EXHIBIT 10.6
PROCEEDS ALLOCATION AND INDEMNITY AGREEMENT
This agreement is made as of the 21st of May, 1999 by and between AOA
Holding LLC, a Minnesota limited liability company ("Holding") and AOA Capital
Corp, a Minnesota corporation ("Capital Corp").
WITNESSETH
WHEREAS, Holding and Capital Corp are jointly the issuers of $50 million in
original principal amount of senior notes due 2006 (the "New Bonds");
WHEREAS, in connection with the issuance of the Bonds, Holding and Capital
Corp have entered into numerous agreements including, without limitation, a
securities purchase agreement with CIBC Xxxxxxxxxxx Corp. and an indenture with
United States Trust Company of New York (collectively, together with any other
instruments executed in connection with the issuance of the New Bonds, "the
Ancillary Agreements");
WHEREAS, Capital Corp is wholly owned by Holding;
WHEREAS, the proceeds of the issuance of the New Bonds are to be
distributed in their entirety to Holding and none of such proceeds are to be
distributed to Capital Corp;
WHEREAS, Capital Corp has no assets and has been formed solely for the
purpose of joining in the issuance of the New Bonds and has executed the
Ancillary Agreements solely as an accommodation to Holding in order to satisfy
certain legal requirements of the purchasers of the New Bonds;
WHEREAS, in view of the foregoing, the parties hereto are desirous of
allocating their respective liabilities in respect of the New Bonds and the
Ancillary Agreements in proportion to the amounts received by them thereunder;
NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto agree as follows:
1. The proceeds of the New Bonds shall be allocated, in their entirety, to
Holding. Capital Corp shall not receive any proceeds therefrom.
2. Holding shall pay all costs and expenses incurred in connection with the
issuance of the New Bonds including, without limitation, legal, accounting,
printing and other costs and expenses.
3. Holding shall indemnify, and forever hold Capital Corp, its officers,
directors and agents (each an "Indemnified Party") harmless against and in
respect of, any and all losses, liabilities, obligations, damages, deficiencies,
actions, suits, proceedings, demands, assessments,
orders, judgements, costs and expenses (including the reasonable fees,
disbursements and expenses of attorneys) of any kind or nature whatsoever to the
extent sustained, suffered, or incurred by an Indemnified Party as a result of
claims made against an Indemnified Party in connection with the New Bonds or any
Ancillary Agreement.
4. An Indemnified Party shall notify the Holding in writing (at the address
and in the manner set forth in paragraph 5 below) promptly upon becoming aware
of any claim for which indemnification may be sought pursuant to paragraph 3
above (and, in the case of the assertion of a claim in writing by a third party,
whether by service of a summons and complaint or otherwise, within five days
after receipt of such notice in writing) or any other matter which may give rise
to any right to indemnification hereunder. Holding shall not be liable to an
Indemnified Party for any legal or other expenses incurred by an Indemnified
Party in connection with the defense of any claim prior to the fifth day after
the receipt by Holding of the notice from the Indemnified Party contemplated by
this paragraph and, thereafter, as long as (i) Holding shall have acknowledged
its obligation to indemnify the Indemnified Party in respect of such claim made
and (ii) Holding shall have assumed the defense of such claim. After the
acknowledgment and assumption of defense contemplated by the prior sentence,
Holding agrees (i) to provide an Indemnified Party reasonable reports upon
reasonable request by such Indemnified Party as to the status of any
indemnification claim and (ii) not to settle any claim for indemnification or
consent to the entry of any judgement in litigation arising from such a claim
without obtaining a release of such Indemnified Party from all liability in
respect of such claim or litigation. An Indemnified Party shall have the right
to employ counsel to represent it, in his or its sole discretion,
notwithstanding the assumption of the defense of any claim by the undersigned
and, in such event, the fees and expenses of the counsel engaged by the
Indemnified Party shall be paid by the Indemnified Party so electing to do. Each
Indemnified Party agrees to keep Holding informed of all negotiations with third
parties and of the progress of any litigation with third parties with respect to
which it may have engaged separate counsel or with respect to which the
undersigned have not assumed the defense. Each Indemnified Party and Holding
agrees to permit the other reasonable access to its respective books and records
and to otherwise cooperate with all reasonable requests of the other in
connection with any matter or claim in respect of the New Bonds, the Ancillary
Agreements or claims thereunder.
5. All notices, requests and other communications from any of the parties
hereto to the other shall be in writing and shall be considered to have been
duly given or served when personally delivered (in the case of a corporate
entity, to an executive officer of such party), or on the first day after the
date of deposit with a recognized overnight delivery service for next day
delivery, postage prepaid, or on the third day after deposit in the United
States mail, certified or registered, return receipt requested, postage prepaid,
or on the date of telecopy, facsimile or similar telephonic transmission during
normal business hours, provided that the recipient has specifically acknowledged
by telephone receipt of such telecopy, facsimile or telephonic transmission;
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addressed, in all cases, to the party at the address set forth below, or to such
other address as such party may hereafter designate by written notice to the
other parties.
AOA Holding LLC
1380 W. Paces Ferry Road NW
Suite 170 South Wing
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxx
AOA Capital Corp
0000 Xxxxx Xxx Xxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
6. This agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. This agreement
shall be construed and enforced in accordance with the laws of the state of
Minnesota. This agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument. This agreement contains the entire understanding of the parties
with respect to the subject matter hereof and may not be varied, modified or
amended except by a writing signed by the parties to be charged. The making,
execution and delivery of this agreement by the parties hereto have been induced
by no representations, statements, warranties or agreement of the other except
those herein expressed. Nothing in this agreement, whether express or implied,
is intended to confer upon any person, other than the parties hereto and their
respective successors and permitted assigns, any right, remedy or claim under or
by reason of this agreement or of any term, condition or covenant hereof.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first above written.
AOA HOLDING LLC
By /s/ Xxx Xxxxxx
Its CFO
AOA CAPITAL CORP
By /s/ Xxx Xxxxxx
Its CFO
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