Exhibit 99.18
November 9, 2005
Xxxxx.xxx, Inc.
0000 000xx Xxx. NE
Redmond, WA 98052
Attention: Xxxx Xxxx, Chief Executive Officer
Source Energy Corporation
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Re: Indemnity Agreement ("AGREEMENT") respecting Section 1.3(b) of the Agreement
and Plan of Merger ("MERGER AGREEMENT"), among Xxxxx.xxx, Inc., a Washington
corporation ("VISTA"), Vista Acquisition Corp., a Washington corporation
("MERGER SUBSIDIARY"), and Source Energy Corporation, a Utah corporation
("SOURCE"); and payment of the aggregate sum of $300,000 and issuance of
500,000 shares of Common Stock of Vista ("VISTA COMMON STOCK") to Xxxxxx
Services, Inc., a Utah corporation ("XXXXXX SERVICES") and/or Xxxxx
Xxxxxxxxx ("XXXXXXXXX").
Gentlemen:
In partial consideration of the Closing (as defined in the Merger
Agreement), in connection with which (a) Xxxxxx Services will be issued 350,000
shares of Vista common stock (70,000 shares of which Xxxxxx Services has
directed be paid to Xxxxxxx X. Xxxxxxxxxx), plus the additional sum of $150,000
($25,000 of which has already been paid to Xxxxxx Services, receipt of which is
hereby acknowledged); and (b) Xxxxxxxxx will be issued 150,000 shares of Vista
common stock, plus the additional sum of $150,000, Xxxxxx Services and Xxxxxxxxx
hereby jointly and severally agree to pay and indemnify and hold Source and
Vista harmless from and against: (i) any and all manners of actions, causes of
action, suits, debts, liabilities, sums of money, accounts, covenants,
controversies, agreements, promises, damages, judgments, executions, costs,
expenses, rights, claims or demands whatsoever of Source or against Source
existing at the date of Closing or arising out of any action or inaction of
Source or its officers, directors, principal shareholders, employees or agents,
at law or in equity, existing on or at any time before the date of Closing or
thereafter arising, whether anticipated or unanticipated, known or unknown,
contingent or non-contingent, liquidated or non-liquidated, including without
limitation, (x) any and all attorney fees owing to Xxxxxxx X. Xxxxxxxxxx,
Xxxxxxx X. Xxxxxxxxxx and Xxxxxxx X. Xxxxxxxxxx, and (x) any and all accountant
fees owing to Xxxxxxx XxXxxxxxxx, but (y) excluding the $75,000 currently owed
to Xxxxxxxxx; as well as (ii) any liabilities (of any nature or type whatsoever)
arising out of or in connection with breach of the covenants or representations
and warranties of Xxxxxxxxx or Xxxxxx Services contained in this Agreement
(matters described in clauses (i) and (ii), collectively the "LIABILITIES"). In
further consideration of the indemnification obligations of Xxxxxx Services and
Xxxxxxxxx (as contemplated hereunder), the above-described shares of Vista
common stock to be granted to Xxxxxx Services, Xxxxxxxxx and Xxxxxxx X.
Xxxxxxxxxx will be entitled to certain registration
EXECUTION VERSION
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rights; provided, that Xxxxxx Services and Messrs. Xxxxxxxxx and Xxxxxxxxxx each
become a party to that certain Registration Rights Agreement dated June 6, 2005,
by and among Vista and the parties listed therein (the "REGISTRATION RIGHTS
AGREEMENT"), by executing and delivering to Vista a counterpart signature page
thereto, and thereupon such shares of Vista common stock so issued shall be
deemed "REGISTRABLE SECURITIES" thereunder in accordance with Section 2.2(b) of
the Registration Rights Agreement.
Each of Xxxxxx Services and Xxxxxxxxx hereby represents and warrants to
Vista that (i) the information contained in the reports and/or registration
statements of Source that have been filed with the Securities and Exchange
Commission (the "SEC REPORTS") as of the date hereof, and (ii) Source's
representations and warranties set forth in Article 3 of the Merger Agreement,
are true, correct and complete in all material respects and do not contain any
misstatement of a material fact or omit to state a material fact required or
necessary to be stated in order to make the statements made therein not
misleading.
1. Xxxxxx Services and Xxxxxxxxx hereby agree jointly and severally to
indemnify and hold Vista, its officers, directors, employees,
attorneys, and agents and each person, if any, who controls Vista
within the meaning of Section 15 of the Securities Act of 1933, as
amended (the "SECURITIES ACT") or Section 20 of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), the
shareholders of Vista and, following the Closing, Source and all of
its then officers, directors, employees and agents and each person, if
any, who then controls Source within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, harmless from and
against any and all Liabilities.
2. In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant hereto (the "INDEMNIFIED
Party"), the Indemnified Party shall promptly notify Xxxxxx Services
or Xxxxxxxxx in writing. A delay in giving notice shall only relieve
Xxxxxx Services or Xxxxxxxxx of liability to the extent Xxxxxx
Services or Xxxxxxxxx suffers actual prejudice because of the delay.
Xxxxxx Services and Xxxxxxxxx shall have the right, at its or his
option and expense, to participate in the defense of such a proceeding
or claim, but not to control the defense, negotiation or settlement
thereof, which control shall at all times rest with the Indemnified
Party. The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such
proceeding or claim.
3. The parties agree that all of the representations, warranties,
covenants and indemnification obligations of Xxxxxx Services and
Xxxxxxxxx contained herein shall survive the Closing for a period of
one (1) year and shall thereafter be of no further force or effect
(the "INDEMNIFICATION PERIOD"). In the event that any claim for
indemnification under this Agreement shall have been given within the
Indemnification Period, the representations and warranties that are
the subject of such indemnification claim shall survive until such
time as such claim is finally
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resolved. Notwithstanding anything to the contrary herein, any claim
relating to fraud or intentional misrepresentation shall also survive
the Closing and continue in full force and effect until expiration of
any applicable statute of limitation. The representations, warranties,
covenants and agreements contained in this Agreement or any
certificate, schedule, document or other writing delivered pursuant
hereto, shall not be affected by any investigation, verification or
examination by Source or by any other person.
4. At any time, and from time to time, each party will execute such
additional instruments and take such action as may be reasonably
requested by the other party to carry out the intent and purposes of
this Agreement.
5. Any failure on the part of any party hereto to comply with any of its
obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
6. All notices and other communications hereunder shall be in writing and
shall be deemed to have been given if delivered in person or sent by
prepaid first-class registered or certified mail, return receipt
requested, as follows:
If to Xxxxxx Services: 0000 Xxxxx Xxxxxxxx Xx., #000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Xxxxx Xxxxxxxxx: 0000 Xxxxxxx Xxxxxx Xxxx
Xxxxx, Xxxx 00000
If to Vista: 0000 000xx Xxx. NE
Redmond, WA 98052
If to Source: 0000 000xx Xxx. NE
Redmond, WA 98052
7. This Agreement, and the provisions of the Merger Agreement referenced
herein, constitute the entire agreement between the parties and
supersede and cancel any other agreement, representation or
communication, whether oral or written, between the parties hereto
relating to the specific subject matter hereof.
8. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Washington, without giving
effect to principles of conflicts of laws.
9. This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their successors and assigns.
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10. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11. In the event of default hereunder by either party, the prevailing
party in any proceeding to enforce this Agreement shall be entitled to
recover attorney's fees and costs and such other damages as may have
been caused by the default of the defaulting party; and the parties
hereby irrevocably consent to the exclusive jurisdiction of, and venue
in, the federal courts sitting in Salt Lake County, State of Utah or
King County, State of Washington, with the applicable jurisdiction and
venue for any particular dispute dependent upon the state in which the
defendant resides.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as the date first written above.
XXXXXX SERVICES, INC.
Dated: By
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Its
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Dated:
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Xxxxx Xxxxxxxxx
SOURCE ENERGY CORPORATION
Dated: By
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Xxxxx Xxxxxxxxx, President
XXXXX.XXX, INC.
Dated: By
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Xxxx X. Xxxx, Chief Executive Officer
BY SIGNING BELOW, I ACKNOWLEDGE THAT I HAVE READ AND UNDERSTOOD THIS
INDEMNIFICATION AGREEMENT AND HAVE BEEN ENCOURAGED TO RETAIN SEPARATE
COUNSEL.
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Spouse of Xxxxx Xxxxxxxxx
