DEFINITIVE AGREEMENT
AGREEMENT, dated December 4, 2003, by and among PINNACLE TAXX ADVISORS
LLC, a Delaware limited liability company with its principal place of business
at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx ("Pinnacle"), and XXXXXX +
XXXXXX, INC., a Delaware corporation with its principal place of business at 00
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxx Xxxx ("Xxxxxx").
WHEREAS, Pinnacle and Xxxxxx entered into an asset purchase agreement (the
"Asset Purchase Agreement") and other documents including but not limited to a
Closing Payment Promissory Note, a Balance Promissory Note, a GTAX General
Release of Pinnacle, a Pinnacle General Release of GTAX, a Transfer Agreement, a
Closing Payment Guarantee, an Assignment, an Assignment Acknowledgement, a Stock
Pledge and Security Agreement, a Collateral Assignment Agreement, a UCC-1
Filings, an Equipment Sublease, a Security Agreement, and a Purchase Price
Adjustment Agreement on or about November 26, 2002 (together with the Asset
Purchase Agreement collectively referred to herein as the "Purchase Documents"),
which agreements provided for the sale of certain assets by Xxxxxx to Pinnacle
and the payment for those assets by Pinnacle; and
WHEREAS, Pinnacle has defaulted on payment of the Notes, as well as under
the Equipment Sublease Agreement and other Purchase Documents, and Xxxxxx and
Pinnacle have been involved in ongoing negotiations for repayment of the Notes
and satisfaction of other obligations under the Asset Purchase Agreement and
Purchase Documents; and
WHEREAS, Pinnacle and Xxxxxx have until now been unable to agree on
resolution of all of the issues between them and seek at this time to resolve
all of their disputes and differences; and
WHEREAS, Pinnacle and Xxxxxx have entered into an Agreement on Amount
dated November 26, 2003 (the "Agreement on Amount"), resolving the amount due
between the parties and also dealing with the production of certain registered
representative documents required by the NASD and SEC.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth and for other good and valuable consideration, the
parties hereby agree as follows:
1. Recitals. The recitals above are adopted herein by reference and
explicitly made a part of this Agreement as if the same were more fully set
forth herein at length.
2. Settlement Amount. A full and final settlement of all of Pinnacle's
financial obligations to Xxxxxx arising pursuant to those certain Purchase
Documents between the parties, has been resolved in the Agreement on Amount
between the parties dated November 26, 2003, a copy of which is annexed hereto
as Exhibit "2". The amount due as set forth in that Agreement is hereby defined
as the "Settlement Amount". The parties agree that the Settlement Amount
constitutes the global settlement amount in connection with the resolution of
all monetary disputes between the parties, acknowledge that the Settlement
Amount is intended to encompass all financial obligations of one party to the
other with the exception of those items listed on Schedule "2", and agree that
there shall be no adjustments to the Settlement Amount unless set forth in the
Agreement on Amount, this Agreement or otherwise agreed to, in writing, by both
parties.
3. Releases. The parties hereto shall exchange general releases, copies of
which are annexed hereto as Exhibit "3". In these releases, Pinnacle, Xxxxx
Xxxxxx ("Xxxxxx") and Xxxxxx Xxxxxxxxx ("Xxxxxxxxx") shall release Xxxxxx, its
employees, officers and directors and Xxxxxx shall release Pinnacle, its
employees, officers and directors, including but not limited to Xxxxxxxxx and
Xxxxxx. The releases by Xxxxxx to Xxxxxx and Xxxxxxxxx will specifically except
any items for claims or liabilities asserted against Xxxxxx by third parties
that use as a basis events that occurred during the period of time when
Xxxxxxxxx was CEO and/or Xxxxxx was CFO which are commitments made by Xxxxxxxxx
and/or Xxxxxx, but which were not disclosed on the books and records of Xxxxxx.
The release by Pinnacle, Xxxxxx and Xxxxxxxxx to Xxxxxx will specifically except
any items for claims or liabilities asserted against Pinnacle, Xxxxxx and/or
Xxxxxxxxx by third parties that use as a basis or relate to the ownership,
operation or management of Xxxxxx and/or its subsidiaries and affiliates
subsequent to September 24, 2002, provided that all of the facts and
circumstances giving rise to the claims or liabilities relate only to periods
subsequent to September 24, 2002, and do not relate to any actions by Pinnacle,
Xxxxxx and/or Xxxxxxxxx. In addition, the release of Xxxxxx and the release of
Pinnacle will each specifically except any claims arising in connection with a
breach of, or failure by either party to perform its obligations under the
Purchase Documents as amended by or under this Agreement and/or the Agreement on
Amount.
4. Assumed Liabilities. Pinnacle shall deliver to Xxxxxx a release or
proof of payment reasonably acceptable to Xxxxxx with respect to any assumed
liabilities of Xxxxxx which were to be assumed by Pinnacle, as set forth in the
Purchase Documents. This will include all Subordinated Debt and Vendor Debt, as
defined in the Purchase Documents as well as all debt of Xxxxxx to any employee
of Xxxxxx who became an employee of Pinnacle with the exception of Xxxxxxx
Xxxxxxxx ("Employee Debt")(Subordinated Debt, Vendor Debt and Employee Debt are
hereinafter referred to collectively as "Assumed Liabilities"). The Purchase
Documents require Pinnacle to deliver releases to Xxxxxx or proof of payment
reasonably acceptable to Xxxxxx for each and every Assumed Liability. In the
event that any specific Subordinated Debt, Vendor Debt or Employee Debt is less
than $10,000, Pinnacle does not need to deliver a release or proof of payment.
Pinnacle, Xxxxxxxxx and Xxxxxx hereby indemnify and hold harmless Xxxxxx, its
officers, directors and employees from and against any and all claims or causes
of action, including any monies paid by judgment, settlement or otherwise (all
of which shall be within Xxxxxx'x sole discretion), costs and reasonable
attorney's fees arising from any Subordinated Debt, Vendor Debt or Employee
Debt. Xxxxxx agrees that, in the event that any third party makes claim for
payment of any Subordinated Debt, Vendor Debt or Employee Debt, Xxxxxx will
promptly provide Pinnacle with written notice of such claim. Pinnacle shall then
have five days from the date on which such notice is delivered to settle the
matter. In the event that Pinnacle fails to do so within the aforementioned five
day period, Xxxxxx shall have the right to settle the claim.
Together with each release, Pinnacle shall deliver to Xxxxxx a letter
dated within thirty (30) days of the execution of this Agreement from each
releasor stating that the release is valid and unconditionally authorizing its
delivery to Xxxxxx upon the signing of this Agreement. The releases and
indemnifications pertaining to Employee Debt include but are not limited to all
debt owed by Xxxxxx for EBITDA bonuses earned by employees while at Xxxxxx. A
list of all Subordinated Debt, Vendor Debt and Employee Debt is annexed hereto
as Exhibit "4a", "4b" and "4c" respectively. It is the intent to include all
employees on Exhibit "4c" who worked for Xxxxxx and were transferred to
Pinnacle.
5. Wachovia Consent. Xxxxxx will obtain the consent of its bank, Wachovia
Bank, N.A. ("Wachovia"), to the settlement, and will authorize Wachovia to
provide Xxxxxxxxx with all information he is entitled to as a guarantor of
Xxxxxx'x debt to Wachovia.
6. Lease Obligations.
(a) Pinnacle acknowledges that, although Pinnacle has assumed the lease
obligations relating to the offices acquired by Pinnacle from Xxxxxx, Xxxxxx
remains responsible for certain of the lease obligations. A list of each
property is annexed hereto as Exhibit "6a" (the "Lease Obligations"). The
parties hereto agree that Pinnacle, Xxxxxxxxx, Xxxxxx and Xxxxxx Xxxxxxxx
("Hoenings") shall each personally guaranty the payment of all such Lease
Obligations to Xxxxxx and each landlord. In addition, to Pinnacle, Xxxxxx,
Xxxxxxxxx and Hoenings, Xxxxxxx Xxxxx ("Xxxxx") and Xxxxxxxx Xxxxxxxx
("Xxxxxxxx") shall also personally guaranty the payment of certain specific
lease obligations to Xxxxxx and the appropriate landlords as set forth on
Exhibit "6a". To memorialize such guarantees, each of Pinnacle, Povinelli,
Puyear, Hoenings , Xxxxx and Xxxxxxxx shall execute and deliver to Xxxxxx and
the landlord guaranties upon the signing of this agreement in substantially the
same form as Exhibit "6a(1)" annexed hereto.
(b) Pinnacle hereby represents and warrants that it will keep all payments
due pursuant to any of the leases set forth in Exhibit "6a" current at all
times, including rent and any other charges which may be due to the landlord as
well as any other non-monetary obligations pursuant to each lease. In addition,
Pinnacle represents and warrants that it has the insurance required by the
leases in full force and effect, with Xxxxxx listed as an additional insured and
additional loss payee on each of those policies. Pinnacle hereby represents and
warrants that as to each of those policies, that if they are changed or
terminated that Pinnacle will maintain the same insurance as required by the
lease on each property without lapse and will obtain a new policy with Xxxxxx
listed as the additional insured and send to Xxxxxx prior to the expiration or
termination of the then current policy, a binder or copy of the new policy
setting forth the terms and Xxxxxx as an additional loss payee.
(c) Pinnacle hereby agrees that upon the signing of this Agreement, it
will deliver to Xxxxxx a copy of an insurance binder or policy specifically
covering each of the Lease Obligations showing Xxxxxx as an additional insured
as of the signing of this Agreement. Pinnacle in addition to the requirements of
paragraph 6(b) above shall provide to Xxxxxx every six (6) months after the
signing of this Agreement (on June 1 and December 1 of each year) a copy of a
binder or policy on each of the Lease Obligations showing Xxxxxx as an
additional insured. This process shall continue until such time as Xxxxxx is
notified in writing, acceptable to it in its reasonable discretion that the
specific lease has been terminated and/or Xxxxxx has been fully released from
any liability pursuant to such specific lease.
(d) In the event that any of the leases goes into default, Pinnacle hereby
agrees to remedy any default immediately. However, if this happens, Xxxxxx has
the right to perform on behalf of Pinnacle or remedy any default on behalf of
Pinnacle and/or to come in and defend any eviction or other proceeding and
Pinnacle, Xxxxxx, Xxxxxxxxx and, if guarantors on the lease in question, Xxxxx
and Xxxxxxxx, shall be responsible to indemnify and hold Xxxxxx harmless for the
costs and any other amounts paid , whether on behalf of Pinnacle by judgment or
settlement (which settlement shall be in Xxxxxx'x sole discretion), including
reasonable attorney's fees and costs of any such defense. For the purposes of
costs, if Xxxxxx utilizes its in house counsel, the parties agree $300 per hour
is a reasonable attorney's fee. Pinnacle and Xxxxxx agree to give notice to the
other within no less than three (3) business days of receipt of any notice, oral
or in writing, from any landlord.
(e) Pinnacle has negotiated a release of Xxxxxx from its obligations
pursuant to the lease for the premises located at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxx, Xxx Xxxx (the "White Plains Lease") where the landlord is Xxxxxx
Corporate Center, LLC ("Xxxxxx"). A copy of this agreement is annexed hereto as
Exhibit "6e" ("Xxxxxx Agreement"). However, the agreement is contingent upon
Xxxxxx'x lender, Metropolitan Life Insurance Company, consenting to the
agreement. In connection with the Xxxxxx Agreement, Pinnacle and Xxxxxx agree to
execute the escrow agreement (the "Xxxxx & Gold Escrow Agreement") annexed
hereto as Exhibit "6(e)(1)" ("M&G Escrow") and Pinnacle agrees to deposit the
sum of $100,000 into escrow with Xxxxx & gold, LLP contemporaneously with the
execution of this Agreement pursuant to the terms of the Xxxxx & Gold Escrow
Agreement.
In the event that (i) a fully executed Xxxxxx Agreement in the same form
as Exhibit "6(e)" ) containing the unequivocal consent of Xxxxxx'x lender,
Metropolitan Life Insurance Company, to the Xxxxxx Agreement in the same form as
Exhibit "6(e)" or (ii) another fully executed form of unconditional release of
Xxxxxx by Xxxxxx unequivocably consented to by Xxxxxx'x lender is not delivered
to Xxxxx & Gold, LLP ("M&G") on or before January 15, 2004, $50,000 of the
$100,000.00 paid into escrow with M&G pursuant to the Xxxxxx Agreement shall be
immediately wired to Xxxxxx and $50,000 of the $100,000.00 paid into escrow with
M&G pursuant to the Xxxxxx Agreement shall be immediately wired to Wachovia Bank
by M&G, the escrow agent in accordance with the terms and conditions of the
Xxxxx & Gold Escrow Agreement. In addition, a $100,000 payment is due from
Pinnacle to Xxxxxx on April 30, 2004 and the remaining balance of $91,000 is due
from Pinnacle to Xxxxxx in consecutive monthly payments starting on July 1, 2004
in the amount of $7,583.33 until paid in full. All of these payments must be
made to Xxxxxx when due pursuant to the note annexed hereto as Exhibit "6(e)(2)"
(the "Note") The Note will be guaranteed by Xxxxxxxxx, Xxxxxx and Hoenings (the
"Guarantees" which are annexed hereto as Exhibit "6(e)(3)"). The Note and
Guarantees will be executed at the time of execution of this Agreement and held
in escrow by Iseman, Cunningham, Xxxxxxx & Hyde, LLP ("ICRH"), attorneys for
Xxxxxx, pursuant to the terms and conditions of the escrow agreement (the
"Xxxxxx Escrow Agreement") annexed hereto as Exhibit "6(e)(4)" ("Xxxxxx
Escrow"), which Pinnacle and Xxxxxx agree to execute contemporaneous with the
execution hereof. As more fully set forth in the Xxxxxx Escrow Agreement, the
Note and Guarantees shall be held in escrow pending (i) delivery of a fully
executed Xxxxxx Agreement in the same form as Exhibit "6(e)" containing the
unequivocal consent of Xxxxxx'x lender, Metropolitan Life Insurance Company, to
the Xxxxxx Agreement in the same form as Exhibit "6(e)" or another fully
executed form of unconditional release of Xxxxxx by Xxxxxx unequivocably
consented to by Xxxxxx'x lender to ICRH on behalf of Xxxxxx in which case the
Note and Guarantees shall be returned to Pinnacle; or (ii) there is no delivery
of a fully executed Xxxxxx Agreement in the same form as Exhibit "6(e)"
containing the unequivocal consent of Xxxxxx'x lender, Metropolitan Life
Insurance Company, to the Xxxxxx Agreement in the same form as Exhibit "6(e)" or
another fully executed form of unconditional release of Xxxxxx by Xxxxxx
unequivocably consented to by Xxxxxx'x lender by January 15, 2004, in which case
the Note and Guarantees shall be released and delivered to Xxxxxx. If any
payment is not paid when due and upon the expiration of ten (10) days notice
from Xxxxxx to Pinnacle, the balance of all payments pursuant to this paragraph
shall be accelerated and become immediately due and payable.
(f) As to personal property leases, Pinnacle hereby represents and
warrants that it will permit Pitney Xxxxx, as well as any other personal
property lessor other than Citicorp Vendor Finance (who financed the Canon
copiers at Pinnacle's White Plains office)("Canon Equipment"), to come in and
pick up any leased equipment on the master lease upon the expiration of those
leases. As to the Canon Equipment, upon the termination of the leases for the
Canon Equipment in White Plains, on or before March 24, 2004, Pinnacle shall
turn over the copiers and other equipment pursuant to those Canon leases to
Xxxxxx. Pinnacle reserves the right to negotiate with Pitney Xxxxx at the time
of termination of the lease in order to keep the equipment if Pinnacle wants to.
However, unless Pinnacle enters into a new lease and obtains a release of Xxxxxx
from any further liability, the equipment must be turned over to the lessor
pursuant to the terms of the lease agreement. In the event that Pinnacle
breaches the representations and warranties contained in this paragraph 6(f),
Pinnacle, Xxxxxx and Xxxxxxxxx hereby agree to indemnify and hold Xxxxxx
harmless from any damages, including any monies paid to lessor by judgment or
settlement or otherwise (which shall all be in Xxxxxx'x sole discretion), costs
and reasonable attorney fees incurred by Xxxxxx in so doing. Xxxxxx hereby
represents and warrants to Pinnacle that, except as set forth on Schedule 6(f),
all lease obligations relating to the personal property leases assumed by
Pinnacle and all leased equipment retained by Pinnacle pursuant to the Purchase
Documents are current and not in default. In addition, Xxxxxx acknowledges and
agrees that it shall be solely liable for any amounts due in connection with the
Canon Equipment lease.
(g) The parties hereto understand that it is the intent of this Agreement
and the assumptions that went into the settlement amount that all continuing
leases for Pitney Xxxxx equipment that were originally under Xxxxxx'x master
leases will be assigned to Pinnacle and Pinnacle will be solely responsible for
making payments on those leases going forward. It is also understood by and
between the parties that all maintenance and copier overage charges for
equipment on the master leases will be assigned to Pinnacle by Xxxxxx as of June
1, 2003 and Pinnacle shall become responsible for all maintenance and overage
charges as of that date. It is also contemplated by the parties that Xxxxxx will
be released from both the leases and maintenance and overage agreements that are
assigned. In the event that it is necessary for Xxxxxx to take any action as a
result of Pinnacle failing to live up to its responsibilities pursuant to this
paragraph 6(g), Pinnacle, Xxxxxx and Xxxxxxxxx hereby indemnify and hold Xxxxxx
harmless from any and all damages, including any monies paid to the lessor by
judgment, settlement or otherwise (all of which shall be within Xxxxxx'x sole
discretion), costs and reasonable attorney's fees incurred by them in so doing.
7. Ongoing Utility Service Accounts. The parties agree to cooperate to
complete the process of transferring certain utility service accounts to the
appropriate party as set forth on Schedule "7". This cooperation shall include
but not be limited to executing any documents that are reasonably necessary as
well as taking whatever actions may be reasonably necessary or reasonably
requested by the other party in order to see to it that these utility service
accounts are transferred into the name of the proper party. The parties also
agree to reimburse the other party for any utility charges pursuant to the
utility service accounts that were paid by the other party.
8. Representations and Warranties of Pinnacle.
(a) Pinnacle hereby represents and warrants that it has removed from all
of its offices any signs, letterhead, forms or anything else that contains the
name of Xxxxxx + Ciocia, Inc., Prime Financial Services, Inc. or Prime Capital
Services, Inc.
(b) Pinnacle hereby represents and warrants that it is no longer using and
will not use in the future any Xxxxxx vendor accounts (other than accounts
identified on Schedule "7", which the parties are cooperating to transfer), and
Pinnacle, Xxxxxx and Xxxxxxxxx hold Xxxxxx harmless from any damages including
any monies paid by judgment, settlement or otherwise (all of which shall be
within Xxxxxx'x sole discretion) resulting therefrom.
(c) Pinnacle hereby represents and warrants that it will not renew or
exercise the option on any of the leases set forth in Schedule "6a" without
obtaining a release on behalf of Xxxxxx directly from the landlord. If it does
make such a renewal or exercises such an option without getting a release for
Xxxxxx in violation of this paragraph, Pinnacle, Xxxxxx and Xxxxxxxxx hereby
indemnify Xxxxxx for any damages resulting therefrom, including any monies paid
by judgment, settlement or otherwise (all of which shall be within Xxxxxx'x sole
discretion), costs and reasonable attorney's fees.
9. Representation and Warranty of Xxxxxx. Xxxxxx hereby represents and
warrants that in the event that it receives any payment after the closing and
execution of this Agreement from BISYS Insurance Services, Inc., BISYS Group,
Inc., InsurMark, Inc., Feingold & Xxxxx, Inc. d/b/a Career Brokerage and/or
Royal Alliance Associates, Inc., Xxxxxx hereby agrees to immediately return the
payment directly to the source that sent it and notify Pinnacle at the same time
as it returns the payment with copies of any documents, checks, etc. received by
it. If Xxxxxx receives any such payment combined with a payment properly due to
it from any of those sources, Xxxxxx may keep the amount properly due to it and
return the balance. Annexed hereto as Exhibit "9" is a schedule of payments
received by Xxxxxx from BISYS Insurance Services, Inc., BISYS Group, Inc.,
InsurMark, Inc., Feingold & Xxxxx, Inc. d/b/a Career Brokerage and Royal
Alliance Associates which have been used in determining the Settlement Amount,
and which may be retained by Xxxxxx.
10. Tax Provisions. As stated in Section 6 of the Asset Purchase
Agreement, the effective date of the Closing was September 1, 2002. Adjustments
to the Purchase Price were delineated in Section 4 of the Asset Purchase
Agreement to accomplish the economic effect of a September 1, 2002 effective
Closing. The parties agree that GTAX managed the Purchased Offices on pinnacle's
behalf from September 1, 2002 through November 25, 2002. The parties have
calculated that the net adjustment paid by Pinnacle to GTAX for managing the
Purchased Offices between September 1, 2002 and November 25, 2002 was
$639,690.00. The parties agree that the $639,690.00 paid by Pinnacle to GTAX was
a management fee that will reduce the Purchase Price to reflect the economic
effect of a September 1, 2002 effective Closing.
11. UCC-3 Terminations. The parties hereto understand that all UCC-1
Financing Statements and security interests that Xxxxxx had pursuant to the
Purchase Documents have been assigned to Wachovia. Simultaneous with the
execution hereof and payment of the settlement amount in full by Pinnacle,
Xxxxxx shall obtain from Wachovia proper UCC-3 termination statements to
terminate the UCC-1 forms which were filed by Xxxxxx against Pinnacle's assets.
A copy of the UCC-3 termination statements are attached hereto as Exhibit "11".
In addition, Xxxxxx and Prime shall use their good faith best efforts to
terminate any additional security created by the Purchase Documents.
12. Termination of Lawsuits. Simultaneous with the execution hereof and
payment of the Settlement Amount in full by Pinnacle, the parties shall execute
a Stipulation of Discontinuance with prejudice with respect to the matter
entitled Xxxxxx + Xxxxxx, Inc. v. Pinnacle Taxx Advisors LLC, Xxxxx Xxxxxx and
Xxxxxx Xxxxxxxxx, Supreme Court of the State of New York, County of Westchester
Index No. 03-08045 (the "NY Action") and the matter entitled Xxxxxx + Ciocia,
Inc. v. Xxxxxx Xxxxxxxxx, Superior Court, Judicial District of Stamford/Norwalk
Docket No. CV 03 0195433 S (the "Connecticut Action"). The Connecticut Action
and NY Action Stipulations of Discontinuance shall be filed immediately upon
payment of the Settlement Amount in full by Pinnacle. Copies of the two
Stipulations of Discontinuance are annexed hereto collectively as Exhibit "12".
13. Indemnification.
I. Indemnification by Pinnacle.
(a) This Agreement provides for indemnification by Pinnacle, Xxxxxx and/or
Xxxxxxxxx of Xxxxxx and/or their employees, directors and officers in several
places, including but not limited to paragraph 4, 6 (including but not limited
to paragraphs 6 (d), (e), (f) and (g)) and paragraph 8 (including but not
limited to paragraphs 8(b) and (c)). In all cases where indemnification is
called for in this Agreement by Pinnacle, Xxxxxxxxx and/or Xxxxxx, it shall
include but not be limited to any monies paid by judgment, settlement or
otherwise (all of which shall be in Xxxxxx'x sole discretion), costs and
reasonable attorney's fees.
(b) Pinnacle, Xxxxxx and Xxxxxxxxx understand that the obligations for
which they are indemnifying are serious and that any breach of the underlying
obligation that is being indemnified for would cause substantial and serious
damage to Xxxxxx. They further agree that the actual damage to Xxxxxx may be
very difficult or impossible to prove to its fullest extent.
(c) As a result thereof, Pinnacle, Xxxxxx and Xxxxxxxxx hereby agree that
in the event that there is an indemnity award made against them, there shall
also be awarded in addition to the actual provable damages, a sum of two times
those damages as liquidated damages for the serious damages caused by the breach
of this Agreement.
(d) In the event that Xxxxxx uses its in-house counsel as a result of any
of these breaches and indemnity, his hourly rate shall be figured at $300 per
hour for the purpose of reasonable attorney's fees.
(e) Paragraph 13(c) shall only apply to Pinnacle, Xxxxxx and Xxxxxxxxx and
shall not apply to Hoenings, Xxxxx and Xxxxxxxx.
(f) Notwithstanding anything contained herein to the contrary, the
original indemnity provisions of the Asset Purchase Agreement contained in
paragraphs 14.1 and 14.2 shall remain in full force and effect and Xxxxxxxxx and
Xxxxxx join in the indemnifications of Xxxxxx pursuant to paragraph 14.1, which
indemnifications are subject to the provisions of this paragraph 13.
(g) Notwithstanding anything contained herein, any indemnification in this
Agreement that runs to Xxxxxx shall include Prime and its employees, directors
and officers for any damages suffered by them.
(h) Xxxxxx agrees to give Pinnacle notice of any claim that gives rise to
an indemnity obligation and give Pinnacle three (3) days to resolve it before
Xxxxxx shall make any attempt to resolve it itself, provided that no rights will
be lost to Xxxxxx in that time period. Xxxxxx agrees that if it attempts to
resolve any such claim itself, it will keep Pinnacle apprised of its efforts to
resolve the claim and provide Pinnacle with notice of any resolution of the
claim.
(i) Pinnacle agrees to give Xxxxxx notice of any claim, event, notice, or
anything else that may give rise to an indemnity obligation pursuant to this
Agreement within no more than three (3) days of when Pinnacle receives notice of
such claim, event, notice or anything else.
(j) Pinnacle, on behalf of itself and its subsidiaries and affiliates,
hereby agrees to indemnify, protect, reimburse and hold harmless Xxxxxx and its
shareholders, officers, directors, successors and assigns (hereinafter
collectively referred to as the "Xxxxxx Group"), from and against any and all
liabilities, damages, losses, obligations, penalties, claims, actions,
litigations, demands, defenses, judgments, suits, costs, disbursements and
expenses, including, but not limited to, reasonable attorneys' fees and expenses
(hereinafter collectively referred to as the "Damages") of whatsoever kind and
nature, imposed upon, incurred by or asserted or awarded against any of the
Xxxxxx Group directly or indirectly arising out of, relating to or resulting
from Pinnacle's breach of any agreement, covenant, term, condition or provisions
contained herein or Pinnacle's failure to perform any agreements, covenant,
term, condition or provision on its part to be performed.
II. Indemnification by Xxxxxx.
Xxxxxx, on behalf of itself and its subsidiaries and affiliates, hereby
agrees to indemnify, protect, reimburse and hold harmless Pinnacle and its
members, officers, directors, successors and assigns, including, without
limitation, Xxxxx Xxxxxx and Xxxxxx Xxxxxxxxx (hereinafter collectively referred
to as the "Pinnacle Group"), from and against any and all liabilities, damages,
losses, obligations, penalties, claims, actions, litigations, demands, defenses,
judgments, suits, costs, disbursements and expenses, including, but not limited
to, reasonable attorneys' fees and expenses (hereinafter collectively referred
to as the "Damages") of whatsoever kind and nature, imposed upon, incurred by or
asserted or awarded against any of the Pinnacle Group directly or indirectly
arising out of, relating to or resulting from Xxxxxx'x breach of any agreement,
covenant, term, condition or provisions contained herein or Xxxxxx'x failure to
perform any agreements, covenant, term, condition or provision on its part to be
performed.
14. Payment at Time of Execution. The parties hereto agree that they
contemplate that this Agreement will be signed contemporaneously with payment of
the Settlement Amount to Xxxxxx and not before. Xxxxxx has an Amended
Forbearance Agreement with Wachovia that provides that Wachovia shall receive
50% of all amounts over $1 million paid as a lump sum pursuant to this
Agreement. At closing, Wachovia shall be wired $636,397.22 directly and the
balance of $1,431,402.71 shall be wired to Xxxxxx. The payment will be made by
wire transfer pursuant to wire instructions furnished to Pinnacle by Xxxxxx and
Wachovia. All other documents to be delivered pursuant to this Definitive
Agreement shall be delivered contemporaneously with the execution of this
Agreement and the payment of the Settlement Amount.
15. Notices. Any notice given hereunder shall be in writing and delivered
personally or by mail, sent either by registered or certified mail, return
receipt requested or by nationally recognized overnight courier to the address
listed below. Either party may, by notice as provided above, designate a
different address. Any such notice shall be deemed delivered on the date of
mailing or delivery to courier, with sufficient postage or fee to reach its
destination if sent by mail or courier, upon physical delivery, if personal
delivery is used.
Notice to Pinnacle, Xxxxxx or Xxxxxxxxx shall be sent to :
c/o Pinnacle Taxx Advisors, LLC
0000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxx & Gold LLP
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Notice to Xxxxxx shall be sent to:
Xxxxxx + Xxxxxx, Inc
00 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxx, President
With a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Iseman, Cunningham, Xxxxxxx & Xxxx, LLP
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
16. Arbitration of Disputes. All disputes, claims or controversies between
Pinnacle and Xxxxxx arising out of the performance or breach of this Agreement,
or claims relating to the interpretation or application of this Agreement, that
cannot be resolved informally by direct negotiation between the parties, shall
be settled by arbitration in Dutchess County in accordance with the rules of the
American Arbitration Association (the "AAA"), utilizing a panel of three
arbitrators who shall be selected from a list of arbitrators maintained by the
AAA. Unless provided otherwise herein, the parties shall bear their own costs,
including attorneys' fees, in connection with any and all arbitration, and each
shall be responsible for half of the arbitration fees payable to the arbitrators
and/or the AAA. Notwithstanding the foregoing, in the event a party commences
litigation of an arbitrable dispute without the consent of the other party or
without waiver of the other party's right to arbitrate, or in the event that a
party attempts to compel litigation of a dispute commenced as an arbitration,
that party shall pay the costs incurred by the party seeking arbitration,
including reasonable attorneys' fees, to enforce this Agreement to arbitrate
disputes. A decision of the arbitrators shall be binding upon the parties and
may be reduced to judgment and filed and enforced in any court of appropriate
jurisdiction. Notwithstanding anything contained herein to the contrary, any
dispute by and between the parties pertaining to the delivery of the documents
pursuant to the Agreement on Amount and the Stipulation contained therein shall
not be arbitrable, but shall be continued in the same court where it is now
pending.
17. Binding Effect; Assignment. No party shall assign this Agreement to
any extent. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors.
18. Governing Law. This Agreement shall be controlled, construed and
enforced in accordance with the laws of the State of New York without giving
effect to its conflicts of law provisions. Each of the parties irrevocably
submits to the exclusive jurisdiction of the State of New York for the purposes
of any suit, action, arbitration or other proceeding in connection with or
relating to this Agreement. As Xxxxxxxxx lives in Connecticut, the only
exception as to this governing law shall be as to any enforcement action against
Xxxxxxxxx in Connecticut, in which case the law of Connecticut as pertains to
enforcement shall apply without regard to its conflict of laws provisions as to
any enforcement actions in Connecticut.
19. Entire Agreement. The Purchase Documents in their entirety shall
remain in full force and effect except as modified by the Agreement on Amount,
and this Agreement or any documents executed pursuant hereto. This Agreement
together with the Agreement on Amount, the Purchase Documents as modified hereby
represents the entire Agreement with respect to matters contemplated herein and
supersedes any prior oral or written agreements or undertakings between the
parties with respect to such matters. This Agreement shall not be amended to any
extent except by a writing executed by the parties. The parties hereto agree
that this is not a novation but a forbearance on the original obligation set
forth in the Purchase Documents which remain in full force and effect except as
stated herein. Notwithstanding the foregoing, the parties agree that the
following Sections of the Asset Purchase Agreement are hereby terminated and of
no further force or effect: 2, 3, 4, 5, 10, 15, 19(b), 19(c), 20, 21, 22.13. In
addition, the following Purchase Documents are hereby terminated and of no
further force or effect: the Closing Payment Promissory Note, the Balance
Promissory Note, the Transfer Agreement, the Closing Payment Guarantee, the
Assignment, the Assignment Acknowledgement, the Stock Pledge and Security
Agreement, the Collateral Assignment Agreement, the UCC-1 filings, the Security
Agreement, and the Purchase Price Adjustment Agreement.
20. Further Assurances. The parties recognize the extremely acrimonious
relationship between them and also that this Agreement was drafted and
negotiated very quickly in order to meet a closing deadline. The parties will do
any and all further acts necessary or required to effectuate the transactions
contemplated hereby, including but not limited to executing, acknowledging,
delivering, filing and recording any and all documents and instruments, as the
other party may reasonably request to fully carry out the intent of the Purchase
Documents as modified by the Agreement on Amount and/or this Agreement. The
parties will cooperate with each other in preparing reports, instruments and
documents which, in the reasonable opinion of any party, are required by any
statute, rule or regulation or order of any governmental or administrative body
in connection with the transaction. Except as otherwise provided in this
Agreement, each party shall pay its own costs and expenses in connection with
this Agreement and the transaction.
21. Counterparts; Facsimile. This Agreement and any amendments hereto may
be executed in any number of counterparts, all of which together shall
constitute a single, original instrument. Facsimile signatures shall be deemed
to be originals.
22. Separability. If any provision of this Agreement is invalid or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person, party or circumstance, the Agreement
shall nevertheless remain applicable to all other persons, parties and
circumstances provided the original intent of this Agreement is maintained.
23. Waiver. A waiver of any breach of any provision of this Agreement must
be in writing and shall not constitute or operate as a waiver of any other
breach of such provision or of any other provision, nor shall any failure to
enforce any provisions hereof operate as a waiver of such provision or of any
other provision hereunder.
24. Confidentiality. Except for disclosure to its bankers, underwriters,
venture capital sources or lenders, or as necessary or desirable for conduct of
business, neither party hereto shall disseminate or release to any third party
any information regarding any provision of this Agreement, or any financial
information regarding the other (past, present or future) that was obtained by
the other pursuant to this Agreement or in the course of the negotiation of this
Agreement, without the other Party's written approval.
25. Remedies Cumulative. No remedy set forth in this Agreement or
otherwise conferred upon or reserved to any party shall be considered exclusive
of any other remedy available to any party, but the same shall be distinct,
separate and cumulative and may be exercised from time to time as often as
occasion may arise or as may be deemed expedient.
26. Language Construction. The language in all parts of this Agreement
shall be construed, in all cases, according to its fair meaning, and not for or
against either party hereto. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.
27. Headings. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
PINNACLE TAXX ADVISORS LLC
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
XXXXXX & CIOCCIA, INC.
By: /s/ Xxx Xxxxxxxxxxx
--------------------------------
/s/ Xxxxx Xxxxxx
------------------------------------
XXXXX XXXXXX
/s/ Xxxxxx Xxxxxxxxx
------------------------------------
XXXXXX XXXXXXXXX
Acknowledged:
STATE OF NEW YORK )
SS.:
COUNTY OF DUTCHESS )
On the 4th day of December, 2003, before me, the undersigned, personally
appeared Xxxxxx Xxxxxxxxx, of PINNACLE TAXX ADVISORS, LLC, personally known to
me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her capacity, and that by his/her signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Notary Public
STATE OF NEW YORK )
SS.:
COUNTY OF DUTCHESS )
On the 4th day of December, 2003, before me, the undersigned, personally
appeared Xxx Xxxxxxxxxxx, of XXXXXX + XXXXXX, INC., personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her capacity, and that by his/her signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Notary Public
STATE OF NEW YORK )
SS.:
COUNTY OF DUTCHESS )
On the 4th day of December, 2003, before me, the undersigned, personally
appeared XXXXX XXXXXX, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Notary Public
STATE OF NEW YORK )
SS.:
COUNTY OF DUTCHESS )
On the 4th day of December, 2003, before me, the undersigned, personally
appeared XXXXXX XXXXXXXXX, personally known to me or proved to me on the basis
of satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Notary Public
