INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT, dated as of ____________, 1998, between Golden
State Vintners, Inc., a Delaware corporation (the "Corporation"), and
________________________ (the "Indemnitee").
W I T N E S S E T H:
WHEREAS, Indemnitee is a member of the board of directors of the
Corporation (the "Board of Directors") or is an officer of the Corporation, and
in such capacity has performed and is continuing to perform valuable services
for the Corporation;
WHEREAS, Indemnitee is willing to serve, continue to serve, and take on
additional responsibilities as a member of the Board of Directors and/or officer
for or on behalf of the Corporation on the condition that he or she be
indemnified as herein provided; and
WHEREAS, it is intended that Indemnitee shall be paid promptly by the
Corporation all amounts necessary to effectuate in full the indemnity provided
herein:
NOW THEREFORE, in consideration of the premises and the covenants in this
Agreement, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. SERVICES BY INDEMNITEE. Indemnitee agrees to serve as a director or
officer of the Corporation so long as he or she is duly appointed or elected and
qualified in accordance with the applicable provisions of the Certificate of
Incorporation and Bylaws of the Corporation and until such time as he or she
resigns or fails to stand for election or is removed from his or her position.
Indemnitee may at any time and for any reason resign or be removed from such
position (subject to any other contractual obligation or other obligation
imposed by operation of law), in which event the Corporation shall have no
obligation under this Agreement to continue Indemnitee in any such position.
2. INDEMNIFICATION. The Corporation shall indemnify Indemnitee against
Expenses and Liabilities in connection with any Proceeding arising out of acts
or omissions of Indemnitee occurring during Indemnitee's service as a director
or as an officer of the Corporation to the fullest extent permitted by
applicable law or the Certificate of Incorporation in effect on the date hereof
or as such law or Certificate of Incorporation may from time to time be amended
(but, in the case of any such amendment, only to the extent such amendment
permits the Corporation to provide broader indemnification rights than the law
or Certificate of Incorporation permitted the Corporation to provide before such
amendment). The right to indemnification provided in the Certificate of
Incorporation shall be presumed to have been relied upon by Indemnitee in
serving or continuing to serve the Corporation and shall be
enforceable as a contract right. Without diminishing the scope of the
indemnification provided by this Section 2, the Corporation shall indemnify
Indemnitee whenever he or she is or was a party or is threatened to be made a
party to any Proceeding, including without limitation any such Proceeding
brought by or in the right of the Corporation, because he or she is or was a
director or officer of the Corporation or because of anything done or not done
by Indemnitee in such capacity, against Expenses and Liabilities actually and
reasonably incurred by Indemnitee or on his or her behalf in connection with
such Proceeding, including the costs of any investigation, defense, settlement
or appeal, except that no indemnification shall be made with respect to any
claim, issue or matter if Indemnitee was finally adjudged to be liable to the
Corporation by a court of competent jurisdiction due to his or her gross
negligence or willful misconduct unless and to the extent that a Delaware Court
of Chancery or the court in which the action was heard determines that
Indemnitee is entitled to indemnification for such amounts as the court deems
proper. In addition to, and not as a limitation of the foregoing, the rights of
indemnification of Indemnitee provided under this Agreement shall include those
rights set forth in Sections 3, 6, 8 and 12 below.
3. ADVANCEMENT OF EXPENSES. All reasonable Expenses incurred by or on
behalf of Indemnitee shall be advanced from time to time by the Corporation to
Indemnitee within thirty (30) days after the Corporation's receipt of a written
request for an advancement of Expenses, whether prior to or after final
disposition of a Proceeding (except to the extent that there has been a Final
Adverse Determination that Indemnitee is not entitled to be indemnified for such
Expenses), including without limitation any Proceeding brought by or in the
right of the Corporation. The written request for an advancement of any and all
Expenses under this Section 3 shall contain reasonable detail of the Expenses
incurred by Indemnitee. The Indemnitee hereby undertakes to repay the amounts
advanced only if, and to the extent that, it is ultimately determined that
Indemnitee is not entitled to be indemnified pursuant to the terms of this
Agreement.
4. LIMITATIONS. The foregoing indemnity and advancement of Expenses
shall apply only to the extent that Indemnitee has not been indemnified and
reimbursed pursuant to such insurance as the Corporation may maintain for
Indemnitee's benefit, or otherwise; provided, however, that notwithstanding the
availability of such other indemnification and reimbursement, Indemnitee may
claim indemnification and advancement of Expenses pursuant to this Agreement by
assigning to the Corporation, at its request, Indemnitee's claims under such
insurance to the extent Indemnitee has been paid by the Corporation.
5. INSURANCE AND FUNDING. The Corporation may purchase and maintain
insurance to protect itself and/or Indemnitee against any Expenses and
Liabilities in connection with any Proceeding to the fullest extent permitted by
applicable laws. The Corporation may create a trust fund, grant an interest or
use other means (including, without limitation, a letter of credit) to ensure
the payment of such amounts as may be necessary to effect indemnification or
advancement of Expenses as provided in this Agreement.
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6. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) NOTIFICATION OF PROCEEDING. Whenever Indemnitee believes that he
or she is entitled to indemnification pursuant to this Agreement, Indemnitee
shall submit a written request for indemnification to the Corporation. Any
request for indemnification shall include sufficient documentation or
information reasonably available to Indemnitee to support his or her claim for
indemnification. Indemnitee shall submit such claim for indemnification
promptly after receipt by the Indemnitee of notice of the commencement of any
Proceeding, any judgment, order, settlement, dismissal, arbitration award,
conviction, acceptance of a plea of nolo contendere or its equivalent, final
termination or other disposition or partial disposition of any Proceeding. The
omission so to notify the Corporation will not relieve it from any liability
which it may have to Indemnitee if such omission does not prejudice the
Corporation's rights. If such omission does prejudice the Corporation's rights,
the Corporation will be relieved from liability only to the extent of such
prejudice, and such omission will not relieve the Corporation from any liability
which it may have to Indemnitee otherwise than under this Agreement.
(b) REQUEST FOR INDEMNIFICATION. The Corporation shall provide any
indemnification requested by Indemnitee not later than ninety (90) days after
the Corporation's receipt of the written request of the Indemnitee for such
indemnification, unless a good faith determination is made within said 90-day
period (i) by the Board of Directors by a majority vote of a quorum thereof
consisting of Disinterested Directors; or (ii) in the event such a quorum is not
obtainable, at the election of the Corporation, either by independent legal
counsel in a written opinion or by a panel of arbitrators, one of whom is
selected by the Corporation, another of whom is selected by the Indemnitee and
the last of whom is selected by the first two arbitrators so selected, that the
Indemnitee is not or (subject to final judgment or other final adjudication as
provided in Section 10(a) below) ultimately will not be entitled to
indemnification hereunder.
(c) APPLICATION FOR ENFORCEMENT. Notwithstanding a determination
under Section 6(b) above that the Indemnitee is not entitled to indemnification
with respect to any specific proceeding, the Indemnitee shall have the right to
apply to any court of competent jurisdiction for the purpose of enforcing the
Indemnitee's right to indemnification pursuant to this Agreement. Neither the
failure of the Corporation (including its Board of Directors or independent
legal counsel or the panel of arbitrators) to have made a determination prior to
the commencement of such action that the Indemnitee is entitled to
indemnification hereunder, nor an actual determination by the Corporation
(including its Board of Directors or independent legal counsel or the panel of
arbitrators) that the Indemnitee is not entitled to indemnification hereunder,
shall be a defense to the action or create any presumption that the Indemnitee
is not entitled to indemnification hereunder.
(d) INDEMNIFICATION OF CERTAIN EXPENSES. The Corporation shall
indemnify the Indemnitee against all expenses incurred in connection with any
hearing or proceeding under this Section 6 if the Indemnitee prevails in such
hearing or proceeding.
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(e) LIMITATION. If a determination that Indemnitee is entitled to
indemnification has been made pursuant to this Section 6 hereof or otherwise
pursuant to the terms of this Agreement, the Corporation shall be bound by such
determination in the absence of (i) a misrepresentation or omission of a
material fact by Indemnitee or (ii) a specific finding (which has become final)
by an appropriate court of the State of Delaware that all or any part of such
indemnification is expressly prohibited by law.
7. MODIFICATION, WAIVER, TERMINATION AND CANCELLATION. No supplement,
modification, termination, cancellation or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver.
8. SUBROGATION. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Corporation effectively to
bring suit to enforce such rights.
9. DEFENSE OF CLAIM.
(a) ASSUMPTION OF DEFENSE. In the event that the Corporation shall
be obligated to pay the Expenses and Liabilities of any Proceeding against the
Indemnitee, the Corporation, jointly with any other indemnifying party similarly
notified, will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee; provided, however, that the Corporation
shall not be entitled to assume the defense of any Proceeding if Indemnitee
shall have reasonably concluded that there may be a conflict of interest between
the Corporation and Indemnitee with respect to such Proceeding. After notice
from the Corporation to Indemnitee of its election to assume the defense
thereof, the Corporation will not be liable to Indemnitee under this Agreement
for any Expenses subsequently incurred by Indemnitee in connection with the
defense thereof, other than reasonable costs of investigation or as otherwise
provided below. Indemnitee shall have the right to employ his or her own
counsel in such Proceeding but the fees and expenses of such counsel incurred
after notice from the Corporation of its assumption of the defense thereof shall
be at the expense of Indemnitee unless:
(i) The employment of counsel by Indemnitee has been authorized
by the Corporation;
(ii) Indemnitee shall have reasonably concluded that counsel
engaged by the Corporation may not adequately represent Indemnitee; or
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(iii) The Corporation shall not in fact have employed counsel to
assume the defense in such Proceeding or shall not in fact have assumed such
defense and be acting in connection therewith with reasonable diligence; in each
of which cases the fees and expenses of such counsel shall be at the expense of
the Corporation.
(b) SETTLEMENT. The Corporation shall not settle any Proceeding in
any manner which would impose any penalty or limitation on Indemnitee without
Indemnitee's written consent; provided, however, that Indemnitee will not
unreasonably withhold his or her consent to any proposed settlement.
10. EXCEPTIONS.
(a) CERTAIN MATTERS. Any provision herein to the contrary
notwithstanding, the Corporation shall not be obligated pursuant to the terms of
this Agreement to indemnify the Indemnitee on account of any Proceeding with
respect to (i) remuneration paid to the Indemnitee if it is determined by final
judgment or other final adjudication that such remuneration was in violation of
law; (ii) which final judgment is rendered against the Indemnitee for an
accounting of profits made from the purchase or sale by the Indemnitee of
securities of the Corporation or any affiliate of the Corporation pursuant to
the provisions of Section 16(b) of the Securities Exchange Act of 1934, as
amended, or similar provisions of any federal, state or local statute; or
(iii) which (but only to the extent that) it is determined by final judgment or
other final adjudication that the Indemnitee's conduct was in bad faith,
knowingly fraudulent or deliberately dishonest. For purposes of the foregoing
sentence, a final judgment or other adjudication may be reached in either the
underlying Proceeding or action in connection with which indemnification is
sought or a separate proceeding or action to establish rights and liabilities
under this Agreement.
(b) CLAIMS INITIATED BY THE INDEMNITEE. Any provision herein to the
contrary notwithstanding, the Corporation shall not be obligated pursuant to the
terms of this Agreement to indemnify or advance expenses to the Indemnitee with
respect to Proceedings initiated or brought voluntarily by the Indemnitee and
not by way of defense, except with respect to Proceedings brought to establish
or enforce a right to indemnification under this Agreement or any other statute
or law or otherwise as required under Section 145 of the Delaware General
Corporation Law, but such indemnification or advancement of Expenses may be
provided by the Corporation in specific cases if the Board finds it to be
appropriate. Any provision herein to the contrary notwithstanding, the
Corporation shall not be obligated pursuant to the terms of this Agreement to
indemnify the Indemnitee for any Expenses incurred by the Indemnitee with
respect to any Proceeding instituted by the Indemnitee to enforce or interpret
this Agreement if the Indemnitee does not prevail in such Proceeding.
(c) UNAUTHORIZED SETTLEMENTS. Any provision herein to the contrary
notwithstanding, the Corporation shall not be obligated pursuant to the terms of
this Agreement to indemnify the Indemnitee under this Agreement for any amounts
paid in settlement of a Proceeding effected without the Corporation's written
consent. Neither the Corporation nor the
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Indemnitee shall unreasonably withhold consent to any proposed settlement;
provided, however, that the Corporation may in any event decline to consent to
(or to otherwise admit or agree to any liability for indemnification hereunder
in respect of) any proposed settlement if the Corporation determines in good
faith (pursuant to Section 6(b) above) that the Indemnitee is not or ultimately
will not be entitled to indemnification hereunder.
(d) SECURITIES ACT LIABILITIES. Any provision herein to the contrary
notwithstanding, the Corporation shall not be obligated pursuant to the terms of
this Agreement to indemnify the Indemnitee or otherwise act in violation of any
undertaking appearing in and required by the rules and regulations promulgated
under the Securities Act of 1933, as amended (the "Act"), in any registration
statement filed with the Securities and Exchange Commission under the Act. The
Indemnitee acknowledges that paragraph (h) of Item 512 of Regulation S-K
currently generally requires the Corporation to undertake in connection with any
registration statement filed under the Act to submit the issue of the
enforceability of the Indemnitee's rights under this Agreement in connection
with any liability under the Act on public policy grounds to a court of
appropriate jurisdiction and to be governed by any final adjudication of such
issue. The Indemnitee specifically agrees that any such undertaking shall
supersede the provisions of this Agreement and to be bound by any such
undertaking.
11. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(a) If to Indemnitee, to:
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(b) If to the Corporation, to:
Golden State Vintners, Inc.
000 Xxxxx'x Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Secretary
or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.
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12. NONEXCLUSIVITY. The rights of Indemnitee hereunder shall not be
deemed exclusive of any other rights to which Indemnitee may now or in the
future be entitled under the Delaware General Corporation Law, the Corporation's
Certificate of Incorporation or Bylaws, or any agreements, vote of stockholders,
resolution of the Board of Directors or otherwise.
13. CERTAIN DEFINITIONS.
(a) "Disinterested Director" shall mean a director of the Corporation
who is not or was not a party to the Proceeding in respect of which
indemnification is being sought by Indemnitee.
(b) "Expenses" shall include all direct and indirect costs
(including, without limitation, attorneys' fees, retainers, court costs,
transcripts, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
all other disbursements or out-of-pocket expenses and reasonable compensation
for time spent by Indemnitee for which he or she is otherwise not compensated by
the Corporation) actually and reasonably incurred in connection with a
Proceeding or establishing or enforcing a right to indemnification under this
Agreement, applicable law or otherwise; provided, however, that "Expenses" shall
not include any Liabilities.
(c) "Final Adverse Determination" shall mean that a determination
that Indemnitee is not entitled to indemnification shall have been made pursuant
to Section 6 hereof and either (1) a final adjudication in a Delaware court
pursuant to Section 8(a) hereof shall have denied Indemnitee's right to
indemnification hereunder, or (2) Indemnitee shall have failed to file a
complaint in a Delaware court pursuant to Section 8(a) for a period of one
hundred twenty (120) days after the determination made pursuant to Section 6
hereof.
(d) "Indemnification Period" shall mean the period of time during
which Indemnitee shall continue to serve as a director or as an officer of the
Corporation, and thereafter so long as Indemnitee shall be subject to any
possible Proceeding arising out of acts or omissions of Indemnitee as a director
or as an officer of the Corporation.
(e) "Liabilities" shall mean liabilities of any type whatsoever
including, but not limited to, any judgments, fines, ERISA excise taxes and
penalties, penalties and amounts paid in settlement (including all interest
assessments and other charges paid or payable in connection with or in respect
of such judgments, fines, penalties or amounts paid in settlement) of any
Proceeding.
(f) "Proceeding" shall mean any threatened, pending or completed
action, claim, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative, including any and all appeals
therefrom.
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14. BINDING EFFECT, DURATION AND SCOPE OF AGREEMENT. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Corporation), spouses, heirs
and personal and legal representatives. This Agreement shall continue in effect
during the Indemnification Period, regardless of whether Indemnitee continues to
serve as a director or as an officer.
15. SEVERABILITY. If any provision or provisions of this Agreement (or
any portion thereof) shall be held to be invalid, illegal or unenforceable for
any reason whatsoever:
(a) the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby; and
(b) to the fullest extent legally possible, the provisions of this
Agreement shall be construed so as to give effect to the intent of any provision
held invalid, illegal or unenforceable.
16. GOVERNING LAW AND INTERPRETATION OF AGREEMENT. This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Delaware, as applied to contracts between Delaware residents entered
into and to be performed entirely within Delaware. If the laws of the State of
Delaware are hereafter amended to permit the Corporation to provide broader
indemnification rights than said laws permitted the Corporation to provide prior
to such amendment, the rights of indemnification and advancement of expenses
conferred by this Agreement shall automatically be broadened to the fullest
extent permitted by the laws of the State of Delaware, as so amended.
17. CONSENT TO JURISDICTION. The Corporation and Indemnitee each
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement. The Corporation and Indemnitee each agree that
any action instituted under this Agreement shall be brought only in the state
courts of the State of Delaware.
18. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties hereto, and there are no other agreements, contracts or
understandings between the parties hereto with respect to the subject matter of
this Agreement, except as specifically referred to herein or as provided in
Section 12 hereof.
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19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement.
COMPANY: GOLDEN STATE VINTNERS, INC.
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INDEMNITEE:
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Name:
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Title:
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