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EXHIBIT 10.3
FORM OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") dated as of December 17,
1999 is entered into by and among GE Energy Services, Inc., a Delaware
corporation ("Parent"), Emmy Acquisition Corp., a Delaware corporation and
wholly owned subsidiary of Parent ("Buyer"), and , in his
capacity as a stockholder of the Company and a resident of the State of
("Securityholder"), with respect to certain equity securities
owned by Securityholder of Showpower, Inc., a Delaware corporation (the
"Company"), and for purposes of Section 3.5 hereof, G. Xxxxxxxx Xxxxxxxx and
Xxxx X. Xxxxxxx (the "Stockholders' Agents").
WITNESSETH:
WHEREAS, Parent, Buyer and the Company have entered into an Agreement and
Plan of Merger (the "Merger Agreement") dated as of the date hereof pursuant to
which Buyer has agreed to make a cash tender offer described therein and
thereafter merge with and into the Company (the "Merger") in accordance with the
provisions of the Delaware General Corporation Law of the State of Delaware;
WHEREAS, as of the date hereof, Securityholder beneficially owns and has
the power to vote certain shares of the common stock, par value $.01 per share,
of the Company (the "Company Common Stock");
WHEREAS, each of Securityholder and certain other stockholders of the
Company entered into tender agreements (the "Tender Agreements") with Parent,
Buyer and the Company dated as of the date hereof pursuant to which such
stockholders agreed to tender their shares of common stock of the Company to
Buyer in the Initial Offer (as defined in the Merger Agreement) and place a
portion of the proceeds received by such stockholders from the Initial Offer
into an escrow account to secure their indemnification obligations pursuant to
this Agreement; and
WHEREAS, in consideration of Buyer's and Parent's agreements herein and in
the Merger Agreement, Securityholder has agreed to cooperate with Buyer and
Parent with respect to the acquisition of the Company by Parent and Buyer upon
the terms and subject to the conditions set forth in the Merger Agreement.
NOW, THEREFORE, in contemplation of the foregoing and in consideration of
the mutual agreements, covenants, representations and warranties contained
herein and for other good and valuable consideration, the receipt of which is
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Representation and Warranties.
1.1 Representations and Warranties of Buyer and Parent. Buyer and
Parent, hereby jointly and severally, represent and warrant to
Securityholder, as of the date hereof and as of the date Buyer purchases
shares of Company Common Stock pursuant to the Initial Offer, as
follows:
(a) Authorization. Each of Buyer and Parent is a corporation
duly organized, validly existing and in good standing under the laws
of its state of incorporation. Each of Buyer and Parent has all
requisite power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. Each of Buyer
and Parent has duly authorized, executed and delivered this Agreement
and this Agreement is a legal, valid and binding agreement of Buyer,
enforceable against Buyer in accordance with its terms.
1.2 Representations and Warranties of
Securityholder. Securityholder hereby represents and warrants to Buyer
and Parent, as of the date hereof and as of the date Buyer purchases
shares of Company Common Stock pursuant to the Initial Offer, as
follows:
(a) Ownership. Securityholder is the sole record and beneficial
owner of, and has good and marketable title to, shares of
Company Common Stock (collectively, the "Securities"), in each case
free and clear of all liabilities, claims, liens, options, proxies,
charges,
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participations and encumbrances of any kind or character whatsoever,
except for the security interest securing the obligations under
Securityholder's note payable to the Company.
(b) Authorization. Securityholder has all requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and has sole voting power and sole
power of disposition, with respect to all of the Securities owned by
Securityholder with no restrictions on its voting rights or rights of
disposition pertaining thereto. Securityholder has duly authorized,
executed and delivered this Agreement and this Agreement is a legal,
valid and binding agreement of Securityholder, enforceable against
Securityholder in accordance with its terms.
(c) No Violation. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will (a) require Securityholder to file or register with, or
obtain any material permit, authorization, consent or approval of,
any governmental agency, authority, administrative or regulatory
body, court or other tribunal, foreign or domestic, or any other
entity, or (b) violate, or cause a breach of or default under, any
contract, agreement or understanding, any statute or law, or any
judgment, decree, order, regulation or rule of any governmental
agency, authority, administrative or regulatory body, court or other
tribunal, foreign or domestic, or any other entity or any arbitration
award binding upon Securityholder. No proceedings are pending which,
if adversely determined, will have a material adverse effect on any
of the Securities. Securityholder has not previously assigned or sold
any of the Securities to any third party.
(d) No Setoff. Securityholder has no liability or obligation
related to or in connection with the Securities other than the
obligations to Buyer and Parent as set forth in this Agreement. There
are no legal or equitable defenses or counterclaims that have been or
may be asserted by or on behalf of the Company, as applicable, to
reduce the amount of the Securities or affect the validity or
enforceability of the Securities.
(g) Company Representations and Warranties. The representations
and warranties of the Company contained in Article III of the Merger
Agreement are hereby incorporated into this Agreement in their
entirety as representations and warranties of Securityholder and,
notwithstanding anything contained in the Merger Agreement to the
contrary, such representations and warranties shall survive for
purposes of this Agreement for the periods described in Article 3 of
this Agreement.
2. Survival of Representations and Warranties. The respective
representations and warranties of Securityholder, Parent and Buyer
contained herein or incorporated herein by reference or in any certificates
or other documents delivered in connection herewith shall not be deemed
waived or otherwise affected by any investigation made by the other party
hereto, and each representation and warranty contained herein or
incorporated herein by reference shall survive the closing of the
transactions contemplated hereby until the expiration of the applicable
statute of limitations, including extensions thereof. Notwithstanding the
foregoing, the representations and warranties of the Company contained in
Article III of the Merger Agreement or incorporated herein by reference
shall survive for a period of twelve months following the Closing (as
defined in the Merger Agreement).
3. Indemnification.
3.1 Indemnification by Securityholder.
(a) Indemnity. Securityholder shall defend and indemnify Buyer,
Parent and the Company and their agents, affiliates, subsidiaries,
controlling persons, officers, directors, and employees
(collectively, the "Buyer Indemnitees"), and hold the Buyer
Indemnitees wholly harmless from and against, any and all losses,
liabilities, damages, costs (including, without limitation, court
costs) and expenses (including, without limitation, reasonable
attorneys' fees) which the Company or any Buyer Indemnitee incurs as
a result of, or with respect to, any third party claims made against
the Company or any Buyer Indemnitee and arising out of or based
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upon or relating to (i) any inaccuracy in or breach of any
representation, warranty, covenant or agreement by or on behalf of
Securityholder or the Company contained in this Agreement (including
the representations and warranties incorporated herein by reference
pursuant to Section 2.2(g)), the Merger Agreement or contained in any
certificate, instrument, agreement or document of Securityholder or
the Company delivered to Buyer or Parent in connection with the
consummation of the transactions contemplated hereunder or thereunder
and (ii) any of the matters contained in the Company Disclosure
Letter with respect to the representations and warranties contained
in Sections 3.9, 3.15, 3.16, 3.17 and 3.18 of the Merger Agreement
which are incorporated by reference herein (collectively "Losses").
For purposes of this Agreement, third party claims shall exclude any
claim brought by or on behalf of any wholly-owned subsidiary of
Parent, unless such third party claim arises out of or is related to
actions or events affecting such subsidiary which occurred on or
prior to the date hereof.
(b) Claims. In the event that any Buyer Indemnitee shall
receive written notice of any claim or proceeding against such Buyer
Indemnitee that, if successful, might result in a claim under this
Section 3.1, such Buyer Indemnitee shall give Securityholder prompt
written notice of such claim or proceeding and shall permit
Securityholder to participate in the defense of such claim or
proceeding by counsel of Securityholder's own choosing and at the
expense of Securityholder. In addition, upon written request of such
Buyer Indemnitee, Securityholder shall assume the carriage of the
defense of any such claim or proceeding.
(c) Right to Indemnification. In no event shall
Securityholder's right to receive indemnification pursuant to Section
5.7 of the Merger Agreement affect or in any way limit
Securityholder's obligation to indemnify the Buyer Indemnitees
hereunder.
3.2 Specific Performance. Securityholder acknowledges that Buyer
and Parent will be irreparably harmed and that there will be no adequate
remedy at law for a violation of any of the covenants or agreements of
Securityholder which are contained in this Agreement. It is accordingly
agreed that, in addition to any other remedies which may be available to
Buyer and Parent upon the breach by Securityholder of such covenants and
agreements, Buyer and Parent shall have the right to obtain injunctive
relief to restrain any breach or threatened breach of such covenants or
agreements or otherwise to obtain specific performance of any of such
covenants or agreements.
3.3 Exclusive Remedy. From and after the Effective Date (as
defined in Merger Agreement), recourse of any Buyer Indemnitee to the
aggregate amount of the property held in the Indemnification Escrow (as
defined in the Tender Agreements) pursuant to each of the Tender
Agreements shall be the sole and exclusive remedy of the Buyer
Indemnitees for monetary damages for any claim for indemnification under
this Article 3, other than with respect to claims made by a Buyer
Indemnitee against Securityholder for fraud, bad faith or willful
misconduct.
3.4 Defense of Third Party Claims. Securityholder may participate
in (but not control) the defense and Buyer Indemnitee will have the sole
right to control the defense of third party claims made pursuant to
Article 3 by using counsel selected by Buyer Indemnitee. Buyer
Indemnitee shall have the sole right to make any significant decisions
with respect to the defense of such claim, except as to the settlement
or compromise of such claim which Buyer Indemnitee shall have the right
to settle, adjust or compromise with the consent of Securityholder;
provided, however, that such consent may not be unreasonably withheld.
Securityholder shall make available to Buyer Indemnitee any documents
and materials in his or its possession or control that may be necessary
to the defense of, and shall otherwise cooperate with Buyer Indemnitee
in the defense of, such claim or legal proceeding.
3.5 Stockholders' Agents.
(a) Appointment. In order to efficiently administer, among
other matters, the defense and/or settlement of any claims for which
Securityholder may be required to indemnify the Buyer Indemnitees
pursuant to Section 3.1, Securityholder hereby irrevocably designates
and
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appoints G. Xxxxxxxx Xxxxxxxx and Xxxx X. Xxxxxxx, as the lawful
agent and attorney-in-fact (the "Stockholders' Agents") with full
powers of substitution to act in the name, place and stead of
Securityholder with respect to the authority provided in paragraph
(b) below. Securityholder hereby ratifies and confirms all that the
Stockholders' Agents shall do or cause to be done by virtue of his
appointment as a Stockholders' Representative and Xxxxxxx X. Xxxxx
and Xxxx X. Xxxxxxx hereby accept such designation and appointment.
(b) Authority. The Stockholders' Agents, acting jointly, are
empowered and authorized, acting specifically and not generally on
behalf of Securityholder (i) to take all action necessary in
connection with the defense and/or settlement of any claims for which
the Securityholder may be required to indemnify the Buyer Indemnitees
pursuant to Section 3.1; (ii) to execute and deliver the Escrow
Agreement (as defined in the Tender Agreements); (iii) to give and
receive all notices required to be given under the Escrow Agreement;
(iv) to receive, hold and distribute to the Securityholder hereto any
moneys received as a distribution pursuant to the Escrow Agreement or
any other sums received by the Stockholders' Agents in such capacity,
and to retain same or a portion thereof as a reserve for expenses
(inclusive without limitation of the expenses referred to in
paragraph (f) below) or for other possible payments or liabilities,
all as determined in the sole discretion of the Stockholders' Agents
with such retained or reserved amounts to be distributed upon or
after the payment of such expenses, making such payments or discharge
of such liabilities; (vi) to employ such legal counsel and other
representatives as the Stockholders' Agents shall select from time to
time; and (vii) to take any and all additional action as is
contemplated or permitted to be taken by or on behalf of the
Securityholder as the Stockholders' Agents deem necessary or
appropriate by the terms of this Agreement and the Escrow Agreement.
(c) Successor. In the event that one of the Stockholders'
Agents dies, becomes unable to perform his responsibilities hereunder
or resigns, Xxxxxxx X. Xxxxxxxxx is hereby appointed and constituted
as one of the Stockholders' Agents, and he shall become and be deemed
one of the Stockholders' Agents.
(d) Decisions Binding. All decisions and actions, taken
jointly, by the Stockholders' Agents, whatsoever shall be binding
upon Securityholder, and Securityholder shall not have the right to
object, dissent, protest or otherwise contest the same.
(e) Further Agreements. By execution of this Agreement,
Securityholder agrees that:
(i) The appointment of the Stockholders' Agents shall be
deemed coupled with an interest and shall be irrevocable and the
Buyer Indemnitees and the escrow agent under the Escrow Agreement
shall be able to rely conclusively, without inquiry or liability,
on the instructions, agreements and decisions of the
Stockholders' Agents, acting jointly, as to the settlement of any
claims for indemnification pursuant to Section 3.1 or any other
actions required or permitted to be taken by the Stockholders'
Agents hereunder or under the Escrow Agreement, and no party
hereunder shall have any cause of action against the Buyer
Indemnitees for any action taken by the Buyer Indemnitees in
reliance upon the agreements, instructions or decisions of the
Stockholders' Agents, acting jointly;
(ii) all actions, agreements, decisions and instructions of
the Securityholders' Agents shall be conclusive and binding upon
Securityholder and Securityholder shall not have any cause of
action against the Stockholders' Agents for any action taken,
decision made or instruction given by the Stockholders' Agents,
acting jointly, under this Agreement, except for fraud or bad
faith;
(iii) the provisions of this Section 3.5 are independent and
severable, are irrevocable and coupled with an interest and shall
be enforceable notwithstanding any rights or remedies that
Securityholder may have in connection with the transactions
contemplated by the Merger Agreement;
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(iv) the provisions of this Section 3.5 shall be binding
upon the executors, heirs, legal representatives and successors
of each Securityholder, and any references in this Agreement to
Securityholder shall mean and include the successors to the
Securityholder's rights hereunder, whether pursuant to
testamentary disposition, the laws of descent and distribution or
otherwise; and
(v) the Buyer Indemnitees and the escrow agent under the
Escrow Agreement shall, upon receipt of any writing which
reasonably appears to have been signed by the Stockholders'
Agents, act upon such writing without any further duty of inquiry
as to the genuineness of the writing.
(f) Expenses. All reasonable fees and expenses incurred by the
Stockholders' Agents or otherwise required to be paid by
Securityholder, may be withheld by the Stockholders' Agents and paid
from sums paid to the Stockholders' Agents as a distribution pursuant
to the Escrow Agreement or any other sums received by the
Stockholders' Agents in such capacity.
4. Trade Secrets, Confidential Information and Noncompetition
Covenants.
4.1 Definitions. For the purposes of this Section 4, the following
definitions shall apply:
(a) "Company Activities" shall mean all activities of the type
conducted or provided by the Company within one year prior to the
date of this Agreement. For purposes of reference, such activities at
the date of this Agreement include the provision of temporary power
generation and temperature control rental equipment and support
services on a worldwide basis for entertainment, corporate and
special events.
(b) "Confidential Information" shall mean any data or
information, other than Trade Secrets, which is valuable to the
Company and not generally known to competitors of the Company.
(c) "Confidentiality Period" shall mean the period beginning the
date hereof and ending on the third anniversary of the date hereof.
(d) "Noncompete Period" shall mean the period beginning on the
date hereof and ending on the third anniversary of the date hereof.
(e) "Territory" shall mean the areas where the Company
Activities are conducted as of the date hereof and any area where
customers or actively sought prospective customers of the Company are
present. For purposes of reference, such areas include the geographic
area contained within a 150-mile radius of the current office
locations of the Company.
(f) "Trade Secret" shall mean information, including, but not
limited to, technical or nontechnical data, a formula, pattern,
compilation, program, device, method, technique, drawing, process,
financial data, financial plan, product plan, list of actual or
potential customers or suppliers, or other information similar to any
of the foregoing, which (i) derives independent economic value,
actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, the public or to other
persons who can derive economic value from its disclosure or use, and
(ii) is the subject of reasonable efforts under the circumstances by
the Company to maintain its secrecy. For purposes of this Agreement,
the term "Trade Secrets" shall not include information that (i) was
generally known to the public at the time the Company disclosed the
information to Securityholder; (ii) became generally known to the
public after disclosure by the Company through no act or omission of
Securityholder; or (iii) was disclosed to Securityholder by a third
party having a bona fide right both to possess the information and to
disclose the information to Securityholder.
4.2 Trade Secrets. Securityholder shall hold in confidence at all
times on and after the date hereof all Trade Secrets, and shall not
disclose, publish or make use at any time on and after the date hereof
of Trade Secrets without the prior written consent of the Company.
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4.3 Confidential Information. During the Confidentiality Period,
Securityholder shall hold in confidence all Confidential Information and
shall not disclose, publish or make use of Confidential Information
without the prior written consent of the Company.
4.4 Noncompetition.
(a) Coverage. Securityholder acknowledges that to protect
adequately the interest of the Company it is essential that any
noncompete covenant with respect thereto cover all Company Activities
and the entire Territory.
(b) Noncompete Covenant. Securityholder hereby agrees that
Securityholder shall not, during the Noncompete Period, in any manner
(other than as an employee of the Company), directly or by assisting
others, engage in, have any equity or profit interest in (except for
an equity interest in a publicly held corporation which does not
exceed one percent (1%) of such corporation's outstanding capital
stock), or render services of any executive, administrative,
supervisory, marketing, production or consulting nature to any
corporation or other entity that conducts the Company Activities in
the Territory.
(c) Customer Nonsolicitation. Securityholder hereby agrees that
Securityholder shall not, during the Noncompete Period, in any manner
(other than as an employee of the Company), directly or by assisting
others, solicit or accept, or attempt to solicit or accept, any
business from any customer of the Company, including actively sought
prospective customers, for purposes of providing products or services
that are competitive with those provided by the Company.
4.5 No-hire Covenant. Securityholder hereby agrees that
Securityholder shall not, during the Noncompete Period, in any manner
(other than as an employee of the Company), directly or by assisting
others, recruit or hire, or attempt to recruit or hire, on the
Securityholder's behalf or on behalf of any other person, firm or
corporation, any employee of the Company.
4.6 Severability, Damages and Tolling. If a judicial or arbitral
determination is made that any of the provisions of this Section 4
constitutes an unreasonable or otherwise unenforceable restriction
against Securityholder, the provisions of this Section 4 shall be
rendered void only to the extent that such judicial or arbitral
determination finds such provisions to be unreasonable or otherwise
unenforceable. In this regard, Securityholder and the Company hereby
agree that any judicial or arbitral authority construing this Agreement
shall be empowered to sever any prohibited business activity, time
period or geographical area from the coverage of this Section 4 and to
apply the provisions of this Section 4 to the remaining business
activities and the remaining time period not so severed by such judicial
or arbitral authority. Moreover, notwithstanding the fact that any
provision of this Section 4 is determined not to be specifically
enforceable, the Company shall nevertheless be entitled to recover
monetary damages as a result of the breach of such provision by
Securityholder. The time period during which the prohibitions set forth
in this Section 4 shall apply shall be tolled and suspended for a period
equal to the aggregate quantity of time during which Securityholder
violates such prohibitions in any respect.
4.7 Injunctive Relief. Securityholder hereby agrees that any
remedy at law for any breach of the provisions contained in Sections
4.2, 4.3, 4.4 or 4.5 hereof shall be inadequate and that the Company
shall be entitled to injunctive relief in addition to any other remedy
the Company might have under this Agreement.
5. Miscellaneous.
5.1 Expenses. Each of the parties hereto shall pay its own
expenses incurred in connection with this Agreement. Each of the parties
hereto warrants and covenants to the others that it will bear all claims
for brokerage fees attributable to action taken by it.
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5.2 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their
respective representatives and permitted successors and assigns.
5.3 Entire Agreement. This Agreement contains the entire
understanding of the parties and supersedes all prior agreements and
understandings between the parties with respect to its subject matter.
This Agreement may be amended only by a written instrument duly executed
by the parties hereto.
5.4 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Time is of the essence with respect to
all provisions of this Agreement.
5.5 Assignment. This Agreement may not be transferred or assigned
by Securityholder but may be assigned by Buyer to any of its affiliates
or to any successor to its business and will be binding upon and inure
to the benefit of any such affiliate or successor.
5.6 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be an original, but both of which
together shall constitute one and the same Agreement.
5.7 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given if so given) by delivery,
telegram or telecopy, or by mail (registered or certified mail, postage
prepaid, return receipt requested) or by any national courier service,
provided that any notice delivered as herein provided shall also be
delivered by telecopy at the time of such delivery. All communications
hereunder shall be delivered to the respective parties at the following
addresses (or at such other address for a party as shall be specified by
like notice, provided that notices of a change of address shall be
effective only upon receipt thereof):
(a) If to Parent or Buyer:
General Electric Company
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: C. Xxxxxxx Xxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
(b) If to Securityholder:
Telecopy:
with a copy to:
Xxxxx & Xxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
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5.8 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
Delaware, without regard to its principles of conflicts of laws.
5.9 Enforceability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity
or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
5.10 Further Assurances. From time to time at or after the date
Buyer purchases shares of Company Common Stock pursuant to the Initial
Offer, at Buyer's request and without further consideration,
Securityholder shall execute and deliver to Buyer such documents and
take such action as Buyer may reasonably request in order to consummate
more effectively the transactions contemplated hereby and to vest in
Buyer good, valid and marketable title to the Securities, including, but
not limited to, using its best efforts to cause the appropriate transfer
agent or registrar to transfer of record the Securities.
IN WITNESS WHEREOF, Buyer, Parent, Securityholder and the Stockholders'
Agents have caused this Agreement to be duly executed as of the day and year
first above written.
EMMY ACQUISITION CORP.
By:
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Name
Title
GE ENERGY SERVICES, INC.
By:
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Name
Title
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Securityholder
STOCKHOLDERS' AGENT, for
purposes of Section 3.5 only
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G. Xxxxxxxx Xxxxxxxx
STOCKHOLDERS' AGENT, for
purposes of Section 3.5 only
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Xxxx X. Xxxxxxx
