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SETTLEMENT AGREEMENT [WILSHIRE/CCL]
1. PARTIES
The parties to this Settlement Agreement consist of the Claimants and the
Released Parties as defined in Sections 1.1 and 1.2 below, and are
collectively referred to as the "Settling Parties."
1.1 CLAIMANTS
"Claimants" include all of the following:
1.1.1 TRUSTS AND TRUSTEES
The trusts identified on attached Exhibit A and the trustees
thereof, acting on behalf of said trusts and for the benefit
of the beneficiaries and/or participants of said trusts, said
trusts having loaned and/or invested funds through Capital
Consultants, Inc., or its successor Capital Consultants, LLC
(collectively known as "CCL").
1.1.2 OTHER INVESTORS
The persons which are not trusts and are not regulated by the
Employees Retirement Income Security Act of 1974, as amended
("ERISA"), who loaned and/or invested funds through CCL and
are listed on attached Exhibit B.
1.1.3 RECEIVER
Thomas Lennon ("Receiver"), as the receiver of Capital
Consultants, LLC, and every entity that it controls, appointed
by the Honorable Garr M. King in SECURITIES AND EXCHANGE
COMMISSION V. CAPITAL CONSULTANTS, LLC, ET AL., United States
District Court for the District of Oregon, Case No. CV
00-1290-KI, and in CHAO V. CAPITAL CONSULTANTS, LLC, ET AL.,
United States District Court for the District of Oregon, Case
No. CV 00-1291-KI (collectively, the "Receivership Actions").
The Receiver is also the court appointed representative of the
persons listed on Exhibit C for purposes of the settlement
provided for in this Settlement Agreement and, as Receiver, is
the holder of all claims CCL may have had at the commencement
of the Receivership or that may have accrued to CCL since that
time, including any claims on behalf of the CCL 401(k) Plan.
The Receiver executes this Settlement Agreement on behalf of
the Receivership Estates (as defined in Section 2.3) and as
the court appointed representative of all persons listed on
Exhibit C.
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1.1.4 Claimants shall also include any and all predecessors,
successors, assignors and assigns of each and every person in
Section 1.1. Claimants that are signatories to this Settlement
Agreement are set forth on Exhibit E.
1.1.5 Neither Jeffrey L. Grayson, Barclay Grayson nor Blake Grayson
shall be considered a Claimant under any of the provisions of
this Settlement Agreement.
1.2 RELEASED PARTIES
Subject to the last sentence of Section 3.1, the "Released Parties"
shall mean and include all of the following:
1.2.1 Capital Wilshire Holdings, Inc. (sometimes referred to in the
litigation as "Old WCC");
1.2.2 The present and former employees, officers and directors of
CCL, CCI Holding Company, CWH Mergeco Corp. and CWH Mergeco
Sub Corp., provided however, that neither Jeffrey L. Grayson
(in any capacity) nor Barclay Grayson (in any capacity) are
Released Parties. Further, neither CCL, CCI Holding Company,
CWH Mergeco Corp. nor CWH Mergeco Sub Corp. (the "CCL Group"),
in any capacity, are Released Parties;
1.2.3 Andrew Wiederhorn, Tiffany Wiederhorn, Ted Wiederhorn,
Lawrence Mendelsohn, and Joyce Mendelsohn and their children,
siblings (including half-blood siblings), parents and in-laws
(collectively "Wiederhorn/Mendelsohn Families");
1.2.4 (i) Ivy Capital Partners LP and companies or entities that
some or all of the Wiederhorn/Mendelsohn Families have
invested in, loaned money to, or funded, which are or were
majority owned by or for the benefit of some or all of the
Wiederhorn/Mendelsohn Families (companies or entities referred
to in this Section 1.2.4(i) are collectively the
"Wiederhorn/Mendelsohn Family Companies"); and (ii) companies
or entities that some or all of the Wiederhorn/Mendelsohn
Family Companies have invested in, loaned money to, or funded,
which are or were majority owned by or for the benefit of some
or all of the Wiederhorn/Mendelsohn Families and/or
Wiederhorn/Mendelsohn Family Companies;
1.2.5 THIS SECTION INTENTIONALLY LEFT BLANK;
1.2.6 Wilshire Financial Services Group Inc., and the following
direct and indirect subsidiaries or affiliates thereof in
which Wilshire Financial Services Group Inc. owns or owned a
controlling interest (collectively known as "WFSG"): Wilshire
Credit Corporation, formerly known as WCC, Inc. (hereinafter
referred to as "WCC," and sometimes referred to in the
litigation as "New WCC"); Wilshire Funding Corporation; WMFC
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1997-1 Inc.; WMFC 1997-2 Inc.; WMFC 1997-3 Properties Inc.;
WMFC 1997-3 Development Inc.; WMFC 1997-4 Inc.; Wilshire
Mortgage Acquisition Corporation; Wilshire Mortgage Funding
Company IV, Inc.; WMFC, L.L.C.; Wilshire Mortgage Funding
Company V, Inc.; Wilshire Mortgage Funding Company VI, Inc.;
Wilshire Mortgage Funding Company VII, Inc.; GT MOHO Sales
Inc.; Wilshire Ventures Corporation; Life Capital, Inc.;
Wilshire FTL Inc.; Wilshire Ventures PFE Inc.; Wilshire Real
Estate Investment Corporation; WREP 1998-1 Member Inc.;
Wilshire Financing Company, L.L.C. (formerly Wilshire Funding
Company, L.L.C.); Wilshire Management Leasing Corporation;
Wilshire Acquisitions Corporation; First Bank of Beverly
Hills, FSB; FBBH Investment Services Corporation; Girard
Financial Corporation; George Elkins Mortgage Banking L.P.;
Wilshire Realty Services Corporation; Wilshire Insurance and
Risk Management Corporation; Wilshire Securities Corporation;
Wilshire Servicing Corporation; Wilshire Servicing FBO SBRC
Corporation; Wilshire Credit Development Inc.; Wilshire
Consumer Receivables Funding Company, LLC; Wilshire Consumer
Obligation Structured Trust 1995-A; Wilshire Mortgage Funding
Company, LLC; Wilshire Asset-Backed Fixed Rate Trust 1995-MFI;
Wilshire Asset-Backed Adjustable Rate Trust 1995-MA1; Wilshire
Manufactured Housing Funding Company, LLC; Wilshire
Manufactured Housing Trust 1995-A; Wilshire Mortgage Funding
Company II, LLC; Wilshire Liquidating Trust 1996-1; Wilshire
Mortgage Funding Company III, LLC; Wilshire Trust Deed
Corporation; WCICC Inc.; WFICC Inc.; Vicksburg Properties
Inc.; Wilshire Financial Services Group Europe Inc.; Wilshire
Financial Services Group UK Limited; Wilshire Servicing
Company UK Limited; Wilshire Funding Company UK Limited; ACFC
Corporate Finance Limited; ACFC Home Loans Limited; Wilshire
Funding Company UK (No. 2) Limited; P.S.P.C. No. 1 Limited;
WFSG Ireland Limited; Wilshire Servicing Company Ireland
Limited; Wilshire Funding Company Ireland Limited; Wilshire
Acquisitions Company Ireland Limited; WFSG (Channel Islands)
Limited; Wilshire Servicing Compagnie S.A.; Unifina; WFSG
Mexico, S de R.L. de C.V.; WFSG Italia SRL; Fonciere Unifina
E.F.; Plurigestation SA; Societe Des Immeubles Industriels
Sindus; Societe Immobiliere De Paris; Chartrinvest; F.S.B.C.
Investissement; SNC La Neuvillette; Fonciere ST Lazare Sarl;
SCI Courcelles 178; Unifinvest I; Unifinvest II; Unifinvest
III; Patricentre; Patriloire; Bapeaume Les Rouen; SCI Du 33 BD
St Antoine; SNC Du 3 Avenue Du Coq; Voltaire 145 Sarl; Sindus
SA; Sip Sarl; and SCI Chartiovest. The intent of this
provision is to include all majority owned or controlled
affiliates of the persons listed herein, and if one is
inadvertently left off this list, then the Settling Parties
agree to amend the list to include such person;
1.2.7 Fog Cutter Capital Group Inc., formerly known as Wilshire Real
Estate Investment Trust, Inc. ("WREIT"), and the following
direct and indirect subsidiaries thereof (collectively "Fog
Cutter"): Wilshire Real Estate
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Partnership, L.P; WREP 1998-1, LLC; Wilshire REIT 1998-1,
Inc.; WREP Islands Limited; WREP Islands #1 Limited; and
WREP Islands #2 Limited. The intent of this provision is to
include all majority owned or controlled affiliates of the
persons listed herein, and if one is inadvertently left off
this list, then the Settling Parties agree to amend the list
to include such person;
1.2.8 Specialty Finance Investors LLC;
1.2.9 Mark Peterman (in all capacities other than as a former
partner of Stoel Rives LLP);
1.2.10 Ken Kepp;
1.2.11 Linda Lucas;
1.2.12 Dean Kirkland;
1.2.13 THIS SECTION INTENTIONALLY LEFT BLANK; and
1.2.14 Released Parties shall also include any and all of the
present and former: officers and directors, counsel (except
as listed on Exhibit F), accountants (except as listed on
Exhibit F), insurers, sureties (except as listed on Exhibit
F), employees, beneficiaries, predecessors, successors,
assignors, assigns, divisions and merged or acquired
companies and operations, owners, managers, members,
partners, partnerships, sole proprietorships, trusts,
estates, receivers (except the Receiver as defined in
Section 1.1.3), conservators, guardians, spouses, children,
parents and siblings, family trusts and children's trusts and
their beneficiaries and trustees, and each of the respective
successors, predecessors, assigns, heirs, administrators,
executors, and personal representatives of the foregoing, of
each and every person set forth in this Section 1.2.
1.2.15 Except as specified in 1.2.9, all Released Parties are
released in all capacities.
2. RECITALS
2.1 CAPITAL CONSULTANTS
Claimants other than the Receiver (in his capacity as receiver) are
or were clients of CCL, an Oregon investment advisory company. The
principals of CCL were Jeffrey L. Grayson, Barclay Grayson and Blake
Grayson (collectively, "Graysons").
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2.2 CCL LOANS
CCL loaned substantial sums of money it obtained from Claimants to
Capital Wilshire Holdings, Inc. (I.E., Old WCC), among others
(hereinafter sometimes referred to as the "Collateralized Note
Program"). Claimants have contended that damages as a result of
those loans are the responsibility of the Released Parties and
others, as more specifically alleged in Claimants' Actions or the
Receivership Actions. The Released Parties individually and
separately deny those contentions and allegations.
2.3 RECEIVERSHIP
On September 21, 2000, the Receiver took control of the assets of
CCL and all entities under CCL's control under the terms of a court
order entered in the Receivership Actions. The CCL assets under the
control of the Receiver include any claims CCL, or any entities
under CCL's control, may have now or may have had (including,
without limitation, any claims against the Released Parties). These
assets, plus any rights and powers (excluding any rights or powers
related to the persons listed on Exhibit C) the Receiver may have by
virtue of his status as a receiver, are referred to in this
Settlement Agreement as the "Receivership Estates."
2.4 CLAIMANTS' ACTIONS
Numerous actions (or threatened actions) by Claimants ("Claimants'
Actions") are pending against a variety of defendants, including
many of the Released Parties, making claims for equitable relief
and/or the recovery of losses allegedly suffered as the result of
misconduct by CCL and other defendants in those actions. Claimants'
Actions include:
<Table>
AFTCS-Preferred Endowment etc.,
et al. v. Grayson CV 01 1429 HA (U.S.D.C. Ore.)
Chilia, et al. v. Stoel Rives LLP CV 01 1315 KI (U.S.D.C. Ore.)
Hazzard, et al. v. Stoel Rives LLP, et al. 0108-08975 (Multnomah County)
Laborers International, etc. et al. v.
Stoel Rives LLP, et al. 0108-08971 (Multnomah County)
Sheet Metal Workers, etc. v.
Stoel Rives LLP CV 01 1314 JO (U.S.D.C. Ore.)
Miller v. Clinton CV 00 01317 HA (U.S.D.C. Ore.)
Hazzard v. Capital Consultants CV 00 01338 HU (U.S.D.C. Ore.)
Schultz v. Kirkland CV 00 01377 HA (U.S.D.C. Ore.)
Eidem v. Local 290 Plumbers, Steam fitters CV 00 01446 HA (U.S.D.C. Ore.)
Chilia v. Capital Consultants CV 00 01633 HU (U.S.D.C. Ore.)
Chilia v. O'Melveny CV 01 1370 AS (U.S.D.C. Ore)
Carpenters Health v. Capital Consultants CV 00 01660 AS (U.S.D.C. Ore.)
American Funeral v. Capital Consultants CV 01 00609 HU (U.S.D.C. Ore.)
Lennon v. Moss Adams CV 01 00449 HA (U.S.D.C. Ore.)
Martinez v. Segal Advisors, Inc. CV 01 5723 (U.S.D.C. C.D. Cal)
Sheet Metal Workers, etc. v. O'Melveny &
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Myers, et al. CV 01 1369 JE (U.S.D.C. Ore.)
Hazzard, et al. v. Moss Adams, et al. 0103-03372 (Multnomah County)
McPherson v. Eighth District CV 00 01445 HA (U.S.D.C. Ore.)
Madole v. Capital Consultants CV 00 01660 HU (U.S.D.C. Ore.)
Olson v. Larson CV 01 00480 BR (U.S.D.C. Ore.)
Hazzard v. Moss Adams CV 01 00603 AS (U.S.D.C. Ore.)
Piet, et al v. Lontine CV 01 WM 0698 (U.S.D.C. Colo.)
Madole, et al. v. Deloitte & Touche, LLP 0202-01882 (Multnomah County)
</Table>
Claimants' Actions also include the Receivership Actions, any action
by 520 Yamhill LLC, and any other past, present or future action by
any or all of Claimants, but only to the extent they seek recovery
on the basis of the transactions, occurrences, or any series of
transactions or occurrences related to any of the above listed
actions, or which arise from matters raised, or which could have
been raised, in any of the above listed actions.
2.5 SPECIAL RECEIVER CLAIMS
Special Receiver Claims are actions or claims held by the Receiver
only by virtue of his status as a receiver, including but not
limited to such claims or actions as preference, fraudulent
conveyance, turnover, violation of stay or equitable subordination,
and for which none of the Released Parties are or would be: (a)
jointly or severally liable; or (b) subject to claims for indemnity,
contribution, or any other claims concerning any of the Released
Claims.
2.6 DENIAL OF CLAIMS
The Released Parties, and each of them, deny any wrongdoing or other
misconduct and deny that Claimants have any right to recover any
portion of their losses from the Released Parties. This Settlement
Agreement and the payments made hereunder are made in compromise of
disputed claims and are not admissions of any liability of any kind.
2.7 MEDIATION
The Released Parties and Claimants have voluntarily participated in
a court-sponsored mediation process presided over by the Honorable
Edward Leavy. As a result of that mediation, the Released Parties
and Claimants have reached the agreement set forth in this
Settlement Agreement.
3. RELEASES AND COVENANT NOT TO SUE
3.1 RELEASED PARTIES
The Released Parties are as defined in Section 1.2 above.
Notwithstanding anything else in this Settlement Agreement, however,
the Released Parties do not include those persons expressly
identified in Exhibit F.
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3.2 RELEASE AND COVENANT NOT TO SUE
Effective at the time prescribed in Section 3.7, Claimants, and each
of them, hereby release and forever discharge the Released Parties,
and each of them, from any and all claims, losses, damages,
attorneys' fees and costs, disgorgement of fees, fines and
penalties, whether accrued or not, whether already acquired or
acquired in the future, whether known or unknown, arising out of or
in any way related to: (1) CCL; or (2) any matters raised, or which
could have been raised, in Claimants' Actions ("Released Claims").
This release is intended to be as broad and comprehensive as
possible, and is intended to include the release of claims or rights
otherwise described above that are obtained by assignment or
operation of law, as well as the release of unknown and unsuspected
claims, including any claim of fraud or misrepresentation in the
inducement of this Settlement Agreement. It also includes a release
of all claims by Claimants against Released Parties for indemnity
and contribution, regardless of whether those claims are asserted
under other legal theories, that in any way arise out of
transactions, occurrences, or any series of transactions or
occurrences related to Claimants' Actions, or which arise from
matters raised, or which could have been raised, in Claimants'
Actions. The release further includes a release of all claims by
Claimants against WFSG for any liabilities it assumed from or on
behalf of Old WCC, if any. This release is not intended to include
the release of any rights or duties arising out of this Settlement
Agreement, including but not limited to the express Warranties and
Covenants set forth herein. Claimants, and each of them, further
covenant and agree not to file any claim, action or proceeding
against any of the Released Parties based on the Released Claims.
Nothing in this Settlement Agreement releases any person other than
the Released Parties. The Settlement Amount specified in Section 4.3
of this Settlement Agreement is less than the amount of the loss
allegedly suffered by Claimants.
3.3 RELEASE OF CLAIMANTS BY THE EXHIBIT G PARTIES
Effective at the time prescribed in Section 3.7, and except as
otherwise expressly provided herein, the Released Parties that are
signatories to this Settlement Agreement as set forth in Exhibit G
(the "Exhibit G Parties"), and each of them, on behalf of
themselves, their predecessors, successors and assigns, hereby
release and forever discharge Claimants and their counsel, and each
of them, from any and all claims, losses, damages, attorneys' fees
and costs, disgorgement of fees, fines and penalties, whether
accrued or not, whether already acquired or acquired in the future,
whether known or unknown, arising out of or in any way related to
CCL or Claimants' Actions. This release is intended to be as broad
and comprehensive as possible, and is intended to include the
release of unknown and unsuspected claims, including any claim of
fraud or misrepresentation in the inducement of this Settlement
Agreement. Except as otherwise provided in this Settlement
Agreement, it also includes release of all claims by the Exhibit G
Parties against Claimants for indemnity and contribution, regardless
of whether those claims are asserted under other legal theories,
that in any way arise out of transactions, occurrences, or any
series of transactions or occurrences related to
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Claimants' Actions, or which arise from matters raised, or which
could have been raised, in Claimants' Actions. This release is not
intended to include the release of any rights or duties arising out
of this Settlement Agreement, including but not limited to the
express Warranties and Covenants set forth herein. The Exhibit G
Parties further covenant and agree not to file any action or
proceedings against Claimants or their counsel based on the matters
released by the Exhibit G Parties in this Settlement Agreement.
Except as otherwise provided in this Settlement Agreement, this
release includes the relinquishment and abandonment by the Exhibit G
Parties of any claim, lien and/or right to seek payment, to the
extent that such claim, lien or payment right relates in any way to
CCL, from the Receivership Estates or from any asset of any kind in
the possession or control of the Receivership Estates or as to which
the Receiver judicially establishes that he has a right to recover.
The purpose of the preceding sentence is to cause the Exhibit G
Parties to receive nothing of value for any reason from the
Receivership Estates or assets in the possession of, or controlled
or obtained by, the Receivership Estates relating to CCL, the
Graysons or any claims based thereon for which a proof of claim has
been filed with the Receiver. The foregoing release by the Exhibit G
Parties does not release any Non-Settling CCL Clients (as defined
in Section 9.7).
Notwithstanding anything else in this Settlement Agreement but
subject to the following paragraph, WFSG does not release any person
from any agreements that arise out of, relate to or are based upon
(1) any loan obligations or subordination agreements serviced by
WFSG; (2) any loan obligations or subordination agreements owed to
or owned by WFSG which came into existence on or after June 10,
1999; or (3) any loan obligations or subordination agreements
currently owed to or owned by WFSG which came into existence prior
to June 10, 1999, except to the extent the Receiver seeks to set
aside such loan obligations or subordination agreements on the
grounds of fraudulent conveyance or preference and such fraudulent
conveyance or preference is judicially established, but only to the
extent of the value of such loan obligation or subordination
agreement owed to or owned by WFSG. In other words, in no event
shall the Receiver be entitled to recover any damages, monetary or
otherwise, from WFSG with respect to such fraudulent conveyance or
preference claims. WFSG and Receiver hereby agree that for any
dispute arising between them concerning such agreements, such
dispute shall be promptly submitted for determination to the United
States District Court for the District of Oregon, which hereby
retains jurisdiction for this purpose.
With respect to Wilshire Funding Corporation's lien on the property
known as the Village Square Shopping Center located at 5511 Main
Street, Springfield, Oregon, the Receiver and Wilshire Funding
Corporation covenant that upon the closing of the sale of the
property by the Receiver, the Receiver shall receive 60% and
Wilshire Funding Corporation shall receive 40% (but such 40% shall
not exceed the amount secured by Wilshire Funding Corporation's
lien) of the proceeds of that sale, net of the Receiver's and his
professionals' reasonable costs and hourly fees directly
attributable to the sale and any court action necessary to
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obtain the property and conduct the sale. Wilshire Funding
Corporation agrees to provide reasonable cooperation to the Receiver
in any such sale or court action. Upon such payment, Wilshire
Funding Corporation will release its lien on said property.
Notwithstanding the foregoing release, Dean Kirkland retains his
claim to his interest in the CCL 401(k) plan pursuant to a separate
agreement with the Receiver.
Blake and Erika Grayson, LLC retains certain elements of its proof
of claim filed against the Receivership Estates pursuant to a
separate agreement with the Receiver.
3.4 RELEASE OF CERTAIN NON-SETTLING PARTIES
The Exhibit G Parties, and each of them, shall enter into a release
in substantially the same form as Exhibit I releasing and forever
discharging any person not a party to this Settlement Agreement
(individually, a "Non-Settling Party" and collectively,
"Non-Settling Parties") with whom Claimants, or any of them, have
entered or subsequently enter into a settlement or compromise for
Claimants' claims that relate in any way to Released Parties or
Released Claims, provided however, that such release by the Exhibit
G Parties of any Non-Settling Party is conditioned upon a written
express reciprocal release by such Non-Settling Party in favor of
the Released Parties substantially in the form set forth in Exhibit
I of claims arising out of or based upon any of Released Claims. As
used in this Settlement Agreement, Non-Settling Parties shall
include, without limitation, Non-Settling CCL Clients (as defined
below).
Notwithstanding the foregoing, the Exhibit G Parties identified in
Sections 1.2.1, 1.2.3, 1.2.4, and 1.2.6 through 1.2.10 of this
Settlement Agreement do not release, and are not obligated to
release, Deloitte & Touche, LLP (or any of its present or former
partners) or Arthur Andersen LLP (or any of its present or former
partners) for any malpractice or other claims based on such
accountants' tax advice or preparation of tax returns for any of the
persons identified in Sections 1.2.1, 1.2.3, 1.2.4, or 1.2.6 through
1.2.10 or any other claim arising out of any government
investigation or proceeding (including any criminal, tax or United
States Department of Labor ("DOL") proceeding). Further, neither
WFSG, WCC, Fog Cutter, nor the directors and officers of WCC, WFSG,
or Fog Cutter, release, nor are they obligated to release, Deloitte
& Touche, LLP (or any of its partners) or Arthur Andersen LLP (or
any of its partners) for any malpractice or other claims based on
such accountants' professional services (which professional services
are unrelated to the claims raised in Claimants' Actions), including
the provision of tax advice, preparation of tax returns, provision
of financial structuring services, provision of consulting services
(including legal services), or auditing of the financial statements
of any of the persons listed in Sections 1.2.1, 1.2.3, 1.2.4, 1.2.6
or 1.2.7, or any other claim arising out of any governmental
investigation or proceeding (including any
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criminal, tax or DOL proceeding). Any bar order(s) obtained pursuant
to any settlements with any other persons shall not bar any of the
claims reserved in this paragraph against Deloitte & Touche, LLP or
Arthur Andersen LLP or any of their present or former partners.
3.5 RELEASES AMONG CERTAIN RELEASED PARTIES
3.5.1 Releases By Exhibit G Parties of Certain Released Parties
(a) Effective at the time prescribed in Section 3.7, and
except as otherwise expressly provided herein, Linda Lucas and
Dean Kirkland, and each of them, hereby release and forever
discharge each other and all other Released Parties, their
predecessors, successors and assigns, counsel, and each of
them, from any and all claims, losses, damages, attorneys'
fees and costs, disgorgement of fees, fines and penalties,
whether accrued or not, whether already acquired or acquired
in the future, whether known or unknown, arising out of or in
any way related to CCL or Claimants' Actions. This release is
intended to be as broad and comprehensive as possible, and is
intended to include the release of unknown and unsuspected
claims, including any claim of fraud or misrepresentation in
the inducement of this Settlement Agreement. Except as
otherwise provided in this Settlement Agreement, it also
includes release of all claims by Linda Lucas and Dean
Kirkland, and each of them, against each other and all other
Released Parties for indemnity and contribution, regardless of
whether those claims are asserted under other legal theories,
that in any way arise out of transactions, occurrences, or any
series of transactions or occurrences related to Claimants'
Actions, or which arise from matters raised, or which could
have been raised, in Claimants' Actions. This release is not
intended to include the release of any rights or duties
arising out of this Settlement Agreement, including but not
limited to the express Warranties and Covenants set forth
herein. Linda Lucas and Dean Kirkland, and each of them,
further covenant and agree not to file any action or
proceedings against each other or any other Released Parties
or their counsel, or any of them, based on the matters
released by Linda Lucas and Dean Kirkland, and each of them,
in this Settlement Agreement. Notwithstanding the foregoing,
this release does not extend to AISLIC.
(b) Effective at the time prescribed in Section 3.7, and
except as otherwise expressly provided herein, the Exhibit G
Parties, their predecessors, successors and assigns, counsel,
and each of them, except for Linda Lucas and Dean Kirkland,
hereby release and forever discharge Linda Lucas and Dean
Kirkland, and each of them, from any and all claims, losses,
damages, attorneys' fees and costs, disgorgement of fees,
fines and penalties, whether accrued or not, whether already
acquired or acquired in the future, whether known or unknown,
arising out of or in any way related to CCL or Claimants'
Actions. This release is intended to be
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as broad and comprehensive as possible, and is intended to
include the release of unknown and unsuspected claims,
including any claim of fraud or misrepresentation in the
inducement of this Settlement Agreement. Except as otherwise
provided in this Settlement Agreement, it also includes
release of all claims by such Exhibit G Parties, and each of
them, against Linda Lucas and Dean Kirkland, and each of them,
for indemnity and contribution, regardless of whether those
claims are asserted under other legal theories, that in any
way arise out of transactions, occurrences, or any series of
transactions or occurrences related to Claimants' Actions, or
which arise from matters raised, or which could have been
raised, in Claimants' Actions. This release is not intended to
include the release of any rights or duties arising out of
this Settlement Agreement, including but not limited to the
express Warranties and Covenants set forth herein. Such
Exhibit G Parties, and each of them, further covenant and
agree not to file any action or proceedings against Linda
Lucas or Dean Kirkland or their counsel, or any of them,
based on the matters released by such Exhibit G Parties in
this Settlement Agreement.
3.5.2 Releases Pertaining to Insurers of Certain Released Parties
The following releases become effective at the time prescribed
in Section 3.7 of this Settlement Agreement:
(a) American International Specialty Lines Insurance Company
(AISLIC) issued Investment Management Insurance Policy numbers
912-45-26, 278-38-72, 244-18-45 and 243-79-12 (collectively,
"the CCL Policies") to CCL. AISLIC has paid, has agreed to pay
and will pay, through the date of the establishment of the
Defense Fund under Section 8.4, defense costs and expenses
incurred by or on behalf of Linda Lucas and Dean Kirkland,
former employees of CCL, that are named as defendants in
certain of the actions identified in Section 2.4 above. AISLIC
has also agreed to contribute to the Payment provided for in
Section 4.1. In consideration of the defense costs and
expenses paid by AISLIC and agreed to be paid by AISLIC and
the contribution by AISLIC to the Payment under Section 4.1,
Jeffrey L. Grayson , Barclay Grayson, Blake Grayson, Linda
Lucas and Dean Kirkland and any other insured under the CCL
policies release AISLIC from any further obligations under the
CCL Policies, including without limitation, any obligation to
pay defense costs and expenses and any damages, judgments or
settlements that may be incurred by any insured under the CCL
Policies. A portion of the AISLIC contribution to the Payment
is the return of premium paid for the CCL Policies. Upon the
Payment, the CCL Policies shall be deemed to be rescinded and
the Receiver shall have obtained the Rescission Order as
provided in Section 5.15 that the CCL Policies are rescinded;
provided however, that in the event this Settlement Agreement
is terminated for any of the reasons set forth under Section
15.14, the Receiver, AISLIC, Linda
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Lucas and Dean Kirkland agree to cooperate to cause such
Rescission Order to be vacated.
(b) AISLIC issued its Financial Institution Professional
Liability Insurance Policy No. 278-78-43 ("FI Policy") to WFSG
which provided, subject to its terms and conditions, certain
coverage to WFSG and its directors, officers and employees.
AISLIC has received notice under the FI Policy of the
Claimants Actions from WFSG and from Andrew Wiederhorn,
Tiffany Wiederhorn, Lawrence Mendelsohn and Joyce Mendelsohn
(the "AISLIC Insured Parties"). AISLIC has denied coverage
under the FI Policy for the Claimants' Actions and has not
paid any of the defense costs or fees incurred by or on behalf
of any of the AISLIC Insured Parties.
WFSG on behalf of itself and its parents, affiliates,
subsidiaries , directors, officers and employees, successors
and assigns, and, Andrew Wiederhorn, Tiffany Wiederhorn,
Lawrence Mendelsohn and Joyce Mendelsohn, each on their own
behalf, release AISLIC with respect to the FI Policy from:
(i) any claims seeking indemnity for costs incurred as
described in the Attorneys' Fees Cap Agreement, a
separate document, to defend against claims made by any
of Claimants in any of the Claimants' Actions expressly
listed in Section 2.4 in excess of the AIG Entities
Defense Payment and the Settlement Finalization Fees, as
defined and set forth in that separate document;
(ii) any claims seeking reimbursement of any monies paid
by any of the AISLIC Insured Parties in settlement of
the Claimants' Actions as currently pleaded and
expressly listed in Section 2.4; and
(iii) any claims based upon AISLIC's handling of any
claim for coverage through Effective Date for any of the
claims asserted in the Claimants' Actions as currently
pleaded and expressly listed in Section 2.4 including,
without limitation, any claims for bad faith.
In consideration of such release, AISLIC agrees to release the
AISLIC Insured Parties with respect to the FI Policy from:
(i) any claims based upon, arising out of or resulting
from the payment of any monies by AISLIC to or on behalf
of any of the AISLIC Insured Parties under this
Settlement Agreement;
(ii) any claims based upon, arising out of or resulting
from the payment of any monies by AISLIC to or on behalf
of any of the AISLIC Insured Parties in defense of any
of the Claimants' Actions as currently pleaded and
expressly listed in Section 2.4,
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including any of the AIG Entities Defense Payment or any
of the Settlement Finalization Fees; and
(iii) any claims arising out of the tender of any of the
Claimants' Actions as currently pleaded and expressly
listed in Section 2.4 by any of the AISLIC Insured
Parties under the FI Policy, including any duty to
cooperate.
AISLIC and the AISLIC Insured Parties agree to a mutual
reservation of rights by AISLIC and the AISLIC Insured Parties
with respect to the amount or applicability of coverage that
may apply with respect to matters not otherwise released
herein. Nothing herein is intended to modify the terms and
conditions of the FI Policy.
(c) National Union Fire Insurance Company of Pittsburgh Pa.
("NUFIC") issued its Directors, Officers and Corporate
Liability Policy, number 484-54-82, (" NUFIC WFSG D&O Policy")
including a $10 million primary limit of liability ("NUFIC
WFSG Primary D&O Coverage") and, pursuant to endorsement 18, a
second excess $10 million limit of liability excess of the
underlying $20 million limit of liability (NUFIC WFSG Second
Excess D&O Coverage) which provided, pursuant to its terms and
conditions, certain coverage to WFSG and its directors and
officers. NUFIC received notice of the Claimants' Actions from
WFSG and from Andrew Wiederhorn, Tiffany Wiederhorn, Lawrence
Mendelsohn, Joyce Mendelsohn, Mark Peterman and Ken Kepp.
NUFIC has paid certain of the defense expenses incurred in
connection with the Claimants' Actions and has agreed to
contribute to the Payment provided for in Section 4.1. WFSG,
Andrew Wiederman, Tiffany Wiederhorn, Lawrence Mendelsohn,
Joyce Mendelsohn, Mark Peterman and Ken Kepp agree and
acknowledge that NUFIC's contribution to the Payment provided
for in Section 4.1 will result in an exhaustion of the $10
million limit of liability of the NUFIC WFSG Primary Coverage.
In consideration of the defense costs paid by NUFIC and the
contribution by NUFIC to the Payment under 4.1 and in
acknowledgement of the exhaustion of the limit of liability of
the NUFIC WFSG Primary Coverage, WFSG on its own behalf and on
behalf of its parents, subsidiaries, affiliates, directors,
officers and employees, successors and assigns, and Andrew
Wiederhorn, Tiffany Wiederhorn, Lawrence Mendelsohn, Joyce
Mendelsohn, Mark Peterman and Ken Kepp (the "NUFIC Insured
Parties") each on their own behalf agree:
(i) except for the AIG Entities Defense Payment and the
Settlement Finalization Fees as described in the
Attorneys' Fees Cap Agreement, a separate document, to
release NUFIC from any further obligation under the
NUFIC WFSG Primary Coverage, including without
limitation, any obligation to pay defense costs,
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expenses and any damages, judgments or settlements that
may be incurred by any insured under the NUFIC WFSG
Primary Coverage; and
(ii) to release NUFIC with respect to the NUFIC WFSG
Second Excess D&O Coverage from:
(1) any claims seeking reimbursement of any monies
paid by any of the NUFIC Insured Parties as
described in the Attorneys' Fees Cap Agreement, a
separate document, in defense or settlement of the
Claimants' Actions as currently pleaded and
expressly listed in Section 2.4; and
(2) any claims based upon NUFIC's handling of any
claim for coverage through Effective Date for any
of the claims asserted in the Claimants' Actions
as currently pleaded and expressly listed in
Section 2.4 including, without limitation, any
claims for bad faith.
In consideration of such release, NUFIC agrees to release the
NUFIC Insured Parties with respect to the NUFIC WFSG D&O
Policy from:
(i) any claims based upon, arising out of or resulting
from the payment of any monies by NUFIC or on behalf of
any of the NUFIC Insured Parties under this Settlement
Agreement;
(ii) any claims based upon, arising out of or resulting
from the payment of any monies by NUFIC to or on behalf
of any of the NUFIC Insured Parties in defense of any of
the Claimants' Actions as currently pleaded and
expressly listed in Section 2.4, including any of the
AIG Entities Defense Payment or any of the Settlement
Finalization Fees; and
(iii) any claims arising out of the tender of any of the
Claimants' Actions as currently pleaded and expressly
listed in Section 2.4 by any of the NUFIC Insured
Parties under any of the NUFIC WFSG D&O Policy,
including any duty to cooperate.
NUFIC and the NUFIC Insured Parties agree to a mutual
reservation of rights by NUFIC and the NUFIC Insured Parties
with respect to the amount or applicability of coverage that
may apply with respect to matters not otherwise released
herein. Nothing herein is intended to modify the terms and
conditions of any of the NUFIC WFSG D&O Policy.
(d) Lexington Insurance Company ("Lexington") issued its
Directors and Officers and Company Reimbursement Policy number
878-3122 (the "Lexington Policy") to WCC which provided,
subject to its terms and conditions, certain coverage to WCC's
directors and officers. Lexington
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has received notice under the Lexington Policy of the
Claimants' Actions from WCC, WFSG, Andrew Wiederhorn, Tiffany
Wiederhorn, Lawrence Mendelsohn, Joyce Mendelsohn, Mark
Peterman and Ken Kepp (the "Lexington Insured Parties").
Notwithstanding its denial of coverage, and as an
accommodation to its insureds under the Lexington Policy,
Lexington has agreed to contribute to the Payment provided
for in Section 4.1. In consideration of the contribution by
Lexington to the Payment under Section 4.1, Andrew Wiederhorn,
Tiffany Wiederhorn, Lawrence Mendelsohn, Joyce Mendelsohn,
Mark Peterman and Ken Kepp, each on their own behalf, release
Lexington with respect to the Lexington Policy from:
(i) any claims seeking indemnity for costs incurred to
date to defend against claims made by any of Claimants
in any of the Claimants' Actions as expressly listed in
Section 2.4;
(ii) any claims seeking reimbursement of any monies paid
by any of the Lexington Insured Parties in settlement of
the Claimants' Actions as expressly listed in Section
2.4; and
(iii) any claims based upon Lexington's handling of any
claim for coverage through Effective Date for any of the
claims asserted in the Claimants' Actions as expressly
listed in Section 2.4 including, without limitation, any
claims for bad faith.
In consideration of such release, Lexington agrees to release
the Lexington Insured Parties with respect to the Lexington
Policy from:
(i) any claims based upon, arising out of or resulting
from the payment of any monies by Lexington to or on
behalf of any of the Lexington Insured Parties under
this Settlement Agreement;
(ii) any claims based upon, arising out of or resulting
from the payment of any monies by Lexington to date to
or on behalf of any of the Lexington Insured Parties in
defense of any of the Claimants' Actions as expressly
listed in Section 2.4; and
(iii) any claims arising out of the tender of any of the
Claimants' Actions as expressly listed in Section 2.4 by
any of the Lexington Insured Parties under the Lexington
Policy, including any duty to cooperate.
Lexington and the Lexington Insured Parties agree to a mutual
reservation of rights by Lexington and the Lexington Insured
Parties with respect to the amount or applicability of
coverage that may apply with respect to matters not otherwise
released herein. Nothing herein is intended to modify the
terms and conditions of the Lexington Policy.
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(e) Lexington issued its Financial Institution Bond number
889-0221 (the "Lexington Bond") to WFSG, the director or
trustee of the Employee Benefit Plan or Pension Benefit Plan
(Rider #11), WCC, Girard Savings Bank, FSB, First Bank of
Beverly Hills, FSB (Rider # 13A) and the entities listed in
Endorsement #16, which provided, subject to its terms and
conditions, certain coverage to the aforementioned. Lexington
has received notice under the Lexington Bond of certain of the
Claimants' Actions from WFSG, Andrew Wiederhorn and Lawrence
Mendelsohn. Coverage has been denied under the Lexington Bond.
WFSG, on its behalf and on behalf of all insureds under the
Bond (the "Lexington Bonded Parties"), release Lexington with
respect to the Lexington Bond from:
(i) any claims seeking indemnity for costs incurred to
date to defend against claims made by any of Claimants
in any of the Claimants' Actions as expressly listed in
Section 2.4;
(ii) any claims seeking reimbursement of any monies paid
by any of the Lexington Bonded Parties in settlement of
the Claimants' Actions as expressly listed in Section
2.4; and
(iii) any claims based upon Lexington's handling of any
claim for coverage through Effective Date for any of the
claims asserted in the Claimants' Actions as expressly
listed in Section 2.4 including, without limitation, any
claims for bad faith.
In consideration of such release, Lexington agrees to release
the Lexington Bonded Parties with respect to the Lexington
Bond from:
(i) any claims based upon, arising out of or resulting
from the payment of any monies by Lexington to or on
behalf of any of the Lexington Bonded Parties under this
Settlement Agreement;
(ii) any claims based upon, arising out of or resulting
from the payment of any monies by Lexington to date to
or on behalf of any of the Lexington Bonded Parties in
defense of any of the Claimants' Actions as expressly
listed in Section 2.4; and
(iii) any claims arising out of the tender of any of the
Claimants' Actions as expressly listed in Section 2.4 by
any of the Lexington Bonded Parties under the Lexington
Bond, including any duty to cooperate.
Lexington and the Lexington Bonded Parties agree to a mutual
reservation of rights by Lexington and the Lexington Bonded
Parties with respect to the amount or applicability of
coverage that may apply with respect to matters not otherwise
released herein. Nothing herein is intended to modify the
terms and conditions of the Lexington Bond.
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3.6 RELEASE OF UNKNOWN CLAIMS
Claimants and the Exhibit G Parties intend and agree that the
foregoing releases shall be effective as a bar to any and all
currently unsuspected, unknown or partially known claims within the
scope of their express terms and provisions. Accordingly, the
Settling Parties hereby expressly waive any and all rights and
benefits conferred upon them by the provisions of Section 1542 of
the California Civil Code and all similar provisions of the laws of
any other State, Territory or other jurisdiction. Section 1542 reads
in pertinent part:
"A general release does not extend to claims that the creditor
does not know or suspect 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."
Claimants and the Exhibit G Parties hereby acknowledge that the
foregoing waiver of the provisions of Section 1542 of the California
Civil Code and all similar provisions of the laws of any other
State, Territory or other jurisdiction was separately bargained for
and that they would not enter into this agreement unless it included
a broad release of all unknown claims, including specifically any
claim of fraud or misrepresentation in the inducement of this
agreement. Claimants and the Exhibit G Parties expressly agree that
all release provisions in this Settlement Agreement shall be given
full force and effect in accordance with each and all of their
express terms and provisions, including those terms and provisions
relating to unknown, unsuspected or future claims, demands and
causes of action. Claimants and the Exhibit G Parties each assume
for themselves the risk of the subsequent discovery or understanding
of any matter, fact or law, that if now known or understood, would
in any respect have affected his, her or its entering into this
Settlement Agreement.
3.7 IMPLEMENTATION OF RELEASES
Notwithstanding Section 15.18, the releases and other provisions set
forth in Sections 3.2, 3.3, 3.4, 3.5 and 3.6 shall become effective
upon the Stock Payment (as defined below in Section 4.3).
Notwithstanding this provision, the dismissals of the Claimants'
Actions against Released Parties shall occur as set forth in Section
7.5. If this Settlement Agreement is terminated pursuant to Section
4.1, the releases and other provisions set forth in Sections 3.2,
3.3, 3.4, 3.5 and 3.6 shall be void AB INITIO and of no force and
effect.
4. PAYMENTS
4.1 PAYMENT AND DISBURSEMENT
Within 14 days of the latest of: (a) entry of the final,
non-appealable order approving the Purchase Agreement referenced in
Section 5.1 (unless such order adopts and applies the provisions of
11 U.S.C. Section 363(m) to Wilshire Financial
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Services Group Inc. as a good faith purchaser, in which case the
event called for by this clause (a) shall be deemed to have occurred
upon entry of such order by the United States District Court for the
District of Oregon approving and authorizing the Receiver to enter
into the Purchase Agreement); (b) entry of the Claims Bar Order and
Injunction referenced in Section 5.2.1; (c) the filing of certain
dismissals to the extent required by Section 5.8; (d) the entry of
the Receiver authorization orders referenced in Section 5.9; and
(e) the entry of the Rescission Order referenced in Section 5.15,
but in any case not sooner than 30 days after notice of the Claims
Bar Hearing is given to the Released Parties, the Released Parties
will deposit in a separate interest-bearing trust account, with a
mutually agreed bank or trust company, pending satisfaction or
waiver of all of the conditions stated in Article 5, INFRA, the sum
of $29,500,000 (the "Payment"). The terms of said deposit shall be
governed by a trust agreement substantially in the form of the
Trust Agreement attached hereto as Exhibit J. If the Settling
Parties are unable to agree as to who should act as trustee under
the Trust Agreement, they shall submit the question to the United
States District Court for the District of Oregon to select and
appoint as trustee a financial institution that is willing to serve
as trustee and meets the qualifications for trustee set forth in the
Trust Agreement.
Disbursement of the Payment, plus any accrued interest from the
trust account, to the Receiver, on behalf of Claimants, is subject
to satisfaction or waiver of the conditions set forth in Article 5,
and shall hereafter be referred to as the "Disbursement." The
persons listed on Exhibit P ("Claimants' Representatives") shall
notify the persons listed in Exhibit K in writing when they believe
each and every condition in Article 5 has been satisfied or waived
such that the Receiver, on behalf of Claimants, is entitled to
receive the Disbursement. The Released Parties listed in Exhibit K-1
shall have 14 days from receipt of said notification either to agree
to the Disbursement to the Receiver, on behalf of Claimants, or to
disagree in writing that all such conditions have been satisfied or
waived. In the event that Claimants and the Released Parties listed
in Exhibit K-1 agree that all such conditions have been satisfied or
waived, the Disbursement shall be made to the Receiver. In the event
that Claimants and the Released Parties listed in Exhibit K-1
disagree as to whether each and every condition has been satisfied
or waived, they shall promptly confer in good faith and, if unable
to resolve their differences, shall promptly present their disputes
for determination to the United States District Court for the
District of Oregon, which shall retain exclusive jurisdiction for
this purpose. No portion of the Payment shall be disbursed in the
event of such a dispute pending the Court's ruling, but the Settling
Parties agree that the Court's ruling shall be deemed final and
binding, and hereby waive any right to appeal from that ruling so
long as all other conditions have been satisfied or waived. The
Disbursement shall then be made pursuant to the Court's order.
In addition, to expedite the ultimate determination of whether every
condition in Article 5 has been satisfied, Claimants'
Representatives may notify the persons listed in Exhibit K in
writing, at any time after the Effective Date, that they believe all
of the conditions contained in a particular section or subsection of
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Article 5 (e.g., 5.2.1) have been satisfied or waived. The Released
Parties listed in Exhibit K-1 shall then have 30 days from receipt
of said notice to object in writing if they do not believe that all
such conditions have been satisfied or waived. Any such objection
shall include a brief statement of the reasons therefor. If the
Released Parties listed in Exhibit K-1 fail to so object, the
conditions contained in the particular section or subsection
referenced in the notice given by Claimants' Representatives shall
thereafter be deemed satisfied or waived. In the event the Released
Parties listed in Exhibit K-1 object as to whether any or all of the
conditions to Disbursement are satisfied or waived, then Claimants
and the Released Parties listed in Exhibit K-1 shall promptly confer
in good faith and, if unable to resolve their differences, they
shall, at the time when Claimants contend that all such conditions
have been satisfied or waived, resolve such dispute before the
United States District Court for the District of Oregon as set forth
in the previous paragraph.
If, for any reason, any of the conditions stated in Article 5 has
not been satisfied or waived within four years of the Effective
Date, only the Released Parties listed in Exhibit K-1 may, at their
option, to be exercised promptly and in writing, choose to terminate
this Settlement Agreement, in which case all sums deposited pursuant
to this Settlement Agreement with said bank or trust company,
including any interest accrued thereon, shall be returned to the
persons who deposited them, and this Settlement Agreement shall be
terminated and rendered void except for the Stock Purchase set forth
in Section 4.3 and any provisions of the Settlement Agreement
necessary for the performance or enforcement of Section 4.3 (to the
extent the conditions expressly set forth in Section 4.3 have been
satisfied).
In the event any of the Released Parties fails to pay all or part of
its share of the Payment, the Released Parties shall notify
Claimants within 10 business days of the identity of such non-paying
Released Party(ies) and the amount of the Payment that was not made
by such Released Party(ies). Except if such amount owing is paid
before such election, Claimants shall then have twenty business days
to elect, by written notice to the Released Parties pursuant Section
15.14 of this Settlement Agreement, to either (1) pursue an action
to enforce the Payment obligation under this Settlement Agreement
solely against such non-paying Released Party(ies) or (2) declare
this Settlement Agreement null and void if the amount is not
otherwise paid within the twenty business day period or within five
business days after the notice is transmitted, whichever is later.
In the event Claimants' Representatives fail to make such election
by written notice then Claimants will be deemed to have declared
this Settlement Agreement null and void under this section. Further,
if such written notice is not received by Released Parties within
twenty-five business days, this Settlement Agreement shall be deemed
terminated. In no event shall any Released Party be responsible for
any other Released Party's allocated share of the Payment.
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4.2 ALLOCATION AND SOURCE OF SETTLEMENT PAYMENTS
The Released Parties are not required to disclose the allocation or
breakdown of the source of the settlement funds hereunder. Andrew
Wiederhorn, Lawrence Mendelsohn, WFSG and Fog Cutter each represent
for themselves that they are contributing to the payments hereunder.
4.3 CLASS B STOCK
The Receiver currently controls 1,000 shares of non-voting stock of
a subsidiary of WFSG, now known as Wilshire Credit Corporation, and
a related liquidation bond issued by WFSG (collectively, the "Class
B Stock"). As part of the consideration for this Settlement
Agreement, immediately after satisfaction of the conditions set
forth in Sections 5.1, 5.2 and 5.9 of this Settlement Agreement and
(1) the Payment has been made pursuant to Section 4.1 or (2) the
Payment has been partially made and Claimants have elected to or
been deemed to have elected to waive their right to declare the
Settlement Agreement null and void under Section 4.1, the Receiver,
CWH and WFSG shall enter into a purchase agreement (the "Purchase
Agreement") substantially in the form attached hereto as Exhibit L,
pursuant to which Receiver and CWH shall cause the sale, transfer
and conveyance of all right, title, and interest in the Class B
Stock to WFSG, for a purchase price to be paid or caused to be paid
by WFSG of $10,500,000.00 (the "Stock Payment"), upon the terms set
forth in the Purchase Agreement (the "Stock Purchase"). If, however,
as a result of the hearing seeking the approval of the Purchase
Agreement by the United States District Court for the District of
Oregon the Stock Payment is increased or decreased, the Payment set
forth in Section 4.1 shall be reduced or increased, as the case may
be, by the amount of such increase or decrease to the Stock Payment.
If the amount of the Stock Payment is so increased or decreased, the
form of the Purchase Agreement shall be revised to reflect such
increase or decrease.
WFSG shall pay the Stock Payment or cause the Stock Payment to be
paid to the Receiver in accordance with the Purchase Agreement.
Except for Sections 5.1, 5.2 and 5.9 below, no other provision set
forth under Article 5 of this Settlement Agreement shall be a
condition precedent to the performance of this Section 4.3, the
completion of the acquisition of the Class B Stock or the Stock
Payment. Accordingly, irrespective of whether the Claims Bar Order
and Injunction entered pursuant to Section 5.2 fails to become final
and non-appealable, or an election is made to declare the Settlement
Agreement null and void pursuant to Sections 4.1 or 5.2, the
Purchase Agreement will remain valid and enforceable and WFSG's
ownership of the Class B Stock purchased thereunder shall remain
unaffected. The sum of the Payment and the Stock Payment is
hereinafter referred to as the "Settlement Amount."
Each Claimant agrees that, upon payment of the Stock Payment
pursuant to the Purchase Agreement and without the need for any
further action on the part of such Claimant or WFSG, any right or
claim to or against, or other interest in, the
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Class B Stock that it currently may have or hold shall be conveyed
to WFSG, and thereafter WFSG shall own the Class B Stock free and
clear of any such right, claim or other interest.
5. CONDITIONS PRECEDENT
The Disbursement shall not be made to the Receiver, on behalf of
Claimants, until each and every one of the following conditions has been
satisfied or waived by the appropriate parties, which in the case of the
Released Parties are those Released Parties listed in Exhibit K-1.
Further, the Stock Payment referenced in Section 4.3 shall not be made
until satisfaction or waiver of the conditions set forth in Sections 5.1,
5.2 and 5.9 below.
5.1 COURT APPROVAL OF THE PURCHASE AGREEMENT
Issuance of an order by the United States District Court for the
District of Oregon approving and authorizing Receiver to enter into
the Purchase Agreement. If any appeal(s) are taken from the order
approving the Purchase Agreement, the approval of the court having
jurisdiction over the final disposition of such appeal(s) shall be a
condition precedent to the Payment and the Stock Purchase, provided,
however, that if the order approving and authorizing the Receiver to
enter into the Purchase Agreement adopts and applies the provisions
of 11 U.S.C. Section 363(m) to Wilshire Financial Services Group
Inc. as a good faith purchaser, final disposition of such appeal
shall not be a condition precedent to the Payment or the Stock
Purchase.
5.2 NOTICE AND COURT APPROVAL
5.2.1 Issuance of a Claims Bar Order and Injunction (the "Bar
Order") in each of the Claimant's Actions pending before the
United States District Court for the District of Oregon, which
Bar Order shall meet all of the requirements of Section 5.2 of
this Settlement Agreement. Claimants will file a motion for
said Bar Order. Claimants agree to give notice (the "Notice")
of the motion for the Bar Order to: (1) any person which has
submitted a claim against CCL in the Receivership Actions,
including, without limitation, those persons listed in Exhibit
A and Exhibit B; (2) all persons identified as Non-Settling
CCL Clients in Exhibit M; (3) all of the parties in any and
all of Claimants' Actions; (4) the persons listed on Exhibit
C; (5) all of Claimants' insurers; (6) any person whom
Claimants believe may have subrogation rights; (7) any person
against whom the Claimants have asserted or threatened the
possible assertion of a claim based upon any of the events or
transactions giving rise to any of the Claimants' Actions,
including without limitation, those persons listed on Exhibit
F; (8) the participants in the ERISA-governed trust fund plans
identified on Exhibit A and as many of the beneficiaries of
the Non-ERISA trusts on Exhibit A as can reasonably be
identified by Claimants; and (9) to the extent not included in
any previous category, every person who was a client of CCL as
of September 21, 2000, as well as (10) giving
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the Notice by publication in THE OREGONIAN, THE WALL STREET
JOURNAL, and in every publication of periodic circulation
issued by any Claimant. Prior to issuance of the Notice,
Claimants shall obtain an order from the United States
District Court for the District of Oregon finding that the
Notice fairly and adequately: (a) describes the terms and
effect of this Settlement Agreement; (b) gives adequate notice
of the time and place of the hearing of the motion for the Bar
Order and of the terms and effect of the Bar Order; (c)
describes how the recipients of the Notice may object to entry
of the Bar Order; and (d) finds that Claimants' proposed
manner of communicating the Notice to the persons listed in
this Section 5.2.1 as recipients of the Notice is the best
notice practicable under the circumstances. Claimants and the
Released Parties will jointly support the motion for the Bar
Order and will not do anything inconsistent with obtaining it
and will reasonably cooperate with one another in obtaining
the Bar Order, except that such reasonable cooperation shall
not extend to the Released Parties' providing to Claimants
financial or other confidential information of any of the
Released Parties. In addition, Claimants agree not to offer
into evidence or assert, in seeking entry, enforcement, or
defense of the Bar Order, the financial or other confidential
information of the Released Parties and will cooperate with
the Released Parties to oppose the effort of any person who
seeks to obtain or introduce into evidence such financial or
confidential information. The persons listed on Exhibit K-1
shall have the right to approve the language of the motion for
entry of the Bar Order and the supporting materials, the
proposed Bar Order, and of the Notice, prior to filing.
5.2.2 The Bar Order shall approve this Settlement Agreement as fair
to (1) the Claimants, (2) the participants in the
ERISA-governed trust fund plans identified on Exhibit A or
Exhibit C, (3) the Non-Settling Parties that are defendants in
any of Claimants' Actions, and (4) any potential additional
defendant(s) in said actions. The Bar Order must also bar all
claims against the Released Parties for indemnity,
contribution, or any other claims concerning any of the
Released Claims and shall enjoin anyone receiving notice of
the Bar Order at any time (said persons referred to
hereinafter as the "Barred Persons") from bringing or pursuing
such claims in any forum. The Bar Order shall provide that,
because the Barred Persons are precluded from asserting claims
against the Released Parties for indemnity, contribution, or
other claims concerning any of the Released Claims, the Barred
Persons shall receive a credit, against any judgment entered
against them in any of Claimants' Actions, equal to that share
of the Claimants' alleged losses attributable, based upon
relative degree of fault or responsibility, to the Released
Parties (such method of calculating the credit being
referenced hereinafter as "Proportionality"). The Bar Order
shall not prohibit Claimants from (a) seeking to recover from
the Barred Persons that share of liability attributable, based
upon relative degree of fault or responsibility, to all Barred
Persons who, at the time of trial, have not settled with
Claimants, and (b) seeking, in any
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settlement with Jeffrey L. Grayson or Barclay Grayson, a Bar
Order giving the Barred Persons a credit equal to the amount
of said settlements as opposed to a credit based on
Proportionality. The Bar Order shall also permanently enjoin
Claimants, and each of them, from bringing any action in any
forum that does not conform to the covenants of this
Settlement Agreement. Specifically, Claimants shall be
enjoined from bringing any action in which they make claims
that are inconsistent with the provisions of Section 8.1 of
this Settlement Agreement. The Bar Order shall not bar or
enjoin any claims that WFSG, WCC, Andrew Wiederhorn, Lawrence
Mendelsohn, Fog Cutter or any of their insurers may have
against each other. The Bar Order shall provide that the
United States District Court for the District of Oregon shall
retain exclusive jurisdiction to resolve any disputes that may
arise as to the validity, enforceability, performance,
interpretation, administration or enforcement of the Notice,
the Bar Order, or this Settlement Agreement.
5.2.3 Upon entry of the Bar Order, Claimants will provide, in the
same manner used to issue the Notice, and to the same persons
and entities who were recipients of the Notice, a copy of the
Bar Order and an accompanying letter explaining how to obtain
or access associated documents.
5.2.4 If the Bar Order entered by the United States District Court
for the District of Oregon is not in substantial conformity
with the proposed Bar Order submitted to the Court by the
Settling Parties, then either Claimants or the Released
Parties listed in Exhibit K-1 may, within thirty (30) days of
the entry of the Bar Order, at their option, declare this
Settlement Agreement null and void. If the Bar Order is not
entered by the United States District Court for the District
of Oregon on or before August 1, 2002, then the Released
Parties listed in Exhibit K-1 may, at their option, declare
this Settlement Agreement null and void by providing written
notice to the Claimants' Representatives.
5.3 FINALITY OF ORDER
The Bar Order shall have become final. The Bar Order shall not be
considered final until any appeal period has lapsed without the
filing of a notice of appeal, or, if a notice of appeal is filed,
upon the final disposition of any challenge to the Bar Order,
including the exhaustion of proceedings in any remand and/or
subsequent appeal on remand.
5.4 THIS SECTION INTENTIONALLY LEFT BLANK.
5.5 CLASS ACTION RELEASES
Claimants shall obtain assurances from the classes in the class
actions listed on the attached Exhibit N that such classes are in
privity with Claimants and shall not re-litigate any claims on
behalf of themselves or their respective plans, trusts or
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investment vehicles against any of Released Parties for any
claims arising out of any matter asserted or which could have been
asserted in Claimants' Actions. Claimants acknowledge that notices
in the form of Exhibit N-1 have been given to the classes, and the
form of the order approving the settlement of such class actions
shall include language substantially in the form of Exhibit N-2.
5.6 APPROVAL BY TRUSTS
This Settlement Agreement shall have been approved by the trusts
whose trustees are Claimants, according to the governing procedures
applicable to each such trust, or, in the case of the persons listed
in Exhibit C, approved by the Receiver as their court appointed
representative pursuant to the Order Authorizing The Receiver's
Participation In Mediation Of Related Litigation dated January 24,
2001.
5.7 ESTABLISHMENT OF DEFENSE FUND
Claimants shall have made appropriate provision for the
establishment of a defense fund that conforms to the requirements of
Section 8.4 below.
5.8 DISMISSAL OF ACTIONS NOT PENDING IN THE DISTRICT OF OREGON
Prior to seeking Court approval as described in Section 5.2 above,
Claimants shall, to the extent that federal subject matter
jurisdiction, including diversity jurisdiction, and the applicable
statute of limitations or an applicable tolling agreement permit,
dismiss any of Claimants' Actions pending against the Released
Parties, or any of them, in any court other than the United States
District Court for the District of Oregon and refile said actions in
the United States District Court for the District of Oregon.
5.9 RECEIVER AUTHORIZATION ORDER
The Receiver has obtained a court order authorizing him to enter
into and sign this Settlement Agreement on behalf of the persons
listed on Exhibit C (i.e., Order Authorizing The Receiver's
Participation In Mediation Of Related Litigation dated January 24,
2001), and that order or a successor order granting equivalent
authority shall remain in effect. Further, the Receiver shall have
obtained an order by the United States District Court for the
District of Oregon authorizing him to enter into and sign this
Settlement Agreement and the Purchase Agreement on behalf of the
Receivership Estates.
5.10 SETTLEMENT OF CERTAIN PENDING CLAIMS
Claimants shall have caused to be filed a dismissal with prejudice,
or obtained a release or the Bar Order in favor of the Released
Parties of the claims by Daniel D. Dyer, Oxbow Capital Partners, LLC
and Sterling Capital, LLC. Also, Jeffrey L. Grayson shall have
executed and delivered to the Released Parties a release of the
Released Parties substantially in the form set forth above in
Section 3.2.
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5.11 DELIVERY OF OPINION OF CLAIMANTS' COUNSEL
Counsel for each of Claimants, other than the individual Claimants,
the Receiver in his capacity as the court appointed representative
of all persons listed on Exhibit C and the Receiver on behalf of the
Receivership Estates, shall have delivered to the persons listed in
Exhibit K an opinion in a form reasonably satisfactory to the
persons listed in Exhibit K, that:
1. The Claimant trust plans, funds or other persons entering into
this Settlement Agreement have taken all actions and/or given all
notice required by their governing rules and the law to consider
whether entering into this Settlement Agreement is reasonable and
prudent for said Claimant and to authorize, approve and agree to be
bound by the terms set forth in this Settlement Agreement.
2. The persons signing this Settlement Agreement have been duly
authorized by the Claimant they represent to bind such Claimant to
the terms of this Settlement Agreement.
3. Under the terms of any trust or agreement, governing document,
contract, or plan to which the Claimant is party or by which it is
bound or governed, no persons other than those signing this
Settlement Agreement for any Claimant plan, fund, trust or other
entity must sign this Settlement Agreement in order to make it
effective and binding upon said Claimant, and the participants of
said Claimant if it is an ERISA-governed trust, or the beneficiaries
of said Claimant if it is a non-ERISA-governed trust.
4. Each Claimant's execution, delivery and performance of this
Settlement Agreement does not contravene or violate the terms of any
trust or other agreement, contract or plan to which the Claimant is
a party or by which it is bound or governed.
5.12 SETTLEMENT WITH OTHER PARTIES
To the extent Claimants shall have entered into settlement
agreements with any other party to any of Claimants' Actions
relating to the claims asserted therein (as of the date that the
other conditions set forth in this Article 5 are satisfied or
waived), or with any other person relating to claims related
directly or indirectly to those asserted in Claimants' Actions, but
excluding settlements of Special Receiver Claims, the terms of those
settlements shall include releases of the Released Parties as
described in Section 7.1 below.
5.13 APPROVAL OF NON-SETTLING CCL CLIENTS' LIST
The Released Parties listed in Exhibit K-1 shall have received the
list of Non-Settling CCL Clients identified in Exhibit M and shall
not have elected to decline to proceed with this settlement in
accordance with Section 9.7.
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5.14 PAYMENT TO AMERICAN FUNERAL PLAINTIFFS
The Claimants designated on Exhibits A and B as "American Funeral
Plaintiffs" shall have received payment for the assignment of their
claims to the other Claimants (other than the Receiver) pursuant to
an agreement dated March 1, 2002. This condition is to be satisfied
on or before August 14, 2002, unless the American Funeral Plaintiffs
agree to extend that deadline.
5.15 RESCISSION OF THE CCL POLICIES
The order by the United States District Court for the District of
Oregon rescinding all of the CCL Policies identified in Exhibit D
(the "Rescission Order") shall have become final, as "final" is used
in Section 5.3 with respect to the Bar Order. The motion requesting
such Rescission Order shall be filed by the Receiver concurrently
with the motion requesting the Bar Order, but on separate motions.
The Rescission Order shall provide that the aforementioned
rescission is effective upon the Payment, but in any case such order
must be entered prior to the Payment.
5.16 MOTION RE: EXHIBIT C PARTIES
Receiver and Claimants' Representatives shall have obtained an order
from the United States District Court for the District of Oregon
after the Effective Date that any persons listed on Exhibit C who
assert or have asserted claims against any Non-Settling Parties that
arise from matters raised or which could be raised in Claimants'
Actions must either: (1) join existing actions by Claimants against
such Non-Settling Parties and be bound by the terms of this
Settlement Agreement, including Section 7.3.1, or (2) pursue
separate actions but nevertheless be deemed to be bound to the terms
of this Settlement Agreement, including Section 7.3.1, pursuant to
such court order.
6. INTEGRATION
Other than documents expressly referred to herein or in the Purchase
Agreement, this is a fully integrated agreement. All terms of the
settlement between the Claimants on the one hand, and the Released Parties
on the other hand, to this Settlement Agreement are contained herein. This
Settlement Agreement replaces, eliminates, and supersedes all previous and
contemporaneous oral and written discussions, statements, and agreements.
There are no separate oral, written, or collateral agreements between
Claimants and Released Parties, and this Settlement Agreement may only be
amended pursuant to Section 15.10. The terms of this Settlement Agreement
are contractual, not mere recitals.
7. COVENANTS REGARDING OTHER SETTLEMENTS AND JUDGMENTS
7.1 RELEASES OF RELEASED PARTIES
Settlements obtained by any Claimant with any person other than a
regulatory agency (or restitution agreements, to the extent
Claimants are able to influence
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their terms), of claims relating in any way to the allegations made
in any of Claimants' Actions shall include a release by such
settling parties in favor of the Released Parties of all claims
that arise out of or in any way relate to (1) CCL; or (2) matters
raised or which could have been raised, in Claimants' Actions,
including claims for indemnity, contribution and any other claims
concerning any of the Released Claims, substantially in the form set
forth in Exhibit I. Any such settlement obtained by Claimants or bar
order relating thereto shall not impose any additional obligations
upon any of Released Parties beyond those set forth in this
Settlement Agreement or impair any rights of any of Released Parties
under this Settlement Agreement, including without limitation, the
non-released claims identified in Section 3.4. Upon request,
Claimants shall furnish the persons listed in Exhibit K a copy of
any such settlement agreement concluded by Claimants. The Released
Parties agree to treat any such settlement agreements as
confidential, and further agree that Claimants may furnish a copy of
this Settlement Agreement to other settling parties, subject to a
like agreement of confidentiality. The terms of this Section 7.1
shall not apply to Special Receiver Claims, unless the defendant
in such Special Receiver Claim seeks indemnity, contribution or any
other claim concerning any of the Released Claims from any of the
Released Parties or as a defense to a Special Receiver Claim seeks
to attribute fault to any of the Released Parties.
7.2 BAR OF ACTIONS BY NON-SETTLING PARTIES
In addition to seeking the Bar Order provided for in Section 5.2 of
this Settlement Agreement, Claimants and the Released Parties shall
seek in any current or future action by Claimants not governed by
Section 5.2 that in any way arises out of transactions, occurrences,
or any series of transactions or occurrences related to, or which
arises from matters raised, or which could have been raised, in
Claimants' Actions, a bar order, or the equivalent thereof, which
likewise prohibits claims against any of Released Parties for
indemnity, contribution and any other claims concerning any of the
Released Claims, but in no event bars the Released Parties' ability
to bring or pursue the non-released claims identified in Section
3.4. The Released Parties shall cooperate with Claimants in seeking
to obtain such bar orders in such actions, but such cooperation
shall not require the payment of any additional sums or the
provision to Claimants or the court of financial or confidential
information of any of the Released Parties. Claimants are required
by Section 8.1 to use reasonable efforts to obtain a Special Verdict
in such actions. As used in this Settlement Agreement, a "Special
Verdict" is one that allows an allocation of fault to the Exhibit G
Parties for any claims that may be subject to judgment reduction
under Section 8.1 of this Settlement Agreement.
The requirements set forth in this section apply in state and
federal court. For ease of discussion, any defendant in any of
Claimants' Actions which has not entered into a settlement agreement
with Claimants shall hereinafter be referred to as a "Non-Settling
Defendant." In the event any court in any action subject to this
Section 7.2 refuses to enter a bar order or equivalent order, the
Claimants shall take all necessary steps in such action to ensure
that Claimants' claims are pleaded
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so that the Non-Settling Defendant cannot reasonably claim that it
is being sued for any of the Released Parties' proportional share of
fault. If the Non-Settling Defendant in such action nevertheless
files a claim against any of Released Parties seeking indemnity,
contribution or any other claims concerning any of the Released
Claims, then Claimants shall seek to dismiss such claims on the
basis that Claimants do not seek any damages from such Non-Settling
Defendants based on any proportional share of fault attributable to
the Released Parties. If Claimants are unable to secure a remedy
that stops prosecution of such claim, including but not limited to a
bar, injunction, stay, abatement or dismissal of such claims, then
Claimants shall defend and indemnify the Released Parties against
such claims as set forth in Sections 7.3 and 8.4 and provide the
Released Parties with judgment reduction protection as set forth in
Section 8.1.
7.3 INDEMNITY / REIMBURSEMENT
7.3.1 Each Claimant, including without limitation, the Receiver on
behalf of the Receivership Estates, shall reimburse,
indemnify, defend and hold the Released Parties, and each of
them, harmless for any claim, actual loss, damage, or expense
caused by that Claimant's breach of any Warranty or Covenant
made in Articles 7, 8, 9 or 11 of this Settlement Agreement,
or resulting from the occurrence of an event described in
Section 10.1, or any event triggering the Defense Fund under
Section 8.4. Such indemnity or reimbursement obligation shall
be several in nature, and such indemnity obligation is not
limited in amount, including without limitation, to the amount
of the Defense Fund. Any defense obligation under this section
that is covered by the Defense Fund shall first be funded from
the Defense Fund. It is agreed that the claims brought by any
of the Non-Settling Parties against any of Released Parties
which Claimants are obligated to defend and/or indemnify are
coextensive with, and not greater than, claims for
contribution, indemnity or any other claims concerning any of
the Released Claims, as set forth as barred in the final Bar
Order. Notwithstanding the foregoing, but subject to Sections
8.2, 8.3 and 8.4, the Receiver shall not be required to
establish a reserve for the purpose of funding any obligation
under this paragraph 7.3.1, unless otherwise agreed or until
any Released Party has obtained a court determination that the
Receivership Estates are obligated under this paragraph 7.3.1
to that Released Party with respect to a specific matter.
7.3.2 Except for matters paid from the Defense Fund, the American
Funeral Plaintiffs shall not be obligated under this Section
7.3 except for breach of obligations under Sections 7.1, 7.2,
7.5, 7.6, 8.1, 8.6, 8.8, 9.1, 9.2, 9.3, 9.4, 9.6, 9.7, 9.8,
10.1, 11.1, 11.2, and 11.3.
7.4 COVENANTS REGARDING AMERICAN FUNERAL PLAINTIFFS
The Receiver covenants that he will expeditiously seek an order of
the United States District Court for the District of Oregon
approving an interim distribution
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plan, so that funds from an interim distribution may be used to
satisfy the condition set forth in Section 5.15 on or before
August 14, 2002 (assuming that the other conditions to a payment
to the American Funeral Plaintiffs have been satisfied). The
Receiver represents and warrants that he currently has sufficient
funds to satisfy the conditions set forth in Section 5.15, and
covenants that, subject to the receipt of an authorizing court
order, he will actually issue payment in satisfaction of such
conditions on or before August 14, 2002.
7.5 DISMISSAL WITH PREJUDICE OF ALL CLAIMS OF CLAIMANTS AGAINST
RELEASED PARTIES
Claimants, and each of them, covenant that prior to Disbursement,
they will deliver into the trust governed by the Trust Agreement set
forth in Exhibit J stipulated dismissal(s) with prejudice of all
claims of Claimants, and each of them, and without costs, sanctions
or attorneys' fees against any Released Party, of all claims for,
related to, arising out of or based upon any of Claimants' Actions
against the Released Parties. The Trust Agreement shall provide that
such stipulated dismissals shall, upon Disbursement, be delivered to
the Released Parties pursuant to Section 15.14 for filing.
7.6 PUBLIC ANNOUNCEMENTS
Until the earlier of the filing of a motion seeking the Bar Order
provided for in Section 5.2 of this Settlement Agreement or: (a)
WFSG has filed a Form 8-K with the Securities and Exchange
Commission relating to (i) this Settlement Agreement and (ii) the
Purchase Agreement, and (b) Fog Cutter has filed a Form 8-K with the
Securities and Exchange Commission relating to this Settlement
Agreement, no Settling Party shall make any public announcement
(other than the aforementioned Forms 8-K) or issue any press release
with respect to, or otherwise publicly disclose, this Settlement
Agreement, the terms of this Settlement Agreement, the Defense Fund
and the Purchase Agreement or any of the transactions contemplated
by the Purchase Agreement, the Defense Fund or the Settlement
Agreement without the prior written consent of Wilshire Financial
Services Group Inc. and Fog Cutter.
8. COVENANTS
8.1 CLAIM AND JUDGMENT REDUCTION
Other than the Special Receiver Claims (unless the defendant against
whom a Special Receiver Claim had or has been filed seeks indemnity,
contribution or any other claim concerning any of the Released
Claims from any of the Released Parties or as a defense to a Special
Receiver Claim seeks to attribute fault to any of the Released
Parties), in all present or future actions by any of Claimants
wherein they assert claims that are subject to this section and that
arise from matters raised or which could be raised in Claimants'
Actions, Claimants hereby agree (1) to seek a Special Verdict from
the court in such actions, and (2) to not
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seek recovery of damages from any Non-Settling Party listed on
Exhibit F for the aggregate proportional shares of the total
liability, based upon relative degree of fault or responsibility,
of Released Parties and any other defendants (other than the CCL
Group, Barclay Grayson or Jeff Grayson) with which Claimants have
settled as of the time of the assertion of said claims. Said
another way, the Claimants shall only pursue such Non-Settling
Parties listed on Exhibit F on a Proportionality basis, which is
based upon FRANKLIN V. KAYPRO CORP., 884 F.2d 1222 (9th Cir.
1989). (Example of Proportionality: Claimants settle with A, B
and C, but not D, E and F. The relative degrees of fault or
responsibility are A:10%; B:20%; C:15%; D:40%; E:5%; F:10%.
Claimants may seek recovery from each of D, E and F of their
aggregate proportional shares, i.e., 40% + 5% + 10% = 55%, of the
total liability. This example assumes that neither the CCL Group,
Barclay Grayson nor Jeffrey Grayson are A, B or C.) (Example of
Proportionality where Claimants have settled with Barclay
Grayson: Claimants settle with A, B and C, but not D, E and F.
Assume as a hypothetical that B is Barclay Grayson and that his
settlement payment is $500,000. The relative degrees of fault or
responsibility in this example are A:10%; B:20%; C:15%; D:40%;
E:5%; F:10%. Claimants may seek recovery from each of D, E and F
of their aggregate proportional shares, i.e., 40% + 5% + 10% =
55%, of the total liability, as well as for B's 20% share of
liability, subject to an offset for the amount of settlement paid
by B, i.e., $500,000.) In any other actions against Non-Settling
Parties which give rise to indemnity, contribution or any other
claims concerning any of the Released Claims against the Released
Parties, Claimants shall only pursue such Non-Settling Parties
not listed on Exhibit F, if at all, on a pure proportional basis.
(Example of Pure Proportionality: Claimants settle with A, B and
C, but not D, E and F. The relative degrees of fault or
responsibility are A:10%; B:20%; C:15%; D:40%; E:5%; F:10%.
Claimants may only seek recovery from D for 40%, E for 5% and F
for 10% of the total liability.)
The intent of limiting Claimants' recovery to the Non-Settling
Parties' aggregate share of the total liability is to thereby
eliminate any claim against defendants who have settled with
Claimants, including specifically the Released Parties, for
indemnity, contribution or any other claims concerning any of the
Released Claims.
In addition, if one or more Non-Settling Parties (including a
defendant in a Special Receivership Claim) nevertheless seeks
indemnity, contribution or any other claims concerning any of the
Released Claims, from any of the Released Parties and if such
defendant(s) shall obtain a judgment (the "Judgment") against any or
all of the Released Parties, whether in the same or a different
action, notwithstanding the first sentence of this section and the
bar orders referenced in Sections 5.2 or 7.2, then Claimants shall
reduce their judgment against said defendant(s) in an amount equal
to the Judgment against the Released Parties or pay the amount of
the Judgment. Alternately, if Claimants, at their own expense and
cost, wish to appeal the entry of the Judgment, they shall be
entitled to fully bond the Judgment, thereby staying execution
against the Released Parties, in lieu of reducing their judgment or
paying the Judgment pending the outcome of said
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appeal. Claimants agree that in the event of any breach of this
section, the Released Parties would not have an adequate remedy
at law and would be entitled to specific performance of this
provision. The provisions of this section do not apply to any
claims against any of the Released Parties that do not arise from
matters raised, or which could not have been raised, in
Claimants' Actions. For purposes of this Section 8.1 only,
Non-Settling Parties shall be deemed third-party beneficiaries
entitled to enforce the claim and judgment reduction provisions
set forth herein.
8.2 POTENTIAL ADMINISTRATIVE CLAIMS
Claimants agree that upon the Payment, $4,250,000 shall be set aside
and held in a separate interest-bearing trust account (the
"Potential Administrative Claims Set-Aside") and not be made a part
of the Disbursement until the expiration of the statute of
limitations for the DOL to seek recovery under 29 U.S.C. Section
1132(l) or any amendment or replacement thereof that would permit
the DOL to recover a percentage of the settlement proceeds relating
to the Released Claims (the "Potential Administrative Claims") from
any of the Released Parties for claims relating to or arising out of
any of the facts, circumstances or allegations in the Released
Claims, or any of them. Provided however, that if the DOL brings any
such Potential Administrative Claims against any of the Released
Parties, the Potential Administrative Claims Set-Aside shall not be
distributed to any of Claimants until the final resolution of such
claim. In no event however, shall any monies in the Potential
Administrative Claims Set-Aside be distributed to any of the
Claimants until the conditions for the Disbursement have been met.
Claimants shall, at their option, defend Released Parties against
any such Potential Administrative Claim brought by the DOL against
any of the Released Parties and/or pay the DOL to compromise such
claims.
It is understood and agreed that the Potential Administrative Claims
Set-Aside is derived solely from monies deposited by the Released
Parties under this Settlement Agreement, and that the Potential
Administrative Claims Set-Aside shall be held in a separate
interest-bearing trust account for the benefit of the Released
Parties, and each of them, for the sole purpose of satisfying any
liability of any of the Released Parties with respect to the
Potential Administrative Claims.
It is further understood and agreed that the monies paid by the
Released Parties, or any of them, under this Settlement Agreement
are intended to include the amount of any liability with respect to
the Potential Administrative Claims, and, therefore, if any of the
Released Parties become liable for the Potential Administrative
Claims, such liability will be paid out of the Potential
Administrative Claims Set-Aside.
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8.3 RECEIVER'S OBLIGATION TO OBTAIN AGREEMENT THAT EXHIBIT C PARTIES
ARE BOUND
The Receiver shall not disburse any funds received pursuant to this
Settlement Agreement to any of those parties listed on Exhibit C,
Exhibit M or any other person who has not signed this Settlement
Agreement without obtaining in exchange a written agreement
substantially in the form of Exhibit O attached hereto that said
party or other person is bound by the terms of this Settlement
Agreement, including specifically the release given to the Released
Parties in Section 3.2 above and the warranties and covenants
regarding assignment of claims. The Receiver shall promptly provide
copies of these written agreements to the persons listed in Exhibit
K. If any such party or other person refuses to sign such a written
agreement, the Receiver shall hold the funds that would otherwise be
distributable to that party or other person until the later of (a)
September 21, 2006, or (b) the date on which any action by said
party or other person against any of Released Parties is finally
resolved, and such funds shall be available to defend and indemnify
Released Parties from any such action in accordance with Section
7.3.1. Upon the lapse of the period specified in the preceding
sentence, the Receiver shall distribute any remainder of such funds
pursuant to the distribution plan approved in the Receivership
Actions.
8.4 DEFENSE FUND
Claimants agree that, within ten (10) days of the Payment, $2
million of the Payment shall be placed in trust in a separate
interest-bearing trust fund (the "Defense Fund") and not be made a
part of the Disbursement until the earlier of: (1) final settlement
or resolution of the claims resulting from claims of Claimants
against all persons listed in Exhibit F and any other persons whom
Claimants have asserted or may assert claims against; or (2) four
years after the Effective Date. Notwithstanding the foregoing
sentence, the Defense Fund shall not be made a part of the
Disbursement if there is pending against any of the Released Parties
a claim for indemnity, contribution or any other claims concerning
any of the Released Claims, until the final settlement or resolution
of such claim(s). Further, in no event shall any monies in the
Defense Fund be distributed among the Claimants until the conditions
for the Disbursement have been met. If the Claimants assert that
they have satisfied provision (1) of this paragraph, the Claimants
shall notify the Released Parties pursuant to Section 15.14, and the
Claimants' Representatives and the Released Parties listed in
Exhibit K-1 shall meet and confer to try to agree on whether
provision (1) of this paragraph has actually been satisfied. If the
Settling Parties are unable to reach an agreement, they shall submit
this matter to United States District Court for the District of
Oregon for resolution pursuant to Section 12.
The Defense Fund, including any accrued interest thereon, shall be
available to fund the defense by Claimants of actions for indemnity,
contribution and any other claims concerning any of the Released
Claims, and shall be used for no other purpose. Notwithstanding
anything else in this Settlement Agreement, any
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payment obligation by the Defense Fund is not several in nature
to the extent of the total amount of monies remaining in the
Defense Fund. Claimants agree to hire, and advance funds to pay
reasonable bills in the ordinary course of: (1) Hoevet, Snyder &
Boise to defend Lawrence Mendelsohn and his family; (2) Stoll,
Stoll, Berne, Lokting & Shlachter to defend Andrew Wiederhorn and
his family; (3) Irell & Manella LLP or Perkins Coie LLP (at
WFSG's election after reasonable consultation with Claimants) to
defend WFSG; and (4) other competent legal counsel to defend the
other Released Parties against any such claims and to fund such
defense to the extent of the Defense Fund, including any accrued
interest thereon. However, Claimants shall not be obligated to
replenish the Defense Fund in the event it is depleted or
exhausted. Any Released Party that believes it is the subject of
a claim subject to this defense obligation shall promptly notify
the Receiver of such claim, and the Receiver shall promptly
respond as to whether he believes the claim is subject to the
defense obligation of this section and shall notify the persons
listed in Exhibits K and P of this decision. Claimants and the
Released Parties, and each of them, reserve the right to dispute
the reasonableness of any attorneys' fees or costs paid in
defense of such claims.
If there is a dispute over whether the obligation to defend applies
to the claim in question, that dispute shall be promptly submitted
for determination to the United States District Court for the
District of Oregon, which hereby retains jurisdiction for this
purpose. Notwithstanding any other provision of this Agreement, the
Defense Fund shall not be used to fund the defense of any Released
Party against any claim other than a claim for indemnity,
contribution or any other claims concerning any of the Released
Claims, by a third party with respect to a claim asserted by one or
more of Claimants against that third party.
8.5 INFORMATION RELATING TO CLAIMS AGAINST OTHER DEFENDANTS
Upon request by any of Claimants, WFSG shall promptly make
reasonably available to Claimants for copying or inspection any
documents or other information in the possession of WFSG (other than
privileged or other confidential information of any of the Released
Parties) that may be relevant to the claims of any of Claimants
against any person identified in Exhibit F.
8.6 SATISFACTION OF CONDITIONS
The Settling Parties, and each of them, covenant that they shall
move to satisfy all conditions set forth in Section 5 in a good
faith and expeditious manner.
8.7 INDEMNITY BY EXHIBIT G PARTIES
Each Exhibit G Party shall indemnify, defend and hold harmless
Claimants, and each of them, from any claim related to CCL or
Claimants' Actions that (a) may be asserted against any of Claimants
by any Released Party associated with that Exhibit G Party (such as
an employee, officer or director, predecessor, successor, assignor,
assign, division, or merged or acquired company or operation), and
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(b) would have been released under Section 3.3 if that Released
Party were an Exhibit G Party. The foregoing indemnity shall be
several in nature, and shall not apply with respect to claims
asserted by persons who are no longer associated with that Exhibit G
Party at the time the claim is first asserted.
8.8 NO ASSIGNMENT OR TRANSFER OF CLAIMS
Each Claimant covenants that it will not assign or otherwise
transfer any interest in its claims against any Released Party,
other than to one or more other Claimants that are bound by this
Settlement Agreement. With regard to each Claimant listed on Exhibit
C, this covenant shall apply only if that Claimant has signed a
written acknowledgment as provided in Section 8.3.
9. CLAIMANTS' WARRANTIES
9.1 NO ASSIGNMENT OR TRANSFER OF CLAIMS
Each Claimant warrants and represents that it has not assigned or
otherwise transferred any interest in its claims against any
Released Party, other than to one or more other Claimants that are
bound by this Settlement Agreement. With regard to each Claimant
listed on Exhibit C, this warranty and representation shall apply
only if that Claimant has signed a written acknowledgment as
provided in Section 8.3.
9.2 AUTHORITY TO EXTINGUISH CLAIMS
The persons signing this Settlement Agreement on behalf of any
trust, fund, plan, or other organization warrant and represent that
they have the authority to bind the party for whom they are signing
and extinguish the claims of the trust, fund, plan or other
organization, and (a) that the execution, delivery and performance
of this Settlement Agreement does not contravene or violate the
terms of any trust or other agreement, contract or plan to which
such trust, fund, plan or other organization is party or by which it
is bound, or (b) with respect to the Receiver in his capacity as the
court appointed representative of all persons listed on Exhibit C,
based upon the court orders referenced in Section 5.9 above that the
execution, delivery and performance of this Settlement Agreement
does not contravene or violate the terms of the Order Authorizing
The Receiver's Participation In Mediation Of Related Litigation
dated January 24, 2001.
9.3 PRUDENCE
The persons signing this Settlement Agreement on behalf of any
trust, fund, plan, or other organization warrant and represent that
they have concluded that this settlement is reasonable, prudent and
in the best interest of the beneficiaries, participants, members,
shareholders, and employees to whom they owe any fiduciary duty or
other duty of care. Said persons also warrant and represent that
they have engaged in all actions and procedures required by law,
agreement, or governing principle to reach the conclusion that this
settlement is reasonable,
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prudent, and in the best interest of the beneficiaries,
participants, members, shareholders, and employees to whom they
owe any fiduciary duty or other duty of care.
9.4 LIST OF OTHER DEFENDANTS
Each Claimant warrants and represents that the persons expressly
identified in Exhibit F are, to the best of that Claimant's
knowledge, the only persons that Claimants intend to pursue a claim
against for any of the facts, events, acts, omissions, transactions,
matters raised, or which could have been raised, by any person in
Claimants' Actions, or any claim or allegation based on, related to
or arising out of such Claimants' Actions or the allegations
contained in such claims or actions. Claimants' furnishing the
aforementioned Exhibit F shall not restrict Claimants from asserting
a claim against any person, other than a Released Party, not listed
on Exhibit F.
9.5 PARTICIPANTS IN COLLATERALIZED NOTE PROGRAM
The Receiver represents that Exhibit H attached hereto sets forth
the CCL computer records listing the persons who, as of September
21, 2000, were participants in the Collateralized Note Program with
respect to loans made by CCL to Capital Wilshire Holdings, Inc.
("Old WCC") or Portland Servicing Corporation ("PSC"), and that such
computer records purport to show the balance of such persons'
participation in the Collateralized Note Program with respect to the
Old WCC and PSC loans as of that same date.
9.6 LISTING OF CLAIMANTS' ACTIONS
Claimants, and each of them, warrant and represent that the
Claimants' Actions expressly listed in Section 2.4 above are an
accurate and complete listing of all litigation of which Claimants
are aware as of the Effective Date against the Released Parties or
others that alleges any claims for equitable relief and/or damages
allegedly suffered as the result of alleged misconduct by CCL or the
Released Parties based on, arising out of or relating to any
Released Claims or any facts, allegations or circumstances contained
in any Released Claims.
9.7 NON-SETTLING CCL CLIENTS
The Receiver has listed on Exhibit M all those persons whom Receiver
believes, based on written responses to the Receiver, were CCL
clients investing in, participating in or lending to CCL's private
investment programs and who are not parties to this Settlement
Agreement (the "Non-Settling CCL Clients"). Receiver also shall
provide the persons listed on Exhibit K with copies of each
Non-Settling CCL Client's proof of claim filed in the CCL
receivership. Receiver shall supplement this provision of proofs of
claim within 30 days of the Effective Date by notice to the persons
listed on Exhibit K. The Released Parties listed on Exhibit K-1 may,
within 10 days of receipt of said supplement, elect in writing to
decline to proceed with this Settlement Agreement if, in their
judgment, the
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claims of the Non-Settling CCL Clients represent an unacceptable
threat of additional liability to the Released Parties. All
Claimants warrant that, to the best of their knowledge, aside
from the Non-Settling CCL Clients, Claimants comprise all of the
persons who lost money invested with CCL, by virtue of any of the
wrongs alleged in Claimants' Actions.
9.8 SUBROGATION
Each Claimant severally represents and warrants that there are no
persons who have any subrogation or similar rights against any of
the Released Parties based on, arising out of or relating to any
Released Claims, that arise from any payments to or on behalf of
that Claimant.
10. OTHER MATTERS
10.1 CLAIMS BY PARTICIPANTS IN ERISA-GOVERNED TRUST FUND PLANS
Claimants and the Released Parties are entering into this Settlement
Agreement based on the understanding that the release given in
Section 3.2 and the assurances provided in Section 5.5 above will
bind the participants in the ERISA-governed trust fund plans in
Exhibit A and Exhibit C, and that said participants shall have no
surviving claim or cause of action against the Released Parties.
Should the participants in any Claimant listed in Exhibit A or
Exhibit C, or anyone on their behalf, nevertheless commence an
action or otherwise assert a claim against any of Released Parties,
that Claimant shall reimburse, indemnify, defend and hold the
Released Parties harmless from such matter. This agreement to
reimburse, indemnify, defend and hold harmless is limited in amount
to the sum of (1) the amount distributed or subject to future
distribution to that Claimant from the Settlement Amount (to the
extent such Claimant's actual distribution is a mixed distribution
of the Settlement Amount and other amounts collected by the
Claimants, and the amount of such Claimant's distribution from the
Settlement Amount cannot be traced to a particular amount, such
Claimant shall be deemed to have received a distribution from the
Settlement Amount equal to the proportionate share that the
Settlement Amount bears to the other payments used to fund the
distribution to said Claimant); and (2) the amount of that
Claimant's recovery, if any from the claim or action commenced by
the participants of that Claimant.
10.2 APPROVAL BY INSURERS OF THE RELEASED PARTIES
The Released Parties hereby represent and warrant that all of their
insurers that are participating in the Payment have approved this
Settlement Agreement, including specifically the payment obligations
of the Released Parties and any tolling agreements included herein.
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11. SETTLING PARTIES' WARRANTIES
11.1 The Settling Parties, and each of them, represent and warrant that
in executing this Settlement Agreement they rely solely upon their
own judgment, belief and knowledge, and the advice and
recommendations of their own independently selected counsel,
concerning the nature, extent and duration of their rights and
claims hereunder and regarding all matters which relate in any way
to the subject matter hereof, and that, except as provided herein,
they have not been influenced to any extent whatsoever in executing
this Settlement Agreement by any representations, statements or
omissions pertaining to any of the foregoing matters by any party or
by any person representing any party to this Settlement Agreement.
Each Settling Party assumes the risk of mistake as to facts or law.
11.2 Subject to court approval for the Receiver, each person and entity
executing this Settlement Agreement on behalf of any other person
does hereby personally represent and warrant to the other Settling
Parties that he or she has the authority to execute this Settlement
Agreement on behalf of, and fully bind, each principal which such
person represents or purports to represent. With regard to the
parties listed in Exhibit C, the Receiver makes this representation
in reliance on the validity and efficacy of the Order entered in the
Receivership Actions on January 25, 2001, appointing the Receiver as
the representative of said parties.
11.3 The Settling Parties, and each of them, warrant and represent to
each other that he, she or it has carefully read the contents of
this Settlement Agreement, and this Settlement Agreement is signed
freely by each person executing this Settlement Agreement on behalf
of each of the Settling Parties. The Settling Parties, and each of
them, further represent and warrant to each other that he, she or it
has made such investigation of the facts pertaining to the
settlement, this Settlement Agreement and all of the matters
pertaining thereto, as it deems necessary.
12. CONTINUING JURISDICTION
The United States District Court for the District of Oregon shall retain
exclusive jurisdiction over Claimants and the Released Parties to resolve
any dispute which may arise regarding this Settlement Agreement or the Bar
Order and Notice referenced in Section 5.2, SUPRA., including any dispute
regarding validity, performance, interpretation, administration,
enforcement, or enforceability.
13. GOVERNING LAW
This Settlement Agreement is governed by Oregon law, without regard to
Oregon's conflict of law principles, except to the extent ERISA (including
federal common law where appropriate to interpret ERISA) is applicable.
Nothing herein may be construed as choice of law with respect to the Bar
Order, which is governed by federal law, including
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federal common law applicable to equity receiverships. To the extent that
such federal law requires resort to state law, Oregon law applies.
14. MOST FAVORED PROVISION
With the exceptions stated below, Claimants hereby agree to extend to the
Released Parties the benefit of any terms contained in any other
settlement of the Claimants' Actions which terms grant some protection or
right not granted to the Released Parties in this Settlement Agreement.
Any and all such rights and protections are hereby incorporated into this
Settlement Agreement by this reference without further action immediately
upon the consummation of any such other settlement of any of the
Claimants' Actions. The only exceptions shall be provisions concerning:
(a) the amounts paid or the manner and timing of payment in such other
settlements; (b) the remedies of Claimants in the event of nonpayment of
the agreed settlement amounts in such other settlements; (c) the
percentages of the insurance policies paid in such other settlements; (d)
the "holding back" by certain other settling defendants of a portion of
the settlement proceeds paid by said other defendants to fund future
defense costs; (e) the setting aside of a portion of any settlement
payment for a period of time to guard against certain contingencies; (f)
the award of attorney fees in the event of a dispute; (h) the right of
appeal with respect to the resolution of disputes over the satisfaction of
conditions to Disbursement; (i) relinquishment or abandonment of claims
against the Receivership Estates such as the claims set forth in Section
3.3 of this Settlement Agreement; and (j) the scope or exceptions to the
most favored provision of the agreements relating to such other
settlements.
15. MISCELLANEOUS
15.1 PERSON DEFINED
As used in this Settlement Agreement, the terms "person" and
"persons" shall include both natural persons and entities.
15.2 CERTAIN MATTERS NOT AFFECTING OBLIGATIONS
The Released Parties agree and acknowledge that they must pay the
Settlement Amount above regardless whether any court or jury
determines that the fault, if any, of the Released Parties is less
in proportion to Claimants' damages than the Settlement Amount.
Claimants agree and acknowledge that they have no right to seek
additional sums from the Released Parties, regardless of whether any
court or jury determines that the fault, if any, of the Released
Parties is greater in proportion to Claimants' damages than the
Settlement Amount.
15.3 HEADINGS
Section headings are for convenience only and shall not be construed
to change or affect the text of this Settlement Agreement.
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15.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties set forth in this Settlement
Agreement shall be deemed continuing and shall survive the Effective
Date of this Settlement Agreement. Provided however, in the event
this Settlement Agreement is terminated, the Settlement Agreement
shall be deemed to be null and void and all representations and
warranties set forth in this Settlement Agreement shall likewise
become null and void except to the extent as provided in Sections
4.1 and 4.3 with respect to the Stock Purchase.
15.5 FURTHER ASSURANCES
The Settling Parties agree to execute such other documents and take
such actions as may reasonably be necessary to further the purpose
of this Settlement Agreement.
15.6 NO BENEFIT TO NON-SETTLING PARTIES
Except as expressly provided herein, this Settlement Agreement shall
not confer any right or benefit upon, or release from liability any
person who is not a party to this Settlement Agreement, including
without limitation, Non-Settling CCL Clients.
15.7 NO ADMISSIONS
Neither Claimants nor the Released Parties have made, nor shall they
be deemed to have made, any admission of any kind by their
negotiation of or entry into this Settlement Agreement. Neither this
Settlement Agreement nor any provision contained herein shall be
construed by any person as an admission by the Released Parties of
any liability for, related to or arising out of any of the Released
Claims or claims of any other nature. Claimants and the Released
Parties are entering into this Settlement Agreement for the purpose
of resolving disputed issues between them and to avoid the costs and
risks of litigation.
15.8 COUNTERPART ORIGINALS
This Settlement Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which shall
constitute one agreement. Facsimile signatures shall be considered
the same as originals.
15.9 BINDING EFFECT
This Settlement Agreement binds and inures to the benefit of the
Settling Parties, their assigns, heirs, administrators, executors,
representatives, beneficiaries and successors, and each of them.
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15.10 MODIFICATION
This Settlement Agreement cannot be modified or amended except by
written agreement signed on behalf of Claimants and those Released
Parties listed on Exhibit K-1 and approved by the United States
District Court for the District of Oregon. Provided however, in the
event that such modification or amendment affects only certain
Claimants or certain Released Parties and does not adversely affect
in any way any other Claimants or any other Released Parties, then,
upon obtaining approval by the United States District Court for the
District of Oregon, such affected Settling Parties may modify or
amend this Settlement Agreement in writing with only the signatures
of the affected Settling Parties.
15.11 WAIVER
No portion of this Settlement Agreement may be waived except by
written instrument signed on behalf of Claimants or Released Parties
listed on Exhibit K-1 on behalf of whom the waived provision is
designed to benefit. A waiver of one provision is not a waiver of
any other. Failure to enforce any provision of this Settlement
Agreement shall not waive that provision or any other.
15.12 CONSTRUCTION
Any rule of construction to the effect that ambiguities in a writing
are to be construed against the drafting party does not apply in the
interpretation of this Settlement Agreement, or any portion hereof,
which has actively been negotiated and drafted by counsel for each
of Settling Parties, and all of them.
15.13 COSTS OF DISPUTE
If any suit or action between any of Claimants and any of Released
Parties to enforce this Settlement Agreement is brought, such
prevailing party or parties shall be entitled to recover from such
losing party or parties the costs and fees (including without
limitation reasonable attorneys' fees, the fees and costs of experts
and consultants, copying, courier and telecommunication costs,
deposition costs and all other costs of discovery) incurred by such
prevailing party or parties in such suit or action, including
without limitation, any arbitration, trial, post-trial or appellate
proceeding, or in any bankruptcy proceeding.
15.14 NOTICE AND TOLLING
Unless this provision is modified in writing, any notice required
under the terms of this Settlement Agreement shall be made to the
following persons or their successors as designated in writing to
the other persons referenced below:
15.14.1 Released Parties: See Exhibit K.
15.14.2 Claimants' Representatives: See Exhibit P.
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15.14.3 Trusts and Trustees: See Exhibit A.
15.14.4 Those persons listed on Exhibit C that Released Parties
are informed have entered into the Agreement referenced
in Section 8.3.
Each of the foregoing persons stipulate that notice transmitted by
certified U.S. mail to those persons referenced above in Sections
15.14.1 through 15.14.4 constitutes adequate notice under this
Settlement Agreement.
In the event (1) the Released Parties listed in Exhibit K-1 elect to
terminate and declare this Settlement Agreement null and void
pursuant to any of Sections 4.1, 5.2 or 15.19 or (2) Claimants elect
to terminate and declare this Settlement Agreement null and void
pursuant to Sections 4.1 or 5.2, then such Settling Parties seeking
to terminate the Settlement Agreement shall make such election known
to the other Settling Parties by written notice to the persons
identified in this Section 15.14. Termination of the Settlement
Agreement pursuant to any of Sections 4.1, 5.2 or 15.19 shall be
deemed effective five business days after the transmittal of such
notice by certified U.S. mail or at the end of the twenty-five
business day notice period referred to in Section 4.1 of this
Settlement Agreement if Claimants' Representatives fail to make an
election regarding termination of this Settlement Agreement
thereunder.
It is agreed that in the event this Settlement Agreement is
terminated pursuant to any of Sections 4.1, 5.2 or 15.19, the
statute of limitations on any Claimants' claims against any of
Released Parties and any Released Parties' claims against any of
Claimants shall be deemed tolled for the period commencing on the
earlier of (a) the inception date of any tolling period as provided
by any operative tolling agreement between any of Claimants and any
of Released Parties or by operation of law, or (b) the Effective
Date of this Settlement Agreement, and ending on the date 60 days
after the date this Settlement Agreement is deemed terminated
pursuant to this Section 15.14. Further, it is agreed that in such
event: (1) the Settling Parties shall cooperate to cause any
order(s) entered pursuant to this Settlement Agreement, except any
orders relating to the Stock Purchase, to be vacated as appropriate;
and (2) all remaining trust funds in the trust account established
pursuant to the Trust Agreement shall be returned as provided in
that agreement.
15.15 RESERVED CLAIMS
Except as otherwise set forth in this Settlement Agreement, nothing
in this Settlement Agreement releases, compromises, reduces, waives,
bars, discharges, or limits in any way, except with respect to the
Bar Order, Claimants' rights to assert claims against any person
(other than the Released Parties or as determined in the Bar Order),
all of which are expressly reserved by Claimants.
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15.16 MATERIALITY OF COVENANTS, WARRANTIES AND REPRESENTATIONS
All covenants, warranties and representations made in this
Settlement Agreement shall be deemed material.
15.17 SEVERABILITY
Provided the remainder of this document does not frustrate the
purpose and intent of the law and the Settling Parties in entering
into this Settlement Agreement, in the event that any portion of
this Settlement Agreement shall be judicially determined to be
invalid or unenforceable to any extent, the same shall to that
extent be deemed severable from this Settlement Agreement and the
invalidity or unenforceability thereof shall not affect the validity
and enforceability of the remaining portion of this Settlement
Agreement.
15.18 EFFECTIVE DATE
The "Effective Date" of this Settlement Agreement shall be May 9,
2002. This Settlement Agreement shall not be effective until the
Effective Date.
15.19 MATERIALITY OF CERTAIN DEFENSE, INDEMNITY AND SET-ASIDES
It is understood and agreed that Claimants' obligations set forth
under Sections 7.3, 8.1, 8.2, 8.4 and 10.1 of this Settlement
Agreement are material to this settlement. If the performance of any
of these provisions is found or deemed unlawful by any court or
administrative agency, then the Settling Parties agree to meet in
good faith and attempt to achieve the performance of such
obligations by lawful means.
If the performance of any of Claimants' obligations set forth under
Sections 7.3, 8.1, 8.2, 8.4 and 10.1 of this Settlement Agreement
are found or deemed unlawful by any court or administrative agency
and cannot be achieved by lawful means, then at the election of the
Released Parties listed in Exhibit K-1, this Settlement Agreement,
except Section 4.3, shall be terminated and deemed null and void.
16. DECLARATIONS
BY SIGNING THIS SETTLEMENT AGREEMENT, EACH SETTLING PARTY ACKNOWLEDGES AND
DECLARES: (A) THAT THE SETTLING PARTY HAS FULLY AND CAREFULLY READ THE
SETTLEMENT AGREEMENT; (B) THAT THE SETTLING PARTY CLEARLY UNDERSTANDS THAT
THE SETTLEMENT AGREEMENT IS A COMPLETE AND FINAL SETTLEMENT; (C) THAT THE
SETTLING PARTY CLEARLY UNDERSTANDS THE MEANING, PURPOSE, AND INTENT OF
EACH PROVISION OF THE SETTLEMENT AGREEMENT, AND THAT EACH PROVISION IS
CLEAR AND DEFINITE; (D) THAT CLAIMANTS ON THE ONE HAND, AND RELEASED
PARTIES ON THE OTHER, HAVE NOT RELIED UPON ANY REPRESENTATION OF THE OTHER
IN AGREEING TO THE TERMS OF THIS SETTLEMENT AGREEMENT; AND (E) THAT THE
SETTLING
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PARTY HAS BEEN REPRESENTED BY COMPETENT LEGAL COUNSEL WITH RESPECT TO
NEGOTIATING, EXPLAINING, AND ENTERING INTO THIS SETTLEMENT AGREEMENT.
__________________________________
Andrew Wiederhorn
__________________________________
Tiffany Wiederhorn
__________________________________
Ted Wiederhorn
__________________________________
Lawrence Mendelsohn
__________________________________
Joyce Mendelsohn
Fog Cutter Capital Group, Inc.
By:_______________________________
Its:______________________________
On behalf of itself and the related persons identified in Section 1.2.7
Specialty Finance Investors LLC
By:_______________________________
Its:______________________________
First Bank of Beverly Hills, FSB
By:_______________________________
Its:______________________________
On behalf of itself, FBBH Investment Services Corporation and Girard Financial
Corporation
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Wilshire Financial Services Group Inc.
By:_______________________________
Its:______________________________
On behalf of itself, Wilshire Funding Corporation; WMFC 1997-1 Inc., WMFC
1997-2 Inc.; WMFC 1997-3 Properties Inc.; WMFC 1997-3 Development Inc.; WMFC
1997-4 Inc.; Wilshire Mortgage Acquisition Corporation; Wilshire Mortgage
Funding Company IV, Inc.; WMFC, L.L.C.; Wilshire Mortgage Funding Company V,
Inc.; Wilshire Mortgage Funding Company VI, Inc.; Wilshire Mortgage Funding
Company VII, Inc.; GT MOHO Sales Inc.; Wilshire Ventures Corporation; Life
Capital, Inc.; Wilshire FTL Inc.; Wilshire Ventures PFE Inc.; Wilshire Real
Estate Investment Corporation; WREP 1998-1 Member Inc.; Wilshire Financing
Company, L.L.C. (formerly Wilshire Funding Company, L.L.C.); Wilshire
Management Leasing Corporation; Wilshire Acquisitions Corporation; George
Elkins Mortgage Banking L.P.; Wilshire Realty Services Corporation; Wilshire
Insurance and Risk Management Corporation; Wilshire Securities Corporation;
Wilshire Servicing Corporation; Wilshire Servicing FBO SBRC Corporation;
Wilshire Credit Development Inc.; Wilshire Consumer Receivables Funding
Company, LLC; Wilshire Consumer Obligation Structured Trust 1995-A; Wilshire
Mortgage Funding Company, LLC; Wilshire Asset-Backed Fixed Rate Trust
1995-MFI; Wilshire Asset-Backed Adjustable Rate Trust 1995-MA1; Wilshire
Manufactured Housing Funding Company, LLC; Wilshire Manufactured Housing
Trust 1995-A; Wilshire Mortgage Funding Company II, LLC; Wilshire Liquidating
Trust 1996-1; Wilshire Mortgage Funding Company III, LLC; Wilshire Trust Deed
Corporation; WCICC Inc.; WFICC Inc.; Vicksburg Properties Inc.; Wilshire
Financial Services Group Europe Inc.; Wilshire Financial Services Group UK
Limited; Wilshire Servicing Company UK Limited; Wilshire Funding Company UK
Limited; ACFC Corporate Finance Limited; ACFC Home Loans Limited; Wilshire
Funding Company UK (No. 2) Limited; P.S.P.C. No. 1 Limited; WFSG Ireland
Limited; Wilshire Servicing Company Ireland Limited; Wilshire Funding Company
Ireland Limited; Wilshire Acquisitions Company Ireland Limited; WFSG (Channel
Islands) Limited; Wilshire Servicing Compagnie S.A.; WFSG Mexico, S de R.L.
de C.V.; and WFSG Italia SR.
Capital Wilshire Holdings, Inc.
By:_______________________________
Its:______________________________
Wilshire Credit Corporation
By:_______________________________
Its:______________________________
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__________________________________
Mark Peterman
__________________________________
Ken Kepp
__________________________________
Linda Lucas
__________________________________
Dean Kirkland
AIG Technical Services, Inc. on behalf of
National Union Fire Insurance Company of Pittsburgh, PA
By:_______________________________
Its:______________________________
AIG Technical Services, Inc. on behalf of
American International Specialty Lines Insurance Company
By:_______________________________
Its:______________________________
Lexington Insurance Company
By:_______________________________
Its:______________________________
__________________________________
Blake Grayson
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Blake and Erika Grayson, LLC
By:_______________________________
Its:______________________________
DENVER JOINT INDUSTRY PROMOTIONAL FUND
By: ____________________________
Ralph Lufen
EIGHTH DISTRICT ELECTRICAL BENEFIT FUND
By: ____________________________
Rick Oakland
By: ____________________________
Susan King
EIGHTH DISTRICT ELECTRICAL PENSION FUND
By: ____________________________
William J. Birkett, Jr.
By: ____________________________
Duane I. Tidwell
IDAHO CHAPTER, NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION
By: ____________________________
Jeff Cates
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IDAHO ELECTRICAL JOINT APPRENTICESHIP TRAINING TRUST
By: ____________________________
Marc Bernsen
WYOMING CHAPTER, NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION
By: ____________________________
William J. Birkett, Jr.
WYOMING ELECTRICAL JOINT APPRENTICESHIP TRAINING TRUST
By: ____________________________
William J. Birkett, Jr.
__________________________________ ___________________________________
Salvatore J. Chilia, Trustee for John F. Whittaker, Trustee for
IBEW Local No. 38 Pension Fund IBEW Local No. 38 Pension Fund
__________________________________ ___________________________________
Thomas R. Whittaker, Trustee for Thomas R. Whittaker, Trustee for
IBEW Local No. 38 Pension Fund IBEW Local No. 38 Health & Welfare Fund
__________________________________ ___________________________________
Richard L. Newcomer, Trustee for Richard L. Newcomer, Trustee for
IBEW Local No. 38 Pension Fund IBEW Local No. 38 Health & Welfare Fund
__________________________________ ___________________________________
Ronald Hirsch, Trustee for James B. Morgan, Jr., Trustee for
IBEW Local No. 38 Pension Fund IBEW Local No. 38 Pension Fund
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__________________________________ ___________________________________
Michael Cala, Trustee for George Mastrobuono, Trustee for
IBEW Local No. 38 Health & Welfare IBEW Local No. 38 Health & Welfare Fund
Fund
__________________________________ ___________________________________
David F. Haines, Trustee for Martin Berkens, Trustee for
IBEW Local No. 38 Health & Welfare IBEW Local No. 38 Health & Welfare Fund
Fund
__________________________________ ___________________________________
Alan J. Chermak, Trustee for Donald Skala, Jr., Trustee for
Sheet Metal Workers Local No. 33, Sheet Metal Workers Local No. 33,
Cleveland District, Pension Fund Cleveland District, Pension Fund
__________________________________ ___________________________________
Todd Alishusky, Trustee for Kenneth Castro, Trustee for
Sheet Metal Workers Local No. 33, Sheet Metal Workers Local No. 33,
Cleveland District, Pension Fund Cleveland District, Pension Fund
__________________________________ ___________________________________
Thomas Crowdther, Trustee for Kenneth Derreberry, Trustee for
Sheet Metal Workers Local Pension Sheet Metal Workers Local Pension Fund
Fund
__________________________________ ___________________________________
James Hurley, Trustee for Paul Newman, Trustee for
Sheet Metal Workers Local Pension Sheet Metal Workers Local Pension Fund
Fund
__________________________________ ___________________________________
Charles Bowman, Trustee for Keith Barker, Trustee for
Sheet Metal Workers Local Pension Sheet Metal Workers Local Pension Fund
Fund
__________________________________ ___________________________________
James Warner, Trustee for Dennis Talbott, Trustee for
Sheet Metal Workers Local Pension Sheet Metal Workers Local Pension Fund
Fund
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SHEET METAL WORKERS'
INTERNATIONAL ASSOCIATION,
LOCAL UNION NO. 33
By: _______________________________
Print Name: _______________________
Title: ____________________________
__________________________________ ___________________________________
William Cunningham, Trustee for Joseph Schamer, Trustee for
IBEW Local 212 Pension Trust Fund IBEW Local 212 Pension Trust Fund
__________________________________ ___________________________________
Stephen Wessels, Trustee for Donald Bolling, Trustee for
IBEW Local 212 Pension Trust Fund IBEW Local 212 Pension Trust Fund
__________________________________ ___________________________________
Joseph Schlager, Trustee for James Cole, Trustee for
IBEW Local 212 Pension Trust Fund IBEW Local 212 Pension Trust Fund
__________________________________ ___________________________________
Jay Lind, Trustee for Sheet Metal David Haddix, Trustee for Sheet Metal
Workers Local No. 2, Market Recovery Workers Local No. 2, Market Recovery
Fund, and Sheet Metal Workers Fund, and Sheet Metal Workers Local
Local No. 2 Supplemental Dues Fund No. 2 Supplemental Dues Fund
__________________________________
Roger Cerveny, Trustee for Sheet
Metal Workers Local No. 2, Market
Recovery Fund, and Sheet Metal
Workers Local No. 2 Supplemental
Dues Fund
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__________________________________ ___________________________________
Robert A. Eslinger, Trustee for Steve K. Howerton, Trustee for Apprentice
Apprentice and Journeyman Training and Journeyman Training Fund of Sheet
Fund of Sheet Metal Workers Local Metal Workers Local No. 2
No. 2
__________________________________ ___________________________________
Kenneth Alexander, Trustee for Arthur J. Tanner, Trustee for Apprentice
Apprentice and Journeyman Training and Journeyman Training Fund of Sheet
Fund of Sheet Metal Workers Local Metal Workers Local No. 2
No. 2
__________________________________ ___________________________________
Kenneth E. Sprung, Trustee for Robert Zahner, Trustee for Apprentice
Apprentice and Journeyman Training and Journeyman Training Fund of Sheet
Fund of Sheet Metal Workers Local Metal Wokers Local No. 2
No. 2
__________________________________ ___________________________________
Reggie Hohenberger, Trustee for John Schlagheck, Trustee for
Sheet Metal Workers Local Union Sheet Metal Workers Local Union No. 33
No. 33 Supplemental Unemployment Supplemental Unemployment Benefits Fund
Benefits Fund
__________________________________ ___________________________________
Craig Mead, Trustee for William J. Brennan, Trustee for
Sheet Metal Workers Local Union Sheet Metal Workers Local Union No. 33
No. 33 Supplemental Unemployment Supplemental Unemployment Benefits Fund
Benefits Fund
__________________________________
Ronald Gabel, Trustee for
Sheet Metal Workers Local Union
No. 33 Supplemental Unemployment
Benefits Fund
401(k) Retirement Fund of the Office and Professional Employees International
Union, Local No. 11
By: _____________________________ ___________________________________
Gary Kirkland Judy O'Connor
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Construction and General Laborers Local 320
By: ____________________________ ___________________________________
Dale Sabroski
Coral Construction Co. Employee Retirement Trust
By: ____________________________ ___________________________________
Richard Morgan
Hawaii Ironworkers Health & Welfare
By: ____________________________ ___________________________________
Hawaii Ironworkers Local 625 Building Fund
By: ____________________________ ___________________________________
Office and Professional Employees International Union, Local No. 11, Health &
Welfare Trust
By: ____________________________ ___________________________________
Brad Eagelston Gary Kirkland
Oregon Laborers-Employers Defined Contribution and 401(k) Plan
By: ____________________________ ___________________________________
John Sutherland Jay Minor
Oregon Laborers-Employers Health & Welfare Trust Fund
By: ____________________________ ___________________________________
John Sutherland Jay Minor
Oregon Laborers-Employers Pension Plan and Trust
By: ____________________________ ___________________________________
John Sutherland Jay Minor
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Oregon, S. Idaho, Wyoming and Utah District Council of Laborers
By: ____________________________ ___________________________________
John Sutherland
Shopman's Local 516 Pension Trust
By: ____________________________ ___________________________________
Dave Williams Richard Gardner
Signatory Employers-Idaho Laborers Pension Trust Fund
By: ____________________________ ___________________________________
Tom Hazzard Chuck Vogel
United Association Local 290 Industry Advancement Fund
By: ____________________________ ___________________________________
Michael H. Anderson
United Association Local 290 Operating Fund
By: ____________________________ ___________________________________
Michael H. Anderson
United Association Local 290 Scholarship Fund
By: ____________________________ ___________________________________
Michael H. Anderson
United Association Union Local No. 290 Plumber, Steamfitter and Shipfitter
Industry 401(k) Plan
By: ____________________________ ___________________________________
Ed Gormley Michael H. Anderson
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United Association Union Local No. 290 Plumber, Steamfitter and Shipfitter
Industry Health and Welfare Plan
By: ____________________________ ___________________________________
Ed Gormley Michael H. Anderson
United Association Union Local No. 290 Plumber, Steamfitter and Shipfitter
Industry Pension Plan
By: ____________________________ ___________________________________
Ed Gormley Michael H. Anderson
CARPENTERS HEALTH & INSURANCE TRUST FUND FOR NORTHERN NEVADA
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
CARPENTERS PENSION TRUST FUND OF NORTHERN NEVADA
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
CARPENTERS SAVINGS TRUST FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
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NORTHERN NEVADA LABORERS HEALTH & WELFARE TRUST FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
LABORERS PENSION TRUST FUND FOR NORTHERN NEVADA
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
CONSTRUCTION WORKERS VACATION SAVINGS TRUST PLAN
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
TEAMSTERS LOCAL NO. 533 HEALTH & WELFARE TRUST FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
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TEAMSTERS LOCAL NO. 533 VACATION TRUST FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
COLORADO PAINTERS INDUSTRY HEALTH BENEFIT FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
SHEET METAL WORKERS LOCAL UNION NO. 20
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
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SHEET METAL WORKERS LOCAL NO. 9 PENSION TRUST FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
SHEET METAL WORKERS LOCAL NO. 9 HEALTH AND WELFARE TRUST FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
SHEET METAL WORKERS LOCAL NO. 9 JOINT APPRENTICE TRAINING FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
SHEET METAL WORKERS INTERNATIONAL ASSOCIATION, LOCAL NO. 9
By:_______________________________
Name:_____________________________
Title:____________________________
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INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL NO. 415
By:_______________________________
Name:_____________________________
Title:____________________________
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL NO. 113
By:_______________________________
Name:_____________________________
Title:____________________________
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL NO. 322
By:_______________________________
Name:_____________________________
Title:____________________________
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL NO. 291
By:_______________________________
Name:_____________________________
Title:____________________________
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INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL NO. 57
By:_______________________________
Name:_____________________________
Title:____________________________
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL NO. 68
By:_______________________________
Name:_____________________________
Title:____________________________
ELECTRICAL INDUSTRY BENEFIT VACATION & PAID HOLIDAY FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
INTERNATIONAL BROTHERHOOD OF PAINTERS & ALLIED TRADES LOCAL UNION NO. 79
By:_______________________________
Name:_____________________________
Title:____________________________
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COLORADO BUILDING & CONSTRUCTION TRADES COUNCIL
By:_______________________________
Name:_____________________________
Title:____________________________
OPERATING ENGINEERS HEALTH AND WELFARE TRUST FUND FOR COLORADO
By:_______________________________
Name:_____________________________
Title:____________________________
UTAH CARPENTERS AND CEMENT MASONS PENSION FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
UTAH CARPENTERS AND CEMENT MASONS HEALTH & WELFARE FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
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LOCAL UNION NO. 184, UNITED BROTHERHOOD OF CARPENTERS
By:_______________________________
Name:_____________________________
Title:____________________________
UTAH CARPENTERS AND ALLIED TRADES APPRENTICESHIP AND EDUCATION TRUST FUND
By:_______________________________
Name:_____________________________
Title:____________________________
JAMES & NANCY CASE, 1982 CASE FAMILY TRUST
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
JAMES E. CASE, IRA ROLLOVER
By:_______________________________
Name:_____________________________
Title:____________________________
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MENTOR INVESTMENTS, LLC
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
RICHARD RUPPERT, IRA ROLLOVER
By:_______________________________
Name:_____________________________
Title:____________________________
ELECTRICAL WORKERS LOCAL NO. 292 ANNUITY FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
ELECTRICAL WORKERS LOCAL NO. 292 PENSION FUND
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
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INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL UNION NO. 294
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL UNION NO. 292
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
CONSTRUCTION AND GENERAL LABORERS LOCAL UNION NO. 563
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
LABORERS DISTRICT COUNCIL OF MINNESOTA AND NORTH DAKOTA
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
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BRIDGE, STRUCTURAL AND REINFORCING IRON WORKERS, LOCAL UNION NO. 1
By:_______________________________
Name:_____________________________
Title:____________________________
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION NO. 134
By:_______________________________
Name:_____________________________
Title:____________________________
HEAT AND FROST INSULATORS AND ASBESTOS WORKERS LOCAL 17
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
PACIFIC NORTHWEST REGIONAL COUNCIL OF CARPENTERS
By:_______________________________
Name:_____________________________
Title:____________________________
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ARIZONA STATE DISTRICT COUNCIL OF CARPENTERS
By:_______________________________
Name:_____________________________
Title:____________________________
UNITED BROTHERHOOD OF CARPENTERS, LOCAL NO. 408
By:_______________________________
Name:_____________________________
Title:____________________________
RENO-SPARKS READY MIX, INC. PROFIT SHARING PLAN
By:_______________________________ By:________________________________
Name:_____________________________ Name:______________________________
Title:____________________________ Title:_____________________________
As Receiver:
___________________________________________
Thomas F. Lennon, as Receiver for Capital
Consultants, LLC, an Oregon limited
liability company in the cases of SECURITIES
AND EXCHANGE COMMISSION V. CAPITAL
CONSULTANTS, LLC, ET. AL. (Case No.
00-1290-KI) and ELAINE L. CHAO, SECRETARY OF
DEPARTMENT OF LABOR V. CAPITAL CONSULTANTS,
LLC, ET. AL. (Case No. 00-1291-KI) pending
in the United States District Court,
District of Oregon
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As representative:
___________________________________________
Thomas F. Lennon, as Receiver for Capital
Consultants, LLC, on behalf of Non Opt-Out,
Unrepresented CCL Clients as listed on
Exhibit C pursuant to the Order Authorizing
Receiver's Participation in Mediation of
Related Litigation entered on January 21,
2001 in the cases of SECURITIES AND EXCHANGE
COMMISSION V. CAPITAL CONSULTANTS, LLC, ET.
AL. (Case No. 00-1290-KI) and ELAINE L.
CHAO, SECRETARY OF DEPARTMENT OF LABOR V.
CAPITAL CONSULTANTS, LLC, ET. AL. (Case No.
00-1291-KI) pending in the United States
District Court, District of Oregon
AMERICAN FUNERAL & CEMETERY TRUST
SERVICES PREFERRED ENDOWMENT
CARE-OREGON/ WASHINGTON
By: ______________________________
Robert Baird
President
Date: _______________
AMERICAN FUNERAL & CEMETERY TRUST
SERVICES PREFERRED ENDOWMENT
CARE-CALIFORNIA
By: ______________________________
Robert Baird
President
Date: _______________
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ARNTSON FAMILY HOLDINGS, LLC
By: ______________________________
Morry Arntson
Its:
Date: _______________
DAVOL FAMILY TRUSTS A AND B
By: ______________________________
Ann Hazen Francis
Trustee
Date: _______________
DONALD E. TYKESON FOUNDATION
By: ______________________________
Donald E. Tykeson
Its:
Date: _______________
DONALD E. TYKESON TRUST
By: ______________________________
Donald E. Tykeson
Trustee
Date: _______________
ESTATE OF BENNIE KAY MUSGROVE
By: ______________________________
Wayne Musgrove
Personal Representative
Date: _______________
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FREMONT LAND COMPANY, LLC
By: ______________________________
James Flynn
Manager
Date: _______________
FUNERAL ASSOCIATES, LLC
By: ______________________________
Stan Morris
Its:_____________________
Date: _______________
ROBERT B. GUTTERMAN TRUST
By: ______________________________
Robert B. Gutterman
Trustee
Date: _______________
G.S. GUTTERMAN, M.D., TRUSTEE OF THE
GSG, MD, PC, PROFIT-SHARING PLAN
By: ______________________________
Gary S. Gutterman, M.D
Trustee
Date: _______________
S.M. GUTTERMAN, MA, JD, PROFIT-SHARING
PLAN
By: ______________________________
Sheila M. Gutterman
Its:_____________________
Date: _______________
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IBEW LOCAL UNION 1245
By: ______________________________
Richard K. Grosboll
Legal Counsel
Date: _______________
INTERTRIBAL TIMBER COUNCIL
By: ______________________________
C. Larry Blythe
Treasurer
Date: _______________
JELD-WEN FOUNDATION
By: ______________________________
R.C. Wendt
Its:
Date: _______________
JENNIFER LEE COUGHLIN TRUST
By: ______________________________
J. David Coughlin
Trustee
Date: _______________
LABORERS INTERNATIONAL UNION OF NORTH
AMERICA LOCAL 296
By: ______________________________
Ron Gedenberg
President
Date: _______________
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BRIX DeARMOND, L.L.C.
By: ______________________________
Peter J. Brix
Its:_____________________
Date: _______________
P.J. BRIX, L.L.C.
By: ______________________________
Peter J. Brix
Its:_____________________
Date: _______________
QUALITY ELECTRIC, INC.
By: ______________________________
Jay A. Hintze
Its:_____________________
Date: _______________
QUALITY ELECTRIC MONEY
PURCHASE PLAN
By: ______________________________
Paula J. King
Its:_____________________
Date: _______________
ROBERT J. WILHELM TRUST DTD
9/27/89
By: ______________________________
Robert J. Wilhelm
Trustee
Date: _______________
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THE POORMAN FAMILY, LLC
By: ______________________________
Kenneth R. Poorman
Its: ____________________
Date: _______________
VIRGINIA B. MUDD REVOCABLE TRUST
By: ______________________________
Virginia B. Mudd
Trustee
Date: _______________
WAUD'S FUNERAL HOME DEFINED BENEFIT PLAN
By: ______________________________
Thomas A. Waud
Its: ____________________
Date: _______________
ALLEN AND ESTHER WILSON REVOCABLE TRUST
10/3/91
By: ______________________________
Kenneth R. Poorman
Trustee
Date: _______________
__________________________________
Carolyn L. Arntson
Date: _____________________
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__________________________________
Mary Arntson
Date: _____________________
__________________________________
Jerry L. Baker
Date: _____________________
__________________________________
Mary Beth Baker
Date: _____________________
__________________________________
Karen Lynn Benson
Date: _____________________
__________________________________
John R. Chaney
Date: _____________________
__________________________________
J. David Coughlin
Date: _____________________
__________________________________
Robert D. Dutcher
Date: _____________________
-71-
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__________________________________
Marlene H. Dutcher
Date: _____________________
__________________________________
Noel B. Flynn
Date: _____________________
__________________________________
Joseph L. Gabriel
Date: _____________________
__________________________________
Nancy M. Gabriel
Date: _____________________
__________________________________
Gary S. Gutterman, M.D.
Date: _____________________
__________________________________
Sheila M. Gutterman
Date: _____________________
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__________________________________
Jay A. Hintze
Date: _____________________
__________________________________
Kenneth E. Holtz
Date: _____________________
__________________________________
Rosella G. Holtz
Date: _____________________
__________________________________
Shelley J. King
Date: _____________________
__________________________________
Paula J. King
Date: _____________________
__________________________________
Roderick A. Livesay
Date: _____________________
__________________________________
Victoria K. Mudd
Date: _____________________
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__________________________________
Elizabeth McNally
Date: _____________________
__________________________________
Patricia J. Murphy
Date: _____________________
__________________________________
James Murphy
Date: _____________________
__________________________________
Betty Norrie
Date: _____________________
__________________________________
Wayne Musgrove
Date: _____________________
__________________________________
Kenneth R. Poorman
Date: _____________________
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__________________________________
Scott Thomason
Date: _____________________
__________________________________
Boyd Van Ness
Date: _____________________
__________________________________
Martin R. Wolf
Date: _____________________
__________________________________
Deborah B. Wolf
Date: _____________________
__________________________________
Leslie R. Wolf
Date: _____________________
__________________________________
Janice Wolf
Date: _____________________
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LIST OF EXHIBITS
A - List of Claimant Trusts
B - List of Non-ERISA Claimants
C - Parties Represented by Receiver under Court Order
D - List of Certain Insurers and Policies
E - List of Claimant Signatories
F - List of Other Defendants
G - List of Released Parties Signatories
H - CCL Computer Print-Out re: Collateralized Note Program
Participants
I - Form of Release with Non-Settling Parties J - Form of Trust
Agreement
K - List of Released Parties' Representatives
K-1 - List of Released Parties Authorized to Exercise Certain Elections
and Rights
L - Form of Purchase Agreement
M - List of Non-Settling CCL Clients
N - List of Class Actions N-1 - Form of Notices to Class Actions
N-2 - Form of Language Insert to Order Approving Settlements with Class
Actions
O - Form of Distributee Agreement
P - List of Claimants' Representatives
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