UNITED CAPITAL CORP. INDEMNITY AGREEMENT
Exhibit 10.5
UNITED
CAPITAL CORP.
INDEMNITY
AGREEMENT
This
Indemnity Agreement (the “Agreement”) is made as of _____________, by and
between UNITED CAPITAL CORP., a Delaware Corporation (the “Company”), and
__________________, (the “Indemnitee”), a director of the Company.
WHEREAS,
the Indemnitee is currently serving as a director of the Company and in such
capacity renders valuable services to the Company; and
WHEREAS,
the Company has investigated whether additional protective measures are
warranted to adequately protect its officers and directors against various legal
risks and potential liabilities to which such individuals are subject due to
their position with the Company and has concluded that additional protective
measures are warranted; and
WHEREAS,
in order to induce and encourage highly experienced and capable persons such as
the Indemnitee to continue to serve as officers and directors of the Company and
its subsidiaries, the Board of Directors has determined, after due
consideration, that this Agreement is reasonable and prudent and necessary to
promote and ensure the best interests of the Company and its
stockholders;
NOW,
THEREFORE, in consideration of the continued services of the Indemnitee as
provided below, and other good and valuable consideration, the company and the
Indemnitee do hereby agree as follows:
1. Definitions. As used in
this Agreement:
(a) The
term “Proceeding” shall include any threatened, pending or completed action,
suit or proceeding, whether brought in the name of the Company or otherwise and
whether of a civil, criminal or administrative or investigative nature, by
reason of the fact that the Indemnitee is or was a director, officer, employee
or agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, whether or not he is serving in such a
capacity at the time any liability or Expense (hereinafter defined) is incurred
for which indemnification or reimbursement is to be provided under this
Agreement.
(b) The
term “Expenses” shall include, without limitation, legal fees, disbursements and
retainers, accounting and witness fees, travel and deposition costs, expenses of
investigations, judicial or administrative proceedings or appeals, amounts paid
in settlement by or on behalf of Indemnitee, and any expenses of establishing a
right to indemnification, pursuant to this Agreement or otherwise, including
reasonable compensation for time spent by the Indemnitee in connection with the
investigation, defense, appeal or settlement of a Proceeding or any action to
establish a right to indemnification pursuant to this Agreement or otherwise for
which he is not otherwise compensated by any third party even if he is not then
regularly employed by the Company or subsidiary or an affiliate
thereof. The term “Expenses” does not include the amount of
judgments, fines, penalties or ERISA excise taxes actually levied against the
Indemnitee.
(c) Discharge
by the Company of Indemnitee’s employment for “cause” shall mean termination
upon (i) the willful and continued failure by Indemnitee to substantially
perform his material duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness) after a written
demand for substantial performance is delivered to Indemnitee by the Board,
which demand specifically identifies the material duties that the Board believes
that Indemnitee has not substantially performed, or (ii) the willful or grossly
negligent engaging by Indemnitee in conduct that is materially injurious to the
Company, monetarily or otherwise, or that involves fraud or dishonesty by the
Indemnitee.
2. Agreement to
Serve. The Indemnitee agrees to continue to
serve as a director of the Company at the will of the Company for so long as
Indemnitee is duly elected or appointed or until such time as Indemnitee tenders
a resignation in writing.
3. Indemnification in Third
Party Actions. The Company shall indemnify
the Indemnitee in accordance with the provisions of this section if the
Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any Proceeding (other than a Proceeding by or in the name of the
Company to procure a judgment in its favor), by reason of the fact that the
Indemnitee is or was a director, officer, employee or agent of the Company, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against all Expenses actually and reasonably incurred by the
Indemnitee in connection with the defense or settlement of such Proceeding and
judgments, fines, penalties and ERISA excise taxes (including all interest,
assessments and other charges paid or payable in respect thereto) actually
levied against the Indemnitee, to the fullest extent permitted by Delaware law;
provided that any settlement shall be approved in writing by the
Company. Notwithstanding the foregoing, any and all obligations of
the Company to indemnify the Indemnitee in accordance with the provisions of
this section shall cease upon the discharge from employment, for cause, of the
Indemnitee by the Company.
4. Indemnification in
Proceedings by or in the Name of the Company. The Company
shall indemnify the Indemnitee in accordance with the provisions of this section
if the Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any Proceeding by or in the name of the Company to procure a
judgment in its favor by reason of the fact that Indemnitee was or is a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against all
Expenses actually and reasonably incurred by Indemnitee in connection with the
defense or settlement of such proceeding, to the fullest extent permitted by
Delaware law. Notwithstanding the foregoing, any and all obligations
of the Company to indemnify the Indemnitee in accordance with the provisions of
this section shall cease upon the discharge from employment, for cause, of the
Indemnitee by the Company.
5. Conclusive Presumption
Regarding Standard of
Conduct. If a determination is
required to be made as to compliance by the Indemnitee with the relevant
standards of conduct as defined by Delaware law for indemnification pursuant to
this Agreement or concerning the rights of the Indemnitee to payments for
indemnification and advancement of Expenses under this Agreement or any other
agreement or Company By-Law now or hereafter in effect relating to claims for
indemnification, the Company shall seek the written opinion of independent
counsel as to whether and to what extent the Indemnitee would be permitted to be
indemnified under applicable law, and the Company shall indemnify the Indemnitee
to the full extent set forth herein to the extent permitted in such written
opinion. Such counsel shall be selected by the Company and approved
by the Indemnitee (which approval shall not be unreasonably
withheld). The Company agrees to pay the fees and disbursements of
such counsel referred to above.
6. Indemnification of Expenses
of Successful Party. Any other provisions of
this Agreement to the contrary notwithstanding, to the extent that the
Indemnitee has been successful in defense of any Proceeding or in defense of any
claim, issue or matter therein, on the merits or otherwise, including, without
limitation, the dismissal of a Proceeding without prejudice, the Indemnitee
shall be indemnified against all Expenses actually and reasonably incurred in
connection therewith to the fullest extent permitted by Delaware
law.
7. Advances of
Expenses. The Expenses incurred by the
Indemnitee in any Proceeding shall, at the written request of the Indemnitee, be
paid in full by the Company in advance of the final disposition of the
Proceeding, and on no less than a bi-monthly basis, upon submission in each
instance of documentation of such Expenses actually and reasonably incurred by
the Indemnitee and not previously paid by the Company; provided that if Delaware
law in effect at the time so requires, the Indemnitee shall undertake in writing
to repay all such amounts to the extent that it is ultimately
determined that the Indemnitee is not entitled to indemnification.
8. Partial
Indemnification. If the Indemnitee is
entitled under any provision of this Agreement to indemnification by the Company
for some or a portion of the Expenses, actually and reasonably incurred by
Indemnitee in the investigation, defense, appeal or settlement of any Proceeding
or for some or a portion of judgments, fines, penalties or ERISA excise taxes
actually levied against the Indemnitee, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify the Indemnitee for the portion
of such Expenses, judgments, fines, penalties or ERISA excise taxes to which the
Indemnitee is entitled.
9. Indemnification Procedure;
Determination of Right to Indemnification.
(a) Promptly
after receipt by the Indemnitee of notice of the commencement of any Proceeding,
the Indemnitee shall, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement
thereof. The omission so to notify the Company shall not relieve it
from any liability that it may have to the Indemnitee (i) hereunder unless, and
then only to the extent that, the Company has been prejudiced by such omission,
or (ii) otherwise than under this Agreement.
(b) If
a claim for Expenses properly made under this Agreement is not paid by the
Company within 30 days of receipt of written notice, the right to
indemnification as provided by this Agreement shall be enforceable by the
Indemnitee in any court of competent jurisdiction. It shall be
defense to any such action (other than an action brought to enforce a claim for
Expenses incurred in defending any Proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Company, unless the Company is acting under advice of counsel
pursuant to Section 5 hereof) that the Indemnitee has failed to meet a standard
of conduct that makes it permissible under Delaware law for the Company to
indemnify the Indemnitee for the amount claimed. The burden of
proving that indemnification is not appropriate shall be on the
Company. Neither the failure to have made a determination prior to
the commencement of such action that indemnification or advances met the
applicable standard of conduct, nor an actual determination that the Indemnitee
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the Indemnitee has not met the applicable
standard of conduct.
(c) The
Indemnitee’s Expenses incurred in connection with any action concerning the
Indemnitee’s right to Indemnification or advances in whole or in part pursuant
to this Agreement shall also be indemnified by the Company regardless of the
outcome of such action, unless the underlying claim as to a right of
indemnification was not made in good faith or was frivolous.
(d) With
respect to any proceeding for which indemnification is requested, the Company
will be entitled to participate therein at its own expense and, except as
otherwise provided below, to the extent that it may wish, the Company may assume
the defense thereof, with counsel reasonably satisfactory to the
Indemnitee. After notice from the Company to the Indemnitee of its
election to assume the defense of a Proceeding, the Company will not be liable
to the Indemnitee under this Agreement for any legal or other Expenses
subsequently incurred by the Indemnitee without the prior written consent of the
Company in connection with the defense thereof other than as provided
below. The Company shall not settle any Proceeding in any manner that
would impose any penalty or limitation on the Indemnitee without the
Indemnitee’s written consent. The Indemnitee shall have the right to
employ counsel in any proceeding, but the fees and expenses of such counsel
incurred after notice from the Company of its assumption of the defense thereof
shall be at the expense of the Indemnitee, unless (i) the employment of counsel
by the Indemnitee has been authorized by the Company, (ii) the Indemnitee shall
have reasonably concluded, based on written advice of counsel, that there are
conflicting legal defenses between the Company and the Indemnitee in the conduct
of the defense of a Proceeding, or (iii) the Company shall not in fact have
employed counsel to assume the defense of a Proceeding, in each of which cases
the fees and expenses of the Indemnitee’s counsel shall be at the expense of the
Company and shall be payable as provided in and subject to Section 7
hereof. The Company shall not be entitled to assume the defense of
any Proceeding brought by or on behalf of the Company or as to which the
Indemnitee has made a reasonable conclusion, based on written advice of counsel,
that there are conflicting legal defenses between the Company and the
Indemnitee.
10. Limitations on
Indemnification. No payments pursuant to
this Agreement shall be made by the Company:
(a) 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 statue or law or otherwise as
required under Delaware law, but such indemnification or advancement of Expenses
may be provided by the Company in specific cases if a majority of the Board of
Directors finds it to be appropriate;
(b) To
indemnify the Indemnitee for any Expenses, judgments, fines, penalties or ERISA
excise taxes for which payment is actually made to the Indemnitee under a valid
and collectible insurance policy, except in respect of any excess beyond the
actual amount of payment under such insurance;
(c) To
indemnify the Indemnitee for any Expenses, judgments, fines or penalties
sustained in any Proceeding for an accounting of profits made from the purchase
or sale by Indemnitee of securities of the Company pursuant to the provisions of
Section 16 (b) of the Securities Exchange Act of 1934 (the “Exchange Act”), the
rules and regulations promulgated thereunder and amendments thereto or similar
provisions of any federal, state or local statutory law; or
(d) If
a court of competent jurisdiction shall finally determine that any
indemnification hereunder is unlawful, from which determination all rights of
appeal have been exhausted or lapsed.
11. Limitation of Actions and
Release of Claims. No proceeding shall be
brought and no cause of action shall be asserted by or on behalf of the Company
or any subsidiary against the Indemnitee, Indemnitee’s spouse, heirs, estate
executors or administrators after the expiration of two years from the act or
omission of the Indemnitee upon which such Proceeding is based; however, in a
case where Indemnitee fraudulently conceals the facts underlying such cause
of action, no Proceeding shall be brought and no cause of action
shall be asserted after the expiration of two years from the earlier of (i) the
date the Company or any subsidiary of the Company discovers such facts, or (ii)
the date the Company or any subsidiary of the Company could have discovered such
facts by the exercise of reasonable diligence. Any claim or cause of
action of the Company or any subsidiary of the Company including claims
predicted upon the negligent act or omission of the Indemnitee, shall be
extinguished and deemed released unless asserted by filing of a legal action
within such period. This section shall not apply to any cause of
action that has accrued on the date hereof and of which the Company has no
actual knowledge apart from the Indemnitee’s knowledge.
12. No
Presumption. For purposes of this Agreement,
the termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption that
the Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
13. Indemnification Hereunder
Not Exclusive. The indemnification provided
by this Agreement shall not be deemed to limit or preclude any other rights to
which the Indemnitee may be entitled under the Certificate of Incorporation, the
By-Laws, any agreement, any vote of stockholders or of disinterested directors,
Delaware Law, or otherwise, both as to action in Indemnitee’s official capacity
and as to action in another capacity on behalf of the Company while holding such
office. To the extent that a change in the Delaware General
Corporation Law (whether by statue or judicial decision) permits greater
indemnification by agreements than would be afforded under the By-Laws or this
Agreement, as then in effect, it is the intent of the parties hereto that the
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change.
14. Successors and
Assigns. This Agreement shall be binding
upon, and shall inure to the benefit of the Indemnitee and Indemnitee’s heirs,
personal representatives and assigns, and the Company and its successors and
assigns.
15. Separability. Each
provision of this Agreement is a separate and distinct agreement and independent
of the others, so that if any provision hereof shall be held to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall not
affect the validity or enforceability of the other provisions
hereof. To the extend required, any provision of this Agreement may
be modified by a court of competent jurisdiction to preserve its validity and to
provide the Indemnitee with the broadest possible indemnification permitted
under Delaware law.
16. Savings
Clause. In the event this Agreement or any
portion thereof is invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Indemnitee as to
expenses, judgments, fines, penalties or ERISA excise taxes with respect to any
Proceeding to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated or by any applicable provision of
the law of Delaware or the law of any other jurisdiction.
17. Interpretation; Governing
Law. This Agreement shall be construed as a
whole and in accordance with its fair meaning. Headings are for
convenience only and shall not be used in construing meaning. This
Agreement shall be governed and interpreted in accordance with the laws of the
State of Delaware governing contracts executed and performed in
Delaware.
18. Amendments. No
amendment, waiver, modification, termination or cancellation of this Agreement
shall be effective unless in writing signed by the party against whom
enforcement is sought. The indemnification rights afforded to the
Indemnitee hereby are contract rights and may not be diminished, eliminated or
otherwise affected by amendments to the Company’s Certificate of Incorporation,
By-Laws or other agreements including directors’ and officers’ liability
insurance policies.
19. Counterparts. This
Agreement may be executed in counterparts, all of which shall be considered one
and the same agreement and shall become effective when signed by or on behalf of
each party and delivered to the other.
20. Notices. Any
notice required to be given under this Agreement shall be directed to the
Company at
______________________________________________________________________, with a
copy to ______________________________________________________________________,
and to the Indemnitee at ___________________________________________________, or
to such other address as either shall designate in writing.
21. Subject
Matter. The intended purpose of this
Agreement is to provide for indemnification, and this Agreement is not intended
to affect any other aspect of any relationship between Indemnitee and
Company.
IN
WITNESS WHEREOF, the Indemnitee has executed this Agreement and the Company has
caused this Agreement to be executed by its duly authorized officer as of the
date first written above.
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INDEMNITEE
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Name:
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UNITED
CAPITAL CORP.
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By:
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