EXHIBIT 10.1
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MASTER SETTLEMENT AGREEMENT
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This Master Settlement Agreement, dated October 31, 2006 (the
"Master Settlement Agreement"), is by and among FINOVA, the Xxxxxxx Debtors, the
Committee, the Proposed Class Representative on behalf of the Proposed Class,
and the Additional Defendants. All capitalized terms used herein shall have the
meaning set forth in Section I of this Master Settlement Agreement.
RECITALS
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WHEREAS, on April 4, 2001, FINOVA and the Xxxxxxx Borrowers entered
into the Loan Agreement and certain Loan Documents;
WHEREAS, pursuant to the Loan Agreement and Loan Documents, the
Xxxxxxx Borrowers granted FINOVA the FINOVA Liens to secure their joint and
several obligations under the Loan Agreement;
WHEREAS, on October 16, 2003, Xxxxx X. Xxxxxxx and certain other
plaintiffs filed the Xxxxxxx Putative Class Action in the Court of Common Pleas
of Lancaster County, South Carolina;
WHEREAS, on the Petition Date, each of the Xxxxxxx Debtors filed a
voluntary petition for relief under chapter 11 of the Bankruptcy Code in the
Delaware Bankruptcy Court;
WHEREAS, on November 14, 2003, FINOVA removed the Xxxxxxx Putative
Class Action to the South Carolina District Court;
WHEREAS, on November 25, 2003, Xxxxxx Xxxxx and certain other
plaintiffs filed the Xxxxx Action in the South Carolina District Court;
WHEREAS, on December 3, 2003, Xxxxx Xxxx and certain other
plaintiffs filed the Hall Action in the Superior Court for Mecklenberg County,
North Carolina;
WHEREAS, on December 2, 2003, FINOVA filed the Bankruptcy Injunction
Action;
WHEREAS, on December 3, 2003, Xxx Xxxxx Xxxx and certain other
plaintiffs filed the Wood Action in the Superior Court for Gwinnett County,
Georgia;
WHEREAS, on January 5, 2004, FINOVA removed the Hall Action to the
North Carolina District Court, and the Wood Action to the Georgia District
Court;
WHEREAS, on January 9, 2004, Xxxxxxx Xxxxx and certain other
plaintiffs filed the Xxxxx Action in the Ohio District Court;
WHEREAS, on March 24, 2004, the Committee filed the Adversary
Proceeding against FINOVA, and the Committee Substantive Consolidation Motion in
the Delaware Bankruptcy Court;
WHEREAS, on June 18, 2004, the JPML issued an order transferring the
Hall Action, the Wood Action and the Xxxxx Action to the South Carolina District
Court for coordinated pre-trial proceedings with the Xxxxxxx Putative Class
Action and the Xxxxx Action;
WHEREAS, on June 24, 2004, the Adversary Proceeding was removed to
the Delaware District Court;
WHEREAS, on August 3, 2004, the JPML issued an order transferring
the Adversary Proceeding to the South Carolina District Court as a "tag-along"
proceeding for coordinated pre-trial proceedings with the Xxxxxxx Putative Class
Action, the Xxxxx Action, the Hall Action, the Wood Action, and the Xxxxx
Action;
WHEREAS, on August 16, 2004, the Xxxxxxx Debtors filed the
Xxxxxxx Debtors' Substantive Consolidation Motion;
WHEREAS, during September and October 2004, the Delaware Bankruptcy
Court conducted a four day trial on the Substantive Consolidation Request;
WHEREAS, on June 8, 2005, the South Carolina District Court
issued its Xxxxxxx Class Certification Order in the Xxxxxxx Putative Class
Action;
WHEREAS, on March 14, 2006, the Fourth Circuit entered an order
reversing the Xxxxxxx Class Certification Order;
WHEREAS, on March 20, 2006, the South Carolina District Court
issued its Partial Summary Judgment Order in the Adversary Proceeding;
WHEREAS, on Xxxxx 00, 0000, XXXXXX filed the Summary Judgment Appeal
with the Fourth Circuit, which appeal remains pending as of the date hereof;
WHEREAS, on May 19, 2006, the South Carolina District Court
issued its Injunction Denial Order;
WHEREAS, on May 24, 2006, FINOVA filed the Injunction Appeal with
the Fourth Circuit, which appeal remains pending as of the date hereof;
WHEREAS, on June 8, 2006, certain Proposed Class Members filed
the Society Action in the South Carolina District Court;
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WHEREAS, on September 6, 2006, the JPML entered an order referring
the Hall Action back to the North Carolina District Court, the Wood Action back
to the Georgia District Court, and the Xxxxx Action back to the Ohio District
Court;
WHEREAS, on September 6, 2006, the JPML entered an order referring
the Adversary Proceeding back to the Delaware District Court;
WHEREAS, on September 11, 2006, the Delaware Bankruptcy Court
entered the Stipulated Xxxxxxx Trust Account Order;
WHEREAS, Proposed Class Counsel has informed FINOVA and the
Additional Defendants that it intends to seek certification of the Proposed
Class in the Xxxxxxx Putative Class Action in the South Carolina District Court;
WHEREAS, in connection with the Litigation, the Committee and the
Proposed Class have alleged that FINOVA and the Additional Defendants are liable
to the Proposed Class Members in connection with the sale of Xxxxxxx Notes by
certain Xxxxxxx Debtor Parties to the Proposed Class Members;
WHEREAS, FINOVA and the Additional Defendant Parties deny all such
allegations and any liability to any of the Proposed Class Members, the Xxxxxxx
Debtor Parties, any other creditors of the Xxxxxxx Debtor Parties, or the
Committee;
WHEREAS, the Additional Defendants and certain of the Additional
Defendant Parties have indicated their intent to assert indemnity claims against
FINOVA in connection with the Litigation;
WHEREAS, the Parties, having taken into account, through their
counsel, the risks, delay, and difficulties involved in establishing liability
and non-liability and the further expense, burden and uncertainty of continuing
the Litigation, wish to settle and dismiss the Litigation on the terms and
conditions set forth herein;
NOW, THEREFORE, in resolution of the entirety of the Litigation, and
for other good and valuable consideration received, the Parties hereby agree to
compromise and settle the Litigation on the terms and conditions set forth
herein.
I. DEFINITIONS
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Additional Defendant Parties. Collectively: (a) the Additional
Defendants; (b) all of the current and former affiliate companies of the
Additional Defendants; and (c) all of the current and former (i) parents,
subsidiaries, predecessors, successors and assigns, officers, directors,
executors, administrators, agents, partners, shareholders, members, insurers,
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affiliated persons or entities, attorneys, other professionals, and employees of
(ii) any of (a) or (b).
Additional Defendants. Collectively: (a) FINOVA Group; (b) Berkadia
Equity Holdings, LLC, a Delaware limited liability company; (c) Berkadia
Management, LLC, a Delaware limited liability company; (d) Berkshire Hathaway,
Inc., a Delaware corporation; (e) Leucadia National Corporation, a New York
corporation; (f) Xxxxxx Xxxx, a natural person and resident of the State of New
Jersey; (g) Berkadia, LLC, a Delaware limited liability company; (h) Berkadia
II, LLC, a Delaware limited liability company; and (i) BH Finance, LLC, a
Nebraska limited liability company.
Additional Xxxxxxx Entities. Collectively: (a) Xxxxxxxxx
Credit of Alabama, Inc.; (b) TICO Reinsurance, Ltd.; (c) Fitch National
Reinsurance, Ltd.; and (d) SoCo Reinsurance, Ltd.
Adversary Proceeding. That certain proceeding originally filed by
the Committee, on behalf of the Xxxxxxx Debtors, in the Delaware Bankruptcy
Court against FINOVA styled The Official Committee of Unsecured Creditors of the
Xxxxxxx Group, Inc. v. FINOVA Capital Corporation, Adversary No. 04-53129, and
currently pending in the Delaware District Court as Case No. 04-CV-0476, and
with respect to Count XII, in which judgment has been entered by the South
Carolina District Court, which proceeding seeks, inter alia, to disallow
FINOVA's Claims under the Loan Documents.
Argo. Collectively: (a) Argo Partners, LLC, a Delaware limited
liability company; and (b) all of its current and former affiliate companies,
parents, subsidiaries, predecessors, successors and assigns, current and former
officers, directors, executors, administrators, agents, partners, shareholders,
members, insurers, affiliated companies, attorneys, other professionals, and
employees.
ASM. Collectively: (a) ASM Capital, L.P., a Delaware limited
partnership; (b) ASM Capital II, L.P., a Delaware limited partnership; (c) ASM
Capital Acquisition Xxxxxxx X.X., a Delaware general partnership; and (d) all of
the current and former affiliate companies, parents, subsidiaries, predecessors,
successors and assigns, current and former officers, directors, executors,
administrators, agents, partners, shareholders, members, insurers, affiliated
companies, attorneys, other professionals, and employees of any of the
foregoing.
Avoidance Actions. Any and all Claims of any of the Xxxxxxx Debtors
arising under any section of chapter 5 of the Bankruptcy Code, including,
without limitation, Bankruptcy Code xx.xx. 502, 510, 541, 542, 543, 544, 545,
547, 548, 549, 550, 551 and 553.
Bankruptcy Injunction Action. That certain proceeding, filed
and currently pending in the Delaware Bankruptcy Court styled FINOVA
Capital Corporation x. Xxxxxxx, et. al., Adversary No. 03-59270.
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Business Day. Any day, other than a Saturday, Sunday, or federal
holiday, in which commercial banks are open for business to the public in
Wilmington, Delaware.
Claims. Any and all claims (including, without limitation,
bankruptcy claims), controversies, actions, causes of actions, demands, torts,
damages, costs, attorneys' fees, moneys due on account, obligations, judgments
or liabilities of any kind whatsoever in law or equity, arising out of agreement
or imposed by statute, common law or otherwise, from the beginning of time to
the Effective Date, whether or not known now, anticipated, unanticipated,
suspected or claimed, fixed or contingent, whether yet accrued or not, and
whether damage has resulted from such or not.
Claims Trader. Any Proposed Class Member that purchased from a Note
Seller, was transferred by a Note Seller, or was assigned by a Note Seller all
or any portion of: (1) a Xxxxxxx Note or a claim related thereto; or (2) any
litigation rights related to a Xxxxxxx Note or a claim related thereto,
including, without limitation, any claims or causes of action against FINOVA,
any of the Additional Defendant Parties, or any of the Xxxxxxx Debtor Parties;
provided, however, that the fact that a person or entity has purchased, was
transferred, or was assigned any of the foregoing solely as a result of the
death of the transferor shall not make such person or entity a Claims Trader
with respect to such purchased, transferred, or assigned rights. For purposes of
clarification, each of ASM, Argo, and Regent is a Claims Trader.
Class Notice. That certain Class Notice attached hereto as Exhibit
1, or such other class notice that: (a) explains the right to opt out by filing
an Opt Out Request, how to complete, file and serve such Opt Out Request, and
the effects of doing so; (b) explains the right to opt out and provide an
Independent Release, how to obtain and complete, file and serve the Independent
Release, and the effects of doing so; (c) explains the right of Note Sellers to
file a Note Seller Notice Of Intent To Assert Claim Form, how to obtain and
complete, file and serve the Note Seller Notice Of Intent To Assert Claim Form,
and the effects of doing so; and (d) is in form and substance acceptable to each
of the Parties, in its sole and absolute discretion.
Class Notice Mailing Date. The second Business Day on or after the
date on which the Preliminary Class Settlement Approval Order is entered.
Committee. The Official Committee of Unsecured Creditors in the
Xxxxxxx Debtors' Bankruptcy Cases.
Committee Parties. The Committee, its current and former members,
and its attorneys and other professionals.
Committee Substantive Consolidation Motion. That certain motion,
filed March 24, 2004 by the Committee in the Delaware Bankruptcy Court, seeking
substantive consolidation of the estates of the Xxxxxxx Debtors in the Xxxxxxx
Debtors' Bankruptcy Cases.
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Xxxxxxxx Xxxxxxxxxx Xxxxx. Xxx Xxxxxx Xxxxxx Bankruptcy Court
for the District of Delaware.
Delaware District Court. The United States District Court for
the District of Delaware.
Disclosure Statement. The disclosure statement that relates to the
Plan and is prepared in accordance with section 1125 of the Bankruptcy Code and
Rule 3018 of the Federal Rules of Bankruptcy Procedure, as such disclosure
statement may be amended, modified or supplemented (and all exhibits and
schedules annexed thereto or referred to therein), and is approved by the
Delaware Bankruptcy Court.
Disclosure Statement Order. An order approving the Disclosure
Statement with respect to the Plan that is in form and substance acceptable to
each of the Parties, in its sole and absolute discretion.
Dismissal Orders. Collectively, the following orders dismissing with
prejudice as of the Effective Date the following actions, all of which orders
are in form and substance acceptable to each of the Parties in its sole and
absolute discretion: (1) by both the South Carolina District Court and the
Delaware District Court, the entirety of the Adversary Proceeding, including
Count XII thereof; (2) by the Delaware Bankruptcy Court, the Bankruptcy
Injunction Action; (3) by the South Carolina District Court, the Xxxxxxx
Putative Class Action; (4) by the North Carolina District Court, the Hall
Action; (5) by the Fourth Circuit, the Injunction Appeal; (6) by the South
Carolina District Court, the Xxxxx Action; (7) by the Ohio District Court, the
Xxxxx Action; (8) by the Fourth Circuit, the Summary Judgment Appeal; and (9) by
the Georgia District Court, the Wood Action.
Effective Date. The definition of the term "Effective Date," as set
forth in the Plan, or such other effective date that is agreed to by each of the
Parties, in its sole and absolute discretion, by giving written notice of such
agreement to each of the other Parties in accordance with Section VII.D of this
Master Settlement Agreement.
Final Class Settlement Approval Order. An order in the Xxxxxxx
Putative Class Action finally approving the Master Settlement Agreement that is
in form and substance acceptable to each of the Parties, in its sole and
absolute discretion.
Final Order. An order or judgment that has not been reversed,
modified, or amended, and as to which: (a) the time to appeal or seek review has
expired and no timely filed appeal or petition for review, rehearing, remand or
certiorari is pending; or (b) any appeal taken or petition for certiorari filed
has been resolved by the highest court to which the order or judgment was
appealed or from which certiorari was sought, provided, however, that the
possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure,
or any analogous rule under the Federal Rules of Bankruptcy Procedure or other
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rules governing procedure in cases before the relevant court, may be filed with
respect to such order shall not cause such order not to be a Final Order.
FINOVA. FINOVA Capital Corporation, a Delaware corporation.
FINOVA Bankruptcy Case. The bankruptcy case of FINOVA, filed on
March 7, 2001, and currently pending in the Delaware Bankruptcy Court as Case
No. 01-00698.
FINOVA Claims. Collectively, all Claims held by FINOVA against the
Xxxxxxx Debtor Parties or their respective assets, including, without
limitation, all Claims arising out of: (a) the Loan Agreement; (b) any of the
Loan Documents; or (c) the TLP Settlement Order.
FINOVA Group. FINOVA Group Inc., a Delaware corporation.
FINOVA Liens. The liens granted to FINOVA by the Xxxxxxx Borrowers
pursuant to the Loan Agreement and the Loan Documents.
FINOVA Settlement Approval Order. An order in the FINOVA Bankruptcy
Case: (a) approving FINOVA's entry into the Master Settlement Agreement and its
terms under Rule 9019 of the Federal Rules of Bankruptcy Procedure as in the
best interests of FINOVA and its creditors, in form and substance acceptable to
each of the Parties, in its sole and absolute discretion; and (b) that is
otherwise in form and substance acceptable to each of the Parties, in its sole
and absolute discretion.
Fourth Circuit. The United States Court of Appeals for the
Fourth Circuit.
Xxxxxxx. Xxxxx Xxxxxxx, a natural person and resident of the state
of North Carolina.
Georgia District Court. The United States District Court for
the Northern District of Georgia.
Xxxxxxx Class Certification Order. That certain order, dated June 8,
2005, entered by the South Carolina District Court, certifying a class of
noteholders of TGI in the Xxxxxxx Putative Class Action.
Xxxxxxx Putative Class Action. That certain action, originally filed
in the Court of Common Pleas of Lancaster County, South Carolina against FINOVA
and certain other defendants styled Xxxxxxx, et al. v. FINOVA Capital
Corporation, et al., Case No. 2003-CP-29-697, and subsequently pending in the
South Carolina District Court as Case No. 03-CV-03604.
Hall Action. That certain action originally filed in the
Superior Court for Mecklenberg County, North Carolina against FINOVA and
certain other defendants styled Hall, et al. v. FINOVA Capital
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Corporation, et al., Case No. 03-CVS-20572, and currently pending in the
North Carolina District Court as Case No. 04-00003.
Independent Processing Agent. Xxxxxx Claims Administration,
LLC.
Independent Release. That certain Independent Release
attached hereto as Exhibit 2.
Independent Release Date. The Opt Out Date.
Injunction Appeal. That certain appeal of the Injunction
Denial Order filed with the Fourth Circuit by FINOVA and currently pending.
Injunction Denial Order. That certain order, dated May 19, 2006,
denying FINOVA's motion for the entry of an order enjoining the Xxxxxxx Putative
Class Action and the Xxxxx Action from proceeding against FINOVA until the
completion of the Adversary Proceeding.
JPML. The Judicial Panel on Multidistrict Litigation.
Litigation. Collectively: (a) the Adversary Proceeding; (b) the
Bankruptcy Injunction Action; (c) the FINOVA Claims and FINOVA Liens; (d) the
Xxxxxxx Putative Class Action; (e) the Hall Action; (f) the Injunction Appeal;
(g) the Xxxxx Action; (h) the Xxxxx Action; (i) the Society Action; (j) the
Substantive Consolidation Request; (k) the Summary Judgment Appeal; (l) the Wood
Action; (m) all disputes as to the right to funds in the Xxxxxxx Debtors' Trust
Account; (n) all Claims of (i) any of the Xxxxxxx Debtor Parties, any member of
the Proposed Class, and the Committee against (ii) FINOVA or any of the
Additional Defendant Parties; and (o) all Claims of (i) the Committee or any
member of the Proposed Class against (ii) any of the Xxxxxxx Debtors.
Loan Agreement. That certain Third Amended And Restated Loan And
Security Agreement dated as of April 4, 2001 by and between FINOVA and certain
of the Xxxxxxx Borrowers, as subsequently amended, modified, or supplemented to
date.
Loan Documents. The "Loan Documents," as that term is defined in the
Loan Agreement (including, without limitation, the Stipulated Xxxxxxx Trust
Account Order and all cash collateral, sale, and escrow orders entered in the
Xxxxxxx Debtors' Bankruptcy Cases), all as subsequently amended, modified, or
supplemented to date.
Xxxxx Action. That certain action, filed in the South
Carolina District Court against FINOVA and certain other defendants styled
Xxxxx, et al. v. FINOVA Capital Corporation, et al., Case No. 03-CV-03724.
Xxxxx Xxxxxxxx Xxxxxxxx Xxxxx. Xxx Xxxxxx Xxxxxx District
Court for the Western District of North Carolina.
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Note Seller. Any Proposed Class Member that sold, transferred, or
assigned all or any portion of his, her or its: (1) Xxxxxxx Note or a claim
related thereto; or (2) any litigation rights related to a Xxxxxxx Note or a
claim related thereto, including, without limitation, any claims or causes of
action against FINOVA, any of the Additional Defendant Parties, or any of the
Xxxxxxx Debtor Parties; provided, however, that any person that sold,
transferred, or assigned any of the foregoing solely as a result of such
person's death shall not be a considered a Note Seller.
Note Seller Claim. Any Claim asserted by a Note Seller.
Note Seller Intent To Assert Claim Form. That certain Note Seller
Intent To Assert Form Claim Form attached hereto as Exhibit 3, which Note Seller
Intent To Assert Claim Form allows each Note Seller to assert that it is
entitled to receive some or all of the consideration that FINOVA and the Xxxxxxx
Debtors are providing pursuant to this Master Settlement Agreement and/or the
Plan.
Note Seller Notice Date. 5:00 P.M. prevailing Eastern time on the
second (2nd) Business Day prior to the Opt Out Date, or such other date and time
selected by the Delaware Bankruptcy Court that is acceptable to each of the
Parties, in its sole and absolute discretion.
Ohio District Court. The United States District Court for
the Southern District of Ohio.
Opt Out Amount. In the aggregate, six ($6) million in claims of
Proposed Class Members; provided, however, that, for purposes of calculating the
Opt Out Amount, the claims of Proposed Class Members that execute an Independent
Release in accordance with Section III.C.4.(a) of this Master Settlement
Agreement shall not be included in calculating the Opt Out Amount.
Opt Out Date. 5:00 P.M. prevailing Eastern time on the first
Business Day on or after the fortieth (40th) day following the date on which the
Preliminary Class Settlement Approval Order is entered, or such other date and
time selected by the South Carolina District Court that is acceptable to each of
the Parties, in its sole and absolute discretion.
Opt Out Request. A statement from a Proposed Class Member that such
Proposed Class Member wishes to opt out of the Proposed Class.
Order Vacating Partial Summary Judgment Order. An order vacating in
its entirety the Partial Summary Judgment Order as of the Effective Date that is
in form and substance acceptable to each of the Parties, in its sole and
absolute discretion.
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Partial Summary Judgment Order. That certain order, dated as of
March 20, 2006, granting the Committee's motion for summary judgment on Count
XII of its complaint in the Adversary Proceeding.
Parties. FINOVA Capital Corporation, the Xxxxxxx Debtors, the
Committee, the Proposed Class Representative on behalf of the Proposed Class,
and the Additional Defendants.
Petition Date. October 17, 2003.
Plan. A plan (or plans) of reorganization of the Xxxxxxx Debtors
that: (a) reflect(s) the provisions of this Master Settlement Agreement; and (b)
is/are in form and substance acceptable to each of the Parties, in its sole and
absolute discretion.
Plan Confirmation Order. An order (or orders) confirming the Plan
that is/are in form and substance acceptable to each of the Parties, in its sole
and absolute discretion.
Preliminary Class Settlement Approval Order. An order in the Xxxxxxx
Putative Class Action that approves this Master Settlement Agreement, certifies
the Proposed Class in the Xxxxxxx Putative Class Action (subject in all cases to
Sections V and VI.B of this Master Settlement Agreement), provides that the
Class Action Fairness Act does not apply, provides that the South Carolina
District Court is willing to consider vacating the Partial Summary Judgment
Order, and is in form and substance acceptable to each of the Parties, in its
sole and absolute discretion.
Proposed Class. Collectively: (1) each person or entity that
purchased any Xxxxxxx Note or other rights or claims arising from a Xxxxxxx Note
at any time from any person or entity, including, without limitation, any Note
Sellers and any Claims Traders; and (2) each person or entity that, as of the
date hereof and/or the Effective Date, holds any other unsecured Claim against
any of the Xxxxxxx Debtor Parties.
Proposed Class Member. Any person or entity that is a member of the
Proposed Class.
Proposed Class Representative. Xxxx X. Xxxxx, as proposed
representative for the Proposed Class.
Proposed Class Counsel. Collectively: (a) Xxxxxxx and Xxxxx,
LLC; and (b) McGowan, Hood, Xxxxxx & Xxxxxxx Law Firm.
Publication Dates. The first Sunday (or, if the Publication Venue is
not published on Sunday, the first Business Day) on or after: (a) the 10th day
following the entry of the Preliminary Class Settlement Order; and (b) the 24th
day following the entry of the Preliminary Class Settlement Approval Order.
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Publication Venues. Collectively: (a) USA Today; (b) The
State (South Carolina); (c) The Lancaster News (South Carolina); (d) The
Charlotte Observer (North Carolina); (e) The Columbus Dispatch (Ohio); (f)
The Atlanta Journal-Constitution (Georgia); (g) The Clarion-Ledger
(Mississippi); and (h) Business Wire.
Regent. Regent Capital I, Inc., a Delaware corporation.
Released Defendants. Collectively: (a) FINOVA; (b) all of the
current and former affiliate companies of FINOVA; (c) all of the current and
former (i) parents, subsidiaries, predecessors, successors and assigns,
officers, directors, executors, administrators, agents, partners, shareholders,
members, insurers, affiliated persons or entities, attorneys, other
professionals, and employees of (ii) any of (a) or (b); and (d) each of the
Additional Defendant Parties.
Released Plaintiffs. Collectively: (a) the Xxxxxxx Debtor Parties;
(b) the Committee Parties; (c) the Proposed Class Representative; and (d) each
Proposed Class Member (provided, however, that a Proposed Class Member is not a
Released Plaintiff if such Proposed Class Member (i) properly and timely
executes, files and serves an Opt Out Request in accordance with Section III.C.2
of this Master Settlement Agreement, and (ii) does not properly and timely
execute, file and serve an Independent Release in accordance with Section
III.C.4.(a) of this Master Settlement Agreement, and (iii) properly and timely
files any Subsequent Litigation prior to the Subsequent Litigation Bar Date in
accordance with Section III.C.4.(b) of this Master Settlement Agreement).
Releasing Defendants. Collectively: (a) FINOVA; (b) FINOVA Group;
(c) all officers, directors, and employees of FINOVA or FINOVA Group; (d) the
Additional Defendants; (e) all officers and directors of the Additional
Defendants (but only with respect to Xxxxxxx-Related Claims arising out of the
performance of their duties as officers and directors of the Additional
Defendants); and (f) all attorneys and professionals for FINOVA and the
Additional Defendants in the Xxxxxxx Debtors' Bankruptcy Cases, the Adversary
Proceeding, the Xxxxxxx Putative Class Action, and the Society Action.
Releasing Plaintiffs. Collectively: (a) the Xxxxxxx Debtor Parties;
(b) the Committee Parties; (c) the Proposed Class Representative; and (d) each
Proposed Class Member (provided, however, that a Proposed Class Member is not a
Releasing Plaintiff if such Proposed Class Member (i) properly and timely
executes, files and serves an Opt Out Request in accordance with Section III.C.2
of this Settlement, and (ii) does not properly and timely execute, file and
serve an Independent Release in accordance with Section III.C.4.(a) of this
Master Settlement Agreement, and (iii) properly and timely files any Subsequent
Litigation prior to the Subsequent Litigation Bar Date in accordance with
Section III.C.4.(b) of this Master Settlement Agreement.)
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Xxxxx Action. That certain action, filed and currently pending in
the Ohio District Court against FINOVA and certain other defendants styled
Xxxxx, et al., v. FINOVA Capital Corporation, et al., Case No. C2-04-022.
Short Form Class Notice. That certain Short Form Class Notice
attached hereto as Exhibit 4, or such other short form class notice that
explains how to obtain the Class Notice and is in form and substance acceptable
to each of the Parties, in its sole and absolute discretion.
Society Action. That certain mass action, originally filed on June
6, 2006 and thereafter contemplated as proceeding in individual cases, and in
various forms currently pending in the South Carolina District Court against
FINOVA and the Additional Defendants styled Society for Crippled Children et
al., v. Berkshire Hathaway, et al., Case No. 06-cv-01728.
Society Dismissal Order. An order dismissing the Society Action that
is in form and substance acceptable to each of the Parties, in its sole and
absolute discretion.
Xxxxx Xxxxxxxx Xxxxxxxx Xxxxx. Xxx Xxxxxx Xxxxxx District
Court for the District of South Carolina.
Southern Debtors. Collectively: (a) Southern Management Corporation,
a South Carolina corporation; (b) Southern Financial Management, Inc., a South
Carolina corporation; (c) Southern Finance of Tennessee, Inc., a Tennessee
corporation; (d) Southern Finance of South Carolina, Inc., a South Carolina
corporation; (e) Xxxxxxxxx Credit of Texas, Inc., a Texas corporation; (f)
Covington Credit of Louisiana, Inc., a Louisiana corporation; (g) Covington
Credit of Georgia, Inc., a Georgia corporation; (h) Xxxxxxxxx Credit, Inc., an
Oklahoma corporation; and (i) Xxxxxxx Investment Corporation, a South Carolina
corporation.
Stipulated Xxxxxxx Trust Account Order. That certain stipulated
order, dated as of September 11, 2006, agreed to by FINOVA, the Xxxxxxx Debtors,
and the Committee and entered by the Delaware Bankruptcy Court, providing for
the establishment of the Xxxxxxx Debtors Trust Account and the funding thereof
in the approximate amount of $97,241,258, to be held in escrow.
Subsequent Litigation. An action commenced by the filing of a
complaint in a court of competent jurisdiction by a Proposed Class Member
asserting any Claim against any of the Released Defendants.
Subsequent Litigation Claims Bar Date. 5:00 P.M. prevailing
Eastern time on the fifth (5th) Business Day prior to the date on which
the hearing on the confirmation of the Plan is scheduled to commence.
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Substantive Consolidation Request. Collectively, the Committee
Substantive Consolidation Motion, the Xxxxxxx Debtors' Substantive Consolidation
Motion, and all other requests made by either the Xxxxxxx Debtors or the
Committee seeking similar relief, including the request made by the Xxxxxxx
Debtors through the plan of reorganization filed by certain Xxxxxxx Debtors on
June 17, 2004 and the amended plan of reorganization filed by certain Xxxxxxx
Debtors on September 9, 2004.
Summary Judgment Appeal. That certain appeal of the Partial Summary
Judgment Order filed with the Fourth Circuit by FINOVA and currently pending.
TGI. The Xxxxxxx Group, Inc., a South Carolina corporation.
Xxxxxxx Borrowers. The Xxxxxxx Debtors, and certain other Xxxxxxx
Debtor Parties that are, or at any time were, parties to the Loan Agreement or
any of the Loan Documents.
Xxxxxxx Debtor Parties. Collectively: (a) the Xxxxxxx Borrowers; (b)
the Additional Xxxxxxx Entities; and (c) all of the current and former (i)
parents and subsidiaries, predecessors, successors and assigns, officers,
directors, partners, shareholders, members, employees, and attorneys and other
professionals of (ii) any of the Xxxxxxx Borrowers or the Additional Xxxxxxx
Entities.
Xxxxxxx Debtors: Collectively: (a) TGI, a South Carolina
corporation; (b) TICO Credit Company, a Delaware corporation; (c) Xxxxxxx
Operating Company, a South Carolina Corporation; (d) Eagle Premium Finance
Company, Inc., a Virginia corporation; (e) TICO Premium Finance Company, Inc., a
South Carolina corporation; (f) Xxxxxxx Insurance Group, Inc., a South Carolina
corporation; (g) Xxxxxxx Commercial Lending, Inc., a South Carolina corporation;
(h) Paragon, Inc., a South Carolina corporation; (i) Modern Central Recovery, an
Ohio corporation; (j) TICO Credit Company, Inc., a South Carolina corporation;
(k) TICO Credit Company of North Carolina, Inc., a North Carolina corporation;
(l) TICO Credit Company of Virginia, Inc., a Virginia corporation; (m) TICO
Credit Company of Alabama, Inc., an Alabama corporation; (n) TICO Credit Company
of Tennessee, Inc., a Tennessee corporation; (o) TICO Credit Company of
Mississippi, Inc., a Mississippi corporation; (p) TICO Credit Company of
Georgia, Inc., a Georgia corporation; (q) The Modern Finance Company d/b/a TICO
Credit Company, an Ohio corporation; (r) TICO Credit Company, a Mississippi
corporation; (s) Modern Financial Services, Inc., an Ohio corporation; (t) TICO
Credit Company, a Tennessee corporation; (u) Xxxxxxx Investment Corporation, a
South Carolina corporation; (v) Southern Management Corporation, a South
Carolina corporation; (w) Southern Finance of Tennessee Inc., a Tennessee
corporation; (x) Southern Financial Management, Inc., a South Carolina
corporation; (y) Xxxxxxxxx Credit, Inc., an Oklahoma corporation; (z) Covington
Credit of Georgia, Inc., a Georgia corporation; (aa) Xxxxxxxxx Credit of
Louisiana, Inc., a Louisiana corporation; (bb) Xxxxxxxxx Credit of Texas, Inc.,
a Texas corporation; (cc) Southern Finance of South Carolina, Inc., a South
13
Carolina corporation; (dd) Quick Credit Corporation, Inc., a South Carolina
corporation; and (ee) TICO Credit Corporation, a South Carolina corporation.
Xxxxxxx Debtors' Bankruptcy Cases. Collectively, the
bankruptcy cases of the Xxxxxxx Debtors, filed on the Petition Date and
currently pending in the Delaware Bankruptcy Court as Case Nos. 03-13182
through 03-13213.
Xxxxxxx Debtors' Substantive Consolidation Motion. That certain
motion, filed by the Xxxxxxx Debtors in the Delaware Bankruptcy Court on August
16, 2004, seeking substantive consolidation of the assets of the Xxxxxxx Debtors
in the Xxxxxxx Debtors' Bankruptcy Cases.
Xxxxxxx Debtors' Trust Account. That certain escrow account
at Wilmington Trust Company, established by the Xxxxxxx Debtors in trust,
on September 13, 2006, as follows: Wilmington Trust Company, ABA# 031 100
092, Acct. No. 077867-000.1, Acct. Name: Xxxxxxx Trust Account, Attn:
Xxxxx Xxxxxxxx, VP.
Xxxxxxx Note. Any note or similar evidence of indebtedness,
however titled, issued by any of the Xxxxxxx Debtors.
Xxxxxxx-Related Claims. All Claims arising under or in connection
with, or in any way related to: (a) the FINOVA Claims or the administration,
collection, enforcement, or performance thereof; (b) the FINOVA Liens or the
administration, collection, enforcement, or performance thereof; (c) the Loan
Agreement or the administration, collection, enforcement, or performance
thereof; (d) any of the Loan Documents or the administration, collection,
enforcement, or performance thereof; (e) FINOVA's loans to any of the Xxxxxxx
Debtor Parties or the administration, collection, enforcement, or performance
thereof; (f) the Xxxxxxx Debtor Parties, in connection with the relationship of
FINOVA with the Xxxxxxx Borrowers; and (g) the conduct of the Released
Defendants and the Released Plaintiffs in connection with, or in any way related
to, any of the foregoing.
Xxxxxxx Settlement Approval Order. An order in the Xxxxxxx Debtors'
Bankruptcy Cases approving the entry of the Xxxxxxx Debtors and the Committee
into the Master Settlement Agreement and its terms under Rule 9019 of the
Federal Rules of Bankruptcy Procedure as in the best interests of the estates of
the Xxxxxxx Debtors, that is in form and substance acceptable to each of the
Parties in its sole and absolute discretion.
TLP Settlement Order. That certain order, dated as of May 3, 2005,
pursuant to which FINOVA acquired and was granted a $1.5 million allowed
unsecured claim against each of the Xxxxxxx Debtors.
Voyager. Collectively: (a) Assurant Reinsurance of Turks & Caicos,
Ltd., a Turks and Caicos corporation; (b) The Voyager Life Insurance Company, a
Georgia corporation; (c) Voyager Life and Health Insurance Company, a Georgia
14
Corporation; (d) Voyager Indemnity Insurance Company, a Georgia corporation; (e)
Voyager Property and Casualty Insurance Company, a South Carolina corporation;
(f) Voyager American Insurance Company, Ltd., a Turks and Caicos company; (g)
American Bankers Insurance Company of Florida, a Florida corporation; (h)
American Bankers Life Assurance Company of Florida, a Florida corporation; and
(i) American Reliable Insurance Company, an Arizona corporation.
Withdrawal Right. The right to reject and withdraw from this Master
Settlement Agreement and the Plan, and all agreements made in connection
therewith.
Wood Action. That certain action, originally filed in the
Superior Court for Gwinnett County, Georgia against FINOVA and certain
other defendants styled Wood, et al. v. FINOVA Capital Corporation, et
al., Case No. 03-A13343-8, and currently pending in the Georgia District
Court as Case No. 04-CV-0011.
II. DIVISION OF ASSETS
------------------
A. TREATMENT OF FINOVA.
--------------------
FINOVA shall retain the FINOVA Claims and the FINOVA Liens upon only
the following property, and receive from the Xxxxxxx Debtors with respect to the
FINOVA Claims and FINOVA Liens (receipt of which shall fully satisfy and
discharge such FINOVA Claims and FINOVA Liens):
1. Cash. On the Effective Date, all of the amounts then in the Xxxxxxx Debtors'
Trust Account, except for (a) $16 million and (b) all interest actually earned
on such $16 million by the Xxxxxxx Debtors since August 16, 2006; and
2. Other Property. On the later of the Effective Date or ten days following the
Xxxxxxx Debtors' receipt thereof, 50% of all net recoveries (after deducting all
litigation expenses from the gross recoveries) in excess of $2.27 million, in
the aggregate, from all Avoidance Actions, excluding any recoveries from Voyager
or Xxxxxxx; provided, however, that nothing herein creates an obligation for the
Xxxxxxx Debtors to pursue such Avoidance Actions.
Except as set forth in this Section II.A and except as provided
elsewhere in this Master Settlement Agreement (including, without limitation, in
Sections III.C, III.D, IV, V and VI of this Master Settlement Agreement), FINOVA
waives and releases its FINOVA Claims and FINOVA Liens upon all real and
personal property of the Xxxxxxx Debtors, including all seniority rights with
respect thereto, including, but not limited to, those granted under the Xxxxxxx
Notes and the Indenture dated February 17, 1998 by and between TGI and Bank of
New York, N.A.
15
B. TREATMENT OF PROPOSED CLASS MEMBERS AND OTHER CREDITORS.
--------------------------------------------------------
On or after the Effective Date, all real and personal tangible and
intangible property of the Xxxxxxx Debtors (other than the property to be
received by FINOVA under Section II.A above), including, without limitation, the
cash and other assets, and the beneficial ownership of the stock, of the
Southern Debtors, shall, subject to the provisions of this Master Settlement
Agreement (including, without limitation, Sections III.C.4 and III.D of this
Master Settlement Agreement), be distributed to or for the benefit of creditors
of the Xxxxxxx Debtors, other than FINOVA, pursuant to the Plan.
All sums received under this Section II.B from the Xxxxxxx Debtors'
Trust Account shall be deemed to be received from the first amounts
provisionally paid to FINOVA during the Xxxxxxx Debtors' Bankruptcy Cases.
The Proposed Class Representative and the Committee represent that
they have received no offers to purchase all or substantially all of such assets
or stock of the Southern Debtors as of September 17, 2006. The Xxxxxxx Debtors
represent that they have received no written offers for all or substantially all
of the assets or stock of the Southern Debtors that they have presented to their
boards of directors, and they have no such written offers to present to their
boards of directors as of September 17, 2006.
Solely for purposes of implementing the terms of this Master
Settlement Agreement, and subject in all cases to Sections V and VI of this
Master Settlement Agreement, FINOVA consents and agrees that the Plan may
provide for the substantive consolidation of some or all of the estates of the
Xxxxxxx Debtors, and FINOVA shall, upon request of any of the Parties made in
accordance with Section VII.D of this Master Settlement Agreement, withdraw its
objection to the Substantive Consolidation Request.
III. STEPS TO IMPLEMENTATION; OPT OUTS; NOTE SELLERS
-----------------------------------------------
A. THE LITIGATION AND BAR DATES.
-----------------------------
All Parties agree that they will take all reasonable steps necessary
to cause the Dismissal Orders and the Society Dismissal Order to be entered
prior to or on the Effective Date. Upon execution of this Master Settlement
Agreement: (1) the Xxxxxxx Debtors and the Committee agree to as soon as
practicable request that the Delaware Bankruptcy Court enter the Xxxxxxx
Settlement Approval Order and an order setting the Note Seller Notice Date and
the Subsequent Litigation Claims Bar Date; and (2) FINOVA and the Committee
agree to as soon as practicable request that the Fourth Circuit stay the Summary
Judgment Appeal and the Injunction Appeal.
B. THE XXXXXXX PUTATIVE CLASS ACTION.
----------------------------------
The Parties agree that they will take all reasonable steps necessary
to cause the Proposed Class to be certified in the Xxxxxxx Putative Class Action
pursuant to the Preliminary Class Settlement Approval Order, subject in all
16
cases to the provisions of this Master Settlement Agreement (including, without
limitation, Sections V and VI of this Master Settlement Agreement). Upon
execution of this Master Settlement Agreement, the Proposed Class Counsel will
immediately seek the South Carolina District Court's approval of the Preliminary
Class Settlement Approval Order. The Parties recognize that each Proposed Class
Member may elect to opt out of the settlement embodied by this Master Settlement
Agreement for the Xxxxxxx Putative Class Action.
C. TREATMENT OF OPT OUTS.
----------------------
The Parties agree that notice to each Proposed Class Member, and the
method for opting out, shall be accomplished in the manner set forth in this
Section III.C.
1. Class Notice Mailing Date. On the Class Notice Mailing Date,
Proposed Class Counsel shall send the Class Notice, via United States mail,
postage prepaid, at the last known address, to each known Proposed Class Member
that either: (a) held a Claim against any of the Xxxxxxx Debtors as of the
Petition Date or the Class Notice Mailing Date; or (b) is a Claims Trader who
has purchased or been transferred or assigned a Claim against any of the Xxxxxxx
Debtors on or after the Petition Date. On each of the Publication Dates,
Proposed Class Counsel shall publish a copy of the Short Form Class Notice in
each of the Publication Venues.
2. Method For Opting Out. In order to opt out, a Proposed Class
Member must, no later than the Opt Out Date, file with the clerk of the South
Carolina District Court, and serve upon each of the Parties and the Independent
Processing Agent in accordance with Section VII.D of this Master Settlement
Agreement, a written, original, fully completed and executed Opt Out Request.
3. Failure To Properly And Timely Execute An Opt Out Request. Any
Proposed Class Member that fails to timely and properly execute, file, and serve
an Opt Out Request in compliance with Section III.C.2 of this Master Settlement
Agreement shall: (a) be deemed to be bound by the terms of this Master
Settlement Agreement and, inter alia, be deemed to have granted the releases and
covenants not to xxx set forth in this Master Settlement Agreement and the Plan;
and (b) be entitled to receive such Proposed Class Member's pro rata share of
the sums to be distributed to the Proposed Class under Section II.B of this
Master Settlement Agreement.
4. Effect Of Proper And Timely Execution Of An Opt Out Request.
(a) Creditors That Provide An Independent Release. If a
Proposed Class Member timely and properly executes, files and serves an Opt Out
Request in compliance with Section III.C.2 of this Master Settlement Agreement,
and also, no later than the Independent Release Date, delivers to each of FINOVA
and the Additional Defendant Parties in accordance with Section VII.D of this
Master Settlement Agreement, an original, fully completed and executed
Independent Release, such Proposed Class Member shall be entitled to its entire
17
pro rata share of the distribution to the Proposed Class under Section II.B of
this Master Settlement Agreement.
(b) Creditors That Fail To Provide An Independent Release.
The Xxxxxxx Debtors, the Committee, and the Proposed Class Representative on
behalf of the Proposed Class have requested that each Proposed Class Member that
timely and properly executes, files and serves an Opt Out Request in compliance
with Section III.C.2 of this Master Settlement Agreement be entitled,
notwithstanding such Opt Out Request, to share in the distribution made pursuant
to Section II.B of this Master Settlement Agreement. In consideration for the
agreement of FINOVA and the Additional Defendants to that request, the Parties
have agreed as follows:
(i) Subsequent Litigation Claims Bar Date. If a Proposed
Class Member timely and properly executes, files and serves an Opt Out Request
in compliance with Section III.C.2 of this Master Settlement Agreement, but such
Proposed Class Member fails to timely and properly execute, file and serve an
Independent Release in accordance with the provisions of Section III.C.4.(a) of
this Master Settlement Agreement, such Proposed Class Member shall be required
to commence any Subsequent Litigation no later than the Subsequent Litigation
Claims Bar Date.
(ii) Failure to Comply With Subsequent Litigation
Claims Bar Date. If a Proposed Class Member fails to commence any Subsequent
Litigation by the Subsequent Litigation Claims Bar Date, such Proposed Class
Member shall, notwithstanding the timely and proper execution, filing, and
service of an Opt Out Request in compliance with Section III.C.2 of this Master
Settlement Agreement: (a) be bound by the terms of this Master Settlement
Agreement and, inter alia, be deemed to have granted the releases and covenants
not to xxx set forth in this Master Settlement Agreement and the Plan; and (b)
be entitled to its entire pro rata share of the distribution to the Proposed
Class under Section II.B of this Master Settlement Agreement.
(iii) Compliance With Subsequent Litigation Claims Bar
Date. In the event such Proposed Class Member does file any Subsequent
Litigation by the Subsequent Litigation Claims Bar Date, any distribution that
would have been made to such Proposed Class Member under the Plan shall be held
in escrow pursuant to the Plan pending resolution of such Subsequent Litigation
by a Final Order of a court of competent jurisdiction. In any such Subsequent
Litigation, the provisions of Sections VI.B.1 and VI.B.3 of this Master
Settlement Agreement shall be deemed to apply.
D. TREATMENT OF NOTE SELLER CLAIMS.
--------------------------------
The Proposed Class includes certain Note Sellers. The purpose of
this Section III.D is to establish a mechanism by which a Note Seller can give
notice of his, her, or its intent to assert a claim with respect to the
consideration that FINOVA and the Xxxxxxx Debtors will provide through this
Master Settlement Agreement and the Plan.
18
1. Method For Preservation Of Note Seller Claim. In order to
assert a Note Seller Claim, a Proposed Class Member must, no later than the Note
Seller Notice Date, file with the clerk of the Delaware Bankruptcy Court, and
serve upon each of the Parties and the Independent Processing Agent in
accordance with Section VII.D of this Master Settlement Agreement, an original,
fully completed and executed Note Seller Notice Of Intent To Assert Claim Form
asserting the amount of such claim and setting forth the name of the Claims
Trader that purchased such claim from the Note Seller. In addition, the Proposed
Class Member shall, no later than the Note Seller Notice Date, be required to
serve such original, fully completed and executed Note Seller Notice Of Intent
To Assert Claim Form upon the identified Claims Trader.
2. Effect of Preservation Of Note Seller Claim. If a Proposed
Class Member fails to timely and properly execute, file and serve a Note Seller
Notice Of Intent To Assert Claim Form in compliance with Section III.D.1 of this
Master Settlement Agreement, such Proposed Class Member shall: (a) be bound of
the terms of this Master Settlement Agreement and, inter alia, be deemed to have
been granted the releases and covenants not to xxx set forth in this Master
Settlement Agreement and the Plan; (b) be barred from asserting its Note Seller
Claim against any of the Released Defendants or any of the Xxxxxxx Debtor
Parties; and (c) be entitled to no part of the distribution made in the Xxxxxxx
Debtors' Bankruptcy Cases to the Proposed Class under Section II.B of the Master
Settlement Agreement. In the event such Proposed Class Member does timely and
properly execute, file and serve a Note Seller Notice Of Intent To Assert Claim
Form in compliance with Section III.D.1 of this Master Settlement Agreement,
such Proposed Class Member shall: (x) be bound of the terms of this Master
Settlement Agreement and, inter alia, be deemed to have been granted the
releases and covenants not to xxx set forth in this Master Settlement Agreement
and the Plan; and (y) be entitled to commence an action against the identified
Claims Trader that receives a distribution in which the Note Seller claims an
interest, in any jurisdiction and venue appropriate under the written agreement
between the Note Seller and Claims Trader. Notwithstanding anything to the
contrary in this Master Settlement Agreement or the Plan (including anything to
the contrary in this Section III.D.2), in the event that either the Note Seller
or the identified Claims Trader timely and properly executes, files and serves
an Opt Out Request in compliance with Section III.C.2 of this Master Settlement
Agreement, all rights of the Note Seller and the identified Claims Trader
(including the rights to any distribution) shall be governed by the provisions
of Section III.C.4 of this Master Settlement Agreement.
E. PAYMENTS TO PROPOSED CLASS COUNSEL.
-----------------------------------
The Proposed Class Counsel agree to limit their request for fees and
expenses in connection with the Settled Class Action and the settlement of class
claims against Cherry, Bekaert & Holland, LLP and Xxxxx & Xxx Xxxxx, PLLC, in
the aggregate, to the amounts set forth in Exhibit 5 of this Master Settlement
Agreement.
19
IV. RELEASES
--------
A. RELEASES IN FAVOR OF DEFENDANTS.
--------------------------------
On the Effective Date, and subject in all cases to the provisions of
this Master Settlement Agreement (including, without limitation, Sections V and
VI hereof), each of the Xxxxxxx Borrowers, the Additional Xxxxxxx Entities, and
the Committee Parties shall be deemed to generally and irrevocably release and
forever discharge, and shall be deemed to have given a covenant not to xxx in
favor of, FINOVA and FINOVA Group from all Claims, including, without
limitation: (1) any claims for payment of any secured, administrative, priority,
unsecured or other claims against the Xxxxxxx Debtors of any person or entity
(including, without limitation, any attorneys for any Proposed Class Member);
and (2) any expenses for the ongoing administration of the Xxxxxxx Debtors'
Bankruptcy Cases.
On the Effective Date, and subject in all cases to the provisions of
this Master Settlement Agreement (including, without limitation, Sections V and
VI hereof), each of the Releasing Plaintiffs shall be deemed to irrevocably
release and forever discharge, and shall be deemed to have given a covenant not
to xxx in favor of, the Released Defendants from all Xxxxxxx-Related Claims,
including, without limitation: (1) any claims for payment of any secured,
administrative, priority, unsecured or other claims against the Xxxxxxx Debtors
of any person or entity (including, without limitation, any attorneys for any
Proposed Class Member); and (2) any expenses for the ongoing administration of
the Xxxxxxx Debtors' Bankruptcy Cases.
The releases described in this Section IV.A shall also be either:
(1) granted in the Xxxxxxx Settlement Approval Order and incorporated in the
Plan; or (2) granted in and by the Plan.
B. RELEASES IN FAVOR OF PLAINTIFFS.
--------------------------------
On the Effective Date, except as set forth in this Master Settlement
Agreement (including, without limitation, in Section II.A hereof), and subject
in all cases to the provisions of this Master Settlement Agreement (including,
without limitation, Sections V and VI hereof), FINOVA and FINOVA Group shall be
deemed to generally and irrevocably release and forever discharge, and shall be
deemed to have given a covenant not to xxx in favor of, each of the Xxxxxxx
Borrowers, the Additional Xxxxxxx Entities, and the Committee Parties from: (1)
all FINOVA Claims, including all seniority rights granted under the Xxxxxxx
Notes and the Indenture dated February 17, 1998 by and between TGI and Bank of
New York, N.A.; and (2) all liens of FINOVA against any of the assets of the
Xxxxxxx Debtor Parties, whether arising as a matter of contract law or otherwise
(including, without limitation, the FINOVA Liens).
On the Effective Date, except as set forth in this Master Settlement
Agreement (including, without limitation, in Section II.A hereof), and subject
in all cases to the provisions of this Master Settlement Agreement (including,
without limitation, Sections V and VI hereof), each of the Releasing Defendants
20
shall be deemed to irrevocably release and forever discharge, and shall be
deemed to have given a covenant not to xxx in favor of, each of the Released
Plaintiffs from all Xxxxxxx-Related Claims, including (from FINOVA only) from
all seniority rights granted under the Xxxxxxx Notes and the Indenture dated
February 17, 1998 by and between TGI and Bank of New York, N.A.
The releases described in this Section IV.B shall also be either:
(a) granted in the Xxxxxxx Settlement Approval Order and incorporated in the
Plan; or (b) granted in and by the Plan.
C. NO RELEASE OF VOYAGER.
----------------------
Notwithstanding any language or provision herein, nothing in this
Master Settlement Agreement shall release or be deemed to have released the
Claims of any of the Xxxxxxx Debtor Parties against Voyager.
V. BANKRUPTCY COURT APPROVAL; CONDITIONS PRECEDENT
-----------------------------------------------
A. BANKRUPTCY COURT APPROVAL.
--------------------------
This Master Settlement Agreement is expressly conditioned upon the
entry of both the Xxxxxxx Settlement Approval Order and the FINOVA Settlement
Approval Order. Upon such orders becoming Final Orders, this Master Settlement
Agreement shall become binding on all of the Parties. In the event either the
Xxxxxxx Settlement Approval Order or the FINOVA Settlement Order is not entered
or does not become a Final Order, this Master Settlement Agreement shall be null
and void ab initio and the provisions of Sections VI.B.1 and VI.B.2 of this
Master Settlement Agreement shall apply. Upon entry of a Xxxxxxx Settlement
Approval Order that is a Final Order and entry of a FINOVA Settlement Approval
Order that is a Final Order, the Parties agree to execute such documents as are
necessary to give effect to the Master Settlement Agreement.
B. CONDITIONS PRECEDENT TO EFFECTIVE DATE.
---------------------------------------
Notwithstanding Section V.A of this Master Settlement Agreement, and
subject in all cases to Section VI of this Master Settlement Agreement: (1) all
transactions that are to occur, and all actions and obligations that are to be
performed, on or after the Effective Date under this Master Settlement Agreement
shall be conditioned upon the occurrence of the Effective Date; and (b) the
following are, unless waived in writing by all Parties, conditions precedent to
the occurrence of the Effective Date, such that the Effective Date may not occur
until the second Business Day following the last of the following dates:
21
A. The date on which the Preliminary Class Settlement Approval Order
becomes a Final Order.
B. The date on which the Xxxxxxx Settlement Approval Order becomes a
Final Order.
C. The date on which the FINOVA Settlement Approval Order becomes a
Final Order.
D. The date on which the Final Class Settlement Approval Order becomes
a Final Order.
E. The date on which the Disclosure Statement Order becomes a Final
Order.
F. The date on which the Plan Confirmation Order becomes a Final Order.
G. The date on which the Order Vacating Partial Summary Judgment Order
becomes a Final Order.
H. The date on which each of the Dismissal Orders becomes a Final
Order.
I. The date on which the Society Dismissal Order becomes a Final Order.
VI. TERMINATION/WITHDRAWAL RIGHTS
-----------------------------
A. GROUNDS FOR EXERCISE OF WITHDRAWAL RIGHT.
-----------------------------------------
A Party may exercise a Withdrawal Right only under the following
circumstances:
1. Default. If a Party defaults on its material obligations under
this Master Settlement Agreement or the Plan, then any other Party shall have
the right to notify all Parties in writing, pursuant to Section VII.D below, of
such default. If such default remains uncured for ten (10) days following the
date on which the defaulting Party receives notice of the default, then any
Party to this Master Settlement Agreement other than the defaulting party may
exercise a Withdrawal Right.
2. Excessive Opt Outs. FINOVA shall have the exclusive right to
exercise a Withdrawal Right by so notifying the other Parties in writing, in
accordance with Section VII.D, no later than the fifth (5th) Business Day
following the Opt Out Date, if: (a) the aggregate amount of claims, including
principal and interest, of all Proposed Class Members (including all Note
Sellers and Claims Traders) that timely and properly file an Opt Out Request in
compliance with Section III.C.2 of this Master Settlement exceeds the Opt Out
Amount; or (b) if any of the Prospective Class Members listed on Exhibit 6
22
hereto timely and properly files an Opt Out Request in compliance with Section
III.C.2 of this Master Settlement Agreement.
3. Failure Of Effective Date To Occur. Schedule 1 attached hereto
reflects the Parties' general intent as to how to proceed to satisfy the
Conditions Precedent To Effective Date set forth in Section V.B of this Master
Settlement Agreement. The Parties acknowledge that the dates listed on Schedule
1 are estimates only, and subject to the schedules of the various courts
involved and the Parties, but each of the Parties agrees that it shall use its
best efforts to cause compliance with Schedule 1. In no event, however, shall
the failure of any of the Parties to comply with any of the dates in Schedule 1
grant any Party a Withdrawal Right; provided, however, that notwithstanding the
foregoing, if, for any reason, the Effective Date does not occur by May 31,
2007, any Party shall thereafter have the right, in its sole and absolute
discretion, to exercise a Withdrawal Right by so notifying the other Parties in
writing, in accordance with Section VII.D of this Master Settlement Agreement.
B. TERMINATION.
------------
1. Acknowledgements. The Parties acknowledge that the agreement
by FINOVA and the Additional Defendants to class certification is based on the
terms of this Master Settlement Agreement, which eliminates individual questions
as to whether particular class members are entitled to recovery and questions as
to whether a class action is the superior manner of adjudicating the claims by
Proposed Class Members against FINOVA and the Additional Defendants, and that
the agreement by FINOVA and the Additional Defendants to the substantive
consolidation of the estates of the Xxxxxxx Debtors is conditioned on the use of
substantive consolidation to implement the terms of this Master Settlement
Agreement.
2. Termination By Exercise Of Withdrawal Right. Upon timely and
proper exercise by any Party of a Withdrawal Right under Section VI.A of this
Master Settlement Agreement, this Master Settlement Agreement shall terminate
automatically and immediately, without the need for further action. Upon
termination under this Section VI.B.2: (a) (i) all provisions of this Master
Settlement Agreement, (ii) all provisions of the Plan, (iii) any court rulings
relating thereto or entered in connection therewith, including, without
limitation, the Preliminary Class Settlement Approval Order, Xxxxxxx Settlement
Approval Order, FINOVA Settlement Approval Order, Final Class Settlement
Approval Order, Disclosure Statement Order, Plan Confirmation Order, Order
Vacating Partial Summary Judgment, Dismissal Orders, and Society Dismissal
Order, and (iv) all releases (including, without limitation, any Independent
Releases) and covenants not to xxx granted in the Master Settlement Agreement or
the Plan shall be null and void ab initio; (b) none of the provisions of this
Master Settlement Agreement, the Plan, any court rulings or orders entered in
connection with the Master Settlement Agreement or the Plan, (including, without
limitation, the Preliminary Class Settlement Approval Order, Xxxxxxx Settlement
Approval Order, FINOVA Settlement Approval Order, Final Class Settlement
23
Approval Order, Disclosure Statement Order, Plan Confirmation Order, Order
Vacating Partial Summary Judgment, Dismissal Orders, and Society Dismissal
Order), or any of the other documents entered into (or written or oral
statements made) in connection with the settlement of the Litigation referenced
herein (i) shall constitute an admission or stipulation of liability, an
admission or stipulation of any facts or circumstances referenced herein, or an
admission, stipulation, or judicial determination that any relief sought by any
of the Parties (including, without limitation, a request for class certification
or the Substantive Consolidation Request) is appropriate, or (ii) may be used as
evidence of consent or liability, or admitted as evidence in the Litigation or
otherwise for any purpose; (c) notwithstanding the entry of the Preliminary
Class Settlement Approval Order or anything contained therein, the Proposed
Class shall automatically be decertified without the necessity for court action;
(d) notwithstanding the entry of the Confirmation Order or anything contained
therein, the Plan shall automatically be revoked and considered null and void
without the necessity for court action; (e) FINOVA and the Additional Defendants
shall have the right to object to the maintenance of a class action in any
court, and to object to the substantive consolidation of the estates of the
Xxxxxxx Debtors; and (f) FINOVA shall retain its FINOVA Claims, FINOVA Liens,
and any other Claims against any person or entity.
3. Termination By Subsequent Litigation. In the event of any
timely and proper Subsequent Litigation, this Master Settlement Agreement shall
terminate automatically and immediately, but only as between the Released
Defendants and the plaintiff(s) in such Subsequent Litigation. Upon termination
under this Section VI.B.3, solely as between the Released Defendants and the
plaintiff(s) in such Subsequent Litigation: (a) (i) all provisions of this
Master Settlement Agreement, (ii) all provisions of the Plan, (iii) any court
rulings or orders relating thereto or entered in connection therewith,
including, without limitation, any Confirmation Order, Preliminary Class
Settlement Approval Order, Final Class Settlement Approval Order, Order Vacating
Partial Summary Judgment, and Dismissal Orders, and (iv) all releases
(including, without limitation, any Independent Releases) and covenants not to
xxx granted in the Master Settlement Agreement or the Plan shall be null and
void ab initio; (b) none of the provisions of this Master Settlement Agreement,
the Plan, any court rulings or orders entered in connection with the Master
Settlement Agreement or the Plan (including, without limitation, any
Confirmation Order, Preliminary Class Settlement Approval Order, Final Class
Settlement Approval Order, Order Vacating Partial Summary Judgment, and
Dismissal Orders) or any of the other documents entered into (or written or oral
statements made) in connection with the settlement of the Litigation referenced
herein (i) shall constitute an admission or stipulation of liability, an
admission or stipulation of any facts or circumstances referenced herein, or an
admission, stipulation, or judicial determination that any relief sought by any
of the Parties (including, without limitation, a request for class certification
or the Substantive Consolidation Request) is appropriate, or (ii) may be used as
evidence of consent or liability, or admitted as evidence in the Litigation or
otherwise for any purpose; (c) notwithstanding the entry of the Confirmation
Order or anything contained therein, the Plan shall automatically be revoked and
24
considered null and void without the necessity for court action; (d) FINOVA and
the Additional Defendants shall have the right to object to the substantive
consolidation of the estates of the Xxxxxxx Debtors; and (f) FINOVA shall retain
(i) the FINOVA Claims, (ii) the FINOVA Liens, and (iii) any other Claims and
priority rights vis-a-vis the plaintiffs in such Subsequent Litigation.
VII. MISCELLANEOUS
-------------
A. RELEASE OF ATTORNEYS' LIEN.
---------------------------
In consideration of this Agreement, Proposed Class Counsel hereby
waive, discharge and release the Parties from any and all claims for attorneys'
fees, by lien or otherwise, for legal services rendered by Proposed Class
Counsel in connection with the Litigation; provided, however, that Proposed
Class Counsel shall be paid out of proceeds derived from the Litigation or out
of the sums to be distributed to the Proposed Class Members pursuant to Section
II.B of this Master Settlement Agreement.
B. EXCULPATION.
------------
Each of the Parties acknowledges and agrees that the Plan may
contain exculpation and discharge provisions in form and substance acceptable to
each of the Parties, in its sole and absolute discretion.
C. COOPERATION.
------------
The Parties and their attorneys agree to cooperate fully with one
another in seeking Court approval of this Master Settlement Agreement and the
Plan, and to use their best efforts to effect the consummation of this Master
Settlement Agreement and the settlement provided for in it.
D. NOTICES TO PARTIES.
-------------------
All notices and other documents to be provided hereunder shall be in
writing and deemed to have been given or made: (1) if delivered in person,
immediately upon delivery, (2) if by telex, telegram or facsimile transmission,
immediately upon sending and upon confirmation of receipt; (3) if by nationally
recognized overnight courier service with instructions to deliver the next
Business Day, one (1) Business Day after sending; and (4) if by certified mail,
return receipt requested, five (5) days after mailing. All notices, requests and
demands upon the parties are to be given to the following addresses (or to such
other address as any party may designate by notice in accordance with this
Section VII.D):
25
If to FINOVA: Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxx X. Xxxx, Esq.
XXXXXXXX XXXX
00 X. Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to any of the Thaxton C. Xxxxxxx Xxxxxxx, Xx., Esq.
Debtors: Xxxxxx X. Xxxxxx, Esq.
XXXXXXX XXXXXX & XXXXXX, P.A.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Judge Xxxxxx X. Xxx, III, Esq.
Xxx X. Xxxxx, Esq.
Xxxxx X. Xxxxxx, Esq.
XXXXXX XXXXXXX XXXXX &
SCARBOROUGH, LLP
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Proposed Class: Xxxxxxx Xxxxx Xxxxxxx, Esq.
XXXXXXX & XXXXX, LLC
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Committee: Xxxx Xxxxx, Esq.
Xxxx X. Xxxxx, Esq.
MOSES & SINGER, LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
26
If to any of the Additional Xxxxxxx X. Xxxxxxxxx, Esq.
Defendants or the Additional XXXXX & XXXXXX, LLP
Defendant Parties: 00 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Independent Xxxxxx Claims Administration, LLC
Processing Agent: X.X. Xxx 0000
Xxxxxxx, XX 00000
The persons and addresses designated in this Section VII.D may be
changed by any signatory party by written notice to the other signatory parties.
E. SUCCESSORS AND ASSIGNS.
-----------------------
This Master Settlement Agreement and any other document referred to
herein or therein shall be binding upon and inure to the benefit of and be
enforceable by each of the Parties and their respective successors and assigns.
Each and every term of this Master Settlement Agreement shall be binding upon
and inure to the benefit of each of the Parties and their respective successors
and assigns, all of which persons and entities are intended to be beneficiaries
of this Master Settlement Agreement.
F. ENTIRE AGREEMENT.
-----------------
This Master Settlement Agreement, any supplements hereto or thereto,
and any instruments or documents delivered or to be delivered in connection
herewith or therewith represents the entire agreement and understanding
concerning the subject matter hereof and thereof between the parties hereto, and
supersede all other prior agreements, understandings, negotiations and
discussions, representations, warranties, commitments, proposals, offers and
contracts concerning the subject matter hereof, whether oral or written. In the
event of any inconsistency between the terms of this Master Settlement Agreement
and any schedule or exhibit hereto, the terms of this Master Settlement
Agreement shall govern.
F. COUNTERPARTS.
-------------
This Master Settlement Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of this Master Settlement Agreement by facsimile shall have the same
force and effect as the delivery of an original executed counterpart of this
27
Master Settlement Agreement. Any party delivering an executed counterpart of any
such agreement by facsimile shall also deliver an original executed counterpart,
but the failure to do so shall not affect the validity, enforceability or
binding effect of such agreement.
G. GOVERNING LAW.
--------------
The validity, interpretation and enforcement of this Master
Settlement Agreement shall be governed by the internal laws of the State of
Delaware (without giving effect to principles of conflicts of law).
H. REPRESENTATION BY COUNSEL.
--------------------------
The Parties recognize and hereby acknowledge that each of the
Parties was represented by counsel, and that they received independent legal
advice with respect to the advisability of entering into this Master Settlement
Agreement. Each of the Parties acknowledges that: (a) the negotiations leading
up to this Master Settlement Agreement were conducted regularly and at arm's
length; (b) this Master Settlement Agreement is made and executed by and of each
Party's own free will; (c) each Party knows all of the relevant facts and his or
its rights in connection therewith; and (d) he, she or it has not been
improperly influenced or induced to make this settlement as a result of any act
or action on the part of any party or employee, agent, attorney or
representative of any Party to this Master Settlement Agreement. The Parties
further acknowledge that they entered into this Master Settlement Agreement
because of their desire to avoid the further expense and inconvenience of the
Litigation and other disputes, and to compromise permanently and settle the
claims among the Parties settled by the execution of this Master Settlement
Agreement.
I. POWER TO EXECUTE SETTLEMENT AGREEMENT.
--------------------------------------
Each of the Parties hereto does hereby represent and warrant as to
itself that it has the power and authority to execute this Master Settlement
Agreement, and that, when executed and delivered by them or their undersigned
officers or other representatives, and subject to entry of the Xxxxxxx Debtors'
Approval Order and the FINOVA Settlement Approval Order and in all cases to
Sections V and VI of this Master Settlement Agreement, this Master Settlement
Agreement shall be valid and legally binding against it.
J. MASTER SETTLEMENT AGREEMENT CONTROLS.
-------------------------------------
To the extent there is any conflict between the terms of this Master
Settlement Agreement and any other document or order (including, without
limitation, the Plan or the Confirmation Order), this Master Settlement
Agreement shall control.
28
K. HEADINGS.
---------
The headings in this Master Settlement Agreement are for
informational purposes only, and shall not constitute a part of this Master
Settlement Agreement.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto, and their respective counsel
of record, have so agreed, on October 31, 2006.
FINOVA CAPITAL CORPORATION
Dated: By:
---------- ------------------------------------
Xxxx Xxxxxxxx, Esq.
Senior Vice President
General Counsel And Secretary
THE XXXXXXX DEBTORS
Dated: By:
---------- ------------------------------------
Xxxxxx Xxxx
President
THE PROPOSED CLASS
Dated: By:
---------- ------------------------------------
Xxxx X. Xxxxx
Proposed Class Representative
THE COMMITTEE
Dated: By:
---------- ------------------------------------
Counsel To The Committee
THE ADDITIONAL DEFENDANTS
Dated: By:
---------- ------------------------------------
Xxxxxxx Xxxxxxxxx, Esq.
Counsel To The Additional Defendants
