EXHIBIT 10.1
STANDSTILL AGREEMENT
This Standstill Agreement, dated as of October 23, 2003, is by and among
American United Global, Inc., a Delaware corporation ("AUGI"), Xxxxx Xxxxxx, an
individual residing in the State of New York ("X. Xxxxxx"), Xx. Xxxxxxxx Xxxxxx,
an individual residing in the State of New York ("X. Xxxxxx"), and Redwood
Investments Associates, L.P., a Delaware limited partnership ("Redwood").
WHEREAS, AUGI, X. Xxxxxx, X. Xxxxxx and Redwood, amongst others, are
parties to a certain Closing Agreement, dated as of June 16, 2003 (the
"Closing Agreement");
WHEREAS, capitalized terms not otherwise defined in this Standstill
Agreement shall have the meanings assigned to such terms in the Closing
Agreement;
WHEREAS, pursuant to the terms of the Closing Agreement, among other
things, a Default Event shall have occurred in the event that the
outstanding principal balance due under the Xxxxxx Note shall equal or
exceed $1,000,000 on October 17, 2003;
WHEREAS, the Closing Agreement provides that, among other things, if a
Default Event shall have occurred, a Sale of NYMI may be requested by X.
Xxxxxx;
WHEREAS, the proceeds of a Sale of NYMI would be utilized, in part and
in priority as set forth in the Closing Agreement, to satisfy the amounts
due under the Xxxxxx Note, the payee of which is X. Xxxxxx, and the Note,
the payee of which is Redwood;
WHEREAS, as of October 17, 2003, the outstanding principal balance due
under the Xxxxxx Note exceeded $1,000,000;
WHEREAS, AUGI has requested that, and X. Xxxxxx and Redwood are
willing to consent to, X. Xxxxxx temporarily withholding the making of a
request for the Sale of NYMI, all upon the terms and conditions set forth
in this Standstill Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1. Standstill. Subject to paragraph 2 of this Standstill Agreement, X. Xxxxxx
shall not make any request for the Sale of NYMI prior to 5:00 PM EST
October 31, 2003, if all the Payment Events are made on or prior to 5:00 PM
EST October 31, 2003.
2. Consideration. In consideration for X. Xxxxxx'x withholding of the making
of a request for the Sale of NYMI in accordance with the provisions of
paragraph 1 of this Agreement, and X. Xxxxxx and Redwood consenting to such
withholding, AUGI hereby (a) agrees to extend the maturity date of the
Amended and Restated Subordinated Promissory Note of NYMI, dated as of June
16, 2003, in the principal amount of $1,500,000 and payable to AUGI, to
January 3, 2005, which maturity date extension shall remain in effect
whether or not the Payment Events are made on or before 5:00 PM EST October
31, 2003, (b) agrees that, if less than all of the Payment Events are made
on or prior to 5:00 PM EST October 31, 2003, X. Xxxxxx shall have the right
to request the Sale of NYMI at any time after 5:00 PM EST October 31, 2003,
in which event, Section 4 of the Closing Agreement shall be in full force
and effect.
3. Indemnification. AUGI hereby agrees to indemnify, defend and hold harmless
each of NYMI, Redwood, Xx. Xxxxxx, and X. Xxxxxx (collectively, the
"Indemnitees") from and against any costs, expenses, liabilities or other
obligations (including attorneys fees) that the Indemnitees, or any of
them, may incur in respect of any finders fees, investment banking fees or
other compensation that Vertical Capital, Xxxxxx Xxxxxx, Xxxxxx XxXxxx,
their affiliates, or any of them, may claim entitlement to, in respect of
any investment made by International Business Consultant GmbH or any of its
affiliates in AUGI or the Indemnitees.
4. Notices. All requests, demands, notices and other communications required
or otherwise given under this Standstill Agreement shall be sufficiently
given if delivered by hand against written receipt therefor, or (a)
forwarded by overnight courier requiring acknowledgment of receipt, or (b)
mailed by postage prepaid, registered or certified mail, return receipt
requested, in either event, addressed as follows:
If to AUGI, to: Xxxxxx X. Xxxxx, President
American United Global, Inc.
00000 XX 000xx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
with a copy to: Xxxxxx Xxxxx, Esq.
Xxxxxxx, Savage, Kaplowitz, Wolf & Marcus, LLP
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to X. Xxxxxx,
X. Xxxxxx and/or
Redwood, to: c/o New York Medical, Inc.
Two Xxxxxxx Xxxxx - Xxxx X
Xxxxxxx, Xxx Xxxx 00000
with a copy to: Xxxxxx X. Xxxxxxx, Esq.
Snow Xxxxxx Xxxxxx P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
or, in the case of any of the parties hereto, at such other address as such
party shall have furnished in writing, in accordance with this paragraph 3,
to the other parties hereto. Each such request, demand, notice or other
communication shall be deemed given (a) on the date of delivery by hand,
(b) on the first business day following the date of delivery to an
overnight courier, or (c) three business days following mailing by
registered or certified mail.
5. Prior Agreements/Oral Modification. This Standstill Agreement supersedes
all prior agreements and constitutes the entire agreement and understanding
between the parties with respect to the subject matter of this Standstill
Agreement. This Standstill Agreement may not be amended, modified in any
manner or terminated orally or by course of conduct; and no amendment,
modification, termination or attempted waiver of any of the provisions
hereof shall be binding unless in writing and signed by the parties against
whom the same is sought to be enforced.
6. Attorney's Fees. In the event of any litigation or arbitration between the
parties to this Standstill Agreement, concerning this Standstill Agreement,
each party shall be responsible for its attorney's fees and costs, except
as may be otherwise determined by a court or arbitration panel of competent
jurisdiction.
7. Costs. AUGI shall pay all of the costs and expenses of X. Xxxxxx, X. Xxxxxx
and Redwood in connection with this Standstill Agreement, including, but
not limited to, the fee and expenses of X. Xxxxxx'x, X. Xxxxxx'x and
Redwood's attorneys in the preparation, negotiation, execution and delivery
of this Standstill Agreement and the representation of X. Xxxxxx, X. Xxxxxx
and Redwood in connection with the subject matters of this Standstill
Agreement.
8. Binding Standstill Agreement; Benefit. The provisions of this Standstill
Agreement will be binding upon, and will inure to the benefit of, the
respective heirs, legal representatives, successors and permitted assigns
of the parties hereto.
9. Governing Law. This Standstill Agreement will be governed by, and construed
and enforced in accordance with, the laws of the State of New York without
regard to the conflict of laws provisions thereof. The parties hereto do
hereby consent and submit to the venue and jurisdiction of the state and
federal courts sitting in the State of New York, County of Nassau, as the
sole and exclusive forum for the enforcement of this Standstill Agreement,
and further agree that, in the event of any action or suit as to any
matters of dispute between the parties, service of any process may be made
upon the other party in the same manner as the giving of notices under
paragraph 3 of this Standstill Agreement.
10. Proper Construction. The language of all parts of this Standstill Agreement
shall in all cases be construed as a whole according to its fair meaning,
and not strictly for or against any of the parties. The parties hereto
agree that they have been represented by counsel during the negotiation and
execution of this Standstill Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be
construed against the party drafting such agreement or document. As used in
this Standstill Agreement, the term "or" shall be deemed to include the
term "and/or" and the singular or plural number shall be deemed to include
the other whenever the context so indicates or requires.
11. Waiver of Breach. The waiver by either party of a breach of any provision
of this Standstill Agreement by the other party must be in writing and
shall not operate or be construed as a waiver of any subsequent breach by
such other party.
12. Headings. The section and paragraph headings contained in this Standstill
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Standstill Agreement.
13. Severability. Any provision of this Standstill Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. Assignment. This Standstill Agreement is personal in its nature and the
parties hereto shall not, without the consent of the other parties, assign
or transfer this Standstill Agreement or any rights or obligations
hereunder.
15. Counterparts. This Standstill Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same Standstill Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Standstill
Agreement as of the date first above written.
American United Global, Inc.
By:
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, President
/s/ Xxxxx Xxxxxx
----------------
Xxxxx Xxxxxx
/s/ Xxxxxxxx Xxxxxx
-------------------
Xxxxxxxx Xxxxxx
Redwood Investments Associates, L.P.
By:
/s/ Xxxxx Xxxxxx
------------------------
Xxxxx Xxxxxx, Member
