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Exhibit 2.5
INDEMNITY AGREEMENT
This INDEMNITY AGREEMENT (this "Agreement") is made as of September 1,
1998 by and among Photobition Group PLC, a company organized under the laws of
England ("Photobition"), KDT Acquisition Corp., a Delaware corporation ("KDT"),
and Xxxx Xxxx (the "Principal Stockholder").
WHEREAS, Photobition and KDT have entered into an Agreement and Plan of
Merger, dated the date hereof (the "Merger Agreement"), with Xxxx Digital
Technologies, Inc., a Delaware corporation (the "Company"), pursuant to which
KDT will merge with and into the Company (the "Merger");
WHEREAS, the Principal Stockholder is the beneficial owner of 2,376,710
shares of common stock, par value $0.001 per share, of the Company ("Company
Common Stock"), and representing approximately 48% of the outstanding shares of
Company Common Stock;
WHEREAS, as a condition and inducement to Photobition's and KDT's
willingness to enter into the Merger Agreement, the Principal Stockholder has
agreed to enter into this Agreement, which provides for the Principal
Stockholder to indemnify the Indemnified Parties for certain Damages (each as
defined below) on the terms and subject to the limitations set forth in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the parties hereby agree as follows:
ARTICLE I.
I.1 Indemnification. (a) The Principal Stockholder hereby agrees to
indemnify, defend and hold harmless Photobition and KDT (and their respective
directors, officers, affiliates, successors and assigns) (each, an "Indemnified
Party") from and against any losses, liabilities, damages, costs or expenses,
including, without limitation, interest, penalties and reasonable fees and
expenses of counsel (collectively, "Damages") asserted prior to the first
anniversary of the Effective Time of the Merger (as defined in the Merger
Agreement) based upon, arising out of or otherwise resulting from (i) the
failure of the Financial Statements (as defined in the Merger Agreement) to be,
to the knowledge of the Principal Stockholder, true, correct and complete in all
material respects, (ii) any broker's or finder's fee or commission payable by
the Company to Xxxxxx Xxxx, West Worldwide Industries or their affiliates, and
(iii) any legal, investment banking, financial advisor's, broker's or finder's
fees, commissions or expenses in connection with the proposed sale of the
Company (by merger or some other business combination) in excess of $325,000 in
the aggregate, excepting any legal fees related to any proxy contest, claim,
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action, suit or proceeding arising out of or otherwise relating to the Merger
Agreement and the transactions contemplated thereby.
(b) Limitations. The Indemnified Parties' rights to indemnification
under Section 1.1(a) shall be subject to the following limitations:
(i) The Indemnified Parties shall be entitled to
indemnification under Section 1.1(a)(i) only if the aggregate amount of
all Damages under Section 1.1(a)(i) exceeds $10,000 (the "Basket
Amount"), in which event the Indemnified Parties shall be entitled to
indemnification for all such Damages (including the Basket Amount). For
the avoidance of doubt, the Basket Amount shall not apply with respect
to any claims made pursuant to Section 1.1(a)(ii) or (iii).
(ii) The Indemnified Parties shall be entitled to
indemnification under Section 1.1(a)(ii) only for 50% of any Damages
with respect to claims made pursuant to Section 1.1(a)(ii).
(iii) In no event shall the aggregate amount paid by the
Principal Stockholder to the Indemnified Parties pursuant to this
Agreement exceed $500,000.
(c) Promptly after the receipt by an Indemnified Party of notice of any
third party claim or the commencement of any third party action, suit or
proceeding subject to indemnification hereunder (a "Third Party Claim"), such
Indemnified Party will, if a claim in respect thereto is to be made against the
Principal Stockholder, give the Principal Stockholder written notice of such
Third Party Claim; provided, however, that the failure to provide such notice
will not relieve the Principal Stockholder of any of his obligations, or impair
the right of the Indemnified Party to indemnification pursuant to this Article I
unless, and only to the extent that, such failure materially prejudices the
Principal Stockholder's opportunity to defend or compromise the Third Party
Claim. The Principal Stockholder shall have the right, at his option, to defend
at his own expense and by his own counsel any Third Party Claim, provided that
(i) the Principal Stockholder acknowledges in writing (at the time he elects to
assume such defense) his obligation under this Article I to indemnify the
Indemnified Party with respect to such Third Party Claim, (ii) such counsel is
reasonably satisfactory to the Indemnified Party, (iii) the Indemnified Party is
kept fully informed of all developments, and is furnished with copies of all
documents and papers related thereto and is given the right to participate in
the defense and investigation thereof as provided below, and (iv) such counsel
proceeds with diligence and in good faith in defending such Claim. If the
conditions of the foregoing sentence are not met, the Indemnified Party shall
have the right to assume and control the defense of such Claim. If the Principal
Stockholder shall undertake to defend any Third Party Claim, he shall notify the
Indemnified Party of his intention to do so promptly (and in any event no later
than 30 days) after receipt of notice of the Third Party Claim, and the
Indemnified Party agrees to cooperate in good faith with the Principal
Stockholder and his counsel in the defense of such Third Party Claim.
Notwithstanding
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the foregoing, the Indemnified Party shall have the right to participate in the
defense and investigation of any Third Party Claim with its own counsel at its
own expense. The Principal Stockholder, however, shall bear the expense of such
separate counsel if (A) there are or may be legal defenses available to the
Indemnified Party that are different from or additional to those available to
the Principal Stockholder, (B) the Principal Stockholder shall not have employed
counsel to represent the Indemnified Party within a reasonable time after notice
of the Third Party Claim is given to the Principal Stockholder or notice that
the Principal Stockholder intends to assume the defense of the Third Party Claim
is given to the Indemnified Party, or (C) the Principal Stockholder authorizes
the Indemnified Party to employ separate counsel at the expense of the Principal
Stockholder. The Principal Stockholder shall not settle any Third Party Claim
without the prior written consent of the Indemnified Party, which consent shall
not be unreasonably withheld; provided, however, that an Indemnified Party shall
not be required to consent to any settlement involving the imposition of
equitable remedies or which does not provide for a complete and unconditional
discharge and release of the Indemnified Party.
ARTICLE II.
MISCELLANEOUS
II.1 Notices. All notices, claims, requests, responses, objections and
other communications given or made pursuant to this Agreement shall be in
writing and dispatched by the same means to all of the parties on the same day
and shall be deemed to have been duly given if delivered (i) personally, (ii) by
facsimile, or (iii) by a nationally recognized courier service, to the parties
at the following address:
(a) If to Photobition or KDT:
Photobition Group PLC
Xxxxx Xxxxx
000 Xxxxxx Xxxx
Xxxxxxx
Xxxxxx, Xxxxxxx XX0 0XX
Attn: Xxxxx Xxxxxxxxxx and Xxxxxx Xxxxx
(Telefax: 011.441.81.687.7007)
with a required copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
(Telefax: (000) 000-0000)
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(b) If to the Principal Stockholder to:
00 Xxxxxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx
(Telefax: (000) 000-0000)
with a required copy to:
Feder, Kaszovitz, Isaacson, Weber, Xxxxx & Bass, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq. and Xxxxxxxx X. Xxxx, Esq.
(Telefax: (000) 000-0000)
or to such other address as the person to whom notice is to be given may have
specified in a notice duly given to the sender as provided herein. Such notice,
request, claim, demand, waiver, consent, approval or other communication shall
be deemed to have been given (x) as of the date so delivered (if delivered
personally or by telefax), and (y) on the second business day following dispatch
(if delivered by recognized courier service).
II.2 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement, nor any of the rights, interests or
obligations hereunder shall be assigned (including by operation of law) by any
party hereto without the prior written consent of the other parties. This
Agreement is not intended, nor shall it be construed, to confer upon any person
except the parties hereto and their successors and permitted assigns any rights
or remedies under or by reason of this Agreement.
II.3 Governing Law; Venue. This Agreement shall be governed by and
construed, interpreted and enforced in accordance with the laws of New York
without reference to the conflict of laws principles thereof. Any disputes
arising out of, in connection with or with respect to this Agreement, the
subject matter hereof, the performance or non-performance of any obligation
hereunder, or any of the transactions contemplated hereby shall be adjudicated
in a court of competent civil jurisdiction sitting in the City and State of New
York and nowhere else. Each of the parties hereto hereby irrevocably submits to
the jurisdiction of such court for the purposes of any suit, civil action or
other proceeding arising out of, in connection with or with respect to this
Agreement, the subject matter hereof, the performance or non-performance of any
obligation hereunder, or any of the transactions contemplated hereby
(collectively, "Suit"). Each of the parties hereto hereby waives and agrees not
to assert by way of motion, as a defense or otherwise in any such Suit, any
claim that it is not subject to the jurisdiction of the above courts, that such
Suit is brought in an inconvenient forum, or that the venue of such Suit is
improper.
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II.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same agreement. In proving this Agreement, it shall not
be necessary to produce or account for more than one such counterpart.
II.5 Headings. The heading references herein are for convenience
purposes only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.
II.6 Severability. The invalidity, illegality or unenforceability of
any provision of this Agreement shall in no way affect the validity, legality or
enforceability of any other provision; and if any provision is held to be
unenforceable as a matter of law, the other provisions shall not be affected
thereby and shall remain in full force and effect. If any provision shall be
declared unenforceable due to its amount, scope, breadth or duration, then it
shall be modified without any further action by the parties as to the amount,
scope, breadth or duration to the maximum extent permitted by law and shall
continue to be fully enforceable as so modified.
II.7 Amendment. This Agreement shall not be amended except in writing
signed by the parties.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties have executed or caused this Agreement
to be executed as of the date first written above.
PHOTOBITION GROUP PLC
By: /s/ J.E.T. XXXXXXXXXX
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Name: J.E.T. XXXXXXXXXX
Title:
KDT ACQUISITION CORP.
By: /s/ J.E.T. XXXXXXXXXX
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Name: J.E.T. XXXXXXXXXX
Title:
/s/ XXXX XXXX
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Xxxx Xxxx, as the Principal Stockholder
