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EXHIBIT 10.6
CONTRIBUTION AND INDEMNITY AGREEMENT
This Contribution and Indemnity Agreement is entered into this 29th day
of November, 1996 by and between Xxxx Xxxxxxx Subsidiaries, Inc., a Delaware
corporation ("Xxxxxxx"), and Xxxx X. Xxxxxxxxx (the "Indemnitor").
RECITALS
A. Simultaneously herewith, JHFSC Acquisition Corp. ("Newco"),
Xxxxxxx, Xxxxxx X. Xxx Equity Fund III, L.P. and SCP Private Equity Partners,
L.P. are entering into a Contribution Agreement (the "Contribution Agreement")
pursuant to which Xxxxxxx is contributing 100% of the issued and outstanding
shares of Xxxx Xxxxxxx Freedom Securities Corporation, a Massachusetts
corporation (the "Company") to Newco in exchange for cash and securities.
B. Pursuant to the Contribution Agreement, Xxxxxxx has agreed to
indemnify and hold harmless Newco against the losses specified therein.
C. Indemnitor has agreed, under certain conditions set forth below,
to be subject to liability for breaches of representations and warranties made
by Xxxxxxx under Sections 3 and 4 of the Contribution Agreement.
X. Xxxxxxx is unwilling to enter into the Contribution Agreement
unless the Indemnitor executes this Contribution and Indemnity Agreement in
favor of Xxxxxxx, and it is a condition precedent to closing the transactions
under the Contribution Agreement that Indemnitor enter into this Contribution
and Indemnity Agreement.
E. Terms used as defined terms herein and not otherwise defined shall
have the meanings set forth in the Contribution Agreement.
NOW, THEREFORE, in consideration of the premises and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
I. INDEMNIFICATION
1. CONTRIBUTION BY INDEMNITOR. In the event that Xxxxxxx has made a
payment to an indemnified party under Section 9.02(a) of the Contribution
Agreement (a "Claim"), the Indemnitor shall contribute to Xxxxxxx an amount
equal to thirty-three and 33/100 percent (33 1/3%) of such Claim; provided,
however, that the Indemnitor's maximum aggregate liability under this Agreement
shall in no event exceed $250,000.
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II. MISCELLANEOUS
1. TERM. This Contribution and Indemnity Agreement shall terminate
and Xxxxxxx shall have no right to seek any contribution from Indemnitor
hereunder immediately upon (a) the termination by the Company of the
Indemnitor's employment, (b) the termination by the Indemnitor of the
Indemnitor's employment for "Good Reason" (as defined in the Indemnitor's
Employment Agreement of even date with Newco) with Newco and/or any of its
Subsidiaries, as the case may be, or (c) the death or "disability" (as defined
in Indemnitor's Employment Agreement of even date with Newco) of Indemnitor;
PROVIDED, THAT, in the event the Indemnitor voluntarily terminates his
employment with the Company at any time after a claim by Newco has been asserted
against Xxxxxxx for which Xxxxxxx is required to make a payment to Newco
pursuant to Section 9.02(a) (a "Pending Claim"), then Xxxxxxx shall still have
the right to seek contribution under this Agreement from the Indemnitor only
with respect to the Pending Claim, and, to such extent, this Agreement shall
remain in full force and effect.
2. SOLE AND EXCLUSIVE REMEDY. The obligations of Indemnitor provided
under this Contribution and Indemnity Agreement shall constitute the sole and
exclusive remedy of Xxxxxxx against the Indemnitor for the recovery of any Loss,
except for any act involving fraud by the Indemnitor, arising under the
Contribution Agreement or out of the transactions contemplated thereby.
3. FEES AND EXPENSES. Each of the parties hereto will pay and
discharge its own expenses and fees in connection of with the negotiation of,
entry into and enforcement of its rights under this Contribution and Indemnity
Agreement.
4. NOTICES. All notices, requests, demands, consents and
communications necessary or required under this Contribution and Indemnity
Agreement shall be made in the manner specified, or, if not specified, shall be
delivered by hand or sent by registered or certified mail, return receipt
requested, or by telecopy (receipt confirmed) to:
(a) if to Indemnitor:
Xxxx X. Xxxxxxxxx
Xxxxxx Xxxxxxx Incorporated
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Facsimile Transmission Number: (000) 000-0000
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with a copy to:
Ropes & Xxxx
00xx Xxxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile Transmission Number: (000) 000-0000
(b) if to Xxxxxxx:
Xxxx Xxxxxxx Mutual Life Insurance Co.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Facsimile Transmission Number: (000) 000-0000
with a copy to:
Xxxx and Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Carp, Esq.
Facsimile Transmission Number: (000) 000-0000
All such notices, requests, demands, consents and other communications
shall be deemed to have been duly given or sent (a) on the date of personal
delivery or facsimile transmission (with telephone confirmation), (b) one
Business Day after being sent, if sent by federal express, or (c) three Business
Days after being sent, if sent by registered or certified mail, and addressed as
aforesaid.
5. SUCCESSORS AND ASSIGNS. All covenants and agreements set forth in
this Contribution and Indemnity Agreement and made by or on behalf of any of the
parties hereto shall bind and inure to the benefit of the successors and assigns
of such party.
6. DESCRIPTIVE HEADINGS AND DEFINITIONS. The headings of the sections
and paragraphs of this Contribution and Indemnity Agreement have been inserted
for convenience of reference only and shall not be deemed to be part of this
Indemnity Agreement. Any capitalized terms used in this Indemnity Agreement and
not defined herein shall have the meanings ascribed thereto in the Contribution
Agreement.
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7. COUNTERPARTS. This Contribution and Indemnity Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be an original, but all of which together shall constitute one
and the same instrument.
8. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason in any
jurisdiction, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions hereof shall not be in any
way impaired or affected.
9. WAIVER. The failure of any of the parties to this Contribution and
Indemnity Agreement to require the performance of a term or obligation under
this Contribution and Indemnity Agreement or the waiver by any of the parties to
this Contribution and Indemnity Agreement of any breach hereunder shall not
prevent subsequent enforcement of such term or obligation or be deemed a waiver
of any subsequent breach hereunder.
10. THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or entity, other than the parties hereto and
their permitted successors or assigns, any rights or remedies under or by reason
of this Contribution and Indemnity Agreement.
11. GOVERNING LAW. This Agreement, including the validity hereof and
the rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the laws of the Commonwealth of Massachusetts.
12. ENTIRE AGREEMENT. This Contribution and Indemnity Agreement is the
complete understanding of the parties with reference to the subject matter
hereof. This Contribution and Indemnity Agreement may not be amended except by
an instrument in writing signed on behalf of Newco and the Indemnitor.
IN WITNESS WHEREOF the parties hereto have executed this Indemnity
Agreement under seal as of the date first set forth above.
ATTEST: XXXX XXXXXXX SUBSIDIARIES, INC.
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Treasurer
ATTEST:
/s/ Xxxxx X. XxXxx /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
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