EXHIBIT 10.6
FORM OF
INDEMNIFICATION AGREEMENT
WHEREAS, Cornerstone Propane Partners, L.P. ("Cornerstone"), a
Delaware limited partnership, proposes to make a public offering of common units
representing limited partner interests in Cornerstone ("the Public Offering");
WHEREAS, Cornerstone Propane, L.P. ("the OLP"), a Delaware limited
partnership, is an operating partnership in which Cornerstone owns a 98.9899%
limited partner interest;
WHEREAS, Northwestern Growth Corporation ("Growth"), a South Dakota
corporation, owns 100% of Cornerstone Propane GP, Inc. ("the Managing General
Partner"), a California corporation formerly named Coast Gas, Inc., which in
turn has a limited partner interest and a managing general partner interest in
Cornerstone;
WHEREAS, SYN Inc. ("SYN"), a Delaware corporation, has or will have a
limited partner interest and a special general partner interest in Cornerstone
and a special general partner interest in the OLP;
WHEREAS, Cornerstone, the OLP and the Managing General Partner have
been organized to conduct what principally will be a retail and wholesale
propane business, as more particularly set forth in the Registration Statement
of Cornerstone on Form S-1, filed with the Securities and Exchange Commission on
October 10, 1996, as amended to date, Registration No. 333-13879 (such
Registration Statement, as it may be amended from time to time referred to
herein as "the Registration Statement");
WHEREAS, there are certain disputes between the former owners of
Synergy Group Incorporated, a Delaware corporation, and such former owners may
challenge one or more of the past or contemplated transactions by which the
business and assets of the OLP were or are to be acquired by Growth or
affiliates of Growth and contributed to the OLP and related transactions,
described in the Registration Statement (any such challenge referred to herein
as "a Xxxxx Claim"); and
WHEREAS, Growth desires to protect each Indemnified Party (as
hereinafter defined) with respect to the possible assertion of all Xxxxx Claims
and thereby assure that such claims will not adversely affect Cornerstone, the
OLP or the consummation of any of the contemplated transactions described in the
Registration Statement, including, without limitation, the Public Offering.
NOW, THEREFORE, in consideration of ten dollars ($10), the receipt and
sufficiency of which by Growth from each of the other parties hereto is hereby
acknowledged, and in consideration of the mutual promises set forth herein, the
parties hereto agree as follows:
1. Growth will indemnify and hold each of Cornerstone, the OLP, the
Managing General Partner and SYN (solely in its capacity as Special General
Partner) (each of which is referred to herein as an "Indemnified Party")
harmless to the fullest extent lawful from and against any and all losses,
claims, liabilities, damages, amounts paid in settlement (subject to paragraph 4
hereof), amounts paid in judgment, costs of bonds and expenses (including,
without limitation, expenses of defense and investigation, including attorneys'
fees) that may arise and be incurred by an Indemnified Party in connection with,
resulting from or relating to a Xxxxx Claim.
2. Each of Cornerstone, the OLP, the Managing General Partner and
SYN will provide Growth written notice of a Xxxxx Claim promptly after
receipt of each and every such claim, whether the Xxxxx Claim is made in the
form of a demand letter, oral communication, commencement of formal legal
proceeding (including, but not limited to, receipt of summons and complaint)
or otherwise. Such notice shall be given by facsimile, confirmed by United
States Mail, return receipt requested, to Xxxxxxx X. Xxxxxxx, Northwestern
Growth Corporation, 00 Xxxxx Xxxxxx, X.X. Xxxxx, Xxxxx Xxxxxx 00000,
Facsimile Number (000) 000-0000, with copies by facsimile to Xxxxxxx X.
Xxxxxxx, Facsimile Number (000) 000-0000, and Xxxxx X. Xxxxx, Xxxxxx Xxxxxx &
Xxxxx, 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Facsimile Number (312)
258-5600.
3. In accordance with paragraph 1 hereof, Growth will reimburse an
Indemnified Party for all reasonable expenses, including reasonable fees and
disbursements of attorneys, promptly upon presentation to Growth of itemized
statements for such expenses, fees and disbursements and evidence that such
amounts have been paid by the Indemnified Party. Any attorney retained by an
Indemnified Party shall be approved in advance by Growth, which approval shall
not be unreasonably withheld. If more than one Indemnified Party is a defendant
or respondent to a Xxxxx Claim, those Indemnified Parties shall retain a single
counsel (in addition to any local counsel which may be required by rule or to
which retention Growth consents), unless such joint representation is determined
by the counsel retained by the Indemnified Parties or by a court to be in
violation of applicable ethical standards. Nothing herein is intended to
preclude joint representation by single counsel of Growth and one or more
Indemnified Parties in connection with a Xxxxx Claim.
4. No Indemnified Party may, without the prior written consent of
Growth, commence negotiations to settle, effect any settlement or compromise, or
consent to the entry of any judgment in connection with any Xxxxx Claim. Any
Indemnified Party shall communicate to Growth, as provided in paragraph 2
hereof, any offer from, or on behalf of, any person making a Xxxxx Claim to
settle any such claim.
5. In the event that a judgment is entered against an Indemnified
Party as a result of a Xxxxx Claim, the Indemnified Party shall prosecute such
appeal or appeals therefrom as Growth may determine in its sole discretion, so
long as Growth continues to comply with its obligations provided in paragraph 1
hereof.
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6. Any Indemnified Party against whom a Xxxxx Claim is asserted
shall, at the expense of Growth, assert against a person who asserted a Xxxxx
Claim such counterclaim or other claim for relief (including, but not limited
to, proceedings under Rule 11 of the Federal Rules of Civil Procedure and a
claim for malicious prosecution) as Growth reasonably requests and shall
cooperation in the prosecution of such counterclaim or other claim for relief.
7. The foregoing obligations of Growth are those solely of Growth
and not of any of its officers, directors or stockholders. The rights of any
Indemnified Party hereunder are not assignable without the written consent of
Growth. The obligations of Growth hereunder are not assignable without the
written consent of each of Cornerstone, the OLP, the Managing General Partner
and SYN.
8. This agreement may be amended, modified or supplemented at any
time by written agreement executed by all parties hereto, except that no such
amendment, modification or supplementation shall result in diminishing the
rights of Cornerstone, the OLP, the Managing General Partner or SYN with respect
to indemnification arising out of a Xxxxx Claim as described in the
Registration Statement.
9. This agreement constitutes the entire agreement among the parties
hereto with respect to indemnification arising out of any Xxxxx Claim, except to
the extent that the Certificate of Incorporation or by-laws of SYN or the laws
of the State of Delaware otherwise provide rights of indemnification with
respect to any claim made against an officer or director of SYN.
10. Should any provision of this agreement for any reason be declared
invalid or unenforceable, then such provision shall be severed from this
agreement without affecting the validity or enforceability of any of the other
provisions of this agreement, and the parties shall negotiate in good faith to
replace such unenforceable or void provisions with a similar clause to achieve,
to the extent permitted under law, the purpose and intent of the provisions
declared void and unenforceable.
11. This agreement is solely for the benefit of the parties hereto.
The parties hereto acknowledge that this agreement has been entered into to
induce the underwriters of the Public Offering to proceed with the Public
Offering in the event that a Xxxxx Claim is asserted prior to the closing of the
Public Offering, but this agreement shall not be deemed to confer upon or give
to any person not a party hereto any indemnity, remedy, claim or other right.
12. This agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which collectively shall constitute one
and the same instrument.
13. (a) Any dispute, controversy or claim arising out of or relating
to this agreement or its breach, interpretation, termination or validity,
including any question whether a matter is subject to arbitration hereunder, is
referred to herein as a "Dispute."
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(b) If the parties fail to settle any Dispute within thirty (30)
days after any party has given notice to the other parties hereto of the claimed
existence of a Dispute, the Dispute shall be resolved by a confidential, binding
arbitration. All such Disputes shall be arbitrated in ___________ pursuant to
the arbitration rules and procedures of J.A.M.S. Endispute before a panel of
three arbitrators chosen in accordance with the procedures of J.A.M.S.
Endispute.
(c) Judgment upon any award rendered by the arbitrators may be
entered in any court having jurisdiction, and each party hereto consents and
submits to the jurisdiction of such court for purposes of such action. The
statute of limitations, estoppel, waiver, laches and similar doctrines, which
would otherwise be applicable in any action brought by a party, shall be
applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for those purposes.
The Federal Arbitration Act shall apply to the construction, interpretation and
enforcement of this arbitration provision. Each party shall bear its own
expenses (including without limitation the fees and expenses of legal counsel)
in connection with such arbitration and the fees of the arbitrators shall be
borne in accordance with the award made by the arbitrators, provided that the
arbitral award shall allocate such fees and expenses of counsel and experts and
the arbitrators according to the relative success of the contesting parties in
the arbitration, as determined by the arbitrators. The arbitrators shall award
an amount equal to the actual monetary damages suffered by each contesting
party, but the arbitrators shall not have the authority to award punitive
damages.
14. This agreement shall be governed by the laws of the State of
Delaware (regardless of the laws that might otherwise govern under applicable
principles of conflicts of law) as to all matters, including but not limited to
matters of validity, construction, effect, performance and remedies.
IN WITNESS WHEREFORE, the parties hereto have duly executed and
delivered this agreement as of the ____ day of _______, 1996.
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