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Exhibit 10.02
FORM OF INDEMNITY AGREEMENT
This INDEMNITY AGREEMENT ("Agreement") is made as of the ____ day of
_______________, 1999 by and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, whose address is ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Indemnitor") and PEOPLESERVE, INC., a
Delaware corporation, and its successors, transferees and assigns ("Indemnitee")
and the other Indemnified Parties (as defined below).
Preliminary Statement
WHEREAS, the Indemnified Parties are lessees under those leases
opposite their names listed on Schedule A attached hereto and incorporated
herein by this reference (collectively the "Leases" or individually a "Lease"),
the lessors of which are affiliates of Indemnitor; and
WHEREAS, the Indemnified Parties have made certain guaranties and
entered into certain guaranty agreements listed opposite their names on Schedule
B attached hereto and incorporated herein by this reference (collectively, the
"Guaranties" and individually, a "Guaranty"), which Guaranties have
substantially benefited the Indemnitor and his affiliates; and
WHEREAS, the Indemnitee has entered into that certain Agreement and
Plan of Merger with Res-Care, Inc., a Kentucky corporation ("Res-Care"), dated
April __, 1999 (the "Merger Agreement"); and
WHEREAS, the Indemnitor is the owner of a significant percent of the
issued and outstanding common stock of the Indemnitee and upon consummation of
the transactions contemplated in the Merger Agreement, will receive substantial
consideration for such shares; and
WHEREAS, the execution of this Agreement is a condition precedent to
the consummation of the transactions contemplated in the Merger Agreement; and
WHEREAS, to induce Res-Care to consummate the above-described
transaction, Indemnitor has agreed to enter into this Agreement;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Indemnitor hereby represents, warrants and covenants to Indemnitee
as follows:
1. (a) Indemnitor shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless each Indemnified Party from and against any
and all Losses (as defined below) imposed upon or incurred by or asserted
against such Indemnified Party, arising out of or in
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any way relating to (i) such Indemnified Party's obligation to pay any portion
of the obligations to which its Guaranty relates; (ii) any increase in payments
under any Lease by reason of (A) any modification after the date hereof of the
terms of the indebtedness to which the Guaranty is applicable, (B) any payment
of such indebtedness at maturity, or (C) any acceleration of payments of such
indebtedness, and (iii) any misrepresentation in any representation or warranty
or material breach or failure to perform any covenants or other obligations
pursuant to this Agreement; provided, however, that the Indemnitor shall not be
obligated hereunder to an Indemnified Party with respect to any Guaranty while a
default of a Lease payment exists by such Indemnified Party under a Lease of
property that is subject to indebtedness to which a Guaranty relates; except for
the failure of an Indemnified Party to make a Lease payment that has been
increased by reason of (i) any modification after the date hereof of the terms
of the indebtedness to which the Guaranty is applicable, (ii) any payment of
such indebtedness at maturity, or (iii) any acceleration of payments of such
indebtedness.
(b) Upon written request by any Indemnified Party, Indemnitor
shall defend such Indemnified Party (if requested by any Indemnified Party, in
the name of the Indemnified Party) by attorneys and other professionals approved
by the Indemnified Party. Notwithstanding the foregoing, any Indemnified Parties
may, in their sole and absolute discretion, engage their own attorneys and other
professionals to defend or assist them, and, at the option of Indemnified
Parties, their attorneys shall control the resolution of claim or proceeding.
Upon demand, Indemnitor shall pay or, in the sole and absolute discretion of the
Indemnified Parties, reimburse, the Indemnified Parties for the payment of
reasonable fees and disbursements of attorneys and other professionals in
connection therewith.
2. The term "Indemnified Parties" means Indemnitee and those entities
listed on Schedule C attached hereto and incorporated herein by this reference.
3. The term "Losses" includes any and all claims, suits, liabilities,
actions, proceedings, obligations, debts, damages, losses, costs, expenses,
penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, or punitive damages, of whatever kind or nature (including, but not
limited to attorney' fees and other costs of defense).
4. Indemnitor agrees that none of the terms of the indebtedness to
which the Guaranties are applicable shall be modified without the Indemnitee's
prior written consent, which may be withheld within Indemnitee's sole
discretion. The liability of Indemnitor under this Agreement shall in no way be
limited or impaired by, and Indemnitor hereby consents to and agrees to be bound
by, any amendment or modification of the provisions of any Guaranty by reason of
any amendment or modification of the terms of the indebtedness to which such
Guaranty is applicable.
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5. Any amounts payable to Indemnitee under this Agreement shall become
immediately due and payable and, if not paid within thirty (30) days of written
demand therefor, shall bear interest at the rate equal to twelve percent (12%)
per annum until paid, from the date payment was due.
6. This Agreement, the payment of all sums due hereunder and the
performance and discharge of each and every obligation, covenant and agreement
of Indemnitor contained herein, are, and shall be deemed to be, secured by the
Stock Pledge Agreement entered into by the Indemnitor and the Indemnitee
concurrently herewith (the "Pledge Agreement"). Indemnitee may enforce the
obligations of Indemnitor without first resorting to or exhausting any security
or collateral or without first having recourse to the Pledge Agreement,
provided, however, that nothing herein shall inhibit or prevent Indemnitee from
exercising any power of sale under, the Pledge Agreement, or exercising any
other rights and remedies thereunder. It is not necessary for an Event of
Default to have occurred pursuant to and as defined in the Pledge Agreement for
Indemnified Parties to exercise their rights pursuant to this Agreement. The
obligations and liabilities of Indemnitor under this Indemnity shall survive any
termination, satisfaction, assignment, or exercise of any power of sale of the
Pledge Agreement.
7. Indemnitor hereby waives (i) any right or claim of right to cause a
marshaling of Indemnitor's assets or to cause Indemnitee or other Indemnified
Parties to proceed against any of the security pledged by the Pledge Agreement
before proceeding under this Agreement against Indemnitor; (ii) the right to
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
action or proceeding brought against or by Indemnitee or other Indemnified
Parties; (iii) notice of acceptance hereof and of any action taken or omitted in
reliance hereon; (iv) presentment for payment, demand of payment, protest or
notice of nonpayment or failure to perform or observe, or other proof, or notice
or demand under this Agreement; and (v) all homestead exemption rights against
the obligations hereunder and the benefits of any statutes of limitations or
repose.
8. Indemnitor represents and warrants that:
(a) Indemnitor has the full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder;
(b) Indemnitor is acting in an individual capacity and has
full power and authority to make this Agreement valid and binding upon
Indemnitor, enforceable in accordance with its terms;
(c) Indemnitor's execution of, and compliance with, this
Agreement will not result in the breach of any term or provision of, or conflict
with or constitute a default under or result in the acceleration of any
obligation under, any agreement, indenture or loan or credit agreement or
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other instrument to which Indemnitor or his properties are subject, or result in
the violation of any law, rule, regulation, order, judgment or decree to which
Indemnitor or his properties are subject;
(d) There is no action, suit, proceeding or investigation
pending or, to Indemnitor's knowledge, threatened against Indemnitor which,
either in any one instance or in the aggregate, may result in any material
adverse change in the financial condition, properties or assets of Indemnitor,
or in any material liability on the part of Indemnitor, or which would draw into
question the validity of this Agreement or of any action taken or to be taken in
connection with the obligations of Indemnitor contemplated herein, or which
would be likely to impair materially the ability of Indemnitor to perform under
the terms of this Agreement;
(e) Indemnitor does not believe, nor does he have any reason
or cause to believe, that he cannot perform each and every covenant contained in
this Agreement;
(f) No approval, authorization, order, license or consent of,
or registration or filing with, any governmental authority or other person, and
no approval, authorization or consent of any other party is required in
connection with this Agreement;
(g) This Agreement constitutes a valid, legal and binding
obligation of Indemnitor, enforceable against him in accordance with the terms
hereof; and
(h) Schedule B completely and accurately identifies the
Guaranties to which any Indemnified Party is subject relating to any
indebtedness of Indemnitor or any entity (other than any of the Target Entities
(as defined in the Merger Agreement) in which Indemnitor has an interest.
9. No delay by any of the Indemnified Parties in exercising any right,
power or privilege under this Agreement shall operate as a waiver of any such
privilege, power or right.
10. Each party hereto shall, within five (5) business days of receipt
thereof, give written notice to the other party hereto of any claim, suit or
proceeding, whether administrative or judicial in nature ("Legal Action"),
brought against such party or instituted with respect to the Guaranties or the
indebtedness to which they relate, with respect to which Indemnitor may have
liability under this Agreement. Such notice shall comply with the provisions of
paragraph 11 hereof.
11. All notices given under this Agreement shall be given and become
effective as provided in the Merger Agreement, except that notices to the
Indemnitor shall be sent to Indemnitor at the address set forth on the first
page hereof with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire, Porter, Wright, ▇▇▇▇▇▇ &
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and (b) notices to the
Indemnitee and the other Indemnified Parties shall be sent ▇/▇ ▇▇▇-▇▇▇▇, Inc.,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Chairman, President and Chief Executive Officer.
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12. Indemnitor, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇ (the "Group I
Owners") have certain guaranty obligations with respect to the properties
described in paragraphs (a), (c) and (d) of Section 8.5 of the Merger Agreement
(the "Group I Guaranties"). No later than ninety (90) days after the Effective
Time, Indemnitee shall cause each of the Group I Owners to be released from all
of the Group I Guaranties (as applicable to such properties).
13. Attached hereto as Schedule D is a list of those Leases which are
included in the financing currently in place as described in that certain
Amended and Restated Pooling Agreement dated December 17, 1998 among VOCA
Corporation, Chase Manhattan Bank, NA, and certain other parties (collectively,
the "Pooled Leases" and individually a "Pooled Lease"). Attached as Schedule E
is a list of those Pooled Leases which have a current term (without regard to
renewal options) which expire before November 1, 2006 (the "Short-Term Pooled
Leases"). Attached hereto as Schedule F is a list of those Pooled Leases which
have a current term (without regard to renewal options) which expire after
November 1, 2006 (the "Long-Term Pooled Leases"). If requested by Indemnitor,
Indemnitee shall cause the respective lessees under the Short-Term Pooled Leases
to agree to amend such leases to extend the current term of the same to expire
on November 1, 2006. As a condition to such extensions, (a) Indemnitor shall
cause all of the Long-Term Pooled Leases to be amended to reduce the current
term of the same (without regard to renewal options) so that they shall expire
on November 1, 2006, and (b) all of the Pooled Leases shall further be amended
to grant to the respective lessees thereunder one renewal option for a period of
five years after November 1, 2006. Any extension of the current terms of the
Short-Term Pooled Leases or the grant of renewal options with respect to the
Pooled Leases shall be on the same terms and conditions as currently applicable.
14. The terms of this Agreement are for the sole and exclusive
protection and use of Indemnitee and the Indemnified Parties. Except as provided
in the next sentence, no party shall be a third-party beneficiary hereunder, and
no provision hereof shall operate or inure to the use and benefit of any such
third party. It is agreed that (a) those persons and entities included in the
definition of "Indemnified Parties" and Res-Care, Inc. are not such excluded
third-party beneficiaries of Indemnitor's covenants and obligations hereunder,
and (b) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇ are not such excluded third-party
beneficiaries of Indemnitors covenants and obligations in Section 12 hereof.
15. This Agreement may be executed in several counterparts, each of
which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Agreement. The failure of any party hereto to
execute this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.
16. This Agreement may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of Indemnitee, but only by
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an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
17. All pronouns and defined terms and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons referred to may require. Without limiting the
effect of specific references in any provision of this Agreement, the term
"Indemnitor" shall be deemed to refer to Indemnitor and to include the heirs,
executors, administrators, legal representatives, successors and assigns of
Indemnitor, all of whom shall be bound by the provisions of this Agreement. Each
reference herein to Indemnitee and the Indemnified Parties shall be deemed to
include their successors and assigns, to whose favor the provisions of this
Agreement shall also inure.
18. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies which Indemnitee and the Indemnified Parties
would otherwise have at law or in equity.
19. If any term, condition or covenant of this Agreement shall be held
to be invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.
20. This Agreement shall be governed and construed in accordance with
the laws of the Commonwealth of Kentucky and the applicable laws of the United
States of America.
21. (a) Wherever pursuant to this Agreement (i) Indemnitee exercises
any right given to it to approve or disapprove, (ii) any arrangement or term is
to be satisfactory to Indemnitee, or (iii) any other decision or determination
is to be made by Indemnitee, the decision of Indemnitee to approve or
disapprove, all decisions that arrangements or terms are satisfactory or not
satisfactory and all other decisions and determinations made by Indemnitee,
shall be reasonable.
(b) Any reference to attorneys' fees payable by Indemnitor shall be
deemed to mean attorneys' fees actually incurred.
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IN WITNESS WHEREOF, this Agreement has been executed by Indemnitor and
Indemnitee and is effective as of the day and year first above written.
INDEMNITOR:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
INDEMNITEE:
PEOPLESERVE, INC.,
a Delaware corporation
By:
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Name:
Title:
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