EXHIBIT 10.5
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of July 8, 1993, by and between Washington
Corporations ("WC"), a Montana corporation, with its principal place of business
at 000 Xxxxxxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxx 00000, and Washington Contractors
Group, Inc. ("WCGI"), a Montana corporation, with its principal place of
business at 000 Xxxxxxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxx 00000.
WHEREAS, WCGI was formerly a wholly owned subsidiary of Washington
Corporations, and currently pursuant to an Agreement and Plan of Reorganization
dated March 11, 1993, the common stock of WCGI is held by WCG Holdings, Inc.
WHEREAS, WCGI and WC desire to enter into an agreement relating to the
indemnification against certain liabilities that each party hereto shall extend
to the other party hereto from and after the date of such reorganization (the
"Reorganization Date");
BOW, THEREFORE, the parties hereto agree as follows:
1. EFFECTIVE DATE. This Agreement shall become effective on the Reorganization
Date.
2. DEFINITIONS. As used in this Agreement, capitalized terms defined
immediately after their use shall have the respective meanings thereby
provided, and 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):
ACTION: Any action, claim, suit, arbitration, inquiry, proceeding, or
investigation by or before any court, any governmental or other regulatory
or administrative agency or commission or any arbitration tribunal.
AFFILIATE: With respect to any specified person, a person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled
by, or is under common control with, such specified person; PROVIDED,
HOWEVER, that for purposes of this Agreement (i) Affiliates of WCGI shall
ONLY be deemed to include Pro Builders, Inc., Washington Construction
Company, Industrial Constructors Corp., Xxxxx Mining, Inc., or subsidiaries
or joint ventures thereof, or any other subsidiary or joint venture of
WCGI, and (ii) Affiliates of WC shall not be deemed to include WCGI or any
of its subsidiaries and joint ventures.
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ENVIRONMENTAL LAW: Any federal, state or local law (including common law),
statute, ordinance, regulation, rule, policy, order (judicial or
administrative), decree, judgment, decision, ruling, permit, or
authorization (each as may be in effect from time to time) relating or
applicable to pollution, human health or safety associated with the
environment, or the environment, including, without limitation, any of the
foregoing relating or applicable to emissions, discharges, spills, releases
of threatened releases of, or human exposures to, Materials of
Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling or Materials of Environmental Concern.
ENVIRONMENTAL LIABILITY: Any liability or obligation (including, without
limitation, liability for investigatory costs, oversight costs, cleanup
costs, governmental or private response costs, natural resource damages,
civil or criminal penalties or forfeitures, and attorneys' fees or other
costs of defending a claim of Environmental Liability) under any
Environmental Law.
INDEMNIFIABLE LOSSES: With respect to any claim by an Indemnitee for
indemnification authorized pursuant to this Agreement, any and all losses,
liabilities, claims, damages, obligations, payments, costs, and expenses
(including, without limitation, the costs and expenses of any and all
Actions, demands, assessments, judgments, settlements, and compromises
relating thereto and reasonable attorneys' fees and expenses in connection
therewith) suffered by such Indemnitee with respect to such claim.
INDEMNIFYING PARTY: Any party who is required to pay any other person
pursuant to Sections 3 and 4 hereof.
INDEMNITEE: Any party who is entitled to receive payment from an
Indemnifying Party pursuant to Sections 3 and 4 hereof.
INDEMNITY PAYMENT: The amount an Indemnifying Party is required to pay an
Indemnitee pursuant to Sections 3 and 4 hereof.
MATERIAL OF ENVIRONMENTAL CONCERN: (i) Any substance, the presence of which
requires investigation or remediation under any Environmental Law or under
common law; (ii) any dangerous, toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous
substance which is regulated by any Environmental Law; (iii) any substance,
the presence of which causes or threatens to cause a nuisance upon the
property where it is located, or
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to adjacent properties or poses or threatens to pose a hazard to the health
and safety of persons on or about the property where it is located; and
(iv) urea-formaldehyde, polychlorinated biphenyls, asbestos or
asbestos-containing materials, petroleum and petroleum products.
SUBSIDIARY OF WCGI: Subsidiaries of WCGI include Pro Builders, Industrial
Constructors Corp., Washington Construction Company and Xxxxx Mining, Inc.
3. INDEMNIFICATION
(a) Except as otherwise provided herein, WCGI shall indemnify, defend and
hold harmless WC and its Affiliates and each of their respective directors,
officers, employees, and agents from and against any and all Indemnifiable
Losses arising out of or based upon Environmental Liability which is
alleged to be, or which is, directly or indirectly, caused by, related to
or a result of, the operation of the business of WCGI or any of its
Affiliates or the ownership of property by WCGI or any of its Affiliates;
and
(b) Except as otherwise provided herein, WC shall indemnify, defend and
hold harmless WCGI and its Affiliates and each of their respective
directors, officers, employees, and agents from and against any and all
Indemnifiable Losses arising out of or based upon any Environmental
Liability which is alleged to be, or which is, directly or indirectly,
caused by, related to or a result of, the operation of the business of WCGI
or any of its Affiliates or the ownership of property by WC or any of its
Affiliates.
4. PROCEDURE FOR INDEMNIFICATION
(a) If an Indemnitee shall receive notice of the assertion by a person who
is not a party to this Agreement of any claim or of the commencement by any
such person of any Action (a "Third Party Claim") with respect to which an
Indemnifying Party is or may be obligated to make an Indemnity Payment,
such Indemnitee shall give such Indemnifying Party prompt notice thereof
after becoming aware of such Third Party Claim and the amount or estimated
amount thereof to the extent then feasible (which estimate shall not be
conclusive of the final amount of such claim); PROVIDED, HOWEVER, that the
failure of any Indemnitee to give notice as provided in this Section 4
shall not relieve the related Indemnifying Party of its obligations under
this Agreement, except to the extent that such Indemnifying Party is
actually prejudiced by such failure to give notice.
(b) An Indemnifying Party may elect to defend, at such Indemnifying
Party's own expense and by such Indemnifying Party's own counsel, any Third
Party Claim. If
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an Indemnifying Party elects to defend a Third Party Claim, it shall,
within 10 days of notice of such Third Party Claim (or sooner, if the
nature of such Third Party Claim so requires), notify the related
Indemnitee of its intent to do so, and such Indemnitee shall cooperate in
the defense of such Third Party Claim. Such Indemnifying Party shall pay
such Indemnitee's actual out-of-pocket expenses (other than officers' or
employees' salaries) reasonably incurred in connection with such
cooperation as such expenses are incurred. After notice from an
Indemnifying Party to an Indemnitee of its election to assume the defense
of a Third Party Claim, such Indemnifying Party shall not be liable to such
Indemnitee under this Agreement for any legal or other expenses
subsequently incurred by such Indemnitee in connection with the defense
thereof; PROVIDED, HOWEVER, that such Indemnitee shall have the right to
employ separate counsel to represent such Indemnitee if, in such
Indemnitee's reasonable judgment, a conflict of interest between such
Indemnitee and such Indemnifying Party exists in respect of such claim, and
in that event the reasonable fees and expenses of such separate counsel
shall be paid by such Indemnifying Party as such fees and expenses are
incurred. Except as so provided, if an Indemnitee desires to participate
in the defense of a Third Party Claim, it may do so but it shall not
control the defense and such participation shall be at its sole cost and
expense. If an Indemnifying Party elects not to defend against a Third
Party Claim, or fails to notify an Indemnitee of its election as provided
in this Section 4, such Indemnitee may defend, compromise and settle such
Third Party Claim; PROVIDED, HOWEVER, that no such Indemnitee may
compromise or settle any such Third Party Claim without prior written
notice to such Indemnifying Party and except by payment of monetary damages
or other money payments. No Indemnifying Party shall consent to entry of
any judgment or enter into any compromise or settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnitee of a release from all liability in respect to
such Third Party Claim.
(c) If any Indemnifying Party chooses to defend any claim, the Indemnitee
shall make available to such Indemnifying Party any personnel or any books,
records or other documents within its control that are necessary or
appropriate for such defense (the cost of copying thereof to be paid by the
Indemnifying Party).
(d) Upon any final determination of a Third Party Claim pursuant to this
Section 4, the Indemnifying Party shall pay promptly on behalf of the
Indemnitee, or to the Indemnitee in reimbursement of any amount theretofore
required to be paid by it, the amount so determined. Upon the payment in
full by the Indemnifying Party of any such amount the Indemnifying Party
shall be subrogated to the rights of such Indemnitee, to the extent not
waived in settlement, against the person who made such Third Party Claim
with respect to the subject matter of such claim.
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(e) Except to the extent expressly provided otherwise herein, the
indemnification provided for by this Agreement shall not inure to the
benefit of any third party or parties and shall not relieve any insurer who
would otherwise be obligated to pay any claim or the responsibility with
respect thereto or, solely by virtue of the indemnification provisions
hereof, provide any subrogation rights respect thereto.
(f) Any claim on account of an Indemnifiable Loss which does not result
from a Third Party Claim shall be asserted by written notice given by the
related Indemnitee to the related Indemnifying Party. Such Indemnifying
Party shall have a period of 30 days within which to respond thereto. If
such Indemnifying Party does not respond with such 30-day period, such
Indemnifying Party shall be deemed to have accepted responsibility to make
payment and shall have not further right to contest the validity of such
claim. If such Indemnifying Party does respond within such 30-day period
and rejects such claim in whole or in part, such Indemnitee shall be free
to pursue all available legal actions.
(g) If the indemnification provided for in this Agreement is unavailable
or insufficient to hold harmless an Indemnitee in respect of any
Indemnifiable Loss, then the "Indemnifying Party shall contribute to the
amount paid or payable by such Indemnitee as a result of such Indemnifiable
Loss, in such proportion as is appropriate to reflect the relative fault of
WCGI and its Affiliates on the one hand and WC and its Affiliates on the
other hand in connection with the circumstances which resulted in such
Indemnifiable Loss. The amount paid or payable by an Indemnitee as a
result of the Indemnifiable Loss referred to above in this subsection (g)
shall be deemed to include any legal or other expenses reasonably incurred
by such Indemnitee in connection with investigating or defending any such
action or claim.
5. NOTICES
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (i) on
the date of service if served personally on the party to whom notice is to be
given, (ii) on the day of transmission if sent via facsimile transmission to the
facsimile number given below, and telephonic confirmation of receipt is obtained
promptly after completion of transmission, (iii) on the day after delivery to
Federal Express or similar overnight courier or the Express Mail services
maintained by the United States Postal Service, or (iv) on the fifth day after
mailing, if mailed to the party to whom notice is to be given, by first class
mail, registered or certified, postage prepaid and properly addressed, to the
party as follows:
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If to WC: Corporate Secretary
P. O. Xxx 0000
Xxxxxxxx, XX 00000
Fax No. (000) 000-0000
If to WCGI: Corporate Secretary
P. O. Xxx 0000
Xxxxxxxx, XX 00000
Fax No. (000) 000-0000
Any party may change its address for the purpose of this Section by giving
the other party written notice of its new address in the manner set forth above.
G. GENERAL
(a) Except as otherwise provided in this Agreement, no party hereto shall
assign this Agreement or any rights or obligations hereunder without the
prior written consent of the other party hereto and any such attempted
assignment without such prior written consent shall be void and of no force
and effect. This Agreement shall be binding upon, and inure solely to the
benefit of, the parties hereto and, to the extent provided herein, their
respective Affiliates and the directors, officers, employees, and agents of
the parties hereto and their respective Affiliates, and their heirs,
personal representatives, successors, and permitted assigns.
(b) This Agreement may be amended or modified and any of the terms and
conditions hereof may be waived, only by a written instrument executed by
the parties hereto, or in the case of a waiver, by the party waiving
compliance. Any waiver by either party hereto of any conditions, or of the
breach of any provision or term in any one or more instances, shall not be
deemed to be nor construed as further or continuing waiver of any such
condition, or of the breach of any other provision or term of this
Agreement.
(c) This Agreement contains the entire understanding between the parties
hereto with respect to the matters specified herein and supersedes and
replaces all prior and contemporaneous agreements and understandings, oral
or written, with regard to such matters.
(d) In the event that any provision of this Agreement is declared by any
court or other judicial or administrative body to be null, void or
unenforceable, such provision shall survive to the extent it is not so
declared, and all of the other provisions of this Agreement shall remain in
full force and effect.
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(e) Nothing in this Agreement is intended to confer any rights or remedies
under or by reason of this Agreement on any persons other than WC or WCGI
and, to the extent provided herein, WC's and WCGI's respective directors,
officers, employees, agents, and Affiliates and their respective heirs,
executors, administrators, successors, and permitted assigns. Nothing in
this Agreement is intended to relieve or discharge the obligations or
liability of any third persons to WC or WCGI. No provision of this
Agreement shall give any third persons any right of subrogation or action
over or against WC or WCGI or their respective directors, officers,
employees, agents, and Affiliates.
(f) This Agreement shall be construed, performed and enforced in
accordance with, and governed by, the internal laws of the State of
Montana, without giving effect to the principles of conflicts of laws
thereof.
(g) The section and paragraph headings in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
(h) This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which shall constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
WASHINGTON CORPORATIONS
/s/ XxXxx Xxxxxx
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XxXxx Xxxxxx, Vice President
WASHINGTON CONTRACTORS GROUP, INC.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx Xxxxxx, President
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