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EXHIBIT 10.1
NATIONSBANC XXXXXXXXXX SECURITIES LLC
NATIONSBANK CORPORATE CENTER
000 XXXXX XXXXX XXXXXX
XXXXXXXXX, XXXXX XXXXXXXX 00000
May 29, 1998
CMI Industries, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxx Xxxxxxx
Ladies and Gentlemen:
This letter agreement (the "Agreement") will confirm the understanding
between CMI Industries, Inc. (the "Company") and NationsBanc Xxxxxxxxxx
Securities LLC ("NMS") pursuant to which the Company has retained NMS to act as
the exclusive dealer manager (the "Dealer Manager"), on the terms and subject to
the conditions set forth herein, in connection with the proposed tender offer
and consent solicitation ("Tender Offer") for any and all of its outstanding
9-1/2% Senior Subordinated Notes due 2003 (the "Notes") issued pursuant to the
Indenture dated as of October 28, 1993, by and between the Company and The Chase
Manhattan Bank (as successor to Chemical Bank), as trustee (the "Trustee"),
governing the Notes (the "Indenture"). The holders of Notes are hereinafter
referred to as the "Holders."
1. Engagement. Subject to the terms and conditions set forth
herein:
(a) The Company hereby exclusively retains the Dealer Manager,
and, subject to Section 4 hereof, NMS agrees to act, as the dealer manager and
consent solicitation agent to the Company in connection with the Tender Offer
until the date on which the Tender Offer expires or is earlier terminated in
accordance with its terms. The Dealer Manager will advise the Company with
respect to the terms and timing of the Tender Offer and assist the Company in
preparing any documents to be delivered by the Company to the Holders or used in
connection with the Tender Offer (the "Tender Documents"). The Company
authorizes the Dealer Manager, in accordance with its customary practices and
consistent with industry practice, to communicate generally regarding the Tender
Offer with the Holders and their authorized agents. The date or dates on which
the Tender Documents are first mailed or otherwise distributed to Holders is
hereinafter referred to as the "Commencement Date."
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(b) The Company acknowledges that the Dealer Manager has been
retained solely to provide the services set forth in this Agreement. In
rendering such services, the Dealer Manager shall act as an independent
contractor, and any duties of the Dealer Manager arising out of its engagement
hereunder shall be owed solely to the Company. The Company also acknowledges
that (a) NMS shall not be deemed to act as an agent of the Company or any of its
affiliates (except that in any jurisdiction in which the Tender Offer is
required to be made by a licensed broker or dealer, it shall be deemed made by
NMS on behalf of the Company), and neither the Company nor any of its affiliates
shall be deemed to act as the agent of NMS and (b) no securities broker, dealer,
bank or trust company shall be deemed to act as the agent of NMS or as the agent
of the Company or any of its affiliates, and NMS shall not be deemed to act as
the agent of any securities broker, dealer, bank or trust company. NMS shall not
have any liability in tort, contract or otherwise to the Company or to any of
the Company's affiliates for any act or omission on the part of any securities
broker or dealer or any bank or trust company or any other person.
(c) The Company acknowledges that the Dealer Manager is a
securities firm that is engaged in securities trading and brokerage activities,
as well as providing investment banking and financial advisory services. In the
ordinary course of trading and brokerage activities, the Dealer Manager and its
affiliates may at any time hold long or short positions, and may trade or
otherwise effect transactions, for their own account or the accounts of
customers, in debt or equity securities of the Company or other entities that
may be involved in the transactions contemplated hereby.
(d) As Dealer Manager, NMS agrees, in accordance with its
customary practice and consistent with industry practice, to perform those
services in connection with the Tender Offer as are customarily performed by
investment banks in connection with tender offers and consent solicitations of a
like nature.
(e) The Company shall arrange for an appropriate institution
to act as information agent (the "Information Agent") in connection with the
Tender Offer and, as such to advise NMS at least daily as to such matters
relating to the Tender Offer as NMS may reasonably request. The Company shall
arrange for an appropriate institution to act as depositary (the "Depositary")
in connection with the Tender Offer and, as such, to advise NMS at least daily
as to such matters relating thereto as NMS may reasonably request. In addition,
the Company hereby authorizes the Dealer Manager to communicate with the
Depository and the Information Agent with respect to matters relating to the
Tender Offer.
(f) The Company shall furnish the Dealer Manager, or cause the
Trustee or registrar for the Notes to furnish the Dealer Manager, as soon as
practicable, with cards or lists or copies thereof showing the names of persons
who were the Holders of record of Notes as of the date or dates specified by the
Dealer Manager and, to the extent available to the Company, the beneficial
Holders of the Notes as of such date or dates, together with their addresses and
the principal amount of Notes held by them. Additionally, the Company shall
update such information from time to time during the term of this Agreement as
reasonably requested by the
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Dealer Manager and to the extent such information is reasonably available to the
Company within the time constraints specified.
(g) The Company agrees to advise the Dealer Manager promptly
of the occurrence of any event, of which it becomes aware, which could cause or
require the Company to withdraw, rescind or modify the Tender Documents. In
addition, if any event occurs as a result of which it shall be necessary to
amend or supplement any Tender Documents in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading in any material respect, the Company shall, promptly upon becoming
aware of any such event, advise NMS of such event and, as promptly as
practicable under the circumstances, prepare and furnish copies of such
amendments or supplements of any such Tender Documents to NMS, so that the
statements in such Tender Documents, as so amended or supplemented, will not, in
light of the circumstances under which they were made, be misleading in any
material respect.
(h) The Company will not use or publish any material in
connection with the Tender Documents, or refer to the Dealer Manager in any such
material, without the prior approval of the Dealer Manager. The Company, upon
receiving such approval, will promptly furnish the Dealer Manager with as many
copies of such approved materials as the Dealer Manager may reasonably request.
The Company will promptly inform the Dealer Manager of any litigation or
administrative proceeding which is initiated or (to the best of its knowledge)
threatened with respect to the Tender Offer.
(i) The Company agrees in accordance with and subject to the
terms and conditions of the Tender Documents, to pay promptly the applicable
purchase price for the Notes to the Holders entitled thereto.
2. Compensation and Certain Expenses. (a) In consideration of
services provided hereunder as Dealer Manager, the Company shall pay the Dealer
Manager a cash fee equal to $2.50 per $1,000 of the principal amount of Notes
purchased by the Company in the Tender Offer. Such fee shall be payable at the
time the Company first purchases Notes pursuant to the Tender Offer. Once any
such fees are paid, they shall not be refundable for any reason.
(b) Whether or not any Notes are tendered pursuant to the
Tender Offer, the Company shall pay all expenses of the preparation, printing,
mailing and publishing of the Tender Documents, and all amounts payable to
securities dealers (including the Dealer Manager), commercial banks, trust
companies and nominees as reimbursement of their customary mailing and handling
expenses incurred in forwarding the Tender Documents to their customers, and of
any forwarding agent, all advertising charges and all other expenses in
connection with the Tender Offer but the Dealer Manager shall be responsible for
all expenses incurred by the Dealer Manager in connection with its services as
Dealer Manager under this Agreement, including its out-of-pocket expenses.
3. Termination. Subject to Section 8 hereof, this Agreement may
be terminated by the Company or by the Dealer Manager at any time upon at least
10 days' prior written notice thereof to the other party. Upon any termination
by the Company of NMS's engagement as
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Dealer Manager hereunder, NMS shall continue to be entitled to receive payment
of the fees otherwise payable to NMS under Section 2(a), provided the Company
before March 31, 1999 purchases Notes or consents are accepted, except to the
extent that it shall be finally judicially determined that NMS (i) was grossly
negligent or engaged in willful misconduct in the performance of its duties
under this Agreement or (ii) failed to cure any material breach of any
obligations of the Dealer Manager under this Agreement.
4. Representations and Warranties by the Company. The Company
represents and warrants to the Dealer Manager, on the date hereof, on each date
that any Tender Documents are published, sent, given or otherwise distributed
and on the date of purchase of Notes by the Company pursuant to the Tender Offer
(the "Consummation Date") that:
(a) The Company (i) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, (ii) has all necessary corporate power and authority to execute and
deliver this Agreement, and to perform all its obligations hereunder and to
consummate the Tender Offer in accordance with its terms and (iii) shall take on
a timely basis all material actions necessary or legally required in relation to
the Tender Offer.
(b) Prior to the Consummation Date, the Company will take all
necessary corporate action to authorize the making or consummation of the Tender
Offer and the performance by the Company of this Agreement; and this Agreement
has been duly executed and delivered by the Company and constitutes a valid and
legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to our affecting
creditors' rights generally, by general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good faith and
fair dealing on the part of NMS.
(c) The Tender Documents (including the documents incorporated
or deemed to be incorporated by reference into the Tender Documents) comply and
(as amended or supplemented, if amended or supplemented) will comply in all
material respects with all applicable requirements of the federal securities
laws; and the Tender Documents (including the documents incorporated or deemed
to be incorporated by reference into the Tender Documents) do not and (as
amended or supplemented, if amended or supplemented) will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The making and consummation of the Tender Offer and the
execution, delivery and performance by the Company of this Agreement do not and
will not conflict with, or result in a breach or violation of, or constitute a
default under, except with respect to indebtedness to be satisfied on or before
the Consummation Date, any of the provisions of the Indenture or of the charter
documents or by-laws of the Company, or any other note, indenture, loan
agreement, mortgage or other agreement, instrument or undertaking to which the
Company
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or any of its subsidiaries is a party or by which it or any of them is bound or
to which any of its or their properties or assets is subject, the breach or
violation of which could reasonably be expected to have a material adverse
effect upon the business, financial condition or prospects of the Company and
its subsidiaries, taken as a whole, nor will such actions result in any
violation of any law, rule or regulation, or any order of any court or of any
other governmental agency or instrumentality having jurisdiction over the
Company or any of its subsidiaries or any of its or their respective properties
or assets.
(e) No consent, approval, authorization or order of, or
registration, qualification or filing with, any court or regulatory authority or
other governmental agency or instrumentality is or will be required in
connection with the making or consummation of the Tender Offer and the
execution, delivery and performance by the Company of this Agreement which have
not been obtained.
(f) The Company shall advise the Dealer Manager promptly of
(i) the occurrence of any event that could cause the Company to withdraw,
rescind or terminate the Tender Offer or would permit the Company to exercise
any right not to purchase Notes tendered under the Tender Offer, (ii) the
occurrence of any event or the discovery by it of any fact, the occurrence or
existence of which it believes would require the making of any change in the
Tender Documents then being used or would cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect,
(iii) any proposal or requirement to make, amend or supplement any Tender
Document or any filing in connection with the Tender Offer pursuant to the
Exchange Act or any applicable law, rule or regulation, (iv) its awareness of
the issuance by any regulatory authority of any comment or order or the taking
of any other action concerning the Tender Offer (and, if in writing, will
furnish the Dealer Manager with a copy thereof), (v) its awareness of any
material developments in connection with the Tender Offer or the financing
thereof, including, without limitation, the commencement of any lawsuit
concerning the Tender Offer, and (vi) any other information relating to the
Tender Offer, the Tender Documents or this Agreement which the Dealer Manager
may from time to time reasonably request.
(g) There is no action, suit or proceeding before or by any
court or governmental agency or body now pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its subsidiaries
which would adversely affect the consummation of the Tender Offer or the
effectiveness of this Agreement.
(h) Neither the Company nor any of its subsidiaries is an
"investment company" or a company "controlled" by an investment company within
the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder.
The representations and warranties set forth in this Section 4 shall
remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Indemnified Party (as defined in Annex
A attached hereto), (ii) any termination of this Agreement or (iii) any
withdrawal by NMS pursuant to Section 3 hereof or otherwise.
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5. Conditions and Obligations. The obligation of NMS to act as a
Dealer Manager hereunder shall at all times be subject, in its discretion, to
the conditions that:
(a) All representations and warranties of the Company
contained herein or in any certificate or writing delivered hereunder at all
times during the Tender Offer shall be true and correct in all material
respects.
(b) The Company at all times during the Tender Offer shall
have performed all of its obligations hereunder required as of such time to have
been performed by it.
(c) Xxxxxxxxxx, Xxxxxx & Xxxxxxx, counsel for the Company,
shall have furnished to the Dealer Manager, an opinion on the Consummation Date,
dated such date, subject to customary qualifications and exceptions, to the
following effect:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware;
(ii) The Company has duly taken all necessary
corporate action to authorize the making and consummation of
the Tender Offer and the execution, delivery and performance
by the Company of this Agreement; and this Agreement has been
duly executed and delivered by the Company;
(iii) Assuming the due authorization, execution and
delivery of this Agreement by NMS, this Agreement constitutes
a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except to the extent that such enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
our affecting creditors' rights generally, by general
equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and
fair dealing on the part of NMS.
(iv) The making and consummation of the Tender Offer
and the execution, delivery and performance by the Company of
this Agreement do not and will not conflict with, or result in
a breach or violation of, or constitute a default under, any
of the provisions of the Indenture or of the charter documents
or by-laws of the Company or of any note, indenture, loan
agreement, mortgage or other agreement, instrument or
undertaking to which the Company is a party or by which it is
bound or any of its subsidiaries is a party or by which any of
them is bound or to which any of its or their properties or
assets is subject, each of which has been identified by the
Company as material on a schedule to such opinion and provided
to such counsel for the Company, nor will such action result
in a violation of any Delaware or federal law, rule or
regulation or any order known to such
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counsel of any court or of any other governmental agency or
instrumentality having jurisdiction over the Company or any of
its subsidiaries or any of its or their respective properties
or assets;
(v) No consent, approval, authorization, order of,
or registration, qualification or filing with, any Delaware or
federal court or regulatory authority or other governmental
agency or instrumentality is or will be required in connection
with the making and consummation of the Tender Offer and the
execution, delivery and performance by the Company of this
Agreement which have not been obtained; and
(vi) Such counsel has participated in conferences
with officers and other representatives of the Company,
representatives of the independent public accountants for the
Company, and the Dealer Manager's representatives, at which
the Tender Offer and the contents of the Tender Documents and
related matters were discussed and, although such counsel is
not passing upon, and does not assume any responsibility for,
the accuracy, completeness or fairness of the statements
contained in the Tender Documents and have not made any
independent check or verification thereof, during the course
of such participation, no facts came to such counsel's
attention that caused such counsel to believe that the Tender
Documents, as of their date, contained an untrue statement of
a material fact or omitted to state a material fact necessary
to make the statements therein, in light of the circumstances
under which they were made, not misleading, it being
understood that such counsel need not express a belief with
respect to the financial statements or other financial data
included in the Tender Documents.
6. Indemnification. In consideration of the engagement hereunder,
the Company on the one hand, and the Dealer Manager, on the other hand, shall
indemnify each other and hold each other harmless, and each Indemnified Person
(as defined in Annex A hereto) to the extent set forth in Annex A hereto, which
provisions are incorporated by reference herein and constitute a part hereof.
7. Confidentiality. (a) The Dealer Manager and its affiliates
shall use all information provided to it by or on behalf of the Company
hereunder solely for the purpose of providing the services which are the subject
of this Agreement and shall treat confidentially all such information, provided
that nothing herein shall prevent the Dealer Manager from disclosing any such
information (i) pursuant to the order of any court or administrative proceeding,
(ii) upon the request or demand of any regulatory authority having jurisdiction
over the Dealer Manager or any of its affiliates, (iii) to the extent that such
information becomes publicly available other than by reason of disclosure by the
Dealer Manager, (iv) to its employees, legal counsel, independent auditors and
other experts or agents who need to know such information and are informed of
the confidential nature of such information or (v) to any of its affiliates as
set forth in Section 11(c) hereof. With respect to clause (i) above, prior to
making any such disclosure, the Dealer
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Manager shall notify the Company of such order or request and use its best
efforts to cooperate with the Company in seeking a protective order or taking
such action as the Company may reasonably request, consistent with applicable
law.
(b) The Company agrees that it will not disclose this Agreement,
the contents hereof or the activities of the Dealer Manager pursuant hereto to
any person without the prior approval of the Dealer Manager, except that the
Company may disclose this Agreement and the contents hereof (i) to its officers,
employees, attorneys and advisors on a confidential and need-to-know basis and
(ii) as required by applicable law or compulsory legal process or in the
prosecution of any proceeding initiated by the Company.
8. Survival. The agreements contained in Sections 2, 6 and 7 and the
representations and warranties of the Company set forth in Section 4 hereof
shall survive any termination or cancellation of this Agreement, any completion
of the engagement provided by this Agreement or any investigation made by or on
behalf the Dealer Manager and any Indemnified Person and shall survive the
termination of the Tender Offer.
9. Governing Law and Submission to Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, without giving effect to the conflicts of laws principles thereof. THE
COMPANY AND THE DEALER MANAGER IRREVOCABLY AGREE TO WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY
RELATED TO OR ARISING OUT OF THIS AGREEMENT OR THE PERFORMANCE OF SERVICES
HEREUNDER.
The Company and the Dealer Manager irrevocably and unconditionally
submit to the non-exclusive jurisdiction of any state or federal court sitting
in the City of New York over any suit, action or proceeding arising out of or
relating to this Agreement. Service of any process, summons, notice or document
by registered mail addressed to the Company shall be effective service of
process against the Company for any suit, action or proceeding brought in any
such court. The Company and the Dealer Manager irrevocably and unconditionally
waive any objection to the laying of venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum. A final judgment in any
such suit, action or proceeding brought in any such court may be enforced in any
other courts to whose jurisdiction the Company or the Dealer Manager is or may
be subject, by suit upon judgment.
10. Notices. Except as otherwise expressly provided in this Agreement,
whenever notice is required by the provisions of this Agreement to be given (i)
to the Company, such notice shall be in writing addressed to CMI Industries,
Inc., 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, facsimile number:
(000) 000-0000, Attention: Xxx Xxxxxxx and (ii) to NMS, such notice shall be in
writing addressed to NationsBanc Xxxxxxxxxx Securities LLC, NationsBank
Corporate Center, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
facsimile number: (000) 000-0000, Attention: Xxxxxx Xxxx.
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11. Miscellaneous. (a) This Agreement contains the entire agreement
between the parties relating to the subject matter hereof and supersedes all
oral statements and prior writings with respect thereto. This Agreement may not
be amended or modified except by a writing executed by each of the parties
hereto. Section headings herein are for convenience only and are not a part of
this Agreement.
(b) This Agreement, including any right to indemnification or
contribution hereunder, is solely for the benefit of the Company and the Dealer
Manager, and no other person (except for Indemnified Persons, to the extent set
forth in Annex A hereto) shall acquire or have any rights under or by virtue of
this Agreement.
(c) The Dealer Manager may (subject to Section 7(a) hereof)
share any information or matters relating to the Company, the Tender Offer and
the transactions contemplated hereby with its affiliates, and such affiliates
may likewise share information relating to the Company with the Dealer Manager.
All such information shall be subject to the confidentiality provisions of
Section 7(a) hereof and the Dealer Manager shall be responsible for compliance
by its affiliates with Section 7(a) hereof.
(d) If any term, provision, covenant or restriction contained
in this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable or against public policy, the remainder of the terms,
provisions, covenants and restrictions contained herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. The
Company and the Dealer Manager shall endeavor via good faith negotiations to
replace the invalid, void or unenforceable provisions with valid provisions, the
economic effect of which comes as close as possible to that of the invalid, void
or unenforceable provisions.
(e) This Agreement may be executed in counterparts each of
which will be deemed an original, but all of which, taken together, will
constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance of the terms hereof by signing in the appropriate space
below and returning to the Dealer Manager the enclosed duplicate originals
hereof, whereupon this letter shall become a binding agreement between us.
Very truly yours,
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
By:
----------------------------------
Name:
Title:
Accepted and agreed to as of
the date first written above:
CMI INDUSTRIES, INC.
By:
--------------------------
Name:
Title:
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ANNEX A
The Company hereby agrees to indemnify and hold harmless the Dealer
Manager and its affiliates and officers, directors, employees, agents and
controlling persons (each a "Dealer Manager Indemnified Person") from and
against any and all losses, claims, damages, liabilities and reasonable
expenses, joint or several, to which any such Dealer Manager Indemnified Person
may become subject arising out of or based upon (A) any untrue statement or
alleged untrue statement of a material fact contained in the Tender Documents or
any of the documents incorporated by reference therein or in any amendment or
supplement to any of the foregoing, or the omission or alleged omission to state
therein a material fact necessary in order to make the statement therein, in the
light of the circumstances under which they were made, not misleading, (B) any
breach by the Company of any representation or warranty or failure to comply
with any of the agreements set forth in the Agreement to which this Annex A is
attached, (C) any withdrawal, termination, rescission or modification of, or
failure to purchase Notes properly tendered pursuant to, the Tender Offer or (D)
the transactions contemplated by the Agreement to which this Annex A is attached
or the performance by the Dealer Manager thereunder, or any claim, litigation,
investigation or proceedings relating to the foregoing ("Dealer Manager
Proceedings") regardless of whether any of such Dealer Manager Indemnified
Persons is a party thereto, and to reimburse such Dealer Manager Indemnified
Persons for any reasonable legal or other reasonable out-of-pocket expenses as
they are incurred in connection with investigating or defending any of the
foregoing, provided that the indemnification contemplated by clause (C) or (D)
above will not, as to any Dealer Manager Indemnified Person, apply to losses,
claims, damages, liabilities or expenses to the extent that they are finally
judicially determined to have resulted from (i) the gross negligence or willful
misconduct of any Dealer Manager Indemnified Person or (ii) the failure of the
Dealer Manager to cure any material breach of any obligations of the Dealer
Manager under this Agreement within a reasonable amount of time after receipt by
the Dealer Manager of written notice from the Company of such breach (which
notice shall specify that it is a notice of breach for purposes of this
Agreement). The Company shall not be liable for any settlement of any lawsuit,
claim or proceeding effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with such consent, the Company and
its subsidiaries jointly and severally agree, subject to the provisions of this
Annex A, to indemnify the Dealer Manager Indemnified Person from and against any
loss, damage or liability by reason of such settlement.
The Dealer Manager shall indemnify and hold harmless the Company and
its affiliates and officers, directors, employees, agents and controlling
persons (each a "Company Indemnified Person") from and against any and all
losses, claims, damages, liabilities and reasonable expenses, joint or several,
to which any such Company Indemnified Person may become subject arising out of
or based upon the transactions contemplated by the Agreement to which this Annex
A is attached or the performance by the Company thereunder, or any claim,
litigation, investigation or proceedings relating to the foregoing ("Company
Proceedings") regardless of whether any of such Company Indemnified Persons is a
party thereto, and to reimburse such Company Indemnified Persons for any
reasonable legal or other reasonable out-of-pocket expenses as they are incurred
in connection with investigating or defending any of the foregoing,
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but only to the extent such losses, claims, damages, liabilities or expenses are
finally judicially determined to have resulted from (i) the gross negligence or
willful misconduct of the Dealer Manager Indemnified Person or (ii) the failure
of the Dealer Manager to cure any material breach of any obligations of the
Dealer Manager under this Agreement within a reasonable amount of time after
receipt by the Dealer Manager of written notice from the Company of such breach
(which notice shall specify that it is a notice of breach for purposes of this
Agreement). The Dealer Manager shall not be liable for any settlement of any
lawsuit, claim or proceeding effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with such consent, the
Dealer Manager agrees, subject to the provisions of this Annex A, to indemnify
the Company Indemnified Person from and against any loss, damage or liability by
reason of such settlement. The terms "Dealer Manager Indemnified Person" and
"Company Indemnified Person" are herein collectively referred to as an
"Indemnified Person" and the terms "Dealer Manager Proceedings" and "Company
Proceedings" are herein collectively referred to as "Proceedings."
Promptly after receipt by an Indemnified Person of notice of the
commencement of any Proceedings, such Indemnified Person will, if a claim in
respect thereof is to be made against the Company or the Dealer Manager, as the
case may be, as indemnifying party (the "Indemnifying Party") for
indemnification hereunder, notify such Indemnifying Party in writing of the
commencement thereof; provided that (i) the omission so to notify the such
Indemnifying Party will not relieve it from any liability which it may have
hereunder except to the extent it has been materially prejudiced by such failure
and (ii) the omission so to notify such Indemnifying Party will not relieve it
from any liability which it may have to such Indemnified Person otherwise than
on account of this indemnity agreement. In case any such Proceedings are brought
against any Indemnified Person and it notifies the applicable Indemnifying Party
of the commencement thereof, such Indemnifying Party will be entitled to
participate therein, and, to the extent that it may elect by written notice
delivered to such Indemnified Person, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Person, provided that if the
defendants in any such Proceeding include both such Indemnified Person and the
Indemnifying Party and such Indemnified Person shall have concluded that there
may be legal defenses available to it which are different from or additional to
those available to the Indemnifying Party, such Indemnified Person shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such Proceedings on behalf of such
Indemnified Person. Upon receipt of notice from the Indemnifying Party to such
Indemnified Person of its election so to assume the defense of such Proceedings
and approval by such Indemnified Person of counsel, the Indemnifying Party shall
not be liable to such Indemnified Person for expenses incurred by such
Indemnified Person in connection with the defense thereof (other than reasonable
costs of investigation) unless (i) such Indemnified Person shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the Indemnifying Party shall not be liable for the expenses of
more than one separate counsel, approved by the Dealer Manager, representing the
Indemnified Persons who are parties to such Proceedings), (ii) the Indemnifying
Party shall not have employed counsel reasonably satisfactory to such
Indemnified Person to represent such Indemnified Person within a reasonable time
after notice of commencement of the Proceedings or (iii) the Indemnifying Party
shall have authorized in
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writing the employment of counsel for such Indemnified Person; and except that,
if clause (i) or (iii) is applicable, such liability shall be only in respect of
the counsel referred to in such clause (i) or (iii). The Indemnifying Party
shall not effect, without the prior written consent of the Indemnified Person,
any settlement of any pending or threatened proceeding unless such settlement
includes an unconditional release from the party bringing such proceeding of
such Indemnified Person and does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
If for any reason the foregoing indemnification is unavailable to any
Indemnified Person or insufficient to hold it harmless, then the applicable
Indemnifying Party shall contribute to the amount paid or payable to such
Indemnified Person as a result of such loss, claim, damage, liability or expense
in such proportion as is appropriate to reflect not only the relative benefits
received by the Indemnifying Party on the one hand and such Indemnified Person
on the other hand but also the relative fault of the Indemnifying Party on the
one hand, and such Indemnified Person, on the other hand, as well as any
relevant equitable considerations. It is hereby agreed that the relevant
benefits to the Company (including its affiliates, officers, directors,
employees, agents and controlling persons) on the one hand and the Dealer
Manager (including its affiliates, officers, directors, employees, agents and
controlling persons) on the other hand shall be deemed to be in the same
proportion as (i) the aggregate original principal amount of the Notes
outstanding bears to (ii) the fee paid or proposed to be paid to the Dealer
Manager pursuant to Section 2(a) of the Agreement to which this Annex A is
attached. The relative fault of the Indemnifying Party on the one hand and the
Indemnified Person on the other relating to an untrue or alleged untrue
statement of material fact or the omission or alleged omission to state a
material fact shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by, or
relating to, the Indemnifying Party and its affiliates or the Indemnified Person
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The indemnity, reimbursement and contribution obligations of an
Indemnifying Party under this Annex A shall be in addition to any liability
which such Indemnifying Party may otherwise have to an Indemnified Party and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of such Indemnifying Party and any such Indemnified
Person. Notwithstanding the foregoing, in no event shall the Dealer Manager be
liable under the foregoing indemnity, reimbursement and contribution provisions
in an amount in excess of the fees actually received by the Dealer Manager in
connection with the Agreement to which this Annex A is attached.
Capitalized terms used but not defined in this Annex A have the
meanings assigned to such terms in the Agreement to which this Annex A is
attached.
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