INDEMNIFICATION
AGREEMENT
Agreement, effective as of March 30, 1999 between New Planet Resources, Inc.,
a Delaware corporation ("Indemnifying Party")
WHEREAS,
Planet and National previously entered into an Agreement and Plan of
Reorganization, dated as of March 25, 1999 (the "Reorganization
Agreement"), providing for the acquisition (the "Acquisition") of
all of the outstanding shares of capital stock of National by Planet;
WHEREAS,
immediately after the Closing (as defined in the Reorganization Agreement) of
the Acquisition Planet intends to transfer all of its mineral properties (as
hereinafter defined) to New Planet in exchange for the issuance of shares of New
Planet Common Stock;
WHEREAS,
Planet's board of directors expects to complete the Distribution (as
hereinafter defined) immediately after the Closing of the Acquisition; and
WHEREAS,
the purpose of the Distribution is to make possible the Acquisition by divesting
Planet of the mineral properties with which National is unwilling to combine,
and this Distribution Agreement sets forth the various agreements between Planet
and New Planet relating to the divestiture of the mineral properties by Planet.
NOW
THEREFORE in consideration of the mutual promises and benefits to be derived
from this Agreement, New Planet and Planet hereby agree as follows:
ARTICLE I
DEFINITIONS
Section
1.1 General. As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
Agreement: This Indemnification Agreement as amended or supplemented
from time to time.
Affiliate: Affiliate of any Person shall mean any Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with such person. For purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Agent: Any Person authorized to act and who acts on behalf of any other
Person with respect to the transactions contemplated by the
Documents.
CERCLA shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601, et seq., as the
same may be amended from time to time.
Documents: This Agreement, the Registration Statement, together with any
exhibits, schedules or other attachments thereto.
Environmental Laws and Orders shall mean collectively, all Laws and
Orders relating to industrial hygiene, occupational safety conditions
or environmental conditions on, under or about property, including,
without limitation, RCRA, CERCLA and all other Laws and Orders relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, hazardous or toxic materials or wastes
into the environment (including ambient air, surface water, ground
water, land surface or sub-surface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial
hazardous or toxic materials or wastes.
Indemnifiable Losses shall mean any and all losses, Liabilities,
claims, damages, penalties, fines, demands, awards and judgments,
including reasonable costs and expenses (including, without limitation,
attorneys' fees and any and all out-of-pocket expenses) whatsoever
reasonably incurred in investigating, preparing for or defending against
any Actions or potential Actions involving an Indemnifiable Loss, incurred
by an Indemnitee.
Mineral Properties shall mean the following:
(a) Subsurface mineral rights on approximately 190 acres located
in the City of Xxxxxx, Idaho. Title was acquired by
issuance to real property owners of one share of capital stock for each
25 square feet of surface owned. In acquiring such mineral rights,
the Company issued 361,739 shares of capital stock as adjusted for
subsequent stock splits and Planet merger. Conveyance of title
included, free of any additional stock issue, all subsurface rights
lying beneath adjacent streets and alleys where ownership rested with
the grantor. The acquisition of such mineral rights was completed in
November of 1985.
(b) Lease agreement dated May 1, 1981, with the City of Xxxxxx
(which supersedes a previous agreement dated December 31,
1971) whereby Planet, as Lessee, has the right to mine subsurface
minerals on approximately 200 acres owned by the City north of Xxxxxx
Fault for a period of 25 years (subject to a renewal option for an
additional 25 years), The City, as lessor, received 20% of all royalty
payments or other consideration received by Allied from Hecla. In the
event Allied enters in to a lease agreement for the exploration and
development of "City Property" south of the Xxxxxx Fault, the City
shall receive 15% of the royalties received. No royalties have been
paid on "City Property" south of the fault.
Person: shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an association, a company, an
unincorporated organization, a government or any department, political
subdivision or agency thereof.
Planet Indemnitees shall mean Planet, National, the directors and
officers of Planet, National and each of the heirs, executors, successors
and assigns of any of the foregoing.
RCRA shall mean the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6901, et seq., as the same may be amended from time
to time.
ARTICLE II
INDEMNIFICATION
Section
2.1 Indemnification by New Planet Subsequent to the Distribution Date,
except as otherwise specifically set forth in any provision of this Distribution
Agreement, New Planet shall indemnify, defend and hold harmless the New Planet
Indemnitees from and against any and all Indemnifiable Losses of the New Planet
Indemnitees arising out of, by reason of or otherwise in connection with (a) the
Mineral Properties, (b) the breach, whether before or after the Distribution
Date, by Planet of any provision of this Distribution Agreement or (c) any
Planet Liabilities.
Section 2.2 Procedures for Indemnification.
(a) If a claim or demand is made against an Indemnitee by any person
who is not a party to this Distribution Agreement (a "Third Party
Claim") as to which such Indemnitee is entitled to indemnification
pursuant to this Distribution Agreement, such Indemnitee shall notify the
Indemnifying Party in writing, and in reasonable detail, of the Third
Party Claim promptly (and in any event within 20 business days) after receipt
by such Indemnitee of written notice of the Third Party Claim; provided,
however, that failure to give such notification within such 20 business day
period shall not affect the indemnification provided hereunder except to
the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure (except that the Indemnifying Party shall not be
liable for any expenses incurred during the period in which the Indemnitee
failed to give such notice). Thereafter, the Indemnitee shall deliver to
the Indemnifying Party, promptly (and in any event within 20 business days)
after the Indemnitee's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnitee relating to the
Third Party Claim.
(b) If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party shall be entitled to participate in the defense thereof
and, if it so chooses and acknowledges in writing its obligation to
indemnify the Indemnitee therefor, to assume the defense thereof with counsel
selected by the Indemnifying Party; provided that such counsel is not
reasonably objected to by the Indemnitee. Should the Indemnifying Party so
elect to assume the defense of a Third Party Claim, the Indemnifying
Party shall not be liable to the Indemnitee for legal or other expenses
subsequently incurred by the Indemnitee in connection with the defense
thereof. If the Indemnifying Party assumes such defense, the Indemnitee shall
have the right to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
Indemnifying Party, it being understood that the Indemnifying Party shall
control such defense. The Indemnifying Party shall be liable for the fees
and expenses of counsel employed by the Indemnitee (i) for any period during
which the Indemnifying Party has failed to assume the defense thereof
(other than during the 20 business day period prior to the time the
Indemnitee shall have given notice of the Third Party Claim as provided above)
or (ii) in the event the Indemnitee reasonably determines, based on the
advice of its counsel that there shall exist a conflict of interest between
the Indemnitee and the Indemnifying Party or that there are defenses
available to the Indemnitee that are not available to the Indemnifying Party,
the effect of which shall be to make it impractical for the Indemnitee and
the Indemnifying Party to be jointly represented by the same counsel, in
which case the Indemnifying Party shall be liable for the fees and expenses
of one counsel for all Indemnitees in any single or series of related
Actions. If the Indemnifying Party so elects to assume the defense of any
Third Party Claim, the Indemnitee shall cooperate with the Indemnifying
Party in the defense or prosecution thereof.
(c) If the Indemnifying Party acknowledges in writing liability for
indemnification of a Third Party Claim, then in no event will the
Indemnitee admit any liability with respect to, or settle, compromise or
discharge, any Third Party Claim without the Indemnifying Party's prior
written consent; provided, however, that the Indemnitee shall have the
right to settle, compromise or discharge such Third Party Claim without the
consent of the Indemnifying Party if the Indemnitee releases the Indemnifying
Party from its indemnification obligation hereunder with respect to
such Third Party Claim and such settlement, compromise or discharge would
not otherwise adversely affect the Indemnifying Party. If the Indemnifying
Party acknowledges in writing liability for indemnification of a Third
Party Claim, the Indemnitee will agree to any settlement, compromise or
discharge of a Third Party Claim that the Indemnifying Party may recommend
that by its terms (i) obligates the Indemnifying Party to pay the full
amount of the liability in connection with such Third Party Claim, (ii)
releases the Indemnitee completely in connection with such Third Party Claim
and (iii) would not otherwise adversely affect the Indemnitee; provided,
however, that the Indemnitee may refuse to agree to any such settlement,
compromise or discharge and may assume the defense of such Third
Party Claim if the Indemnitee agrees (A) that the Indemnifying Party's
indemnification obligation with respect to such Third Party Claim shall
not exceed the amount that would have been required to be paid by or on
behalf of the Indemnifying Party in connection with such settlement,
compromise or discharge and (B) to assume all costs and expenses thereafter
incurred in connection with the defense of such Third Party Claim (other
than those contemplated by subclause (A) herein above).
(d) Notwithstanding the foregoing, the Indemnifying Party shall not
be entitled to assume the defense of any Third Party Claim (and shall
be liable for the fees and expenses of counsel incurred by the Indemnitee
in defending such Third Party Claim) if the Third Party Claim seeks an
order, injunction or other equitable relief or relief other than money
damages against the Indemnitee which the Indemnitee reasonably determines,
based on the advice of its counsel, cannot be separated from any related
claim for money damages. If such equitable or other relief portion of the
Third Party Claim can be so separated from the claim for money damages,
the Indemnifying Party shall be entitled to assume the defense of the
portion relating to money damages.
Section
2.3 Indemnification Payments. Indemnification required by this Article III
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or loss, liability,
claim, damage or expense is incurred.
Section
2.4 Indemnities. . The obligations of New Planet under this Article III
shall survive the sale or other transfer by either of them of any assets or
businesses or the assignment by either of them of any Liabilities, with respect
to any Indemnifiable Loss of any Indemnitee related to such assets, businesses
or Liabilities and shall be binding on the successors and assigns of all, or
substantially all, of their respective assets and business.
ARTICLE III
DISPUTE
RESOLUTION
Section
3.1 Indemnification Agreement Disputes. In the event of a controversy,
dispute or claim arising out of, in connection with, or in relation to the
interpretation, performance, nonperformance, validity or breach of this
Agreement or otherwise arising out of, or in any way related to this Agreement,
including, without limitation, any claim based on contract, tort, statute or
constitution (singly, an "Agreement Dispute" and collectively,
"Agreement Disputes"), the party asserting the Agreement Dispute shall
give written notice to the other party of the existence and nature of such
Agreement Dispute. Thereafter, the general counsels (or other designated
representatives) of the respective parties shall negotiate in good faith for a
period no less than 60 days after the date of the notice in an attempt to settle
such Agreement Dispute. If after such 60 calendar day period such
representatives are unable to settle such Agreement Dispute, any party hereto
may commence arbitration by giving written notice to all other party that such
Agreement Dispute has been referred to the American Arbitration Association for
arbitration in accordance with the provisions of this Article.
Section
3.2 Arbitration in Accordance with American Arbitration Association Rules.
All Agreement Disputes shall be settled by arbitration in Houston, Texas, before
a single arbitrator in accordance with the rules of the American Arbitration
Association (the "Rules"). The arbitrator shall be selected by the
mutual agreement of all parties, but if they do not so agree within twenty (20)
days after the date of the notice of arbitration referred to above, the
selection shall be made pursuant to the Rules from the panels of arbitrators
maintained by the American Arbitration Association. The arbitrator shall be an
individual with substantial professional experience with regard to resolving or
settling sophisticated commercial disputes.
Section
3.3 Final and Binding Awards. Any award rendered by the arbitrator shall be
conclusive and binding upon the parties hereto; provided, however, that any such
award shall be accompanied by a written opinion of the arbitrator giving the
reasons for the award. This provision for arbitration shall be specifically
enforceable by the parties and the decision of the arbitrator in accordance
therewith shall be final and binding, and there shall be no right of appeal
therefrom. The parties agree to comply with any award made in any such
arbitration proceedings that has become final in accordance with the Rules, and
agree to the entry of a judgment in any jurisdiction upon any award rendered in
such proceedings becoming final under the Rules.
Section
3.4 Costs of Arbitration. In the award the arbitrator shall allocate, in his
or her discretion, among the parties to the arbitration all costs of the
arbitration, including, without limitation, the fees and expenses of the
arbitrator and reasonable attorneys' fees, costs and expert witness
expenses of the parties. Absent such an allocation by the arbitrator, each party
shall pay its own expenses of arbitration, and the expenses of the arbitrator
shall be equally shared.
Section
3.5 Settlement by Mutual Agreement. Nothing contained in this Article shall
prevent the parties from settling any Agreement Dispute by mutual agreement at
any time.
SECTION IV
MISCELLANEOUS
Section
4.1 No Inconsistent Agreements. New Planet will not on or after the date of
this Agreement enter into any agreement with respect to its securities which is
inconsistent with this Agreement or otherwise conflicts with the provisions
hereof. In the event New Planet has previously entered into any agreement with
respect to its securities granting any registration rights to any Person, the
rights granted to Planet hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of New Planet's
securities under any such agreements.
Section
4.2 Survival of Obligations. The obligations of the parties under
Sections 3 and 4 of this Agreement shall survive the termination for any reason
of this Agreement (whether such termination is by New Planet, by Planet, upon
the expiration of this Agreement or otherwise).
Section
4.3 Severability. In case any one or more of the provisions or part of the
provision contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect in any jurisdiction, such
invalidity, illegality or unenforceability shall be deemed not to affect any
other jurisdiction or any other provision or part of a provision of this
Agreement, but this Agreement shall be reformed and construed in such
jurisdiction as if such provision or part of a provision held to be invalid or
illegal or unenforceable had never been contained herein and such provision or
part reformed so that it would be valid, legal and enforceable in such
jurisdiction to the maximum extent possible. In furtherance and not in
limitation of the foregoing, New Planet and Planet each intend that the
covenants contained in Sections 4 and 5 shall be deemed to be a series of
separate covenants, one for each county of the State of Texas and one for each
and every other state, territory or jurisdiction of the United States and any
foreign country set forth therein. If, in any judicial proceeding, a court shall
refuse to enforce any of such separate covenants, then such enforceable
covenants shall be deemed eliminated from the provisions hereof for the purpose
of such proceedings to the extent necessary to permit the remaining separate
covenants to be enforced in such proceedings. If, in any judicial proceeding, a
court shall refuse to enforce any one or more of such separate covenants because
the total time thereof is deemed to be excessive or unreasonable, then it is the
intent of the parties hereto that such covenants, which would otherwise be
unenforceable due to such excessive or unreasonable period of time, be enforced
for such lesser period of time as shall be deemed reasonable and not excessive
by such court.
Section
4.4 Entire Agreement, Amendment. This Agreement contains the entire
agreement between New Planet and Planet with respect to the subject matter
thereof. Planet acknowledges that it neither holds any right, warrant or option
to acquire securities of New Planet, nor has the right to any such rights,
warrants or options, except pursuant to the is Agreement. This Agreement may not
be amended, waived, changed, modified or discharged except by an instrument in
writing executed by or on behalf of the party against whom any amendment,
waiver, change, modification or discharge is sought.
Section
4.5 Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing and shall be deemed to have duly given if
delivered by hand-delivery, registered first-class mail, postage prepaid, telex,
telecopier, or air courier guaranteeing overnight delivery as follows:
To New Planet: To Planet:
New Planet Resources, Inc. Planet Resources, Inc.
1415 Louisiana, Suite 0000 Xxx Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
Attn: X.X. Xxxxx, President Attn: Hunter M.A. Xxxx, President
with an additional copy by like means to: with an additional copy to:
Sonfield and Sonfield Planet Resources, Inc.
000 Xxxxx Xxxx Xxx Xxxx Xxx Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Xx., Esq. Attn: Xxxxxxxx X. Xxxxxxxxx, Esq.
and/or to such other persons and addresses as any party shall have specified
in writing to the other.
All
such notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next business day
if timely delivered to an air courier guaranteeing overnight delivery.
Section
4.6 Assignability. This Agreement shall be assignable by either party on the
express consent of the other and shall be binding upon, and shall inure to the
benefit of, the successors and assigns of the parties.
Section 4.7 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Delaware.
Section
4.8 Waiver and Further Agreement. Any waiver of any breach of any terms or
conditions of this Agreement shall not operate as a waiver of any other breach
of such terms or conditions or any other term or condition, nor shall any
failure to enforce any provision hereof operate as a waiver of such provision or
of any other provision hereof. Each of the parties hereto agrees to execute all
such further instruments and documents and to take all such further action as
the other party may reasonably require in order to effectuate the terms and
purposes of this Agreement.
Section
4.9 Heading of No Effect. The paragraph headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
NEW PLANET RESOURCES, INC.
By: /s/X.X. Xxxxx
----------------------------------------
X.X. Xxxxx, President
PLANET RESOURCES, INC.
By: /s/Hunter M.A. Xxxx
----------------------------------------
Hunter M.A. Xxxx, President
