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EXHIBIT 10.53
INDEMNIFICATION AGREEMENT
This Indemnification Agreement is made and entered into on this 15th
day of January 1999 by Piedmont Propane Company ("Indemnifying Party") in favor
of AGL Resources Inc. ("AGLR"). AGLR's affiliate, Atlanta Gas Light Services,
Inc., and the Indemnifying Party's affiliate, Piedmont Energy Company (the
"Affiliate"), are parties to that certain Limited Liability Company Agreement of
SouthStar Energy Services LLC dated July 1, 1998 ("LLC Agreement") as members of
SouthStar Energy Services LLC ("SouthStar"). Pursuant to that certain Guaranty
Agreement (the "Guaranty"), effective November 1, 1998, between AGLR and Atlanta
Gas Light Company, AGLR has agreed to guaranty SouthStar's obligations to
Atlanta Gas Light Company. AGLR's agreement with SouthStar to provide the
Guaranty to Atlanta Gas Light Company was subject to the condition that certain
affiliates of each member of SouthStar would indemnify AGLR against any losses
AGLR incurs as a result of AGLR providing financial support for SouthStar under
the Guaranty in accordance with the applicable SouthStar member's Allocable
Share of Net Profits and Losses, as set forth in the LLC Agreement. This
Indemnification Agreement sets forth the terms and conditions of that
indemnification.
In consideration of the benefit the Indemnifying Party and its
affiliates derive from AGLR providing financial support to SouthStar pursuant to
the Guaranty and the benefit to AGLR of the Indemnifying Party indemnifying
AGLR, the parties agree as follows:
1. The Indemnifying Party shall indemnify, defend and hold AGLR harmless
against any losses, costs, fees, liabilities or other expenses AGLR
incurs as a result of AGLR's providing financial support for SouthStar
under the Guaranty ("Indemnified Expenses"). The Indemnifying Party shall
be liable for indemnifying AGLR hereunder for an amount equal to the
product of the Affiliate's Allocable Share (as set forth in the LLC
Agreement or any successor agreement) and the Indemnified Expenses.
Notwithstanding any statement herein to the contrary, the Indemnifying
Party shall not be liable to AGLR to the extent that the Indemnified
Expenses resulted from AGLR's gross negligence or willful misconduct.
2. AGLR shall invoice the Indemnifying Party (at the address set forth in
numbered paragraph 9 below) no later than ten days prior to the end of
each calendar month for the Indemnifying Party's share of the Indemnified
Expenses due from the previous calendar month or any portion thereof. The
Indemnifying Party shall pay AGLR the amount of such invoice (via wire
transfer to the account specified on the invoice) no later than the last
day of
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the calendar month during which AGLR sent the Indemnifying Party an
invoice.
If the Indemnifying Party fails to pay all of the amount of any invoice
when that amount becomes due, the Indemnifying Party shall pay AGLR a
late charge on the unpaid balance that shall accrue daily on each
calendar day from the due date at an annual rate equal to two percentage
points above the then-effective monthly prime commercial lending rate per
annum announced by NationsBank, N.A. from time to time multiplied by the
unpaid balance; provided, that for any period that such rate exceeds any
applicable maximum rate permitted by law, the rate shall equal the
applicable maximum rate.
3. This Indemnification Agreement shall inure to the benefit of each party,
its successors, assigns and creditors, and can be modified only by a
written instrument signed by the Indemnifying Party and AGLR. No
Indemnifying Party shall have the right to assign this Indemnification
Agreement or its obligations hereunder to any person or entity without
the prior written consent of AGLR, which shall not be unreasonably
withheld.
4. This Indemnification Agreement shall be governed by, and construed in
accordance with the internal laws (but not the laws concerning conflicts
of laws) of the state of Georgia.
5. The Indemnifying Party represents and warrants to AGLR that it is
authorized to indemnify AGLR under the terms of this Indemnification
Agreement, that it has all of the rights and powers necessary to do so,
and that the individual signing below is authorized to bind the
Indemnifying Party to its obligations under this Indemnification
Agreement.
6. The Indemnifying Party hereby agrees to provide AGLR with copies of
Indemnifying Party's annual financial statements (consisting of at least
a balance sheet and statements of income and cash flows) within 90 days
following the end of the fiscal year to which such financial statements
relate. If such financial statements have been reviewed or audited, the
statements provided pursuant to the immediately preceding sentence shall
be the reviewed or audited statements, as the case may be.
7. The Indemnifying Party hereby agrees to notify AGLR within 45 days
following the close of each of the first three quarters of each of
Indemnifying Party's fiscal years if at the end of such quarter,
Indemnifying Party's stockholders' equity, determined in accordance with
generally accepted accounting principles consistently applied, shall be
less than $30 million.
8. On the date of each delivery of financial statements pursuant numbered
paragraph 6 above, Indemnifying Party represents and warrants to AGLR
that the balance sheet delivered by Indemnifying Party on such date
reflects
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all obligations, contingent or otherwise, which in accordance with
generally accepted accounting principles should be classified upon
Indemnifying Party's balance sheet as liabilities or disclosed in
footnotes thereto.
9. Notices hereunder must be given in writing (which may be a facsimile
transmission) to be effective and shall be effective upon receipt by AGLR
or the Indemnifying Party at the address set forth below or at such other
address as AGLR or the Indemnifying Party may notify the other:
If to AGLR:
AGL Resources Inc.
P. O. Xxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
If to Indemnifying Party:
Piedmont Propane Company
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Treasurer
Facsimile No.: (000)000-0000
10. THE INDEMNIFYING PARTY HEREBY INTENTIONALLY AND VOLUNTARILY WAIVES ANY
DEFENSE TO PAYMENT UNDER THIS INDEMNIFICATION AGREEMENT THAT IS BASED
UPON OR ARISES OUT OF AGLR'S DIRECT OR INDIRECT OWNERSHIP OF AN EQUITY
INTEREST IN SOUTHSTAR AND/OR ATLANTA GAS LIGHT COMPANY.
AGREED TO AND ENTERED INTO the date first written above by:
AGL Resources Inc. Piedmont Propane Company
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Title: Senior Vice President Title: Vice President
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