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EXHIBIT 2.3
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made and entered into as of the 19th day of
October, 1998, by and between Xx. Xxxxxxx Xxxxxx, Xx. ("Xxxxxx"), Express
Capital Concepts, Inc., a Delaware corporation ("Parent"), and GreyStone
Technology, Incorporated, a California corporation ("GreyStone"), with reference
to the following facts:
A. Pursuant to an Agreement and Plan of Merger and
Reorganization, dated as of August 11, 1997, among Xxxxxx, GreyStone, Parent and
Express Capital Acquisition Corp., a Delaware corporation ("Merger Sub"), as
amended by a First Amendment to Agreement and Plan of Merger and Reorganization
of even date herewith (such Agreement and Plan of Merger and Reorganization, as
so amended, the "Merger Agreement"), GreyStone has agreed to merge with and into
Merger Sub in a transaction in which Merger Sub will be the surviving
corporation and will continue to be a wholly-owned subsidiary of Parent (the
"Merger"). In such transaction, the shareholders of GreyStone will receive
common stock, par value $.001 per share, of Parent (the "Parent Stock") exchange
for of the common stock, without par value, of GreyStone presently owned by
them.
B. The parties have agreed that the shares of Parent Stock to be
so issued will be registered under the Securities Act of 1933, as amended,
pursuant to a registration statement on Form S-4. Such registration statement is
being filed with the Securities and Exchange Commission (the "SEC"), and the
parties anticipate that one or more amendments to such registration statement
may be filed before such registration statement is declared effective by the
SEC. Such registration statement, together with each amendment thereto which may
be filed, any final prospectus contained therein and any amendment or supplement
to any thereof, are collectively referred to as the "Registration Statement".
C. The parties have agreed to indemnify each other in accordance
with the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, for good and valid consideration, the receipt and
sufficiency of which is acknowledged, and intending to be legally bound, the
parties agree as follows:
1. INDEMNIFICATION BY GREYSTONE. GreyStone shall hold harmless
and indemnify Xxxxxx and his heirs, administrators, successors and assigns from
and against, and shall compensate and reimburse each of them for, any and all
Damages which are directly or indirectly suffered or incurred by any of them or
to which any of them may otherwise become subject, insofar as such Damages arise
out of or are based on (a) any claim made with respect to, or Legal Proceeding
involving, any portion of the Registration Statement other than those
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sections listed on Exhibit A (the "Xxxxxx Responsible Sections"), or (b) any
actual or alleged failure to deliver the Registration Statement or any
prospectus included therein to any person.
2. INDEMNIFICATION BY XXXXXX. Xxxxxx shall hold harmless and
indemnify Parent, GreyStone and their administrators, successors and assigns
from and against, and shall compensate and reimburse each of them for, any and
all Damages which are directly or indirectly suffered or incurred by any of them
or to which any of them may otherwise become subject, insofar as such Damages
arise out of or are based on any claim made with respect to, or Legal Proceeding
involving, any portion of the Xxxxxx Responsible Sections of the Registration
Statement.
3. DEFENSE OF THIRD PARTY CLAIMS. In the event of the assertion or
commencement by any Person of any claim or Legal Proceeding (whether against
Xxxxxx, GreyStone, Parent or any other Person) with respect to which GreyStone
or Xxxxxx, as the case may be, may become obligated to hold harmless, indemnify,
compensate or reimburse any Person pursuant to this Agreement (the Person so
obligated, the "Indemnitor"), the Indemnitor shall have the obligation to defend
each indemnitee against such claim or Legal Proceeding. In connection with the
defense of any such claim or Legal Proceeding:
(a) all expenses relating to the defense of such claim or Legal
Proceeding shall be borne and paid for exclusively by the Indemnitor;
(b) Each indemnitee shall make available to the Indemnitor any
documents and materials in its possession or control that may be necessary to
the defense of such claim or Legal Proceeding;
(c) The Indemnitor shall have the right to settle, adjust or
compromise such claim or Legal Proceeding with the consent of each indemnitee
therein; provided, however, that any such settlement shall include an
unconditional and full release of each indemnitee therein and that such consent
to any settlement which does include such a release shall not unreasonably be
withheld; and
(d) if the Indemnitor, within 20 days after receipt of notice of a
claim or Legal Proceeding which it is obligated to defend hereunder, fails to
assume the defense of all indemnitees hereunder, the indemnitees shall have the
right to undertake the defense, compromise or settlement of such claim or Legal
Proceeding on behalf of and for the sole account and risk of the Indemnitor.
4. ARBITRATION. The parties agree that arbitration shall constitute
the exclusive remedy for the settlement of any dispute, controversy or claim
under, arising out of, in connection with or in relation to this Agreement or
the rights of the parties hereunder, including, without limitation, the
interpretation, coverage, performance, non-performance, breach validity or
enforceability of this Agreement and whether such dispute, controversy or claim
is arbitrable.
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The arbitration proceedings shall be accomplished in accordance with the
provisions hereof, as follows:
(a) The arbitration proceedings shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association in effect at the time
a demand for arbitration is made. To the extent that these is any conflict
between the rules of the American Arbitration Association and this arbitration
clause, this clause shall govern and determine the rights of the parties.
(b) The arbitration will take place in San Diego, California before a
single arbitrator.
(c) The decision of the arbitrator; including determination of the amount
of any Damages suffered, shall be exclusive, final, and binding on all parties,
their heirs, executors, administrators, successors, and assigns, as applicable.
(d) The costs of arbitration, including administrative fees, fees for a
record and transcript, and the arbitrator's fee, shall be borne equally by the
parties to the arbitration.
(e) Any party may require any arbitration hereunder to be an accelerated
arbitration by giving written demand for accelerated arbitration to the other
parties and the American Arbitration Association. No later than three business
days after its receipt of such demand such Association shall designate the
arbitrator to conduct the accelerated arbitration. Such arbitrator shall reach
a decision in the matter as promptly as possible and in any event shall attempt
to do so no later than 14 days after the arbitrator is designated as such by
such Association.
(f) The parties incorporate the provisions of California Code of Civil
Procedure, Section 1283.05, into this Agreement and make those provisions part
of and applicable to any proceedings arising under the terms of this Agreement.
Without limited the generality of this Section, if any claim or Legal
Proceeding arises out of, or is based upon, both the Xxxxxx Responsible
Sections and a portion or portions of the Registration Statement other than the
Xxxxxx Responsible Sections, the arbitrator will allocate between Xxxxxx and
GreyStone responsibility for indemnification hereunder, and will determine the
procedures for defense hereunder, with respect to such claim or Legal
Proceeding based upon such criteria as the arbitrator may determine to be fair
and appropriate. Such criteria shall include, but not necessarily be limited
to, the relative importance to a reasonable investor of any omissions from or
misstatements in the portions of (i) the Registration Statement other than the
Xxxxxx Responsible Sections, and (ii) the Xxxxxx Responsible Sections, which
are involved in such claim or Legal Proceeding.
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5. DEFINITIONS. As used in this Agreement, (i) "Damages" shall
include any loss, damage, injury, liability, claim, demand, settlement,
judgment, award, fine, penalty, tax, fee (including reasonable attorneys'
fees), charge, cost (including costs of investigation) or expense of any nature,
and even if the indemnitee has been advised of the possibility of such damages;
however, "Damages" shall not include lost profits, lost savings, or other
indirect, special, incidental or consequential damages; (ii) "Legal
Proceeding" shall mean any action, suit, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), hearing, inquiry, audit, examination or investigation commenced,
brought, conducted or heard by or before, or otherwise involving, any court or
other Governmental Body or any arbitrator or arbitration panel; (iii)
"Governmental Body" shall mean any: (a) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government; or (c)
governmental or quasi-governmental authority of any nature (including any
governmental division, department, agency, commission, instrumentality,
official, organization, unit, body or Entity and any court or other tribunal);
(iv) "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company, limited liability company,
joint stock company, firm or other enterprise, association, organization or
entity; and (v) "Person" shall mean any individual, Entity or Governmental Body.
6. JURISDICTION; VENUE; SERVICE OF PROCESS. Each of the parties
irrevocably submits to the jurisdiction of any California State or United
States Federal court sitting in San Diego, California in any action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and irrevocably agrees that any such action or proceeding
may be heard and determined only in such California State or Federal court. Each
of the parties irrevocably waives, to the fullest extent it may effectively do
so, the defense of an inconvenient forum to the maintenance of any such action
or proceeding. Each of the parties consents to the service of copies of the
summons and complaint and any other process which may be served in any such
action or proceeding by the mailing or delivering of a copy of such process to
such party at its address specified in or pursuant to Section 7. Each of the
parties agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
7. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon actual
receipt, and shall be delivered (a) in person, (b) by registered or certified
mail (air mail if addressed to an address outside of the country in which
mailed), postage prepaid, return receipt requested, (c) by a generally
recognized overnight courier service which provides written acknowledgment by
the addressee of receipt, or (d) by facsimile or other generally accepted means
of electronic transmission (provided that a copy of any notice delivered
pursuant to this clause (d) shall also be sent pursuant to clause (b)),
addressed as follows:
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(i) If to Xxxxxx:
c/o Inverness Investments
00 Xxxx Xxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx, Xx.
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxxxxxx & Xxxxx LLP
00000 Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
(ii) If to GreyStone:
GreyStone Technology, Incorporated
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other addresses as may be specified by like notice to the other
parties.
8. NO STRICT CONSTRUCTION. The language of this Agreement shall be
construed as a whole, according to its fair meaning and intent, and not
strictly for or against either party hereto, regardless of who drafted or was
principally responsible for drafting the Agreement or any specific term or
conditions hereof. This Agreement shall be deemed to have been drafted by all
parties hereto, and no party shall urge otherwise.
9. EXECUTION KNOWING AND VOLUNTARY. In executing this Agreement,
the undersigned acknowledge and represent that each: (a) has fully and
carefully read and considered this Agreement; (b) has been or has had the
opportunity to be fully apprized by his or its
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attorneys of the legal effect and meaning of this documents and all terms and
conditions hereof; (c) has had the opportunity to make whatever investigation or
inquiry he or it deemed necessary or appropriate in connection with the subject
matter of this Agreement; (d) has been afforded the opportunity to negotiate as
to any and all terms hereof; and (e) is executing this Agreement voluntarily,
free from any influence, coercion or duress of any kind.
10. ASSIGNMENTS. Neither this Agreement nor any rights, duties
or obligations hereunder may be assigned or delegated by any of the parties, in
whole or in part, whether voluntarily, by operation of law or otherwise. Any
attempted assignment or delegation in violation of this prohibition shall be
null and void. Subject to the foregoing, all of the terms and provisions hereof
shall be binding upon, and inure to the benefit of, the successors and assigns
of the parties. Nothing contained herein, express or implied, is intended to
confer on any person other than the parties or their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each
party and delivered to each party.
12. GOVERNING LAW. This Agreement and the legal relations among
the parties shall be governed by and construed in accordance with the laws of
the State of California applicable to contracts between California parties made
and performed in that State, without regard to conflict of laws principles.
13. SEVERABILITY. If any provision of this Agreement is too
broad to permit enforcement to its full extent, such provision shall
nevertheless be enforced to the maximum extent permitted by law, and each party
agrees that such provisions may be judicially modified accordingly in any
proceeding brought to enforce this Agreement. In the event that any portion of
this Agreement shall be held to be indefinite, invalid or otherwise entirely
unenforceable, the entire Agreement shall not fail on account thereof, and the
balance of the Agreement shall continue in full force and effect.
14. TIME OF THE ESSENCE. Time is of the essence of this
Agreement.
15. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties hereto relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings among or
between any of the parties relating to the subject matter hereof.
16. EFFECT OF MERGER. From and after the Merger, by operation of
law all of the liabilities of GreyStone hereunder will become liabilities of
Merger Sub, and this Agreement shall continue in full force and effect.
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17. CONSTRUCTION OF MERGER AGREEMENT. Neither Section 9.3 of the
Merger Agreement, nor the Release in the form of Exhibit F to the Merger
Agreement which Xxxxxx has executed and delivered pursuant thereto, is intended
to limit or restrict the rights of Xxxxxx under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
/s/ XXXXXXX XXXXXX, XX.
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XXXXXXX XXXXXX, XX.
EXPRESS CAPITAL CONCEPTS, INC.
By: /s/ XXXXXXX XXXXXX, XX.
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Xxxxxxx Xxxxxx, Xx.
Its: President
GREYSTONE TECHNOLOGY, INCORPORATED
By:
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Xxxxxxx X. Xxxxx
Its: Chief Executive Officer
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17. CONSTRUCTION OF MERGER AGREEMENT. Neither Section 9.3 of the
Merger Agreement, nor the Release in the form of Exhibit F to the Merger
Agreement which Xxxxxx has executed and delivered pursuant thereto, is intended
to limit or restrict the rights of Xxxxxx under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
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XXXXXXX XXXXXX, XX.
EXPRESS CAPITAL CONCEPTS, INC.
By:
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Xxxxxxx Xxxxxx, Xx.
Its: President
GREYSTONE TECHNOLOGY, INCORPORATED
By: /s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
Its: Chief Executive Officer
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Exhibit A
1. Summary - The Companies - Express Capital Portion
2. Summary - Market Price Data - prices in table.
3. Selected Historical Financial Information - Express Capital Selected
Historical Financial Information.
4. Express Capital Approvals.
5. The Merger and Relate Transactions - Background of Merger - Express Capital.
6. The Merger and Related Transactions - Recommendations of the Board of
Directors and Reasons for the Merger - Express Capital's Reasons for the
Merger.
7. Express Capital Management's Discussion and Analysis of Financial Conditions
and Results of Operations.
8. Express Capital Business.
9. Express Capital Principal Shareholders.
10. Express Capital Concepts, Inc. and Subsidiary Consolidated Financial
Statements.
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