Exhibit 99.4
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT, dated as of January 2, 2003, by and between THE
SAGEMARK COMPANIES LTD., a corporation organized under the laws of the State of
New York (the "Corporation"), with its principal office located at 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and XXXXXXXX X. XXXXXXX, XXXXXXX X.
XXXXXXXX, M.D., XXXXXX X. XXXXXXX, XXXXXX X. XXXXXX, XXXXXXXX X. XXXXXXXX and
XXXXXX X. XXXXXXX, individuals with an address at c/o Premier P.E.T. Imaging
International, Inc., 0000 Xxxxxx Xxxx, Xxxxx 000X, Xxxx Xxxxx, Xxxxxxx
00000(xxxx an "Indemnitee" and collectively, the "Indemnitees").
WHEREAS, the substantial increase in corporate litigation subjects directors and
officers of corporations and others to expensive litigation risks at the same
time that the availability of competent and qualified directors, officers,
employees, consultants, advisers and agents has been greatly reduced, and the
coverage offered by director's and officer's liability insurance has been
severely limited;
WHEREAS, Indemnitees do not regard the protection available under the
Corporation's Articles of Incorporation, By-Laws and professional liability
insurance as adequate in the present circumstances and are not willing to serve
as officers and/or directors of the Corporation without adequate protection, and
the Corporation desires Indemnitees to serve in such capacities;
WHEREAS, as a condition to the Indemnitees' agreement to continue to serve as
officers and/or directors of the Corporation, each of the Indemnitees requires
that he be indemnified from liability to fullest extent permitted by law; and
WHEREAS, the Corporation is willing to indemnify each of the Indemnitees to the
fullest extent permitted by law in order to retain the services of the
Indemnitees.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein, the Corporation and the Indemnitees agree as follows:
SECTION 1
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MANDATORY INDEMNIFICATION IN PROCEEDINGS OTHER THAN THOSE BY OR IN THE RIGHT OF
THE CORPORATION
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Subject to Section 5 hereof, the Corporation shall defend, indemnify and hold
harmless each Indemnitee from and against any and all claims, damages, costs,
expenses (including attorneys' fees), judgments, penalties, fines (including
excise taxes assessed with respect to an employee benefit plan), settlements,
and all other obligations or liabilities incurred or paid by him in connection
with the investigation, defense, prosecution, settlement or appeal of any
threatened, pending or completed legal action, suit or proceeding, whether
civil, criminal, administrative, or investigative (other than a legal action or
proceeding by or in the right of the Corporation) and to which an Indemnitee was
or is a party or is threatened to be made a party by reason of the fact that the
Indemnitee is or was an officer, director, shareholder, employee, consultant,
adviser or agent of the Corporation, or is or was serving at the request of the
Corporation as an officer, director, partner, trustee, employee, adviser or
agent of another corporation (including subsidiaries of the Corporation),
partnership, joint venture, trust, employee benefit plan or other enterprise, or
by reason of anything done or not done by an Indemnitee in any such capacity or
capacities, provided that the Indemnitee acted in good faith and in a manner the
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
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SECTION 2
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MANDATORY INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION
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Subject to Section 5 hereof, the Corporation shall defend, indemnify and hold
harmless each Indemnitee from and against any and all claims, damages, costs,
expenses (including attorneys' fees), judgments, penalties, fines, obligations,
liabilities and amounts incurred or paid by him in connection with the
investigation, defense, prosecution, settlement or appeal of any threatened,
pending or completed legal action, suit or proceeding by or in the right of the
Corporation to procure a judgment in its favor, whether civil, criminal,
administrative or investigative, and to which the Indemnitee was or is a party
or is threatened to be made party by reason of the fact that the Indemnitee is
or was an officer, director, shareholder, employee, consultant, adviser, or
agent of the Corporation, or is or was serving at the request of the Corporation
as an officer, director, partner, trustee, employee adviser or agent of another
corporation (including subsidiaries of the Corporation), partnership, joint
venture, trust, employee benefit plan or other enterprise, or by reason of
anything done or not done by an Indemnitee in any such capacity or capacities,
provided that (i) the Indemnitee acted in good faith and in a manner the
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Corporation and (ii) no indemnification shall be made under this Section 2
in respect of any claim, issue or matter as to which the Indemnitee shall have
been adjudged to be liable to the Corporation for misconduct in the performance
of his duty to the Corporation unless, and only to the extent that, the court in
which such proceeding was brought (or any other court of competent jurisdiction)
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such costs, expenses and other amounts
which such court shall deem proper.
SECTION 3
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MANDATORY INDEMNIFICATION AGAINST EXPENSES INCURRED WHILE TESTIFYING
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Subject to Section 5 hereof, the Corporation shall indemnify each Indemnitee
against all costs and expenses (including attorneys' fees) incurred or paid by
the Indemnitee as a result of providing testimony in any legal action or
proceeding, whether civil, criminal, administrative or investigative (including
but not limited to any legal action or proceeding by or in the right of the
Corporation to procure judgment in its favor), by reason of the fact that the
Indemnitee is or was an officer, director, shareholder, employee, consultant,
adviser or agent of the Corporation, or is or was serving at the request of the
Corporation as an officer, director, partner, trustee, employee, adviser or
agent of another corporation (including subsidiaries of the Corporation),
partnership, joint venture, trust, employee benefit plan or other enterprise.
SECTION 4
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REIMBURSEMENT OF EXPENSES FOLLOWING ADJUDICATION OF NEGLIGENCE
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The Corporation shall reimburse each Indemnitee for all costs and expenses
(including attorneys' fees) and amounts incurred or paid by him in connection
with the investigation, defense, settlement or appeal of any legal action or
proceeding described in Section 2 hereof that results in an adjudication that
the Indemnitee was liable for negligence, gross negligence or recklessness (but
not willful misconduct) in the performance of his duty to the Corporation;
provided, however, that the Indemnitee acted in good and in a manner he believed
to be in the best interests of the Corporation.
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SECTION 5
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AUTHORIZATION OF INDEMNIFICATION
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5.1. Any indemnification under Sections 1, 2 and 3 hereof (unless ordered by a
court), and any reimbursement made under Section 4 hereof, shall be made by the
Corporation only as authorized in the specific case upon a determination (the
"Determination") that indemnification or reimbursement of the Indemnitee is
proper in the circumstances because the Indemnitee has met the applicable
requirements set forth in Sections 1, 2, 3 and 4 hereof, as the case may be.
Subject to Sections 6.6, 6.7 and 9 of this Agreement, the Determination shall be
made in the following order of preference:
(1) first, by the Corporation's Board of Directors (the "Board") by majority
vote or consent of a quorum consisting of directors ("Disinterested Directors")
who are not, at the time of the Determination, named parties to such legal
action, suit, or proceeding; or
(2) next, if such quorum of Disinterested Directors cannot be obtained, by
majority vote or consent of a committee duly designated by the Board (in which
designation of all directors, whether or not Disinterested Directors, may
participate) consisting solely of two or more Disinterested Directors; or
(3) next, if such a committee cannot be designated, by any independent legal
counsel (who may be any outside counsel regularly employed by the Corporation)
in a written opinion; or
(4) next, if such legal counsel determination cannot be obtained, by vote or
consent of the holders of a majority of the Corporation's common stock.
5.2. No Presumptions. The termination of any legal action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Indemnitee
did not act in good faith and in a manner that he reasonably believed to be in
or not opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was not unlawful.
5.3. Benefit Plan Conduct. The Indemnitee's conduct with respect to an employee
benefit plan for a purpose he reasonably believed to be in the interests of the
participants in and beneficiaries of the plan shall be deemed to be conduct that
the Indemnitee reasonably believed to be not opposed to the best interests of
the Corporation.
5.4. Reliance a Safe Harbor. For purposes of any Determination hereunder, the
Indemnitee shall be deemed to have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal action or proceeding, to have had
no reasonable cause to believe his conduct was unlawful, if his action is based
on (i) the records or books of account of the Corporation or another enterprise,
including financial statements, (ii) information supplied to him by the officers
of the Corporation or another enterprise in the course of their duties, (iii)
the advice of legal counsel for the Corporation or another enterprise, or (iv)
information or records given or reports made to the Corporation or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this Section 5.3 shall mean
any other corporation (including subsidiaries of the Corporation) or any
partnership, joint venture, trust, employee benefit plan or other enterprise of
which the Indemnitee is or was serving at the request of the Corporation as an
officer, director, partner, trustee, employee, adviser or agent. The provisions
of this Section 5.3 shall not be deemed to be exclusive or to limit in any way
the other circumstances in which an Indemnitee may be deemed to have met the
applicable standard of conduct set forth in Section 1, 2, or 4 hereof, as the
case may be.
5.5. Success on Merits or Otherwise. Notwithstanding any other provision of this
Agreement, to the extent that an Indemnitee has been successful on the merits or
otherwise in defense of any action, suit, or proceeding described in Section 1
or 2 hereof, or in defense of any claim, issue or matter therein, he shall be
indemnified against all costs and expenses (including attorneys' fees) incurred
by him in connection with the investigation, defense, settlement or appeal
thereof. For purposes of this Section 5.4, the term "successful on the merits or
otherwise" shall include, but not be limited to, (i) any termination,
withdrawal, or dismissal (with or without prejudice) of any claim, action, suit
or proceeding against the Indemnitee without any express finding of liability or
guilt against him, or (ii) the expiration of 120 days after the making of any
claim or threat of an action, suit or proceeding without the institution of the
same and without any promise or payment made to induce a settlement.
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5.6. Partial Indemnification or Reimbursement. If the Indemnitee is entitled
under any provision of this Agreement to indemnification and/or reimbursement by
the Corporation for some or a portion of the claims, damages, expenses
(including attorneys' fees), judgments, penalties, fines or amounts paid in
settlement by the Indemnitee in connection with the investigation of, defense
of, settlement of, appeal of our testimony provided with respect to any action
or proceeding specified in Section 1, 2, or 3 hereof, but not, however, for the
total amount thereof, the Corporation shall nevertheless indemnify and/or
reimburse the Indemnitee for the portion thereof to which the Indemnitee is
entitled. The party or parties making the Determination shall determine the
portion (if less than all) of such claims, damages, expenses (including
attorneys' fees), judgments, penalties, fines or amounts paid in settlement for
which the Indemnitee is entitled to indemnification and/or reimbursement under
this Agreement.
SECTION 6
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PROCEDURES FOR DETERMINATION OF WHETHER STANDARDS HAVE BEEN SATISFIED
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6.1. Costs. All costs of making the Determination required by Section 5
hereof shall be borne solely by the Corporation, including, but not limited to,
the costs of legal counsel, proxy solicitations and judicial determinations. The
Corporation shall also be solely responsible for paying (i) all reasonable costs
and expenses incurred by the Indemnitee to enforce this Agreement, including,
but not limited to, all costs incurred by the Indemnitee to obtain court-ordered
indemnification pursuant to Section 9 hereof, regardless of the outcome of any
such application or proceeding, and (ii) all costs of defending any legal
actions or proceedings challenging payments to the Indemnitee under this
Agreement.
6.2. Timing of the Determination. The Corporation shall use its best efforts to
make the Determination contemplated by Section 5 hereof promptly (but in no
event later than forty-five (45) days after receipt by the Corporation of a
written request for indemnification). In addition, the Corporation agrees:
(a) if the Determination is to be made by the Board or a committee thereof, such
Determination shall be made not later than 15 days after a written request for a
Determination (a "Request") is delivered to the Corporation by the Indemnitee;
(b) if the Determination is to be made by independent legal counsel, such
Determination shall be made not later than 30 days after a Request is delivered
to the Corporation by the Indemnitee; and
(c) if the Determination is to be made by the shareholders of the Corporation,
such Determination shall be made not later than 90 days after a Request is
delivered to the Corporation by the Indemnitee.
The failure to make a Determination within the above-specified time period shall
constitute a Determination approving full indemnification or reimbursement of
the Indemnitee. Notwithstanding anything herein to the contrary, a Determination
may be made in advance of (i) the Indemnitee's payment (or incurring) of
expenses with respect to which indemnification of reimbursement is sought,
and/or (ii) final disposition of the action, suit or proceeding with respect to
which indemnification or reimbursement is sought.
6.3. Payment of Indemnified Amount. Immediately following a Determination that
the Indemnitee has met the applicable requirements set forth in Sections 1, 2,
3, or 4 hereof, as the case may be, or the passage of time prescribed for making
such Determination(s), the Corporation shall pay to the Indemnitee in cash, the
amount which the Indemnitee is entitled to be indemnified and/or reimbursed, as
the case may be, without further authorization or action by the Board; provided,
however, that costs and expenses for which indemnification or reimbursement is
sought have actually been incurred by the Indemnitee.
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6.4. Shareholder Vote on Determination. Notwithstanding the provisions of
applicable law, if the Indemnitee is a shareholder of the Corporation, the
Indemnitee and any other shareholder who is a party to the legal action or
proceeding for which indemnification or reimbursement is sought shall be
entitled to vote on any Determination to be made by the Corporation's
shareholders. In addition, in connection with each meeting at which a
shareholder Determination will be made, the Corporation shall solicit proxies
that expressly include a proposal to indemnify or reimburse the Indemnitee. The
Corporation's proxy statement relating to the proposal to indemnify or reimburse
an Indemnitee shall not include a recommendation against indemnification or
reimbursement.
6.5. Selection of Independent Legal Counsel. If the Determination required under
Section 5 is to be made by independent legal counsel, such counsel shall be
selected by the Indemnitee with the approval of the Board, which approval shall
not be unreasonably withheld. The fees and expenses incurred by counsel in
making any Determination (including Determinations pursuant to Section 6.7
hereof) shall be borne solely by the Corporation regardless of the results of
any Determination and, if requested by counsel, the Corporation shall give
counsel an appropriate written agreement with respect to the payment of their
fees and expenses and such other matters as may be reasonably requested by
counsel.
6.6. Right of Indemnitee to Appeal an Adverse Determination by Board. If a
Determination is made by the Board or a committee thereof that the Indemnitee
did not meet the requirements set forth in Section 1, 2, 3, or 4 hereof, upon
the written request of the Indemnitee and the Indemnitee's delivery of $500 to
the Corporation, the Corporation shall cause a new Determination to be made by
the Corporation's shareholders at the next regular or special meeting of
shareholders. Subject to Section 9 hereof, such Determination by the
Corporation's shareholders shall be binding and conclusive for all purposes of
this Agreement.
6.7. Right of Indemnitee to Select Forum for Determination. If at any time
subsequent to the date of this Agreement, Continuing Directors (as defined
below) do not constitute a majority of the members of the Board, or there is
otherwise a change in control of the Corporation, then upon the request of the
Indemnitee, the Corporation shall cause the Determination required by Section 5
hereof to be made by independent counsel selected by the Indemnitee and approved
by the Board (which approval shall not be unreasonably withheld), which counsel
shall be deemed to satisfy the requirements of clause (3) of Section 5 hereof.
If legal counsel selected by the Indemnitee is not willing and/or able to make
the Determination, then the Corporation shall cause the Determination to be made
by a majority vote or consent of a Board committee consisting solely of
Continuing Directors. For purposes of this Agreement, a "Continuing Director"
means either a member of the Board on the date of this Agreement or a person
nominated to serve as a member of the Board by a majority of the then Continuing
Directors.
6.8. Access by Indemnitee to Determination. The Corporation shall afford to the
Indemnitee and his representatives ample opportunity to present evidence of the
facts upon which the Indemnitee relies for indemnification or reimbursement,
together with other information relating to any requested Determination. The
Corporation shall also afford the Indemnitee the reasonable opportunity to
include such evidence and information in any Corporation proxy statement
relating to a shareholder Determination.
6.9. Judicial Determinations in Derivative Suits. In each legal action or
proceeding described in Section 2 hereof, the Corporation shall cause its
counsel to use its best efforts to obtain from the Court in which such action or
proceeding was brought (i) an express adjudication whether the Indemnitee is
liable for negligence or misconduct in the performance of his duty to the
Corporation, and, if the Indemnitee is so liable, (ii) a determination whether
and to what extent, despite the adjudication of liability but in view of all the
circumstances of the case (including this Agreement), the Indemnitee is fairly
and reasonably entitled to indemnification.
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SECTION 7
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SCOPE OF INDEMNITY
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The actions, suits and proceedings described in Section 1 and 2 hereof shall
include, for purposes of this Agreement, any actions that involve, directly or
indirectly, activities of the Indemnitee both in his capacities as a Corporation
director, officer, adviser, or agent and actions taken in another capacity while
serving as a director, officer, adviser, or agent, including, but not limited
to, actions or proceedings involving (i) compensation paid to the Indemnitee by
the Corporation (ii) activities by the Indemnitee on behalf of the Corporation,
including actions in which the Indemnitee is plaintiff, (iii) actions alleging a
misappropriation of a "corporate opportunity", (iv) responses to a takeover
attempt or threatened takeover attempt of the Corporation, (v) transactions by
the Indemnitee in the Corporation's securities, and (vi) the Indemnitee's
preparation for and appearances (or potential appearance) as a witness in any
action or proceeding relating, directly or indirectly, to the Corporation. In
addition, the Corporation agrees that, for purposes of this Agreement, all
services performed by the Indemnitee on behalf of, in connection with or related
to any subsidiary of the Corporation, any employee benefit plan established for
the benefit of employees of the Corporation or any subsidiary, corporation,
partnership or other entity in which the Corporation or any subsidiary has a 5%
or greater ownership interest, or any other affiliate shall be deemed to be at
the request of the Corporation.
SECTION 8
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ADVANCE FOR EXPENSES
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8.1. Mandatory Advance. All costs and expenses (including attorneys' fees)
incurred by the Indemnitee in investigating, defending, settling, or appealing
any action, suit or proceeding described in Section 1 or 2 hereof shall be paid
by the Corporation in advance of the final disposition of such action, suit or
proceeding. The Corporation shall promptly pay the amount of such costs and
expenses to the Indemnitee, but in no event later than 7 days following the
Indemnity's delivery to the Corporation of a written request for an advance
pursuant to this Section 8, together with a reasonable accounting of such costs
and expenses.
8.2. Undertaking to Repay. The Indemnitee hereby undertakes and agrees to repay
to the Corporation any advances made pursuant to this Section 8 if and to the
extent that it shall ultimately be found that the Indemnitee is not entitled to
be indemnified by the Corporation for such amounts.
8.3. Miscellaneous. The Corporation shall make the advances contemplated by this
Section 8 regardless of the Indemnitee's financial ability to make repayment,
and regardless of whether indemnification of the Indemnitee by the Corporation
will ultimately be required. Any advances and undertakings to repay pursuant to
this Section 8 shall be unsecured and interest-free.
SECTION 9
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COURT ORDERED INDEMNIFICATION
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9.1. Application to Court. Regardless of whether the Indemnitee has met the
requirements set forth in Section 1, 2, 3, or 4 hereof, as the case may be, and
notwithstanding the presence or absence of any Determination whether such
standards have been satisfied, the Indemnitee may apply for indemnification
(and/or reimbursement pursuant to Section 4 or 13 hereof) to the court
conducting any action or proceeding to which the Indemnitee is a party or to any
other court of competent jurisdiction. On receipt of an application, the court,
after giving any notice the court considers necessary, may order indemnification
(and/or reimbursement) if it determines the Indemnitee is fairly and reasonably
entitled to indemnification (and/or reimbursement) in view of all the relevant
circumstances (including this Agreement).
9.2. Enforceability. The right to indemnification and advances as provided by
this Agreement shall be enforceable by an Indemnitee in an action in any court
of competent jurisdiction. In such an action, the burden of proving that
indemnification is not required hereunder shall be on the Corporation. Neither
the failure of the Corporation (including its Board and independent legal
counsel) to have made a declaration prior to the commencement of such an action
that indemnification is proper in the circumstances because Indemnitee has met
the applicable standard of conduct, nor an actual Determination by the
Corporation (including its Board and independent legal counsel) that Indemnitee
has not met such applicable standard of conduct, shall be a defense to such an
action or create a presumption that Indemnitee has not met the applicable
standard of conduct. Indemnitee's expenses reasonably incurred in connection
with establishing his right to indemnification, in whole or in part, in
connection with any proceeding shall also be indemnified by the Corporation.
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SECTION 10
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NON-DISCLOSURE OF PAYMENTS
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Except as expressly required by applicable law, neither the Corporation nor any
Indemnitee shall disclose any payments under this Agreement unless prior
approval of each of the applicable parties is obtained. Any payments to an
Indemnitee that must be disclosed shall, unless otherwise required by law, be
described only in the Corporation's proxy or information statements relating to
special and/or annual meetings of the Corporation's shareholders, and the
Corporation shall afford the Indemnitee the reasonable opportunity to review all
such disclosures and, if requested, to explain in such statement any mitigating
circumstances regarding the events reported.
SECTION 11
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COVENANT NOT TO XXX, LIMITATION OF ACTIONS AND RELEASE OF CLAIMS
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No legal action shall be brought and no cause of action shall be asserted by or
on behalf of the Corporation (or any of its subsidiaries) against an Indemnitee,
his spouse, heirs, executors, personal representatives or administrators, after
the expiration of 2 years from the date the Indemnitee ceases (for any reason)
to serve as either an officer, director, advisor, or agent of the Corporation,
and any claim or cause of action of the Corporation (or any of its subsidiaries)
shall be extinguished and deemed released unless asserted by filing of a legal
action within such 2-year period.
SECTION 12
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INDEMNIFICATION OF INDEMNITEE'S ESTATE
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Notwithstanding any other provision of this Agreement, if the Indemnitee is
deceased, and indemnification of the Indemnitee would be permitted and/or
required under this Agreement, the Corporation shall defend, indemnify and hold
harmless the Indemnitee's estate, spouse, heirs, administrators, personal
representatives and executors (collectively the "Indemnitee's Estate") against,
and the Corporation shall assume, any and all claims, damages, liabilities,
costs, expenses (including attorney's fees) penalties, judgements, fines, and
amounts paid in settlement actually incurred by the Indemnitee or the
Indemnitee's Estate in connection with the investigation, defense, settlement,
or appeal of any action or proceeding described in Section 1 or 2 hereof.
SECTION 13
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DEFENSE OF CLAIMS
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13.1. Notification of Indemnification Claim. Promptly after receipt by
Indemnitee of notice of the commencement of any legal action or proceeding which
is the subject of this Agreement, Indemnitee will, if a claim in respect thereof
is to be made against the Corporation under this Agreement, notify the
Corporation in writing of the commencement thereof, but the omission to so
notify the Corporation will not relieve the Corporation from any liability that
it may have to the Indemnitee, unless such omission prejudices the Corporation
with respect thereto.
13.2. Defense of Claim. Notwithstanding any other provision of this Agreement,
with respect to any such legal action or proceeding to which an Indemnitee gives
notice to the Corporation of the commencement thereof: (a) The Corporation will
be entitled to participate therein at its own expense; and (b) except as
otherwise provided in this Section 13.2, to the extent that it wishes, the
Corporation, jointly with any other indemnifying party similarly notified, shall
be entitled to assume the defense thereof, with counsel reasonably satisfactory
to the Indemnitee. After notice from the Corporation to an Indemnitee of its
election to so assume the defense of any such action or proceeding, the
Page 42
Corporation shall not be liable to the Indemnitee under this Agreement for any
legal or other expenses subsequently incurred by Indemnitee in connection with
the defense thereof, other than the costs of investigation or as otherwise
provided below, provided that the Indemnitee approves counsel to be engaged by
the Corporation therein. Indemnitee shall have the right to employ its own
counsel in any such legal action or proceeding, however, the fees and expenses
of such counsel following the date of Indemnitee's approval of the Corporation's
counsel therein shall be at the expense of the Indemnitee unless (i) the
employment of counsel by the Indemnitee has been authorized by the Corporation,
(ii) counsel for the Corporation shall reasonably conclude that there may be a
conflict of interest between the Corporation and the Indemnitee in the conduct
of the defense of such action or proceeding, such that under the applicable code
of professional responsibility the same counsel cannot represent both the
Corporation and the Indemnitee, or (iii) the Corporation shall not in fact have
employed counsel approved by Indemnitee to assume the defense of any such action
or proceeding, in each of which cases, all of the fees and expenses of
Indemnitee's counsel shall be at the expense of the Corporation.
13.3. Settlement. The Corporation shall not be liable to indemnify the
Indemnitee under this Agreement for any amounts paid by Indemnitee in settlement
of any legal action or proceeding effected without the Corporation's written
consent, unless the Corporation is in breach of its obligations under this
Agreement. The Corporation shall not settle any such action or proceeding in any
manner that would impose any penalty, limitation or obligation on the Indemnitee
without the Indemnitee's written consent. Neither the Corporation nor the
Indemnitee will unreasonably withhold, condition or delay providing their
consent to any such proposed settlement.
SECTION 14
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TERM
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This Agreement shall continue until and terminate upon the later of (a) ten
years after the date that Indemnitee ceases to be employed by the Corporation or
any of its subsidiaries (including service as a member of the Corporation's or
any of its subsidiary's Board of Directors), (b) the final termination of any
pending or threatened legal actions or proceedings to which the Indemnitee may
be subject, by reason of the fact that he is or was a director, officer,
employee, agent or fiduciary of the Corporation or is or was performing services
at the request of the Corporation or any subsidiary thereof as a director,
officer, employee, agent or fiduciary of any other entity including, but not
limited to, another corporation, partnership, joint venture or trust, or by
reason of any act or omission by him in such capacity, or (c) the expiration of
all applicable statutes of limitation with respect to all such actions or
potential actions to which the Indemnitee is or could be a party as a result of
his services to the Corporation and/or its subsidiaries.
SECTION 15
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MISCELLANEOUS
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15.1. Notice Provision. Any notice, demand or communication required or
permitted to be delivered or given by the provisions of this Agreement shall be
deemed to have been effectively delivered or given and received on the date
personally delivered to the respective party to whom it is directed, or within
three (3) days after being sent by registered or certified mail, with postage
prepaid and addressed to the parties at the addresses set forth in the preamble
to this Agreement. Any party may by notice change the address to which notice or
other communications to it are to be delivered or mailed.
15.2. Entire Agreement. Except for the Corporation's Articles of Incorporation
and By-Laws, this Agreement constitutes the entire understanding of the parties
and supercedes all prior understandings, whether written or oral, between the
parties with respect to the subject matter of this Agreement.
Page 43
15.3. Non-exclusivity. The rights of indemnification and reimbursement provided
for in this Agreement shall be in addition to any other rights to which the
Indemnitee may otherwise be entitled under the Corporation's Articles of
Incorporation or By-Laws or any statute, agreement, vote of shareholders or
otherwise. To the extent that any change in applicable law (whether by statute
or judicial decision) permits greater indemnification by agreement that would be
afforded currently under the Corporation's Certificate of Incorporation, or
otherwise as set forth in this Agreement, it is the intent of the parties that
this Agreement provide Indemnitee with all of the greater benefits so afforded
by such change and the Corporation will, upon request of an Indemnitee, so amend
or modify this Agreement to effectuate the foregoing.
15.4. Severability of Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid, or unenforceable provision there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
15.5. Saving Clause. If this Agreement or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, the
Corporation shall nevertheless indemnify Indemnitee as to all costs, expenses,
liabilities, judgments, fines, and penalties with respect to any legal action or
proceeding to the fullest extent permitted by any applicable portion of this
Agreement that shall not have been invalidated or by any applicable law.
15.6. Cooperation and Intent. The Corporation shall cooperate in good faith with
the Indemnitee and use its best efforts to ensure that the Indemnitee is
indemnified and/or reimbursed for liabilities described herein to the fullest
extent permitted by law.
15.7. Employment. Nothing in this Agreement shall confer on Indemnitee the right
to continue in the employ or service of the Corporation or affect the right of
the Corporation to terminate an Indemnitee's employment and/or directorship at
any time in the sole discretion of the Corporation, with or without cause,
subject to any contractual or other rights which Indemnitee may have as a result
of, or otherwise with respect to, any such termination.
15.8. Security. To the fullest extent permitted by applicable law, the
Corporation may from time to time, but shall not be required to, provide such
insurance, collateral, letters of credit, or other security devices as its Board
may deem appropriate to support or secure the Corporation's obligations under
this Agreement.
15.9. Applicable Law. This Agreement shall be governed by and construed under
the laws of the State of New York.
15.10. Amendment. No amendment, modification or alteration of the terms of this
Agreement shall be binding unless in writing, dated subsequent to the date of
this Agreement, and executed by the parties to be bound thereby.
15.11. Binding Effect. The obligations of the Corporation to the Indemnitee
hereunder shall survive and continue as to the Indemnitee even if the Indemnitee
ceases to be a director, officer, employee, adviser and/or agent of the
Corporation. Each and all of the covenants, terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the estate, heirs,
executors, administrators and personal representatives of Indemnitee.
15.12. Execution in Counterparts. This Agreement and any amendment may be
executed simultaneously or in counterparts, each of which together shall
constitute on and the same instrument.
15.13. Effective Date. The provisions of this Agreement shall cover claims,
actions, suits and proceedings whether now pending or hereafter commenced and
shall be retroactive to cover all acts or omissions or alleged acts or omissions
which heretofore have taken place.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first above written.
THE SAGEMARK COMPANIES LTD.
By: /s/ XXXXXXXX X. XXXXXXX
-------------------------------------
Xxxxxxxx X. Xxxxxxx
President and Chief Executive Officer
INDEMNITEES:
/s/ XXXXXXX X. XXXXXXXX, M.D.
-------------------------------------
Xxxxxxx X. Xxxxxxxx, M.D.
/s/ XXXXXXXX X. XXXXXXX
-------------------------------------
Xxxxxxxx X. Xxxxxxx
/s/ XXXXXX X. XXXXXXX
-------------------------------------
Xxxxxx X. Xxxxxxx
/s/ XXXXXX X. XXXXXX
-------------------------------------
Xxxxxx X. Xxxxxx
/s/ XXXXXXXX X. XXXXXXXX
-------------------------------------
Xxxxxxxx X. Xxxxxxxx
/s/ XXXXXX X. XXXXXXX
-------------------------------------
Xxxxxx X. Xxxxxxx
Page 45
