Exhibit 2.5
INDEMNITY AGREEMENT
This INDEMNITY AGREEMENT (this "AGREEMENT") is entered into as of
October 21, 2003, by and among Great Universal Incorporated, a Delaware
corporation ("GUI"), Miltope Corporation, an Alabama corporation (the "DSS
CLEARED COMPANY"), and Vision Technologies Kinetics, Inc., a Delaware
corporation ("VTK").
WHEREAS, prior to June 1999, IV Phoenix Group, Inc., a New York
corporation ("PGI"), was 82% owned and Miltope Group Inc., a Delaware
corporation (the "COMPANY"), was 62.8% owned by XSource Corporation (formerly
Innova International Corporation), a Delaware corporation; XSource Corporation
was a wholly-owned subsidiary of GUI; GUI was a wholly-owned subsidiary of
MIC-USA, Inc., a Delaware corporation ("MIC-USA"); and MIC-USA was a
wholly-owned subsidiary of Millicom International Cellular S.A., a Luxembourg
corporation (collectively, the "MIC-USA GROUP"); and
WHEREAS, in connection with a reorganization in June 1999, GUI
became the 90% owner of PGI and the 62.8% owner of the Company; GUI became a
wholly-owned subsidiary of Great Universal LLC ("GU-LLC"), a Delaware limited
liability company; and MIC-USA became the sole member of GU-LLC until December
1999 when MIC-USA assigned all of its ownership interests in GU-LLC to the 1999
Great Universal LLC Trust (collectively, the "GUI GROUP"); and
WHEREAS, pursuant to a Stock Purchase Agreement by and between GUI
and the Company dated April 1, 2000, GUI sold all of its shares of PGI capital
stock to the Company (the "SALE"); and
WHEREAS, the Company received the letter referred to on ANNEX A
hereof (the "LETTER"), and
WHEREAS, VTK, VTK Merger Subsidiary Corporation, an Alabama
corporation and wholly-owned subsidiary of VTK ("MERGER SUBSIDIARY"), the
Company and the DSS Cleared Company entered into an Agreement and Plan of Merger
dated as of the date hereof (the "MERGER AGREEMENT"), pursuant to which Merger
Subsidiary and the Company will merge with and into the DSS Cleared Company; and
WHEREAS, as a condition to the obligation of VTK and Merger
Subsidiary to close under the Merger Agreement, this Agreement must have been
authorized, executed and delivered by GUI and GUI must be in compliance with the
terms of this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
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ARTICLE 1 DEFINITIONS
"DAMAGES" shall mean any damage, loss, cost or liability,
including without limitation, interest, penalties and reasonable attorneys'
fees.
"TAX" shall mean any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.
ARTICLE 2 INDEMNIFICATION
2.1 INDEMNIFIED MATTERS. Effective as of the closing under the
Merger Agreement, GUI shall indemnify, save and hold VTK, the DSS Cleared
Company, PGI and any affiliate of the DSS Cleared Company, harmless from and
against any and all Damages incurred in connection with, arising out of,
resulting from or incident to:
(a) the unpaid Tax liability incurred prior to
the Sale with respect to any entity in the MIC-USA Group or the
GUI Group or any affiliate thereof, (other than PGI, the Company,
or a subsidiary of the Company) under Section 1.1502-6 of the
Treasury Regulations promulgated under the Internal Revenue Code
of 1986, as amended or any successor provision (and any similar
provision of state, local or foreign law), as a transferee or
successor, by contract, or otherwise; and
(b) the Letter and the alleged conditions or
events giving rise to the claims therein;
2.2 NOTICE AND OPPORTUNITY TO DEFEND THIRD PARTY CLAIMS.
(a) Promptly after receipt by VTK or its
Representatives (as defined below), including, without limitation,
any entity that has become a subsidiary of VTK pursuant to the
Merger Agreement, of notice of any demand, claim, circumstance,
examination, investigation, audit, suit, action, claim or
proceeding which would or might give rise to a claim or the
commencement (or threatened commencement) of any action,
proceeding or investigation for which a claim may be made
hereunder (an "ASSERTED LIABILITY"), VTK shall give prompt notice
thereof (the "CLAIMS NOTICE") to GUI, PROVIDED, HOWEVER, the
failure of VTK to so notify GUI will not relieve GUI of any
liability that it may have under this Agreement except to the
extent GUI is prejudiced by VTK's or its Representatives', as the
case may be, failure to give such notice and only to the extent of
such prejudice.
(b) GUI may elect to defend, with its own
counsel, any Asserted Liability. If GUI elects to defend such
Asserted Liability, it shall within thirty (30) days of receipt of
the Claims Notice (or sooner, if the nature of the
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Asserted Liability so requires) notify VTK of its intent to do so,
and VTK and its Representatives shall cooperate, at the expense of
GUI, in the defense of such Asserted Liability. If GUI chooses to
defend any Asserted Liability, (i) VTK and its Representatives
shall make reasonably available to GUI any books, records or other
documents within its control that are necessary or appropriate for
such defense, (ii) GUI shall keep VTK reasonably informed of the
progress of the defense and any settlement discussions, (iii) GUI
agrees that it will not compromise or settle an Asserted Liability
under Section 2.1(b) hereunder without the consent of VTK (which
consent will not be unreasonably withheld), and (iv) VTK may
retain separate co-counsel at its own cost and expense and
participate in the defense. If GUI fails to give notice to VTK
within thirty (30) days of receipt of the Claims Notice (or
sooner, if the nature of the Asserted Liability so requires) of
its election to assume the defense of such Asserted Liability, GUI
will be bound by any determination made with respect to such
Asserted Liability or any compromise or settlement reached with
respect thereto.
ARTICLE 3 COVENANTS
3.1 COMMUNICATION WITH RESPECT TO THE LETTER. Neither VTK nor
any of its stockholders, subsidiaries, affiliates, directors, officers,
employees, agents or advisors (including, without limitation, attorneys,
accountants, consultants, bankers and financial advisors) (collectively,
"REPRESENTATIVES"), shall, directly or indirectly, initiate any communication
with respect to the Letter with any Interested Party (as defined on Annex A) or
their respective past, present or future Representatives without the prior
written consent of GUI.
3.2 COMMUNICATION WITH RESPECT TO THIS AGREEMENT. Except for
communication between the parties hereto and their respective Representatives,
none of the parties hereto or their respective Representatives shall disclose
this Agreement or the contents hereof to any other Person (as such term is
defined in the Merger Agreement). Notwithstanding the foregoing, nothing in this
Agreement shall restrict any of the foregoing parties from making any disclosure
(i) of information that was at the time of disclosure already publicly
available, other than as a result of a breach by that party of this Agreement,
(ii) that may be required by applicable law, rule or regulation or by
obligations pursuant to any listing agreement with any securities exchange or
market, or (iii) that may be required or appropriate in response to any summons
or subpoena or in connection with any litigation, PROVIDED THAT, in each case,
to the extent possible, prior to making any such disclosure the disclosing party
shall promptly provide the other parties to this Agreement with notice of such
pending disclosure and provide such parties with an opportunity to prevent, or
minimize the extent of, such disclosure.
3.3 BREACH. If VTK or its Representatives breach Sections 3.1
or 3.2 hereof and such breach prejudices GUI, GUI shall be relieved of liability
it has under this Agreement but only to the extent of such prejudice; PROVIDED
HOWEVER, if such breach relates to the Letter or the contents thereof, GUI shall
be relieved of all liability it has with respect to Section 2.1(b), regardless
of whether or not it was prejudiced by such breach.
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ARTICLE 4 MISCELLANEOUS
4.1 ENTIRE AGREEMENT; CONSTRUCTION. This Agreement shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and shall supersede any previous negotiations, commitments and
writings with respect to such subject matter.
4.2 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
4.3 NOTICES. Notices shall be sent to the parties at the
following addresses:
if to GUI:
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx, Esq.
Xxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
if to the Company:
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxx Xxxx, XX 00000
Attn: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx, Esq.
Xxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
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if to VTK:
000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxx & Xxxxxxx LLP
00 Xxxxxxx Xxxxx #00-00
XXX Xxxxx 0, Xxxxxxxxx 000000
Facsimile: (x00) 0000-0000
Notices may be hand-delivered or sent by certified mail, return
receipt requested, Federal Express or comparable overnight delivery service, or
facsimile. Notice shall be deemed received at the time delivered by hand, on the
fourth business day following deposit in the U.S. mail, on the first business
day following deposit with Federal Express or other delivery service, or if
given by facsimile when confirmation of transmission is indicated by the
sender's facsimile machine. Any party to this Agreement may change its address
for notice by giving written notice to the other party at the address and in
accordance with the procedures provided above.
4.4 AMENDMENTS; WAIVERS. No modification or amendment to this
Agreement, or waiver of any right or remedy herein provided, shall be effective
for any purpose unless such modification, amendment or waiver is specifically
set forth in a writing signed by the party or parties to be bound thereby. The
waiver of any right or remedy with respect to any occurrence on one occasion
shall not be deemed a waiver of such right or remedy with respect to such
occurrence on any other occasion.
4.5 TRANSFER OF ASSETS; SUCCESSORS AND ASSIGNS. GUI covenants
and agrees that it will not sell, assign, distribute, dispose of or otherwise
transfer all or substantially all of its assets, or enter into any agreement to
do any of the foregoing, without making adequate provisions for its obligations
hereunder or causing the recipient, assignee, or transferee thereof, as the case
may be, to adopt, approve and agree to be bound by the terms of this Agreement.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. This Agreement shall not be
assigned without the express written consent of each of the parties hereto.
4.6 TERMINATION. This Agreement shall terminate on December 31,
2005, provided that, if any claim for indemnification has been made pursuant to
Article 2 prior to such date which has not been satisfied as of such date, the
parties' rights and obligations with respect to such claim for indemnification
shall continue and this Agreement shall not be terminated with respect to such
claim for indemnification until it has been satisfied in full or otherwise
finally resolved.
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4.7 FURTHER ACTIONS. The parties will execute and deliver such
further instruments and take such further actions (including, without
limitation, by causing their affiliates, if any, to take such actions) as may be
required to carry out the intent and purpose of this Agreement.
4.8 GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of Delaware, without giving effect to
the conflict of laws of such state.
4.9 TITLES AND HEADINGS. Titles and headings to sections herein
are inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the day and year first above written.
GREAT UNIVERSAL INCORPORATED,
a Delaware corporation
/s/ XXXXX XXX GUY
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By: Xxxxx Xxx Guy
Its: President and CEO
MILTOPE CORPORATION, an Alabama corporation
By: /s/ XXXXXX X. XXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxx
Title: President and CEO
VISION TECHNOLOGIES KINETICS, INC.,
a Delaware corporation
/s/ XXXX XXXXXX
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By: Xxxx Xxxxxx
Its: Authorized Represenative
