DIRECTOR INDEMNIFICATION AGREEMENT
This
DIRECTOR INDEMNIFICATION AGREEMENT (this ''Agreement") is made and entered into
this July 1,
2007 (the "Effective Date") by and between T3
Motion, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X.
Xxxxx (the "Indemnitee").
RECITALS
WHEREAS, the
Company believes it is essential to retain and attract qualified
directors;
WHEREAS,
the Indemnitee has been duly elected to serve as a director of the Company in
accordance with the Bylaws of the Company (the "Bylaws"") and the
DGCL (as hereinafter defined);
WHEREAS,
the parties hereto acknowledge that Indemnity's service to the Company may
expose the Indemnities to claims, lawsuits and risk of
liability;
WHEREAS,
the Company's Certificate of Incorporation (the
"Certificate, of
Incorporation ) and Bylaws
require the Company to indemnify and advance expenses
to its directors and officers to the extent permitted by the DGCL (as
hereinafter defined);
WHEREAS,
the parties hereto acknowledge the need for (i) substantial protection of the
Indemnitee against personal liability based on the Indemnitee's reliance on the
Certificate of Incorporation and Bylaws, and (ii) specific contractual assurance
that the protection promised by the Certificate of Incorporation and Bylaws will
be available to the Indemnitee, regardless of, among other things, any amendment
to or revocation of the Bylaws or any change in the composition of the Company's
Board of Directors (the "Board") or
acquisition transactions relating to the Company; and
WHEREAS,
as an inducement to continue to provide effective services to the Company as a
director thereof, the Company wishes to provide indemnification, of the
Indemnitee and to advance expenses to the Indemnitee to the fullest extent
permitted by law and as set forth in this Agreement, and, to the extent
insurance is maintained by the Company, to provide for the continued coverage of
the Indemnitee under the Company's directors' and officers liability insurance
policies;
NOW,
THEREFORE in consideration of the premises contained herein and of the
Indemnitee continuing to serve the Company directly or, at its request with
another enterprise, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Certain
Definitions.
(a) A “Change in Control"
shall be deemed to have occurred if:
(i) any
"person" as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the “Exchange Act”),
other then (a) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company; (b) a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company; or (c) any current beneficial stockholder
or group, as defined by
Rule 13d-5 of the Exchange Act, including the heirs, assigns and successors'
thereof, of beneficial ownership, within the meaning of Rule 13d-3 of the
Exchange Act, of securities possessing more than 50% of the total combined
voting power of the Company's outstanding securities; hereafter becomes the
"beneficial owner," as defined in Rule 13d-3 of the Exchange Act, directly or
indirectly, of securities of the Company representing 20% or more of the total
combined voting power represented by the Company's then outstanding Voting
Securities;
(ii) during
any period of two consecutive years, individuals who at the beginning
of such period constitute the Board and any new director whose election by the
Board or nomination for election by the Company's stock holders was approved by
a vote of at least two thirds of the directors then in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or
(iii) the
stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
which would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving
entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company, in one
transaction or a series of transactions, of all or substantially all of the
Company's assets.
(b) "DGCL" shall mean the
General Corporation Law of the State of Delaware, as the same exists or may
hereafter be amended or interpreted; provided, however, that in the case of any
such amendment or interpretation, only to the extent that such amendment or
interpretation permits the Company to provide broader indemnification rights
than were permitted prior thereto.
(c) "Expense"
shall mean attorneys' fees and all other costs, expenses and obligations paid or
incurred in connection with, investigating, defending, being a witness in or
participating in (including on appeal), or preparing for any of the foregoing,
any Proceeding relating to any Indemnifiable Event,
(d) "Indemnifiable Event" shall mean
any event or occurrence that takes place either prior to or after the execution
of this Agreement, related to the fact that the Indemnitee is or was a
director or officer of the Company, or is or was serving at the request of the
Company as a director, officer, employee, or agent of another corporation or of
a partnership, joint venture, trust or other enterprise including
service with respect to employee benefit plans, or by reason of anything done or
not done by the Indemnitee in any such capacity.
(e) “Proceeding" shall
mean any threatened, pending or completed action, suit, investigation or
proceeding, and any appeal thereof, whether civil, criminal, administrative or
investigative and/or any inquiry or investigation, whether conducted by the
Company or any other party, that the Indemnitee in good faith believes might
lead to the institution of any such action.
(f) "Voting Securities"
shall mean any securities of the Company which vote generally in the election of
directors.
2. Indemnification. In
the event the Indemnitee becomes a party to or becomes involved (as a party,
witness, or otherwise) in any Proceeding by reason of (or arising in part out
of) an Indemnifiable Event, whether the basis of the Proceeding is the
Indemnitee's alleged action in an official capacity as a director or officer or
in any other capacity while serving as a director, the Company shall indemnify
the Indemnitee to the fullest extent permitted by the DGCL against
any and all Expenses, liability, and loss (including judgments, fines,
ERISA excise taxes or penalties, and amounts paid or to be paid in
settlement, and any interest, assessments, or other charges imposed thereon, and
any federal, state, local, or foreign taxes imposed on any director or officer
as a result, of the actual or deemed receipt of any payments under this
Agreement (collectively, "Liabilities'') reasonably incurred or suffered by such
person in connection with such Proceeding. The Company shall provide
indemnification pursuant to this Section 2 as soon as practicable, but in no
event later than thirty (30) days after it receives written demand from the
Indemnitee. Notwithstanding anything in this Agreement to the contrary and
except as provided in Section 5 below, the Indcmnitee shall not be entitled to
indemnification pursuant to this Agreement (i) in connection with any
Proceeding initiated by the Indemnitee against the Company or any director or
officer of the Company unless the Company has joined in or consented to the
initiation of such Proceeding or (ii) on account of any suit in which
judgment is rendered against the Indemnitee pursuant to Section 16(b) of the
Exchange Act for an accounting of profits made from the purchase or sale by the
Indemnity of securities of the Company.
3.
Advancement of
Expenses. The Company shall advance Expenses to the Indemnitee within
thirty (30) days of such request (an "Expense Advance"); provided, however, that
if required applicable corporate laws such Expenses shall be advanced
only upon delivery to the Company of an undertaking by or on behalf of the
Indemnity to repay such amount if it is ultimately determined that the
Indemnitee is not entitled to be indemnified by the Company; and provided
further, that the Company shall make such advances only to the extent permitted
by law.
4. Review Procedure for
Indemnification.
Notwithstanding the foregoing, (i) the obligations of the Company under Sections
2 and 3 above shall be subject to the condition that the Board shall not have
determined (in a written opinion, in any case in which the special independent
counsel referred to in Section 6 hereof is involved)
that the Indemnitee would not be permitted to be indemnified under applicable
law, and (ii) the obligation of the Company to make an Expense Advance pursuant
to Section 3 above
shall be subject to the condition that, if, when and to the extent that the
Board determines that the Indemnitee would not be permitted to be so indemnified
under applicable law, the Company shall be entitled to be reimbursed by the
Indemnitee (who hereby agrees to reimburse the Company) for all such amounts
theretofore paid; provided, however, that if the Indemnitee has commenced legal
proceedings in a court of competent jurisdiction pursuant to Section 5 below to
secures determination that the Indemnitee should be indemnified under applicable
law, any determination made by the Board that the Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and the
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or have
lapsed). The Indemnitee's obligation to reimburse the Company
for Expense Advances pursuant to this Section 4 shall be unsecured and no
interest shall he charged thereon.
5. Enforcement of
Indemnification Rights. If the Board determines that the Indemnitee
substantively would not be permitted to be indemnified in whole or in part under
applicable law, or if the Indemnitee has not otherwise been paid in full
pursuant, to Sections 2 and 3 above within thirty (30) days after a written
demand has been received by the Company, the Indemnitee shall have the right to
commence litigation in any court in the State of Delaware having subject matter
jurisdiction thereof and in which venue is proper to recover the unpaid amount
of the demand (an ”Enforcement
Proceeding”) and, if successful in whole or in part, the Indemnitee shall
be entitled to be paid any and all Expenses in connection with such Enforcement
Proceeding. The Company hereby consents to service of process for such
Enforcement Proceeding and to appear in any such Enforcement Proceeding. Any
determination by the Board otherwise shall be conclusive and binding on the
Company and the Indemnitee,
6. Change in
Control. The Company agrees that if there is a Change in Control of the
Company, other than a Change in Control which has been approved by a majority of
the Company's Board who were directors immediately prior to such Change in
Control, then with respect to all matters thereafter arising concerning the
rights of the Indemnitee to indemnity payments and Expense Advances under this
Agreement or any other agreement or under applicable law or the Company's
Certificate of Incorporation or Bylaws now or hereafter in effect relating to
indemnification for Idemnifiable Events,
the Company shall seek legal advice only from special independent counsel
selected by the Indemnitee and approved by the Company, which approval shall not
be unreasonably withheld. Such special independent counsel shall not have
otherwise performed services for the Company or the Indemnitee, other than in
connection with such matters, within the last five years. Such 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 the Indemnitee, in an
action to determine the Indemnitee's rights under this Agreement. Such counsel,
among other things shall render its written opinion to the Company and the
Indemnitee as to whether and to what extent the Indemnitee would be permitted to
be indemnified under applicable law. The Company agrees to pay the reasonable
fees of the special independent counsel referred to above and to indemnify fully
such counsel against any and all expenses (including attorneys' fees),
claims,
liabilities and damages arising out of or relating to this Agreement or the
engagement of special independent counsel pursuant to this
Agreement.
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8. Non-exclusivity.
The rights of the Indemnitee hereunder shall be in addition to any other rights
the Indemnitee may have under any statute, provision of the Company's
Certificate of Incorporation or Bylaws, 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. To the extent
that a change in the DGCL permits greater indemnification by Agreement than
would be afforded currently under the Company's Certificate of Incorporation and
Bylaws and this Agreement, it is the intent of the parties hereto that the
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change.
9. Liability Insurance. To the
extent the Company maintains an insurance policy or policies providing
directors' and officers' liability insurance, the 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 director of the
Company.
10. Settlement of Claims. The
Company shall not be liable to indemnify the Indemnitee under this Agreement (a)
for any amounts paid in settlement of any action or claim effected without the
Company's written consent, which consent shall not be unreasonably withheld; or
(b) for any judicial award if the Company was not given a reasonable and timely
opportunity, at its expense, to participate in the defense of such
action.
11. No Presumption. For purposes
of this Agreement to the fullest extent permitted by law, the termination of any
Proceeding, action, suit or claim, by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea 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.
12. Period of Limitations. No
legal action shall be brought and no cause of action shall be asserted by or on
behalf of the Company or any affiliate of the Company against the Indemnitee,
the Indenmitee's spouse, heirs, executors or personal or legal representatives
after the expiration of two (2) years from the date of
accrual of such cause of action, or such longer period as may be required by
state law under the circumstances, and any claim or cause of action of the
Company or its affiliate shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such period; provided,
however, that if any shorter period of limitations is otherwise applicable to
any such cause of action, such shorter period shall govern.
13. Amendment of this Agreement.
No supplement, modification or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No waiver of any other
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver. Except as specifically provided herein, no
failure to exercise or any delay in exercising any right or remedy herunder
shall constitute a waiver thereof.
14. Subrogation. In the event of
payment under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of the Indemnitee, 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 Company effectively to bring suit to enforce such
rights.
15. No Duplication of Payments.
The Company shall not be liable under this Agreement to make any payment in
connection with any claim made against Indemnitee to the extent the Indemnitee
has otherwise actually received payment (under any Insurance policy, Bylaw,
vote, agreement or otherwise) of the amounts otherwise indemnifiable
hereunder.
16. Binding
Effect. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Company, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place. This Agreement shall continue in effect
regardless of whether the Indemnitee continues to serve as a director or officer
of the Company or of any other enterprise at the Company's
request.
17.
Severability. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable that is not itself
invalid, void or unenforceable) shall be construed so as to give effect the
intent manifested by the provision held invalid, illegal or
unenforceable.
18. Governing
Law.
This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State of
Delaware applicable to contracts made and
to be performed in such State without giving
effect to the principles of conflicts of laws.
19. Counterparts. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
20. Notices. All notices, demands,
and other communications required or permitted hereunder shall be made in
writing and shall be deemed to have been duly given if delivered by hand,
against receipt, or mailed, postage prepaid, certified or registered mail,
return receipt requested, and addressed to the Company at the address indicated
on the signature page hereof and to the Indemnitee or the address on
the signature page
hereof. Notice of change of address shall be effective only when done in
accordance with this Section. All notices complying with this Section shall be
deemed to have been received on the date of delivery or on the third business
day after mailing.
[Signature
page follows]
IN
WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the day first set forth above.
| THE COMPANY: | |||
| T3 Motion, Inc. | |||
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|
By: /s/ Ki Nam | ||
| Name: Ki Nam | |||
|
Title:
CEO
|
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| Address: | |||
| 00 Xxxxxxx Xxxxx | |||
| Xxxxxx, XX 00000 | |||
| Fax No.: 000.000.0000 | |||
| INDEMNITEE: | |||
| /s/ Xxxxxx X. Xxxxx | |||
| Signature | |||
| Print Name: Xxxxxx X. Xxxxx | |||
| Address: | |||
| 000 Xxxxxxx Xxxx | |||
| Xxxxxxxxx, XX 00000 | |||
| Fax No.: 000.000.0000 | |||
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