EXHIBIT 10.16
GENERAL SETTLEMENT AND MUTUAL RELEASE AGREEMENT
-----------------------------------------------
JMC GROUP, INC., a Delaware corporation ("JMCG"), James K. Mitchell, D.
Mark Carlson, Simon C. Baitler, Kevin L. Rakin, USBA HOLDINGS, LTD., a Georgia
corporation ("USBA"), James P. Cotton, Jr., Ronald D. Wallace, and Louie W. Moon
hereby enter into this General Settlement and Mutual Release Agreement dated as
of November 20, 1996 (hereinafter the "Agreement") for the purpose of
compromising all disputes between them (and/or any of their agents, employees,
attorneys, successors and assigns), including those disputes pending in an
action styled JMC Group, Inc. v. USBA Holdings, Ltd., James P. Cotton, Jr.,
-------------------------------------------------------------
Louie W. Moon and Ronald D. Wallace v. JMC Group, Inc., James K. Mitchell, D.
- -----------------------------------------------------------------------------
Mark Carlson, Simon C. Baitler, and Kevin L. Rakin, Civil Action File No. 96-
- --------------------------------------------------
1775-K-JFS, United States District Court for the Southern District of California
(hereinafter the "Litigation").
WITNESETH
WHEREAS, it is the mutual desire of the parties to this Agreement to
resolve and to settle all claims and disputes between them, including those at
issue in the Litigation and otherwise as provided for herein;
NOW, THEREFORE, for the consideration hereinafter set forth, together with
the premises, mutual promises and covenants contained herein, and such other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged by each of the parties to this Agreement, the parties
agree as follows:
1. MUTUAL RELEASE AMONGST THE PARTIES
---------------------------------------
A. Except as provided for in this Agreement, each party to this Agreement
for herself, himself or itself and her, his or its successors, assigns, heirs,
executors, administrators and personal representatives, hereby fully releases,
remises, acquits and forever discharges the other party/parties to this
Agreement and their/her, his or its allied, affiliated, parent and associated
companies and their/her, his or its officers, agents, attorneys, accountants
(including without limitation Gross, Collins & Cress, P.C.), employees and
servants from any and all claims, demands, actions, causes of action, damages,
obligations, losses and expenses of whatsoever kind or nature arising out of any
acts, omissions, transactions, transfers, happenings, violations, promises,
contracts, agreements, facts or situations which occurred or existed at any time
before the execution of this Agreement, whether or not now known or suspected or
claimed, whether in law, admiralty, arbitration, administrative, equity or
otherwise, and whether accrued or hereafter maturing, including, but not limited
to, any and all claims, counterclaims, damages, demands, actions or causes of
action of any kind or nature that have been asserted or that could have been
asserted by any party in the Litigation.
B. It is expressly understood and agreed that any and all consideration
received, as herein described, is in full accord and satisfaction and in
compromise of disputed claims, and that
the payment and receipt thereof is not an admission of liability, but is made
for the purpose of terminating disputes in litigation and all other disputed
matters amongst the parties to this Agreement, and that there is no
understanding or agreement amongst the parties of any kind for any further or
future consideration whatsoever, implied or expected, or to come to or among the
parties, except as set forth in this Agreement.
C. The parties to this Agreement acknowledge that except as stated in
this Agreement, no representations of fact or opinion have been made by any
other party or anyone acting in his, her, their or its behalf to induce this
compromise with respect to the nature of the damages or issues of liability, and
this Release shall be complete as to all matters referred to in this Agreement.
2. DISMISSAL OF THE LITIGATION
--------------------------------
The parties hereto agree that their attorneys shall sign and file with the
United States District Court for the Southern District of California, within
five (5) days after the date of this Agreement, a stipulation of voluntary
dismissal of the Litigation, with prejudice, and that a true and correct copy of
the stipulation of voluntary dismissal that shall be signed and filed is
attached hereto as Exhibit A. JMCG shall cooperate with USBA in any reasonable
efforts USBA shall undertake to cause all public records regarding the
Litigation to be permanently sealed or to cause any portion of the Litigation to
be stricken from the record.
3. CONSIDERATION
------------------
A. Upon the execution of this Agreement, USBA shall pay and JMCG shall
receive the sum of $500,000.00 in the form of a wire transfer to the client
trust account of JMCG's attorney of record, which payment shall constitute a
partial refund of amounts paid by JMCG under the Consulting Agreement described
below and a payment of a portion of JMCG's expenses incurred in connection with
the proposed JMCG/USBA merger.
B. Upon the execution of this Agreement, the Consulting Agreement dated
January 26, 1996, the Marketing Agreement dated January 29, 1996 and the Merger
Agreement dated as of May 20, 1996, each between USBA and JMCG, shall be
terminated in their entirety and be of no further force nor effect and neither
party shall have any duties, obligations or liabilities to the other thereunder
as a result of any such termination, and any other business relationship between
JMCG and USBA, whether evidenced by a writing or otherwise, shall also be
terminated in its entirety without liability of either party to the other as a
result thereof.
C. Upon the execution of this Agreement, the Warrant to purchase
1,000,000 Shares of Common Stock of JMC Group, Inc. issued by JMCG to USBA on
January 29, 1996 shall be canceled and terminated in its entirety and be of no
further force nor effect. Within five (5) days of the execution of this
Agreement, USBA shall deliver the original of said Warrant to JMCG free and
clear of any liens, claims or encumbrances.
4. ACKNOWLEDGMENT
-------------------
The parties to this Agreement acknowledge that they have read the terms of
this Agreement, that these terms are fully understood by each of them, that they
each have entered into this Agreement voluntarily, with full knowledge of the
effect thereof and upon the advice of counsel.
5. CONFIDENTIALITY
--------------------
Promptly after the execution of this Agreement, JMCG will issue a press
release in the form of Exhibit B hereto. All communications by any party to
this Agreement or anyone acting on their behalf regarding the Litigation or this
Agreement, whether oral or written, will be consistent with and limited to the
substance of such press release, except where required by law, governmental
regulation or stock exchange requirements. In any event, any filings or
statements that contain information describing the financial terms of the
settlement contained herein or from which such financial terms could be derived
will also contain the description of such payments contained in Section 3A of
this Agreement.
6. BENEFIT
------------
The terms and conditions of this Agreement shall be binding upon, and inure
to the benefit of, the parties to this Agreement, their heirs, successors,
assigns, transferees, administrators, representatives and trustees.
7. ENTIRE AGREEMENT
---------------------
This Agreement, together with the stipulation or order of dismissal of the
Litigation, with prejudice, shall constitute the entire agreement between the
parties and anyone acting for, associated with or employed by any party to this
Agreement concerning all matters and supersedes any prior discussions,
agreements or understandings, and there are no promises, representations or
agreements between the parties hereto or anyone acting for, associated with or
employed by any party hereto, except as provided herein. Each party to this
Agreement represents and warrants that, other than as recited herein, there has
been no reliance, inducement, representation or agreement causing, affecting or
in connection with this Agreement. No representation or promise not included in
this Agreement is binding on any party to this Agreement or anyone acting for,
associated with or employed by any party hereto.
8. MODIFICATION; WAIVER
-------------------------
A. No person is or will be authorized by any party to this Agreement
orally to modify, terminate or waive any provision of this Agreement or orally
to make any additional or other agreement relating to this Agreement or its
subject matter. Any discussion or conversation pertaining to any such
modification, termination, waiver or additional or other agreement is to be
considered preliminary and non-binding. If any such modification, termination,
waiver or additional or other agreement is in the future authorized by or to be
binding on a party hereto, it shall be set forth in writing signed on behalf of
such party.
B. No waiver with respect to any portion of this Agreement shall apply to
any other portion of the Agreement, and a waiver on one occasion shall not be
deemed to be a waiver of the same of any other breach on a future occasion. No
course of dealing by any party, and no failure, omission, delay or forbearance
by any party in exercising such party's rights or remedies shall be deemed a
waiver of any such rights or remedies or modification of this Agreement.
9. CAPTIONS
-------------
The captions used herein are for the convenience of the parties to this
Agreement only and shall not be deemed to be a part of this Agreement and shall
have no independent significance or bear upon the intent of the parties hereto.
10. PRESUMPTIONS
------------------
This Agreement has been drafted mutually among the parties hereto, and the
parties expressly acknowledge and agree that no presumption, interpretation or
construction of this Agreement shall be made either for or against the drafter
or drafters of this Agreement.
11. COUNTERPARTS
------------------
This Agreement may be executed simultaneously in one or more counterparts,
each of which shall be deemed an original, all of which together shall
constitute one and the same document. Facsimile signatures on this Agreement
shall be deemed to be effective signatures for all purposes.
12. COOPERATION OF THE PARTIES HEREIN
---------------------------------------
Each of the parties hereto agrees, by its signature hereon, that they shall
cooperate with each other in the execution and delivery of all documents
necessary to consummate the intent of this Agreement.
13. SEVERABILITY
------------------
If any provision of this Agreement shall, to any extent, be held invalid,
illegal or unenforceable, in whole or in part, the validity, legality, and
enforceability of the remaining part of such provision, and the validity,
legality and enforceability of the other provisions of this Agreement shall not
be affected thereby. Any provision of this Agreement which is held invalid,
illegal or unenforceable in any jurisdiction shall not be deemed invalid,
illegal or unenforceable in any other jurisdiction.
14. ASSIGNMENT
----------------
Neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof, shall be assignable by any party, without
prior written consent of the other party or parties.
15. FURTHER ASSURANCES
------------------------
The parties to this Agreement shall execute, deliver, acknowledge or supply
such further documents, instruments and assurances as shall be reasonably
necessary or appropriate to carry out the full intent and purposes of this
Agreement.
16. USE OF TERMS
------------------
Use of the terms "herein", "hereto", "hereby", "hereunder", "hereof",
"hereinbefore", "hereinafter", and other equivalent words refer to this
Agreement in its entirety and not solely to the particular portion of the
Agreement in which such word is used. Reference to "this Article", "this
Section", or a similar reference to a specific part of this Agreement shall
refer to the particular Article, Section or specific part in which such
reference appears.
17. CIVIL CODE SECTION 1542
-----------------------------
Each party hereto expressly waives any and all rights under Section 1542 of
the Civil Code of the State of California, and any like provision or principal
of common law in any foreign jurisdiction. Section 1542 provides as follows:
"A general release does not extend to claims which 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 her
settlement with the debtor."
This, notwithstanding the provision of Section 1542, and for the purpose of
implementing a full and complete release and discharge of all parties released
herein, each party hereto expressly acknowledges that this Agreement is intended
to include in its effect, without limitation, claims and causes of action,
against any other party hereto, which they do not know or suspect to exist in
their favor at the time of execution hereof, and that this Agreement
contemplates extinguishment of all such claims and causes of action.
18. ATTORNEY'S FEES
---------------------
If any party employs counsel to enforce this Agreement, the prevailing
party shall be entitled to recover its reasonable attorneys' fees and court
costs in addition to any other remedy it may obtain or be awarded.
19. GOVERNING LAW
-------------------
This Agreement shall be construed and interpreted in accordance with
the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals on the day
and year first above written.
JMCGROUP, Inc.
By: /s/James K. Mitchell
---------------------
Title: Chairman, CEO
--------------
/s/James K. Mitchell
--------------------
James K. Mitchell
/s/D. Mark Carlson
------------------
D. Mark Carlson
/s/Simon C. Baitler
-------------------
Simon C. Baitler
/s/Kevin L. Rakin
-----------------
Kevin L. Rakin
USBA HOLDINGS, LTD.
By: /s/Ronald D. Wallace
---------------------
Title: President & CEO
---------------
/s/James P. Cotton, Jr.
-----------------------
James P. Cotton, Jr.
/s/Louie W. Moon
----------------
Louie W. Moon
/s/Ronald D. Wallace
--------------------
Ronald D. Wallace
David E. Kleinfeld (110734)
PILLSBURY MADISON & SUTRO, L.L.P.
101 West Broadway, Suite 1800
San Diego, CA 92101-8219
(619) 234-5000
ATTORNEYS FOR PLAINTIFF
William H. Boice
Admitted pro hac vice
KILPATRICK & CODY
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
(404) 815-6500
ATTORNEYS FOR DEFENDANTS
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
- -----------------------------
)
JMC GROUP, INC., )
a Delaware corporation ) Civil No. 96-1775K(JFS)
Plaintiff, )
)
vs. )
)
USBA HOLDINGS, LTD., a ) MUTUAL STIPULATION OF
Georgia corporation; JAMES ) VOLUNTARY DISMISSAL WITH
P. COTTON, JR., an ) PREJUDICE
individual, LOUIE W. MOON, )
an individual, RONALD D. )
WALLACE, an individual, )
)
Defendants, )
)
vs. )
)
JMC GROUP, INC., a )
Delaware corporation; )
JAMES K. MITCHELL, an )
individual; D. MARK )
CARLSON, an individual; )
SIMON C. BAITLER, an )
individual; and KEVIN L. )
RAKIN, an individual, )
)
Defendants-in- )
Counterclaim )
_____________________________
EXHIBIT A
Pursuant to Fed. R. Civ. P. 41(a)(1)(ii), plaintiff hereby dismisses all of
its claims against the defendants, with prejudice.
Pursuant to Fed. R. Civ. P. 41(a)(1)(ii), defendants hereby dismiss all of
their counterclaims against the plaintiff and the defendants-in counterclaim,
with prejudice.
____________________________ ___________________________________
David E. Kleinfeld (110734) John H. Stephens (#82971)
PILLSBURY MADISON & SUTRO LLP ROBBINS & KEEHN
101 West Broadway, Suite 1800 530 B Street, 24th Floor
San Diego, CA 92101-8219 San Diego, CA 92101
(619) 234-5000 (619)232-1700
___________________________________
William H. Boice
Stephen E. Hudson
David Hopkins
Admitted pro hac vice
KILPATRICK & CODY, LLP
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
(404) 815-6500
ATTORNEYS FOR DEFENDANTS