Current Report — Form 8-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 8-K Advanced Marketing Services, Inc. 8-K 5 16K
2: EX-10.1 Material Contract 14 47K
3: EX-10.2 Material Contract 12 43K
EX-10.1 — Material Contract
| EX-10.1 | 1st Page of 14 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
|---|
Exhibit 10.1
SETTLEMENT AGREEMENT AND GENERAL RELEASE
This Settlement Agreement and General Release ("Settlement Agreement" or
"Agreement") is made and entered into pursuant to the following terms.
1. THE PARTIES TO THE SETTLEMENT AGREEMENT
1.1 Advanced Marketing Services, Inc. ("AMS").
1.2 Columbia Casualty Company, Continental Casualty Company, and CNA
Financial Corporation (jointly "CNA").
1.3 Liberty Mutual Insurance Company ("Liberty Mutual").
1.4 Columbia Casualty Company and Liberty Mutual are sometimes
collectively referred to herein as the "Insurers." (Subject to the provisions of
paragraph 10, it is agreed that CNA Financial Corporation is not an insurer and
that Continental Casualty Company did not issue any insurance policy to AMS
relevant to the matters that are the subject of this Agreement.)
1.5 AMS, CNA, and Liberty Mutual are sometimes collectively referred to
herein as "the Parties" and sometimes individually as a "Party."
2. THE INSURANCE POLICIES
2.1 Columbia Casualty Company issued Combined Solutions Policy Number
267868733 to AMS for the policy period April 28, 2003 to April 28, 2004 (the
"Columbia Casualty Policy"). The Columbia Casualty Policy contains a maximum
aggregate Limit of Liability for all Loss under the Policy of $5 million.
2.2 Liberty Mutual Insurance Company issued Excess Follow Form Policy
Number 192825-013 to AMS for the policy period April 28, 2003 to April 28, 2004
(the "Liberty Mutual Policy"). The Liberty Mutual Policy contains a maximum
Limit of Liability for all loss of $5 million in excess of the Columbia Casualty
Policy's Limit of Liability and any applicable Retention under the Columbia
Casualty Policy.
2.3 The Columbia Casualty Policy and Liberty Mutual Policy, collectively,
are sometimes referred to herein as the "Policies."
3. THE COVERAGE ACTION
3.1 The "Coverage Action" refers to the case captioned Advanced Marketing
Services, Inc. v. Columbia Casualty Company, et al., Case No. GIC 832603, which
is pending in San Diego Superior Court.
Page 1 of 14
3.2 Liberty Mutual has filed a Cross-Complaint in the Coverage Action. A
demurrer was sustained as to that Cross-Complaint. No Amended Cross-Complaint
has yet been filed.
4. RECITALS
4.1 In July 2003, the U.S. District Court for the Southern District of
California issued a search warrant to the Federal Bureau of Investigation,
authorizing a search of AMS's corporate offices, and the FBI executed that
warrant.
4.2 Commencing in July of 2003, the United States Attorney's Office issued
one or more grand jury subpoenas to AMS and/or its custodian of records. AMS
represents that the United States Attorney's Office issued grand jury subpoenas
to certain of AMS's present and/or former officers, directors and/or employees.
4.3 In September 2003, the United States Securities and Exchange
Commission began an investigation of AMS and subsequently issued subpoenas to
certain of AMS's present and/or former officers, directors and/or employees, and
to AMS's custodian of records.
4.4 AMS announced in January 2004 that it would restate its financial
statements for the previous five fiscal years. AMS has subsequently announced
certain anticipated revisions to that restatement. As of this date AMS has not
yet issued the restated financial information.
4.5 In or around January and February 2004, several purported class action
securities lawsuits were filed against AMS and others. These lawsuits have since
been consolidated under the case captioned In re Advanced Marketing Services,
Inc. Securities Litigation, Master File No. 04-00121 JM (AJB), which is pending
in the United States District Court for the Southern District of California (the
"Securities Litigation").
4.6 In or around January 2004, two derivative lawsuits were filed against
certain individuals alleged to be directors and officers of AMS, with AMS named
as a nominal defendant. These lawsuits have since been consolidated under the
case captioned In re Advanced Marketing Services, Inc. Derivative Litigation,
Lead Case No. GIC824845, which is pending in San Diego Superior Court (the
"State Court Derivative Litigation").
4.7 On or around April 6, 2005, a derivative lawsuit captioned Dubbert v.
Bartlett, et al., No. 05CV706H(RBB), was filed against certain individuals
alleged to be directors and officers of AMS, with AMS as a nominal defendant, in
the United States District Court for the Southern District of California (the
"Dubbert Action").
4.8 In addition, other lawsuits were filed and indictments were issued
against directors, officers, or employees of AMS, including but not necessarily
limited to lawsuits filed or indictments issued by the United States and/or its
agencies against Karyn Larko and Marcy Roke.
Page 2 of 14
4.9 AMS has sought coverage under the Policies for the matters listed on
Exhibit "A" to this Agreement (collectively, the "Underlying Matters"). Columbia
Casualty has denied coverage for some Underlying Matters and accepted possible
coverage for other Underlying Matters under a full reservation of rights.
Liberty has not accepted coverage for any of the Underlying Matters under the
Liberty Mutual Policy. Columbia Casualty has reserved the right to rescind the
Columbia Casualty Policy, and Liberty Mutual, in its Cross-Complaint, has
asserted a claim for rescission of the Liberty Mutual Policy.
4.10 AMS disputes the Insurers' coverage positions with respect to the
Underlying Matters, and specifically disputes that there is a basis to rescind
the Policies.
4.11 AMS has paid attorneys' fees and costs incurred by AMS and present
and/or former directors, officers and/or employees of AMS in connection with
some or all of the Underlying Matters. AMS has requested from Columbia Casualty
and Liberty Mutual payment of invoices totaling at least $14,369,461.60, and has
contended that such invoices constitute covered Defense Costs within the meaning
of the Policies.
4.12 AMS contends that all of the attorneys' fees and costs it has paid to
date in connection with some or all of the Underlying Matters constitute covered
"Defense Costs" within the meaning of the Policies, and Columbia Casualty and
Liberty Mutual dispute that contention.
4.13 AMS has stated its intention to incur future attorneys' fees and costs
both on behalf of itself and on behalf of various present and/or former
directors, officers and/or employees in connection with the Underlying Matters.
4.14 Plaintiffs in the Securities Litigation and AMS have reached an
agreement to settle the Securities Litigation for payment by or on behalf of AMS
of $6 million and releases by the plaintiff class of claims against AMS and all
of its current and former directors, officers, agents, employees, etc. The terms
of the settlement are embodied in a Memorandum of Understanding that was
executed by counsel for the Lead Plaintiff in the Securities Litigation and AMS
on February 17, 2006. The Board of AMS has approved the settlement of the
Securities Litigation subject to funding by the carriers. Settlement of the
Securities Litigation is subject to approval by the United States District Court
for the Southern District of California.
4.15 Prior to execution of this Settlement Agreement, Columbia Casualty
paid the sum of $798,341.41 to AMS for amounts that Columbia Casualty determined
constituted Defense Costs within the meaning of the Columbia Casualty Policy,
without waiver of any of its rights under the Columbia Casualty Policy or
applicable law, including, but not limited to, the right to seek repayment by
AMS for amounts advanced that are finally established not to be insured, and
subject to AMS's written undertaking to repay such amounts.
Page 3 of 14
4.16 The Parties hereby enter into the Settlement Agreement in
consideration of the foregoing and in consideration of the promises, covenants,
releases and agreements set forth herein, the adequacy of which consideration is
hereby acknowledged.
5. PAYMENT AND DISMISSALS
5.1 AMS/CNA Settlement:
5.1.1 This Agreement shall be effective as between AMS and CNA when
this Agreement has been executed by or on behalf of AMS and CNA independent of
whether this Agreement also has been executed by or on behalf of Liberty Mutual.
5.1.2 On or before May 11, 2006, but not before this Agreement has
been executed by AMS and CNA and executed copies of the signature pages have
been provided to all Parties hereto, Columbia Casualty shall pay or cause to be
paid, the sum of $4,151,658.59, which payment shall be deemed to have exhausted
the remaining Limit of Liability of the Columbia Casualty Policy (the "CNA
Settlement Payment"). Columbia Casualty will deliver the CNA Settlement Payment
to Valley National Bank pursuant to the instructions set forth in Schedule 5.1.2
hereto. The CNA Settlement Payment will be deposited by Valley National Bank
directly into the escrow account referenced in Schedule 5.1.2 hereto (the
"Securities Litigation Escrow Account") to be held in trust to fund the
settlement of the Securities Litigation.
5.1.3 AMS shall dismiss the Coverage Action with prejudice as to CNA,
each party to bear its own costs, within five (5) court days after deposit of
the CNA Settlement Payment into the Securities Litigation Escrow Account.
5.1.4 Upon dismissal of the Coverage Action with prejudice as to CNA
as set forth in Section 5.1.3 of this Agreement, Section 6 of this Agreement
shall be deemed effective as between AMS and CNA. This shall be understood as
including, but not be limited to, a relinquishment of any rights which CNA may
have had pursuant to the Undertaking of Repayment executed by AMS on July 22,
2004.
5.1.5 Should the settlement of the Securities Litigation as described
in Section 4.14 of this Agreement not be consummated, for whatever reason, then
the CNA Settlement Payment shall be paid out of the Securities Litigation Escrow
Account directly to AMS as a final resolution of AMS's claim against CNA for
reimbursement of Defense Costs.
Page 4 of 14
5.2 AMS/Liberty Mutual Settlement:
5.2.1 This Agreement shall be effective as between AMS and Liberty
Mutual when this Agreement has been executed by or on behalf of AMS and Liberty
Mutual, independent of whether this Agreement also has been executed by or on
behalf of CNA.
5.2.2 On or before May 11, 2006, but not before this Agreement has
been executed by AMS and Liberty Mutual and executed copies of the signature
pages have been provided to all Parties hereto, Liberty Mutual shall pay or
cause to be paid, in accordance with the provisions of Schedule 5.2.3, the sum
of $3,450,000, which payment shall be deemed to have exhausted the remaining
Limit of Liability of the Liberty Mutual Policy, including all claims for
Defense Costs thereunder (the "Liberty Mutual Settlement Payment").
5.2.3 AMS and Liberty Mutual expressly agree that payment of the
Liberty Mutual Settlement Payment is not conditioned upon settlement of any
Underlying Matter(s). However, it is agreed by AMS and Liberty Mutual that
Liberty Mutual will deliver the Liberty Mutual Settlement Payment in accordance
with Schedule 5.2.3 hereto to be held in trust and distributed as follows: (a)
if the settlement of the Securities Litigation as described in Section 4.14 of
this Agreement is consummated, then an amount equal to such settlement payment
less the amount of the CNA Settlement Payment shall be released and delivered to
AMS as reimbursement of amounts paid to settle the Securities Litigation; (b)
any remaining portion of the Liberty Mutual Settlement Payment shall be released
and delivered as payment or reimbursement of Defenses Costs incurred in
connection with the Underlying Matters. The foregoing, together with the other
terms and provisions herein, shall be accepted by AMS as a final resolution of
AMS's claim against Liberty Mutual for reimbursement of Defense Costs incurred
in connection with the Underlying Matters.
5.2.4 AMS shall dismiss the Coverage Action with prejudice as to
Liberty Mutual, each party to bear its own costs, within five (5) court days
after deposit of the Liberty Mutual Settlement Payment into the account
identified on Schedule 5.2.3.
5.2.5 Upon the dismissals set forth in Section 5.2.4 of this
Agreement, Section 6 of this Agreement shall be deemed effective as between AMS
and Liberty Mutual.
6. RELEASES
6.1 This Section 6 shall become effective between the Parties only at such
time, and between such Parties, as specified in Section 5 of this Agreement.
6.2 AMS, for and on behalf of itself and, to the extent legally
permissible, on behalf of its predecessors, successors, successors in interest,
affiliates, subsidiaries, parents, divisions, partnerships and joint ventures,
and all of the foregoing persons' and entities' past, present and future
Page 5 of 14
associates, representatives, owners, members, managing members, managers, heirs,
assigns, shareholders, creditors, liquidators, administrators, executors,
partners, principals, trustees, directors, officers, employees, spouses,
independent contractors, attorneys, agents, and all others acting or claiming
by, through, under or in concert with any of the foregoing (hereinafter the
"AMS-Related Persons and Entities"), hereby releases, remises, acquits and
forever discharges CNA and Liberty Mutual and their respective predecessors,
successors, successors in interest, affiliates, subsidiaries, parents,
divisions, partnerships and joint ventures, and all of the foregoing entities'
past, present and future associates, representatives, owners, members, assigns,
insurers, reinsurers, claims managers, shareholders, creditors, liquidators,
administrators, executors, partners, principals, trustees, directors, officers,
employees, independent contractors, attorneys, agents, and all others acting or
claiming by, through, under or in concert with any of the foregoing
(hereinafter, the "CNA-Related Persons and Entities" and "Liberty Mutual-Related
Persons and Entities," respectively) from any and all claims (including without
limitation all rights and claims for fraud or misrepresentation, or pursuant to
any applicable statute, case law, and/or doctrine, for any alleged failure to
effectuate prompt, fair and equitable investigation or settlement of the
Underlying Matters or any matter that is the subject of this Agreement, or for
any actions taken or not taken in connection therewith, or for breach of
statutory duties, or for breach of the covenant of or other alleged duties of
good faith and fair dealing in connection therewith), debts, duties, benefits,
costs, expenses, judgments, settlements, actions, causes of action, demands,
obligations, liabilities, promises, acts, agreements, rights, damages
(including, but not limited to, compensatory, contractual, bad faith, punitive,
exemplary, statutory or extra-contractual damages, or any other damages),
losses, attorneys' fees, or other relief of any kind or character, whether known
or unknown, suspected or unsuspected, asserted or unasserted, whether at law or
in equity, which AMS or the AMS-Related Persons and Entities now have or may
hereafter accrue against CNA or the CNA-Related Persons and Entities, or Liberty
Mutual or the Liberty Mutual-Related Persons and Entities, or any of them, by
reason of, in connection with, based on, arising out of, related to, or in any
way involving: (1) the Coverage Action, (2) the Underlying Matters, including
but not limited to the Securities Litigation, the State Court Derivative
Litigation, and the Dubbert Action, (3) any matter described in the Recitals to
this Agreement, (4) the facts, circumstances, events, or allegations asserted in
or underlying the Coverage Action, the Underlying Matters, or the matters
described in the Recitals to this Agreement, (5) the Columbia Casualty Policy,
and/or (6) the Liberty Mutual Policy. This release will not apply to claims for
breach of this Agreement.
6.3 CNA and Liberty Mutual, for and on behalf themselves and their
respective Related Persons and Entities, hereby release, remise, acquit and
forever discharge AMS from any and all claims, debts, duties, benefits, costs,
expenses, judgments, settlements, actions, causes of action, demands,
obligations, liabilities, promises, acts, agreements, rights, damages, losses,
attorneys' fees, or other relief of any kind or character, whether known or
unknown, suspected or unsuspected, asserted or unasserted, whether at law or in
equity, which CNA or the CNA-Related Persons and Entities, or Liberty Mutual or
the Liberty Mutual-Related Persons and Entities, or any of them, now have or may
hereafter accrue against AMS by reason of, in connection with, based on, arising
Page 6 of 14
out of, related to, or in any way involving: (1) the Coverage Action, (2) the
Underlying Matters, including but not limited to the Securities Litigation, the
State Court Derivative Litigation, and the Dubbert Action, (3) any matter
described in the Recitals to this Agreement, (4) the facts, circumstances,
events, or allegations asserted in or underlying the Coverage Action, the
Underlying Matters, or the matters described in the Recitals to this Agreement,
(5) the Columbia Casualty Policy, and/or (6) the Liberty Mutual Policy. This
release will not apply to claims for breach of this Agreement.
6.4 Except as provided in Paragraph 6.5 of this Agreement, this Agreement
shall not affect any Party's rights under or with respect to any insurance
policy issued by CNA or Liberty Mutual to AMS other than the Policies.
6.5 Notwithstanding Paragraph 6.4 of this Agreement, or any other
provision of this Agreement, this Agreement, including the releases set forth in
Paragraphs 6.2 and 6.3, shall apply fully to any request for coverage for the
matters released in this Agreement, whether under the CNA Policy, the Liberty
Mutual Policy, or any other insurance policy issued by CNA or Liberty to AMS.
7. INDEMNITY AND HOLD HARMLESS IN FAVOR OF CNA AND LIBERTY
7.1 AMS agrees to indemnify, defend, and hold harmless CNA and Liberty
Mutual and their respective Related Persons and Entities, or any of them, in the
event that an individual or entity purporting to be entitled to coverage under
the Columbia Casualty Policy and/or the Liberty Mutual Policy, or any attorney,
agent, representative, spouse, heir, executor, administrator, successor, or
assign of any such individual or entity, seeks coverage from CNA or its Related
Persons or Entities, or Liberty Mutual or its Related Persons or Entities, or
any of them, for claimed Defense Costs, Loss, or other losses with respect to
the matters released in this Agreement. AMS will defend CNA and its Related
Persons and Entities and Liberty Mutual and its Related Persons and Entities
with respect to any and all such claims and will pay 100% of any resulting
liability. CNA and Liberty Mutual, jointly as to claims asserted against both
CNA and Liberty Mutual, CNA, as to claims asserted against CNA but not Liberty,
and Liberty, as to claims asserted against Liberty Mutual but not CNA, shall
have the right to select counsel to defend such claims, subject to the consent
of AMS, which shall not be unreasonably withheld. CNA and/or Liberty Mutual, as
applicable, shall have the right to direct such counsel concerning the defense
of the claim, subject to reasonable cooperation and consultation with AMS.
8. REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties by AMS Relating to AMS's Solvency: AMS
represents and warrants that: (1) AMS has sufficient resources to pay its debts
as they come due; (2) there is currently no petition in bankruptcy, voluntary or
involuntary, on file in any court involving AMS as debtor (as distinguished from
creditor and/or claimant); (3) AMS has no present intent to file a voluntary
Page 7 of 14
petition in bankruptcy; (4) to the best of AMS's knowledge, no creditor of AMS
intends to file an involuntary bankruptcy petition against AMS; and (5) to the
extent permitted and required under applicable law, as such may be limited by
general principles of corporate, bankruptcy or insolvency law, AMS will continue
to indemnify, and pay attorneys' fees and costs incurred by, its present and/or
former directors, officers and employees in connection with the Underlying
Matters to the fullest extent permitted by law.
8.2 No Assignment: The Parties represent and warrant that they have not
assigned, sold, transferred or otherwise disposed of any of the claims, demands,
rights, or causes of action released in this Agreement, that they are the
current holders of all such claims, and that no future assignment or transfer
will be made without the prior written consent of all other Parties to this
Agreement. Any assignment of rights or delegation of duties or obligations
hereunder made without the written consent of each other Party hereto shall be
void and of no effect.
8.3 Authority: Each of the undersigned individuals executing this
Agreement on behalf of his respective Party represents and warrants that he or
she is authorized to enter into and execute this Agreement on behalf of such
Party, that the appropriate corporate resolutions or other consents have been
passed and/or obtained, and that this Agreement will be binding on the Party on
whose behalf it is executed.
8.4 Advice of Counsel: Each Party hereby represents, agrees and warrants
to each other Party: (a) that he, she, or it has made and executed this
Agreement with the advice and counsel of independently selected legal counsel;
(b) that he, she, or it has not relied upon a representation, disclosure or
nondisclosure by any other Party not explicitly provided in this Agreement; and
(c) that he, she, or it has not been coerced or induced to enter into this
Agreement by any improper action of any other Party.
8.5 Indemnity and Hold Harmless: AMS expressly covenants and agrees to
indemnify, defend and hold harmless CNA and Liberty Mutual and their respective
Related Persons and Entities, and CNA and Liberty and their respective Related
Persons and Entities expressly covenant and agree to indemnify, defend, and hold
harmless AMS of and from any and all losses, costs, damages, liabilities,
claims, suits, proceedings, demands, causes of action and expenses (including
costs of investigation, defense of legal action, and reasonable attorneys' fees)
arising out of or resulting from a breach by such Party of the representations
and warranties contained in this Agreement, whether in this Section 8 or
elsewhere in this Agreement.
9. RELEASE OF UNKNOWN CLAIMS.
9.1 The Parties, and each of them, acknowledge their awareness of
California Civil Code Section 1542, which reads as follows:
Page 8 of 14
Section 1542. A general release does not extend to claims which the
creditor does not know or suspect to exist in his or her favor at the time
of executing the release, which if known by him or her must have materially
affected his or her settlement with the debtor.
It is the intention of each of the Parties to waive his, her, or its respective
rights under that section and any statute, rule, or legal doctrine of similar
import for any and all matters released herein. In waiving the provisions of
Section 1542 of the California Civil Code and similar statutes, rules, or legal
doctrines, the Parties, and each of them, expressly acknowledge and understand
that they may hereafter discover facts in addition to or different from those
which they now believe to be true with respect to the subject matter of the
matters released herein, but expressly agree that they have taken these
possibilities into account in electing to participate in this Agreement, and
that the releases given herein shall be and remain in effect as full and
complete releases notwithstanding the discovery or existence of any such
additional or different facts, as to which the Parties, and each of them,
expressly assume the risk.
9.2 In entering into this Agreement, each Party assumes the risk of any
mistake. Subject to the possibility of this Agreement terminating or becoming
null and void as expressly set forth therein, this Agreement is intended to be
and is a final and binding agreement among the Parties, regardless of any claims
of mistake of fact or law.
10. NO ADMISSION OF LIABILITY
10.1 This Agreement is intended to be, and is, a compromise of disputed
claims among the Parties and shall not be construed as an admission with respect
to coverage under the Policy or any other policy, or of any liability by any
Party to any other Party or person for any purpose whatsoever. This Agreement
shall not be used in any proceeding or hearing to create, prove, or interpret
the obligations under, or terms and conditions of, any other agreement or any
alleged insurance policy.
11. NO FURTHER ACTIONS
11.1 The Parties understand, acknowledge and agree that this Agreement may
be pleaded as a full and complete defense to, and used as a basis for an
injunction against, any action, suit or other proceeding that may be instituted,
prosecuted or attempted in breach of this Agreement or in connection with any
matter released pursuant to this Agreement.
12. CONSTRUCTION OF AGREEMENT
12.1 This Agreement will not be construed against the Party preparing it
but will be construed as if all Parties had prepared it, and it will not be
construed against any Party because that Party is or may be an insurer.
Page 9 of 14
13. ENTIRE AGREEMENT
13.1 This Agreement and the Policies constitute the entire agreement among
the Parties with respect to the subject matter hereof, and supersede all other
prior discussions, agreements and understandings, both written and oral, among
the Parties with respect thereto.
14. SUCCESSORS AND ASSIGNS
14.1 The Parties agree that this Agreement will be binding upon and inure
to the benefit of the Parties and their Related Persons and Entities (except as
may be otherwise specifically provided for in this Agreement) and any
corporation, partnership or other entity into which either of the corporate
Parties may merge, consolidate or reorganize.
15. MODIFICATIONS, AMENDMENTS, WAIVERS AND EXTENSIONS
15.1 This Settlement Agreement may not be modified, changed or
supplemented, nor may any obligations hereunder be waived or extensions of time
for performance granted, except by written instrument signed by the Party to be
charged or by its agent duly authorized in writing or as otherwise expressly
permitted herein. No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof
or of any other agreement or provision herein contained. No extension of time
for performance of any obligations or acts shall be deemed an extension of the
time for performance of any other obligations or acts.
16. COOPERATION
16.1 The Parties shall cooperate fully and execute and deliver any and all
supplementary documents and take any and all additional actions which may be
necessary or appropriate to give full force and effect to this Settlement
Agreement.
17. RELATIONSHIP BETWEEN PARTIES
17.1 This Settlement Agreement creates no agency relationship between the
Parties hereto, and nothing herein contained shall be construed to place the
Parties in the relationship of partners or joint venturers.
18. FORCE MAJEURE
18.1 In the event that any Party is prevented from performing, or is unable
to perform, any of its obligations under this Settlement Agreement due to any
act of God, fire, casualty, loss, flood, war, insurrection, failure of public
utilities, epidemic, or destruction of facilities, then the affected Party's
performance shall be excused and the time for performance shall be extended for
the period of delay or inability to perform due to such occurrence.
Page 10 of 14
19. GOVERNING LAW
19.1 This Settlement Agreement shall be governed by, interpreted under,
construed and enforced in accordance with the substantive and procedural laws of
the State of California.
20. VENUE
20.1 The Parties agree that sole and exclusive jurisdiction for litigation
of any disputes between the Parties related to this Settlement Agreement shall
be in the state or federal courts having principal jurisdiction in San Diego,
California.
21. HEADINGS
21.1 The section headings contained herein are for convenience only and are
not intended to define, limit or describe the scope or intent of any provision
of this Settlement Agreement.
22. CONFIDENTIALITY
22.1 The Parties acknowledge that AMS has substantial disclosure
obligations relating to this Agreement such that general confidentiality is
impractical and/or impossible. However, the Parties agree to confidentiality of
specific information as set forth below.
22.2 AMS is concurrently entering into a settlement with Federal Insurance
Company, which issued a policy of insurance which was excess to Liberty Mutual
(the "Federal Settlement"). The Federal Settlement is a separate transaction and
forms no part of this Agreement, but AMS will exercise its best efforts to
obtain a similar degree of confidentiality in the Federal Settlement. Subject to
the provisions of Section 22.3, the Parties agree that the separate dollar
amount of payment by CNA, by Liberty Mutual, and/or by Federal, will be treated
as confidential and not disclosed. Specifically, it is understood and agreed
that the total dollar amount of the settlement payments, in the aggregate
($10,150,000) will not be confidential, but the amount of contribution by any
individual insurer is confidential. Further, the parties agree that the names of
individuals set forth in Paragraph 5 of Exhibit "A" shall also be treated as
confidential information under this Settlement Agreement.
22.3 The Parties may disclose the confidential information: (1) as required
by a Court Order; (2) in an action or other proceeding among the Parties, or any
of them, regarding enforcement of the terms of this Agreement; (3) by agreement,
in writing, among the Parties to this Agreement; (4) to their counsel, auditors,
accountants, reinsurers and agents; (5) to any governmental agency, if such
disclosure is required by law, while exercising all reasonably available options
to preserve confidentiality on such disclosure; and/or (6) publicly, if the
Party is advised by legal counsel that such disclosure is required by law.
Page 11 of 14
22.4 All Parties hereto shall cooperate to protect the confidential
information from disclosure. If any Party to this Agreement is served with a
demand or request to produce the confidential information, or is advised by
legal counsel that disclosure is required by law, such Party shall give written
notice to the other Parties. Such notice shall be given within ten (10) days of
the receipt of such disclosure demand or determination to disclose, unless ten
(10) days' notice would not permit sufficient time in which to allow the other
Parties to assert any interest in prohibiting the requested disclosure. In such
case, the Party being requested to make the disclosure or planning to disclose
shall give written notice to the other Parties as soon as possible.
23. NOTICE
23.1 Unless another person is designated in writing to all respective
Parties for receipt of notice hereunder, notices to the respective Parties shall
be sent to the following persons:
If to AMS: Steven Brower
Stephan, Oringher, Richman, Theodora & Miller
535 Anton Boulevard, Ninth Floor
Costa Mesa, California 92626
Telephone: (714) 549-5150
Email: sbrower@sortm.com
If to CNA: Michael R. Davisson
Sedgwick, Detert, Moran & Arnold LLP
801 South Figueroa Street, 18th Floor
Los Angeles, CA 90017-5556
If to Liberty Mutual: Andrew Margulis
Ropers, Majeski, Kohn & Bentley
17 State Street, 24th Floor
New York, NY 10004
24. EXECUTION
24.1 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and when taken together with the other signed
counterparts, shall constitute one agreement which shall be binding upon and
effective as to all Parties. This Agreement shall be effective when at least one
counterpart has been executed by each Party and delivered to all Parties, even
though no single counterpart is executed by all Parties. Facsimile or .pdf
signatures will constitute valid evidence of execution.
Page 12 of 14
IN WITNESS WHEREOF, the Parties agree to be bound by the terms of this
Agreement and, in order to signify such agreement, have executed this Agreement
as of the last date appearing below.
Dated: May 5, 2006 Advanced Marketing Services, Inc.
-------------
By: /s/ Loren C. Paulsen
----------------------------------------
Title: President and Chief Executive Officer
----------------------------------------
Dated: May 5, 2006 Columbia Casualty Company
-------------
By: /s/ Danielle Librizzi
----------------------------------------
Title: Director - Complex Claims
----------------------------------------
Dated: May 5, 2006 Continental Casualty Company
-------------
By: /s/ Danielle Librizzi
----------------------------------------
Title: Director - Complex Claims
----------------------------------------
Page 13 of 14
Dated: May 5, 2006 CNA Financial Corporation
-------------
By: /s/ Danielle Librizzi
----------------------------------------
Title: Director - Complex Claims
----------------------------------------
Dated: May 5, 2006 Liberty Mutual Insurance Company
-------------
By: /s/ John Patterson
----------------------------------------
Title: Vice President
----------------------------------------
Page 14 of 14
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘8-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 5/19/06 |
| For Period End: | | 5/15/06 | | | | | | | 3 |
| | 5/11/06 | | 4 | | 5 | | | 8-K |
| | 5/5/06 | | 13 | | 14 |
| | 2/17/06 | | 3 |
| | 4/6/05 | | 2 |
| | 7/22/04 | | 4 |
| | 4/28/04 | | 1 | | | | | 8-K |
| | 4/28/03 | | 1 |
| List all Filings |
↑Top
Filing Submission 0001157523-06-005411 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Fri., Apr. 26, 6:55:17.1am ET 