INDEMNIFICATION AGREEMENT
Exhibit
10.23
THIS
INDEMNIFICATION AGREEMENT (the “Agreement”) is made and
entered into as of September 3, 2009 between New Air, Inc. (the “Company”), and Xx. Xxxxx Xx
Xxxxx (“Indemnitee”).
WITNESSETH
THAT:
WHEREAS,
highly competent persons have become more reluctant to serve corporations as
directors or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate
risks of claims and actions against them arising out of their service to and
activities on behalf of the corporation;
WHEREAS,
the Board of Directors of the Company (the “Board”) has determined that,
in order to attract and retain qualified individuals, the Company will attempt
to maintain on an ongoing basis, at its sole expense, liability insurance to
protect persons serving the Company and its subsidiaries from certain
liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time,
directors, officers, and other persons in service to corporations or business
enterprises are being increasingly subjected to expensive and time-consuming
litigation relating to, among other things, matters that traditionally would
have been brought only against the Company or business enterprise
itself. The By-laws of the Company require indemnification of the
officers and directors of the Company. Indemnitee may also be
entitled to indemnification pursuant to the General Corporation Law of the State
of Maryland (“MGCL”). The By-laws
and the MGCL expressly provide that the indemnification provisions set forth
therein are not exclusive, and thereby contemplate that contracts may be entered
into between the Company and members of the board of directors, officers and
other persons with respect to indemnification;
WHEREAS,
the uncertainties relating to such insurance and to indemnification have
increased the difficulty of attracting and retaining such persons;
WHEREAS,
the Board has determined that the increased difficulty in attracting and
retaining such persons is detrimental to the best interests of the Company's
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future;
WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify, and to advance expenses on behalf of, such persons
to the fullest extent permitted by applicable law so that they will serve or
continue to serve the Company free from undue concern that they will not be so
indemnified;
WHEREAS,
this Agreement is a supplement to and in furtherance of the By-laws of the
Company and any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder;
WHEREAS,
Indemnitee does not regard the protection available under the Company's By-laws
and insurance as adequate in the present circumstances, and may not be willing
to serve as an officer or director without adequate protection, and the Company
desires Indemnitee to serve in such capacity. Indemnitee is willing
to serve, continue to serve and to take on additional service for or on behalf
of the Company on the condition that he be so indemnified; and
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NOW,
THEREFORE, in consideration of Indemnitee’s agreement to serve as a director
after the date hereof, the parties hereto agree as follows:
1. Indemnity of
Indemnitee. The Company hereby agrees to hold harmless and
indemnify Indemnitee to the fullest extent permitted by law, as such may be
amended from time to time. In furtherance of the foregoing
indemnification, and without limiting the generality thereof:
(a) Proceedings Other Than
Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section l(a) if, by
reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or
is threatened to be made, a party to or participant in any Proceeding (as
hereinafter defined) other than a Proceeding by or in the right of the
Company. Pursuant to this Section 1(a),
Indemnitee shall be indemnified against all Expenses (as hereinafter defined),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him, or on his behalf, in connection with such Proceeding
or any claim, issue or matter therein, if the Indemnitee acted in good faith and
in a manner the Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company, and with respect to any criminal Proceeding, had
no reasonable cause to believe the Indemnitee’s conduct was
unlawful.
(b) Proceedings by or in the
Right of the Company. Indemnitee shall be entitled to the
rights of indemnification provided in this Section 1(b) if, by
reason of his Corporate Status, the Indemnitee is, or is threatened to be made,
a party to or participant in any Proceeding brought by or in the right of the
Company. Pursuant to this Section 1(b),
Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with
such Proceeding if the Indemnitee acted in good faith and in a manner the
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, if applicable law so provides, no
indemnification against such Expenses shall be made in respect of any claim,
issue or matter in such Proceeding as to which Indemnitee shall have been
adjudged to be liable to the Company unless and to the extent that the Court of
Chancery of the State of Delaware shall determine that such indemnification may
be made.
(c) Indemnification for Expenses
of a Party Who is Wholly or Partly Successful. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of his Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, he shall be indemnified to the maximum extent
permitted by law, as such may be amended from time to time, against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or
matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
2. Additional
Indemnity. In addition to, and without regard to any
limitations on, the indemnification provided for in Section 1 of this
Agreement, the Company shall and hereby does indemnify and hold harmless
Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
or participant in any Proceeding (including a Proceeding by or in the right of
the Company), including, without limitation, all liability arising out of the
negligence or active or passive wrongdoing of Indemnitee. The only
limitation that shall exist upon the Company’s obligations pursuant to this
Agreement shall be that the Company shall not be obligated to make any payment
to Indemnitee that is finally determined (under the procedures, and subject to
the presumptions, set forth in Sections 6 and 7 hereof) to be
unlawful.
3. Contribution.
(a) Whether or not the indemnification
provided in Sections
1 and 2
hereof is available, in respect of any threatened, pending or completed action,
suit or proceeding in which the Company is jointly liable with Indemnitee (or
would be if joined in such action, suit or proceeding), the Company shall pay,
in the first instance, the entire amount of any judgment or settlement of such
action, suit or proceeding without requiring Indemnitee to contribute to such
payment and the Company hereby waives and relinquishes any right of contribution
it may have against Indemnitee. The Company shall not enter into any
settlement of any action, suit or proceeding in which the Company is jointly
liable with Indemnitee (or would be if joined in such action, suit or
proceeding) unless such settlement provides for a full and final release of all
claims asserted against Indemnitee.
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(b) Without diminishing or impairing the
obligations of the Company set forth in the preceding subparagraph, if, for any
reason, Indemnitee shall elect or be required to pay all or any portion of any
judgment or settlement in any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall contribute to
the amount of expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred and paid or payable by
Indemnitee in proportion to the relative benefits received by the Company and
all officers, directors or employees of the Company, other than Indemnitee, who
are jointly liable with Indemnitee (or would be if joined in such action, suit
or proceeding), on the one hand, and Indemnitee, on the other hand, from the
transaction from which such action, suit or proceeding arose; provided, however,
that the proportion determined on the basis of relative benefit may, to the
extent necessary to conform to law, be further adjusted by reference to the
relative fault of the Company and all officers, directors or employees of the
Company other than Indemnitee who are jointly liable with Indemnitee (or would
be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, in connection with the events that resulted in
such expenses, judgments, fines or settlement amounts, as well as any other
equitable considerations which the Law may require to be
considered. The relative fault of the Company and all officers,
directors or employees of the Company, other than Indemnitee, who are jointly
liable with Indemnitee (or would be if joined in such action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand, shall be
determined by reference to, among other things, the degree to which their
actions were motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary and the degree to which
their conduct is active or passive.
(c) The Company hereby agrees to fully
indemnify and hold Indemnitee harmless from any claims of contribution which may
be brought by officers, directors or employees of the Company, other than
Indemnitee, who may be jointly liable with Indemnitee.
(d) To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating to
an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such Proceeding in
order to reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and/or (ii) the relative fault of the Company (and its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).
4. Indemnification for Expenses
of a Witness. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a witness in any Proceeding to which Indemnitee is not a party, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith.
5. Advancement of
Expenses. Notwithstanding any other provision of this
Agreement, the Company shall advance all Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate
Status within thirty (30) days after the receipt by the Company of a statement
or statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence
the Expenses incurred by Indemnitee and shall include or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses. Any advances and
undertakings to repay pursuant to this Section 5 shall be
unsecured and interest free.
6. Procedures and Presumptions
for Determination of Entitlement to Indemnification. It is the
intent of this Agreement to secure for Indemnitee rights of indemnity that are
as favorable as may be permitted under the Delaware General Corporation Law and
public policy of the State of Delaware. Accordingly, the parties
agree that the following procedures and presumptions shall apply in the event of
any question as to whether Indemnitee is entitled to indemnification under this
Agreement:
(a) To obtain indemnification under this
Agreement, Indemnitee shall submit to the Company a written request, including
therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification. The Secretary
of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee has
requested indemnification.
(b) Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 6(a) hereof,
a determination, if required by applicable law, with respect to Indemnitee’s
entitlement thereto shall be made in the specific case by one of the following
four methods, which shall be at the election of the board: (1) by a
majority vote of the disinterested directors, even though less than a quorum, by
a committee of disinterested directors designated by a majority vote of the
disinterested directors, even though less than a quorum, (2) if there are no
disinterested directors or if the disinterested directors so direct, by
independent legal counsel in a written opinion to the Board of Directors, a copy
of which shall be delivered to the Indemnitee, or (3) if so directed by the
Board of Directors, by the stockholders of the Company. For purposes
hereof, disinterested directors are those members of the board of directors of
the Company who are not parties to the action, suit or proceeding in respect of
which indemnification is sought by Indemnitee.
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(c) If the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof,
the Independent Counsel shall be selected as provided in this Section
6(c). The Independent Counsel shall be selected by the Board
of Directors. Indemnitee may, within 10 days after such written
notice of selection shall have been given, deliver to the Company, as the case
may be, a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as
defined in Section
13 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper
and timely objection, the person so selected shall act as Independent
Counsel. If a written objection is made and substantiated, the
Independent Counsel selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection
is without merit. If, within 20 days after submission by Indemnitee
of a written request for indemnification pursuant to Section 6(a) hereof,
no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the Court of Chancery of the State of
Delaware or other court of competent jurisdiction for resolution of any
objection which shall have been made by the Indemnitee to the Company’s
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the court or by such other person as the court
shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under Section 6(b)
hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 6(b) hereof,
and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 6(c),
regardless of the manner in which such Independent Counsel was selected or
appointed.
(d) In making a determination with respect
to entitlement to indemnification hereunder, the person or persons or entity
making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement. Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion by clear
and convincing evidence. Neither the failure of the Company
(including by its directors or independent legal counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement
that indemnification is proper in the circumstances because Indemnitee has met
the applicable standard of conduct, nor an actual determination by the Company
(including by its directors or independent legal counsel) that Indemnitee has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that Indemnitee has not met the applicable standard of
conduct.
(e) Indemnitee shall be deemed to have
acted in good faith if Indemnitee’s action is based on the records or books of
account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise (as hereinafter
defined) in the course of their duties, or on the advice of legal counsel for
the Enterprise or on information or records given or reports made to the
Enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Enterprise. In
addition, the knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this
Agreement. Whether or not the foregoing provisions of this Section 6(e) are
satisfied, it shall in any event be presumed that Indemnitee has at all times
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company. Anyone seeking to
overcome this presumption shall have the burden of proof and the burden of
persuasion by clear and convincing evidence.
(f) If the person, persons or entity
empowered or selected under Section 6 to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within sixty (60) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee’s statement not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law; provided,
however, that such 60-day period may be extended for a reasonable time, not to
exceed an additional thirty (30) days, if the person, persons or entity making
such determination with respect to entitlement to indemnification in good faith
requires such additional time to obtain or evaluate documentation and/or
information relating thereto; and provided, further, that the foregoing
provisions of this Section 6(g) shall
not apply if the determination of entitlement to indemnification is to be made
by the stockholders pursuant to Section 6(b) of this
Agreement and if (A) within fifteen (15) days after receipt by the Company of
the request for such determination, the Board of Directors or the Disinterested
Directors, if appropriate, resolve to submit such determination to the
stockholders for their consideration at an annual meeting thereof to be held
within seventy-five (75) days after such receipt and such determination is made
thereat, or (B) a special meeting of stockholders is called within fifteen (15)
days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so
called and such determination is made thereat.
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(g) Indemnitee shall cooperate with the
person, persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such
determination. Any Independent Counsel, member of the Board of
Directors or stockholder of the Company shall act reasonably and in good faith
in making a determination regarding the Indemnitee’s entitlement to
indemnification under this Agreement. Any costs or expenses
(including attorneys’ fees and disbursements) incurred by Indemnitee in so
cooperating with the person, persons or entity making such determination shall
be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company hereby indemnifies and agrees to
hold Indemnitee harmless therefrom.
(h) The Company acknowledges that a
settlement or other disposition short of final judgment may be successful if it
permits a party to avoid expense, delay, distraction, disruption and
uncertainty. In the event that any action, claim or proceeding to
which Indemnitee is a party is resolved in any manner other than by adverse
judgment against Indemnitee (including, without limitation, settlement of such
action, claim or proceeding with or without payment of money or other
consideration) it shall be presumed that Indemnitee has been successful on the
merits or otherwise in such action, suit or proceeding. Anyone
seeking to overcome this presumption shall have the burden of proof and the
burden of persuasion by clear and convincing evidence.
(i) The termination of any Proceeding or of
any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely
affect the right of Indemnitee to indemnification or create a presumption that
Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company or, with
respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.
7. Remedies of
Indemnitee.
(a) In the event that (i) a determination
is made pursuant to Section 6 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this
Agreement, (iii) no determination of entitlement to indemnification is made
pursuant to Section
6(b) of this Agreement within 90 days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is not made
pursuant to this Agreement within ten (10) days after receipt by the Company of
a written request therefor or (v) payment of indemnification is not made within
ten (10) days after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 6 of
this Agreement, Indemnitee shall be entitled to an adjudication in an
appropriate court of the State of Delaware, or in any other court of competent
jurisdiction, of Indemnitee’s entitlement to such
indemnification. Indemnitee shall commence such proceeding seeking an
adjudication within 180 days following the date on which Indemnitee first has
the right to commence such proceeding pursuant to this Section
7(a). The Company shall not oppose Indemnitee’s right to seek
any such adjudication.
(b) In the event that a determination shall
have been made pursuant to Section 6(b) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding commenced pursuant to this Section 7 shall be
conducted in all respects as a de novo trial on the merits, and Indemnitee shall
not be prejudiced by reason of the adverse determination under Section
6(b).
(c) If a determination shall have been made
pursuant to Section
6(b) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding
commenced pursuant to this Section 7, absent (i)
a misstatement by Indemnitee of a material fact, or an omission of a material
fact necessary to make Indemnitee’s misstatement not materially misleading in
connection with the application for indemnification, or (ii) a prohibition of
such indemnification under applicable law.
(d) In the event that Indemnitee, pursuant
to this Section
7, seeks a judicial adjudication of his rights under, or to recover
damages for breach of, this Agreement, or to recover under any directors’ and
officers’ liability insurance policies maintained by the Company, the Company
shall pay on his behalf, in advance, any and all expenses (of the types
described in the definition of Expenses in Section 13 of this
Agreement) actually and reasonably incurred by him in such judicial
adjudication, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of expenses or insurance
recovery.
(e) The Company shall be precluded from
asserting in any judicial proceeding commenced pursuant to this Section 7 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Company is bound by
all the provisions of this Agreement. The Company shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after receipt by the Company of a written request
therefore) advance, to the extent not prohibited by law, such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for indemnification or advance of Expenses from the
Company under this Agreement or under any directors' and officers' liability
insurance policies maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement of
Expenses or insurance recovery, as the case may be.
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(f) Notwithstanding anything in this
Agreement to the contrary, no determination as to entitlement to indemnification
under this Agreement shall be required to be made prior to the final disposition
of the Proceeding.
8. Non-Exclusivity; Survival of
Rights; Insurance; Primacy of Indemnification; Subrogation.
(a) The rights of indemnification as
provided by this Agreement shall not be deemed exclusive of any other rights to
which Indemnitee may at any time be entitled under applicable law, the
certificate of incorporation of the Company, the Bylaws, any agreement, a vote
of stockholders, a resolution of directors or otherwise. No
amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal. To the extent that a change
in the Delaware General Corporation Law, whether by statute or judicial
decision, permits greater indemnification than would be afforded currently
under the Bylaws and this Agreement, it is the intent of the parties
hereto that Indemnitee 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, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) To the extent that the Company
maintains an insurance policy or policies providing liability insurance for
directors, officers, employees, or agents or fiduciaries of the Company or of
any other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise that such person serves at the request of the Company,
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,
officer, employee, agent or fiduciary under such policy or
policies. If, at the time of the receipt of a notice of a claim
pursuant to the terms hereof, the Company has director and officer liability
insurance in effect, the Company shall give prompt notice of the commencement of
such proceeding to the insurers in accordance with the procedures set forth in
the respective policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such proceeding in accordance
with the terms of such policies.
(c) In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all papers required
and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such
rights.
(d) Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
(e) Company's obligation to indemnify or
advance Expenses hereunder to Indemnitee who is or was serving at the request of
the Company as a director, officer, employee or agent of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of expenses from such other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise.
9. Exception to Right of
Indemnification. Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
(a) for which payment has actually been
made to or on behalf of Indemnitee under any insurance policy or other indemnity
provision, except with respect to any excess beyond the amount paid under any
insurance policy or other indemnity provision, provided, that the foregoing
shall not affect the rights of Indemnitee or the Fund Indemnitors set forth in
Section 8(c) above; or
(b) for an accounting of profits made from
the purchase and sale (or sale and purchase) by Indemnitee of securities of the
Company within the meaning of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or similar provisions of state
statutory law or common law; or
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(c) in connection with any Proceeding (or
any part of any Proceeding) initiated by Indemnitee, including any Proceeding
(or any part of any Proceeding) initiated by Indemnitee against the Company or
its directors, officers, employees or other indemnitees, unless (i) the Board of
Directors of the Company authorized the Proceeding (or any part of any
Proceeding) prior to its initiation or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the
Company under applicable law.
10. Duration of
Agreement. All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is an officer or
director of the Company (or is or was serving at the request of the Company as a
director, officer, 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 Proceeding (or any proceeding commenced under
Section 7
hereof) by reason of his Corporate Status, whether or not he is acting or
serving in any such capacity at the time any liability or expense is incurred
for which indemnification can be provided under this Agreement. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), assigns, spouses,
heirs, executors and personal and legal representatives.
11. Security. To
the extent requested by Indemnitee and approved by the Board of Directors of the
Company, the Company may at any time and from time to time provide security to
Indemnitee for the Company’s obligations hereunder through an irrevocable bank
line of credit, funded trust or other collateral. Any such security,
once provided to Indemnitee, may not be revoked or released without the prior
written consent of the Indemnitee.
12. Enforcement.
(a) The Company expressly confirms and
agrees that it has entered into this Agreement and assumes the obligations
imposed on it hereby in order to induce Indemnitee to serve as an officer or
director of the Company, and the Company acknowledges that Indemnitee is relying
upon this Agreement in serving as an officer or director of the
Company.
(b) This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter
hereof.
13. Definitions. For
purposes of this Agreement:
(a) “Corporate Status” describes
the status of a person who is or was a director, officer, employee, agent or
fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise that such person is or
was serving at the express written request of the Company.
(b) “Disinterested Director” means
a director of the Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee.
(c) “Enterprise” shall mean the
Company and any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise that Indemnitee is or was serving at the
express written request of the Company as a director, officer, employee, agent
or fiduciary.
(d) “Expenses” shall include all
reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of
experts, witness fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating,
participating, or being or preparing to be a witness in a
Proceeding. Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs relating to any cost bond,
supersede as bond, or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the
amount of judgments or fines against Indemnitee.
7
(e) “Independent Counsel” means a
law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning
Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “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 Indemnitee in
an action to determine Indemnitee’s rights under this Agreement. The
Company agrees to pay the reasonable fees of the Independent Counsel referred to
above and to fully indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
(f) “Proceeding” includes 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 brought by or in the
right of the Company or otherwise and whether civil, criminal, administrative or
investigative, in which Indemnitee was, is or will be involved as a party or
otherwise, by reason of the fact that Indemnitee is or was an officer or
director of the Company, by reason of any action taken by him or of any inaction
on his part while acting as an officer or director of the Company, or by reason
of the fact that he is or was serving at the request of the Company as a
director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other Enterprise; in each case whether or
not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this
Agreement; including one pending on or before the date of this Agreement, but
excluding one initiated by an Indemnitee pursuant to Section 7 of this
Agreement to enforce his rights under this Agreement.
14. Severability. The
invalidity of unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision. Without
limiting the generality of the foregoing, this Agreement is intended to confer
upon Indemnitee indemnification rights to the fullest extent permitted by
applicable laws. In the event any provision hereof conflicts with any
applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such
conflict.
15. Modification and
Waiver. No supplement, modification, termination or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the 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.
16. Notice By
Indemnitee. Indemnitee agrees promptly to notify the Company
in writing upon being served with or otherwise receiving any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification covered
hereunder. The failure to so notify the Company shall not relieve the
Company of any obligation which it may have to Indemnitee under this Agreement
or otherwise unless and only to the extent that such failure or delay materially
prejudices the Company.
17. Notices. All
notices and other communications given or made pursuant to this Agreement shall
be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the
recipient, and if not so confirmed, then on the next business day, (c) five (5)
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the
addresses kept by the Company or to such other address as may have been
furnished to Indemnitee by the Company or to the Company by Indemnitee, as the
case may be.
18. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement. This Agreement may also be executed and delivered by
facsimile signature and in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
19. Headings. The
headings of the paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
20. Governing Law and Consent to
Jurisdiction. This Agreement and the legal relations among the
parties shall be governed by, and construed and enforced in accordance with, the
laws of the State of Maryland, without regard to its conflict of laws rules. The
Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any
action or proceeding arising out of or in connection with this Agreement shall
be brought in the competent courts in the State of Maryland, and not in any
other state or federal court in the United States of America or any court in any
other country, (ii) consent to submit to the exclusive jurisdiction of the court
for purposes of any action or proceeding arising out of or in connection with
this Agreement, (iii) waive any objection to the laying of venue of any such
action or proceeding in the Delaware Court, and (iv) waive, and agree not to
plead or to make, any claim that any such action or proceeding brought in the
court has been brought in an improper or inconvenient forum.
8
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first above written.
| COMPANY | |||
|
|
By:
|
/s/ Xxxx Xxxxxxx | |
| By: Xxxx Xxxxxxx | |||
| Title: CEO | |||
| INDEMNITEE | |||
|
|
By:
|
/s/ Xxxxx Xx Xxxxx | |
| Name: Xxxxx Xx Xxxxx | |||
9
