INDEMNITY AGREEMENT
Exhibit 10.2
INDEMNITY AGREEMENT
THIS AGREEMENT is made and entered into this __ day of ________________, 20__ by and between IPASS INC., a Delaware corporation (the “Corporation”), and ________ (“Agent”).
RECITALS
WHEREAS, the Corporation desires to attract and retain the services of highly qualified individuals as directors, officers, employees and other agents;
WHEREAS, Agent performs a valuable service to the Corporation in his capacity as ____________ of the Corporation;
WHEREAS, the stockholders of the Corporation have adopted bylaws (the “Bylaws”) requiring the indemnification of the directors and executive officers of the Corporation, and may indemnify employees and other agents of the Corporation, including persons serving at the request of the Corporation in such capacities with other corporations or enterprises, as authorized by the Delaware General Corporation Law, as amended (the “Code”);
WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit contracts between the Corporation and its agents, officers, employees and other agents with respect to indemnification of such persons;
WHEREAS, Agent does not regard the protection currently provided by applicable law, the Corporation’s governing documents and available insurance as adequate under the present circumstances, and the Corporation has determined that Agent and other directors, officers, employees and other agents of the Corporation may not be willing to serve or continue to serve in such capacities without additional protection;
WHEREAS, in order to induce Agent to continue to serve as ______________ of the Corporation, the Corporation has determined and agreed to enter into this Agreement with Agent; and
WHEREAS, Agent is willing to continue to serve the Corporation if Agent is furnished the indemnity provided for herein by the Corporation.
AGREEMENT
NOW, THEREFORE, in consideration of Agent’s continued service as ___________ of the Corporation after the date hereof, the parties hereto agree as follows:
1.Services to the Corporation. Agent will serve, at the will of the Corporation or under separate contract, if any such contract exists, as _______________ of the Corporation or as a director, officer or other fiduciary of an affiliate of the Corporation (including any employee benefit plan of the Corporation) faithfully and to the best of his ability so long as he is duly elected and qualified in accordance with the provisions of the Bylaws or other applicable charter documents of the Corporation or such affiliate; provided, however, that Agent may at any time and for any reason resign from such position (subject to any contractual obligation that Agent may have assumed apart from this Agreement) and that the Corporation or any affiliate shall have no obligation under this Agreement to continue Agent in any such position. The Corporation acknowledges that it has entered into this Agreement and assumes the obligations imposed on it hereby, in addition to and separate from its obligations to Agent under the Bylaws, to induce Agent to serve, or continue to serve, as a director, officer or other fiduciary of the Corporation, and the Corporation acknowledges that Agent is relying upon this Agent in serving as a director, officer or other fiduciary of the Corporation.
2. Indemnity of Agent. The Corporation hereby agrees to hold harmless and indemnify Agent to the fullest extent authorized or permitted by the provisions of the Bylaws and the Code, as the same may be amended from time to time (but, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the Bylaws or the Code permitted prior to adoption of such amendment).
1.
Exhibit 10.2
3. Additional Indemnity. In addition to and not in limitation of the indemnification otherwise provided for herein, and subject only to the exclusions set forth in Section 4 hereof, the Corporation hereby further agrees to hold harmless and indemnify Agent:
(a) against any and all expenses (including attorneys’ fees and witness fees), damages, judgments, fines and amounts paid in settlement and any other amounts that Agent becomes legally obligated to pay because of any claim or claims made against or by him in connection with any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether civil, criminal, arbitrational, administrative or investigative (including an action by or in the right of the Corporation) and whether formal or informal in any case, to which Agent is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Agent is, was or at any time becomes a director, officer, employee or other agent of Corporation, or is or was serving or at any time serves at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, whether or not serving in any such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses may be provided under this Agreement. For the purposes of this Agreement, the term “expenses” shall also include reasonable compensation for time spent by Agent for which he is not compensated by the Corporation or any subsidiary or third party (i) for any period during which Agent is not an agent, in the employment of, or providing services for compensation to, the Corporation or any subsidiary, and (ii) if the rate of compensation and estimated time involved is approved by a majority of the directors of the Corporation who are not parties to any action with respect to which expenses are incurred, for Agent while an agent of, employed by, or providing services for compensation to, the Corporation or any subsidiary; and
(b) otherwise to the fullest extent as may be provided to Agent by the Corporation under the non-exclusivity provisions of the Code and the Bylaws.
4. Limitations on Additional Indemnity. No indemnity pursuant to Section 3 hereof shall be paid by the Corporation:
(a) on account of any claim against Agent solely for an accounting of profits made from the purchase or sale by Agent of securities of the Corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law;
(b) on account of Agent’s conduct that is established by a final judgment as knowingly fraudulent or deliberately dishonest or that constituted willful misconduct;
(c) on account of Agent’s conduct that is established by a final judgment as constituting a breach of Agent’s duty of loyalty to the Corporation or resulting in any personal profit or advantage to which Agent was not legally entitled;
(d) or which payment is actually made to Agent under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of any excess beyond payment under such insurance, clause, bylaw or agreement;
(e) if indemnification is not lawful (and, in this respect, both the Corporation and Agent have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication);
(f) in connection with any proceeding (or part thereof) initiated by Agent, or any proceeding by Agent against the Corporation or its directors, officers, employees or other agents, unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Corporation, (iii) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the Code, or (iv) the proceeding is initiated pursuant to Section 10 hereof; or
2.
Exhibit 10.2
(g) with respect to any forfeiture or “clawback” of compensation paid, or profits from sales of securities made, pursuant to any contract or policy of the Corporation or applicable law.
5. Continuation of Indemnity. All agreements and obligations of the Corporation contained herein shall continue during the period Agent is a director, officer, employee or other agent of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Agent shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitrational, administrative or investigative, by reason of the fact that Agent was serving in the capacity referred to herein.
6. Partial Indemnification. Agent shall be entitled under this Agreement to indemnification by the Corporation for a portion of the expenses (including attorneys’ fees and witness fees), damages, judgments, fines and amounts paid in settlement and any other amounts that Agent becomes legally obligated to pay in connection with any action, suit or proceeding referred to in Section 3 hereof even if not entitled hereunder to indemnification for the total amount thereof, and the Corporation shall indemnify Agent for the portion thereof to which Agent is entitled.
7. Notification and Defense of Claim. Not later than thirty (30) days after receipt by Agent of notice of the commencement of any action, suit or proceeding, or of any demand, judgment or other requirement for payment that Agent reasonably believes to be subject to indemnification under the terms of this Agreement, Agent will, if a claim in respect thereof is to be made against the Corporation under this Agreement, notify the Corporation of the commencement thereof; but the omission so to notify the Corporation will not relieve it from any liability which it may have to Agent otherwise than under this Agreement. With respect to any such action, suit or proceeding as to which Agent notifies the Corporation of the commencement thereof:
(a) the Corporation will be entitled to participate therein at its own expense;
(b) except as otherwise provided below, the Corporation may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Corporation to Agent of its election to assume the defense thereof, the Corporation will not be liable to Agent under this Agreement for any legal or other expenses subsequently incurred by Agent in connection with the defense thereof except for reasonable costs of investigation or otherwise as provided below. Agent shall have the right to employ separate counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Agent unless (i) the employment of counsel by Agent has been authorized by the Corporation, (ii) Agent shall have reasonably concluded, and so notified the Corporation, that there is an actual conflict of interest between the Corporation and Agent in the conduct of the defense of such action or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action within a reasonable time, in each of which cases the fees and expenses of Agent’s separate counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Corporation or as to which Agent shall have made the conclusion provided for in clause (ii) above; and
(c) the Corporation shall not be liable to indemnify Agent under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent, which shall not be unreasonably withheld. The Corporation shall be permitted to settle any action except that it shall not settle any action or claim in any manner which would impose any penalty or limitation on Agent without Agent’s written consent, which may be given or withheld in Agent’s sole discretion.
8. Expenses. To the extent not prohibited by law, the Corporation shall advance, prior to the final disposition of any proceeding, promptly following request therefor, all expenses incurred by Agent in connection with such proceeding within fifteen (15) days after the receipt by the Corporation of a statement or statements requesting such advances (which shall include invoices received by Agent in connection with such expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Agent to waive any privilege accorded by applicable law shall not be included with the invoice) and an undertaking
3.
Exhibit 10.2
by or on behalf of Agent to repay said amounts if it shall be determined ultimately that Agent is not entitled to be indemnified under the provisions of this Agreement, the Bylaws, the Code or otherwise. Advances shall be unsecured, interest free and without regard to Agent’s ability to repay the expenses. Advances shall include any and all expenses actually and reasonably incurred by Agent pursuing an action to enforce (i) Agent’s right to indemnification, under this Agreement or otherwise, and (ii) this right of advancement, including expenses incurred preparing and forwarding statements to the Corporation to support the advances claimed. Agent acknowledges that the execution and delivery of this Agreement shall constitute an undertaking providing that Agent shall, to the fullest extent required by law, repay the advance if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Agent is not entitled to be indemnified by the Corporation. The right to advances under this Section 8 shall continue until final disposition of any proceeding, including any appeal therein. This Section 8 shall not apply to any claim made by Agent for which indemnity is excluded pursuant to Section 4(e).
9. Tax Treatment. The payments to or on behalf of Agent pursuant to this Agreement, including any payments referenced in Section 3(b) but not including payments pursuant to this Section 9, are intended to qualify for the exemption from the definition of “deferred compensation” for the purposes of Section 409A of the Internal Revenue Code of 1986, as amended, pursuant to the provisions of Treas. Reg. Section 1.409A-1(b)(10) (relating to certain indemnification and liability insurance plans for the benefit of a service provider), and this Agreement shall be interpreted accordingly. Any payments pursuant to this Section 9 shall be paid within the time periods set forth in Treas. Reg. Section 1.409A-3(i)(1)(v) (relating to “tax gross-up payments”). In addition to and not in limitation of the indemnification otherwise provided for herein, the Corporation hereby further agrees to provide such additional indemnification and/or loans so that the Agent is placed in the same after-tax position that Agent would have been in had Agent not been subject to Indemnification Costs (as defined below) and had, therefore, not received indemnification from the Corporation. Notwithstanding the foregoing, no indemnification pursuant to this Section 9 shall be provided with respect to any tax consequences resulting from the failure of Agent to repay when due any advances made to Agent pursuant to Section 8. For the purposes of this Section 9, “Indemnification Costs” shall mean the expenses, damages, judgments, fines, settlements and other amounts for which Agent is entitled to indemnification pursuant to Section 3(a), Section 3(b) or Section 6. The parties acknowledge that the precise calculation of amounts due to Agent pursuant to this Section 9 will be complex and will involve estimates and judgment. Accordingly, the parties agree that the calculation of all amounts due Agent and the timing for the payment of such amounts to Agent pursuant to this Section 9 shall be made by the accounting firm engaged by the Corporation for general tax compliance purposes (or, if there is no such accounting firm, a nationally recognized accounting firm appointed by the Corporation for this purpose) which determination(s) shall be final and binding on all persons. The Corporation shall bear all expenses with respect to the determination(s) by such accounting firm required to be made hereunder.
10. Enforcement. Any right to indemnification or advances granted by this Agreement to Agent shall be enforceable by or on behalf of Agent in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. Agent, in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting his claim. It shall be a defense to any action for which a claim for indemnification is made under Section 3 hereof (other than an action brought to enforce a claim for expenses pursuant to Section 8 hereof, provided that the required undertaking has been tendered to the Corporation) that Agent is not entitled to indemnification because of the limitations set forth in Section 4 hereof. In such an enforcement hearing or proceeding, the burden of proof shall be on the Corporation to prove that indemnification or advancement of expenses to Agent is not required under this Agreement or permitted by applicable law. Neither the failure of the Corporation (including its Board of Directors or its stockholders) to have made a determination prior to the commencement of such enforcement action that indemnification of Agent is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors or its stockholders) that such indemnification is improper shall be a defense to the action or create a presumption that Agent is not entitled to indemnification under this Agreement or otherwise.
11. Subrogation. 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 Agent, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Corporation effectively to bring suit to enforce such rights.
4.
Exhibit 10.2
12. Non-Exclusivity of Rights. The rights conferred on Agent by this Agreement shall not be exclusive of any other right which Agent may have or hereafter acquire under any statute, provision of the Corporation’s Certificate of Incorporation or Bylaws, agreement, vote of stockholders or directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Agent under this Agreement in respect of any action taken or omitted by such Agent in his or her corporate status prior to such amendment, alteration or repeal. To the extent that a change in the Code, whether by statute or judicial decision, permits greater indemnification or advancement of expenses than would be afforded currently under the Corporation’s Certificate of Incorporation, Bylaws and this Agreement, it is the intent of the parties hereto that Agent shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, by Agent shall not prevent the concurrent assertion or employment of any other right or remedy by Agent. Notwithstanding anything in the foregoing, in no event shall Agent be entitled to indemnification pursuant to this Agreement for any expense for which Agent has already received payment by the Corporation or otherwise.
13. Survival of Rights.
(a) The rights conferred on Agent by this Agreement shall continue after Agent has ceased to be a director, officer, employee or other agent of the Corporation or to serve at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the benefit of Agent’s heirs, executors and administrators. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Corporation against an Agent or an Agent's estate, spouse, heirs, executors or personal or legal representatives after the expiration of five (5) years from the date of accrual of such cause of action, and any claim or cause of action of the Corporation shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such five-year period; provided, however, that if any shorter period of limitations is otherwise applicable to such cause of action, such shorter period shall govern.
(b) The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, expressly to assume and agree, in writing and to the satisfaction of Agent, to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.
14. Separability. Each of the provisions 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 for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions hereof. Furthermore, if this Agreement shall be invalidated in its entirety on any ground, then the Corporation shall nevertheless indemnify Agent to the fullest extent provided by the Bylaws, the Code or any other applicable law.
15. Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware.
16. Amendment and Termination; Waiver. No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
17. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute but one and the same Agreement. Only one such counterpart need be produced to evidence the existence of this Agreement.
18. Headings. The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.
5.
Exhibit 10.2
19. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) upon delivery if delivered by hand to the party to whom such communication was directed or (ii) upon the third business day after the date on which such communication was mailed if mailed by certified or registered mail with postage prepaid:
(a) If to Agent, at the address indicated on the signature page hereof or to such other address as may have been furnished to the Corporation by Agent.
(b) If to the Corporation, to:
0000 Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxx, XX 00000
20. Insurance. To the extent that the Corporation maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Corporation or of any subsidiary (“D&O Insurance”), Agent 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 such director, officer, employee or agent under the terms of such policy or policies as maintained by the Corporation. If, at the time of the receipt of a notice of a claim or proceeding pursuant to the terms hereof, the Corporation has D&O Insurance in effect, the Corporation shall give prompt notice of the assertion of such claim and/or commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Agent, all amounts payable as a result of such claim and/or proceeding in accordance with the terms of such policies.
6.
Exhibit 10.2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.
By:
Xxxx X. Xxxxxx
President and CEO
AGENT
By:
Name: _______________________________
Address: iPass Inc.
0000 Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxx, XX. 00000
7.
