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EXHIBIT 10.13
MCM INDEMNIFICATION AGREEMENT
MCM INDEMNIFICATION AGREEMENT, dated as of August 31, 1996, made by
XxXxxxxx, Xxxxxxxx & Xxxxxx, Inc., a New York corporation (the "Company"), in
favor of VK/AC Holding, Inc., a Delaware corporation ("VKAC Holding") and Xxxxxx
Xxxxxxx Group Inc., a Delaware corporation ("Xxxxxx Xxxxxxx").
WHEREAS, VKAC Holding has entered into an Agreement and Plan of Merger
with Xxxxxx Xxxxxxx, Holdco and the Buyer, dated as of June 21, 1996 (as such
agreement may be amended, the "Merger Agreement");
WHEREAS, as of the date hereof, VKAC Holding has distributed to its
common stockholders (the "MCM Spin-off") all of the outstanding common stock of
MCM Group, Inc., a Delaware corporation ("MGI") formed by VKAC Holding for the
purpose of holding all of the outstanding common stock of the Company, which at
the date of the Merger Agreement was a wholly-owned subsidiary of VKAC Holding
(collectively, MGI, the Company and the subsidiaries of the Company, the "MCM
Group");
WHEREAS, in connection with the MCM Spin-off, the Company and VKAC
Holding have entered into a Tax Sharing Agreement, dated as of August 31, 1996,
(the "Tax Sharing Agreement"); and
WHEREAS, pursuant to Section 4.2.3 of the Merger Agreement, it is a
condition to the obligations of Xxxxxx Xxxxxxx and the Buyer that the Company
shall have entered into an Indemnification Agreement with respect to the
ownership of the stock of the Company and of MGI prior to the MCM Spin-off;
NOW THEREFORE, in consideration of the promises herein contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company, VKAC Holding and Xxxxxx Xxxxxxx hereby agree
as follows:
1. Indemnity. (a) The Company (hereinafter sometimes referred to as the
"Indemnitor") hereby agrees to indemnify and hold harmless VKAC Holding, Xxxxxx
Xxxxxxx and their respective affiliates, successors and assigns (collectively,
the "Indemnitees"), from and against, and to pay or reimburse each Indemnitee
for, any and all claims, actions, causes of action, suits, judgments, losses,
taxes,
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liabilities, damages, obligations, costs and expenses including, but not limited
to, reasonable attorneys' fees (and the costs and expenses, including reasonable
attorneys' fees and expenses, of enforcing the Company's obligations hereunder)
incurred by any of the Indemnitees in connection with or arising from (each, an
"Indemnifiable Loss") incurred or suffered by any of the Indemnitees, whether
arising before, on or after the MCM Spin-off, (i) except as otherwise provided
in the Tax Sharing Agreement, of or relating to the MCM Group or arising from or
in connection with the conduct of the business of the MCM Group, including but
not limited to taxes of the MCM Group to the extent that such taxes are
attributable to income, assets or operations of the MCM Group and VKAC Holding
has not previously received a payment with respect thereto, (ii) the ownership
of the stock of the Company and MGI prior to the MCM Spin-off (other than any
taxes imposed upon VKAC Holding or any of its subsidiaries as a consequence of
the Spin-Off) and (iii) the Guarantee, dated December 7, 1993, by Xxx Xxxxxx
American Capital, Inc. of the Company's obligations under the Lease Agreement,
dated December 7, 1993, between the Company, as lessee, and The Chase Manhattan
Bank, N.A., as lessor, with respect to certain premises occupied by the Company
on the 37th floor of the building located at One Chase Manhattan Plaza, New
York, New York.
(b) Any indemnity payable hereunder shall be made on an after-tax basis
(taking into account both the deductibility of the Indemnifiable Loss and the
inclusion in income of the indemnity payment and using for this purpose the
maximum statutory rate applicable to the recipient of such indemnity payment for
the relevant taxable year).
2. Claims. In the case of any claim asserted by a third party against
an Indemnitee, notice shall be given by such Indemnitee to the Indemnitor
promptly after such Indemnitee shall have received (i) notice of the
commencement by a third party of any suit or other proceeding against or
otherwise involving such Indemnitee or (ii) information from a third party
alleging the existence of a claim against such Indemnitee, in either case, with
respect to which indemnification may be sought under this Agreement (a
"Third-Party Claim"); provided that the failure of such Indemnitee to give
notice as provided by this Section 2 shall not relieve the Indemnitor of its
obligations under this Agreement, except to the extent that the Indemnitor is
materially damaged as a result of such failure to give notice. Within 30 days
after receipt of such notice, the Indemnitor may (i) by giving written notice
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thereof to such Indemnitee, acknowledge liability for such indemnification claim
and at its option and at its sole cost and expense assume the defense of any
claim or any litigation resulting therefrom, provided that counsel for the
Indemnitor, who shall conduct the defense of such claim or litigation, shall be
reasonably satisfactory to such Indemnitee, and such Indemnitee may participate
in such defense at such Indemnitee's expense, or (ii) object to the claim for
indemnification set forth in the notice delivered by such Indemnitee pursuant to
this Section 2, provided that if the Indemnitor does not within such 30-day
period give such Indemnitee written notice objecting to such indemnification
claim and setting forth the grounds therefor, the Indemnitor shall be deemed to
have acknowledged its liability for such indemnification claim. The Indemnitor,
in the defense of any such claim or litigation, shall not, except with the prior
written consent of the Indemnitee against whom the claim was made or the
litigation was brought, consent to entry of any judgment or enter into any
settlement that provides for injunctive or other non-monetary relief affecting
such Indemnitee or that does not include as an unconditional term thereof the
giving by each claimant or plaintiff to such Indemnitee of a release from all
liability with respect to such claim or litigation. In the event that an
Indemnitee shall in good faith determine that such Indemnitee has available to
it one or more defenses or counterclaims that conflict with one or more of those
that may be available to the Indemnitor in respect of such claim or any
litigation relating thereto, such Indemnitee shall have the right at all times
to take over and assume control over the defense, settlement, negotiations or
litigation relating to any such claim at the sole cost of the Indemnitor,
provided that if such Indemnitee does so take over and assume control, such
Indemnitee shall not consent to entry of any judgment or settle such claim or
litigation without the prior written consent of the Indemnitor. In the event
that the Indemnitor does not exercise its right to assume the defense of any
matter as above provided, the Indemnitee shall have the right (but not the
obligation) to defend against any such claim or demand.
3. Cooperation. The Indemnitees and their affiliates shall make
available to the Indemnitor and its attorneys and accountants, and the
Indemnitor and its affiliates shall make available to the Indemnitees and their
attorneys and accountants, at reasonable times and for reasonable periods,
during normal business hours, all books and records in its possession or under
its control
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reasonably requested by the Indemnitor relating to any matter with respect to
which indemnification is being provided pursuant to this Agreement, and the
Indemnitees and the Indemnitor, and their respective affiliates, shall render to
the Indemnitor or the Indemnitees, as the case may be, such assistance as may be
reasonably required to ensure prompt and adequate prosecution or the defense of
any suit, claim or proceeding, including using its reasonable efforts to make
available for interviews and to give testimony those officers or employees of
the Indemnitees or the Indemnitor, or their respective affiliates, as the
Indemnitor or the Indemnitees, as the case may be, may reasonably request;
provided, however, that in each such case, any expense reasonably incurred by
the Indemnitees in connection therewith shall be promptly paid by the Indemnitor
upon submission to the Indemnitor of an itemized request for such payment.
4. Subrogation. The Indemnitor shall be subrogated to any claims or
rights of the Indemnitees against any other person with respect to any
Indemnifiable Loss assumed or borne by the Indemnitor. The Indemnitees shall
cooperate with the Indemnitor to the extent reasonable under the circumstances
consistent with the provisions of Section 3, at the expense of the Indemnitor,
in connection with the assertion by the Indemnitor of any such claim against any
such other persons.
5. Addresses for Notices. All notices and other communications provided
for hereunder shall be in writing and addressed to:
(i) if to the Indemnitor:
XxXxxxxx, Xxxxxxxx & Xxxxxx, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
(ii) if to the Indemnitees:
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VK/AC Holding, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
with a copy to:
Xxxxxx Xxxxxxx Asset Management, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
(iii) or, as to any party, at such other address as shall be designated by such
party in a written notice to other parties.
All such notices and other communications shall be made by certified
mail, postage prepaid, and shall be effective the third business day after being
deposited in the mails; provided that such notices and other communications may
be faxed, telegraphed, telexed or delivered by hand delivery, but in any such
case shall be effective only when receipt is confirmed in writing by the party
to which sent.
6. Waivers; Remedies. No failure on the part of Indemnitees to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
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7. Amendments, Etc. No amendment, waiver, modification, discharge or
termination of any provisions of this Agreement, and no consent to any departure
by the Indemnitor herefrom, shall in any event be effective unless the same
shall be in writing and signed by the Indemnitee or Indemnitees affected
thereby, and then such amendment, waiver, modification, discharge, termination
or consent shall be effective only in the specific instance and for the specific
purpose for which given. Any such amendment, waiver, modification, discharge,
termination or consent shall be effective only if approved by the directors of
the applicable Indemnitees who are unaffiliated with the Indemnitor.
8. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF
RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW).
9. Parties in Interest. This Agreement shall not be assignable by any
party hereto without the prior written consent of the other parties hereto, and
any attempt to assign this Agreement without such consent shall be void and of
no effect. This Agreement shall be binding on and enforceable against the
Indemnitor and its successors and permitted assigns, and shall inure to the
benefit of and be enforceable by the Indemnitees and their respective successors
and permitted assigns.
10. Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
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11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the Indemnitor and the Indemnitees has
caused this Indemnification Agreement to be duly executed and delivered by its
officer duly authorized as of the date first written above.
XXXXXXXX, XXXXXXXX &
XXXXXX, INC.
By /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President and Chief
Executive Officer
VK/AC HOLDING, INC.
By /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
XXXXXX XXXXXXX GROUP INC.
By /s/ Xxxxx X. Xxxxxx
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Name:
Title:
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