EXHIBIT 10.1
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT, dated as of April 3, 2000 is made by
and between XxxXxxxxxx.Xxx, Inc., a Delaware corporation having an address at 0
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (the "Company"), and [ ], an individual
residing at [ ] (the "Indemnitee").
R E C I T A L S :
A. The Company recognizes that competent and experienced persons are
increasingly reluctant to serve as directors and officers of corporation unless
they are protected by comprehensive liability insurance or indemnification, or
both, due to increased exposure to litigation costs and risks resulting from
their service to such corporations, and due to the fact that the exposure
frequently bears no reasonable relationship to the compensation of such
directors and officers;
B. The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous or conflicting,
and therefore fail to provide such directors and officers with adequate,
reliable knowledge of legal risks to which they are exposed or information
regarding the proper course of action to take;
C. The Company and Indemnitee recognize that plaintiffs often seek
damages in such large amounts and the costs of litigation may be so enormous
(whether or not the case is meritorious), that the defense and/or settlement of
such litigation is often beyond the personal resources of officers and
directors;
D. The Company believes that it is unfair for its directors and
officers and those serving other entities at the request of the Company to
assume the risk of huge judgments and other expenses which may occur in cases in
which the director or officer received no personal profit and in cases where the
director or officer acted in good faith;
E. The Delaware General Corporation Law (the "DGCL"), under which the
Company is organized, empowers the Company to indemnify its officers, directors,
employees and agents by agreement and to indemnify persons who serve, at the
request of the Company, as the directors, officers, employees or agents of other
corporations or enterprises, and expressly provides that the indemnification
provisions of the DGCL are not exclusive;
F. The Board of Directors has determined that contractual
indemnification as set forth herein is not only reasonable and prudent but
necessary to promote the best interests of the Company and its stockholders;
G. The Company has requested the Indemnitee to serve or continue to
serve the Company free from undue concern for claims for damages arising out of
or related to such services to the Company;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. Definitions.
(a) Affiliate(s). Means any affiliate, subsidiary or other entity
similarly related to Company.
(b) Company. For purposes of this Agreement, "Company" shall
include XxxXxxxxxx.Xxx, Inc., as well as all of its Affiliates.
(c) Expenses. For purposes of this Agreement. "Expenses" includes
all direct and indirect costs of any type or nature whatsoever
(including, without limitation, attorneys' fees and related
disbursements, other out-of-pocket costs and compensation for time
spent by the Indemnitee for which he or she is not otherwise
compensated by the Company or any third party), incurred by the
Indemnitee in connection with either (i) the investigation, defense or
appeal of or being a witness or otherwise participating or preparing
for a Proceeding or (ii) the establishment or enforcement of
Indemnitee's right to indemnification under this Agreement, the DGCL or
otherwise, including judgments, fines and amounts paid in settlement by
or on behalf of Indemnitee.
(d) Proceedings. For the purposes of this Agreement, "Proceeding"
means any investigation or any threatened, pending or completed action,
suit or other proceeding, whether civil, criminal, administrative,
investigative or any other type whatsoever, whether instituted by, or
in the right of, the Company or by any other person or entity to which
the Indemnitee was or is a party or a witness or is otherwise involved
or is threatened to be made a party or a witness or to be otherwise
involved, by reason of the fact that he is or was a director, officer,
employee, fiduciary or other agent of the Company, or who is or was
serving at the request of the Company as a director, officer, employee,
fiduciary, or agent of another corporation, partnership, joint venture,
trust or other enterprise of the Company.
(e) Reviewing Party. For purposes of this Agreement, "Reviewing
Party" shall be the Special Independent Counsel.
(f) Special Independent Counsel. For purposes of this Agreement,
"Special Independent Counsel" shall mean counsel selected by Indemnitee
and approved by the Company (which approval shall not be unreasonably
withheld) and who has not, unless waived by the Company and Indemnitee,
otherwise performed services for the Company or Indemnitee, within the
last three (3) years. The Company agrees to pay the reasonable fees of
the Special Independent Counsel referred to above and to fully
indemnify such counsel against, any and all expenses (including
attorneys' fees), claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
2
(g) Voting Securities. For purposes of this Agreement, "Voting
Securities" shall mean any securities of the Company which vote
generally in the election of directors.
2. Agreement to Serve. The Indemnitee has served and agrees to continue
to serve as a member of the board of directors, an officer, employee and/or
consultant, at his will and will serve in such capacities, so long as he is duly
appointed or elected and qualified as such or until such time as he tenders his
resignation in writing.
3. Basic Indemnity.
(a) The Company shall indemnify the Indemnitee if the Indemnitee is
or was a witness or a party to or is threatened to be made a party to
or is otherwise involved in any Proceeding brought by any person or
entity to the fullest extent permitted by law as soon as practicable,
but in any event no later than ten (10) days after written demand is
presented to the Company, against any and all Expenses, judgments,
fines, penalties and amounts paid or owing in settlement (including all
interest assessments and other charges paid or payable in connection
with or in respect of such Expenses, judgments, fines, penalties or
amounts paid in settlement) of such Proceeding.
(b) Notwithstanding anything in this Agreement to the contrary, (i)
the obligations of the Company under Section 3(a) shall be subject to
the condition that the Reviewing Party shall not have determined in a
writing stating the reasons therefor that Indemnitee would not be
permitted to be indemnified under applicable law and (ii) the
obligation of the Company to make an Expense Advance pursuant to
Section 6 shall be subject to the condition that, if, when and to the
extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall
be entitled to be reimbursed by Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid; provided,
however, that if Indemnitee has commenced legal proceedings in a court
of competent jurisdiction to secure a determination that Indemnitee
should be indemnified under applicable law, any determination made by
the Reviewing Party that Indemnitee would not be permitted to be
indemnified under applicable law shall not be binding and Indemnitee
shall not be required to reimburse the Company for any Expense Advance
until such a final judicial determination is made with respect thereto
(as to which all rights of appeal therefrom have been exhausted or
lapsed).
(c) If the Reviewing Party determines that Indemnitee would not be
permitted to be indemnified in whole or in part under applicable law
(such determination to be made by the Reviewing Party independent of
any position of the Company on any aspect of the indemnification
including but not limited to the appropriateness of the amount of any
settlement), Indemnitee shall have the right to commence litigation in
any court, having subject matter jurisdiction thereof, and in which
venue is proper, seeking an initial determination by the court or
challenging any such determination by the Reviewing Party or any aspect
thereof, and the Company hereby consents to service of any process and
to appear in any such proceeding. Any determination by the Reviewing
Party otherwise shall be conclusive and binding on the Company and
Indemnitee.
3
4. Exceptions. Notwithstanding any other provision of this Agreement,
the Company shall not be obligated pursuant to the terms of this Agreement to
indemnify or make Expense Advances to Indemnitee with respect to any Proceeding
arising out of acts, omissions or transactions for which Indemnitee is
prohibited from receiving indemnification under applicable law.
5. Partial Indemnity Etc. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in settlement of a
Proceeding but not, however, for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Moreover, notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding or in defense of any issue or matter
therein, including dismissal without prejudice, Indemnitee shall be indemnified
against all Expenses incurred in connection therewith. In connection with any
determination by the Reviewing Party as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.
6. Advancement of Expenses. The Company shall advance all Expenses
incurred by the Indemnitee in connection with the investigation, defense,
settlement or appeal of any Proceeding for which the Indemnitee is entitled to
such advances, and any such advances to be made hereunder shall be paid by the
Company to or on behalf of the Indemnitee within ten (10) days following
delivery of a written demand therefor by the Indemnitee to the Company.
7. Notice and Other Indemnification Procedures.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement, or the threat of commencement, of any Proceeding, the
Indemnitee shall, if the Indemnitee believes that indemnification with
respect thereto may be sought from the Company under this Agreement,
notify the Company of the commencement or threat of commencement
thereof. The failure to notify the Company shall not affect the
Company's obligations to indemnify otherwise than under this Agreement.
(b) In the event the Company shall be obligated hereunder to
provide indemnification for or make any Expense Advances with respect
to the Expenses of any Claim, the Company, if appropriate, shall be
entitled to assume the defense of such Claim upon the delivery to
Indemnitee of written notice of the Company's election to do so. The
Company shall keep the Indemnitee and his counsel (which shall be
retained at the Company's expense) reasonably and currently apprised
throughout such negotiations and/or defense of the status thereof and
shall promptly pay the amount of all final judgments and agreed
settlements, including attorneys' fees and costs. The Indemnitee shall
cooperate with the Company in all reasonable ways in such negotiations
and/or defense, but at the sole expense of the Company, and without
incurring or being deemed to have incurred any obligation or liability
of any kind, nature or description by reason thereof.
4
(c) The Company shall indemnify Indemnitee against any and all
expenses (including attorneys' fees) and, if requested by Indemnitee,
shall, within ten (10) days of such request, advance such expenses to
Indemnitee which are incurred by Indemnitee in connection with any
claim asserted against or action brought by Indemnitee for (i)
indemnification hereunder or advance payment of Expenses by the Company
under this Agreement (or any other agreement or the Company's
Certificate of Incorporation or By-Laws now or hereafter in effect)
relating to Proceedings and/or (ii) recovery under any director and
officer liability insurance policies maintained by the Company,
regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance, expense payment or insurance
recovery, as the case may be.
(d) For purposes of this Agreement, the termination of any claim,
action, suit or proceeding by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification
is not permitted by applicable law.
8. Insurance. The Company may, but is not obligated to, obtain
directors' and officers' liability insurance ("D&O Insurance") as may be or
become available with respect to which the Indemnitee is named as an insured.
Notwithstanding any other provision of this Agreement, the Company shall not be
obligated to indemnify the Indemnitee for expenses, judgments, fines or
penalties which have been paid directly to the Indemnitee by D&O Insurance. If
the Company has D&O Insurance in effect at the time the Company receives from
the Indemnitee any notice of the commencement of a Proceeding, the Company shall
give prompt notice of the commencement of such Proceeding to the insurers to
pay, on behalf of the Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policy.
9. Settlement. The Company shall have no obligation under this
Agreement to indemnify the Indemnitee for any amounts paid in settlement of any
Proceeding effected without the Company's prior written consent. The Company
shall not settle any claim in which it takes the position that the Indemnitee is
not entitled to indemnification in connection with such settlement without the
prior written consent of the Indemnitee, nor shall the Company settle any
Proceeding in any manner which would impose any fine or any obligation on the
Indemnitee, without the Indemnitee's prior written consent. Neither the Company
nor the Indemnitee shall unreasonably withhold such consent to any proposed
settlement; provided, however, that the Indemnitee shall not be obligated to
consent to any proposed settlement unless in connection with such settlement the
Indemnitee shall be fully released from all liability with respect to the
relevant Proceeding either because such Proceeding was settled without liability
to the Indemnitee or, if the Indemnitee shall have any liability with respect to
such Proceeding, the Indemnitee shall be fully Indemnified hereunder from all
Expenses resulting from such Proceeding and/or shall receive payment in the
amount of such Expenses pursuant to D&O Insurance.
5
10. Nonexclusivity. The provisions for indemnification and advance of
Expenses set forth in this Agreement shall not be deemed exclusive of any other
rights which the Indemnitee may have pursuant to (i) any provision of law, the
Company's Certificate of Incorporation (as amended or restated from time to
time) or Bylaws, (ii) the order or judgment of any court in which a Proceeding
is brought, (iii) the vote of the Company's stockholders or disinterested
directors, or (iv) any other agreements or otherwise, both as to action in his
or her official capacity and to action in another capacity while an Agent of the
Company. The Indemnitee's rights hereunder shall continue after the Indemnitee
has ceased acting as an Agent of the Company and shall inure to the benefit of
the heirs, executors and administrators of the Indemnitee. To the extent that a
change in applicable law (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded currently, it is the
intent of the parties hereto that the Indemnitee shall enjoy by this Agreement
the greater benefits afforded by such change.
11. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.
12. Termination. No termination of this Agreement shall nullify any of
the rights and obligations of either Indemnitee or the Company hereunder in
respect of any matter occurring prior to the effective date of termination.
13. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby.
14. Modification and Waiver. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any 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.
15. Successors and Assigns. The terms of this Agreement shall bind, and
shall inure to the benefit of, the heirs, administrators, successors (including
any direct or indirect successor by purchase, merger, consolidation or otherwise
to all or substantially all of the business and/or assets of the Company) and
assigns of the parties hereto.
6
16. Notice. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, (ii) if delivered to
a recognized overnight carrier, such as Federal Express; or (iii) if by
facsimile transmission, upon receipt of a clear transmission report. Addresses
for notice to either party are as shown on the first page of this Agreement, or
as subsequently modified by written notice. At the same time any notice is given
to the Company, copies shall be sent to:
Xxxxx Xxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
17. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York without giving
effect to the principles of conflicts of laws.
18. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same Agreement.
19. Exclusive Agreement. Except as expressly set forth herein, this
Agreement shall supersede and replace in its entirety any prior written or oral
agreement between the Company and the Indemnitee with regard to the subject
matter hereof.
7
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
XXXXXXXXXX.XXX, INC.
By:_______________________
_______________________
8
