1. SETTLEMENT AGREEMENT
This settlement agreement (“Agreement”) is between Hwacheon Machinery America,
Inc., an Illinois corporation (“HMA”), and [Entities], a California corporation, also doing
business as both [Entities] (collectively referred to as “Company”), as of the last signature date
set forth below with reference to the following facts:
A. HMA is in the business of manufacturing machine tools and related products for
sale to other manufacturing companies (“Products”).
B. HMA delivered Products to Company and Company’s customers based upon
sales of the Products consummated by Company in exchange for payment from Company.
C. Between January 1, 2007, and through June 30, 2009, Company submitted to
HMA purchase orders for the purchase from HMA of Products, including various machines,
accessories and spare parts in order to sell and deliver to Company’s customers. HMA caused
to be shipped and delivered to Company the various machinery and spare parts.
D. As a result of the shipment and delivery by HMA to Company, Company owes
and has not paid an outstanding balance of $_______________, which became past due (“Debt”).
E. After making several demands for full payment, HMA filed suit against Company
on [Date], in the [County] Superior Court (Case No. [No.]), entitled Hwacheon Machinery
America, Inc. v. [Name] (the “Action”) and duly caused service of the summons and complaint
upon Company’s registered agent for service of process.
F. Company also caused HMA to incur attorney’s fees and costs, as well as in [other
actions] in the amount of $__________________.
G. HMA obtained judgment against [Name] on [Date].
H. The parties desire to resolve their differences and to confirm the amount to be
paid by Company to HMA for the Debt. The Company represents to HMA that it is unable to
pay the Debt in full at this time, but that it could satisfy the Debt through an installment payment
schedule.
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2. The parties therefore agree as follows:
1. Confirmation of Obligations and Liabilities. The parties acknowledge the current
amount of the Debt is $[Amount]. The Company further acknowledges and agrees that it
shall not raise against HMA any defense, offsets, claims, counterclaims, or any other
argument with respect to the payment of all monies owed under the Agreement for the
Debt.
2. Payment of Debt. The Company shall pay HMA the sum of $[Amount], plus interest if
applicable, according to the terms below.
a. Initial Installment.
Company shall make an immediate payment of $[Amount] to HMA.
b. Monthly Payments.
i. Payment Amount. Commencing in [Date], the Company shall make the
following fifteen monthly payments:
On or by 2/15/11 - $[Amont]
On or by 3/15/11 - $[Amont]
On or by 4/15/11 - $[Amont]
On or by 5/15/11 - $[Amont]
On or by 6/15/11 - $[Amont]
On or by 7/15/11 - $[Amont]
Final on or by 3/15/12- $607.41
No provision in this Agreement is meant to limit the Company’s right or
privilege to prepay any portion of the judgment. Any payment made in excess
of the monthly scheduled amount will be credited toward the next consecutive
payment.
ii. Due Date and Delinquency. Payments are due on the 15th day of each month
and are considered delinquent if not received at HMA by the 15th day of each
month. All payments must be received by HMA on or before the 15th day
of each month to be considered timely made.
iii. Form of Payment. All payments must be by check mailed or hand-delivered to
HMA at the address set forth in Section 7.
iv. Insufficient Funds. If any check is returned for insufficient funds (“NSF
Check”), the Company shall pay a $35.00 NSF penalty. The Company shall
immediately replace any NSF check with a cashier’s check in the amount of the
NSF check plus the NSF penalty plus any delinquency penalty.
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3. c. Calculation of Interest.
i. Payment Schedule Interest. As long as the Company remains current with
monthly payments, as set forth above and in the Summary of Combined
Payment Schedule, then no interest on the Debt balance will accrue. If any
monthly payment is no received on or by the 15th of every month, interest shall
accrue at the annual rate of 5% on the late monthly installment.
ii. Default Interest. Upon default of the Agreement, interest will accrue at the
legal annual rate of 10% on the Debt balance.
3. Delinquency and Default.
a. Delinquency. If the full monthly payment is not received by the 15th of the
month in which it is due, the Company will be considered delinquent on the
Payment Schedule. For each delinquency on the Payment Schedule, the Company
shall pay a $50.00 delinquency penalty.
b. Notice and Opportunity to Cure. If the Company becomes delinquent on the
Payment Schedule, HMA will provide a delinquency notice via fax and first class
mail to the Company. The Company may cure the delinquency by paying the full
monthly payment amount due plus the penalty charge within 5 days after the
transmittal date of the delinquency notice. Failure to pay the penalty charge
constitutes a failure to cure.
c. Default. Failure by the Company to cure a delinquency within 5 days after notice
is sent constitutes default on this Agreement. Upon default, HMA may enforce
the judgment, less any credits or payments made by the Company, without any
further notice to the Company. Should HMA grant the Company’s request for a
brief extension of time to cure any delinquency, the parties acknowledge that an
extension of time is not intended to be a waiver of HMA’s right to demand timely
payment in the future.
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4. 4. Stipulation and Entry of Judgment.
a. Stipulation. The parties stipulate to the entry of judgment in the Action in favor
of HMA and against Company. The Stipulation for Entry of Judgment will be in
the form of Exhibit A, or another form required by the court and approved by
HMA in its reasonable discretion.
b. Form of Judgment. The Judgment (“Judgment”) will be in the form of Exhibit B,
or another form required by the court. Company shall take all necessary steps;
including signing the Stipulation for Entry of Judgment, to ensure that the court
enters the Judgment. This Agreement is contingent upon the court’s entry of the
Judgment.
c. Judgment Final and Binding. The Company agrees that the Judgment will
constitute a binding and final adjudication of its monetary liability to HMA in the
Action, except that HMA retains all further rights expressly identified elsewhere
in this Agreement. The Company fully and forever waives any rights of appeal, to
bring post-trial motions, or to bring any other challenge to the Judgment. The
Company acknowledges that the Judgment is final, valid, and in full force and
effect.
5. Enforcement of Judgment and Forbearance.
a. HMA’s Right to Enforce. Except as specifically provided below, the Company
acknowledges that HMA is entitled to enforce the Judgment by levy, judgment
sale, or seizure of assets, filings or recording documents with governmental
authorities, including but not limited to any Secretary of State or County
Recorder), and may take any other action that a judgment creditor is entitled to
take on a Judgment.
b. Forbearance. Despite its right to enforce the Judgment, HMA shall not cause
writs of execution to be enforced and shall not cause the judgment sale of any
asset of the Company as long as the Company is in complete compliance with all
provisions of this Agreement (and as long as the representations and warranties of
the Company under this Agreement are and continue to be true in all material
respects), and the Company remains current on all future obligations, if any,
incurred with HMA. However, upon default or breach of this Agreement by the
Company, HMA may pursue all of its rights under the Judgment without further
notice to the Company or the court. The Company waives all notice of and
objections to any action taken by HMA to enforce the Judgment.
c. If during the duration of this Agreement, the Company breaches any
requirement under this Agreement or becomes delinquent on any payment,
then the Company will be deemed to have defaulted on the Agreement and
HMA will be entitled to collect the balance of all monies owed to HMA under
this Agreement and the judgment.
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5. 6. Satisfaction of Judgment. If the Company complies with all provisions of this
Agreement, and if all of the Company’s representations are and remain accurate, then
upon receipt by HMA of payment of the full amount of the Debt, including any accrued
interest and penalties, HMA shall file with the court an Acknowledgment of Satisfaction
of Judgment and shall provide a duplicate original to the Company.
7. Notices. Failure to provide updated contact information for notice, shall constitute a
waiver of any notice requirement. The parties shall provide all notices, correspondence,
and payments as follows:
To HMA: To Company:
Hwacheon Machinery America, Inc. [Address]
50 Lakeview Parkway, Unit #119
Vernon Hills, IL 60061
Attn: Mark Leeser Attn: [Name], [Title]
Phone: (847) 573-0100 Phone: (___) ___-____
Fax: (847) 573-9900 Fax: (___) ___-____
8. Limited Release. The parties acknowledge and agree that this Agreement resolves and
releases only the delinquent Debt, and does not it in any way release, affect, reduce or
limit any of the Company’s other obligations or liabilities to HMA.
9. Representations and Warranties. Each party represents to the other parties that it is not
aware of any other person or entity having an interest (nor has it assigned or otherwise
transferred any interest) in the claim that is the subject of this Agreement. Each party
shall indemnify and hold harmless the other parties from any and all liabilities, claims,
demands, obligations, damages, costs, expenses and attorneys’ fees as a result of anyone
asserting such interest, assignment, or transfer. Each party additionally warrants that each
person signing this Agreement on behalf of a party is authorized to enter into and execute
this Agreement on behalf of the party for which that person is signing.
10. General Provisions.
a. All parties shall execute any other documents and take any additional actions
necessary or appropriate to give full force and effect to the terms and to the intent
of this Agreement.
b. This Agreement inures to the benefit of, and is binding upon, the respective
successors and assigns of each of the parties.
c. If HMA undertakes any collection efforts following the Company’s default on
this Agreement, then the Company shall pay HMA for all attorneys’ fees and
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6. costs HMA incurs to collect the balance of the monies owing on the legal
judgment.
d. If any legal action or other proceeding is brought for the enforcement or
interpretation of this Agreement, or because of an alleged dispute, breach, default
or misrepresentation in connection with this Agreement, the successful or
prevailing party or parties shall be entitled to recover reasonable attorneys’ fees
and costs incurred in that action or proceeding, in addition to any other relief to
which it may be entitled.
e. The parties acknowledge that they have been represented by independent counsel
of their choice throughout the negotiations that preceded the execution of this
Agreement. Each party has participated in negotiating this Agreement, so if an
ambiguity or a question of intent or interpretation arises, this Agreement is to be
construed as if the parties had drafted it jointly as opposed to being construed
against a party because it was responsible for drafting one or more provisions of
this Agreement. The parties waive section 1654 of the California Civil Code.
f. The laws of the State of California govern all matters arising out of this
Agreement.
g. The provisions of this Agreement are severable and if any provision or portion of
this Agreement is declared illegal or unenforceable, the remainder of this
Agreement shall remain effective and binding on the parties.
h. This Agreement may be executed in multiple counterparts, any of which may be
transmitted by facsimile, each of which shall be deemed an original Agreement,
and all of which shall constitute one Agreement.
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7. i. This Agreement constitutes the parties’ entire agreement and supersedes all prior
and contemporaneous agreements and understandings of the parties with respect
to the Debt; there are no warranties, representations, or other agreements between
the parties with respect to the Debt. No supplementation, modification, waiver or
termination of this Agreement will be binding unless executed in writing by the
party to be bound.
Each party is signing this Agreement on the date stated opposite that party’s signature.
Dated: _______________________ Hwacheon Machinery America, Inc.
_____________________________________
Mark Leeser
National Sales Manager
Dated: _______________________ [Company Name]
_____________________________________
By: _________________________________
Title: ________________________________
APPROVED AS TO FORM:
Dated: ________________________ Dated: _____________________________
______________________________ ___________________________________
[Counsel for Debtor] Grant Nigolian
[Law firm]. Masuda, Funai, Eifert & Mitchell, LTD.
Attorney For [Companies] 19191 South Vermont Avenue, Suite 420
Torrance, CA 90502
Attorneys for Hwacheon Machinery America,
Inc.
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