EXHIBIT 10.50
AGREEMENT BY AND AMONG THE CLASS, THE ESTATE PARTIES,
THE XXXXXX DEFENDANTS, THE XXXX FAMILY, AND THE XXXXXX
DEFENDANTS ESTABLISHING THE SETTLEMENT EFFECTIVE DATE
WHEREAS, certain class action lawsuits filed in Texas and Illinois
arising out of the sale and voting of the securities of Reliance Acceptance
Group, Inc. were transferred to the United States District Court for the
District of Delaware for coordinated pretrial proceedings by order of the
Judicial Panel on Multidistrict Litigation and are now pending before the
Delaware District Court under the caption In re Reliance Securities Litigation,
MDL Docket No. 1304, Civil Action No. 99-858-RRM;
WHEREAS, the Settling Parties have executed the Stipulation of
Settlement, dated as of October 10, 2001 (the "Class Settlement Stipulation"),
which agreement shall not be final and effective until the occurrence of certain
conditions set forth in Section IV.4 thereof;
WHEREAS, the Settling Parties have executed the First Addendum to the
Class Settlement Stipulation dated as of January 1, 2002 ("First Addendum") and
the Second Addendum to the Class Settlement Stipulation dated as of March 1,
2002 ("Second Addendum") amending certain provisions of the Class Settlement
Stipulation;
WHEREAS, on or about February 8, 2002, the Court entered a Final
Judgment and Order of Dismissal with Prejudice with respect to the Class
Settlement Stipulation (the "Final Judgment") wherein the parties hereto (among
others) were fully, finally and forever released from certain defined claims as
of the "Settlement Effective Date and subject to the satisfaction of the
condition subsequent in Section IV.4.8" of the Class Settlement Stipulation;
WHEREAS, the parties hereto wish to accelerate the payment to the
Estate Representative under the Xxxxxx Settlement Agreement of the consideration
to be paid thereunder and to have the settlement consideration paid in cash; and
WHEREAS, all defined terms not otherwise defined herein shall have the
same meanings as set forth in the Class Settlement Stipulation, the First
Addendum and the Second Addendum;
NOW, THEREFORE, the parties hereto (as set forth below) hereby agree as
follows:
1. This agreement (the "Effectiveness Agreement") is dated as of May
24, 2002. The parties to this Effectiveness Agreement (the "Stipulating
Parties") are the Class, the Estate Parties, the Xxxx Family, and the Xxxxxx
Defendants, as those terms are defined in the Class Settlement Stipulation;
provided, however, that the following persons shall not be deemed to be Related
Persons (as defined in the Class Settlement Stipulation) to any of the
Stipulating Parties: Xxxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxx, Xxxxxxx X. Race, Xxxx
X. Xxxxxxx, Solway X. Xxxxxxxxx, Xxxxxx Xxxxxx, Xxxx X. Xxxxxxxx, Xxxxxxx
X'Xxxxx & Partners, L.P. and ABN-AMRO, Incorporated.
2. On or before June 5, 2002, the Estate Parties and the other
Stipulating Parties shall comply with the requirements of Section IV.2.16 of the
Class Settlement Stipulation.
3. On or before June 5, 2002, the Class (by and through Class Co-Lead
Counsel), for itself and on behalf of the Persons designated as lead plaintiffs
in the Delaware Class Litigation, and the other Stipulating Parties shall comply
with the requirements of Section IV.2.17 of the Class Settlement Stipulation.
4. On or before June 30, 2002, the Xxxx Family either (i) shall have
dismissed the Xxxx Family Chancery Action in its entirety with prejudice and
without costs or (ii) shall have dismissed the Xxxxxx Defendants from said
action with prejudice and without costs. In the event the Xxxx Family shall have
elected subclause (ii) hereof, the Xxxx Family members agree that any damages
recovered by them against any other tortfeasor, as a result of any injury or
damages found to have been also caused by the Xxxxxx Defendants or any of their
Related Persons shall be reduced in accordance with the provisions of 10 Del. C.
Chapter 63 to the extent of the pro rata share of the Xxxx Family's damages
attributable to the Xxxxxx Defendants or their Related Persons to any of the
foregoing; provided, however, that any reduction pursuant to 10 Del. C. Section
6304(a) of the Xxxx Family's Claims against Persons that are not released from
the Xxxx Family Chancery Action shall be limited to the value of the
consideration actually received by the Xxxx Family members through this
Settlement Stipulation. The foregoing is intended to comply with 10 Del. C. ss.
6304 so as to
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preclude any liability of the Xxxxxx Defendants (or any of their Related
Persons) to other joint tortfeasors, if any, for contribution and to define and
limit any reduction of the Xxxx Family's Claims against any party to the Xxxx
Family Chancery Action that is not released from said action.
5. If the "IPO" (as defined in that certain "Fourth Amendment to the
Amended and Restated Stipulation of Settlement" (hereinafter, the "Fourth
Amendment") a copy of which is attached hereto as EXHIBIT A and incorporated
herein by reference) shall have closed and the orders contemplated by paragraphs
2 through 4 hereof shall have become Final, then at the precise moment that the
"Settlement Proceeds" (as defined in the Fourth Amendment) shall be deposited in
a bank account designated by the Estate Representative, then (i) all of the
conditions set forth in Sections IV.4.1 and IV.4.8 of the Class Settlement
Stipulation shall be deemed to have been fully, completely, and unequivocally
satisfied with respect to and among the Stipulating Parties alone and (ii) as
among these Stipulating Parties alone, the Settlement Effective Date under the
Class Settlement Stipulation shall be deemed to have occurred. Nothing herein is
intended by the Stipulating Parties to affect the rights, duties, conditions or
obligations applicable to any party to the Class Settlement Stipulation who is
not also a party to this Effectiveness Agreement.
6. The Estate Representative agrees that, as soon as practicable (but
no more than ten business days) following the later of (i) the date the IPO
shall have closed, (ii) the date the Settlement Proceeds shall have been
deposited with the Estate Representative, and (iii) the date that notice shall
have been delivered to counsel for the Estate Representative by attorneys for
the Lead Plaintiffs and the Xxxx Family that the Allocation Agreement is
effective and enforceable by its terms, it shall make distributions under the
Allocation Agreement of the Settlement Proceeds in such manner as is required by
the Allocation Agreement (which shall remain in full force and effect), the
Final order of the Court approving the Allocation Agreement, and the Final order
of the Court granting Lead Plaintiffs' motion to approve and implement the
proposed allocation among Class 5 constituents.
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7. The Stipulating Parties agree, that except as otherwise specifically
set forth herein and in the Fourth Amendment, it is their intent that the terms
of the Class Settlement Stipulation, the First Addendum, the Second Addendum,
and/or the Other Agreements (described in Section IV.8.10 of the Class
Settlement Stipulation) shall be unchanged and shall remain in full force and
effect.
8. To eliminate the potential for liability of the Estate Parties, the
Xxxx Family, and the Xxxxxx Defendants, and/or any of their Related Persons, for
liability under any theory of contribution, the Lead Plaintiffs (for themselves
and on behalf of the Class) shall execute on any judgment against any Person
that in any way relates (whether directly or indirectly) to any of the Released
Claims only to the extent of such Person's proportionate share of responsibility
in respect thereof.
9. This Effectiveness Agreement may be amended or modified only by a
written instrument signed by or on behalf of all the Stipulating Parties;
provided, however, that if a Stipulating Party unreasonably refuses to execute
an amendment or modification deemed by another Stipulating Party to be (i)
necessary to implement the terms and conditions of this Effectiveness Agreement
consistent with the intent of the Stipulating Parties as reflected herein or
(ii) of immaterial effect to the Stipulating Party refusing to execute such
amendment or modification, then Section IV.8.17 of the Class Settlement
Stipulation shall apply.
10. This Effectiveness Agreement may be executed in one or more
counterparts. All executed counterparts and each of them shall be deemed to be
one and the same instrument. Counsel for the parties hereto shall exchange among
themselves signed counterparts of this Effectiveness Agreement. Signatures
delivered by facsimile transmission shall be effective upon receipt and have the
same weight and effect as an executed original.
11. All counsel and any other Person executing this Effectiveness
Agreement represent and warrant that they have the full authority to take
appropriate action required or permitted to be taken hereunder to effectuate its
terms (including, without limitation, execution of this Effectiveness
Agreement).
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12. The parties hereto agree that they shall take such additional
actions and/or execute such additional documents, statements, releases,
instruments or assurances as may be reasonably necessary to effectuate the terms
of this Effectiveness Agreement provided that such additional actions,
documents, statements, releases, instruments or assurances are generally
consistent with the material terms and conditions set forth herein.
IN WITNESS WHEREOF, the following Stipulating Parties have caused this
Effectiveness Agreement to be executed by their duly authorized attorneys as of
the date specified in paragraph 1 hereof.
[EXECUTION PAGES FOLLOW]
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COUNSEL FOR LEAD PLAINTIFFS AND THE CLASS
XXXXX X. XXXX & ASSOCIATES, LTD.
By: /s/ Xxxx X. Xxxx
-------------------------
Xxxx X. Xxxx
Xxxxx X. Xxxx
Xxxx X. Xxxx
Xxxxxx X. Xxxxx
Xxx Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Class Co-Lead Counsel
XXXXXXX XXXXX XXXXXXX XXXXX & XXXXXX LLP
By: /s/ Xxxxx X. Park
-------------------------
Xxxxx X. Park
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxx X. Park
000 X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Class Co-Lead Counsel
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COUNSEL FOR THE ESTATE PARTIES
XXXXXX X. XXXXXXX & ASSOCIATES
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxx
Xxxxxxxxx X. Xxxxxx
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Counsel for the Estate Parties
COUNSEL FOR THE XXXXXX DEFENDANTS
XXXXXXXXX WILL & XXXXX
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxxxx
XXXXXXXXX, WILL & XXXXX
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Counsel for the Xxxxxx Defendants
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LAW OFFICE OF XXXXX XXXXXXXX
By: /s/ Xxxxx Xxxxxxxx
------------------------
Xxxxx Xxxxxxxx
LAW OFFICE OF XXXXX XXXXXXXX
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Counsel for Certain of the Xxxxxx Defendants in the Alstrin Litigation
COUNSEL FOR THE XXXX FAMILY
XXXXXXX XXXXXXX XXXXX & XXXXX
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
XXXXXXX XXXXXXX XXXXX & XXXXX
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Counsel for the Xxxx Family in the Xxxxxx Litigation and the Bankruptcy Cases
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XXXXXXX & XXXXX L.L.P.
By: /s/ Xxxx X. Xxxxxxxx
___________________________
Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
XXXXXXX & XXXXX, L.L.P.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Counsel for the Xxxx Family in the Delaware Chancery Action and the Alstrin
Litigation
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