Extension and Indemnity Agreement
THIS EXTENSION AND INDEMNITY AGREEMENT ("Agreement") is entered
into as of the 31st day of May, 2011, by and among Delta Mechanical
Group, LLC, a Delaware limited liability company ("DMG"), Iron Eagle
Group, Inc., a Delaware corporation ("Iron Eagle"), with offices
located at 00 Xxxx 00xx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000
(Iron Eagle and DMG are hereinafter collectively referred to as
"Buyer") and Xxxxx X. Xxxxxxxxxx, an individual and resident of 000
Xxxxxxx Xxxxx Xxxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxxx 00000 (hereinafter
"Seller" or "Selling Member" or "Bookbinder") (Selling Member and Buyer
are sometimes hereinafter referred to collectively as "Parties".)
W I T N E S S E T H:
WHEREAS, Selling Member conveyed his Membership Interest in
Sycamore Enterprises LLC, a Rhode Island limited liability company, on
or about January 21, 2011 ("Closing Date") pursuant to the terms of a
Member Interest Purchase Agreement ("Purchase Agreement"); and
WHEREAS, Buyer executed a Secured Term Note ("Buyer Note") on the
Closing Date requiring payment of the Purchase Price by the Buyer for
the Membership Interest on or before June 2, 2011; and
WHEREAS, Buyer has requested an extension of the Payment Due Date, as
defined in the Purchase Agreement, and Seller has agreed to grant an
extension of the Payment Due Date subject to the terms and conditions
contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto agree as follows:
1. Extension. Subject to the satisfaction of the terms and
conditions hereinafter described, Selling Member hereby agrees to
extend the Payment Due Date to the earlier occurrence of the following:
(i) date funds have been received from Obligor's investment banking firm
to be obtained through proposed equity financing; or (ii) September 2,
2011 ("Extension Period").
2. Consideration for the granting of the Extension Period. Buyer
shall, within ten (10) days following payment of the Buyer Note ("Buyer
Note Payment"), secure a full release of the indemnity ("Release") by
and among Selling Member, related entities of Selling Member, Berkley
Regional Insurance Company and/or its affiliates or subsidiaries
("Berkley") as described in that certain General Agreement of Indemnity
dated January 25, 2005 by and between Selling Member and Berkley
("Indemnity Agreement"), a copy of which is attached hereto as Exhibit
A. Buyer shall take all reasonable steps necessary to provide Berkley
with the substitute collateral satisfactory to Berkley to provide the
Release.
3. Indemnity Bond. In the event that Buyer has not satisfied the
conditions contained in Section 2 of this Agreement within thirty (30)
days after the Buyer Note Payment, Buyer shall immediately deliver to
Selling Member an indemnity bond ("Indemnity Bond"), or other mutually
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agreed upon form(s) of indemnity, in a form satisfactory to Selling
Member and mutually satisfactory to the Parties, indemnifying Selling
Member personally as obligee for any obligations to Berkley or payments
required to be made by Selling Member and/or related entities of
Selling Member to Berkley, pursuant to the terms of the Indemnity
Agreement. It is further agreed that the amount of the Indemnity Bond
shall be no less than one hundred (100%) percent of the aggregate cost-
to-complete of all Open Bonds, exclusive of gross profit or change
orders that have not been approved, as further described in Exhibit B
attached hereto, as of the Buyer Note Payment. Notwithstanding the
aforementioned, the Indemnity Bond shall not indemnify Selling Member
for acts of fraud, intentional misrepresentation, gross negligence or
willful misconduct.
4. Indemnification. In addition to the conditions set forth in
Sections 2 and 3 above, Buyer, jointly and severally, hereby agrees to
indemnify, defend, save and hold Selling Member harmless from and
against any and all costs, damages, liability, loss, expense,
assessment, judgment, or deficiency of any nature whatsoever
(including, without limitation, reasonable attorney's fees and other
costs and expenses incident to any suit action or proceeding)
(collectively "Losses") incurred or sustained, directly or indirectly,
by Selling Member arising from or in relation to any breach by Buyer of
the terms of: (i) this Agreement; and/or (ii) the Purchase Agreement.
5. Ratification and Confirmation. In all other respects, the
Purchase Agreement and all transactional documents executed pursuant
thereto, including but not limited to, the Buyer Note, which do not
conflict with this Agreement are hereby ratified and confirmed as if
fully restated in this Agreement. Notwithstanding the modification to
the Payment Due Date, Buyer hereby acknowledges and agrees that the
granting of said extension does not in any way waive or modify the
Seller's rights as set forth in the Purchase Agreement, Pledge
Agreement, Buyer Note and other transactional documents.
6. Miscellaneous.
6.01 Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall
be determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the
application of such provision to such person or circumstances other
than those to which it is so determined to be invalid and
unenforceable, shall not be affected thereby, and each provision hereof
shall be validated and shall be enforced to the fullest extent
permitted by law.
6.02 Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the Parties hereto and their respective successors and
assigns; provided, however, that nothing in this Agreement shall be
construed to confer any rights, remedies, obligations or liabilities on
any person other than the Parties hereto or their respective successors
and assigns.
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6.03 Defined Terms. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the respective meanings ascribed to
them in the Purchase Agreement.
6.04 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same document. The Parties
hereto and any third parties may rely upon machine copies of signatures
to this Agreement to the same extent as manually signed original
signatures.
6.05 Headings. Headings of the sections in this Agreement are for
reference purposes only and shall not be deemed to have any substantive
effect.
6.06 Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other.
6.07 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES OR THOSE OF ANY OTHER
JURISDICTION.
6.08 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their
respective successors and permitted assigns.
6.09 Separate Legal Counsel. Each of the Parties has had the
opportunity to consult with its own legal counsel prior to signing and
delivering this Agreement, has read and understands such Agreement and
has signed and delivered the same with the intent to be legally bound
hereby.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first set forth above.
WITNESS: BUYER:
Xxxxxx X. Xxxx Delta Mechanical Group, LLC
By: /s/Xxxxx Xxxxxxx
----------------------
Name: Xxxxx Xxxxxxx
----------------------
Title: CEO Director
Xxxxxx X. Xxxx Iron Eagle Group, Inc.
By: /s/Xxxxx Xxxxxxx
----------------------
Name: Xxxxx Xxxxxxx
----------------------
Title: CFO
SELLING MEMBER:
/s/Xxxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx
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EXHIBIT A
General Agreement of Indemnity
EXHIBIT B
Open Bonds
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{P0120974 V 10}
{P0120974 V 10}
