EXHIBIT 10.20
TERMINATION AND ASSIGNMENT AGREEMENT
This Termination and Assignment Agreement (this "Agreement") is executed
this 23rd day of December, 1997, effective December 31, 1997, by and between
and First Tennessee Bank National Association ("FTB"), in its own capacity
and as trustee under the Trust Agreement, dated August 31, 1988, as amended
from time to time, by and between Xxxxx Xxxxxxxx & Co., as trustor and FTB,
as trustee of the trust thereby established and First Tennessee Brokerage,
Inc., a Tennessee corporation ("FTBR") and JMC Group, Inc. ("JMCG"), Xxxxx
Xxxxxxxx & Co., JMC Insurance Services Corporation and JMC Financial
Corporation (the "JMC Entities"), (collectively "JMC").
R E C I T A L S
On January 31,1996, JMC and FTB entered into that certain Integrated
Support Services Agreement ("Services Agreement") pursuant to which JMC and
its Subsidiaries agreed to provide certain services to FTB.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to those terms in the Services Agreement.
FTB and JMC have agreed to terminate the Services Agreement in
accordance with Article XV of such agreement, subject to the terms and
conditions set forth below. In connection with the termination of the
Services Agreement, FTB has exercised its option to purchase in accordance
with Article V and JMC has agreed to sell, transfer and assign all of its
right, title and interest to (1) all asset and renewal fees earned after
December 31, 1997 in connection with (a) fixed annuity contracts issued by
Keyport Life Insurance Company, and (b) whole life policies issued by all
provider companies sold to FTB customers by JMC since the date of inception
(c) fixed and variable annuity contracts issued by The Life Insurance Company
of Virginia, and (d) variable annuity products issued by all provider
companies sold to FTB customers by JMC since the date of inception (the
"Asset Fee Income"); (2) all 12b-1 fees earned after December 31, 1997 in
connection with the Current Mutual Fund Block (the "12b-1 Fee Income"); and
(3) all Trail Commissions payable by Product Providers on the Current Block
and ISS Block not described in (1) and (2) herein.
NOW THEREFORE, in consideration of the premises and mutual covenants and
undertakings hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I.
TERMINATION AND ASSIGNMENT
1.1 TERMINATION OF SERVICES AGREEMENT. The parties hereby acknowledge
that the Services Agreement shall be terminated effective December 31,1997
provided, however, that the
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indemnification provisions of the Services Agreement and such other
provisions of the Services Agreement which define the responsibilities and
duties of the parties after December 31, 1997, shall survive termination.
1.2 TRUST AGREEMENT. Effective January 1, 1998:
(a) JMC appoints FTBR its agent and attorney-in-fact for purposes
of appointing a successor trustee under the Trust Agreement or amending the
Trust Agreement;
(b) FTBR will serve as recordkeeping agent under the Trust
Agreement; and
(c) Hereinafter, the transactions and assignments described in
1.3(a), 1.3(b) and 1.3(c) hereof shall be referred to as the JMC Assignment.
1.3 ASSIGNMENTS.
(a) JMC agrees, and agrees to cause its wholly owned subsidiaries,
to (i) sell, assign, transfer and convey to FTB, or its designee, all of
JMC's right, title and interest in and to the Asset Fee Income earned by JMC
or its Subsidiaries after December 31, 1997 from Keyport Life Insurance
Company, the Life Insurance Company of Virginia and such other insurance
companies that wrote whole life policies, (collectively, the "Provider
Companies") as a result of sales of annuity contracts and whole life
insurance sold to FTB customers by JMC from inception to and including
December 31, 1997, and (ii) to execute any and all documents reasonably
required in connection therewith.
(b) JMC agrees, and agrees to cause its wholly owned subsidiaries,
to (i) sell, assign, transfer and convey to FTB, or its designee, all of
JMC's right, title and interest in and to the 12b-1 Fee Income earned by JMC
or its Subsidiaries after December 31, 1997 as a result of sales of the
Current Mutual Fund Block; and (ii) to execute any and all documents
reasonably required in connection with the JMC Assignment; and
(c) JMC agrees, and agrees to cause its wholly owned subsidiaries,
to (i) sell, assign, transfer and convey to FTB or its designee, all of JMC's
right, title and interest in and to, all other Trail Commissions earned by
JMC or its Subsidiaries after December 31, 1997 on the Current Block and the
ISS Block not described by (a) and (b) above.
1.4 CONSIDERATION. In connection with the JMC Assignments, the
parties agree to make the following payments in accordance with the Existing
Agreements:
(a) The Asset Purchase Price, as defined in Article V of the
Services Agreement is $2,200,000.00 (see Exhibit I). The Asset Purchase
Price will be paid as follows.
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(i) $478,987 for the Current Mutual Fund Block 12b-1 fees.
The 12b-1 fees will be paid by wire transfer on the later of December 31,
1997 or receipt by FTB or FTBR of (1) a list in form and substance
satisfactory to FTBR, which indicates each Active Account and the applicable
account value or fund balance as of September 30, 1997 (the "List of
Accounts"); (2) all customer books and records and FTB Information received
or under control of JMC ("Records") and (3) all agreements with the Product
Providers that provide for the payment of Trail Commissions ("Trail
Commission Agreements") related to the Current Mutual Fund Block;
(ii) $551,300 for the Keyport Life Insurance Company
("Keyport") Asset Fee Income to be paid by wire transfer the later of
December 31, 1997 or upon receipt by FTB or FTBR of (1) an executed consent
to the JMC Assignment by Keyport and (2) the List of Accounts, Records and
Trail Commission Agreements for that portion of the Current Block and ISS
Block for which Keyport is the Product provider;
(iii) $144,857 for the Beneficial Standard Life Insurance
Company ("Beneficial") Asset Fee Income to be paid by wire transfer on the
later of December 31, 1997 or upon receipt by FTB or FTBR of (1) an executed
Acknowledgment and Acceptance of Assignment by Beneficial and (2) the List of
Accounts, Records and Trail Commission Agreements for that portion of the ISS
Block and Current Block for which Beneficial is the Product Provider;
(iv) $24,856.00 for the First Penn-Pacific Life Insurance
Company ("First Penn") Asset Fee Income to be paid by wire transfer on the
later of December 31, 1997 or upon receipt by FTB or FTBR of (1) an executed
Acknowledgment and Acceptance of Agent of Record Change from First Penn and
(2) the List of Accounts, Records and Trail Commission Agreements for that
portion of the ISS Block and Current Block for which First Penn is the
Product Provider; and
(v) $1,000,000 for the Life Insurance Company of Virginia
("LICOVA") Asset Fee Income to be paid by wire transfer on the later of
December 31, 1997 or upon receipt by FTB or FTBR of (1) an executed
Acknowledgment and Acceptance of Assignment from LICOVA and (2) the List of
Accounts, Records and Trail Commission Agreements for that portion of the ISS
Block and Current Block for which LICOVA is the Product Provider.
(b) On or prior to February 14, 1998, JMC shall provide FTB with a
reconciliation of:
(i) any Asset Fee Income earned after December 31, 1997 and
received by JMC from the Provider Companies;
(ii) any 12b-1 Fee Income earned after December 31, 1997 and
received by JMC from the Investment Companies; and
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(iii) any Chargebacks processed by the Provider Companies on
or after December 31, 1997 which Chargebacks were deducted from amounts paid
to JMC.
(c) Notwithstanding the provisions of Section 1.4(a), 15% of each
payment of the Asset Purchase Price set forth in Section 1.4(a)(i)-(v) shall
be paid to the Escrow Agent in accordance with Article V of this Agreement
and the Escrow Agreement.
ARTICLE II.
SALES AND SERVICING
2.1 FUTURE SALES. JMC hereby acknowledges that, effective January 1,
1998, FTB is free of any restrictions imposed by the Services Agreement with
respect to offering annuity and mutual fund products directly to its
customers. FTB shall be entitled to continue to offer to its customers
annuity and mutual fund products previously designed and offered by JMC
("JMC Products"). FTB shall be entitled to receive all compensation related
to any future sales of annuity and mutual fund products, including premiums,
asset fees, front end loads and 12b-1 fees. To the extent FTB has not entered
into contracts with any Provider Company or mutual fund, Customers will need
to contact any such Provider Company or mutual fund directly if they wish to
make additional purchases and neither JMC nor FTB will receive any
compensation in connection with such additions.
2.2 CHARGEBACKS. In the event any Customer surrenders a JMC Product
during the chargeback period, the Provider Company will chargeback some or
all of the front sales commission paid at the time the products was sold
("Chargeback"). JMC and FTB agree FTB is financially responsible for all
Chargebacks processed by the Provider Companies on and after January 1, 1998.
Such Chargebacks shall be deducted from the Asset Fee Income otherwise
payable by the Provider Companies to FTB or paid to JMC by FTB as provided in
Section 1.4(b) hereof.
2.3 TRAIL COMMISSIONS. FTB or FTBR will receive 100% of all Trail
Commissions earned pursuant to the Trail Commission Agreements after December
31, 1997.
2.4 SALES MANAGEMENT AND COMPLIANCE. On and after January 1, 1998, FTB
or FTBR shall have complete and sole responsibility (including financial
responsibility) for all sales, sales management and compliance aspects of its
annuities program including, without limitation, the following:
(a) Supervision, management and compensation of the annuity and
mutual fund sales force;
(b) All appointment setting, tracking and reporting;
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(c) All sales support, including product training, promotions,
marketing materials and sales personnel inquiries;
(d) All compliance responsibilities, including suitability reviews
and sales supervision; and
(e) All commission, asset fee and 12b-1 fee accounting with the
exception of accounting on the existing block prior to the JMC Assignment of
the Asset Fee Income and 12b-1 fee income to FTB.
2.5 CUSTOMER COMPLAINTS.
(a) On and after January 1, 1998, FTB or FTBR shall have complete
and sole responsibility for the research and investigation of all complaints
(whether written or oral) received by JMC, any of its Subsidiaries or
affiliates, or by any officer, director, agent or employee of any of them or
by FTB or FTBR, any of its subsidiaries or affiliates, or by any officer,
director, agent or employee or any of them, from any person (including state
and government agencies, departments, divisions or offices or any
self-regulatory organization ("Regulators")) with respect to the sales of JMC
Products or the provision of any of the services described in the Existing
Agreements, the Service Agreement or the Clearing Agreement ("Customer
Complaints") which arise on and after January 1, 1998, including Customer
Complaints which arise out of sales made or services provided by JMC, any of
its Subsidiaries or affiliates or any officer, director, agent or employee of
any of them prior to January 1, 1998. Such responsibility shall include,
without limitation, the research and investigation necessary to determine the
validity of any Customer Complaint, any and all communication with the
complaining person, any former JMC officer, director, employee or agent, or
any Provider Company or mutual fund company concerning the Customer
Complaint. In the event JMC receives any Customer Complaints on and after
January 1, 1998, it will forward them promptly to FTB. Any action taken by
FTB or FTBR under this Section 2.5(a) shall not prejudice FTB or FTBR's right
to seek indemnification or JMC's obligation to indemnify FTB and FTBR under
the Existing Agreements, the Service Agreement or this Agreement.
(b) JMC shall have complete and sole responsibility for the
resolution of all Customer Complaints which are listed on the attached
Schedule 3.4.
(c) Notwithstanding the foregoing, in the event that any Regulator
with jurisdiction over JMC, any of its affiliates or Subsidiaries, or any
officer, director, agent or employee of any of them, shall initiate a
Customer Complaint or become involved in any manner in any Customer Complaint
or if a Customer Complaint is initiated or otherwise results in a proceeding
or action before a court or self-regulatory organization ("Action"), JMC
shall be responsible for the research and investigation necessary to
determine the validity of such Customer Complaint and any communication with
the complaining person, any current or former JMC officer, director, employee
or agent, any Provider Company, mutual fund company or such
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Regulator and FTB, its subsidiaries and affiliates, and any officer,
director, agent or employee of any of them, shall cooperate with JMC in
connection therewith. The defense of any such Action shall be in accordance
with the terms of the indemnification provisions of the Existing Agreements
and the Services Agreement.
(d) JMC, its affiliates and Subsidiaries will cooperate, and will
use their best efforts to cause any current officer, director, employee or
agent of any of them, to cooperate with FTB in connection with the research
and investigation of any Customer Complaint.
(e) FTB shall undertake a complete investigation of all Customer
Complaints as provided in Section 2.5(a) hereof and its recommendation for
resolution and shall provide JMC with a copy of its complete file on any
Customer Complaint for which it seeks reimbursement from JMC pursuant to
indemnification provisions of the Existing Agreements. Such file shall
include at a minimum all written communications from the complaining
persons(s) or any written summaries of the complaining persons(s) complaints
and allegations prepared by FTB or its employees or agents, any written
documentation provided by the licensed representative who sold the product at
issue, the confidential customer profile and the customer disclosure form, if
any. FTB agrees that in connection with the resolution of any Customer
Complaint that it will obtain a written release satisfactory in form and
substance to JMC from the complaining person or persons releasing JMC, its
affiliates and Subsidiaries, and any officer, director, employee or agent of
any of them, from any future liability to such persons(s) prior to paying any
compensation to such complaining person or persons. In addition, in
connection with the negotiation and resolution of any Customer Complaint by
any party hereto not involving an Action, the other party agrees that in
connection with the investigation and research of a Customer Complaint, no
licensed representative thereof or its agents will admit or imply orally or
in writing to a customer that the other party, any of its affiliates or
subsidiaries, or any officer, director, employee or agent or any of them,
engaged in any wrongful act or omission or is in any way responsible or
liable for any Customer Complaint nor will either party or any officer or
employee thereof issue any press release or make any statement to the press
or general public that would in any way damage or disparage the reputation of
the other party, its affiliates or subsidiaries.
(f) Nothing in this Section 2.5 is intended to modify the
obligations of the parties under the Existing Agreements or the Service
Agreement to indemnify, defend or hold harmless the other party for Claims as
provided therein.
ARTICLE III.
JMC REPRESENTATIONS AND WARRANTIES
3.1 CORPORATE AUTHORITY. JMCG is a Delaware corporation, duly
organized, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and authority to enter into
this Agreement and to perform its obligations hereunder and
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thereunder and to consummate the transactions contemplated hereby and
thereby. Each of the JMC Entities are California corporations, duly
organized, validly existing and in good standing under the laws of the State
of California and has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby.
3.2 ENFORCEABILITY OF AGREEMENT. The execution, delivery and
performance of this Agreement by JMC and the consummation by JMC of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action. This constitutes legal, valid and binding
obligations of JMC enforceable against it in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors rights generally and except as the enforcement of
certain provisions thereof may be limited by the application of general
equitable principals of law in certain circumstances (whether such provisions
are considered in a proceeding at law or in equity).
3.3 EFFECT OF AGREEMENT. The execution and delivery of this Agreement
and the consummation of all other transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof as well as the
terms of all other documents executed in connection herewith by JMC shall not
(a) result in a breach of any of the terms or provisions of, or constitute a
default under, or conflict with: (i) any agreement, indenture or other
instrument to which JMC is a party or by which it is bound except for
agreements with Provider companies that require the consent of such companies
to the assignment of JMC's rights which consents are being requested (See
Section 3.5 and attachments hereto); (ii) the Articles of Incorporation or
Bylaws of JMC; (iii) any judgment, decree, order or award of any court,
governmental body or arbitrator by which JMC is bound; or (iv) any law, rule
or regulation applicable to JMC or (b) require the consent, waiver, approval,
license or authorization of, or the filing with, any federal, state or local
government, governmental department or agency, with the exception of any
required filing with the Securities and Exchange Commission.
3.4 DISCLOSURE OF CUSTOMER COMPLAINTS. Schedule 3.4 attached hereto
contains a complete and accurate list of all pending or threatened Customer
Complaints received by JMC, or any of its subsidiaries or affiliates or by
any officer, director, agent or employee of any of them as of the date
hereof, from any person and JMC does not know or have reason to know of the
existence of any additional or threatened Customer Complaints other than as
listed in Schedule 3.4. JMC has furnished FTB copies of all correspondence
and other documents in its possession related to any pending or threatened
Customer Complaints. All Customer Complaints received by JMC, or any of its
Subsidiaries or affiliates or by any officer, director, agent or employee of
any of them, on or after January 1, 1998 will be delivered to FTB to be
handled as provided in Section 2.5 hereof.
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3.5 JMC ANNUITY PROVIDER COMPANIES. JMC has contacted all of the
Provider Companies to request their consent to the JMC Assignment. JMC has
also encouraged the Provider Companies to enter into agreements with FTB
which would enable FTB to continue to sell JMC Products through its annuity
sales program.
3.6 INFORMATION. All information, reports and records provided by JMC
to FTB, FTBR or its agents and all information to be provided to FTB, FTBR or
its agents as described in Exhibit II ("Information") including Information
provided in connection with the calculation of the Asset Purchase Price, and
the List of Accounts, the Records and the Trail Commission Agreements is, or
will be, true, correct and complete as of the date hereof and thereof and
does not contain any misstatement or omissions.
ARTICLE IV.
INDEMNIFICATION
JMC agrees to indemnify, defend and hold harmless FTB, FTBR, its agents,
officers and employees from and against any and all loss (including losses
due to misstatement or omission in the Information which if known to FTB
before the execution of this Agreement would have decreased in the aggregate
the Asset Purchase Price by an amount greater than $50,000), costs and
expenses, including reasonable attorney fees ("Loss") incurred by FTB or FTBR
which arise out of or relate to a breach of representations or warranties
contained herein. The representation as to Accumulated Value is as set out
and limited by Note 1 to Exhibit I, hereto. JMC agrees that $330,000 of the
Asset Purchase Price will be held in an escrow account (the "Funds") for
purposes of payment of any Loss as provided in Article V hereof. The Funds
will be released as provided in Article V hereof; provided however that JMC's
obligation to indemnify FTB and FTBR for Losses as provided herein shall
survive termination of the escrow and release of the Funds.
ARTICLE V.
ESCROW
5.1 THE FUNDS. JMC agrees that $330,000 of the Asset Purchase Price
(the "Funds") shall be held in escrow for purposes of payment of any Loss
incurred by FTB or FTBR which is indemnifiable under Article IV hereof.
5.2 90 DAY PERIOD. Subject to Section 5.3 hereof, the Funds will be
released to JMC ninety (90) days following the date as of which all of the
following has been received by FTB or FTBR:
(a) the Lists of Accounts described in 1.4(a)(i), (ii), (iii),
(iv) and (v);
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(b) the Records described in 1.4(a)(i), (ii), (iii), (iv) and (v);
(c) the Trail Commission Agreements described in 1.4(a)(i), (ii),
(iii), (iv) and (v); and
(d) the information requested from JMC by Xxxxxxxx and Xxxxxxxxx,
Inc. described in Exhibit II (the "90 Day Period").
5.3 UNRESOLVED CLAIMS. Notwithstanding the foregoing, in the event that
FTB or FTBR has made a claim(s) for any Funds as of the end of the 90 Day Period
and such claim(s) remain(s) unresolved as of the end of the 90 Day Period
("Unresolved Claim") and such Unresolved Claim is less than the Funds, then at
the end of such 90 Day Period, the Escrow Agent will release only that portion
of Funds which equals the difference between the Funds and the amount of the
Unresolved Claim.
ARTICLE VI.
FTB REPRESENTATIONS AND WARRANTIES
6.1 CORPORATE AUTHORITY. FTB is a national bank, duly organized,
validly existing and in good standing under the laws of the United States and
has all requisite corporate power and authority to enter into this Agreement
and to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. FTBR is a corporation, duly
organized, validly existing and in good standing under the laws of the State
of Tennessee and has all requisite corporate power and authority to enter
into this Agreement and the other Definitive Agreements to which it is a
party, to perform the obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby.
6.2 ENFORCEABILITY OF AGREEMENT. The execution, delivery and
performance of this Agreement by FTB and the consummation by FTB of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action. This Agreement constitutes legal, valid and
binding obligations of FTB enforceable against it in accordance with its
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors rights generally and except as the
enforcement of certain provisions thereof may be limited by the application
of general equitable principals of law in certain circumstances (whether such
provisions are considered in a proceeding at law or in equity).
6.3 EFFECT OF AGREEMENT. The execution and delivery of this
Agreement, the consummation of all other transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof as well as the
terms of all other documents executed in connection herewith by FTB shall not
(a) result in a breach of any of the terms or provisions of, or constitute a
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default under, or conflict with: (i) any agreement, indenture or other
instrument to which either FTB is a party or by which it is bound; (ii) the
Articles of Incorporation or Bylaws of FTB; (iii) the Trust Agreement; (iv)
any judgment, decree, order or award of any court, governmental body or
arbitrator by which FTB is bound; or (v) any law, rule or regulation
applicable to FTB, or (b) require the consent, waiver, approval, license or
authorization of, or the filing with, any federal, state or local government,
governmental department or agency, the receipt of which FTB has not obtained.
ARTICLE VII.
COOPERATION
The parties hereto shall execute and deliver any such additional
documents, and shall take such additional actions as are reasonably requested
by the other party hereto, for the purpose of accomplishing the transactions
contemplated hereby or carrying out the provisions hereof. In addition, FTB
will, to the full extent necessary, assist and cooperate with JMC in
negotiations to obtain the consent of the Provider Companies to the JMC
Assignment.
ARTICLE VIII.
MISCELLANEOUS
8.1 NOTICES. All notices that are required or may be given pursuant
to the terms of this Agreement shall be in writing and shall be sufficient in
all respects if delivered or mailed by registered or certified mail postage
prepaid, or if sent by telex or telefax (in each case promptly confirmed by
registered or certified mail postage prepaid), or by overnight courier,
addressed as follows:
If to FTB or FTBR:
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 000000
Attn: Xxxx Xxxx
President
Telecopy number: (000) 000-0000
If to JMC, to: XXXXX XXXXXXXX & CO.
0000 Xxxxxxxx Xx. Xxx. 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxxxx, Chairman and
Chief Executive Officer
Telecopy number: (000) 000-0000
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8.2 EXPENSES. Except as otherwise expressly provided herein, or in
the Services Agreement the parties hereto shall pay all of their own expenses
relating to the transactions contemplated hereby, including, without
limitation, the fees and expenses of their respective counsel, accountants,
and financial advisors. In the event of litigation or other adversary
proceeding with respect to this Agreement or the transactions contemplated
hereby, the non-prevailing party shall reimburse the prevailing party for all
reasonable attorney's fees and court costs incurred in connection therewith.
8.3 AMENDMENTS. This Agreement may not be changed orally, but only by
agreement in writing signed by the parties hereto. Any provision of this
Agreement can be waived, amended, supplemented or modified only by written
agreement of the parties hereto.
8.4 INTERPRETATION. This Agreement has been negotiated fully and
fairly between the parties. If this Agreement becomes the subject of
interpretation by a court of law or equity or other third party, this
Agreement shall not be construed either against, or in favor of, JMC, FTB or
Trustee, by virtue of one of the parties being deemed the draftsman of this
Agreement.
8.5 SEVERABILITY. Any provision of this Agreement which is invalid,
illegal or unenforceable shall be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof or rendering any other provision of this
Agreement invalid, illegal or unenforceable.
8.6 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and shall be binding upon the directors, principals, shareholders,
successors and assigns of the parties hereto.
8.7 DISPUTE RESOLUTION. In the event of any dispute, claim or
controversy which in any way relates to, results from or arises out of this
Agreement or the Interim Services Agreement, any amendment or breach hereof
or thereof, or any resulting transactions ("Dispute"), if the Dispute cannot
be settled through negotiations, the parties hereto agree to first try in
good faith to settle the Dispute by mediation under the Commercial Mediation
Rules of the American Arbitration Association, before resorting to
arbitration, as mandated below. Regardless of the outcome of such mediation,
each party shall bear its own costs and attorneys' fees and any mediation
fees shall be shared by the parties on an equal basis, one-half by JMC and
one-half by FTB.
Thereafter, any remaining Dispute shall be decided by neutral
binding arbitration in accordance with the rules of the NASD and not by court
action. Such arbitration shall be conducted in Memphis, TN. Regardless of
the outcome of the arbitration, each party shall bear its own costs and
attorneys' fees and any costs of expenses assessed by the NASD shall be
shared by the parties on an equal basis, one-half by JMC and one-half by FTB
and Trustee. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof; provided,
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however, that no arbitrator shall be permitted to award punitive damages in
such arbitration proceeding.
If any party hereto, after notice thereof, fails to be present or
represented at an arbitration hearing, or adjournment thereof, the arbitrator
may, nevertheless, in their discretion, proceed with the adjudication of the
Dispute.
8.8 CONFIDENTIALITY. Neither FTB nor JMC shall disclose any
information or make any public announcement with respect to this Agreement
prior to its execution. JMC and FTB will coordinate the content and timing
of any internal and public announcements regarding this Agreement.
8.9 APPLICABLE LAW. This Agreement is governed by, and shall be
construed and enforced in accordance with, the laws of the State of
Tennessee, except such laws that would render this choice of laws
ineffective.
8.10 ENTIRE AGREEMENT. This Agreement evidences the entire agreement of
the parties hereto with respect to the subject matter hereof.
This Agreement has been executed by the parties hereto as of the date
first above written.
JMC GROUP, INC.
XXXXX XXXXXXXX & CO.
JMC INSURANCE SERVICES CORPORATION
JMC FINANCIAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx,
Senior Vice President and General
Counsel
FIRST TENNESSEE BANK NATIONAL FIRST TENNESSEE BROKERAGE,
ASSOCIATION INC.
By: /s/ C. Xxxxxxx Xxxxx, III By: /s/ Xxxx Xxxx
------------------------------------ -------------------------
Its: Senior Vice President Its: President
------------------------------------ -------------------------
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EXHIBIT I
ASSET PURCHASE PRICE
ASSET FEE
------------------
ACCUMULATED VALUE (1) MEASURING DATE FACTOR VALUE
----------------- -------------- ------ -----
KEYPORT FIXED $60,122,364 9/26/97 .009143 $549,699
LIFE OF VIRGINIA FIXED $73,861,479 9/30/97 .007938 $586,312
VARIABLE ANNUITIES $33,909,823 9/30/97 .012488 $423,466
WHOLE LIFE $14,693,621 9/30/97 .014882 $218,670
MUTUAL FUNDS $72,208,750 9/30/97 .005842 $421,853
------------- -----------
TOTAL $254,796,037 $2,200,000
(1) This information is as of the Measuring Date set out in each row. No
representation is made for accumulated values after such date.
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SCHEDULE 3.4
DISCLOSURE OF CUSTOMER COMPLAINTS
None.
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