Exhibit 10.7
INDEMNIFICATION AGREEMENT
This Indemnification Agreement, dated as of September __, 1999, is
made by and between NetCreations, Inc., a New York corporation (the
"Corporation"), and the person whose name, address and position at the
Corporation and/or any of the direct or indirect subsidiaries of the
Corporation appear on the signature page hereto ("Indemnitee").
RECITALS
A. Indemnitee is currently serving as, or is assuming the position
of, a director and/or officer of the Corporation and/or, at the Corporation's
request, a director, officer, employee and/or agent of another corporation,
partnership, joint venture, trust or other enterprise, and the Corporation
wishes Indemnitee to continue in such capacity(ies);
B. The Corporation and indemnitee recognize that the present state of
the law is too uncertain to provide the Corporation's directors and officers
with adequate and reliable advance knowledge or guidance with respect to the
legal risks and potential liabilities to which they may become personally
exposed as a result of performing their duties for the Corporation;
C. The Amended and Restated Certificate of Incorporation (the
"Certificate") and the Amended and Restated Bylaws (the "Bylaws") of the
Corporation each provide that the Corporation may indemnify, to the fullest
extent permitted by law, certain persons, including directors, officers,
employees or agents of the Corporation, against specified expenses and losses
arising out of certain threatened, pending or completed actions, suits or
proceedings;
D. Section 721 of the Business Corporation Law (the "BCL") expressly
recognizes that the indemnification provided by the other subsections of the BCL
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in an official capacity and as to action in another capacity while
holding such office;
E. Indemnitee has indicated that Indemnitee may not be willing to
serve, or continue to serve, as a director and/or officer of the Corporation
and/or, at the Corporation's request, as a director, officer, employee and/or
agent of another corporation, partnership, joint venture, trust or other
enterprise in the absence of an indemnification agreement of the Corporation;
F. The Board of Directors of the Corporation has concluded that, to
retain and attract talented and experienced individuals to serve as directors
and officers of the Corporation and to encourage such individuals to take the
business risks necessary for the success of the Corporation, it is necessary for
the Corporation to contractually indemnify them, and to assume for itself
liability for expenses and damages in connection with claims against them in
connection with their service to the Corporation, and has further concluded that
the failure to
provide such contractual indemnification could result in great harm to the
Corporation and its shareholders.
NOW, THEREFORE, the Corporation and Indemnitee agree as follows:
AGREEMENT
1. Definitions.
(a) "Expenses" means, for the purposes of this Agreement, all
direct and indirect costs of any type or nature whatsoever (including, without
limitation, any fees and disbursements of Indemnitee's counsel, accountants and
other experts and other out-of-pocket costs) actually and reasonably incurred by
Indemnitee in connection with the investigation, preparation, defense or appeal
of a Proceeding; provided, however, that Expenses shall not include judgments,
fines, penalties or amounts paid in settlement of a Proceeding unless such
matters may be indemnified under applicable provisions of the BCL.
(b) "Proceeding" means, for the purposes of this Agreement,
any threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative (including actions, suits or
proceedings brought by or in the right of the Corporation) in which Indemnitee
may be or may have been involved as a party or otherwise, by reason of the fact
that Indemnitee is or was a director or officer of the Corporation, by reason of
any action taken by him or of any inaction on his part while acting as such
director or officer or by reason of the fact that he is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust or other
enterprise, or was a director and/or officer of the foreign or domestic
corporation which was a predecessor corporation to the Corporation or of another
enterprise at the request of such predecessor corporation, whether or not he is
serving in such capacity at the time any liability or expense is incurred for
which indemnification or reimbursement can be provided under this Agreement.
2. Indemnification.
(a) Third Party Proceedings. To the fullest extent permitted
by law, the Corporation shall indemnify Indemnitee against Expenses and
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, penalties, and amounts paid in settlement (if the settlement is approved
in advance by the Corporation)) actually and reasonably incurred by Indemnitee
in connection with a Proceeding (other than a Proceeding by or in the right of
the Corporation) if Indemnitee acted in good faith and in a manner 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 Indemnitee's conduct was unlawful. The termination
of any Proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that Indemnitee did not act in good faith and in a manner that Indemnitee
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, or, with respect to any criminal Proceeding, had reasonable cause
to believe that Indemnitee's conduct was unlawful. Notwithstanding the
foregoing, no indemnification shall be made in any criminal proceeding where
Indemnitee has been adjudged
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guilty unless a disinterested majority of the directors determines that
Indemnitee did not receive, participate in or share in any pecuniary benefit to
the detriment of the Corporation and, in view of all the circumstances of the
case, Indemnitee is fairly and reasonably entitled to indemnity for Expenses or
liabilities.
(b) Proceedings by or in the Right of the Corporation. To the
fullest extent permitted by law, the Corporation shall indemnify Indemnitee
against Expenses actually and reasonably incurred by Indemnitee in connection
with the defense or settlement of a Proceeding by or in the right of the
Corporation to procure a judgment in its favor if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in, or not opposed to, the
best interests of the Corporation. Notwithstanding the foregoing, no
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Corporation in the
performance of Indemnitee's duty to the Corporation unless and only to the
extent that the court in which such Proceeding is or was pending shall determine
upon application that, in view of all the circumstances of the case, Indemnitee
is fairly and reasonably entitled to indemnity for Expenses and then only to the
extent that the court shall determine.
(c) Scope. Notwithstanding any other provision of this
Agreement other than Sections 3 and 13, the Corporation shall indemnify
Indemnitee to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by other provisions of this
Agreement, the Certificate, the Bylaws or statute.
3. Limitations on Indemnification. Any other provision herein
to the contrary notwithstanding, the Corporation shall not be obligated pursuant
to the terms of this Agreement:
(a) Excluded Acts. To indemnify Indemnitee for any acts or
omissions or transactions from which a director may not be relieved of liability
under Section 402(b) of the BCL; or
(b) Claims Initiated by Indemnitee. To indemnify or advance
Expenses to Indemnitee with respect to Proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 722 of the BCL, but such indemnification or advancement of Expenses may
be provided by the Corporation in specific cases if a majority of the
disinterested directors has approved the initiation or bringing of such suit; or
(c) Lack of Good Faith. To indemnify Indemnitee for any
Expenses incurred by Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by Indemnitee
in such proceeding was not made in good faith or was frivolous; or
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(d) Insured Claims. To indemnify Indemnitee for Expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines or penalties, and amounts paid in settlement) which have been paid
directly to or on behalf of Indemnitee by an insurance carrier under a policy of
directors' and officers' liability insurance maintained by the Corporation or
any other policy of insurance maintained by the Corporation or Indemnitee; or
(e) Claims Under Section 16(b). To indemnify Indemnitee for
Expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.
4. Determination of Right to Indemnification. Upon receipt of
a written claim addressed to the Board of Directors for indemnification pursuant
to Section 2 of this Agreement, the Corporation shall determine by any of the
methods set forth in Section 723 of the BCL whether Indemnitee has met the
applicable standards of conduct that make it permissible under applicable law to
indemnify Indemnitee. If a claim under Section 2 of this Agreement is not paid
in full by the Corporation within ninety days after such written claim has been
received by the Corporation, Indemnitee may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and, unless
such action is dismissed by the court as frivolous or brought in bad faith,
Indemnitee shall be entitled to be paid also the expense of prosecuting such
claim. Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) to make a determination prior to
the commencement of such action that indemnification of Indemnitee is proper in
the circumstances because Indemnitee has met the applicable standard of conduct
under applicable law, nor an actual determination by the Corporation (including
its Board of Directors, independent legal counsel or its stockholders) that
Indemnitee has not met such applicable standard of conduct, shall create a
presumption that Indemnitee has not met the applicable standard of conduct. The
court in which such action is brought shall determine whether Indemnitee or the
Corporation shall have the burden of proof concerning whether Indemnitee has or
has not met the applicable standard of conduct.
5. Advancement and Repayment of Expenses. The Expenses
incurred by Indemnitee in defending and investigating any Proceeding shall be
paid by the Corporation prior to the final disposition of such Proceeding within
thirty days after receiving from Indemnitee copies of invoices presented to
Indemnitee for such Expenses and an undertaking by or on behalf of Indemnitee to
the Corporation to repay such amount to the extent it is ultimately determined
that Indemnitee is not entitled to indemnification. In determining whether or
not to make an advance hereunder, the ability of Indemnitee to repay shall not
be a factor. Notwithstanding the foregoing, in a proceeding brought by the
Corporation directly, in its own right (as distinguished from an action brought
derivatively or by any receiver or trustee), the Corporation shall not be
required to make the advances called for hereby if a majority of the
disinterested directors determine that it does not appear that Indemnitee has
met the standards of conduct that made it permissible under applicable law to
indemnify Indemnitee and that the advancement of Expenses would not be in the
best interests of the Corporation and its shareholders.
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6. Partial Indemnification. If Indemnitee is entitled under
any provision of this Agreement to indemnification or advancement by the
Corporation of some or a portion of any Expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, penalties, and
amounts paid in settlement) incurred by him in the investigation, defense,
settlement or appeal of a Proceeding, but is not entitled to indemnification or
advancement of the total amount thereof, the Corporation shall nevertheless
indemnify or pay advancements to Indemnitee for the portion of such Expenses or
liabilities to which Indemnitee is entitled.
7. Notice to Corporation by Indemnitee. Indemnitee shall
notify the Corporation in writing of any matter with respect to which Indemnitee
intends to seek indemnification hereunder as soon as reasonably practicable
following the receipt by Indemnitee of written notice thereof; provided that any
delay in so notifying the Corporation shall not constitute a waiver by
Indemnitee of his rights hereunder. The written notification to the Corporation
shall be addressed to the Board of Directors and shall include a description of
the nature of the Proceeding and the facts underlying the Proceeding and be
accompanied by copies of any documents filed with the court, if any, in which
the Proceeding is pending. In addition, Indemnitee shall give the Corporation
such information and cooperation as it may reasonably require and as shall be
within Indemnitee's power.
8. Defense of Claim. In the event that the Corporation shall
be obligated under Section 5 hereof to pay the Expenses of any Proceeding
against Indemnitee, the Corporation, if appropriate, shall be entitled to assume
the defense of such Proceeding, with the Corporation's counsel or such other
counsel as may be approved by Indemnitee, which approval shall not be
unreasonably withheld, upon the delivery to Indemnitee of written notice of its
election to do so. After delivery of such notice, approval of such counsel by
Indemnitee and the retention of such counsel by the Corporation, the Corporation
will not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same Proceeding;
provided that (i) Indemnitee shall have the right to employ Indemnitee's own
counsel in any such Proceeding at Indemnitee's expense, and (ii) if (A) the
employment of counsel by Indemnitee has been previously authorized by the
Corporation, or (B) Indemnitee shall have reasonably concluded that there may be
a conflict of interest between the Corporation and Indemnitee in the conduct of
such defense or (C) the Corporation shall not, in fact, have employed counsel to
assume the defense of such Proceeding, then the fees and expenses of
Indemnitee's counsel shall be paid by the Corporation.
9. Attorneys' Fees. If any legal action is necessary to
enforce the terms of this Agreement, the prevailing party shall be entitled to
recover, in addition to other amounts to which the prevailing party may be
entitled, actual attorneys' fees and court costs as may be awarded by the court.
10. Continuation of Obligations. All agreements and
obligations of the Corporation contained herein shall continue during the period
Indemnitee is a director or officer of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, fiduciary, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, and shall continue thereafter so long as Indemnitee shall be subject
to any possible Proceeding by reason of the fact that Indemnitee served in any
capacity referred to herein.
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11. Successors and Assigns. This Agreement establishes
contract rights that shall be binding upon, and shall inure to the benefit of,
the successors, assigns, heirs and legal representatives of the parties hereto.
12. Non-exclusivity.
(a) The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed to be exclusive of any
other rights that Indemnitee may have under any provision of law, the
Certificate or Bylaws, the vote of the Corporation's shareholders or
disinterested directors, other agreements or otherwise, both as to action in his
official capacity and action in another capacity while occupying his position as
a director or officer of the Corporation.
(b) In the event of any changes, after the date of this
Agreement, in any applicable law, statute, or rule that expand the right of a
New York corporation to indemnify its directors and officers, Indemnitee's
rights and the Corporation's obligations under this Agreement shall be expanded
to the fullest extent permitted by such changes. In the event of any changes in
any applicable law, statute or rule, that narrow the right of a New York
corporation to indemnify a director and officer, such changes, to the extent not
otherwise required by such law, statute or rule to be applied to this Agreement,
shall have no effect on this Agreement or the parties' rights and obligations
hereunder.
13. Effectiveness of Agreement. This Agreement shall be
effective as of the date set forth on the first page and may apply to acts or
omissions of Indemnitee that occurred prior to such date if Indemnitee was a
director or officer of the Corporation or its predecessor, or was serving at the
request of the Corporation or its predecessor as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, at the time such act or omission occurred.
14. Severability. Nothing in this Agreement is intended to
require or shall be construed as requiring the Corporation to do or fail to do
any act in violation of applicable law. The Corporation's inability, pursuant to
court order, to perform its obligations under this Agreement shall not
constitute a breach of this Agreement. The provisions of this Agreement shall be
severable as provided in this Section 14. If this Agreement or any portion
hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless indemnify Indemnitee to
the fullest extent permitted by any applicable portion of this Agreement that
shall not have been invalidated, and the balance of this Agreement not so
invalidated shall be enforceable in accordance with its terms.
15. Governing Law. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of New York without regard to
its rules pertaining to conflicts of laws. To the extent permitted by applicable
law, the parties hereby waive any provisions of law that render any provision of
this Agreement unenforceable in any respect.
16. Notice. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed duly
given (i) if delivered by hand and receipted for by the party addressed, on the
date of such receipt, or (ii) if delivered by facsimile
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transmission to the recipient followed by a copy sent by mail on the same date
as the facsimile transmission, on the date of receipt of such facsimile
transmission, or (iii) if mailed by certified or registered mail with postage
prepaid, on the third business day after the mailing date. Addresses for notice
to either party are as shown on the signature page of this Agreement, or as
subsequently modified by written notice.
17. Mutual Acknowledgment. Both the Corporation and Indemnitee
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Corporation from indemnifying its directors and officers under
this Agreement or otherwise. Indemnitee understands and acknowledges that the
Corporation has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Corporation's
right under public policy to indemnify Indemnitee.
18. Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original.
19. Amendment and Termination. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth above.
NETCREATIONS, INC.,
a New York corporation
By:
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Title:
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Address:
000 Xxxx Xxxxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Attn: Xxxxxxxx Xxxxxxx
INDEMNITEE:
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Address:
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Tel:
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Attn:
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