DIRECTOR’S INDEMNIFICATION AGREEMENT
EXHIBIT
10.1
This
Director’s Indemnification Agreement (“Agreement”) is made as of April 3, 2008
(the “Effective Date”) by and between the Federal Agricultural Mortgage
Corporation, a corporation established as a federally chartered instrumentality
of the United States (the “Company”), and
______________ who serves as a Director of the Company (“Indemnitee”).
RECITALS
WHEREAS,
highly competent persons have become more reluctant to serve corporations as
Directors unless they are provided with adequate protection through insurance
and/or indemnification against the risks of claims being asserted against them
arising out of their service to and activities on behalf of such corporations;
and
WHEREAS,
the Board of Directors of the Company (the “Board”) has
determined that the increased difficulty in attracting and retaining such
persons is detrimental to the best interests of the Company’s investors and that
the Company should act to assure such persons that there will be increased
certainty of such protection in the future; and
WHEREAS,
the Board has determined that, in order to help attract and retain qualified
individuals as Directors, the best interests of the Company and its investors
will be served by attempting to maintain, on an ongoing basis, at the Company’s
sole expense, insurance to protect persons serving the Company and its
subsidiaries as directors and in other capacities from certain
liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises for many years, the Company believes that, given
current market conditions and trends, such insurance may be available to it in
the future only at higher premiums and with more exclusions. At the
same time, directors, in service to corporations or business enterprises are
being increasingly subjected to expensive and time-consuming litigation;
and
WHEREAS,
the Board has determined that, in order to help attract and retain qualified
individuals as directors and in other capacities, the best interests of the
Company and its investors will be served by assuring such individuals that the
Company will indemnify them to the maximum extent permitted by law;
and
WHEREAS,
the Amended By-Laws of the Company (the “By-Laws”) require
indemnification of the officers and directors of the Company, and Indemnitee may
also be entitled to indemnification pursuant to applicable law in the District
of Columbia (“DC
Law”); and
WHEREAS,
the By-Laws expressly provide that the indemnification provisions set forth
therein are not exclusive, and thereby contemplate that contracts may be entered
into
between the Company and members of the Board with respect to indemnification and
the advancement of defense costs; and
WHEREAS,
it therefore is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify, and to advance defense costs on behalf of, such
persons to the fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern that they will
not be so indemnified; and
WHEREAS,
this Agreement is a supplement to and in furtherance of the By-Laws and any
resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor shall it be deemed to diminish or abrogate any rights of
Indemnitee thereunder; and
WHEREAS,
the Board recognizes that the Indemnitee does not regard the protection
available under the By-Laws and insurance program as adequate in the present
circumstances, and may not be willing to serve or continue to serve as a
director and/or in such other capacity as the Company may request without
adequate protection, and the Company desires Indemnitee to serve in such
capacity; and
WHEREAS,
Indemnitee is willing to serve, and continue to serve, as a member of the Board
of Directors (and any committee thereof) of the Company, on the condition that
he or she be indemnified as provided for herein.
NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:
1. Services to the
Company. Indemnitee will serve or continue to serve as a
Director of the Company for so long as Indemnitee is duly elected or appointed
or until Indemnitee tenders his or her resignation. This Agreement
shall not serve as a binding commitment on the part of Indemnitee to continue to
serve in such capacity, or on the part of the Company to cause him to be
nominated to successive terms as a Director or to not otherwise be removed for
cause as permitted under law.
2. Definitions. As
used in this Agreement:
(a) A
“Change in
Control” shall be deemed to occur upon the earliest to occur after the
date of this Agreement of any of the following events:
(i) Any
Person (excluding any employee benefit plan of the Company or any subsidiary of
the Company) is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company’s outstanding securities then entitled
ordinarily to vote for the election of Directors; or
(ii) During
any period of two (2) consecutive years commencing on or after the Effective
Date, the individuals who at the beginning of such period constitute the Board
or any individuals who would be Continuing Directors (as defined below) cease
for any reason to constitute at least a majority thereof; or
(iii) The
Board shall approve a sale of all or substantially all of the assets of the
Company; or
(iv) The
Board shall approve any merger, consolidation, or like business combination or
reorganization of the Company, the consummation of which would result in the
occurrence of any event described in clause (i) or (ii), above.
(b) “Continuing Directors”
shall mean the directors of the Company in office on the Effective Date and any
successor to any such director and any additional director who after the
Effective Date (i) was nominated or selected by a majority of the
Continuing Directors in office at the time of his or her nomination or selection
and (ii) who is not an “affiliate” or “associate” (as defined in Regulation
12B promulgated under the Exchange Act) of any person who is the beneficial
owner, directly or indirectly, of securities representing ten percent (10%) or
more of the combined voting power of the Company’s outstanding securities then
entitled ordinarily to vote for the election of directors.
(c) “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.
(d) “Person” shall have
the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act; provided,
however, that Person shall exclude (i) the Company and (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a
subsidiary of the Company.
(e) “Beneficial Owner”
shall have the meaning given to such term in Rule 13d-3 issued under the
Exchange Act; provided, however, that Beneficial Owner shall exclude any Person
becoming a Beneficial Owner by reason of the stockholders of the Company
approving a merger of the Company with another entity.
(f) “Corporate Status”
shall describe the status of a person who is or was a director, officer,
trustee, partner, member, fiduciary, employee or agent of the Company or of any
other Enterprise (as defined below), which such person is or was serving at the
request of the Company.
(g) “Disinterested
Director” shall mean a director of the Company who is not and was not a
party to the Proceeding (as defined below) in respect of which indemnification
is sought by Indemnitee.
(h) “Enterprise” shall
mean any corporation, limited liability company, partnership, joint venture,
trust, employee benefit plan or other enterprise of which Indemnitee is or was
serving at the request of the Company as a director, officer, trustee,
administrator, partner, member, fiduciary, employee or agent.
(i) “Expenses” shall
include all reasonable attorneys’ fees, retainers, court costs, transcript
costs, fees of experts and accountants, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types and
amounts customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, a Proceeding (as defined
below). Expenses also shall include costs incurred in connection with
any appeal resulting from any Proceeding (as defined below), including, without
limitation, the premium, security for, and other costs relating to any bond,
supersedeas bond, or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the
amount of judgments or fines against Indemnitee.
(j) References
to “fines”
shall include any excise tax assessed on a person with respect to any employee
benefit plan pursuant to applicable law.
(k) References
to “serving at the
request of the Company” shall include any service provided at the request
of the Company as a director, officer, trustee, administrator, partner, member,
fiduciary, employee or agent of the Company which imposes duties on, or involves
services by, such director, officer, trustee, administrator, partner, member,
fiduciary, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries.
(l) Any
action taken or omitted to be taken by a person for a purpose which he or she
reasonably believed to be in the interests of the participants and beneficiaries
of an employee benefit plan shall be deemed to have been taken in “good faith” and for a
purpose which is “not
opposed to the best interests of the Company”, as such terms are referred
to in this Agreement and may be used in DC Law.
(m) The
term “Proceeding” shall
include any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether brought
in the right of the Company or otherwise and whether of a civil, criminal,
administrative or investigative nature, including any related appeal, in which
Indemnitee was, is or will be involved as a party or witness or otherwise by
reason of the fact that Indemnitee is or was a director, officer, trustee,
administrator, partner, member, fiduciary, employee or agent of the Company, by
reason of any action taken or not taken by him or her while acting as director,
officer, trustee, administrator, partner, member, fiduciary, employee or agent
of the Company, or by reason of the fact that he or she is or was serving at the
request of the Company as a director, officer, trustee, administrator,
partner,
member, fiduciary, employee or agent of any other Enterprise, in each case
whether or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of expenses
can be provided under this Agreement.
(n) “Independent Counsel”
means a law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five (5) years has
been, retained to represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning the
Indemnitee under this Agreement, or other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement.
3. Indemnity in Third-Party
Proceedings. The Company shall indemnify and hold harmless
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is
made, or is threatened to be made, a party to or a participant in (as a witness
or otherwise) any Proceeding, other than a Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section
3, Indemnitee shall be indemnified and held harmless against all judgments,
fines, penalties, amounts paid in settlement (if such settlement is approved in
writing in advance by the Company, which approval shall not be unreasonably
withheld) (including, without limitation, all interest, assessments and other
charges paid or payable in connection with or in respect of any of the
foregoing) (collectively, “Losses”) and Expenses
actually and reasonably incurred by Indemnitee or on his or her behalf in
connection with such Proceeding or any action, discovery event, claim, issue or
matter therein or related thereto, if Indemnitee acted in good faith, for a
purpose which he or she reasonably believed to be in or not opposed to the best
interests of the Company and, in the case of a criminal Proceeding, in addition,
had no reasonable cause to believe that his or her conduct was
unlawful.
4. Indemnity in Proceedings by or in the
Right of the Company. The Company shall indemnify Indemnitee
in accordance with the provisions of this Section 4 if Indemnitee is made, or is
threatened to be made, a party to or a participant in (as a witness or
otherwise) any Proceeding by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 4, Indemnitee shall
be indemnified and held harmless against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection with the defense or
settlement of such Proceeding or any action, discovery event, claim, issue or
matter therein or related thereto, if Indemnitee acted in good faith, for a
purpose which he or she reasonably believed to be in or not opposed to the best
interests of the Company. No indemnification, however, shall be made
under this Section 4 in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Company, unless and only
to the extent that the court
in which the Proceeding was brought or, if no Proceeding was brought in a court,
any court of competent jurisdiction, determines upon application that, in view
of all the circumstances of the case, Indemnitee fairly and reasonably is
entitled to indemnification for such portion of the Expenses as the court deems
proper.
5. Indemnification for Expenses Where
Indemnitee is Wholly or Partly Successful. Notwithstanding and
in addition to any other provisions of this Agreement, to the extent that
Indemnitee is a party to a Proceeding and is successful, on the merits or
otherwise, in the defense of any claim, issue or matter therein, the Company
shall indemnify and hold harmless Indemnitee against all Expenses actually and
reasonably incurred by him or her or on his or her behalf in connection with
such successful defense if Indemnitee acted in good faith, for a purpose which
he or she reasonably believed to be in or not opposed to the best interests of
the Company. For the avoidance of doubt, if Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or her or on his or her behalf in connection with
each successfully resolved claim, issue or matter. For purposes of
this Section 5 and, without limitation, the termination of any claim, issue or
matter in such a Proceeding by withdrawal or dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or
matter.
6. Indemnification for Expenses of a
Witness. Notwithstanding and in addition to any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
or her Corporate Status, a witness in or otherwise incurs Expenses in connection
with any Proceeding to which Indemnitee is not a party, he or she shall be
indemnified and held harmless by the Company against all Expenses actually and
reasonably incurred by him or her or on his or her behalf in connection
therewith.
7. Additional
Indemnification.
(a) Notwithstanding
any limitation in Sections 3, 4, or 5 hereof or other applicable statutory
provision, the
Company shall indemnify Indemnitee to the fullest extent permitted by law if
Indemnitee is made, or is threatened to be made, a party to any Proceeding
(including a Proceeding by or in the right of the Company to procure a judgment
in its favor) against all Losses and Expenses actually and reasonably incurred
by Indemnitee in connection with the Proceeding. No indemnification
shall be made under this Section 7(a) on account of Indemnitee’s conduct which
constitutes a breach of Indemnitee’s duty of loyalty to the Company or its
investors or is an act or omission not in good faith or which involves
intentional misconduct or a knowing violation of the law.
(b) For
purposes of Sections 7(a), the meaning of the phrase “to the fullest extent
permitted by law” shall include, but not be limited to:
i. to
the fullest extent authorized or permitted by the then-applicable provisions of
DC Law or other applicable statutory provision, that authorize or contemplate
indemnification by agreement, or the corresponding provision of any amendment to
or replacement of DC Law or other applicable statutory provision, and
ii. to
the fullest extent authorized or permitted by any amendments to or replacements
of DC Law or other applicable statutory provision, adopted after the date of
this Agreement that increase the extent to which a corporation limited liability
company or partnership, as applicable may indemnify its officers, directors or
persons holding similar fiduciary responsibilities.
(c) Indemnitee
shall be entitled to the prompt payment of all Expenses reasonably incurred in
enforcing successfully (fully or partially) this Agreement.
8. Exclusions. Notwithstanding
any provision in this Agreement, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made against
Indemnitee:
(a) for
which payment actually has been received by or on behalf of Indemnitee under any
insurance policy or other indemnity provision, except with respect to any excess
beyond the amount actually received under such insurance policy or other
indemnity provision; or
(b) for
an accounting of profits made from the purchase and sale (or sale and purchase)
by Indemnitee of securities of the Company or any subsidiary of the Company
within the meaning of Section 16(b) of the Exchange Act, as amended, or similar
provisions of state blue sky law, state statutory law or common law;
or
(c) prior
to a Change in Control, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company (other than any
Proceeding referred to in Sections 13(d) or (e) below or any other Proceeding
commenced to recover any Expenses referred to in Section 7(c) above) or its
directors, officers, employees or other indemnitees, unless (i) the Board
authorized the Proceeding (or any part of any Proceeding) prior to its
initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law;
or
(d) if
the funds at issue were paid pursuant to a settlement approved by a court and
indemnification would be inconsistent with any condition with respect to
indemnification expressly imposed by the court in approving the settlement;
or
(e) that
would constitute an “indemnification payment” as defined in 12 U.S.C.
Sec.2277a-10b(2) and is prohibited by 12 U.S.C. Sec.2277a-10b(e).
9. Advances of Expenses; Defense of
Claim.
(a) Notwithstanding
any provision of this Agreement to the contrary, the Indemnitee shall be
entitled to advances of Expenses incurred by him or her or on his or her behalf
in connection with a Proceeding that Indemnitee claims is covered by Sections 3
and 4 hereof, prior to a final determination of eligibility for indemnification
and prior to the final disposition of the Proceeding, upon the execution and
delivery to the Company of an undertaking by or on behalf of the Indemnitee
providing that the Indemnitee will repay such advances to the extent that it
ultimately is determined that Indemnitee is not entitled to be indemnified by
the Company. This Section 9(a) shall not apply to any claim made by
Indemnitee for which indemnity is excluded pursuant to Section 8.
(b) The
Company shall advance pursuant to Section 9(a) the Expenses incurred by
Indemnitee in connection with any Proceeding within thirty (30) days after the
receipt by the Company of a written statement or statements requesting such
advances from time to time, whether prior to or after final disposition of any
Proceeding. Advances shall be unsecured and interest
free. Advances shall be made without regard to Indemnitee’s ability
to repay such advances. Advances shall include any and all reasonable
Expenses incurred pursuing an action to enforce such right to receive
advances.
(c) The
Company will be entitled to participate in the Proceeding at its own
expense.
(d) The
Company shall not settle any action, claim or Proceeding (in whole or in part)
which would impose any Expense, judgment, fine, penalty or limitation on the
Indemnitee without the Indemnitee’s prior written consent, which consent shall
not be unreasonably withheld.
10. Procedure for Notification and
Application for Indemnification.
(a) Within
sixty (60) days after the actual receipt by Indemnitee of notice that he or she
is a party to or is requested to be a participant in (as a witness or otherwise)
any Proceeding, Indemnitee shall submit to the Company a written notice
identifying the Proceeding. The failure by the Indemnitee to notify
the Company within such 60-day period will not relieve the Company from any
liability which it may have to Indemnitee (i) otherwise than under this
Agreement, and (ii) under this Agreement, provided that if the Company can
establish that such failure to notify the Company in a timely manner resulted in
actual prejudice to the Company, then the Company will be relieved from
liability under this Agreement only to the extent of such actual
prejudice.
(b) Indemnitee
shall at the time of giving such notice pursuant to Section 10(a) or
thereafter deliver to the Company a written application for
indemnification. Such application may be delivered at such time as
Indemnitee deems appropriate
in his or her sole discretion. Following delivery of such a written
application for indemnification by Indemnitee, the Indemnitee’s entitlement to
indemnification shall be determined promptly according to Section 11(a) of this
Agreement and the outcome of such determination shall be reported to Indemnitee
in writing within forty-five (45) days of the submission of such
application.
11. Procedure Upon Application for
Indemnification.
(a) Upon
written application by Indemnitee for indemnification pursuant to Section 10(b)
or written statement by Indemnitee for advances of Expenses pursuant to
Section 9(b), a determination with respect to Indemnitee’s entitlement
thereto pursuant to the mandatory terms of this Agreement, pursuant to statute,
or pursuant to other sources of right to indemnity, and pursuant to Section 12
of this Agreement shall be made in the specific case: (i) by a majority vote of
the Disinterested Directors, whether or not such directors otherwise would
constitute a quorum of the Board; (ii) by a committee of Disinterested Directors
designated by a majority vote of such directors, whether or not such directors
would otherwise constitute a quorum of the Board, (iii) if there are no
Disinterested Directors or if so requested by (x) the Indemnitee in his or her
sole discretion or (y) the Disinterested Directors, by Independent Counsel in a
written opinion to the Board, a copy of which shall be delivered to Indemnitee
or (iv) by the stockholders of the Company. Indemnitee shall
reasonably cooperate with the person, persons or entity making the determination
with respect to Indemnitee’s entitlement to indemnification, including providing
to such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any costs or expenses (including
attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with
the person, persons or entity making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company hereby jointly and severally indemnify and
agree to hold Indemnitee harmless from any such costs and expenses.
(b) If
it is determined that Indemnitee is entitled to indemnification requested by the
Indemnitee in a written application submitted to the Company pursuant to
Section 10(b), payment to Indemnitee shall be made within ten (10) days
after such determination. All advances of Expenses requested in a
written statement by Indemnitee pursuant to Section 9(b) prior to a final
determination of eligibility for indemnification shall be paid in accordance
with Section 9.
(c) In
the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel
shall be selected as provided in this Section 11(c). If a Change in
Control shall not have occurred, the Independent Counsel shall be selected by
the Board, and the Company shall give written notice to Indemnitee advising him
or her of the identity of the Independent Counsel so selected. If a
Change in Control shall have occurred, the Independent
Counsel shall be selected by Indemnitee (unless Indemnitee shall request that
such selection be made by the Board, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Company, as the case may be, may, within ten (10) days after
such written notice of selection shall have been received, deliver to the
Company or to Indemnitee, as the case may be, a written objection to such
selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in
Section 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper
and timely objection, the person so selected shall act as Independent
Counsel. If a written objection is made and substantiated, the
Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court of competent jurisdiction has
determined that such objection is without merit.
(d) If,
within twenty (20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 9(b) or 10(b) hereof, no Independent Counsel
shall have been selected and not objected to, either the Company or Indemnitee
may petition a court of competent jurisdiction for resolution of any objection
which shall have been made by the Company or Indemnitee to the other’s selection
of Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Court or by such other person as the Court shall
designate, and the person with respect to whom all objections are so resolved or
the person so appointed shall act as Independent Counsel under Section 11(a)
hereof.
(e) The
Company shall pay the reasonable fees and expenses of the Independent Counsel
and to fully indemnify such Independent Counsel against any and all Expenses,
claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.
(f) Upon
the due commencement of any judicial proceeding or arbitration pursuant to
Section 13(a) of this Agreement, any Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).
12. Presumptions and Effect of Certain
Proceedings.
(a) Presumption in Favor of
Indemnitee. In making a determination with respect to
entitlement to indemnification hereunder, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted an application for
indemnification in accordance with Section 10(a) of this Agreement, and the
Company shall have the burden of proof to overcome that
presumption.
(b) No Presumption Against
Indemnitee. Neither the failure of the Company (including by
its Directors or Independent Counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement nor an actual
determination by the Company (including by its Directors or Independent Counsel)
that Indemnitee has not met the applicable standard of conduct for
indemnification shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
(c) Sixty Day Period for
Determination. If the person, persons or entity empowered or
selected under Section 11 of this Agreement to determine whether Indemnitee is
entitled to indemnification shall not have made a determination within sixty
(60) days after receipt by the Company of an application therefor, a
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be entitled to such indemnification, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact
necessary to make Indemnitee’s statement not materially misleading, in
connection with the application for indemnification, or (ii) a prohibition of
such indemnification under applicable law; provided, however, that such 60-day
period may be extended for a reasonable time, not to exceed an additional thirty
(30) days, if the person, persons or entity making the determination with
respect to entitlement to indemnification in good faith requires such additional
time for the obtaining or evaluating of documentation and/or information
relating thereto.
(d) No Presumption from
Termination of a Proceeding. The termination of any Proceeding
or of any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of nolo contendere, or its
equivalent, shall not of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and for a purpose which he or she reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal
Proceeding, that Indemnitee had reasonable cause to believe that his or her
conduct was unlawful.
(e) Reliance as Safe
Harbor. For purposes of any determination of good faith,
Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action or
failure to act is based on the records or books of account of the Company or any
Enterprise other than the Company, including financial statements, or on
information supplied to Indemnitee by the officers of the Company or any
Enterprise other than the Company in the course of their duties, or on the
advice of legal counsel for the Company or any Enterprise other than the Company
or on information or records given or reports made to the Company or any
Enterprise other than the Company by an independent certified public accountant
or by an appraiser or other expert selected by the Company or any Enterprise
other than the Company, except if the Indemnitee knew or had reason to know that
such records or books of account of the Company, information supplied by the
officers of the Company, advice of legal counsel or information or records given
or reports made by an independent certified public accountant or by an appraiser
or other expert were materially false or materially inaccurate. The
provisions of this Section 12(e) shall not
be deemed to be exclusive or to limit in any way the other circumstances in
which the Indemnitee may be deemed or found to have met any applicable standard
of conduct.
(f) Actions of
Others. The knowledge and/or actions, or failure to act, of
any other director, officer, trustee, administrator, partner, member, fiduciary,
employee or agent of the Company or any Enterprise other than the Company shall
not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.
13. Remedies of
Indemnitee.
(a) Adjudication/Arbitration. In
the event that (i) a determination is made pursuant to Section 11 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9
of this Agreement, (iii) subject to Section 12(c), no determination of
entitlement to indemnification shall have been made pursuant to Section 11(a) of
this Agreement within 60 days after receipt by the Company of the application
for indemnification, or (iv) payment of indemnification is not made pursuant to
Sections 3, 4, 5, 6, 7 and 11(b) of this Agreement within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification, or
after receipt by the Company of a written request for any additional monies owed
with respect to a Proceeding as to which it already has been determined that
Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an
adjudication by a court of his or her entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his or her
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. The Company shall not oppose Indemnitee’s right to seek
any such adjudication or award in arbitration.
(b) Indemnitee Not Prejudiced by
Prior Adverse Determination. In the event that a determination
shall have been made pursuant to Section 11(a) of this Agreement that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
commenced pursuant to this Section 13 shall be conducted in all respects as a
de novo trial, or
arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of
the prior adverse determination. In any judicial proceeding or
arbitration commenced pursuant to this Section 13, the Company shall have the
burden of proving Indemnitee is not entitled to indemnification or advancement
of Expenses, as the case may be.
(c) Company Bound by Prior
Determination. If a determination shall have been made
pursuant to Section 11(a) of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 13, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the
application for indemnification, or (ii) a prohibition of such indemnification
under applicable law.
(d) Expenses. In
the event that Indemnitee, pursuant to this Section 13, seeks a judicial
adjudication of or an award in arbitration to enforce his or her rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be jointly and severally
indemnified by the Company against, any and all Expenses actually and reasonably
incurred by him or her in such judicial adjudication or arbitration if it shall
be determined in such judicial adjudication or arbitration that Indemnitee is
entitled to receive all or part of the indemnification or advancement of
Expenses sought which the Company had disputed prior to the commencement of the
judicial proceeding or arbitration.
(e) Advances of
Expenses. If requested by Indemnitee, the Company shall
(within ten (10) days after receipt by the Company of a written request
therefore) advance to Indemnitee the Expenses which are incurred by Indemnitee
in connection with any judicial proceeding or arbitration brought by Indemnitee
for indemnification or advance of Expenses from the Company under this Agreement
or under any directors’ and officers’ liability insurance policies maintained by
the Company, if the Indemnitee has submitted an undertaking to repay such
Expenses if Indemnitee ultimately is determined to not be entitled to such
indemnification, advancement of Expenses or insurance recovery, as the case may
be. The Indemnitee’s financial ability to repay any such advances
shall not be a basis for the Company to decline to make such
advances.
(f) Precluded Assertions by the
Company. The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 13 that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
14. Non-exclusivity; Survival of Rights;
Insurance; Subrogation.
(a) Rights of Indemnitee Not
Exclusive. The rights of indemnification and to receive
advancement of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, or the By-Laws, any agreement, vote of investors or a
resolution of directors, members, partners, or otherwise. No right or
remedy herein conferred by this Agreement is intended to be exclusive of any
other right or remedy, and every other right and remedy shall be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent or subsequent assertion or employment of any other right or
remedy.
(b) Survival of
Rights. No amendment, alteration or repeal of this Agreement
or of any provision hereof shall limit or restrict any right of Indemnitee under
this Agreement in respect of any action taken or omitted by such Indemnitee in
his or her Corporate Status prior to such amendment, alteration or
repeal.
(c) Change of
Law. To the extent that a change in applicable DC Law, whether
by statute or judicial decision, permits greater indemnification or advancement
of Expenses than would be afforded currently under the By-Laws, or this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy
and be conferred by this Agreement the greater benefits so afforded by such
change.
(d) Insurance. To
the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, administrators partners,
members, fiduciaries, employees, or agents of the Company or of any other
Enterprise which such person serves at the request of the Company, Indemnitee
shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any such director,
trustee, partner, member, fiduciary, officer, employee or agent under such
policy or policies. If, at the time the Company receives notice from
any source of a Proceeding as to which Indemnitee is a party or a participant
(as a witness or otherwise) the Company has director and officer liability
insurance in effect that covers Indemnitee, the Company shall give prompt notice
of such Proceeding to the insurers in accordance with the procedures set forth
in the respective policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such Proceeding in accordance
with the terms of such policies.
(e) Subrogation. In
the event of any payment under this Agreement, the Company, 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 take all action necessary to secure
such rights, including execution of such documents as are necessary to enable
the Company to bring suit to enforce such rights.
(f) Other
Payments. The Company shall not be liable under this Agreement
to make any payment of amounts otherwise indemnifiable (or for which advancement
is provided hereunder) if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement
or otherwise.
(g) Other
Indemnification. The Company’s obligation to indemnify or
advance Expenses hereunder to Indemnitee who is or was serving at the request of
the Company as a director, officer, trustee, administrator partner, member,
fiduciary, employee or agent of any other Enterprise shall be reduced by any
amount Indemnitee has actually received as indemnification or advancement of
expenses from such Enterprise.
15. Duration of
Agreement. This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have
ceased to serve as any of the following: a director, officer, agent or employee
of the Company or as a director, officer, trustee, administrator partner,
member, fiduciary, employee or agent of any other corporation, partnership,
joint venture, trust, employee benefit plan or other Enterprise which Indemnitee
served at the request of the Company; or (b) one (1) year after the final
termination of any Proceeding (including after the expiration of any rights of
appeal) then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Section 13 of this Agreement (including any
rights of appeal of any Proceeding commenced pursuant to Section
13). This Agreement shall be binding upon the Company and its
respective successors and assigns and shall inure to the benefit of Indemnitee
and his or her heirs, executors and administrators.
16. Severability. If
any provision or provisions of this Agreement 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 (including,
without limitation, each portion of any Section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby and shall remain enforceable to the fullest extent permitted by law; (b)
such provision or provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.
17. Enforcement.
(a) The
Company expressly confirms and agrees that it has entered into this Agreement
and assumed the obligations imposed on it hereby in order to induce Indemnitee
to serve, or to continue to serve, as a director, of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
or continuing to serve as a director agent of the Company.
(b) This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof.
18. Modification and
Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each 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 of this Agreement nor shall any waiver
constitute a continuing waiver.
19. Successors and Binding
Agreement.
(a) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) and any acquiror of all or
substantially all of the business or assets of the Company by agreement in form
and substance reasonably satisfactory to Indemnitee and/or his or her counsel,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent the Company would be required to perform it if no such
succession had taken place.
(b) This
Agreement will be binding upon and inure to the benefit of the Company and any
successor to the Company, including, without limitation, any person acquiring
directly or indirectly all or substantially all of the business or assets of the
Company whether by purchase, merger, consolidation, reorganization or otherwise
(and such successor will thereafter be deemed the “Company” for purposes of this
Agreement), but will not otherwise be assignable or delegatable by the
Company.
(c) This
Agreement will inure to the benefit of and be enforceable by the Indemnitee’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, legatees and other successors.
(d) This
Agreement is personal in nature and neither of the parties hereto will, without
the consent of the other, assign or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Sections 19(a), (b) and
(c). Without limiting the generality or effect of the foregoing,
Indemnitee’s right to receive payments hereunder will not be assignable, whether
by pledge, creation of a security interest or otherwise, other than by a
transfer by the Indemnitee’s will, devise, a grantor’s trust instrument under
which the Indemnitee or his estate is the sole beneficiary, or by the laws of
descent and distribution, and, in the event of any attempted assignment or
transfer contrary to this Section 19(d), the Company will have no liability to
pay any amount so attempted to be assigned or transferred.
20. Notices. All
notices, requests, demands and other communications under this Agreement 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, on the date of such receipt, 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, at the address indicated on the signature page of this Agreement,
or such other address as Indemnitee subsequently shall provide in writing to the
Company.
(b) If
to the Company to:
0000
Xxxxxx-Xxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx,
XX 00000
Attention: Chief
Executive Officer
or to any
other address as may have been furnished to Indemnitee in writing by the
Company.
21. Contribution. To the fullest extent
permissible under applicable law, if the indemnification provided for in this
Agreement is unavailable to Indemnitee for any reason whatsoever, the Company,
in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by
Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid
or to be paid in settlement and/or for Expenses, in connection with any claim
relating to an indemnifiable event under this Agreement, in such proportion as
is deemed fair and reasonable in light of all of the circumstances of such
Proceeding in order to reflect (i) the relative benefits received by the
Company, on the one hand, and Indemnitee , on the other, as a result of the
event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the
relative fault of the Company, on the one hand (and its directors, officers,
employees and agents) and Indemnitee, on the other, in connection with such
event(s) and/or transaction(s).
22. Applicable Law and Consent to
Jurisdiction. This Agreement and the legal relations among the
parties shall be governed by, and construed and enforced in accordance with, the
laws of the District of Columbia, without regard to its conflict of laws,
principles or rules. Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 13 of this Agreement, the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Federal District Court of the District of Columbia (the “DC Court”), and not
in any other state or federal court in the United States of America or any court
in any other country, (ii) consent to submit to the exclusive jurisdiction of
the DC Court for purposes of any action or proceeding arising out of or in
connection with this Agreement, (iii) irrevocably appoint, to the extent such
party is not a resident of the District of Columbia, CT Corporation, 0000 00xx
Xxxxxx, XX, Xxxxxxxxxx, XX 00000 as its agent in the District of Columbia as
such party's agent for acceptance of legal process in connection with any such
action or proceeding against such party with the same legal force and validity
as if served upon such party personally within the District of Columbia, (iv)
waive any objection to the laying of venue of any such action or proceeding in
the DC Court, and (v) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the DC Court has been brought in an
improper or inconvenient forum.
23. Identical
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. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
24. Miscellaneous. Use
of the masculine pronoun shall be deemed to include usage of the feminine
pronoun where appropriate. The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction
thereof.
[The
remainder of this page is intentionally left blank.]
IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the
day and year first above written.
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INDEMNITEE
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By:
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Name:
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Name:
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Address
for Notices to Indemnitee:
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____________________________
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____________________________
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____________________________
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