EXHIBIT 10.16
AGREEMENT
AGREEMENT, dated April 3, 2001, between X.X. Xxxxxxx & Co., Inc., a
New York corporation ("Seller"), Xxxxxx Securities, Inc., a Delaware corporation
("Buyer"), Xxxxxx Holding Corp., a Delaware corporation and sole stockholder of
Buyer ("Xxxxxx Holding"), and the other parties executing this Agreement on the
signature page hereto.
IT IS AGREED:
1. Transaction. Subject to the terms and conditions of this
Agreement, on the Closing Date (as defined in Section 1.7):
1.1 Purchase and Sale of Assets. Seller shall sell, assign,
convey, transfer and deliver to Buyer, and Buyer shall purchase and acquire from
Seller, the furniture and equipment and other assets of Seller set forth with
specificity on Appendix A to this Agreement (hereinafter collectively referred
to as the "Purchased Assets").
1.2 Assignment of Real Property Leases. Seller shall either (i)
assign to Buyer all of its right, title and interest in and to the leases ("Real
Property Leases") for offices maintained by Seller in New York, New York, Red
Bank, New Jersey and Fort Lauderdale, Florida as described on Appendix B to this
Agreement, or (ii) sublet such space to Buyer, without economic profit and
evidenced by sublease agreements containing usual and customary terms and
reasonably acceptable to Buyer, and Buyer shall correspondingly either (i)
assume the obligations of Seller under such leases if such transfer is by
assignment of lease or (ii) enter into such sub-leases if such transfer is by
sub-lease.
1.3 Assignment of Equipment Leases. Seller shall assign to Buyer
all of its right, title and interest in and to the equipment leases ("Equipment
Leases") for certain equipment leased by Seller as described on Appendix C of
this Agreement, and Buyer shall assume the obligations of Seller under such
equipment leases.
1.4 Effectiveness of Certain Employment Agreements; Offer of
Employment. Concurrently with the execution of this Agreement, Buyer is entering
into Employment or Consulting Agreements with those employees of Seller listed
on Schedule 1.4 to this Agreement, which agreements provide for the commencement
of employment or consultantcy simultaneous with the closing under this
Agreement). In addition, Buyer shall offer employment to those other employees
of Seller that it desires to employ and shall designate to Seller prior to the
Closing Date, and Seller shall refer those employees to the employ of Buyer
(those employees identified on Schedule 1.4 and those other employees designated
by Buyer are hereinafter referred to as the "Employees").
1.5 Transfer of Customer Accounts. Seller shall electronically
transfer to Buyer the client accounts of the non-objecting clients of the
Employees. Following receipt of regulatory approval of the NASD, or at such
earlier time as Seller and Buyer may agree, Seller and Buyer shall take such
action as may be required to initiate the electronic, negative transfer of such
client accounts, including without limitation, sending notice to such clients.
1.6 Consideration; Limited Assumption of Seller's Liabilities.
In full consideration for the foregoing, the sole stockholder of Buyer, Xxxxxx
Holding Corp. ("Xxxxxx Holding"), shall issue to Seller, on the Closing Date, a
Warrant to purchase 1,200,000 shares of the Common Stock of Xxxxxx Holding, to
be evidenced by a Warrant Agreement in the form annexed as Exhibit A to this
Agreement, and Buyer shall assume the obligations of Seller as provided above in
Sections 1.2 and 1.3 ("Assumed Liabilities"). Buyer shall not, and shall not
have any responsibility or obligation to, assume, discharge or carry out any
liabilities or obligations of Seller except the Assumed Liabilities.
1.7 Closing. The Closing of the transactions described in
Article 1 shall take place at 10:00 a.m. on the fifth business day after which
the last of the conditions to Closing set forth in Article 7 is fulfilled or
waived by the appropriate party, as the case may be, or such other date as shall
be agreed to by Seller and Buyer in writing ("Closing Date"), at the offices of
Xxxxxxxx Xxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
1.8 Instruments of Conveyance and Transfer. On the Closing Date,
Seller shall deliver to Buyer such bills of sale, assignments or sub-leases and
other good and sufficient instruments of conveyance and transfer, satisfactory
in form and substance to Buyer and its counsel, as shall be effective to vest in
Buyer good and marketable title in and to the Purchased Assets, Real Property
Leases and Equipment Leases (hereinafter collectively called the "Acquired
Assets"), free and clear of any security interest, mortgage, pledge, lien,
conditional sales agreement, encumbrance or charge of any nature
("Encumbrance"). Simultaneously with and after such delivery, Seller shall take
all additional steps as may be necessary to put Buyer in possession and
operating control of the Acquired Assets.
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1.9 Non-Assignable Agreements. Nothing in this Agreement shall
constitute an agreement to assign any lease, contract or agreement (i) which, by
its terms or by law, is not assignable without the consent of the other party or
parties to such lease, contract or agreement, unless such consent shall have
been given, or (ii) if any attempted assignment thereof, without the consent of
the other party or parties, would constitute a breach thereof, or would
contravene any law or regulation. If any such consent shall not be obtained,
then Seller and Buyer shall, at the request of Buyer, do all things reasonably
necessary and cooperate with each other in any legal and reasonable arrangement
designed to provide for Buyer the benefit of any such lease, contract or
agreement.
1.10 Expenses.
(a) Each party to this Agreement shall pay its own expenses
and costs incurred by it in connection with negotiating and consummating this
Agreement.
(b) Seller shall pay any sales tax arising by reason of the
sale of the Purchased Assets to Buyer.
1.11 Security Deposits and Apportionments. If Seller assigns to
Buyer any or all of the Real Property Leases and the lessors are holding
security deposits under such leases, at the Closing, Buyer shall remit to Seller
a sum equal to such security deposits. In addition, the parties shall apportion
as of the Closing Date the rent, utility charges and other related charges for
the then current month under such leases and Buyer or Seller, as the case may
be, shall remit to the other as appropriate.
2. Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows and acknowledges that Buyer is relying upon such
representations and warranties in connection with the purchase by Buyer of the
Acquired Assets:
2.1 Corporate Existence and Power. Seller is a corporation duly
organized and validly existing, in good standing, under the laws of the State of
New York. Seller has all requisite power to own, lease or operate its properties
and to carry on its business as now being conducted and is duly qualified as a
foreign corporation in New Jersey, Florida and in all other jurisdictions where
the operation of its business requires it to qualify as a foreign corporation.
2.2 Authorization. The execution, delivery and performance of
this Agreement by Seller have been duly authorized by all necessary corporate
action. This Agreement has been duly executed by Seller and constitutes a legal,
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valid and binding obligation of Seller enforceable against Seller in accordance
with its terms, except as enforceability may be limited or barred by applicable
bankruptcy, reorganization, moratorium, or similar laws of general application
now or hereafter in effect affecting the rights and remedies of creditors and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
2.3 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this
Agreement by Seller in accordance with its terms will not, with or without the
giving of notice or the passage of time, or both, except as set forth on
Schedule 2.3, (i) conflict with or violate the certificate of incorporation or
by-laws of Seller; (ii) conflict with or violate any law, statute, ordinance,
rule, regulation, order, judgment or decree applicable to Seller or by which its
properties or assets are bound or affected; or (iii) result in any breach of or
constitute a default under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of an
Encumbrance on any of the Acquired Assets pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
obligation to which Seller is a party or by which Seller's properties or assets
are bound or affected.
(b) The execution, delivery and performance of this
Agreement by Seller does not require any consent, approval authorization or
permit of, or filing with or notification to, any governmental or regulatory
entity or other third party, except as set forth on Schedule 2.3.
2.4 Title to Purchased Assets. Seller has, and on the Closing
Date will have, good and marketable title to the Purchased Assets. None of the
Purchased Assets is or will be subject to any Encumbrance or adverse claim of
any nature whatsoever, direct or indirect, whether accrued, absolute, contingent
or otherwise.
2.5 Condition of Purchased Assets and Personal Property Under
Equipment Leases. Except as to good title, Seller is selling the Purchased
Assets "as is" without representation or warranty as to their current condition
or repair. The machinery, equipment and other tangible assets subject to
Equipment Leases to be assumed by Buyer hereunder are, and on the Closing Date
will be, in good operating condition and repair and suitable for the purposes
used.
2.6 Financial Statements.
(a) Seller has delivered to Buyer, and Buyer acknowledges
receipt of, the following financial statements, including notes, comments,
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schedules, and supplemental data therein (collectively called the "Financial
Statements"), all of which have been prepared from the books and records of
Seller in accordance with generally accepted accounting principles consistently
applied and maintained throughout the periods indicated and fairly present the
financial condition of Seller as at their respective dates and the results of
the operations of Seller for the periods covered thereby:
(i) Audited statements of financial condition, income,
changes in stockholder's equity and cash flows for the year ended December 31,
2000 (the "Seller's Audited Financial Statements"); and
(ii) A draft of Seller's Focus Report (and Seller
represents that the draft Focus Report is materially identical to the Focus
Report as filed) for the period February 1, 2001 to February 28, 2001, including
Seller's balance sheet at February 28, 2001 included therein ("Seller's Balance
Sheet").
(b) The Purchased Assets included in the Financial
Statements have been valued at actual cost less accumulated depreciation and at
February 28, 2001 are carried on Seller's books in the aggregate sum of $78,828.
(c) Set forth on Appendix C to this Agreement is a statement
of the term of each Equipment Lease, the monthly cost under each Equipment Lease
and the total amounts that will become due or the buy-out option price under
each Equipment Lease.
(d) Seller is solvent and is able to pay its debts and other
financial obligations as they become due.
2.7 Undisclosed Liabilities. Except as disclosed on Schedule
2.7, Seller has no liabilities, whether absolute, accrued, contingent or
otherwise, except (a) as and to the extent reflected or reserved against on
Seller's Balance Sheet, and (b) those incurred in the ordinary course of
business and consistent with prior practices since the date of the Balance
Sheet.
2.8 Agreements Valid; No Default. All the Real Property Leases,
Equipment Leases and the New York Sub-Lease are legal, valid and binding,
enforceable in accordance with their respective terms, and are in full force and
effect. There is not under any Real Property Lease, Equipment Lease or the New
York Sub-Lease (a) any existing default by Seller, or any event which, after
notice or lapse of time, or both, would constitute a default by Seller or result
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in a right to accelerate by any other person or a loss of any rights of Seller
and (b) to the best of Seller's knowledge, any default by any other person, or
any event which, after notice or lapse of time, or both, would constitute a
default by any such person or result in a right to accelerate by Seller or a
loss of any rights of any such person. None of the Real Property Leases or
Equipment Leases is, either when considered singly or in the aggregate with
others, has been unduly burdensome, onerous or materially adverse to the
business or earnings of Seller. True and complete copies of all Real Property
Leases and Equipment Leases will be delivered to Buyer within seven days after
the date hereof.
2.9 Accredited Investor Status: Purchase for Own Account. Seller
is an "Accredited Investor" within the meaning of Rule 501(a)(1) of Regulation
D, promulgated under the Securities Act of 1933, as amended ("Securities Act").
Seller has reviewed copies of the reports filed by Xxxxxx Holding under the
Securities Exchange Act of 1934, as amended, within the last twelve months.
Seller acknowledges that it has been given reasonable opportunity to meet with
officers of Xxxxxx Holding for the purpose of asking questions of such officers
concerning the business and operations of Xxxxxx holding and all such questions
have been answered to its satisfaction. Seller has also been given an
opportunity to obtain any additional relevant information to the extent
reasonably available to Xxxxxx Holding. The Warrant is being acquired for
investment by Seller's own account, not as nominee or agent, and not with a view
to the resale or distribution of any part thereof, and Seller has no present
intention of selling or otherwise distributing the same. Seller understands that
the Warrant and the shares of common stock issuable upon exercise of the Warrant
are "restricted securities" under the federal securities laws inasmuch as they
are being acquired from Buyer in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act, only in certain limited
circumstances. Seller understands that it cannot make any disposition of all or
any portion of the Warrant or the shares of common stock issuable upon exercise
unless there is then in effect a registration statement under the Securities Act
covering such proposed distribution and such distribution is made in accord with
such registration statement, or Seller shall have notified Buyer of the proposed
disposition, shall have furnished Buyer with the statement of the circumstances
surrounding the proposed disposition, and shall have furnished Buyer with an
opinion of counsel, reasonably satisfactory to Buyer, that such disposition will
not require registration of such shares under the Securities Act. Seller
understands that the instrument evidencing the Warrant and the shares of common
stock underlying the Warrant shall bear appropriate restrictive legends.
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2.10 Brokers. Seller represents and warrants to Buyer that
neither it nor its representatives have engaged or dealt with any broker or
other person who may be entitled to any finder's fee, brokerage commission or
other like payment in respect of the negotiation, execution, or performance of
this Agreement.
3. Representations and Warranties of Buyer and Xxxxxx Holding. Each
of Buyer and Xxxxxx Holding represents and warrants to Seller as follows:
3.1 Corporate Existence and Power. Each of Buyer and Xxxxxx
Holding is a corporation duly organized and validly existing, in good standing,
under the law of Delaware. Each of Buyer and Xxxxxx Holding has all requisite
power to own, lease or operate its properties and to carry on its business as
now being conducted and is duly qualified as a foreign corporation in all
jurisdictions where the operation of their respective business requires it to
qualify as a foreign corporation.
3.2 Authorization. The execution, delivery and performance of
this Agreement by Buyer and Xxxxxx Holding have been duly authorized by all
necessary corporate action. This Agreement has been duly executed by Buyer and
Xxxxxx Holding and constitutes a legal, valid and binding obligation of Buyer
enforceable against Buyer and Xxxxxx Holding in accordance with its terms,
except as enforceability may be limited or barred by applicable bankruptcy,
reorganization, moratorium, or similar laws of general application now or
hereafter in effect affecting the rights and remedies of creditors and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
3.3 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this
Agreement by Buyer in accordance with its terms will not, with or without the
giving of notice or the passage of time, or both, except as set forth on
Schedule 3.3, (i) conflict with or violate the certificate of incorporation or
by-laws of Buyer or Xxxxxx Holding; (ii) conflict with or violate any law,
statute, ordinance, rule, regulation, order, judgment or decree applicable to
Buyer or Xxxxxx Holding or by which their respective properties or assets are
bound or affected; or (iii) result in any breach of or constitute a default
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of an Encumbrance on any of the
assets of Buyer or Xxxxxx Holding pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
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obligation to which either Buyer or Xxxxxx Holding is a party or by which
Buyer's or Xxxxxx Holding's properties or assets are bound or affected.
(b) The execution, delivery and performance of this
Agreement by Buyer and Xxxxxx Holding does not require any consent, approval
authorization or permit of, or filing with or notification to, any governmental
or regulatory entity or other third party, except as set forth on Schedule 3.3.
3.4 Brokers. Each of Buyer and Xxxxxx Holding represents and
warrants to Seller that neither it nor its representatives have engaged or dealt
with any broker or other person who may be entitled to any finder's fee,
brokerage commission or other like payment in respect of the negotiation,
execution, or performance of this Agreement.
3.5 Warrant. The Warrant has been duly authorized by Xxxxxx
Holding and, when delivered, will constitute a legal, valid and binding
obligation of Xxxxxx Holding enforceable against Xxxxxx Holding in accordance
with its terms, except as enforceability may be limited or barred by applicable
bankruptcy, reorganization, moratorium, or similar laws of general application
now or hereafter in effect affecting the rights and remedies of creditors and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Upon exercise of the Warrant and payment of the
exercise price as provided for therein, the shares of Common Stock of Xxxxxx
Holding to be issued will be duly and validly issued, fully paid and
non-assessable and the holders thereof will not be subject to personal liability
by reason of being such holders; and the common stock so issued will not be
subject to the preemptive rights of any holders of any securities of Xxxxxx
Holding. Xxxxxx Holding has reserved from its authorized but issued shares of
Common Stock a sufficient number of shares to permit the full exercise of the
Warrant.
4. Nature and Survival of Representations and Warranties of the
Parties.
4.1 Survival. Each representation and warranty made or deemed
made by either Party to another under this Agreement shall remain in effect
following the Closing, and shall terminate at such time as the obligation to
indemnify under such representation or warranty under Article 8 so terminates.
Notwithstanding the above, there shall be no duty to update such representations
or warranties after the Closing.
4.2 Nonwaiver of Rights. The representations and warranties made
or deemed made by either party to another shall not be affected or deemed waived
by reason of the fact that another party or its representatives knew or should
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have known that any such representations or warranties is or might be inaccurate
in any respect. Any furnishing of information by either party to another
pursuant to, or otherwise in connection with, this Agreement, including, without
limitation, any information contained in any document of the delivering party to
which the other party shall have access or any information obtained by, or made
available to, either party as a result of any investigation made by or on behalf
of such party prior to or after the date of this Agreement, shall not affect
such party's right to rely on any representation or warranty made or deemed made
by the other party in this Agreement and shall not be deemed a waiver thereof.
5. Joint Covenants of Seller and Buyer.
5.1 Further Action. Each of Seller and Buyer shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby. Upon the terms and subject to the conditions hereof, each
of Seller and Buyer shall use commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement.
5.2 Regulatory and Other Authorizations. Each of Seller and
Buyer shall promptly make all necessary filings, if any, and use commercially
reasonable efforts to obtain all authorizations, consents, orders and approvals
of all Federal, state and other regulatory bodies and officials that are
required for the consummation of the transactions contemplated by this
Agreement, including, but not limited to, the NASD and all other applicable
self-regulatory agencies, and will cooperate fully with each other in connection
therewith.
6. Individual Covenants of Seller and Buyer.
6.1 Conduct of Business Pending Closing. Seller covenants that
until the Closing, except as otherwise consented to in writing by Buyer, Seller
(i) shall maintain, keep and preserve the Acquired Assets in substantially the
same condition and repair they are in as of the date of this Agreement and
maintain insurance thereon in accordance with past practice; (ii) shall continue
to meet its obligations under the Real Property Leases and Equipment Leases on a
timely basis; and (iii) shall not, without Buyer's prior written approval,
amend, modify or terminate any of the Real Property Leases or Equipment Leases.
Seller shall give Buyer prompt written notice of any material change in or
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addition to any of the information contained in the representations and
warranties made by Seller or in the Appendices or Schedules furnished by Seller
in this Agreement which occurs after the date hereof and prior to the Closing.
6.2 Consents. Between the date of this Agreement and the
Closing, Seller, at its cost and expense, shall use commercially reasonable
efforts to obtain the non-governmental and non-regulatory third party consents
or approvals that are required to permit the consummation of the transactions
contemplated hereby. In connection therewith, Seller will keep Buyer advised of
its efforts to obtain all such consents and approvals, will instruct its counsel
to submit to Buyer's counsel for review copies of all material to be submitted
in connection therewith, and will permit Buyer or its counsel, whichever may be
appropriate, to attend and participate in conferences with representatives of
any such third party. Seller shall (and Seller shall request its counsel to)
furnish to Buyer, as promptly as practicable, copies of all communications
received from or transmitted to any such or other person in connection with
obtaining such consents and approvals.
6.3 Board Representation. For a period of 30 months after the
Closing Date, Buyer shall cause to be nominated to the Board of Directors of
Buyer, and Xxxxxx Holding shall cause to be nominated for election to the Board
of Directors of Xxxxxx Holding, a designee of Seller (which designee shall be
the same person for both positions), reasonably acceptable to Buyer and Xxxxxx
Holding. Seller has informed Buyer and Xxxxxx Holding that its initial designee
is Xxxxxx X. Xxxxxxxx, which designee is acceptable to Buyer and Xxxxxx Holding
provided that his election shall not require Xxxxxx Holding to provide public
disclosure of any of the matters enumerated in Item 401(f) of Regulation S-K.
7. Conditions to Closing.
7.1 Conditions to Each Party's Obligations. The respective
obligations of each party to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment at or prior to the Closing Date of
the following conditions:
(a) No Governmental Order or Regulation. There shall not be
in effect any order, decree or injunction (whether preliminary, final or
appealable) of a United States Federal or state court of competent jurisdiction,
and no regulation shall have been enacted or promulgated by any governmental
authority or agency, that prohibits consummation of the transactions
contemplated by this Agreement, and no litigation pending or threatened
regarding same; and
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(b) Regulatory and Other Authorizations. All authorizations,
consents, orders and approvals of all Federal, state and other regulatory bodies
and officials that are required for the consummation of the transactions
contemplated by this Agreement, including, but not limited to, the NASD and all
other applicable self-regulatory agencies, shall have been obtained.
(c) Shareholder Approval. Seller shall have obtained the
approval of its shareholders.
7.2 Conditions to the Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Representations and Warranties; Covenants. Without
supplementation after the date hereof, the representations and warranties of
Buyer contained in this Agreement shall be true and correct in all material
respects as of the Closing, with the same force and effect as if made as of the
Closing, and all the covenants and agreements contained in this Agreement to be
complied with by Buyer on or before the Closing Date shall have been complied
with, and Seller shall have received a certificate of officers of Buyer to such
effect.
(b) Consents. Buyer shall have obtained and delivered to
Seller all governmental, regulatory and private third party consents to the
transaction contemplated by this Agreement which are described on Schedule 3.3.
(c) Other Agreements. Buyer shall execute and deliver to
Seller:
(i) assignment and assumption agreements and/or sub-
leases relating to the Real Property Leases;
(ii) assignment and assumption agreements relating to
the Equipment Leases; and
(iii) the Warrant (which shall be executed by Xxxxxx
Holding).
(d) Board Seat. Xxxxxx X. Xxxxxxxx or another designee of
Seller shall have been elected to the Board of Directors of Buyer and Xxxxxx
Holding.
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7.3 Conditions to the Obligations of Buyer. The obligations of
Buyer to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Representations and Warranties; Covenants. Without
supplementation after the date hereof, the representations and warranties of
Seller contained in this Agreement shall be true and correct in all material
respects as of the Closing, with the same force and effect as if made as of the
Closing, and all the covenants and agreements contained in this Agreement to be
complied with by Seller on or before the Closing Date shall have been complied
with, and Buyer shall have received a certificate of officers of Seller to such
effect;
(b) Consents. Seller shall have obtained and delivered to
Buyer all governmental, regulatory and private third party consents to the
transactions contemplated by the Agreement which are described on Schedule 2.3.
(c) No Material Adverse Change. At the Closing, there shall
have been no material adverse change in the assets, liabilities, financial
condition or business of Seller since the date of the Seller's Balance Sheet.
(d) Other Agreements. Seller shall execute and deliver to
Buyer.
(i) the instruments of transfer and conveyance for the
Purchased Assets;
(ii) assignment and assumption agreements and/or
sub-leases relating to the Real Property Leases; and
(iii) assignment and assumption agreements relating to
the Equipment Leases.
8. Indemnification.
8.1 A "Third Party Claim" as used in this Agreement is a claim,
demand, suit, proceeding or action by a person firm or corporation other than a
party hereto or any affiliate of such party or by any government entity.
8.2 Seller, its sole stockholder, X.X. Xxxxxxx Holdings, Inc.,
and those stockholders of X.X. Xxxxxxx Holdings, Inc. set forth on the signature
page to this Agreement (collectively, the "Xxxxxxx Indemnitors"), shall jointly
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and severally indemnify and hold harmless Buyer and its successors and assigns,
from and against any losses, damages, expenses or liabilities, including,
without limitation, reasonable attorneys' fees, which may be sustained, suffered
or incurred by Buyer or its successors and assigns, arising from or by reason of
Third Party Claims related to the ownership or operation of the Seller or any
liability of Seller that is not an Assumed Liability. The Xxxxxxx Indemnitors
shall jointly and severally indemnify and hold harmless Buyer and its successors
and assigns, from and against any losses, damages, expenses or liabilities,
including, without limitation, reasonable attorneys' fees, which may be
sustained, suffered or incurred by Buyer or its successors and assigns, arising
from or in connection with the breach of any Seller's covenants,
representations, warranties, agreements, obligations or undertakings hereunder.
The indemnities set forth in this Section 8.2 shall survive the Closing of this
Agreement.
8.3 Buyer and Xxxxxx Holding (collectively, the "Xxxxxx
Indemnitors") shall jointly and severally indemnify and hold harmless Seller and
its successors and assigns, from and against any losses, damages, expenses or
liabilities, including, without limitation, reasonable attorneys' fees, which
may be sustained, suffered or incurred by Seller or its successors and assigns,
arising from or in connection with the breach of any Buyer's covenants
representations, warranties, agreements, obligations or undertakings hereunder.
The indemnity set forth in this Section 8.3 shall survive the Closing of this
Agreement.
8.4 In the event that an indemnified party becomes aware of a
Third Party Claim for which an indemnifying party would be liable to an
indemnified party hereunder, the indemnified party shall give reasonably prompt
notice in writing to the indemnifying party of such Claim, identifying the basis
for such Claim or demand, and the amount or the estimated amount thereof to the
extent then determinable (which estimate shall not be conclusive of the final
amount of such Claim whether or not the Claim is a Third Party Claim) ("Claim
Notice"); provided, however, that any delay in giving such Claim Notice will not
be deemed a waiver of nor result in any discontinuation of any rights of the
indemnified party except to the extent the rights of the indemnifying party are
actually materially prejudiced by such failure. The indemnifying party, upon
request of the indemnified party, shall retain counsel (who shall be reasonably
acceptable to the Indemnified party) to represent the indemnified party and
shall pay the reasonable fees and disbursements of such counsel with regard
thereto; provided, however, that the indemnified party is hereby authorized,
prior to the date on which it receives written notice from the indemnifying
party designating such counsel, to retain counsel, whose fees and expenses shall
be at the expense of the indemnifying party, to file any motion, answer or other
pleading and take such other action which it reasonably shall deem necessary to
protect its interests or those of the indemnifying party until the date on which
the Indemnified party receives such notice from the indemnifying party. After
the indemnifying party shall retain such counsel, the Indemnified party shall
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have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties of any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not, in connection with any proceedings or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one such firm for the indemnified party (except to the extent the
indemnified party retained counsel to protect its (or the indemnifying party)
rights prior to the selection of counsel by the indemnifying party). If
requested by the indemnifying party, the indemnified party agrees to cooperate
with the indemnifying party and its counsel in contesting any Third Party Claim
which the indemnifying party defends. A Third Party Claim may not be settled by
the indemnifying party without the prior written consent of the indemnified
party (which consent will not be unreasonably withheld) unless, as part of such
settlement, the indemnified party shall receive a full and unconditional
release; provided, however, that the indemnifying party shall not settle any
claim without the prior written consent of the indemnified party (which consent
shall not be unreasonably withheld) if such Claim is not exclusively for
monetary damages.
8.5 In the event any indemnified party has a direct claim
against any indemnifying party, the indemnified party shall send a Claim Notice
with respect to the claim to the indemnifying party.
8.6 After delivery of a Claim Notice, so long as any right to
indemnification exists pursuant to this Article 8, the affected parties each
agree to retain all books and records related to such Claim Notice. In each
instance, the indemnified party shall have the right to be kept fully informed
by the indemnifying party and its legal counsel with respect to any legal
proceedings. Any information or documents made available to any party hereunder
and designated as confidential by the party providing such information or
documents and which is not otherwise generally available to the public and not
already within the knowledge of the party to whom the information is provided
(unless otherwise covered by the confidentiality provisions of any other
agreement among the parties hereto, or any of them), and except as may be
required by applicable law, shall not be disclosed to any third party (except
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for the representatives of the party being provided with the information, in
which event the party being provided with the information shall request its
representatives not to disclose any such information which it otherwise required
hereunder to be kept confidential).
8.7 Any claim for indemnification under this Article 8 must be
made not later than two years from the Closing Date.
8.8 Neither the Xxxxxxx Indemnitors nor the Xxxxxx Indemnitors
shall have liability under this Article 8 in excess of $2,000,000.
9. Notices. Any and all notices or other communications required or
permitted to be given under any provision of this Agreement shall be in writing
and shall be deemed given as of the date delivered personally or by courier, or
three days after the mailing thereof by first class certified mail, return
receipt requested, as follows:
If to Buyer, addressed to Buyer at:
0000 Xxxxxxx Xxxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
with a copy to:
Xxxxxxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
If to Seller or X.X. Xxxxxxx Holdings, Inc., addressed to Seller or
X.X. Xxxxxxx Holdings, Inc., as the case may be, at:
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
If to any of the stockholders of X.X. Xxxxxxx Holdings, Inc. identified
on the signature page hereof, addressed to such stockholder at the address set
forth on Schedule 1.4 to this Agreement.
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In either case, with a copy to:
Xxxxxxx, Xxxxxx & Kaplowitz, LLP
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxx, Esq.
Any of the above may change its address for the purpose of this
Agreement by notice to all the others given as aforesaid, except that notice of
changes of address shall be effective only upon receipt.
10. Termination.
10.1 Termination. The transactions contemplated herein may be
terminated and/or abandoned at any time but not later than the Closing:
(a) By mutual written consent of Seller and Buyer;
(b) By either Seller or Buyer (if the terminating party is
not then in material breach of its obligations hereunder) if (i) a material
default or breach shall be made by the other party with respect to the due and
timely performance of any of its covenants and agreements contained herein and
such default cannot be cured within a reasonable period of time, or (ii) if any
of the other party's representations and warranties, without supplementation
after the date hereof, are not true and correct in all material respects as of
the Closing Date;
(c) By Buyer if Seller has not obtained shareholder approval
to the transactions contemplated by this Agreement within seven calendar days
after the date of this Agreement.
(d) By either Seller or Buyer (if the termination party is
not then in material breach of its obligations hereunder) if the Closing Date
has not occurred within three months from the date of this Agreement for any
reason, unless such failure to close is a result of the failure to obtain NASD
approval of the transactions contemplated by this Agreement, in which case, six
months, unless Seller and Buyer agree to an extension in writing.
10.2 Effect of Termination. In the event of termination by
Seller or Buyer, or both Seller and Buyer, pursuant to Section 10.1 hereof,
written notice thereof shall forthwith be given to the other party and all
obligations (except as set forth in this Section 10.2) of the parties shall
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terminate and no party shall have any right against the other parties hereto.
Notwithstanding the foregoing, if this Agreement is so terminated by either
Seller or Buyer under Section 10.1(b) above, it is expressly agreed and
understood that the terminating party's right to pursue all legal remedies for
breach of contract or otherwise, including, without limitation, damages (other
than consequential damages) relating thereto, shall survive such termination
unimpaired. If the transactions contemplated by this Agreement are terminated
and/or abandoned as provided herein, all parties hereto will return all
documents, work papers and other material (and all copies thereof) of the other
parties, relating to the transactions contemplated hereby, whether so obtained
before or after the execution hereof, to the party furnishing the same.
11. Miscellaneous.
11.1 Entire Agreement. This Agreement, together with the
Appendices, Schedules and Exhibits, constitutes the entire agreement of the
parties with respect to the subject matter hereof and may not be modified,
amended or terminated except by a written agreement specifically referring to
this Agreement signed by the parties.
11.2 Severability. In the event that any provision of this
Agreement would be held to be invalid, prohibited or unenforceable in any
jurisdiction for any reason, unless such provision is narrowed by judicial
construction, this Agreement shall, as to such jurisdiction, be construed as if
such invalid, prohibited or unenforceable provision had been more narrowly drawn
so as not to be invalid, prohibited or unenforceable. If notwithstanding the
foregoing, any provision of this Agreement would be held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason, such provision,
as to such jurisdiction for any reason, shall be ineffective to the extent of
such invalidity, prohibition or unenforceability, without invalidating the
remaining portion of such provision or the other provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.
11.3 No Waiver. No waiver of any breach or default hereunder
shall be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
11.4 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. This Agreement shall not be assigned by either Buyer or Seller and any
attempted assignment shall be void.
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11.5 Headings. The article and section headings contained herein
are for the purpose of convenience only and are not intended to define or limit
the contents of said articles or sections.
11.6 Governing Law. This Agreement and all amendments thereof
shall, in all respects, be governed by and construed and enforced in accordance
with the internal law (without regard to principles of conflicts of law) of the
State of New York. Each party hereby submits to the exclusive jurisdiction of
the courts (city, state and federal) located in the County of New York, State of
New York, for any action, proceeding or claim brought by any other party
pursuant to this Agreement or any other agreement, instrument or other document
executed and delivered in connection with this Agreement or pursuant hereto and
waives any objection to the venue of such suit, action or proceeding and the
right to assert that such forum is not a convenient forum. Service of process in
any such action or proceeding brought against a Party may be made by registered
mail addressed to such Party at the address set forth in Article 9 or to such
other address as such Party shall notify the other Party in writing is to be
used for such purpose pursuant to Article 9.
11.7 Counterparts. This Agreement may be signed in two or more
counterparts, which taken together, shall constitute one and the same agreement.
[The balance of this page left intentionally blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed the day and year first above written.
XXXXXX SECURITIES, INC. X.X. XXXXXXX & CO., INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------------ ----------------------------
Xxxxxxx X. Xxxxxxxx, President Xxxxxx X. Xxxxx, CEO
XXXXXX HOLDING CORP. X.X. XXXXXXX HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------------ -----------------------------
Xxxxx X. Xxxxxxx, Chairman Xxxxxx X. Xxxxx, CEO
Certain Stockholders of X.X. Xxxxxxx
Holdings, Inc.:
/s/ Xxxxxx X. Xxxx
--------------------
Xxxxxx X. Xxxx
/s/ Xxxxxx X. Xxxxx
--------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxx
--------------------
Xxxxxxx X. Xxxx
/s/ Xxxxx Xxxxxx
-------------------
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxxxx
-------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
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