EXHIBIT 99.1
INDEMNIFICATION AGREEMENT
{Director Form}
This Agreement is made and entered into this ___ day of ________, 2004 (the
"Agreement"), by and between Xxxxxx Corporation, a Massachusetts corporation
(the "Company," which term shall include, where appropriate, any Entity (as
hereinafter defined) controlled directly or indirectly by the Company and any
domestic or foreign predecessor entity of Xxxxxx Corporation in a merger) and
_________________________ ("Indemnitee," which term shall include, unless the
context requires otherwise, the estate or personal representative of such
person).
WHEREAS, it is essential to the Company that it be able to retain and
attract as directors the most capable persons available;
WHEREAS, the substantial increase in corporate litigation has subjected
directors to expensive litigation risks and expenses, and the limitations on the
availability of directors and officers liability insurance have made it, or may
in the future make it, increasingly difficult for the Company to attract and
retain such persons;
WHEREAS, the Bylaws of the Company require the Company to indemnify and
advance expenses to its directors to the fullest extent permitted by applicable
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 Bylaws or any change in the ownership of the Company or
the composition of its Board of Directors); and
WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in 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 applicable to the Company or
any Subsidiary at the request of the Company, or (iii) as a director,
officer, partner, trustee, employee, or agent of any other Entity at
the request of the Company. For purposes of subsection (ii) and (iii)
of this Section 1(a), if Indemnitee is serving or has served in any
capacity with respect to an employee benefit plan applicable to the
Company or any Subsidiary, or as a director, officer, partner,
trustee, employee or agent of a Subsidiary, Indemnitee shall be deemed
to be serving at the request of the Company.
(b) "Entity" shall mean any domestic or foreign corporation,
partnership, limited liability company, joint venture, trust, employee
benefit plan, foundation, association, organization or other entity.
(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 10 and 11(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 obligations to pay judgments,
settlements, penalties, fines including excise taxes assessed with
respect to employee benefit plans, or reasonable expenses incurred
with respect to Proceedings.
(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 10 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:
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(a) Proceedings Other Than By or In the Right of the Company. Subject
to the exceptions contained in Section 4(a) 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, 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) 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 Massachusetts 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 Sections 3(a) and 3(b) 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 in The
Commonwealth of Massachusetts that, with respect to such specific
claim, issue or matter, Indemnitee (i) did not conduct himself or
herself in good faith in the reasonable belief that his or her conduct
was (A) in the best interest of the Company or such other Entity, or
(B) at least not opposed to the best interests of the Company or such
other Entity; (ii) did not conduct himself or herself, to the extent
such matter related to service with respect to an employee benefit
plan, in the reasonable belief that his or her conduct was in the best
interests of the participants or beneficiaries of such employee
benefit plan, or (iii) with respect to any criminal Proceeding, had no
reasonable cause to believe that his or her conduct was lawful,
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
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(i) it has been finally adjudicated by a court of competent
jurisdiction in The Commonwealth of Massachusetts that, with
respect to such specific claim, issue or matter, Indemnitee (i)
did not conduct himself or herself in good faith in the
reasonable belief that his or her conduct was (A) in the best
interest of the Company or such other Entity, or (B) at least not
opposed to the best interests of the Company or such other
Entity; or (ii) did not conduct himself or herself, to the extent
such matter related to service with respect to an employee
benefit plan, in the reasonable belief that his or her conduct
was in the best interests of the participants or beneficiaries of
such employee benefit plan, Indemnitee shall not be entitled to
payment of Indemnifiable Expenses hereunder; or
(ii) it has been finally adjudicated by a court of competent
jurisdiction in The Commonwealth of Massachusetts that Indemnitee
is liable to the Company with respect to such specific claim,
Indemnitee shall not be entitled to payment of Indemnifiable
Expenses hereunder with respect to such claim, issue or matter,
unless a court of competent jurisdiction in The Commonwealth of
Massachusetts 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 in The Commonwealth of Massachusetts 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) Determination of Good Faith. For purposes of determining "good
faith" hereunder, the Indemnitee shall be deemed to have acted in good
faith if Indemnitee's conduct was based primarily on (i) the records
or books of account of the Company or the applicable Entity, including
financial statements, (ii) information supplied to Indemnitee by or at
the direction of the management of the Company or the applicable
Entity in the course of their duties, (iii) the advice of legal
counsel for the Company or the applicable Entity, or (iv) information
or records given or reports made to the Company or the applicable
Entity by an independent certified public accountant, by an appraiser
or other expert selected with reasonable care by the Company or the
applicable Entity. The provisions of this clause shall not be deemed
to be exclusive or to limit in any way the other circumstances in
which Indemnitee may be deemed to have acted in good faith.
(d) 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.
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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,
and in any event within thirty (30) calendar days of receipt of the 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 wholly 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 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 (i) did not conduct himself or herself in good faith in the
reasonable belief that his or her conduct was (A) in the best interest of the
Company or such other Entity, or (B) at least not opposed to the best interests
of the Company or such other Entity; (ii) did not conduct himself or herself, to
the extent such matter related to service with respect to an employee benefit
plan, in the reasonable belief that his or her conduct was in the best interests
of the participants or beneficiaries of such employee benefit plan, or (iii)
with respect to any criminal Proceeding, had no reasonable cause to believe that
his or her conduct was lawful.
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, whether
prior to or after final disposition of such Proceeding. To the extent required
by Massachusetts law, Indemnitee hereby undertakes to repay any and all of the
amount of Indemnifiable Expenses paid to, or amounts paid on behalf of,
Indemnitee if it is finally determined by a court of competent jurisdiction in
The Commonwealth of Massachusetts that Indemnitee is not entitled under this
Agreement to indemnification with respect to such Expenses. This undertaking is
an unlimited general obligation of Indemnitee.
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9. Procedure for Advance Payment of Expenses. Indemnitee shall submit to
the Company (i) 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; (ii) a written affirmation of his or her good faith
belief that he or she (a) conducted himself or herself in good faith in the
reasonable belief that his or her conduct was (I) in the best interest of the
Company or such other Entity, or (II) at least not opposed to the best interests
of the Company or such other Entity; (b) conducted himself or herself, to the
extent such matter related to service with respect to an employee benefit plan,
in the reasonable belief that his or her conduct was in the best interests of
the participants or beneficiaries of such employee benefit plan, or (c) with
respect to any criminal Proceeding, had reasonable cause to believe that his or
her conduct was lawful; (iii) his or her written undertaking to repay any funds
advanced if it is ultimately determined by a court of competent jurisdiction
that he or she is not entitled to indemnification under this Agreement. Payment
of Indemnifiable Expenses under Section 8 shall be made no later than thirty
(30) calendar days after the Company's receipt of such request.
10. 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 any court of competent jurisdiction
in The Commonwealth of Massachusetts to enforce the Company's
obligations under this Agreement.
(b) Burden of Proof. In any judicial proceeding brought under Section
10(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 10(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.
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(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 shareholders) 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 10(a)
above, and shall not create a presumption that such payment or
advancement is not permissible.
11. 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 11(b) and of Section 11(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 with counsel
chosen by the Company with the consent of the Indemnitee (which
consent shall not be unreasonably withheld); 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 11(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 11(b) shall not apply to a Proceeding brought
by Indemnitee under Section 10(a) above or pursuant to Section 19
below.
(c) Indemnitee's Right to Counsel. Notwithstanding the provisions of
Section 11(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 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.
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12. 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 and its successors 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.
13. Insurance. Nothing contained in this Agreement shall be deemed to
prohibit the Company from purchasing and maintaining insurance, at its expense,
to protect itself or the Indemnitee against any expense, liability or loss
incurred by it or the Indemnitee in any such capacity, or arising out of the
Indemnitee's Corporate Status as such, whether or not the Indemnitee would be
indemnifiable against such expense, liability or loss under this Agreement;
provided that the Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
the Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
14. 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 Restated Articles of
Organization or Bylaws, or any other agreement, vote of shareholders 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 Corporate Status. In no event shall this Agreement limit
the Indemnitee's right to indemnification contained within the Company's Bylaws.
15. 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.
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16. 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.
17. Change in Law. To the extent that a change in Massachusetts law
(whether by statute or judicial decision) shall permit broader indemnification
or advancement of expenses than is provided under the terms of the Bylaws 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.
18. 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.
19. Indemnitee as Plaintiff. Except as provided in Sections 10(a) and (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.
20. Modifications and Waiver. Except as provided in Section 17 above with
respect to changes in Massachusetts 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.
21. 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 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 the address set forth on the signature page
hereto.
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(ii) If to the Company, to:
Xxxxxx Corporation
Xxx Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxx, XX 00000-0000
Attn: Corporate Secretary
or to such other address as may have been furnished in the same manner by any
party to the other.
22. Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts 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 any court of competent jurisdiction in
The Commonwealth of Massachusetts (the "Massachusetts 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 Massachusetts Courts and agrees not to plead or claim in any
Massachusetts Court that such litigation brought therein has been brought in an
inconvenient forum.
[Signature Page Follows Next]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXXXX CORPORATION
By:
----------------------------
Name:
Title:
INDEMNITEE
---------------------------------
Name:
Address:
---------------------------------
---------------------------------
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