August 19, 2002
Titan EMS, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ventures-National Incorporated
0000 Xxxxx 000 Xxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
Re: Indemnification Agreement respecting Section 5.02(n)(i)
of the Agreement and Plan of Merger, dated as of August
12, 2002 ("Merger Agreement"), among Ventures-National
Incorporated, a Utah corporation ("Ventures"), Titan EMS
Acquisition, Inc., a Delaware corporation and a wholly-
owned subsidiary of Ventures ("Acquisition"), and Titan
EMS, Inc., a Delaware corporation ("Titan"), and payment
of the sum of $150,000 to Xxxxxx Services, Inc. ("Xxxxxx
Services")
Gentlemen:
At the Effective Time (as defined in the Merger Agreement), $150,000
shall be paid by Titan EMS to Xxxxxx Services in consideration of Xxxxxx
Services' indemnification of Ventures and Titan against any and all past
liabilities of any type or nature whatsoever of Ventures existing at the
Closing of the Merger Agreement, which will include all expenses related to
the Merger Agreement and the compromise and settlement of any amounts due and
owing to Xxxxxx Services for advances or otherwise that were incurred by
Ventures in this respect prior to the Closing of the Merger Agreement.
1. Xxxxxx Services hereby agrees to indemnify and hold Titan, its
officers, directors, employees and agents and each person, if
any, who controls Titan within the meaning of Section 15 of
the Securities Act of 1933, as amended (the "Securities Act")
or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the stockholders of Titan and,
following the Effective Time, Ventures and all of its then
officers, directors, employees and agents and each person, if
any, who then controls Ventures within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act,
harmless from and against the following:
(i) Any and all liabilities, losses, claims, costs,
expenses, damages and judgments (including, without
limitation, any legal or other reasonable expenses
incurred in connection with investigating or defending
any matter, including any action, that could give rise
to such liabilities, losses, claims, costs, expenses,
damages and judgments and any action to enforce this
Letter Agreement (collectively, the "Losses") resulting
from or arising out of any breach of any representation,
warranty, or non-performance of any covenant or
agreement on the part of Ventures contained in the
Merger Agreement or in any statement or certificate
furnished or to be furnished by Ventures pursuant hereto
or in connection with the transactions contemplated by
the Merger Agreement;
(ii) Any and all losses resulting from or arising out of
the conduct of any business, any act or any omissions by
or on behalf of Ventures prior to the Effective Time; and
(iii) Any and all past liabilities of any type or nature
whatsoever of Ventures existing at the Effective Time,
which includes all expenses related to the Merger
Agreement (excluding the fees of Xxxxxxx X. Xxxxxxxxxx,
Esq. which Titan has previously agreed to pay) and the
compromise and settlement of any amounts due and owing
to Xxxxxx Services for advances or otherwise that were
incurred by Ventures in this respect prior to the
Effective Time.
2. In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant hereto (the
"Indemnified Party"), the Indemnified Party shall promptly
notify the person against whom such indemnity may be sought
(the "Indemnifying Party") in writing. A delay in giving
notice shall only relieve the Indemnifying Party of liability
to the extent the Indemnifying Party suffers actual prejudice
because of the delay. The Indemnifying Party shall have the
right, at its option and expense, to participate in the
defense of such a proceeding or claim, but not to control the
defense, negotiation or settlement thereof, which control
shall at all times rest with the Indemnified Party, unless the
proceeding or claim involves only money damages or relates to
a corporate restructuring, recapitalization or stock issuance
prior to the Effective Time, not an injunction or other
equitable relief, and unless the Indemnifying Party:
(i) irrevocably acknowledges in writing complete
responsibility for and agrees to indemnify the
Indemnified Party; and
(ii) furnishes satisfactory evidence of the financial
ability to indemnify the Indemnified Party;
in which case the Indemnifying Party may assume such control
through counsel of its choice and at its expense, but the
Indemnified Party shall continue to have the right to be
represented, at its own expense, by counsel of its choice in
connection with the defense of such a proceeding or claim. If
the Indemnifying Party does not assume control of the defense
of such a proceeding or claim, (i) the entire defense of the
proceeding or claim by the Indemnified Party, (ii) any
settlement made by the Indemnified Party, and (iii) any
judgment entered in the proceeding or claim shall be deemed to
have been consented to by, and shall be binding on, the
Indemnifying Party as fully as though it alone had assumed the
defense thereof and a judgment had been entered in the
proceeding or claim in the amount of such settlement or
judgment, except that the right of the Indemnifying Party to
contest the right of the Indemnified Party to indemnification
under the Agreement with respect to the proceeding or claim
shall not be extinguished. If the Indemnifying Party does
assume control of the defense of such a proceeding or claim,
it will not, without the prior written consent of the
Indemnified Party settle the proceeding or claim or consent to
entry of any judgment relating thereto which does not include
as an unconditional term thereof the giving by the claimant to
the Indemnified Party a release from all liability in respect
of the proceeding or claim. The parties hereto agree to
cooperate fully with each other in connection with the
defense, negotiation or settlement of any such proceeding or
claim.
3. The parties agree that all of the representations and
warranties contained herein shall survive the Effective Time
and continue to be binding regardless of any investigation
made at any time by any party.
4. At any time, and from time to time, each party will execute
such additional instruments and take such action as may be
reasonably requested by the other party to carry out the
intent and purposes of this Agreement.
5. Any failure on the part of any party hereto to comply with any
of its obligations, agreements or conditions hereunder may be
waived in writing by the party to whom such compliance is
owed.
6. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in
person or sent by prepaid first-class registered or certified
mail, return receipt requested, as follows:
If to Xxxxxx Services: 0000 Xxxxx 000 Xxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Titan:
If to Ventures:
7. This Agreement constitutes the entire agreement between the
parties and supersedes and cancels any other agreement,
representation or communication, whether oral or written,
between the parties hereto relating to the transaction
contemplated herein or the subject matter hereof.
8. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Utah, without
giving effect to principles of conflicts of laws.
9. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their successors and assigns.
10. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
11. In the event of default hereunder by either party, the
prevailing party in any proceeding to enforce this Agreement
shall be entitled to recover attorney's fees and costs and
such other damages as may have been caused by the default of
the defaulting party.
XXXXXX SERVICES, INC.
By /s/ Xxxxx X. Xxxxxx
Its President
VENTURES-NATIONAL
INCORPORATED
By /s/ Xxxx Xxxxxxxxxx
Its President
TITAN EMS, INC.
By /s/ Xxxxx Xxxxxx
Its President and Chief Executive Officer
