INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made this _____ day of
September, 1996 by and between NCO FINANCIAL SYSTEMS, INC., a Pennsylvania
Corporation ("NCO") with a principal place of business at 0000 Xxxxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxxxx, 00000, MANAGEMENT ADJUSTMENT BUREAU, INC. ("MAB"), a New
York corporation and XXXXX XXXXXXXX ("Xxxxxxxx") an individual with an address
of 000 Xxxxxxxxxxx, Xxxx Xxxxxxx, X.X. 00000.
BACKGROUND
A. On or about July 18, 1996, NCO executed a certain stock purchase
agreement ("Stock Purchase Agreement") with Xxxxx Xxxxxxxx pursuant to which NCO
agreed to purchase 100% of the stock of MAB.
B. On or about August 5, 1994, MAB had executed a certain lease
agreement (as amended, hereinafter collectively "Lease Agreement") with THE
UNILAND PARTNERSHIP, L.P., a New York Limited Partnership ("Uniland"), pursuant
to which MAB leased from Uniland certain real property located in Amherst, New
York. In connection with the Lease Agreement, Xxxxxxxx executed a certain
Guarantee Agreement ("Guarantee") pursuant to which Xxxxxxxx agreed to guarantee
the obligations of MAB under the Lease Agreement.
C. In connection with the Stock Purchase Agreement, Xxxxxxxx and NCO
agreed to use their best efforts to obtain a release of Xxxxxxxx'x obligations
under the Guarantee. Although
under no legal obligation to do so, NCO submitted a certain assignment
and assumption of guarantee agreement to Uniland on August 28, 1996, a copy of
which is attached hereto as Exhibit "A" and incorporated by reference herein
("Assumption Agreement").
D. Uniland has advised NCO and Xxxxxxxx that as of the date of the
closing under the Stock Purchase Agreement, it is not in a position to execute
the Assumption Agreement.
E. NCO assigned certain of its rights and obligations under the Stock
Purchase Agreement to NCO of New York, Inc. pursuant to the terms of a certain
assignment agreement dated _____________________, 1996.
X. Xxxxxxxx and NCO are desirous of consummating and closing the Stock
Purchase Agreement while agreeing to continue to use their best efforts to
obtain Uniland's consent to the terms and conditions contained in the Assumption
Agreement.
NOW, THEREFORE, with the foregoing background being incorporated by
reference, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. NCO and Xxxxxxxx agree that for a period of 180 days following the
execution of this Agreement, they shall continue to use their best efforts to
cause Uniland to execute the Assumption Agreement.
2. NCO agrees to pay Xxxxxxxx a sum not to exceed Ten Thousand Dollars
within ten (10) days of a presentation of
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invoices for legal fees incurred by Xxxxxxxx for estate planning matters.
3. NCO agrees to submit an application for an irrevocable letter of
credit in favor of Xxxxxxxx in an amount not to exceed $300,000.00 pursuant to
the terms of the (i) Application for Standby Letter of Credit and (ii) Letter of
Credit Agreement both of which are attached hereto as Exhibit "B" (collectively
"Letter of Credit").
4. During the remaining term of the Lease Agreement, NCO and MAB agree
to indemnify and hold Xxxxxxxx harmless for all costs, damages, attorneys fees,
liabilities and expenses incurred by Xxxxxxxx arising out of or relating to any
claim made against Xxxxxxxx under the Guarantee; provided, however, that
Xxxxxxxx agrees to look to the Letter of Credit in the first instance to satisfy
NCO's and MAB's obligations hereunder. Xxxxxxxx acknowledges that NCO's and
MAB's obligation hereunder shall be limited solely to any claims made against
Xxxxxxxx under the Guarantee and shall not include an indemnification of any
other claims which may be made against Xxxxxxxx by Uniland or any other party.
5. Xxxxxxxx acknowledges and agrees that NCO may alter, amend, or
modify the Assumption Agreement without the prior written consent of Xxxxxxxx;
provided, however, that NCO may not modify paragraph 12 of the Assumption
Agreement without the express written consent of Xxxxxxxx (which consent shall
not be unreasonably withheld).
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6. Xxxxxxxx and NCO acknowledge and confirm that the terms of paragraph
1 constitute an agreement to use the parties "best efforts" and shall in no way
constitute a legal and binding obligation on either party to take any action
with respect to the Assumption Agreement other than to continue to request that
Uniland execute the same and to entertain (in NCO's and Xxxxxxxx'x sole and
absolute discretion) any modifications which Uniland may request.
7. NCO agrees that if Uniland fails to release Xxxxxxxx from his
obligations under the Guarantee prior to the expiration of the Letter of Credit
then, NCO shall cause a replacement letter of credit(s) to be issued until the
earlier of (i) the date on which Uniland executes the Assumption Agreement or
(ii) expiration of the term of the Lease Agreement. If Uniland executes the
Assumption Agreement then, Xxxxxxxx agrees to return to NCO the original Letter
of Credit then outstanding and to execute such other documents as may be
necessary to release NCO of its obligations to post the Letter of Credit
hereunder.
8. This Agreement constitutes the entire understanding and agreement
among the parties with respect to the subject matter hereof. This Agreement
shall be governed by the laws of the State of New York. This Agreement shall be
binding upon and enure to the benefit of the parties and their respective
successors and assigns. No modification of this Agreement shall be effective
unless in writing and signed by authorized
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representatives of the parties. No party has been induced to enter into this
Agreement by any fact, representation, or a matter that is not expressly
described in this Agreement.
9. This Agreement may be executed in one or more counterpart copies,
all of which shall be deemed to constitute a single original instrument. If any
term or provision of this Agreement shall be determined by a Court of competent
jurisdiction to be unenforceable, such determination shall not effect or impair
the enforceability the remaining terms and provisions of this Agreement. Each
party to this Agreement has taken all requisite corporate action to execute,
deliver, and perform under this Agreement.
10. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE
ANY RIGHT EITHER OF THEN MAY HAVE BY A TRIAL BY JURY IN RESPECT TO ANY
LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY COURSE OF CONDUCT,
DEALING, STATEMENT, OR ACTIONS OF ANY OF THE PARTIES, INCLUDING THE RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES, AGENTS OR ATTORNEYS. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT.
The parties hereto have executed this Agreement as of the date first
set forth above.
NCO FINANCIAL SYSTEMS
By: _______________________________
Xxxxxxx X. Xxxxxxx, President
Attest: ___________________________
Xxxxxx Xxxxxx
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MANAGEMENT ADJUSTMENT BUREAU, INC.
By: _________________________________
Xxxxxxx X. Xxxxxxx
Attest: _____________________________
Xxxxxx Xxxxxx
_____________________________________
Xxxxx Xxxxxxxx
