EXHIBIT 10.7
AGREEMENT AND RELEASE
This Agreement and Release (this "Release") is made and entered into as of
the 31st day of December, 2003, by and between Xxxx Xxxxx ("Xxxxx"), FIC
Financial Services, Inc., a Nevada corporation ("FICFS"), and Financial
Industries Corporation, a Texas corporation ("FIC").
W I T N E S S E T H:
WHEREAS, on May 30, 2003, FICFS acquired all of the shares of capital stock
of Total Compensation Group Consulting, Inc., a Texas corporation ("TCG"),
pursuant to that certain Stock Purchase Agreement, dated as of May 30, 3003 (the
"TCG Stock Purchase Agreement"), by and among Xxxxxx Xxxxxx, Xxxxxxxx Xxxxxxx,
X.X. Xxxxxxx, Xxxxxx Xxxxxx, III, M.B. Xxxxxxxxx, Xxxx Xxxx, Xxxxxx Xxxxxxx,
Xxxxxxx Xxxxxxx, Xxx Xxxx, Xxxxx Xxxxx and Xxxxxx Xxxxx (each, a "Shareholder,"
and collectively, the "Shareholders"), Xxxxx, Xxxx Xxxxxxx, TCG, FIC and FICFS;
WHEREAS, pursuant to the TCG Stock Purchase Agreement, 50,004 shares of
common stock, par value $.20 per share, of FIC (the "FIC Shares") were issued to
Xxxxx and Xxxx Xxxxxxx and deposited in escrow to be distributed to Xxxxx and
Xxxx Xxxxxxx in accordance with the TCG Stock Purchase Agreement;
WHEREAS, on May 30, 2003, Xxxxx became an employee of FICFS pursuant to
that certain Employment Agreement, dated as of May 30, 2003 (the "Employment
Agreement"), by and between Xxxxx and FICFS;
WHEREAS, on May 30, 2003, FICFS acquired (i) from Xxxxx Xxxx, Xxxxx
Xxxxxxxx and Xxxxx Xxxxxx all of the shares of capital stock of Paragon
Benefits, Inc., a Texas corporation ("Paragon Benefits"), The Paragon Group,
Inc., a Texas corporation ("Paragon Group"), and Paragon National, Inc., a Texas
corporation ("Paragon National" and, together with Paragon Benefits and Paragon
Group, "Paragon"), and (ii) from Xxxx Xxxxxxx and TCG all of the shares of
capital stock of JNT Group, Inc., a Texas corporation ("JNT" and, together with
Paragon and TCG, the "New Era Companies"), with Xxxxx participating in the
negotiations and sale of the New Era Companies to FICFS;
WHEREAS, Xxxxx has resigned his employment with FICFS, effective as of
December 31, 2003;
WHEREAS, Xxxxx has asserted certain claims against FICFS and FIC under the
TCG Stock Purchase Agreement and the Employment Agreement, asserting rights to
recover certain amounts allegedly owed to Xxxxx under the Employment Agreement
in connection with his resignation, including accelerated salary and bonus, and
demanding the release of the FIC Shares from escrow pursuant to the TCG Stock
Purchase Agreement and the Employment Agreement;
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WHEREAS, FICFS and FIC have at all times denied, and continue to deny, any
liability to Xxxxx and have denied, and continue to deny, any and all claims
asserted by Xxxxx arising out of the TCG Stock Purchase Agreement and Employment
Agreement;
WHEREAS, Xxxxx, FICFS and FIC have agreed to resolve fully and finally any
and all differences between them;
WHEREAS, the parties recognize that arbitration, litigation and other
disputes between them are expensive, uncertain, and time-consuming, and that
settlement on agreeable terms is preferable to ongoing disputes and litigation;
WHEREAS, the parties desire to provide the below-described mutual releases
of claims, and Xxxxx, FICFS and FIC desire to enter into this Release and agree
to the terms and provisions hereof; and
WHEREAS, the settlement provided for herein is not and shall not in any way
be construed or deemed to be evidence or an admission or a concession of any
fault, liability, fact or amount of damages, or any other matter whatsoever on
the part of the parties, and the parties are entering into this Release solely
to avoid the substantial expense, inconvenience and burden of litigation and to
completely and finally put to rest all claims;
NOW, THEREFORE, in consideration of the mutual promises contained in this
Release, the parties agree as follows:
1. Any and all Xxxxx Claims (as hereinafter defined) shall be and hereby
are fully and finally settled, satisfied, released and discharged in
consideration of (i) the sum of TEN THOUSAND DOLLARS ($10,000.00), which shall
be paid by FICFS or FIC by check delivered to Xxxxx upon the execution by Xxxxx
of this Release, and (ii) the release by FIC and FICFS of all FIC Claims (as
hereinafter defined) pursuant to this Release. Xxxxx agrees that FIC's and
FICFS's release of any and all FIC Claims pursuant to this Release and the
above-described payment are contrary to FIC's and FICFS's normal policies and
interests, and are good and valuable consideration for Xxxxx'x release of all
Xxxxx Claims pursuant hereto. Except for the payment to be made pursuant to this
paragraph, Xxxxx agrees that FICFS and FIC have paid him all sums owed Xxxxx by
virtue of the TCG Stock Purchase Agreement and Employment Agreement, whether
with respect to past, present and/or future periods of time, including, without
limitation, any and all vacation pay, severance pay, salary, bonus, stock,
variable and other wages, and any and all other compensation amounts and expense
reimbursements, and that he has no rights, with respect to past, present and/or
future periods of time, to the FIC Shares. The parties agree that the described
payment is to be treated as wages and subject to standard payroll deductions and
withholdings.
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2. Any and all FIC Claims shall be and hereby are fully and finally
settled, satisfied, released and discharged in consideration of the release by
Xxxxx of all Xxxxx Claims pursuant to this Release. FIC and FICFS agree that
Xxxxx'x release of any and all Xxxxx Claims pursuant to this Release is contrary
to Xxxxx'x normal policies and interests, and is good and valuable consideration
for FIC's and FICFS's release of all FIC Claims pursuant hereto and for the
above described payment to Xxxxx.
3. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Xxxxx, for and on behalf of his present and
former assignors, creditors, assigns, heirs, executors, spouses, personal
representatives, administrators, transferees and attorneys (collectively, the
"Xxxxx Releasors"), hereby knowingly and voluntarily and forever release, acquit
and discharge FICFS and FIC and their respective past, present and future parent
companies, stockholders, owners, subsidiaries, divisions, related or affiliated
entities, predecessors and successors, their respective present and former
officers, directors, partners, limited partners, principals, members,
stockholders, owners, employees, agents, servants, subrogees, insurers and
attorneys, and their respective successors, predecessors, assigns,
representatives, heirs, executors, spouses, personal representatives,
administrators, transferees and attorneys from any and all claims or causes of
action, including debts, suits, rights of action, dues, sums of money, accounts,
bonds, bills, covenants, contracts, controversies, agreements, promises,
damages, judgments, variances, executions, demands, rights, liabilities, losses
or obligations of any kind or nature whatsoever, matured or unmatured,
liquidated or unliquidated, absolute or contingent, accrued or unaccrued, known
or unknown, suspected or unsuspected, whether heretofore or hereafter accruing,
whether or not asserted, threatened, alleged or litigated in any forum, at law,
admiralty, equity or otherwise, including without limitation, claims for
indemnity or contribution, or for costs, expenses (including without limitation
amounts paid in settlement) and attorneys' fees which any person or entity has,
owns or holds, or might have had, owned or held, formerly had or hereafter might
have, own or hold, directly, indirectly, individually, representatively,
derivatively or in any capacity for or because of anything done or omitted prior
to and including the date hereof including, but not limited to, those which
arise out of or are directly or indirectly related in any way to (i) Xxxxx'x
employment with and/or resignation from FICFS, including, without limitation,
any and all claims for sums allegedly owed Xxxxx under the Employment Agreement,
including, without limitation, any and all vacation pay, severance pay, salary,
bonus, stock, variable and other wages, and any and all other compensation
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amounts and expense reimbursements, or (ii) the acquisition of the New Era
Companies by FICFS, including, without limitation, any and all claims for the
release of the FIC Stock to Xxxxx under the TCG Stock Purchase Agreement and/or
the Employment Agreement (collectively, "Xxxxx Claims"); provided, however, that
this Release shall not include a release of any rights the Xxxxx Releasors may
have to enforce the terms and conditions of this Release or the Stock Purchase
Agreement, dated as of the date hereof (the "New Era Stock Purchase Agreement"),
by and among BCDP Holdings, LLP, a Delaware limited liability partnership
("BCDP"), FICFS and FIC.
4. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, FICFS and FIC and their respective past, present
and future parent companies, stockholders, owners, subsidiaries, divisions,
related or affiliated entities, predecessors and successors, their respective
present and former officers, directors, partners, limited partners, principals,
members, stockholders, owners, employees, agents, servants, subrogees, insurers
and attorneys, and their respective successors, predecessors, assigns,
representatives, heirs, executors, spouses, personal representatives,
administrators, transferees and attorneys (collectively, the "FIC Releasors"),
hereby knowingly and voluntarily and forever release, acquit and discharge
Xxxxx, the New Era Companies and their respective assigns, heirs, executors,
spouses, representatives, administrators, transferees, past, present and future
parent companies, subsidiaries, divisions, related or affiliated entities,
predecessors and successors, subrogees, insures and attorneys, from any and all
claims or causes of action, including debts, suits, rights of action, dues, sums
of money, accounts, bonds, bills, covenants, contracts, controversies,
agreements, promises, damages, judgments, variances, executions, demands,
rights, liabilities, losses or obligations of any kind or nature whatsoever,
matured or unmatured, liquidated or unliquidated, absolute or contingent,
accrued or unaccrued, known or unknown, suspected or unsuspected, whether
heretofore or hereafter accruing, whether or not asserted, threatened, alleged
or litigated in any forum, at law, admiralty, equity or otherwise, including
without limitation, claims for indemnity or contribution, or for costs, expenses
(including without limitation amounts paid in settlement) and attorneys' fees
which any person or entity has, owns or holds, or might have had, owned or held,
formerly had or hereafter might have, own or hold, directly, indirectly,
individually, representatively, derivatively or in any capacity for or because
of anything done or omitted prior to and including the date hereof including,
but not limited to, those which arise out of or are directly or indirectly
related in any way to (i) the Employment Agreement or Xxxxx'x employment with
and/or resignation from FICFS, or (ii) the acquisition of the New Era Companies
by FICFS, including the TCG Stock Purchase Agreement (collectively, "FIC
Claims"); provided, however, that this Release shall not include a release of
any rights the FIC Releasors may have to enforce the terms and conditions of
this Release or the New Era Stock Purchase Agreement.
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5. Neither this Release nor any payments or performance by the Xxxxx
Releasors or the FIC Releasors shall in any way be construed as an admission by
the Xxxxx Releasors or the FIC Releasors, or any of their parents, subsidiaries,
affiliates, or related companies, of any acts of wrongdoing, negligence, or
violation of any statute, law, or legal right. The parties hereto are settling
any and all FIC Claims and Xxxxx Claims solely in the interest of reasonable
compromise. Neither this Release nor any of its terms and provisions nor any of
the negotiations or proceedings in connection with it (a) is, or is intended to
be, an admission by any party or any evidence of the truth of any fact alleged,
or the validity of any claim that has been or could have been asserted, or of
any liability, fault or wrongdoing of such party, or (b) shall be offered or
received in evidence in any action or proceeding of any kind other than such
proceedings as may be necessary to consummate, defend or enforce this Release.
6. Xxxxx represents that he has not transferred or assigned, to any person
or entity, any Xxxxx Claim, or any portion thereof, or interest therein. FICFS
and FIC represent that neither has transferred or assigned, to any person or
entity, any FIC Claim, or any portion thereof, or interest therein.
7. FIC and FICFS (collectively, the "Indemnifying Parties"), jointly and
severally, shall indemnify TCG and Xxxxxxx and their respective successors,
heirs, personal representatives and assigns (collectively, the "Indemnified
Parties"), against and hold them harmless from any and all damage, claim, loss
and liability (excluding any expenses incurred by the Indemnified Parties,
including, without limitation, attorneys' fees) (collectively, "Damages")
arising directly out of any right of contribution asserted by a Shareholder
against any Indemnified Party to the extent such right of contribution arises
directly out of any dispute, claim, litigation or similar proceeding initiated
by FIC or FICFS against such Shareholder that is related to the TCG Stock
Purchase Agreement and/or the transactions contemplated thereby. An Indemnified
Party seeking indemnification pursuant to this paragraph shall give prompt
written notice to the Indemnifying Parties of the assertion of any claim, or the
commencement of any action or proceeding, in respect of which indemnity may be
sought hereunder; provided that the failure to give such notice shall not affect
the Indemnified Party's rights to indemnification hereunder, unless such failure
shall prejudice in any material respect the Indemnifying Parties' ability to
defend such claim, action or proceeding. An Indemnified Party shall have the
right to settle the claim for Damages at any time, subject to the approval of
the Indemnifying Parties which shall not be unreasonably withheld.
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8. The parties represent and acknowledge that in executing this Release, no
party has relied upon any representation(s) by any other party, or agents or
attorneys of any other party, except as expressly contained in this Release.
9. The parties hereby expressly waive any and all claims based upon
representations that are not set forth in this Release, including, without
limitation, claims for fraudulent inducement of this Release.
10. The parties agree, each to the others, that the statements,
representations, agreements and covenants contained herein are contractual in
nature and not mere recitations of fact, and that the agreements and covenants
herein shall be binding upon the parties, their respective heirs,
administrators, representatives, executors, successors and assigns, and shall
inure to the benefit of their respective heirs, administrators, representatives,
executors, successors and assigns.
11. The language of this Release shall, in all cases, be construed as a
whole, according to its fair meaning, and not strictly for, or against, any of
the parties.
12. Should any provision of this Release be declared, or be determined, by
any court to be illegal or invalid, the validity of the remaining parts, terms
or provisions of this Release shall not be affected and any illegal or invalid
part, term, or provision, should not be deemed to be a part of this Release.
13. Each party agrees to enter into or execute such additional documents as
are or may be necessary to carry out the intent and express terms of this
Release
14. This Release may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall be deemed one
and the same instrument.
15. Each party shall bear their own costs and attorney's fees in connection
with this Release.
16. The parties agree that any disputes arising under or related to this
Release shall be submitted to binding arbitration. Such arbitration shall be
conducted pursuant to the then-current rules of the American Arbitration
Association ("AAA"). However, AAA need not conduct said arbitration as the
parties may agree to utilize any other commercially suitable service or
qualified individual.
17. This Release shall be construed and enforced in accordance with the
laws of the State of Texas. The parties agree that this Release affects
interstate commerce and that the arbitration, referenced in paragraph 16, shall
be subject to the Federal Arbitration Act.
18. The failure of a party to insist upon strict performance of any
provision of this Release shall not constitute a waiver of, or estoppel against
asserting, the right to require performance in the future. A waiver or estoppel
in any one instance shall not constitute a waiver or estoppel with respect to a
later breach.
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19. This Release sets forth the entire agreement between the parties, and
fully supersedes any and all prior and contemporaneous agreements or
understandings, oral or written, between the Parties pertaining to the subject
matter in this Release. This Release may only be amended or modified in a
writing duly executed by both Parties.
MY SIGNATURE BELOW SUBSTANTIATES THAT I HAVE READ THE ABOVE AGREEMENT AND
RELEASE AND AGREE AND CONSENT TO THE TERMS AND CONDITIONS THEREIN.
Witness my hand this 31st day of December, 2003.
/s/ Xxxx Xxxxx
______________________________________
Xxxx Xxxxx
Subscribed and sworn to by Xxxx Xxxxx before the undersigned Notary Public,
on this 31st day of December, 2003.
______________________________________
Notary Public for the State of Texas
My Commission Expires: ______________
* * * * * * * * * * *
Witness my hand this 31st day of December, 2003.
FIC Financial Services, Inc.
By: /s/ Xxxxxxxx X. Xxxxxx
___________________________________
Xxxxxxxx X. Xxxxxx
Secretary
Subscribed and sworn to by Xxxxxxxx X. Xxxxxx before the undersigned Notary
Public on this 31st day of December, 2003.
______________________________________
Notary Public for the State of Texas
My Commission Expires: ______________
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* * * * * * * * * * *
Witness my hand this 31st day of December, 2003.
Financial Industries Corporation
By: /s/ Xxxxxxxx X. Xxxxxx
___________________________________
Xxxxxxxx X. Xxxxxx
Vice President and Secretary
Subscribed and sworn to by Xxxxxxxx X. Xxxxxx before the undersigned Notary
Public on this 31st day of December, 2003.
______________________________________
Notary Public for the State of Texas
My Commission Expires: ______________
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