Exhibit 10.27
INDEMNITY AGREEMENT
This Agreement is made as of 3rd day of April, 1996, between Vertex
Industries, Inc. (the Corporation) and Xxxxxx X. XxXxxxxxxx, Chief
Financial Officer and Treasurer of the Corporation (the Officer).
RECITALS
Whereas, Xxxxxx X. XxXxxxxxxx is currently serving as an Officer of
the Corporation at its request and the Corporation wishes the Officer
to continue in such capacity, and the Officer is willing, under
certain circumstances, to continue in such capacity.
Whereas, the Officer has indicated that he does not regard the
indemnities available under the Corporation's by-laws and with no
Director's & Officer's liability insurance available, as adequate to
protect him against the risks associated with his service to the
Corporation, the Officer may not be willing to continue in office in
the absence of the benefits accorded to him under this Agreement.
Now, therefore, in order to induce the Officer to continue to serve in
that capacity and in consideration for his continued service, the
Corporation hereby agrees to indemnify the Officer as follows:
1) The Corporation will pay on behalf of the Officer, and his
executors, administrators or assigns, any amount which he is or
becomes legally obligated to pay because of any claim or claims made
against him because of any act or omission or neglect or breach of
duty, including any actual or alleged error or misstatement or
misleading statement, which he commits or suffers while acting in his
capacity as an Officer of the Corporation and solely because of his
being an Officer. The payments which the Corporation will be
obligated to make hereunder shall include, inter alia, damages,
judgments, settlements and costs, costs of investigation (excluding
salaries of officers or employees of the Corporation) and costs of
defense of legal actions, claims of or proceedings and appeals
therefrom, and costs of attachment or similar bonds; provided,
however, that the Corporation shall not be obligated to pay fines or
other obligations or fees imposed by law or otherwise make any
payments hereunder which it is prohibited by applicable law from
paying as indemnity or for any other reason.
2) If a claim under this Agreement is not paid by the Corporation, or
on its behalf, within ninety days the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid
amount of the claim and if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting
such claim.
3) In the event of payment under this Agreement, the Corporation shall
be subrogated to the extent of such payment to all of the rights of
recovery of the Officer, who shall execute all papers required and
shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the
Corporation effectively to bring suit to enforce such rights.
4) The Corporation shall not be liable under this Agreement to make
any payment in connection with any claim made against the Officer:
{a} for which payment is actually made to the Officer under a valid
and collectible insurance policy, except in respect of any excess
beyond the amount of payment under such insurance;
{b} for which the Officer is entitled to indemnity and/or payment by
reason of having given notice of any circumstances which might give
rise to a claim under any policy of insurance, the terms of which have
expired prior to the effective date of this Agreement;
{c} for which the Officer is indemnified by the Corporation otherwise
than pursuant to the Agreement;
{d} based upon or attributable to the Officer gaining in fact any
personal profit or advantage to which he was not legally entitled;
{e} for an accounting of profits made from the purchase or sale by the
Officer of securities of the Corporation within the meaning of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any state statutory law or common law; or
{f} brought about or contributed to by the dishonesty of the Officer
seeking payment hereunder; however, notwithstanding the foregoing, the
Officer shall be protected under this Agreement as to any claims upon
which suit may be brought against him by reason of any alleged
dishonesty on his part, unless a judgment or other final adjudication
thereof adverse to the Officer shall establish that he committed (i)
acts of active and deliberate dishonesty (ii) with actual dishonest
purpose and intent, which acts were material to the cause of action so
adjudicated.
5) No costs, charges or expenses for which indemnity shall be sought
hereunder shall be incurred without the Corporation's consent, which
consent shall not be unreasonably withheld.
6) The Officer, as a condition precedent to his right to be
indemnified under this Agreement, shall give to the Corporation notice
in writing as soon as practicable of any claim made against him for
which indemnity will or could be sought under this Agreement. Notice
to the Corporation shall be directed to the Corporation at 00 Xxxxx
Xxxxxx, X.X. Xxx 000, Xxxxxxx, Xxx Xxxxxx 00000, Attention Xxxxxx Xxxx
(or such other address or person as the Corporation shall designate in
writing as the Agent). Notice shall be deemed received if sent by
registered or certified mail, postage prepaid and properly addressed,
the date of such notice being the date three days following the date
postmarked. In addition, the Officer shall give the Corporation such
information and cooperation as it may reasonably require and as shall
be within the Officer's power.
7) Costs and expenses (including attorneys' fees) incurred by the
Officer in defending or investigating any action, suit, proceeding or
investigation shall be paid by the Corporation in advance of the final
disposition of such matter, if the Officer shall undertake in writing
to repay any such advances in the event that it is ultimately
determined that the Officer is not entitled to indemnification under
the terms of this agreement. Notwithstanding the foregoing or any
other provision of this Agreement, no advance shall be made by the
Corporation if a determination is reasonably and promptly made by a
majority vote of a quorum of the Board of Directors or (if such a
quorum is not obtainable by the President & CEO of Vertex) by
independent legal counsel, that, based upon the facts known to the
Board of Directors or counsel at the time such determination is made,
(a) the Officer acted in bad faith of deliberately breached his duty
to the Corporation or its stockholders, and (b) as a result of such
actions by the Officer, it is more likely than not that it will
ultimately be determined that the Officer is not entitled to
indemnification under the terms of this Agreement.
8) Nothing herein shall be deemed to diminish or otherwise restrict
the Officer's right to indemnification under any provision of the
certificate of incorporation or by laws of the Corporation or under
New Jersey law.
9) This Agreement shall be governed by an construed in accordance with
law.
10) This Agreement shall be binding upon all successors and assigns of
the Corporation (including any transferee of all or substantially all
of its assets and any successors by merger or operation of law) and
shall inure to the benefit of the heirs, personal representatives and
estate of the Officer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and signed as of the day and year first above
written.
VERTEX INDUSTRIES, INC.
BY: s/Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
President & CEO
OFFICER:
s/Xxxxxx X. XxXxxxxxxx
Xxxxxx X. XxXxxxxxxx
