.C. no later than the 15th day of each month commencing June 15, 1996 through and including November 15, 1996. WGHI further agrees to register, qualify and issue to F.O.C. additional WGHI shares to the extent the number of WGHI shares originally registered, qualified and issued are insufficient to net $2,304 per month commencing June 15, 1996. Once F.O.C. has received a total of $19,821 as a result of monthly payments commencing March 15, 1996, any remaining F.O.C. shares will be returned to WGHI and shall be retired. 4. In the event WGHI fails to pay F.O.C. in accordance with the schedule set forth above or in the further event WGHI fails to cause the sale of sufficient shares to enable F.O.C. to receive $2,304 per month commencing June 15, 1996, WGHI shall be in default of this agreement. In the event of default, F.O.C. shall be entitled to file the Confession of Judgment which is attached hereto marked Exhibit "A" and by this reference made a part hereof and proceed with any and all remedies available at law or in equity. In the event of default, F.O.C. shall have no obligation to liquidate the WGHI shares and in the absence of liquidation, said shares shall be returned to WGHI. In the absence of default, said Confession of Judgment Statement shall be held by F.O.C., unfiled. 5. F.O.C. hereby releases and forever discharges WGHI, and all of its past, present and future attorneys, agents, officers, directors, employees, insurers, successors and assigns from any and all claims, demands, obligations or causes of action of any nature whatsoever, whether in law or in equity, or whether for contractual, compensatory or punitive damages, which have arisen or may arise out of WGHI alleged failure to pay for services provided by F.O.C.. Provided, however, that this release does not in any way pertain to WGHI's obligations to F.O.C. set forth herein and in the event of default by WGHI, this release shall be null and void. 6. WGHI hereby releases and forever discharges F.O.C., and all of its past, present and future employees, partners, agents, officers, directors, employees, insurers, successors and assigns, from any and all claims, demands, obligations or causes of action of any nature whatsoever, whether in law or in equity, or whether for contractual, compensatory or punitive damages, which have or may arise out of F.O.C.'s services rendered on behalf of WGHI, or failure thereof, and any and all other claims or causes of action WGHI may have against F.O.C., whether real or imaginary or known or unknown at this time. 7. Subject to satisfaction of the terms set forth herein, all parties hereto acknowledge that they execute and agree to this Agreement, and accept the terms set forth herein, as a complete compromise of all matters involving disputed issues of law and fact and fully assume, thereby, the risk that the facts or law may be other than they believe. 8. The parties hereto acknowledge and understand that this Agreement creates new obligations and rights between them. Except as otherwise provided for in this Agreement, each party expressly waives and assumes the risk of any and all claims for 2 damages which exist as of this date, but of which it is unaware, whether through ignorance, oversight, error, negligence or otherwise, and which, if known to F.O.C. or to WGHI, would materially affect their decision to enter into this Agreement. Each party further assumes the risk that it may suffer damages in the future which it does not now anticipate nor suspect. Each party waives all rights under California Civil Code Section 1542, which states as follows: "A general release does not extend to claims which the creditor does not know or expect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 9. F.O.C. agrees and acknowledges that it will accept the payments set forth above together with delivery of the WGHI shares and proceeds of sale thereof, as a full and complete compromise of matters involving disputed issues as to WGHI. F.O.C. and WGHI agree and acknowledge that neither this Agreement nor delivery of the WGHI shares herein, or any event occurring during the negotiations for this Agreement (nor any statement or communication made in connection therewith) by either party, or their attorneys or representatives, shall be considered an admission by any party of any act or omission to act, or of any responsibility or liability for any claims, suits, actions or any facts, representations or misrepresentations regarding any of the parties, and that no past nor present wrongdoing on the part of either party shall be implied therefrom. 10. Each party represents and warrants that it has full authority to enter into this Agreement and to release all of the claims, known or unknown, which are the subject matter of the releases herein. 11. This Agreement is binding upon, and shall inure to the benefit of, each of the parties and their respective officers, directors, investors, agents, representatives, partners, predecessors, successors and assigns. 12. This Agreement contains the entire agreement between the parties and supersedes and replaces any and all prior or contemporaneous agreements or understandings, whether written or oral, with regard to the matters set forth herein. This Agreement may be amended or modified in whole or in part at any time, but only by a written agreement executed by both parties in the same manner as this Agreement. 13. This Agreement has been negotiated, and is entered into, in the State of California, County of Contra Costa. The validity, interpretation, construction and enforcement of this Agreement shall be construed, interpreted and governed pursuant to California law. 14. In entering into this Agreement, each party represents that: (a) It has read the Agreement and has had the 3 opportunity to consult with its attorneys, who are the attorneys of its own choice, during the negotiation and preparation of this Agreement. (b) It fully understands and is aware of the terms of this Agreement, and the legal consequences thereof, and voluntarily accepts them; and (c) Its counsel has reviewed and revised, or has had the opportunity to review and revise this Agreement, and accordingly the normal rule of construction, which states to the effect that any ambiguities are to resolved against the drafting party, shall not be employed in the interpretation of this Agreement. 15. Each party represents and warrants that no other person or entity has or has had any interest in the claims, demands, obligations or causes of action referred to in this Agreement. Each party further warrants and represents that the individuals executing this Agreement are duly authorized by the respective parties to bind the parties to the terms of this Agreement. 16. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same document. It shall not be necessary, in making proof of this Agreement, to produce or account for more than one counterpart. 17. In the event of any litigation arising out of or pertaining to this Agreement, the prevailing party shall be entitled to reasonable attorney's fees in addition to any other relief provided by law. 18. The parties agree that any notices to be provided pursuant to this Agreement shall be addressed to the respective parties as follows: Westmark Group Holdings, Inc. Mortgage Quality Management, Inc., 355 N.E. Fifth Ave., Suite 4 dba Foster Ousley Conley Delray Beach, Florida 33483 c/o Ed Vegliante Commercial Lawyers' Network, Inc. and 45 Polk Street San Francisco, California 94102 Harry C. Coolidge, Esq. 1260 41st Ave., Suite N and Capitola, California 59010 Peter Hass, Esq. 4 WATSON, HOFFE & HASS P.O. Box 5001 Richmond, California 94805 In the event of default by WGHI, F.O.C. agrees to provide ten (10) days written notice of default to WGHI on no more than two (2) separate occasions during the term of this Agreement. After the expiration of either ten (10) day written notice, F.O.C. shall be entitled to proceed as hereinabove set forth. Each party shall notify the other party by certified mail of any change of address or change of the person designated herein to receive notices to be provided pursuant to this Agreement. Once a party has received notice of a change of address or designated person, that party shall send all future notices to be provided in this Agreement to that address and designated person. IN WITNESS WHEREOF, the parties have duly executed this Agreement on the dates set forth below. DATED: DATED: MORTGAGE QUALITY MANAGEMENT, WESTMARK GROUP HOLDINGS, INC. INC., dba FOSTER OUSLEY CONLEY By: By: Its: Its: 5 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF CONTRA COSTA MORTGAGE QUALITY ) Case No.: MANAGEMENT, INC., dba ) FOSTER OUSLEY CONLEY, ) ATTORNEY'S DECLARATION IN ) SUPPORT OF CONFESSION OF Plaintiff, ) JUDGMENT STATEMENT ) vs. ) [CCP 1132(b)] ) WESTMARK GROUP HOLDINGS, ) INC., ) ) Defendant. ) ) __________________________) I, Harry C. Coolidge, declare as follows: 1. I am an attorney at law, licensed to practice in the courts of the State of California. I am outside counsel for WESTMARK GROUP HOLDINGS, INC. ("WGHI"), the party confessing judgment in the above-entitled action. I have personal knowledge of the facts set forth in this Declaration, and I could and would testify competently to these facts if called as a witness. 2. I have examined the Judgment attached hereto as Exhibit "A," and I have advised WGHI with respect to the waiver of rights and defenses under the confession of judgment procedure, California Code of Civil Procedure Section 1132 ET SEQ. I have advised WGHI to utilize the confession of judgment procedure in this matter. 1 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. DATED:__________ _______________________ Harry C. Coolidge 2 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF CONTRA COSTA MORTGAGE QUALITY ) Case No.: MANAGEMENT, INC., dba ) FOSTER OUSLEY CONLEY, ) CONFESSION OF JUDGMENT ) STATEMENT Plaintiff, ) [CCP 1133] ) vs. ) ) WESTMARK GROUP HOLDINGS, ) INC., ) ) Defendant. ) ) _______________________________) WESTMARK GROUP HOLDINGS, INC. ("WGHI"), a Colorado corporation, hereby confesses judgment in the above-entitled action in favor of MORTGAGE QUALITY MANAGEMENT, INC., dba FOSTER OUSLEY CONLEY, ("F.O.C."), a California corporation in the principal amount of $19,821, plus costs, and interest on said principal amount at ten percent (10%) per annum from the date of this Confession of Judgment Statement to the date of entry of judgment herein, less any amounts received by F.O.C. pursuant to that certain Settlement Agreement and Mutual Release of all Claims dated ,______ 1996, and authorizes entry of judgment against it in that total amount. This confession of judgment is for a debt justly due that arises out of a contractual relationship between Plaintiff and Defendant wherein and whereby Plaintiff provided the services to Defendant. WGHI owes F.O.C. the sum of $19,821 for such services. By the 1 terms of a settlement agreement between WGHI and F.O.C. dated the day_____ of March, 1996, WGHI agreed that, if it defaulted on its obligations thereunder, F.O.C. could obtain judgment against it pursuant to this Confession of Judgment Statement and the procedures of California Code of Civil Procedures Section 1132 ET SEQ. DATED: WGHI GROUP HOLDINGS, INC. By: Norman Birmingham, President VERIFICATION I, Norman Birmingham, am the President of WESTMARK GROUP HOLDINGS, INC., ("WGHI") Defendant in the above-entitled action, and I make this Verification on WGHI's behalf. I have read the foregoing CONFESSION OF JUDGMENT STATEMENT and know its contents. The CONFESSION OF JUDGMENT STATEMENT is true of my own knowledge. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Dated: Norman Birmingham 2 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF CONTRA COSTA MORTGAGE QUALITY ) Case No.: MANAGEMENT, INC., dba ) FOSTER OUSLEY CONLEY, ) JUDGMENT ) [CCP 1134] Plaintiff, ) ) vs. ) ) WESTMARK GROUP HOLDINGS, ) INC., ) ) Defendant. ) ) ___________________________) Pursuant to the Confession of Judgment Statement on file herein, the above-entitled court ordered the following judgment to be entered in the above-entitled action: IT IS ADJUDGED that Plaintiff MORTGAGE QUALITY MANAGEMENT, INC., dba FOSTER OUSLEY CONLEY recover from Defendant WESTMARK GROUP HOLDINGS, INC., the following: 1. Principal in the amount of $19,821 less any amounts recovered by WGHI pursuant to that certain Settlement Agreement and Mutual Release of All Claims dated ________________ , 1996. 2. Interest from __________, 199_, to date at ten percent (10%) per annum in the amount of ____________ ; and 3. Costs in the amount of __________. 4. Reasonable attorney's fees in the sum of __________. Dated: Judge of the Superior Court 1