EXHIBIT 10.11
FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
This Indemnification and Contribution Agreement (the "AGREEMENT") is
made this ___ day of February, 1998 by and between the undersigned selling
stockholders (the "STOCKHOLDER(S)"), and Xxxxxx Exploration Company, a Delaware
corporation ("XXXXXX"), in connection with the transactions contemplated by the
underwriting agreement between Xxxxxx, the Stockholders, and Bear Xxxxxxx & Co.
Inc., Xxxxxxx Xxxxx & Associates, Inc. and Xxxxxxxx Inc., on behalf of
themselves and the other several named underwriters, dated February ___, 1998
(the "UNDERWRITING AGREEMENT"). Capitalized terms used in this Agreement and not
otherwise defined shall have the meanings given to them in the Underwriting
Agreement.
In consideration of the premises, covenants, and obligations of the
parties under the Underwriting Agreement, the parties agree as follows:
1. INDEMNIFICATION. Xxxxxx agrees to indemnify and hold harmless the
Stockholders and each other person, if any, who controls any Stockholder within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
(collectively, the "INDEMNITEE(S)") against any and all losses, liabilities,
claims, damages, and expenses whatsoever as incurred (including but not limited
to reasonable attorneys' fees and any and all expenses whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), to which the Indemnitee(s) may become
subject under the Act, the Exchange Act, or otherwise, insofar as such losses,
liabilities, claims, damages, or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any related
preliminary prospectus or the Prospectus if used within the time period
specified in Section 4(A)(b) of the Underwriting Agreement and as supplemented
by any post-effective supplement or as amended by any amendment that has become
effective, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (i) in the case of the Registration Statement, not
misleading, and (ii) in the case of the Prospectus, in light of the
circumstances under which they were made, not misleading; provided, however,
that Xxxxxx will not be liable in any such case to the extent but only to the
extent that any such loss, liability, claim, damage, or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to Xxxxxx by or on behalf of any Indemnitee expressly for
use therein. This indemnity agreement will be in addition to any liability which
Xxxxxx otherwise may have to the Indemnitee(s) or any other party, including
liability under the Underwriting Agreement.
2. NOTICE AND DEFENSE OF CLAIMS.
(a) Promptly after receipt by the Indemnitee(s) of notice of the
commencement of any action, the Indemnitee(s) shall, if a claim in respect
thereof is to be made against Xxxxxx, notify Xxxxxx in writing of the
commencement thereof, but the failure to notify Xxxxxx shall not relieve Xxxxxx
from any liability which it may have to the Indemnitee except to the extent that
it has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise. In case any such action is brought
against the Indemnitee(s), Xxxxxx will be entitled to participate therein, and
to the extent that Xxxxxx may elect by written notice delivered to the
Indemnitee(s) promptly after receiving the notice from the Indemnitee(s), to
assume the defense thereof with counsel reasonably satisfactory to the
Indemnitee(s). After notice to the Indemnitee(s) of its election to assume the
defense of the action, Xxxxxx will not be liable for any legal or other fees and
expenses subsequently incurred by the Indemnitee(s). Notwithstanding the
foregoing, the Indemnitee(s) shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Indemnitee(s) unless (i) the employment of such counsel
shall have been authorized in writing by Xxxxxx in connection with the defense
of such action, or (ii) Xxxxxx shall not have employed counsel to have charge of
the defense of such action within a reasonable time after notice of commencement
of the action, in any of which events such fees and expenses shall be borne by
Xxxxxx. Xxxxxx shall not, without the prior written consent of the Indemnitee(s)
(which consent will not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Agreement (whether or not the
Indemnitee(s) are actual or potential parties thereto), unless such settlement,
compromise, or consent (i) includes an unconditional release of each Indemnitee
from all liability arising out of such litigation, investigation, proceeding, or
claim and (ii) does not include a statement as to or an admission of fault,
culpability, or a failure to act by or on behalf of any Indemnitee.
(b) In addition, no such settlement, compromise, or consent by any
Indemnitee shall be binding on Xxxxxx without Xxxxxx'x consent (which shall not
be unreasonably withheld) for purposes of Xxxxxx'x indemnity obligations under
this Agreement or otherwise. Any consent of any Indemnitee under this paragraph
may be given on behalf of all Indemnitee(s).
(c) Any party granted the right to direct the defense of any action under
this Agreement shall (i) keep the other parties fully informed of material
developments in the action, (ii) promptly submit to the other parties copies of
all pleadings, responsive pleadings, motions, and other similar legal documents
and papers received in connection with the action, (iii) permit the other
parties and their counsel, to the extent practicable, to confer on the conduct
of the defense of the action, and (iv) to the extent practicable, permit the
other parties and their counsel an opportunity to review all legal papers to be
submitted prior to their submission. The parties shall make available to each
other and each other's counsel and accountants all of its or their books and
records relating to the action, and each party shall render to the other such
assistance as may be reasonably required to insure the proper and adequate
defense of the action. The parties shall use their respective good faith efforts
to avoid the waiver of any privilege of another
-2-
party. The assumption of the defense of any matter by Xxxxxx shall not
constitute an admission or responsibility to indemnify or in any manner impair
or restrict Xxxxxx'x rights to later seek to be reimbursed its costs and
expenses if indemnification with respect to such matter was not required.
3. CONTRIBUTION. To provide for contribution under the Act in
circumstances in which the indemnification provided for in this Agreement is
applicable but for any reason (other than the failure to provide notice to
Xxxxxx as provided above) held to be unavailable from Xxxxxx or is insufficient
to hold harmless a party indemnified under this Agreement, Xxxxxx shall
contribute to the aggregate losses, claims, damages, liabilities, and expenses
of the nature contemplated by this Agreement (including any investigation,
legal, and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit, or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities, and expenses
suffered by the Indemnitee(s) any contribution received by the Indemnitee(s)
from persons who also may be liable for contribution) as incurred to which one
or more Indemnitee(s) may be subject, in such proportions as is appropriate to
reflect the relative benefits received by Xxxxxx and the Indemnitee(s) from the
offering of the Shares or, if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of Xxxxxx and the
Indemnitee(s) in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities, or expenses, as well as any other
relevant equitable considerations. The relative benefits received by Xxxxxx and
the Indemnitee(s) shall be deemed to be in the same proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by Xxxxxx and the Indemnitee(s) as set forth
in the table on the cover page of the Prospectus (and as each such amount may be
similarly determined to give effect to the sale of the Additional Shares, if
any). The relative fault of Xxxxxx and the Indemnitee(s) 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 Xxxxxx and the Indemnitee(s) and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. Xxxxxx and the Indemnitee(s) agree that it
would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls an Indemnitee within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as such
Indemnitee. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit, or proceeding against such party in
-3-
respect of which a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section or otherwise, except to the
extent that the contributing party has been prejudiced in any material respect
by such failure or from any liability which it may have otherwise.
4. GOVERNING LAW. This Agreement shall be construed, interpreted, and
the rights of the parties determined in accordance with the laws of the State of
Michigan without regard for the conflicts of laws provided thereof.
5. ENTIRE AGREEMENT; WAIVER. This Agreement and the Underwriting
Agreement, together with all exhibits and schedules constitute the entire
agreement among the parties pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations, and discussions,
whether oral or written, of the parties. No supplement, modification, or waiver
of this Agreement shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any of this Agreement's provisions shall be deemed
or shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such wavier constitute a continuing waiver unless otherwise
expressly provided.
6. 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 instrument.
-4-
The parties hereto have executed this Agreement as of the date and
year first written above.
-----------------------------------------
Xxxxxx X. Xxxxxx, as trustee of the
Xxxxxx X. Xxxxxx Trust
-----------------------------------------
Xxxxx X. Xxxxxx, as trustee of the Xxxxx
X. Xxxxxx Trust
-----------------------------------------
Xxxxxx X. Xxxxxx, as trustee of the
Xxxxxx X. Xxxxxx Trust
-----------------------------------------
Xxx Xxxxx Xxxx, as trustee of the Xxx
Xxxxx Xxxx Trust
-----------------------------------------
X.X. Xxxxxx, as trustee of the Xxxxxx
X. Xxxxxx Retained Annuity Trust #1, the
Xxxxx X. Xxxxxx Retained Annuity Trust
#1, the Xxxxxx X. Xxxxxx Retained Annity
Trust #1, and the Xxx Xxxxx Xxxx Retained
Annuity Trust #1
XXXXXX AND XXXXXX, INC.
By:
---------------------------------------
Xxxxxx X. Xxxxxx
Its President
OAK SHORE INVESTMENTS, INC.
By:
---------------------------------------
Xxxxx X. Xxxxxx
Its President
DOUBLE DIAMOND ENTERPRISES, INC.
By:
---------------------------------------
Xxxxxx X. Xxxxxx
Its President
FRONTIER INVESTMENTS, INC.
By:
---------------------------------------
Xxx Xxxxx Xxxx
Its President
"Indemnitee(s)"
XXXXXX EXPLORATION COMPANY
By:
---------------------------------------
X.X. Xxxxxx
Its Chairman
"Xxxxxx"
-5-
