Extension and Indemnity Agreement
THIS EXTENSION AND INDEMNITY AGREEMENT ("Agreement") is entered
into as of the 18th day of August, 2011, by and among Delta Mechanical
Group, LLC, a Delaware limited liability company ("DMG"), Iron Eagle
Group, Inc., a Delaware corporation ("Iron Eagle"), with offices
located at 00 Xxxx 00xx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000
(Iron Eagle and DMG are hereinafter collectively referred to as
"Buyer") and Xxxxx X. Xxxxxxxxxx, an individual and resident of 000
Xxxxxxx Xxxxx Xxxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxxx 00000 (hereinafter
"Seller" or "Selling Member" or "Bookbinder") (Selling Member and Buyer
are sometimes hereinafter referred to collectively as "Parties".)
W I T N E S S E T H:
WHEREAS, Selling Member conveyed his Membership Interest in
Sycamore Enterprises LLC, a Rhode Island limited liability company, on
or about January 21, 2011 ("Closing Date") pursuant to the terms of a
Member Interest Purchase Agreement ("Purchase Agreement"); and
WHEREAS, Buyer executed a Secured Term Note ("Buyer Note") on the
Closing Date requiring payment of the Purchase Price by the Buyer for
the Membership Interest on or before June 2, 2011; and
WHEREAS, Buyer has requested an extension of the Payment Due Date, as
defined in the Purchase Agreement, and Seller has agreed to grant an
extension of the Payment Due Date subject to the terms and conditions
contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto agree as follows:
1. Consideration for the granting of the extension of the
Payment Due Date. In consideration for the extension of the Payment Due
Date, Buyer shall, within ten (10) days following payment of the Buyer
Note ("Buyer Note Payment"), secure a full release of the indemnity by
and among Selling Member, related entities of Selling Member,
Berkley Regional Insurance Company and/or its affiliates or
subsidiaries ("Berkley") as described in that certain General Agreement
of Indemnity dated January 25, 2005 by and between Selling Member and
Berkley ("Indemnity Agreement"), a copy of which is attached hereto as
Exhibit A ("Release"). Buyer shall take all reasonable steps necessary
to provide Berkley with the substitute collateral satisfactory to
Berkley to provide the Release.
2. Indemnity Bond. In the event that Buyer has not satisfied
the conditions contained in Section 1 within thirty (30) days after the
Buyer Note Payment, Buyer shall immediately deliver to Selling Member
an indemnity bond ("Indemnity Bond"), or other mutually agreed upon
form(s) of indemnity, in a form satisfactory to Selling Member and
mutually satisfactory to the Parties, indemnifying Selling Member
personally as obligee for any obligations to Berkley or payments
required to be made by Selling Member and/or related entities of
Selling Member to Berkley, pursuant to the terms of the Indemnity
Agreement. It is further agreed that the amount of the Indemnity Bond
shall be no less than one hundred (100%) percent of the aggregate cost-
to-complete of all Open Bonds, exclusive of gross profit or change
orders that have not been approved, as further described in Exhibit B
attached hereto, as of the Buyer Note Payment. Notwithstanding the
aforementioned, the Indemnity Bond shall not indemnify Selling Member
for acts of fraud, intentional misrepresentation, gross negligence or
willful misconduct.
3. Extension. Subject to the satisfaction of the terms and
conditions described in this Agreement, Selling Member hereby agrees to
extend the Payment Due Date to the earlier occurrence of the following:
2
(i) the date funds have been received from Obligor's investment banking
firm to be obtained through proposed equity financing; or (ii)
September 16, 2011. In the event that Selling Member has not received
payment in full of the Buyer Note the Transaction shall be
automatically rescinded on September 16, 2011 ("Rescission Date").
4. Indemnification. In addition to the satisfaction of the
conditions set forth in Sections 1 and 2 above, Buyer, jointly and
severally, hereby agrees to indemnify, defend, save and hold Selling
Member harmless from and against any and all costs, damages, liability,
loss, expense, assessment, judgment, or deficiency of any nature
whatsoever (including, without limitation, reasonable attorney's fees
and other costs and expenses incident to any suit action or proceeding)
(collectively "Losses") incurred or sustained, directly or indirectly,
by Selling Member arising from or in relation to any breach by Buyer of
the terms of: (i) this Agreement; and/or (ii) the Purchase Agreement.
5. Rescission. Notwithstanding any other provision hereof and in
addition to any and all other remedies, in the event the Buyer Note is
not paid in full on or before the Rescission Date, the Transaction, as
that term is defined in the Purchase Agreement shall be considered and
is irrevocably rescinded, in which event, the Transaction, including
the sale of the Membership Interest, shall be deemed to be void ab
initio, for all purposes, including but not limited to federal and
state income tax purposes, and all of Buyer's legal and equitable
interests in the Membership Interest shall immediately revert to
Selling Member. On the Rescission Date, Selling Member will provide
Buyer with notification that the Transaction has been rescinded
consistent with Rev. Rul. 80-58, 1980-1 CB 181 (hereinafter "Rev. Rul.
80-58"). In the event of a rescission in accordance with this
Agreement, Selling Member shall have the absolute and unfettered right
to take any and all steps necessary to comply with Rev. Rul. 80-58
without the need for any further consents or assent by Buyer.
6. Ratification and Confirmation. In all other respects, the
Purchase Agreement and all transactional documents executed pursuant
thereto, including but not limited to, the Buyer Note, which do not
conflict with this Agreement are hereby ratified and confirmed as if
fully restated in this Agreement. Notwithstanding the modification to
the Payment Due Date, Buyer hereby acknowledges and agrees that the
granting of said extension does not in any way waive or modify the
Seller's rights as set forth in the Purchase Agreement, Pledge
Agreement, Buyer Note and other transactional documents.
7. Miscellaneous.
7.01 Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall
be determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the
application of such provision to such person or circumstances other
than those to which it is so determined to be invalid and
unenforceable, shall not be affected thereby, and each provision hereof
shall be validated and shall be enforced to the fullest extent
permitted by law.
7.02 Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the Parties hereto and their respective successors and
assigns; provided, however, that nothing in this Agreement shall be
construed to confer any rights, remedies, obligations or liabilities on
any person other than the Parties hereto or their respective successors
and assigns.
3
7.03 Defined Terms. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the respective meanings ascribed to
them in the Purchase Agreement.
7.04 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same document. The Parties
hereto and any third parties may rely upon machine copies of signatures
to this Agreement to the same extent as manually signed original
signatures.
7.05 Headings. Headings of the sections in this Agreement are for
reference purposes only and shall not be deemed to have any substantive
effect.
7.06 Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other.
7.07 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES OR THOSE OF ANY OTHER
JURISDICTION.
7.08 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their
respective successors and permitted assigns.
7.09 Separate Legal Counsel. Each of the Parties has had the
opportunity to consult with its own legal counsel prior to signing and
delivering this Agreement, has read and understands such Agreement and
has signed and delivered the same with the intent to be legally bound
hereby.
(Remainder of Page Intentionally Left Blank)
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first set forth above.
WITNESS: BUYER:
Delta Mechanical Group, LLC
Xxxxxx X. Xxxx By: /s/Xxxxx Xxxxxxx
---------------------- ---------------------
Name: Xxxxx Xxxxxxx
Title: CEO
Iron Eagle Group, Inc.
Xxxxxx X. Xxxx By: /s/Xxxxx Xxxxxxx
---------------------- ---------------------
Name: Xxxxx Xxxxxxx
Title: CEO
SELLING MEMBER:
By: /s/Xxxxx X. Xxxxxxxxxx
----------------------
Xxxxx X. Xxxxxxxxxx
EXHIBIT A
General Agreement of Indemnity
See Exhibits to Extension and Indemnity Agreement dated May 31, 2011
EXHIBIT B
Open Bonds
Delta Mechanical Contractors, LLC
Active Bond Listing as of August 31, 2011
Original
Delta Contract
Project Bond Value or Percent
No. Description Number Bond Type Bond Amount Complete
------- ------------------------------- ------- ------------------------ ----------- -------
-- Airpro Mechanical - Lien 0108387 Release of Lien $ 40,336 N/A
-- Plumbers & Pipefitters Local 51 0101154 Union Benefits Bond - $ 665,000 N/A
Delta
-- Plumbers & Pipefitters Local 51 0149299 Union Benefits Bond - $ 50,000 N/A
NAT
00-000 Xxxxx Xxxx Reserve Center 0143151 Performance & Payment $ 1,730,000 100
00-000 Xxxxxx Xxxxx WWTF 0143153 Performance & Payment $ 1,915,500 90
00-000 Xxxx Xxxxxxxxx XX 0000000 Performance & Payment $ 4,067,000 100
10-020 P112V Maritime Subsurface 0145646 Performance & Payment $ 2,072,000 100
10-025 Building 292 Galley Hoods 0143154 Performance & Payment $ 224,900 100
10-030 Arlington Manor 0143152 Performance & Payment $ 165,000 100
10-040 CCRI - Lincoln 0143158 Performance & Payment $ 4,975,500 75
10-055 URI Pharmaceutical 0143160 Performance & Payment $10,745,700 70
10-065 Pharmacy & Specialty Clinic 0145660 Performance & Payment $ 957,000 90
10-080 Wheaton College Science 0145662 Performance & Payment $ 7,308,000 90
10-095 Building 448 Groton 0145655 Performance & Payment $ 1,197,000 40
10-095 Building 448 Groton 0145656 CT Non-Resident Tax Bond $ 59,850 40
10-100 MNS Seawater Systems 0145652 Performance & Payment $ 581,100 100
10-015 QTA Car Wash Systems 0145658 Performance & Payment $ 616,607 100
10-110 Citizens Bank Section C 0000000 Performance & Payment $ 124,700 100
10-120 Xxxxx University - Mind Brain 0149282 Performance & Payment $ 4,665,888 95
10-140 Xxxxxx Xxxxxx Medical 0149289 Performance & Payment $ 640,000 100
10-145 NAPS Gym B302 0149286 Performance & Payment $ 556,190 100
10-160 USEPA Chemistry Lab 0149293 Performance & Payment $ 1,887,690 85
11-015 OTC Quarters - Newport Naval 0155291 Performance & Payment $ 5,932,080 2
00-000 Xxxxxxxx Junction Station 0155301 Performance & Payment $ 350,000 40
11-060 URI Fire Code Upgrades 0155305 Performance & Payment $ 1,137,000 60
11-070 URI Hillside Residence Hall 0155307 Performance & Payment $ 3,216,000 2
11-075 CSX Intermodal Facility, 0155310 MA Non-Resident $ 38,063 10
Worcester Contractor Tax Bond
11-080 RIC Recreation Center 0155311 Performance & Payment $ 1,860,512 5
Renovation
11-110 XxXxx Stadium HVAC 0155314 Performance & Payment $ 348,600 1
System Repairs
11-115 Providence Community Health - 0155315 Performance & Payment $ 705,000 4
HVAC
11-105 Providence Community Health - 0159643 Performance & Payment $ 969,000 1
Piping
TBD XXX Xxxxxx Theater Project 0159648 Performance & Payment $ 489,000 0
TBD CCRI Knight Campus Fire 0159650 Performance & Payment $ 3,513,000 0
Sprinkler System
27-040 Tower @ Carnegie Abbey 0108393 Performance & Payment $11,450,000 100
28-070 Navy Supply School/B1112 0122083 Performance & Payment $ 4,290,000 000
00-000 Xxxxx Xxxxx 0122071 Performance & Payment $ 4,920,000 100
28-120 Blue Cross & Blue Shield 0122070 Performance & Payment $12,324,000 100
28-135 Xxxxxx Xxxxxx Middle School 0122076 Performance & Payment $ 5,515,000 000
00-000 XXX New Residence Halls 0122084 Performance & Payment $ 6,257,000 100
28-175 RI Public Transit Authority 0122088 Performance & Payment $ 3,714,000 100
29-010 RIANG 102nd Special Op 0122102 Performance & Payment $ 861,000 100
00-000 Xxxxxxx Fire & Rescue 0122096 Performance & Payment $ 1,000,000 000
00-000 XXX MNS Expansion 0122091 Performance & Payment $ 654,000 100
00-000 Xxxxxxx Intermodal Station 0122099 Performance & Payment $ 6,228,000 100
29-035 Taunton Trial Court 0122098 Performance & Payment $ 168,000 100
29-045 Army Aviation Support 0122102 Performance & Payment $ 886,000 100
29-050 RI State Police 0137718 Performance & Payment $ 3,601,500 99
29-060 RI School for the Deaf 0122106 Performance & Payment $ 3,750,000 000
00-000 Xxxxxxxx Xxxxxxxx 656 0137734 Performance & Payment $ 110,000 100
TBD Xxxxxxxx VAMC Steam Lines 0155306 Performance & Payment $ 5,238,800 5
