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EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is made as of March , 2000, and is
entered into by and between Sierra Well Service, Inc., a Delaware corporation
(the "Company"), and ______________________ ("Indemnitee").
R E C I T A L S:
WHEREAS, the certificate of incorporation and bylaws of the
Company provide for the indemnification of its directors and executive officers
to the maximum extent permitted from time to time under applicable law and,
along with the Delaware General Corporation Law, contemplate that the Company
may enter into agreements with respect to such indemnification; and
WHEREAS, the Board of Directors of the Company has concluded that
it is reasonable, prudent and in the best interests of the Company*s
stockholders for the Company to contractually obligate itself to indemnify
certain of its Authorized Representatives (defined below) so that they will
serve or continue to serve with greater certainty that they will be adequately
protected.
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Indemnitee hereby agree as follows:
1. Definitions. For purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the following respective meanings:
"Authorized Representative" means (i) a director, officer,
employee, agent or fiduciary of the Company or any Subsidiary and (ii) a
person serving at the request of the Company or any Subsidiary as a
director, officer, employee, fiduciary or other representative of
another Enterprise.
"Enterprise" means any corporation, partnership, limited
liability company, association, joint venture, trust, employee benefit
plan or other entity.
"Expenses" means all expenses, including (without limitation)
reasonable fees and expenses of counsel.
"Liabilities" means all liabilities, including (without
limitation) the amounts of any judgments, fines, penalties, excise taxes
and amounts paid in settlement.
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"Proceeding" means any threatened, pending or completed claim,
action (including any action by or in the right of the Company), suit or
proceeding (whether formal or informal, or civil, criminal,
administrative, legislative, arbitrative or investigative) in respect of
which Indemnitee is, was or at any time becomes, or is threatened to be
made, a party, witness, subject or target, by reason of the fact that
Indemnitee is or was an Authorized Representative or a prospective
Authorized Representative.
"Subsidiary" means, at any time, (i) any corporation of which at
least a majority of the outstanding voting stock is owned by the Company
at such time, directly or indirectly through subsidiaries, and (ii) any
other Enterprise in which the Company, directly or indirectly, owns more
than a 50% equity interest at such time.
2. Interpretation. (a) In this Agreement, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Section or other subdivision;
(iv) unless the context indicates otherwise, reference to any
Section means such Section hereof; and
(v) the words "including" (and with correlative meaning
"include") means including, without limiting the generality of any
description preceding such term.
(b) The Section headings herein are for convenience only and
shall not affect the construction hereof.
(c) No provision of this Agreement shall be interpreted or
construed against any party solely because that party or its legal
representative drafted such provision.
(d) In the event of any ambiguity, vagueness or other similar
matter involving the interpretation or meaning of this Agreement, this Agreement
shall be liberally construed so as to provide to Indemnitee the full benefits
contemplated hereby.
(e) If the indemnification to which Indemnitee is entitled as
respects any aspect of any claim varies between two or more provisions of this
Agreement, that provision providing the most comprehensive indemnification shall
apply.
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3. Limitation on Personal Liability. To the fullest extent
permitted by applicable law, Indemnitee shall not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director of the Company, provided that the foregoing shall not eliminate or
limit the liability of Indemnitee (i) for any breach of Indemnitee's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law relating to
unlawful dividend payments and unlawful stock purchases or redemptions or (iv)
for any transaction from which Indemnitee derived an improper personal benefit.
4. Indemnity. (a) Subject to the following provisions of this
Agreement, the Company shall hold harmless and indemnify Indemnitee against all
Expenses and Liabilities actually incurred by Indemnitee in connection with any
Proceeding; provided, however, that no indemnity shall be paid by the Company
pursuant to this Agreement:
(i) for amounts actually paid to Indemnitee pursuant to one or
more policies of directors and officers liability insurance maintained
by the Company or pursuant to a trust fund, letter of credit or other
security or funding arrangement provided by the Company; provided,
however, that if it should subsequently be determined that Indemnitee is
not entitled to retain any such amount, this clause (i) shall no longer
apply to such amount;
(ii) in respect of remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that payment
of such remuneration was in violation of applicable law;
(iii) on account of Indemnitee*s conduct which is finally
adjudged to constitute willful misconduct or to have been knowingly
fraudulent, deliberately dishonest or from which the Indemnitee derives
an improper personal benefit; or
(iv) on account of any suit in which final judgment is rendered
against Indemnitee for an accounting of profits made from the sale or
purchase by Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934, as
amended.
(b) If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for only a portion (but not,
however, for the total amount) of any Expenses or Liabilities actually incurred
by Indemnitee in connection with any Proceeding, the Company shall nevertheless
indemnify Indemnitee for the portion of such Expenses and Liabilities to which
Indemnitee is entitled. If the indemnification provided for herein in respect of
any Expenses or Liabilities actually incurred by Indemnitee in connection with
any Proceeding is finally determined by a court of competent jurisdiction to be
prohibited by applicable law, then the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount paid or payable by Indemnitee as a
result of such Expenses and Liabilities in such proportion as is appropriate to
reflect (i) the relative benefits
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received by the Company on the one hand and Indemnitee on the other hand from
the events, circumstances, conditions, happenings, actions or transactions from
which such Proceeding arose, (ii) the relative fault of the Company (including
its other Authorized Representatives) on the one hand and of Indemnitee on the
other hand in connection with the events, circumstances and happenings which
resulted in such Expenses and Liabilities, such relative fault to be determined
by reference to, among other things, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent the events,
circumstances and/or happenings resulting in such Expenses and Liabilities, and
(iii) any other relevant equitable considerations, it being agreed that it would
not be just and equitable if such contribution were determined by pro rata or
other method of allocation which does not take into account the foregoing
equitable considerations.
(c) The indemnification provided herein shall be applicable only
to Proceedings commenced after the date hereof, regardless, however, of whether
they arise from acts, omissions, facts or circumstances occurring before or
after the date hereof.
(d) The indemnification provided herein shall be applicable
whether or not negligence of Indemnitee is alleged or proved, and regardless of
whether such negligence be contributory or sole.
(e) Amounts paid by the Company to Indemnitee under this Section
4 are subject to refund by Indemnitee as provided in Section 8.
5. Notification and Defense of Claims. (a) Promptly after the
receipt by Indemnitee of notice of the commencement of any Proceeding,
Indemnitee will, if a claim in respect thereof is to be made against the Company
under this Agreement, notify the Company of the commencement of such Proceeding;
provided, however, that the omission to so notify the Company will not relieve
the Company (i) from any liability which it may have to Indemnitee under this
Agreement unless, and then only to the extent that, such omission results in
insufficient time being available to permit the Company or its counsel to
effectively defend against or make timely response to any loss, claim, damage,
liability or expense resulting from such Proceeding or otherwise has a material
adverse effect on the Company's ability to promptly deal with such loss, claim,
damage, liability or expense or (ii) from any liability which it may have to
Indemnitee otherwise than under this Agreement.
(b) The following provisions shall apply with respect to any such
Proceeding as to which Indemnitee notifies the Company of the commencement
thereof:
(i) The Company shall be entitled to participate therein at its
own expense.
(ii) Except as otherwise provided below, to the extent it may
elect to do so, the Company (jointly with any other indemnifying party
similarly notified) will be entitled to assume the defense thereof, with
counsel of its own selection reasonably satisfactory to Indemnitee.
After notice from the Company to Indemnitee of its election so to assume
the defense thereof, the Company will not be liable to Indemnitee under
this Agreement for any
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Expenses subsequently incurred by Indemnitee in connection with the
defense of such Proceeding other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have
the right to employ separate counsel in such 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
Indemnitee unless (1) the employment of separate counsel by Indemnitee
has been authorized by the Company; (2) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between
the Company and Indemnitee in the conduct of the defense of such
Proceeding; or (3) the Company shall not in fact have employed counsel
to assume the defense of such Proceeding, in each of which cases the
reasonable fees and expenses of Indemnitee's counsel shall be borne by
the Company. 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 Indemnitee shall have made the conclusion provided for in (2)
above. Nothing in this subparagraph (ii) shall affect the obligation
of the Company to indemnify Indemnitee against Expenses and
Liabilities paid in settlement for which it is otherwise obligated
hereunder.
(iii) The Company shall not be liable to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any
Proceedings or claims effected without its prior written consent. The
Company shall not settle any Proceeding or claim in any manner which
would impose any penalty or limitation on Indemnitee without
Indemnitee's prior written consent. Neither the Company nor Indemnitee
will unreasonably withhold or delay its consent to any proposed
settlement.
6. Advancement of Expenses, etc. If requested to do so by
Indemnitee with respect to any Proceeding, the Company shall advance to or for
the benefit of Indemnitee, in reasonable intervals prior to the final
disposition of such Proceeding, the Expenses actually incurred by Indemnitee in
investigating, defending or appealing such Proceeding. Any judgments, fines or
amounts to be paid in settlement of any Proceeding shall also be advanced by the
Company upon request by Indemnitee. Advances made by the Company under this
Section 6 are subject to refund by Indemnitee as provided in Section 8.
7. Right of Indemnitee to Bring Suit. (a) If a claim for
indemnification or a claim for an advance under this Agreement is not paid in
full by the Company within 30 days after receipt by the Company from Indemnitee
of a written request or demand therefor, Indemnitee may bring suit against the
Company to recover the unpaid amount of the claim. If, in any such action,
Indemnitee makes a prima facie showing of entitlement to indemnification under
this Agreement, the Company shall have the burden of proving that
indemnification is not required under this Agreement. The only defense to any
such action shall be that indemnification is not required by this Agreement.
(b) In the event that any action is instituted by Indemnitee to
enforce Indemnitee's rights or to collect monies due to Indemnitee under this
Agreement and if Indemnitee is successful in such action, the Company shall
reimburse Indemnitee for all Expenses incurred by Indemnitee with respect to
such action.
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8. Repayment Obligation of Indemnitee. If the Company advances or
pays any amount to Indemnitee under Section 4, 6 or 7 and if it shall thereafter
be finally adjudicated that Indemnitee was not entitled to be indemnified
hereunder for all or any portion of such amount, Indemnitee shall promptly repay
such amount or such portion thereof, as the case may be, to the Company. If the
Company advances or pays any amount to Indemnitee under Section 4, 6 or 7 and if
Indemnitee shall thereafter receive all or a portion of such amount under one or
more policies of directors and officers liability insurance maintained by the
Company or pursuant to a trust fund, letter of credit or other security or
funding arrangement provided by the Company, Indemnitee shall promptly repay
such amount or such portion thereof, as the case may be, to the Company.
9. Changes in Law. If any change after the date of this Agreement
in any applicable law, statute or rule expands the power of the Company to
indemnify Authorized Representatives, such change shall be within the purview of
Indemnitee's rights and the Company's obligations under this Agreement. If any
change after the date of this Agreement in any applicable law, statute or rule
narrows the right of the Company to indemnify an Authorized Representative, such
change shall, to the fullest extent permitted by applicable law, leave this
Agreement and the parties' rights and obligations hereunder unaffected.
10. Continuation of Indemnity. All agreements and obligations of
the Company hereunder shall continue during the period Indemnitee is an
Authorized Representative, and shall continue after Indemnitee has ceased to
occupy such position or have such relationship so long as Indemnitee shall be
subject to any possible Proceeding.
11. Maintenance of Insurance. (a) The Company represents that it
presently maintains in force and effect the following directors and officers
liability insurance ("D&O Insurance") policies (the "Insurance Policies"):
Insurer Policy No. Coverage
------- ---------- --------
Subject only to the provisions of Section 11(b) hereof, the Company hereby
agrees that, so long as Indemnitee shall continue to serve as an Authorized
Representative and thereafter so long as Indemnitee shall be subject to any
possible Proceeding, the Company shall use its best efforts to purchase and
maintain in effect for the benefit of Indemnitee one or more valid and
enforceable policy or policies of D&O Insurance providing, in all respects,
coverage at least comparable to that currently provided pursuant to the
Insurance Policies, provided that the Company shall have no obligation to
provide primary coverage in excess of $_____ million or excess coverage in
excess of $______ million.
(b) The Company shall not be required to purchase and maintain
the Insurance Policies in effect if D&O Insurance is not reasonably available or
if, in the reasonable business judgement of the then directors of the Company,
either (i) the premium cost for such insurance is excessive in light of the
amount of coverage or (ii) the coverage provided by such insurance is so
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limited by exclusions, retentions, deductibles or otherwise that there is
insufficient benefit from such insurance.
12. Nonexclusivity. The indemnification and other rights provided
by any provision of this Agreement shall not be deemed exclusive of any other
rights to which Indemnitee may be entitled under (i) any statutory or common
law, (ii) the Company's certificate of incorporation, (iii) the Company's
bylaws, (iv) any other agreement or (v) any vote of stockholders or
disinterested directors or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while occupying any of the
positions or having any of the relationships referred to in this Agreement.
Nothing in this Agreement shall in any manner affect, impair or compromise any
indemnification Indemnitee has or may have by virtue of any agreement previously
entered into between Indemnitee and the Company.
13. Severability. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable (i) the validity, legality or
enforceability of the remaining provisions of this Agreement shall not be in any
way affected or impaired thereby and (ii) to the fullest extent possible, the
provisions of this Agreement shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or unenforceable. Each
provision of this Agreement is a separate and independent portion of this
Agreement.
14. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties. No waiver of any of the provisions of this Agreement shall be
binding unless executed in writing by the person making the waiver nor shall
such waiver constitute a continuing waiver.
15. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be addressed (i) if to
the Company, at its principal office address as shown on the signature page
hereof or such other address as it may have designated by written notice to
Indemnitee for purposes hereof, directed to the attention of the Secretary and
(ii) if to Indemnitee, at Indemnitee's address as shown on the signature page
hereof or to such other address as Indemnitee may have designated by written
notice to the Company for purposes hereof. Each such notice or other
communication shall be deemed to have been duly given if (a) delivered by hand
and receipted for by the party to whom said notice or other communication shall
have been directed, (b) transmitted by facsimile transmission, at the time that
receipt of such transmission is confirmed, or (c) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed.
16. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
17. Heirs, Successors and Assigns. (a) This Agreement shall be
binding upon, inure to the benefit of and be enforceable by (i) Indemnitee and
Indemnitee's personal or legal
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representatives, executors, administrators, heirs, devisees and legatees and
(ii) the Company and its successors and assigns. This Agreement shall not inure
to the benefit of any other person or Enterprise.
(b) The Company agrees to require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used herein, the term "Company" shall include any successor
to its business and/or assets as aforesaid which executes and delivers the
assumption and agreement provided for in this Section 17 or which otherwise
becomes bound by all terms and provisions of this Agreement by operation of law.
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ENTERED into on the day and year first above written.
SIERRA WELL SERVICE, INC.
By:
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Name:
Title:
Address:
Telecopier:
INDEMNITEE:
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[OFFICER/DIRECTOR]
Address:
Telecopier:
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