Exhibit 10.2
INDEMNITY AND SUBROGATION AGREEMENT
THIS INDEMNITY AND SUBROGATION AGREEMENT (this "Agreement") is made
and entered into as of January 1, 1998 by and between Object Products, Inc., a
Delaware corporation ("OPI"), and Xxxxxxx X. Xxxxxx ("Xx. Xxxxxx").
WHEREAS, Res-Q, Inc. ("Res-Q") merged with and into a wholly-owned
subsidiary of OPI ("Sub");
WHEREAS, Res-Q had entered into a revolving line of credit agreement
("Loan Agreement") with Xxxxx Fargo Bank (the "Bank") which was assigned to and
assumed by Sub;
WHEREAS, Xx. Xxxxxx had provided a guaranty (the "Guaranty") in
connection with the Loan Agreement;
WHEREAS, Xx. Xxxxxx has become a director of OPI and has provided
additional services to OPI;
WHEREAS, OPI desires, upon the terms and conditions set forth in this
Agreement, to indemnify Xx. Xxxxxx from any loss or damage, including, without
limitation, reasonable attorneys' fees and costs, as a result of any claim,
demand or action brought against him by the Bank (or any successor in interest
thereto) in connection with the Guaranty;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants contained herein and certain other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Indemnity. OPI shall indemnify Xx. Xxxxxx for any deficiency that
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he suffers after making a claim for reimbursement from the [principal borrower]
(as such term is defined in the Guaranty) in connection with any claim by the
Bank against Xx. Xxxxxx under the Guaranty; provided, however, that OPI shall
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not be liable for any such loss or damage he may incur resulting from a
settlement with respect to the Loan Agreement or the Guaranty effected by Xx.
Xxxxxx without OPI's prior written consent (which consent shall not be
unreasonably withheld) or from any gross misconduct on the part of Xx. Xxxxxx as
employee of OPI or one of its subsidiaries.
2. Notice of Claims. Xx. Xxxxxx shall promptly notify OPI of any
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claim under and payment in respect of the Guaranty and shall promptly notify OPI
of any claim he intends to make pursuant to this Agreement in such detail as OPI
shall reasonably require.
3. Maximum Liability. It is understood by both parties to this
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Agreement that the maximum liability of OPI under this indemnity shall be two
hundred thousand dollars
($200,000.00) which is the current amount of Xx. Xxxxxx'x guarantee under the
Loan Agreement with the Bank plus accrued interest on the outstanding amount.
4. No Modifications. It is further understood, and Xx. Xxxxxx
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agrees, that Xx. Xxxxxx shall not accept or effect any modifications of terms of
the Loan Agreement, as they apply to him or the Guaranty or any liability or
obligation thereunder, or the Guaranty (which OPI's prior consent which consent
shall not be unreasonably withheld).
5. Right of Subrogation. If OPI makes a payment to Xx. Xxxxxx or any
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third party pursuant to a claim for indemnification under this Agreement, or any
liability or obligation incurred with respect to or arising out of the
transactions contemplated by the Loan Agreement or the Guaranty, OPI shall be
subrogated to the rights of the payee, to the extent of such payment against the
Bank or any third party with respect to such payment to the extent of such
payment. Xx. Xxxxxx agrees to execute all documents required and to do all acts
that may be necessary to secure such rights and to enable OPI effectively to
bring suit to enforce or otherwise enforce such rights.
6. Negative Covenants. Xx. Xxxxxx agrees that, without OPI's prior
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written consent, he will not take any action that may impair OPI's right of
subrogation.
7. Miscellaneous.
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a. Amendments; Waivers. No amendment or other modification,
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forbearance or waiver of any provision of this Agreement nor any consent to any
departure herefrom shall under any circumstances be effective unless the same
shall be in writing and signed by both of the parties hereto, and then any such
forbearance, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of any
party hereto to exercise, and no delay in exercising, any right or remedy under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right or remedy under this Agreement preclude any other
or further exercise thereof or the exercise of any other right or remedy.
b. Notices. Notices and other communications required or permitted
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to be given under this Agreement shall be in writing and delivered personally or
sent by certified mail, postage prepaid, by facsimile or by reputable overnight
courier service at the following addresses:
(1) if to OPI:
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000-0000
Fax: 000-000-0000
Attention: Xxxxxxx X. Xxxx, III
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(2) if to Xx. Xxxxxx:
Xx. Xxxxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx
c. Severability. If any provision or provisions, or if any portion
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of any provision or provisions, in this Agreement is held to be illegal, void,
voidable, invalid, nonbinding or unenforceable, in its entirety or partially, or
as to any party, for any reason, then it is the intent of the parties hereto
that such provision or provisions shall be given force to the fullest possible
extent that they are legal, valid and enforceable, including by reducing the
amount or degree of any obligation or waiver which is illegal, invalid or
unenforceable by the minimum amount necessary in order to make the same legal,
valid and enforceable, and that the remainder of this Agreement shall be
construed as if such illegal, void, voidable, invalid, nonbinding or
unenforceable provision or provisions were not contained therein, and that the
rights, obligations and interest of the parties under the remainder of this
Agreement shall continue in full force and effect.
d. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
e. Integration. This Agreement constitutes the entire agreement
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among the parties hereto with respect to the subject matter hereof, and shall
supersede and take the place of all drafts and other communications and any
other instrument purporting to be an agreement of the parties hereto, with
respect to the subject matter hereof.
f. Governing Law. This Agreement, shall be governed by the laws of
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the State of California without giving effect to conflicts of laws provisions.
g. Successors and Assigns. This Agreement is intended to be binding
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upon and inure to the parties hereto and their respective successors, heirs and
assigns; provided that neither party shall assign any of his or its rights or
obligations hereunder without the prior written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have executed this Indemnity
and Subrogation Agreement effective as of the date first set forth above.
Object Products, Inc.
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By: /s/ Xxxxxxx X. Xxxx, III
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Xxxxxxx X. Xxxx, III
President
Xx. Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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