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EXHIBIT 10.2
MUTUAL RELEASE AGREEMENT
THIS MUTUAL RELEASE AGREEMENT ("Release Agreement") is made and
entered into effective as of November 21, 1996 by and among SEARCH CAPITAL
GROUP, INC., a Delaware corporation ("Search"), XXXXXX X. XXXXX ("Xxxxx"),
XXXXX XXXX ("Xxxx"), XXXXX XXXXX ("Xxxxx"), XXXX FINANCIAL GROUP, INC. ("HFG"),
a Delaware corporation, PHOENIX/INWOOD CORPORATION ("PIC"), a Texas
corporation, and HALL PHOENIX/INWOOD, LTD. ("HPI"), a Texas limited
partnership. (Hall, Levey, HFG, PIC, and HPI are sometimes collectively
referred to as the "Stockholders" and individually as a "Stockholder").
RECITALS
WHEREAS, the Stockholders own, either jointly or severally, the
"Stockholder Search Securities" (as defined below).
WHEREAS, certain disputes have arisen between Search and the
Stockholders and certain lawsuits have been filed regarding such disputes in
both Delaware and Texas.
WHEREAS, Search and the Stockholders have agreed to resolve such
disputes and lawsuits as more fully set forth in that certain Compromise and
Settlement Agreement dated November ___, 1996 ("Settlement Agreement") by and
among Search and the Stockholders.
WHEREAS, pursuant to the Settlement Agreement, Search and the
Stockholders have agreed to enter into this Mutual Release Agreement on the
terms and conditions below.
NOW, THEREFORE, in consideration of the foregoing recitals, and the
covenants, payments of money or other consideration, and agreements set forth
below, the receipt and sufficiency of which is hereby acknowledged and agreed
to, the parties hereto agree as follows:
1. DEFINITIONS Capitalized terms used in this Release Agreement shall have the
meaning set forth in the Settlement Agreement except for the capitalized terms
specifically set forth below:
a. "Effective Date" means the date upon which the Settlement
Agreement and this Release Agreement have been fully signed by all of the
parties hereto.
b. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
c. "Search Affiliate" means each "affiliate" or "associate" of Search
(as such terms are defined in Rule 12b-2 under the Exchange Act as of the
Effective Date), whether or not such person or entity is such an Affiliate as
of the Effective Date, and each officer, director, employee, shareholder,
consultant, agent, representative, successor and assign, of
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either Search or any Search Affiliate; excluding, however, the Stockholders and
any Stockholder Affiliate.
d. "Search Group" means Search, all Search Affiliates, and all
officers, directors, employees, shareholders, consultants, agents,
representatives, successors and assigns, of either Search or any Search
Affiliate.
e. "Search Securities" means all common stock, convertible preferred
stock, warrants, and debentures (whether senior or subordinated, secured or
unsecured, convertible or nonconvertible), and any other securities, which have
been issued prior to the Effective Date and/or which are issued during the
Standstill Period, by Search or any member of the Search Group.
f. "Stockholder Affiliate" means each "affiliate" or "associate" of a
Stockholder (as such terms are defined in Rule 12b-2 under the Exchange Act as
of the Effective Date), whether or not such person or entity is such an
Affiliate as of the Effective Date, and each officer, director, employee,
shareholder, consultant, agent, representative, successor and assign, of either
a Stockholder or any Stockholder Affiliate; excluding, however, Search and any
Search Affiliate.
g. "Stockholder Documents" means any and all agreements, contracts or
other arrangements to which a Stockholder and/or a Stockholder Affiliate is a
party along with Search and/or a Search Affiliate.
h. "Stockholder Search Securities" means all Search Securities owned,
possessed, or acquired by all of the Stockholders and/or any Stockholder
Affiliate prior to the Effective Date.
i. "Lawsuits" means Xxxxx Xxxx and Xxxxx X. Xxxxx v. Search Capital
Group, Inc., C.A. No. 15264, pending in the Court of Chancery of the State of
Delaware in and for New Castle County, and Search Capital Group, Inc. x. Xxxx
Financial Group, Inc., Phoenix/Inwood Corp., Hall Phoenix/Inwood, Ltd., Xxxxx
Xxxx and Xxxxx Xxxxx, No. 9611254, pending in the 162nd Judicial District,
Dallas County, Texas.
2. Stockholder Release. For the purposes and considerations set forth in the
Settlement Agreement, the Stockholders and the Stockholder Affiliates, do
hereby compromise, settle and fully release, acquit, and forever discharge, the
Search Group, as well as all persons (whether natural, corporate, or otherwise)
in privity with them, including all of their predecessors and successors,
affiliates, corporate subsidiaries, divisions, any of their present and former
officers, directors, employees, agents, representatives, independent
contractors, attorneys, assigns and insurers, from any and all claims, demands,
damages, actions, causes of action, liability, expense, losses, costs or
attorneys fee of any and every nature, known or unknown, suspected or
unsuspected, fixed or contingent, either in or arising out of the law of
contract or torts, whether arising under statutory law or
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common law, federal law or state law, at law or in equity, arising out of any
act, omission, representation, communication, conduct or other matter occurring
prior to the Effective Date of the Settlement Agreement, specifically
including, but not limited to: any matter arising out of or in any way related
to the acts, facts, transactions, occurrences, representations, or omissions
set forth or alleged in the Lawsuits, or which could have been set forth or
alleged in the Lawsuits; any claims regarding alleged mismanagement of Search
and/or any other member of the Search Group; claims for alleged abdication of
authority; claims for alleged self-dealing; claims for alleged breach of
fiduciary duty; claims for alleged fraud in the inducement; claims for alleged
fraud (both statutory and common law); claims for indemnity; claims for alleged
tortious interference; claims for alleged misrepresentation; claims for alleged
failure to disclose; claims for alleged defamation; claims under Section 220(d)
of the Delaware General Corporation Law; claims under federal securities law
(including, but not limited to, the Exchange Act and/or alleged rights of
rescission under the Securities Act of 1933) or blue sky laws; claims for
sanctions; and any and all claims arising out of the activities and conduct of
Search and/or any other member of the Search Group prior to the Effective Date.
3. Search Group Releases. For the purpose and considerations set forth in the
Settlement Agreement, Search, Xxxxx, and the Search Affiliates, do hereby
compromise, settle and fully release, acquit, and forever discharge, the
Stockholders and Stockholders Affiliates, as well as all persons (whether
natural, corporate, or otherwise) in privity with them, including all of their
predecessors and successors, affiliates, corporate subsidiaries, divisions, any
of their present and former officers, directors, employees, agents,
representatives, independent contractors, attorneys, assigns and insurers, from
any and all claims, demands, damages, actions, causes of action, liability,
expense, losses, costs or attorneys fee of any and every nature, known or
unknown, suspected or unsuspected, fixed or contingent, either in or arising
out of the law of contract or torts, whether arising under statutory law or
common law, federal law or state law, at law or in equity, arising out of any
act, omission, representation, communication, conduct or other matter occurring
prior to the Effective Date of the Settlement Agreement, specifically
including, but not limited to: any matter arising out of or in any way related
to the acts, facts, transactions, occurrences, representations, or omissions
set forth or alleged in the Lawsuits, or which could have been set forth or
alleged in the Lawsuits; claims for alleged greenmail; claims for alleged
breach of fiduciary duty; claims for alleged fraud (both statutory and common
law); claims for indemnity; claims for alleged tortious interference; claims
for wrongful termination; claims for alleged failure to disclose; claims for
alleged defamation; claims for alleged misrepresentation; claims under Section
220(d) of the Delaware General Corporation Law; claims under federal securities
law (including, but not limited to, the Exchange Act and claims related to the
filing of and/or disclosures in the 13D statement(s)) or blue sky laws; claims
for
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sanctions; and any and all claims arising out of the Stockholders'
activities and conduct with respect to their ownership of securities in and/or
position as members of the board of directors of Search Capital Group, Inc.
4. No Assignment of Claims. The Stockholders and Search Group expressly warrant
to each other that no claims, demands, controversies, actions, causes of
action, liability, damages, injuries, losses or other rights which are
mentioned in the Release Agreement or in the Settlement Agreement have been
assigned, conveyed, or in any other manner transferred to any other person or
entity.
5. Partial Invalidity. Should any of the parts, terms, clauses or provisions of
this Release Agreement be declared or determined by any court of competent
jurisdiction to be illegal or invalid, the validity of the remaining parts,
terms, clauses and provisions shall not be affected thereby and said invalid or
illegal part, term, clause or provision shall be deemed not to be a part of the
Release Agreement.
6. Choice of Law. Search and the Stockholders agree that this Release
Agreement shall be governed by and construed in accordance with the laws of
the State of Texas.
7. Full Authority. Each party hereto represents, warrants and covenants that
such party has the full power and authority to enter into and execute this
Release Agreement and carry out its terms and conditions, and upon signing this
Release Agreement, that this Release Agreement shall be a binding obligation on
such party, enforceable with the terms and conditions of the Release Agreement
and the terms and conditions of the Settlement Agreement.
8. Review by Counsel. Search and the Stockholders acknowledge that this
Release Agreement has been reviewed by their respective counsel and that they
are voluntarily executing the same as their free act and deed for the purposes
herein stated.
9. No Release. Notwithstanding any other provision herein to the contrary
or apparently to the contrary, nothing in this Release Agreement shall be
construed as releasing any party from such party's obligations as set forth in
the Settlement Agreement.
10. Counterparts. This Release may be executed in any number of counterparts
and any party hereto may execute any such counterpart, each of which when
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
This Release shall become binding when one or more counterparts taken together
shall have been executed and delivered (which deliveries may be by telefax) by
the parties.
11. No Admission of Liability. It is understood and agreed that this Release
Agreement is being executed in connection with the
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settlement and compromise of doubtful and disputed claims, and that the payment
received by the Stockholders shall not be construed as an admission of
liability on the part of Search nor any member of the Search Group, by whom
liability is expressly denied. All parties to this Release Agreement expressly
deny any liability.
12. Voluntary Acceptance. The parties hereby declare that the terms of this
Release Agreement have been completely read and are fully understood and are
voluntarily accepted for the purpose of making a full and final compromise,
adjustment and settlement of any and all claims, disputed or otherwise, on
account of the alleged injuries and damages above mentioned, and for the
express purpose of precluding forever any further or additional claims of the
parties arising out of their relationships prior to the date of the execution
of this Release Agreement.
13. No Precedent. All parties agree that this Release Agreement shall not be
used as a precedent in any other claim, suit, cause or hearing. Any attempt to
use this release as a precedent for any other case shall be considered a
material breach of the Agreement and shall subject the breaching party to
liability as to the non-breaching party for damages.
14. Arms Length. This Release Agreement was entered into in good faith
based upon arms length negotiation between the parties and their counsel.
IN WITNESS WHEREOF, the parties hereto have executed this Release
Agreement effective as of the date set forth above in the preamble to this
Release Agreement.
PLEASE READ THIS DOCUMENT CAREFULLY; IT RELEASES CLAIMS.
SEARCH CAPITAL GROUP, INC.
By /s/ Xxxxxx X. Xxxx
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Title: Senior EVP & CFO
/s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
/s/ Xxxxx Xxxx
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XXXXX XXXX
/s/ Xxxxx Xxxxx
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XXXXX XXXXX
HALL FINANCIAL GROUP, INC.
By /s/ Xxxxx Xxxxx
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Title: Vice President
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PHOENIX/INWOOD CORPORATION
By /s/ Xxxxx Xxxxx
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Title: Vice President
HALL PHOENIX/INWOOD, LTD.
By /s/ Xxxxx Xxxxx
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Title: Vice President
