Exhibit 10.7
INDEMNIFICATION AGREEMENT
This Agreement made and entered into this ____ day of _______ 2007, (the
"Agreement"), by and between Virtusa Corporation, a Delaware corporation (the
"Company," which term shall include, where appropriate, any Entity (as
hereinafter defined) controlled directly or indirectly by the Company) and
____________ (the "Indemnitee"):
WHEREAS, it is essential to the Company that it be able to retain and
attract as directors the most capable persons available;
WHEREAS, increased corporate litigation has subjected directors to
litigation risks and expenses, and the limitations on the availability of
directors and officers liability insurance have made it increasingly difficult
for the Company to attract and retain such persons;
WHEREAS, the Company's By-laws (the "By-laws") require it to indemnify its
directors to the fullest extent permitted by law and permit it to make other
indemnification arrangements and agreements;
WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of the By-laws or any change in the ownership of the Company or
the composition of its Board of Directors);
WHEREAS, the Company intends that this Agreement provide Indemnitee with
greater protection than that which is provided by the Company's By-laws; and
WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in becoming or continuing as a director of the Company.
NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Definitions.
(a) "Corporate Status" describes the status of a person who is
serving or has served (i) as a director of the Company, (ii) in any
capacity with respect to any employee benefit plan of the Company,
or (iii) as a director, partner, trustee, officer, employee, or
agent of any other Entity at the request of the Company. For
purposes of subsection (iii) of this Section 1(a), if Indemnitee is
serving or has served as a director, partner, trustee, officer,
employee or agent of a Subsidiary, Indemnitee shall be deemed to be
serving at the request of the Company.
(b) "Entity" shall mean any corporation, partnership, limited
liability company, joint venture, trust, foundation, association,
organization or other legal entity.
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(c) "Expenses" shall mean all fees, costs and expenses incurred by
Indemnitee in connection with any Proceeding (as defined below),
including, without limitation, attorneys' fees, disbursements and
retainers (including, without limitation, any such fees,
disbursements and retainers incurred by Indemnitee pursuant to
Sections 11 and 12(c) of this Agreement), fees and disbursements of
expert witnesses, private investigators and professional advisors
(including, without limitation, accountants and investment bankers),
court costs, transcript costs, fees of experts, travel expenses,
duplicating, printing and binding costs, telephone and fax
transmission charges, postage, delivery services, secretarial
services, and other disbursements and expenses.
(d) "Indemnifiable Expenses," "Indemnifiable Liabilities" and
"Indemnifiable Amounts" shall have the meanings ascribed to those
terms in Section 3(a) below.
(e) "Liabilities" shall mean judgments, damages, liabilities,
losses, penalties, excise taxes, fines and amounts paid in
settlement.
(f) "Proceeding" shall mean any threatened, pending or completed
claim, action, suit, arbitration, alternate dispute resolution
process, investigation, administrative hearing, appeal, or any other
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, whether formal or informal, including a proceeding
initiated by Indemnitee pursuant to Section 11 of this Agreement to
enforce Indemnitee's rights hereunder.
(g) "Subsidiary" shall mean any corporation, partnership, limited
liability company, joint venture, trust or other Entity of which the
Company owns (either directly or through or together with another
Subsidiary of the Company) either (i) a general partner, managing
member or other similar interest or (ii) (A) 50% or more of the
voting power of the voting capital equity interests of such
corporation, partnership, limited liability company, joint venture
or other Entity, or (B) 50% or more of the outstanding voting
capital stock or other voting equity interests of such corporation,
partnership, limited liability company, joint venture or other
Entity.
2. Services of Indemnitee. In consideration of the Company's covenants and
commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director of the Company. However, this Agreement shall not impose any obligation
on Indemnitee or the Company to continue Indemnitee's service to the Company
beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.
3. Agreement to Indemnify. The Company agrees to indemnify Indemnitee as
follows:
(a) Proceedings Other Than By or In the Right of the Company.
Subject to the exceptions contained in Section 4(a) and 4(c) below,
if Indemnitee was or is a party or is threatened to be made a party
to any Proceeding (other than an action by or in the right of the
Company) by reason of Indemnitee's Corporate Status,
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Indemnitee shall be indemnified by the Company against all Expenses
and Liabilities incurred or paid by Indemnitee in connection with
such Proceeding (referred to herein as "Indemnifiable Expenses" and
"Indemnifiable Liabilities," respectively, and collectively as
"Indemnifiable Amounts").
(b) Proceedings By or In the Right of the Company. Subject to the
exceptions contained in Section 4(b) and 4(c) below, if Indemnitee
was or is a party or is threatened to be made a party to any
Proceeding by or in the right of the Company by reason of
Indemnitee's Corporate Status, Indemnitee shall be indemnified by
the Company against all Indemnifiable Expenses.
(c) Conclusive Presumption Regarding Standard of Care. In making any
determination required to be made under Delaware law with respect to
entitlement to indemnification hereunder, the person, persons or
entity making such determination shall presume that Indemnitee is
entitled to indemnification under this Agreement if Indemnitee
submitted a request therefor in accordance with Section 5 of this
Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that
presumption.
4. Exceptions to Indemnification. Indemnitee shall be entitled to
indemnification under Section 3 above in all circumstances other than with
respect to any specific claim, issue or matter involved in the Proceeding out of
which Indemnitee's claim for indemnification has arisen, as follows:
(a) Proceedings Other Than By or In the Right of the Company. If
indemnification is requested under Section 3(a) and it has been
finally adjudicated by a court of competent jurisdiction that, in
connection with such specific claim, issue or matter, Indemnitee
failed to act (i) in good faith and (ii) in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of
the Company, or, with respect to any criminal Proceeding, Indemnitee
had reasonable cause to believe that Indemnitee's conduct was
unlawful, Indemnitee shall not be entitled to payment of
Indemnifiable Amounts hereunder.
(b) Proceedings By or In the Right of the Company. If
indemnification is requested under Section 3(b) and
(i) it has been finally adjudicated by a court of
competent jurisdiction that, in connection with such
specific claim, issue or matter, Indemnitee failed to
act (A) in good faith and (B) in a manner Indemnitee
reasonably believed to be in or not opposed to the best
interests of the Company, Indemnitee shall not be
entitled to payment of Indemnifiable Expenses hereunder;
or
(ii) it has been finally adjudicated by a court of
competent jurisdiction that Indemnitee is liable to the
Company with respect to such specific claim, Indemnitee
shall not be entitled to payment
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of Indemnifiable Expenses hereunder with respect to such
claim, issue or matter unless the Court of Chancery or
another court in which such Proceeding was brought shall
determine upon application that, despite the
adjudication of liability, but in view of all the
circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnification for such
Indemnifiable Expenses which such court shall deem
proper; or
(iii) it has been finally adjudicated by a court of
competent jurisdiction that Indemnitee is liable to the
Company for an accounting of profits made from the
purchase or sale by the Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of
the Securities Exchange Act of 1934, the rules and
regulations promulgated thereunder and amendments
thereto or similar provisions of any federal, state or
local statutory law, Indemnitee shall not be entitled to
payment of Indemnifiable Expenses hereunder.
(c) Insurance Proceeds. To the extent payment is actually made to
the Indemnitee under a valid and collectible insurance policy in
respect of Indemnifiable Amounts in connection with such specific
claim, issue or matter, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts hereunder except in respect of any excess
beyond the amount of payment under such insurance.
5. Procedure for Payment of Indemnifiable Amounts. Indemnitee shall submit
to the Company a written request specifying the Indemnifiable Amounts for which
Indemnitee seeks payment under Section 3 of this Agreement and the basis for the
claim. The Company shall pay such Indemnifiable Amounts to Indemnitee promptly
upon receipt of its request. At the request of the Company, Indemnitee shall
furnish such documentation and information as are reasonably available to
Indemnitee and necessary to establish that Indemnitee is entitled to
indemnification hereunder.
6. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's 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 reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Agreement, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without prejudice, by
reason of settlement, judgment, order or otherwise, shall be deemed to be a
successful result as to such claim, issue or matter.
7. Effect of Certain Resolutions. Neither the settlement or termination of
any Proceeding nor the failure of the Company to award indemnification or to
determine that
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indemnification is payable shall create a presumption that Indemnitee is not
entitled to indemnification hereunder. In addition, the termination of any
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent shall not create a presumption that Indemnitee did
not act in good faith and in a manner which Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company or, with respect to any
criminal Proceeding, had reasonable cause to believe that Indemnitee's action
was unlawful.
8. Agreement to Advance Expenses; Undertaking. The Company shall advance
all Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding, including a Proceeding by or in the right of the Company, in which
Indemnitee is involved by reason of such Indemnitee's Corporate Status within
ten (10) calendar days after the receipt by the Company of a written statement
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. To the extent required
by Delaware law, Indemnitee hereby undertakes to repay any and all of the amount
of Indemnifiable Expenses paid to Indemnitee if it is finally determined by a
court of competent jurisdiction that Indemnitee is not entitled under this
Agreement to indemnification with respect to such Expenses. This undertaking is
an unlimited general obligation of Indemnitee.
9. Procedure for Advance Payment of Expenses. Indemnitee shall submit to
the Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks an advancement under Section 8 of this Agreement, together with
documentation evidencing that Indemnitee has incurred such Indemnifiable
Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no
later than ten (10) calendar days after the Company's receipt of such request.
10. 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 by
incurred by him or on his behalf in connection therewith.
11. Remedies of Indemnitee.
(a) Right to Petition Court. In the event that Indemnitee makes a
request for payment of Indemnifiable Amounts under Sections 3 and 5
above or a request for an advancement of Indemnifiable Expenses
under Sections 8 and 9 above and the Company fails to make such
payment or advancement in a timely manner pursuant to the terms of
this Agreement, Indemnitee may petition the Court of Chancery to
enforce the Company's obligations under this Agreement.
(b) Burden of Proof. In any judicial proceeding brought under
Section 11(a) above, the Company shall have the burden of proving
that Indemnitee is not entitled to payment of Indemnifiable Amounts
hereunder.
(c) Expenses. The Company agrees to reimburse Indemnitee in full for
any Expenses incurred by Indemnitee in connection with
investigating, preparing for, litigating, defending or settling any
action brought by Indemnitee under Section
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11(a) above, or in connection with any claim or counterclaim brought
by the Company in connection therewith, whether or not Indemnitee is
successful in whole or in part in connection with any such action.
(d) Failure to Act Not a Defense. The failure of the Company
(including its Board of Directors or any committee thereof,
independent legal counsel, or stockholders) to make a determination
concerning the permissibility of the payment of Indemnifiable
Amounts or the advancement of Indemnifiable Expenses under this
Agreement shall not be a defense in any action brought under Section
11(a) above, and shall not create a presumption that such payment or
advancement is not permissible.
12. Defense of the Underlying Proceeding.
(a) Notice by Indemnitee. Indemnitee agrees to notify the Company
promptly upon being served with any summons, citation, subpoena,
complaint, indictment, information, or other document relating to
any Proceeding which may result in the payment of Indemnifiable
Amounts or the advancement of Indemnifiable Expenses hereunder;
provided, however, that the failure to give any such notice shall
not disqualify Indemnitee from the right, or otherwise affect in any
manner any right of Indemnitee, to receive payments of Indemnifiable
Amounts or advancements of Indemnifiable Expenses unless the
Company's ability to defend in such Proceeding is materially and
adversely prejudiced thereby.
(b) Defense by Company. Subject to the provisions of the last
sentence of this Section 12(b) and of Section 12(c) below, the
Company shall have the right to defend Indemnitee in any Proceeding
which may give rise to the payment of Indemnifiable Amounts
hereunder; provided, however that the Company shall notify
Indemnitee of any such decision to defend within ten (10) calendar
days of receipt of notice of any such Proceeding under Section 12(a)
above. The Company shall not, without the prior written consent of
Indemnitee, consent to the entry of any judgment against Indemnitee
or enter into any settlement or compromise which (i) includes an
admission of fault of Indemnitee or (ii) does not include, as an
unconditional term thereof, the full release of Indemnitee from all
liability in respect of such Proceeding, which release shall be in
form and substance reasonably satisfactory to Indemnitee. This
Section 12(b) shall not apply to a Proceeding brought by Indemnitee
under Section 11(a) above or pursuant to Section 20 below.
(c) Indemnitee's Right to Counsel. Notwithstanding the provisions of
Section 12(b) above, if in a Proceeding to which Indemnitee is a
party by reason of Indemnitee's Corporate Status, (i) Indemnitee
reasonably concludes that he or she may have separate defenses or
counterclaims to assert with respect to any issue which may not be
consistent with the position of other defendants in such Proceeding,
(ii) a conflict of interest or potential conflict of interest exists
between Indemnitee and the Company, or (iii) if the Company fails to
assume the defense of such proceeding in a timely manner, Indemnitee
shall be entitled to be
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represented by separate legal counsel of Indemnitee's choice at the
expense of the Company. In addition, if the Company fails to comply
with any of its obligations under this Agreement or in the event
that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any action, suit
or proceeding to deny or to recover from Indemnitee the benefits
intended to be provided to Indemnitee hereunder, Indemnitee shall
have the right to retain counsel of Indemnitee's choice, at the
expense of the Company, to represent Indemnitee in connection with
any such matter.
13. Representations and Warranties of the Company. The Company hereby
represents and warrants to Indemnitee as follows:
(a) Authority. The Company has all necessary power and authority to
enter into, and be bound by the terms of, this Agreement, and the
execution, delivery and performance of the undertakings contemplated
by this Agreement have been duly authorized by the Company.
(b) Enforceability. This Agreement, when executed and delivered by
the Company in accordance with the provisions hereof, shall be a
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the enforcement
of creditors' rights generally.
14. Insurance. The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the Company to obtain and
maintain a policy or policies of insurance with a reputable insurance company
providing the Indemnitee with coverage for losses from wrongful acts. For so
long as Indemnitee shall remain a director of the Company and with respect to
any such prior service, in all policies of director and officer liability
insurance, Indemnitee shall be named as an insured in such a manner as to
provide Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company's officers and directors. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, or if the coverage provided
by such insurance is limited by exclusions so as to provide an insufficient
benefit. The Company shall promptly notify Indemnitee of any good faith
determination not to provide such coverage.
15. Contract Rights Not Exclusive. The rights to payment of Indemnifiable
Amounts and advancement of Indemnifiable Expenses provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee
may have at any time under applicable law, the Company's Certificate of
Incorporation or By-laws, or any other agreement, vote of stockholders or
directors (or a committee of directors), or otherwise, both as to action in
Indemnitee's official capacity and as to action in any other capacity as a
result of Indemnitee's serving as a director of the Company.
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16. Successors. This Agreement shall be (a) binding upon all successors
and assigns of the Company (including any transferee of all or a substantial
portion of the business, stock and/or assets of the Company and any direct or
indirect successor by merger or consolidation or otherwise by operation of law)
and (b) binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of Indemnitee. This Agreement
shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.
17. Subrogation. In the event of any payment of Indemnifiable Amounts
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of contribution or recovery of Indemnitee against
other persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.
18. Change in Law. To the extent that a change in Delaware law (whether by
statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the By-laws and this
Agreement, Indemnitee shall be entitled to such broader indemnification and
advancements, and this Agreement shall be deemed to be amended to such extent.
19. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement, or any clause thereof,
shall be determined by a court of competent jurisdiction to be illegal, invalid
or unenforceable, in whole or in part, such provision or clause shall be limited
or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties.
20. Indemnitee as Plaintiff. Except as provided in Section 11(c) of this
Agreement and in the next sentence, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect
to any Proceeding brought by Indemnitee against the Company, any Entity which it
controls, any director or officer thereof, or any third party, unless the Board
of Directors of the Company has consented to the initiation of such Proceeding.
This Section shall not apply to counterclaims or affirmative defenses asserted
by Indemnitee in an action brought against Indemnitee.
21. Modifications and Waiver. Except as provided in Section 18 above with
respect to changes in Delaware law which broaden the right of Indemnitee to be
indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each 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 of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.
22. General Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by
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hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if
mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
(i) If to Indemnitee, to:
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(ii) If to the Company, to:
Virtusa Corporation
0000 Xxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Facsimile No.:[__________]
Attn: Secretary
or to such other address as may have been furnished in the same manner by any
party to the others.
23. Governing Law; Consent to Jurisdiction; Service of Process. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to its rules of conflict of laws. Each of the
Company and the Indemnitee hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of the Court of Chancery of the State of
Delaware and the courts of the United States of America located in the State of
Delaware (the "Delaware Courts") for any litigation arising out of or relating
to this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Delaware Courts
and agrees not to plead or claim in any Delaware Court that such litigation
brought therein has been brought in an inconvenient forum. Each of the parties
hereto agrees, (a) to the extent such party is not otherwise subject to service
of process in the State of Delaware, to appoint and maintain an agent in the
State of Delaware as such party's agent for acceptance of legal process, and (b)
that service of process may also be made on such party by prepaid certified mail
with a proof of mailing receipt validated by the United States Postal Service
constituting evidence of valid service. Service made pursuant to (a) or (b)
above shall have the same legal force and effect as if served upon such party
personally within the State of Delaware. For purposes of implementing the
parties' agreement to appoint and maintain an agent for service of process in
the State of Delaware, each such party does hereby appoint The Corporation Trust
Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000, as
such agent and each such party hereby agrees to complete all actions necessary
for such appointment.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
VIRTUSA CORPORATION
By:_______________________
Name:
Title:
INDEMNITEE
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