Exhibit 10.9
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT dated as of _______ ___, 1999,
between I.D. SYSTEMS, INC., a Delaware corporation with its principal office
located at 00 XXXXXXX XXXXXX, XXXXX 000, XXX XXXX, XXX XXXX 00000 (the
"CORPORATION"), and [ ], an [officer and/or director] of the Corporation
residing at _________________________ (the "INDEMNITEE").
W I T N E S S E T H:
WHEREAS, the Corporation seeks to attract and retain the most
capable persons available to serve as its directors and officers; and
WHEREAS, such persons require substantial protection against
personal liability arising out of their faithful service to the Corporation; and
WHEREAS, the Corporation and the Indemnitee believe it desirable
to enter into agreements to reflect indemnification and advancement of expenses
arrangements; and
WHEREAS, in recognition of the Corporation's desire to retain the
services of the Indemnitee and in furtherance of the Corporation's policy and in
accordance with Article Tenth of the Corporation's By-laws, the Corporation
desires to provide the Indemnitee with the right to indemnification and
advancement of expenses and the Indemnitee desires to receive such right, all
upon the terms and subject to the conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing premises, the
Indemnitee's continued service to the Corporation and the mutual covenants
contained herein, the parties hereby agree as follows:
1. CERTAIN TERMS DEFINED. As used in this Agreement, the
following terms shall have the following meanings:
(a) The term "ACTION" shall mean any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, and including one by or in the right of the Corporation or by or
in the right of any other Entity which the Indemnitee served in any capacity at
the request of the Corporation.
(b) The term "AGREEMENT" shall mean this Indemnification
Agreement, as the same may be amended from time to time.
(c) The term "BOARD" shall mean the Board of Directors of the
Corporation.
(d) The term "ENTITY" shall mean any corporation of any type
or kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise.
2. RIGHT TO INDEMNIFICATION; LIMITATIONS. (a) Subject to the
terms set forth in this Agreement, the Corporation shall indemnify the
Indemnitee if the Indemnitee was or is a party or is threatened to be made a
party to any Action by reason of the fact that the Indemnitee (or the
Indemnitee's testator or intestate) is or was a director or officer of the
Corporation, or served another Entity in any capacity, against all expenses and
liabilities (including attorney's fees, judgments, fines, excise taxes,
penalties and amounts payable in settlements) reasonably incurred by or imposed
upon such person in connection with such Action.
(b) The Indemnitee shall be entitled to indemnification under
this Section 2 only to the extent that (i) with respect to any and all Actions,
the Indemnitee acted in good faith and in a manner the Indemnitee reasonably
believed to be in the best interests of the Corporation, (ii) to the extent that
such Action relates to service with respect to an employee benefit plan, the
Indemnitee acted in the best interests of the participants or beneficiaries of
such employee benefit plan, and (iii) as to any matter disposed of by a
compromise payment by the Indemnitee, pursuant to a consent decree or otherwise,
the payment and indemnification thereof have been approved by the Corporation,
which approval shall not unreasonably be withheld, or by a court of competent
jurisdiction.
(c) Notwithstanding Sections 2(a) and (b), above, to the extent
required by law, no indemnification shall be made in respect of any Action as to
which the Indemnitee shall have been adjudged to be liable to the Corporation
unless and only to the extent that the court in which such Action was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the Action, the Indemnitee is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.
3. ADVANCES OF EXPENSES. (a) At the written request of the
Indemnitee, the Corporation will advance to the Indemnitee the expenses
(including attorneys' fees) incurred by the Indemnitee in defending any Action
in advance of the final disposition of such Action.
(b) The Indemnitee hereby agrees and undertakes to repay such
advanced amounts (or appropriate portions thereof) as to which it ultimately is
determined that the Indemnitee was not entitled, which undertaking may be
accepted without regard to the financial ability of such person to make
repayment; PROVIDED THAT this undertaking shall be effective only if and to the
extent that, by law, it must be enforced as a condition to the receipt by the
Indemnitee of advanced expenses under this Section.
-2-
4. PAYMENT BY CORPORATION. The Corporation shall pay the
indemnification requested under Section 2 and advance the expenses requested
under Section 3 promptly following receipt by the Corporation of the
Indemnitee's written request therefor and, in any event, no later than thirty
(30) days after such receipt (in the case of requested indemnification) or
fifteen (15) days after such receipt (in the case of requested advanced
expenses).
5. ENFORCEMENT. (a) The right of the Indemnitee to
indemnification and advancement of expenses provided by this Agreement shall be
enforceable by the Indemnitee in any court of competent jurisdiction. In such an
enforcement action, the burden shall be on the Corporation to prove that the
indemnification and advancement of expenses being sought are not appropriate.
Neither the failure of the Corporation to determine whether indemnification or
the advancement of expenses is proper in the circumstances nor an actual
determination by the Corporation thereon adverse to the Indemnitee shall
constitute a defense to the action or create a presumption that the Indemnitee
is not so entitled.
(b) Without limiting the scope of indemnification to which the
Indemnitee is entitled under this Agreement, (i) if the Indemnitee has been
successful on the merits or otherwise in the defense of an Action, the
Indemnitee shall be entitled to indemnification as authorized in Section 2, and
(ii) the termination of any Action by judgment, order, settlement, conviction or
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnitee has not met the standard of conduct required for
indemnification under this Agreement.
(c) The Indemnitee's reasonable expenses incurred in connection
with successfully establishing the Indemnitee's right to indemnification or
advancement or expenses, in whole or in part, in any such proceeding under this
section also shall be indemnified by the Corporation.
6. NON-EXCLUSIVITY. Nothing contained in this Agreement shall
limit the right to indemnification and advancement of expenses to which the
Indemnitee would be entitled by law in the absence of this Agreement, or shall
be deemed exclusive of any other rights to which the Indemnitee in seeking
indemnification or advancement of expenses may have or hereafter be entitled
under any law, provision of the Certificate of Incorporation, By-law, agreement
approved by or resolution of disinterested members of the Board, resolution of
Shareholders of the Corporation or otherwise.
7. SUBROGATION. (a) The Corporation shall not be liable under
this Agreement to make any payment in connection with any claim made against the
Indemnitee to the extent the Indemnitee has otherwise actually received payment
(under any insurance policy, By-law or otherwise) of the amounts otherwise
subject to indemnification or expense advance under this Agreement.
(b) 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 the Indemnitee other than from the Corporation, and the
Indemnitee shall execute all papers required and shall do everything that
-3-
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Corporation effectively to bring suit to
enforce such rights.
8. NOTICE OF CLAIM. As a condition precedent to the right to be
indemnified under this Agreement, the Indemnitee shall give the Corporation
written notice as soon as practicable of any claim made against the Indemnitee
for which indemnification or expense advances will or could be sought under this
Agreement. In addition, the Indemnitee shall give the Corporation such
information and cooperation as the Corporation reasonably may require.
9. SEVERABILITY. If this Agreement or any portion hereof shall
be invalidated or held unenforceable on any ground by any court of competent
jurisdiction, the Corporation nevertheless shall indemnify the Indemnitee to the
fullest extent permitted by any applicable portion of this Agreement that shall
not have been so invalidated or held unenforceable.
10. CONTINUITY OF RIGHTS. The right of the Indemnitee to
indemnification and advancement of expenses under this Agreement shall (a)
continue after the Indemnitee has ceased to serve in a capacity which would
entitle the Indemnitee to indemnification or advancement of expenses pursuant to
this Agreement with respect to acts or omissions occurring prior to such
cessation, (b) inure to the benefit of the heirs, executors and administrators
of the Indemnitee, (c) apply with respect to acts or omissions occurring prior
to the execution and delivery of this Agreement to the fullest extent permitted
by law, and (d) survive any restrictive amendment or termination of this
Agreement with respect to events occurring prior thereto.
11. PROCEEDINGS INITIATED BY INDEMNITEE. Other than to the
extent provided in Section 5(c), above, the Indemnitee shall not be entitled to
indemnification or advancement of expenses under this Agreement with respect to
any Action initiated by the Indemnitee, but shall be entitled to indemnification
and advancement of expenses with respect to any counterclaim or third-party
claim in any such Action.
12. BINDING EFFECT. This Agreement shall be binding upon all
successors and assigns of the Corporation (including any transferee of all or
substantially all of its assets and any successor by merger or operation of law)
and shall inure to the benefit of the heirs, personal representatives,
successors, representatives and estate of the Indemnitee.
13. GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York
applicable to contracts made and to be performed in the State of New York,
without giving effect to the principles of conflicts of laws.
14. EFFECT OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction hereof.
-4-
15. NOTICES. (a) Any notice, request or other communication
hereunder to or on behalf of the Corporation or the Indemnitee shall be in
writing and shall be delivered to the other party hereto at the address shown on
the first page hereof (in the case of the Corporation, addressed to the
attention of the Board, with a copy delivered to Xxxxxx Xxxxxx Flattau & Klimpl,
LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, addressed to Xxxxx
X. Xxxxxxx, Esq.). Any such notice, request or other communication shall be
deemed delivered one business day after sent by Federal Express, Express Mail or
similar overnight delivery service or, if sent otherwise, then upon the receipt
thereof at that address.
(b) Either address referred to in the preceding subsection may
be changed from time to time in the manner specified in the preceding
subsection, and thereafter notices, requests and other communications shall be
delivered to the most recent address so furnished.
16. COUNTERPARTS. This Agreement may be executed in any number
of counterparts. Each counterpart of an agreement so executed shall be deemed an
original, but all such counterparts shall together constitute but one and the
same instrument. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one counterpart.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first written above.
I. D. SYSTEMS, INC.
By:
------------------------------------
Name:
Title:
----------------------------------------
[NAME OF INDIVIDUAL]
-5-
