INDEMNIFICATION AGREEMENT
THIS AGREEMENT is effective as of the 8th day of June, 2001, by and among
AmeriNet Xxxxx.xxx, Inc., a Delaware corporation ("AmeriNet") and Xxxxxxxxxx
Capital Corp. ("Xxxxxxxxxx").
RECITALS:
WHEREAS, on May 31, 2001, AmeriNet entered into a reorganization agreement
("Reorganization Agreement") with the Park City Group Participants, as such
participants are defined in the Reorganization Agreement ("Park City Group
Participants"), pursuant to which AmeriNet will acquire at least ninety-eighty
percent of the outstanding stock of Park City Group, Inc., a Delaware
corporation, in exchange for shares of AmeriNet's common stock; and
WHEREAS, as an inducement to the Park City Group Participants entering into
the Reorganization Agreement and as a condition to the closing (the "Closing")
of the Reorganization Agreement, Xxxxxxxxxx has agreed to indemnify AmeriNet for
certain expenses as defined in this Agreement.
AGREEMENT:
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Indemnification. Xxxxxxxxxx shall indemnify and defend AmeriNet and its
subsidiaries and affiliates, and their respective officers, directors,
shareholders, successors and assigns (collectively, the "AmeriNet
Parties"), from and against any and all costs, expenses, losses, damages,
fines, penalties, or liabilities (including, without limitation, interest
which may be imposed in connection therewith, court costs, litigation
expenses, and reasonable attorneys' and accounting fees) (collectively,
"Expenses") incurred by the AmeriNet Parties, directly or indirectly, with
respect to, in connection with, arising from, or alleged to result from any
of the following that exist as of the date of Closing (collectively, the
"Proceedings"):
A. Any claims by Xxxxx Xxxxxxx for cash or stock;
B. Any unpaid claims by Liberty Transfer Co. for services as transfer
agent;
C. Any unpaid tax obligations;
D. Any unpaid AmeriNet payroll or employee benefits obligations; or
E. Any other AmeriNet liens and/or judgments.
2. Procedure for Indemnification.
A. AmeriNet shall promptly give notice hereunder to Xxxxxxxxxx after
obtaining written notice of any Proceeding as to which recovery may be
sought because of the indemnity in Section 1. Notwithstanding the
foregoing, the right to indemnification hereunder shall not be
affected by any failure of AmeriNet to give such notice, or delay by
AmeriNet in giving such notice, unless, and then only to the extent
that, the rights and remedies of Xxxxxxxxxx shall have been prejudiced
as a result of the failure to give, or delay in giving, such notice.
B. If AmeriNet shall assume the defense of any such Proceeding after
giving notice to Xxxxxxxxxx, AmeriNet may defend against such
Proceeding in such manner as it deems appropriate and may settle such
Proceeding on such terms as it may deem appropriate and Xxxxxxxxxx
shall promptly reimburse AmeriNet for the amount of such settlement
and for all Expenses incurred by AmeriNet in connection with such
Proceeding. Xxxxxxxxxx agrees to cooperate with AmeriNet in all
reasonable respects with respect to a Proceeding.
C. If Xxxxxxxxxx assumes the defense of the Proceeding, the obligations
of Xxxxxxxxxx hereunder as to such Proceeding shall include taking all
steps necessary in the defense or settlement of such Proceeding and
holding AmeriNet harmless from and against any and all damages caused
by or arising out of any settlement approved by Xxxxxxxxxx or any
judgment in connection with such Proceeding. Xxxxxxxxxx shall not, in
the defense of such Proceeding, consent to entry of any judgment
(other than a judgment of dismissal on the merits without costs), or
enter into any settlement (except with AmeriNet's written consent)
which does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to AmeriNet a release from all liability
in respect of such Proceeding. Anything in this Section 2 to the
contrary notwithstanding, AmeriNet may, with counsel of its choice,
assume the defense of any such Proceeding.
X. Xxxxxxxxxx shall promptly reimburse AmeriNet for the amount of any
judgment rendered with respect to any Proceeding for all Expenses
incurred by AmeriNet in connection with such Proceeding, whether or
not resulting from, arising out of, or incurred with respect to, the
act of a third party.
3. Arbitration. Any dispute, controversy or claim, whether contractual or
non-contractual, between the parties arising directly or indirectly out of
or connected with the indemnification obligations set forth under this
Agreement, unless mutually settled by the parties, shall be resolved in
accordance with the dispute resolution procedures set forth in Section 9.12
of the Reorganization Agreement, incorporated herein by this reference.
4. Additional Remedy. If for any reason Xxxxxxxxxx fails to provide the
indemnification required by this Agreement, and AmeriNet incurs Expenses
related to (1) any Proceeding, (2) improperly issued AmeriNet securities,
(3) improper compliance by AmeriNet with the Investment Company Act, or (4)
AmeriNet liabilities or obligations existing as of the date of Closing, the
Park City Group Participants will be entitled to additional AmeriNet common
stock equal in value to 78% of the amount of the Expenses (the AmeriNet
stock will be valued at $.17 per share). The remedy provided in this
section will be in addition to any other remedies provided by law.
5. Notices. All notices, consents, and other communications hereunder shall be
in writing and deemed to have been duly given when (a) delivered by hand,
(b) sent by telecopier (with receipt confirmed), provided that a copy is
mailed by registered mail, postage pre-paid return receipt requested, or
(c) when received by the addressee, if sent by Express Mail, Federal
Express, or other express delivery service (postage pre-paid return receipt
requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers
as a party may designate as to itself by notice to the other):
If to AmeriNet: AmeriNet Xxxxx.xxx, Inc.
000 Xxxx Xxxxxx,
X.X. Xxx 0000
Xxxx Xxxx, Xxxx 00000
Phone: (000) 000-0000
FAX: (000) 000-0000
Attn: Chief Executive Officer
With a copy to: Xxxxx & Xxxxxx L.L.P.
Gateway Tower West
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Phone: (000) 000-0000
FAX: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esq.
If to Xxxxxxxxxx Parties Xxxxxxxxxx Capital Corp.
Crystal Corporate Center
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
6. Miscellaneous. None of the rights of any party under this Agreement may be
transferred or assigned without the prior written consent of the other
parties hereto. The captions which precede the articles and the sections of
this Agreement are for convenience only and shall in no way affect the
manner in which any provision hereof is construed. Whether the context or
circumstance requires, the singular shall include the plural and the plural
shall include the singular and the whole shall include any part thereof and
any gender shall include both genders. Each right or remedy required by the
provisions of this Agreement shall be in addition to and not in
substitution of, any rights or remedies available or now existing or
hereafter arising under applicable law. Any rights or remedies provided for
by this Agreement or afforded by law or equity are distinct and cumulative
and may be exercised concurrently or independently or successively. This
Agreement supersedes all prior agreements, negotiations or understandings
between the parties hereto in any way related to the specific subject
matter of this Agreement. None of the provisions of this Agreement may be
altered or modified except through an instrument in writing signed by all
of the parties hereto. All of the terms, provisions, agreements and
undertakings herein contained shall be binding upon and shall inure to the
benefit of the respective heirs, personal representatives, successors and
assigns of the parties hereto. This Agreement shall be governed by,
construed in accordance with the laws of the State of Delaware. The
provisions of this Agreement are severable and should any provision hereof
be void, voidable or unenforceable under any applicable law, such provision
shall not affect or invalidate any other provision of this Agreement, which
shall continue to govern the relative rights and duties of the parties as
though the void, voidable or unenforceable provision were not a part
hereof. It is the intention and agreement of the parties that all of the
terms and conditions hereof shall be enforced to the fullest extent
permitted by law. All warranties, representation, indemnities, covenants
and other agreements of the parties hereto shall survive the execution and
delivery of this Agreement and shall, notwithstanding the execution and
delivery of this Agreement, continue in full force and effect. This
Agreement may be executed in any number of counterparts, each of which
shall be deemed an original.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the date first written above by their respective officers thereunder duly
authorized.
AmeriNet Xxxxx.xxx, Inc.,
a Delaware corporation
By: /s/ Xx Xxxxxxx
Its: President
Xxxxxxxxxx Capital Corp.
By: /s/ Xxxxxxx Xxxxxx
Its: President
