EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT ("Agreement") is made and entered
into as of the 14th day of November, 2003, between Amazing Savings Holding LLC
("Amazing Savings") and Odd Job Stores, Inc. (the "Company").
RECITALS:
A. On the date hereof, Amazing Savings, OJSAC, Inc. ("OJSAC") and
the Company are entering into an Agreement and Plan of Merger (the "Merger
Agreement"), pursuant to which OJSAC will be merged with and into the Company;
B. On the date hereof, Amazing Savings is entering into an asset
purchase agreement with the Company in which Amazing Savings is selling
substantially all of its assets to the Company (the "Asset Purchase Agreement"
and, together with the Merger Agreement, the "Transaction Agreements");
C. On the date hereof, Amazing Savings is entering into a
registration rights agreement with the Company (the "Registration Rights
Agreement"); and
D. The execution and delivery of this Agreement by Amazing
Savings and the Company constitute a condition precedent to the parties'
obligations under the Transaction Agreements.
In consideration of the foregoing and of the representations,
warranties, covenants and agreements set forth in this Agreement, the parties
hereto, intending to be legally bound, agree as follows:
1. Definitions. Capitalized terms used but not otherwise defined
in this Agreement shall have the meanings ascribed to such terms in the Merger
Agreement.
2. Indemnification.
(a) Subject to the other provisions of this Agreement, from and
after the Closing, Amazing Savings shall indemnify and hold harmless, the
Company and its Affiliates, each of their respective officers, directors,
employees, agents and representatives, and each of the heirs, executors,
successors and assigns of any of the foregoing (individually, a "Company
Indemnified Party" and, collectively, the "Company Indemnified Parties"),
against any losses, claims, damages, liabilities or expenses whenever arising or
incurred (including, without limitation, amounts paid in settlement, reasonable
costs of investigation and reasonable attorneys' fees and expenses) (hereinafter
"Losses") arising out of or relating to any breach of any representation or
warranty (in each case, without regard to any materiality or similar
qualification) made by Amazing Savings in this Agreement or the Transaction
Agreements.
(b) Subject to the other provisions of this Agreement, from and
after the Closing, the Company shall indemnify and hold harmless, Amazing
Savings and its Affiliates, each of their respective officers, employees, agents
and representatives, and each of the heirs, executors, successors and assigns of
any of the foregoing (individually, an "Amazing Indemnified Party" and,
collectively, the "Amazing Indemnified Parties"), against any Losses arising out
of or relating to any breach of any representation or warranty (in each case,
without regard to any materiality or similar qualification) made by the Company
in this Agreement or the Transaction Agreements.
(c) For the purposes hereof, a Company Indemnified Party or an
Amazing Indemnified Party seeking indemnification pursuant to this Agreement is
referred to as an "Indemnified Party", and the party from whom such
indemnification is sought is referred to as the "Indemnifying Party."
(d) No Indemnified Party shall be entitled to make any claim for
indemnification pursuant to this Agreement after the applicable Claims Period
(as defined in Section 4 hereof).
(e) The following provisions shall apply:
(i) Promptly after receipt by an Indemnified Party of notice
of the commencement of any action or proceeding involving a claim
in respect of which indemnification is being sought, such
Indemnified Party will, if a claim for indemnification hereunder
is to be made against the Indemnifying Party, give written notice
to the Indemnifying Party of the commencement of such action or
proceeding, the basis for such claim for indemnification and such
other information relating thereto as the Indemnifying Party may
reasonably request; provided, however, that failure to so notify
the Indemnifying Party or to provide such information shall not
relieve such Indemnifying Party from any liability which it may
have with respect to such claim, except to the extent that it is
actually materially prejudiced by such failure to give notice.
(ii) In case any such action is brought against an
Indemnified Party, unless in the reasonable opinion of counsel of
such Indemnified Party (A) a conflict of interest between the
Indemnified Party and the Indemnifying Party may exist in respect
of such claim, or (B) the Indemnified Party has available to it
reasonable defenses which are different from or additional to
those available to the Indemnifying Party, the Indemnifying Party
shall be entitled to assume and control the defense of such
action to the extent that it may wish, with counsel reasonably
satisfactory to such Indemnified Party, and after notice from the
Indemnifying Party to such Indemnified Party of its election so
to assume and control the defense of such action, the
Indemnifying Party shall not be liable to such Indemnified Party
for any legal or other expenses subsequently incurred by the
latter in connection with the defense of such action other than
reasonable costs of investigation. If in such case the
Indemnifying Party elects not to do so, or if the circumstances
described in clause (A) or (B) above shall apply, the Indemnified
Party shall retain its own counsel, shall inform the Indemnifying
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Party of the progress of the defense upon request and shall
respond to the reasonable requests of the Indemnifying Party for
information with respect thereto. In any case in which the
circumstances described in clauses (A) or (B) above do not apply
and the Indemnifying Party elects to assume and control the
defense, any Indemnified Party shall have the right to retain its
own counsel, but the fees and disbursements of such counsel shall
be at the expense of such Indemnified Party unless the
Indemnifying Party and such Indemnified Party shall have mutually
agreed to the retention of such counsel. The Indemnifying Party
shall not, in connection with any action or related actions in
the same jurisdiction, be liable for the fees and disbursements
of more than one separate firm to act as counsel for all
Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written
consent but if settled with such consent or if there shall be a
final, non-appealable, judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from
and against any Losses by reason of such settlement or judgment.
The Indemnifying Party shall not, without the consent of the
Indemnified Party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term
the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or
litigation. Any dispute as to whether any Indemnified Party is
entitled to indemnification in connection with any action or
proceeding under Section 2(e)(i) or this Section 2(e)(ii), the
defense or settlement of such action or proceeding, or any other
rights or obligations of the parties hereto in connection with
such action or proceeding shall be submitted to arbitration in
accordance with Section 5 of this Agreement.
(iii) In the event that an Indemnified Party shall claim a
right to payment pursuant to this Agreement with respect to which
there has been no action or proceeding involving such claim
pursuant to Section 2(e)(i) hereof, such Indemnified Party shall
send written notice of such claim to the Indemnifying Party. Such
notice shall specify the basis for such claim in reasonable
detail. As promptly as possible after the Indemnified Party has
given such notice, such Indemnified Party and the Indemnifying
Party shall establish the merits and amount of Losses, if any, to
which the Indemnified Party is entitled. If the parties do not
agree with respect to these matters within 30 days after the
giving of such notice, either party may submit the matter to
arbitration in accordance with Section 5 of this Agreement. In
such arbitration, if the arbitrator determines that a breach of a
representation, warranty, covenant or agreement in the Merger
Agreement, the Asset Purchase Agreement or this Agreement by the
Indemnifying Party occurred and that such breach caused Losses to
an Indemnified Party, the arbitrator will determine the amount of
any such Losses. Within ten business days after the final
determination of the merits of such claim and amount of such
Losses, the Indemnifying Party shall, subject to the limitations
set forth herein, deliver to the Indemnified Party an amount of
cash in immediately available funds sufficient to satisfy such
Losses or the portion of such Losses for which such Indemnifying
Party is obligated to provide indemnity hereunder.
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3. Liability Limits.
(a) Neither Amazing Savings, on the one hand, nor the Company on
the other, shall have any liability for Losses in respect of claims for
indemnification under Section 2 hereof until the aggregate amount of such Losses
exceeds $375,000 (the "Threshold"), in which event the applicable Indemnifying
Party or Parties shall, subject to the other provisions of this Section 4, be
liable for the total amount of such Losses (including Losses below the
Threshold).
(b) The aggregate liability of either Amazing Savings or the
Company, as the case may be, for Losses pursuant to this Agreement shall not
exceed $2.0 million.
4. Claim Periods. The term "Claims Period" shall mean the
following:
(a) With respect to any claim for indemnity against Amazing
Savings hereunder, the period of time commencing on the date hereof and expiring
on the first anniversary of the Closing Date; and
(b) With respect to any claim for indemnity against the Company
hereunder, the period of time commencing as of the date hereof and expiring on
the first anniversary of the Closing Date.
5. Jurisdiction and Forum; Arbitration. Any controversy arising
under, out of, in connection with, or relating to, this Agreement, and any
amendment hereof, or the breach hereof or thereof, shall be determined and
settled by arbitration in New York, New York, by an arbitrator or arbitrators
mutually agreed upon by Amazing Savings and the Company or, if Amazing Savings
and the Company shall fail or be unable to so agree within ten Business Days
after the written request therefor by Amazing Savings or the Company to the
other, such arbitrator or arbitrators as may be selected in accordance with the
rules of the American Arbitration Association. Any award rendered therein shall
specify the findings of fact of the arbitrator or arbitrators and the reasons
for such award, with reference to and reliance on relevant law. Any such award
shall be final and binding on each and all of the parties thereto and their
personal representatives, and judgment may be entered thereon in any court
having jurisdiction thereof.
6. Representations and Warranties of Amazing Savings and the
Company.
(a) Amazing Savings hereby represents and warrants to the Company
that:
(i) this Agreement has been duly authorized, executed and
delivered by it and constitutes the legal, valid and binding
agreement of it, enforceable against it in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other laws affecting creditors'
rights and remedies generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); and
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(ii) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
by this Agreement will not violate or conflict with, constitute a
breach of or default under, result in the loss of any material
benefit under, or permit the acceleration of or entitle any party
to accelerate any obligation under or pursuant to, any material
mortgage, lien, lease, agreement, instrument, order, arbitration
award, judgment or decree to which it is a party or by which it
or any of its assets are bound.
(b) The Company hereby represents and warrants to Amazing Savings
that:
(i) this Agreement has been duly authorized, executed and
delivered by it and constitutes the legal, valid and binding
agreement of it, enforceable against it in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other laws affecting creditors'
rights and remedies generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); and
(ii) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
by this Agreement will not violate or conflict with, constitute a
breach of or default under, result in the loss of any material
benefit under, or permit the acceleration of or entitle any party
to accelerate any obligation under or pursuant to, any material
mortgage, lien, lease, agreement, instrument, order, arbitration
award, judgment or decree to which it is a party or by which it
or any of its assets are bound.
7. Notices. All notices, communications and deliveries required
or permitted by this Agreement shall be made in writing signed by the party
making the same, shall specify the Section of this Agreement pursuant to which
it is given or being made, and shall be deemed given or made (i) on the date
delivered if delivered by telecopy or in person, (ii) on the third business day
after it is mailed if mailed by registered or certified mail (return receipt
requested) (with postage and other fees prepaid), or (iii) on the day after it
is delivered, prepaid, to an overnight express delivery service that confirms to
the sender delivery on such day, as follows:
To Amazing Savings:
Amazing Savings Holding LLC
00 Xxxxxxxx Xx.
X.X. Xxx 00
Xxxxxxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
Facsimile: (000) 000-0000
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with a copy (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
To the Company:
Odd Job Stores, Inc.
000 Xxxxx Xxxxxx
Facsimile No.: 000-000-0000
Attention: Xxxxx Xxxxxxx
with a copy (which shall not constitute notice) to:
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
or to such other representative or at such other address of a party as such
party hereto may furnish to the other Parties in writing. If notice is given
pursuant to this Section 7 of any assignment to a successor or assign of a party
hereto, the notice shall be given as set forth above to such successor or assign
of such party.
8. Computation of Time. Whenever the last day for the exercise of
any privilege or the discharge of any duty under this Agreement shall fall upon
a Saturday, Sunday or any date on which banks in New York, New York are closed,
the party having such privilege or duty may exercise such privilege or discharge
such duty on the next succeeding day which is a regular business day.
9. Successors in Interest. This Agreement shall be binding upon
and shall inure to the benefit of the Parties and their successors and assigns,
and any reference to a party shall also be a reference to a permitted successor
or assign.
10. Number; Gender. Whenever the context so requires, the
singular number shall include the plural and the plural shall include the
singular, and the gender of any pronoun shall include the other genders.
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11. Captions. The titles and captions contained in this Agreement
are inserted in this Agreement only as a matter of convenience and for reference
and in no way define, limit, extend or describe the scope of this Agreement or
the intent of any provision of this Agreement. Unless otherwise specified to the
contrary, all references to Sections are references to Sections of this
Agreement.
12. Amendments. To the extent permitted by law, this Agreement
may be amended by a subsequent writing signed by each of the Parties.
13. Controlling Law; Integration; Waiver. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of New York. This Agreement supersedes all negotiations, agreements and
understandings among the parties with respect to the subject matter of this
Agreement and constitutes the entire agreement among the parties to this
Agreement with respect to such subject matter. The failure of any party at any
time or times to require performance of any provisions of this Agreement shall
in no manner affect the right to enforce the same. No waiver by any party of any
conditions, or of the breach of any term, provision, warranty, representation,
agreement or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed or construed as a
further or continuing waiver of any such condition or breach of any other term,
provision, warranty, representation, agreement or covenant contained in this
Agreement.
14. Exclusive Remedy. The Parties agree that, from and after the
Closing (as defined in the Asset Purchase Agreement), the rights and remedies of
any party under this Agreement shall be the sole and exclusive remedy of the
parties for Losses arising out of any breach of the representations or
warranties under this Agreement, the Merger Agreement or the Asset Purchase
Agreement.
15. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction will, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction will not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by law, the Parties waive any provision of law which renders any such
provision prohibited or unenforceable in any respect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
AMAZING SAVINGS HOLDING LLC
By: Ascend Retail Investment LLC, Managing Member of
Amazing Savings Holding LLC
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Member
ODD JOB STORES, INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------------------------------
Name: Xxxxx Xxxxxxx
Title Chief Financial Officer
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