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EXHIBIT 10.31
FORM OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT, dated as of the ____ day of _________,
1998, between MEGO MORTGAGE CORPORATION, a Delaware corporation (the
"Company"), and _______________, a resident of the State of ___________ (the
"Indemnitee").
RECITALS
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A. The Indemnitee is currently serving as a director and/or executive
officer of the Company and the Company desires to continue to retain the
services of the Indemnitee as a director and/or executive officer of the
Company and/or as a consultant to the Company.
B. The Company and the Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors, officers and/or
employees of, and consultants to, public companies and the subsidiaries of such
companies.
C. The Certificate of Incorporation of the Company requires the
Company to indemnify its directors and officers to the fullest extent permitted
by law and the Indemnitee has been serving and continues to serve as a director
and/or officer of the Company, in part, in reliance on such provisions of the
Certificate of Incorporation.
D. The Indemnitee has indicated that he does not regard the
indemnities available under the Company's Certificate of Incorporation and
bylaws and available insurance, if any, as adequate to protect him against the
risks associated with his services to the Company. As a condition to the
Indemnitee's agreement to continue to serve as such, the Indemnitee requires
that he be indemnified from liability in accordance with the provisions of this
Agreement to the fullest extent permitted by law.
E. The Company recognizes that the Indemnitee needs substantial
protection against personal liability in order to maintain the Indemnitee's
continued service to the Company in an effective manner and is willing to
indemnify the Indemnitee in accordance with the provisions of this Agreement to
the fullest extent permitted by law in order to continue to retain the services
of the Indemnitee.
F. The Company desires to provide in this Agreement for
indemnification of, and the advance of expenses to, Indemnitee to the fullest
extent (whether partial or complete) permitted by law, as set forth in this
Agreement and, to the extent officers' and directors' liability insurance is
maintained by the Company, to provide for the continued coverage of the
Indemnitee under the Company's officers' and directors' liability insurance
policies, in part to provide the Indemnitee with specific contractual assurance
that the protection promised by the indemnification provisions of the
Certificate of Incorporation will be available to the Indemnitee (regardless
of, among other things, any amendment to or revocation of such provisions of
the Certificate of Incorporation or any change in the composition of the
Company's Board of Directors or any acquisition transaction relating to the
Company).
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants contained herein and the Indemnitee's past and continued
service to the Company, the Company and the Indemnitee agree as follows:
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SECTION 1. MANDATORY INDEMNIFICATION IN PROCEEDINGS OTHER THAN THOSE
BY OR IN THE RIGHT OF THE COMPANY. Subject to Section 4 hereof, the Company
shall indemnify and hold harmless the Indemnitee form and against any and all
claims, damages, expenses, costs (including attorneys' fees and costs of other
professionals), judgments, penalties, fines (including excise taxes assessed
with respect to an employee benefit plan), settlements, and all other
liabilities incurred or paid by him in connection with the investigation,
defense, prosecution, settlement or appeal of, or being or preparing to be a
witness in, or participating in, any threatened, pending or completed action,
suit, investigation that the Indemnitee in good faith believes might lead to the
institution of such action, or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Company) and to which the Indemnitee was or is a party or is threatened to be
made a party or was or is a witness or participates or may participate in by
reason of the fact that the Indemnitee is or was an officer, director, manager,
consultant, stockholder, employee or agent of the Company or any of its
subsidiaries, or is or was serving at the request of the Company or any of its
subsidiaries as an officer, director, consultant, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, or by reason of anything done or not done by
the Indemnitee in any such capacity or capacities, provided that the Indemnitee
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, did not know his conduct was unlawful.
SECTION 2. MANDATORY INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT
OF THE COMPANY. Subject to Section 4 hereof, the Company shall indemnify and
hold harmless the Indemnitee from and against any and all expenses (including
attorneys' fees) and amounts actually and reasonably incurred or paid by him in
connection with the investigation, defense, prosecution, settlement or appeal
of, or being or preparing to be a witness in, or participating in, any
threatened, pending or completed action, suit, investigation that the Indemnitee
in good faith believes might lead to the institution of such action, or
proceeding by or in the right of the Company to procure a judgment in its favor,
whether civil, criminal, administrative or investigative, and to which the
Indemnitee was or is a party or is threatened to be made a party or was or is a
witness or participate or may participate in by reason of the fact that the
Indemnitee is or was an officer, director, manager, consultant, stockholder,
employee or agent of the Company or any of its subsidiaries, or is or was
serving at the request of the Company or any of its subsidiaries as an officer,
director, consultant, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of anything done or not done by the Indemnitee in any
such capacity or capacities, provided that (i) the Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and (ii) no indemnification shall be made under this
Section 2 in respect of any claim, issue or matter as to which the Indemnitee
shall have been adjudged to be liable to the Company for knowingly, fraudulent,
deliberate, dishonest or willful misconduct in the performance of his duty to
the Company unless, and only to the extent that, the court in which such
proceeding was brought (or any other court of competent jurisdiction) shall
determine upon application that, despite the adjudication of such liability but
in view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.
SECTION 3. REIMBURSEMENT OF EXPENSES FOLLOWING ADJUDICATION OF
NEGLIGENCE. The Company shall reimburse the Indemnitee for any expenses
(including attorney's fees) and amounts actually and reasonably incurred or paid
by him in connection with the investigation, defense, settlement or appeal of
any action, suit or proceeding described in Section 2 hereof that results in an
adjudication that the Indemnitee was liable other
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than for willful misconduct in the performance of his duty to the Company;
provided, however, that the Indemnitee acted in good faith and in a manner he
believed to be in the best interests of the Company.
SECTION 4. AUTHORIZATION OF INDEMNIFICATION. Any indemnification under
Sections 1 and 2 hereof (unless ordered by a court) and any reimbursement made
under Section 3 hereof shall be made by the Company only as authorized in the
specific case upon a determination (the "Determination") that indemnification or
reimbursement of the Indemnitee is proper in the circumstances because the
Indemnitee has met the applicable standard of conduct set forth in Section 1, 2
or 3 hereof, as the case may be. Subject to Sections 5.5, 5.6 and 8 of this
Agreement, the Determination shall be made in the following order of preference:
(1) first, by the Company's Board of Directors (the "Board") by
majority vote or consent of a quorum consisting of directors ("Disinterested
Directors") who are not, at the time of the Determination, named parties to such
action, suit or proceeding; or
(2) next, if such a quorum of Disinterested Directors cannot be
obtained, by majority vote or consent of a committee duly designated by the
Board (in which designation all directors, whether or not Disinterested
Directors, may participate) consisting solely of two or more Disinterested
Directors; or
(3) next, if such a committee cannot be designated, by any
independent legal counsel in a written opinion, which independent legal counsel
shall be selected in accordance with Section 5.5.
4.1. No Presumptions. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Indemnitee
did not act in good faith and in a manner that he reasonably believed to be in
or not opposed to the best interests of the Company, and with respect to any
criminal action or proceeding, knew that his conduct was unlawful.
4.2. Benefit Plan Conduct. The Indemnitee's conduct with respect to an
employee benefit plan for a purpose he reasonably believed to be in the
interests of the participants in and beneficiaries of the plan shall be deemed
to be conduct that the Indemnitee reasonably believed to be not opposed to the
best interests of the Company.
4.3. Reliance as Safe Harbor. For purposes of any Determination
hereunder, the Indemnitee shall be deemed to have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, or, with respect to any criminal action or proceeding, to have had
no reasonable cause to believe or did not know his conduct was unlawful, if his
action is based on (i) the records or books of account of the Company or another
enterprise, including financial statements, (ii) information supplied to him by
the officers of the Company or another enterprise in the course of their duties,
(iii) the advice of legal counsel for the Company or another enterprise, or (iv)
information or records given or reports made to the Company or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Company or another enterprise.
The term "another enterprise" as used in this Section 4.3 shall mean any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise of which the Indemnitee is or was serving at the request of the
Company or any of its subsidiaries as an officer, director, consultant, partner,
trustee, employee or agent. The provisions of this Section 4.3 shall not be
deemed to be exclusive or to limit in any way the other circumstances in which
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the Indemnitee may be deemed to have met the applicable standard of conduct set
forth in Sections 1, 2 or 3 hereof, as the case may be.
4.4. Success on Merits or Otherwise. Notwithstanding any other provision
of this Agreement, to the extent that the Indemnitee has been successful on the
merits or otherwise in defense of any action, suit or proceeding described in
Section 1 or 2 hereof, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the investigation, defense,
settlement or appeal thereof. For purposes of this Section 4.4, the term
"successful on the merits or otherwise" shall include, but not be limited to,
(i) any termination, withdrawal, or dismissal (with or without prejudice) of
any claim, action, suit or proceeding against the Indemnitee without any
express finding of liability or guilt against him, (ii) the expiration of 120
days after the making of any claim or threat of an action, suit or proceeding
without the institution of the same and without any promise or payment made to
induce a settlement, or (iii) the settlement of any action, suit or proceeding
under Section 1, 2 or 3 hereof pursuant to which the Indemnitee pays less than
$10,000.
4.5. Partial Indemnification or Reimbursement. If the Indemnitee is
entitled under any provision of this Agreement to indemnification and/or
reimbursement by the Company for some or a portion of the claims, damages,
expenses (including attorneys' fees and costs of other professionals),
judgments, fines or amounts paid in settlement by the Indemnitee in connection
with the investigation, defense, settlement or appeal of any action specified
in Section 1, 2 or 3 hereof, but not, however, for the total amount thereof,
the Company shall nevertheless indemnify and/or reimburse the Indemnitee for
the portion thereof to which the Indemnitee is entitled. The party or parties
making the Determination shall determine the portion (if less than all) of such
claims, damages, expenses (including attorneys' fees), judgments, fines or
amounts paid in settlement for which the Indemnitee is entitled to
indemnification and/or reimbursement under this Agreement.
SECTION 5. PROCEDURES FOR DETERMINATION OF WHETHER STANDARDS HAVE BEEN
SATISFIED.
5.1. Costs. All costs of making any Determination required by Section 4
or 5 hereof shall be borne solely by the Company, including, but not limited
to, the costs of legal counsel and judicial determinations. The Company shall
also be solely responsible for paying (i) all reasonable expenses incurred by
the Indemnitee to enforce this Agreement, including, but not limited to, the
costs incurred by the Indemnitee to obtain court-ordered indemnification
pursuant to Section 8 hereof, regardless of the outcome of any such application
or proceeding, and (ii) all costs of defending any suits or proceedings
challenging payments to the Indemnitee under this Agreement.
5.2. Timing of the Determination. The Company shall use its best efforts
to make the Determination contemplated by Section 4 or 5 hereof promptly. In
addition, the Company agrees:
(a) if the Determination is to be made by the Board or a committee
thereof, such Determination shall be not later than 15 days after a written
request for a Determination (a "Request") is delivered to the Company by the
Indemnitee; and
(b) if the Determination is to be made by independent legal
counsel, such Determination shall be made not later than 30 days after a
Request is delivered to the Company by the Indemnitee.
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The failure to make a Determination within the above-specified time period
shall constitute a Determination approving full indemnification or
reimbursement of the Indemnitee. Notwithstanding anything herein to the
contrary, the Determination may be made in advance of (i) the Indemnitee's
payment (or incurring) of expenses with respect to which indemnification or
reimbursement is sought, and/or (ii) final disposition of the action, suit or
proceeding with respect to which indemnification or reimbursement is sought.
5.3. REASONABLENESS OF EXPENSES. The evaluation and finding as to the
reasonableness of expenses incurred by the Indemnitee for purposes of this
Agreement shall be made (in the following order of preference) within 15 days
of the Indemnitee's delivery to the Company of a Request that includes a
reasonable accounting of expenses incurred:
(a) first, by the Board by a majority vote of a quorum consisting of
Disinterested Directors; or
(b) next, if a quorum cannot be obtained under subdivision (a), by
majority vote or consent of a committee duly designated by the Board (in which
designation all directors, whether or not Disinterested Directors, may
participate), consisting solely of two or more Disinterested Directors; or
(c) next, if such a committee cannot be designated, by any
independent legal counsel.
All expenses shall be considered reasonable for purposes of this Agreement if
the finding contemplated by this Section 5.3 is not made within the prescribed
time. The finding required by this Section 5.3 may be made in advance of the
payment (or incurring) of the expenses for which indemnification or
reimbursement is sought.
5.4 PAYMENT OF INDEMNIFIED AMOUNT. Immediately following a Determination
that the Indemnitee has met the applicable standard of conduct set forth in
Section 1, 2 or 3 hereof, as the case may be, and the finding of reasonableness
of expenses contemplated by Section 5.3 hereof, or the passage of time
prescribed for making such determination(s), the Company shall pay to the
Indemnitee in cash the amount to which the Indemnitee is entitled to be
indemnified and/or reimbursed, as the case may be, without further
authorization or action by the Board; provided, however, that the expenses for
which indemnification or reimbursement is sought have actually been incurred by
the Indemnitee.
5.5 SELECTION OF INDEPENDENT LEGAL COUNSEL. If the Determination required
under Section 4 or 5 is to be made by independent legal counsel, such counsel
shall be selected by the Indemnitee with the approval of the Board, which
approval shall not be unreasonably withheld. The fees and expenses incurred by
counsel in making any Determination (including Determinations pursuant to
Section 5.7 hereof) shall be borne solely by the Company regardless of the
results of any Determination and, if requested by counsel, the Company shall
give such counsel an appropriate written agreement with respect to the payment
of their fees and expenses and such other matters as may be reasonably
requested by counsel.
5.6 RIGHT OF INDEMNITEE TO APPEAL AN ADVERSE DETERMINATION BY BOARD. If a
Determination is made by the Board or a committee thereof that the Indemnitee
did not meet the applicable standard of conduct set forth in Section 1, 2 or 3
hereof or that the Indemnitee's expenses are not reasonable as set forth in
Section 5.3 hereof, upon the written request of the Indemnitee and the
Indemnitee's delivery of $500 to the Company, the Company shall cause a new
Determination to be made by independent legal counsel, which independent legal
counsel
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shall be selected in accordance with Section 5.5. Subject to Section 8 hereof,
such Determination by such independent legal counsel shall be binding and
conclusive for all purposes of this Agreement.
5.7. Right of Indemnitee To Select Forum For Determination. If, at
any time subsequent to the date of this Agreement, "Continuing Directors" do
not constitute a majority of the members of the Board, or there is otherwise a
change in control of the Company (as contemplated by Item 403(c) of Regulation
S-K), then the Determination required by Section 4 or 5 hereof shall be made by
independent legal counsel selected by the Indemnitee and approved by the Board
(which approval shall not be unreasonably withheld), which counsel shall be
deemed to satisfy the requirements of clause (3) of Section 4 and clause (c) of
Section 5.3 hereof. If none of the legal counsel selected by the Indemnitee are
willing and/or able to make the Determination, then the Company shall cause the
Determination to be made by a majority vote or consent of a Board committee
consisting solely of Continuing Directors. For purposes of this Agreement, a
"Continuing Director" means either a member of the Board at the date of this
Agreement or a person nominated to serve as a member of the Board by a majority
of the then Continuing Directors.
5.8. Access by Indemnitee to Determination. The Company shall
afford to the Indemnitee and his representatives ample opportunity to present
evidence of the facts upon which the Indemnitee relies for indemnification or
reimbursement, together with other information relating to any requested
Determination.
5.9. Judicial Determination in Derivative Suits. In each action or
suit described in Section 2 hereof, the Company shall cause its counsel to use
its best efforts to obtain from the Court in which such action or suit was
brought (i) an express adjudication whether the Indemnitee is liable for
negligence or misconduct in the performance of his duty to the Company, and, if
the Indemnitee is so liable, (ii) a determination whether and to what extent,
despite the adjudication of liability but in view of all the circumstances of
the case (including this Agreement), the Indemnitee is fairly and reasonably
entitled to indemnification.
5.10. Burden of Proof. In the event of any claim by the Indemnitee
for indemnification hereunder, there shall be a presumption that the Indemnitee
is entitled to indemnification hereunder and the Company shall have the burden
of proving that the Indemnitee is not entitled to such indemnification.
SECTION 6. SCOPE OF INDEMNITY. The actions, suits and proceedings
described in Sections 1 and 2 hereof shall include, for purposes of this
Agreement, any actions that involve, directly or indirectly, activities of the
Indemnitee both in his official capacities as a Company director or officer and
actions taken in another capacity while serving as director or officer,
including, but not limited to, actions or proceedings involving (i)
compensation paid to the Indemnitee by the Company, (ii) activities by the
Indemnitee on behalf of the Company, including actions in which the Indemnitee
is plaintiff, (iii) actions alleging a misappropriation of a "corporate
opportunity," (iv) responses to a takeover attempt or threatened takeover
attempt of the Company, (v) transactions by the Indemnitee in Company
securities, and (vi) the Indemnitee's preparation for and appearance (or
potential appearance) as a witness in any proceeding relating, directly or
indirectly, to the Company. In addition, the Company agrees that, for purposes
of this Agreement, all services performed by the Indemnitee on behalf of, in
connection with or related to any subsidiary of the Company, any employee
benefit plan established for the benefit of employees of the Company or any
subsidiary, any corporation or partnership or other entity in which the Company
or any subsidiary has a 5% ownership interest, or any other affiliate shall be
deemed to be at the request of the Company.
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SECTION 7. ADVANCE FOR EXPENSES.
7.1 Mandatory Advance. Expenses (including attorney's fees) incurred by the
Indemnitee in investigating, defending, settling or appealing, or being or
preparing to be a witness in, any action, suit or proceeding described in
Section 1 or 2 hereof shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding. The Company shall promptly pay
the amount of such expenses to the Indemnitee, but in no event later than 5
days following the Indemnitee's delivery to the Company of a written request
for an advance pursuant to this Section 7, together with a reasonable
accounting of such expenses.
7.2 Undertaking to Repay. The Indemnitee hereby undertakes and agrees to repay
to the Company any advances mad e pursuant to this Section 7 if and to the
extent that a court of competent jurisdiction shall make a final judgment (as to
which all rights of appeal therefrom have been exhausted or lapsed) that the
Indemnitee is not entitled to be indemnified by the Company for such amounts.
7.3 Miscellaneous. The Company shall make the advances contemplated by this
Section 7 regardless of the Indemnitee's financial ability to make repayment,
and regardless whether indemnification of the Indemnitee by the Company will
ultimately be required. Any advances and undertakings to repay pursuant to this
Section 7 shall be unsecured and interest-free.
SECTION 8. COURT-ORDERED INDEMNIFICATION. Regardless of whether the Indemnitee
has met the standard of conduct set forth in Sections 1, 2 or 3 hereof, as the
case may be, and notwithstanding the presence or absence of any Determination
whether such standards have been satisfied and notwithstanding any other
provision hereof, the Indemnitee may apply for indemnification (and/or
reimbursement pursuant to Section 3 or 12 hereof) to the court conducting any
proceeding to which the Indemnitee is a party or a witness or to any other
court of competent jurisdiction. On receipt of an application, the court, after
giving any notice the court considers necessary, may order indemnification
(and/or reimbursement) if it determines the Indemnitee is fairly and reasonably
entitled to indemnification (and/or reimbursement) in view of all the relevant
circumstances (including this Agreement).
SECTION 9. CONTRIBUTION. If and to the extent that a final adjudication shall
specify that the Company is not obligated to indemnify Indemnitee under this
Agreement for any reason (by reason of public policy, as a matter of law or
otherwise), then in respect of any threatened, pending or completed action, suit
or proceeding in which the Company is jointly liable with Indemnitee (or would
be so liable if joined in such action, suit or proceeding), the Company shall
contribute to the amount of expenses (including attorney's fees and costs of
other Company shall contribute to the amount of expenses (including attorneys'
fees and costs of other professionals), judgment, penalties, fines (including
excise taxes assessed), settlements and all other liabilities incurred and paid
or payable by Indemnitee in connection with such action, suit or proceeding in
such proportion as is appropriate to reflect (i) the relative benefits received
by the Company on the one hand and Indemnitee on the other hand from the
transaction with respect to which such action, suit or proceeding arose, and
(ii) the relative fault of the Company on the one hand and of Indemnitee on the
other hand in connection with the circumstances which resulted in such
expenses, judgments, fines or settlement amounts, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of Indemnitee on the other hand shall be determined by reference to among other
things, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent the circumstances resulting in such expense,
judgments, fines or settlement amounts. The Company agrees that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
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rata allocation or any other method of allocation which does not take account
of the foregoing equitable considerations.
SECTION 10. NONDISCLOSURE OF PAYMENTS. Except as expressly required by
Federal securities laws, neither party shall disclose any payments under this
Agreement unless prior approval of the other party is obtained. Any payments to
the Indemnitee that must be disclosed shall, unless otherwise required by law,
be described only in Company proxy or information statements relating to
special and/or annual meetings of the Company's stockholders, and the Company
shall afford the Indemnitee the reasonable opportunity to review all such
disclosures and, if requested, to explain in such statement any mitigating
circumstances regarding the events reported.
SECTION 11. COVENANT NOT TO XXX, LIMITATION OF ACTIONS AND RELEASE OF
CLAIMS. No legal action shall be brought and no cause of action shall be
asserted by or on behalf of the Company (or any of its subsidiaries) against
the Indemnitee, his spouse, heirs, executors, personal representatives or
administrators after the expiration of 2 years from the date the Indemnitee
ceases (for any reason) to serve as either an officer or a director of the
Company, and any claim or cause of action of the Company (or any of its
subsidiaries) shall be extinguished and deemed released unless asserted by
filing of a legal action within such 2-year period.
SECTION 12. INDEMNIFICATION OF INDEMNITEE'S ESTATE. Notwithstanding any
other provision of this Agreement, and regardless whether indemnification of
the Indemnitee would be permitted and/or required under this Agreement, if the
Indemnitee is deceased, the Company shall indemnify and hold harmless the
Indemnitee's estate, spouse, heirs, administrators, personal representatives
and executors (collectively the "Indemnitee's Estate") against, and the Company
shall assume, any and all claims, damages, expenses, costs (including
attorneys' fees and costs of other professionals), penalties, judgments, fines
and amounts paid in settlement actually incurred by the Indemnitee or the
Indemnitee's Estate in connection with the investigation, defense, settlement
or appeal of any action described in Section 1 or 2 hereof. Indemnification of
the Indemnitee's Estate pursuant to this Section 12 shall be mandatory and not
require a Determination or any other finding that the Indemnitee's conduct
satisfied a particular standard of conduct.
SECTION 13. REIMBURSEMENT OF ALL LEGAL EXPENSES. Notwithstanding any
other provision of this Agreement, and regardless of the presence or absence of
any Determination, the Company promptly (but not later than 10 days following
the Indemnitee's submission of a reasonable accounting) shall reimburse the
Indemnitee for all attorneys' fees and related court costs and other expenses
incurred by the Indemnitee in connection with the investigation, defense,
settlement or appeal of or preparation to be a witness in or participating in
(including an appeal) or preparing to defend any action described in Section 1
or 2 hereof (including, but not limited to, the matters specified in Section 6
hereof).
SECTION 14. MAINTENANCE OR INSURANCE. The Company represents that a copy
of the policies of directors and officers liability insurance that are in
effect are set forth as Exhibit A hereto. The Company hereby agrees that during
the period commencing on the date hereof and ending six years from the date the
Indemnitee ceases to serve the Company, the Company shall purchase and maintain
in effect for the benefit of the Indemnitee such insurance providing coverage
at least as favorable to the Indemnitee as that presently provided, if such
insurance can be purchased for premiums not in excess of 200% of the amount of
the current premiums, adjusted from time to time in accordance with the
Consumer Price Index, or, if such coverage cannot be obtained, the maximum
coverage that can be obtained for 200% of the
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amount of the current premiums adjusted from time to time in accordance with the
Consumer Price Index.
SECTION 15. CHANGES IN THE LAW. If any change after the date of this
Agreement in any applicable law, statute or rule or the Company's Certificate of
Incorporation expands the power of the Company to indemnify the Indemnitee, such
change shall be within the purview of the Indemnitee's rights and the Company's
obligations under this Agreement. If any change in any applicable law, statute
or rule or the Company's Certificate of Incorporation narrows the right of the
Company to indemnify a person such as the Indemnitee, such change, to the extent
not otherwise required by such law, statute or rule or the Company's Certificate
of Incorporation to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations thereunder.
SECTION 16. MISCELLANEOUS.
16.1. Notice Provision. Any notice, payment, demand or communication
required or permitted to be delivered or given by the provisions of this
Agreement shall be deemed to have been effectively delivered or given and
received on the date personally delivered to the respective party to whom it is
directed, or when deposited by registered or certified mail, with postage and
charges prepaid and addressed to the parties at the addresses set forth below
opposite their signatures to this Agreement.
16.2. Entire Agreement. Except for the Company's Certificate of
Incorporation, this Agreement constitutes the entire understanding of the
parties and supersedes all prior understandings, whether written or oral,
between the parties with respect to the subject matter of this Agreement.
Nothing in this Agreement shall be deemed to limit any other indemnification to
which the Indemnitee may be entitled, including under the Company's
Certificate of Incorporation, without duplication of payment.
16.3. Severability of Provisions. If any provision of this Agreement
is held to be illegal, invalid, or unenforceable under present or future laws
effective during the term of this Agreement, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of each such illegal, invalid, or unenforceable provision there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid, and enforceable.
16.4. Applicable Law. This Agreement shall be governed by and
construed under the laws of the State of Delaware.
16.5. Execution in Counterparts. This Agreement and any amendment may
be executed simultaneously or in counterparts, each of which together shall
constitute one and the same instrument.
16.6. Cooperation and Intent. The Company shall cooperate in good
faith with the Indemnitee and use its best efforts to ensure that the
Indemnitee is indemnified and/or reimbursed for liabilities described herein to
the fullest extent permitted by law.
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16.7. Amendment. No amendment, modification or alteration of the
terms of this Agreement shall be binding unless in writing, dated subsequent to
the date of this Agreement, and executed by the parties.
16.8. Binding Effect. The obligations of the Company to the
Indemnitee hereunder shall survive and continue as to the Indemnitee even if the
Indemnitee ceases to be a director, officer, consultant, employee and/or agent
of the Company. Each and all of the covenants, terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the successors to
the Company and, upon the death of the Indemnitee, to the benefit of the estate,
heirs, executors, administrators and personal representatives of the Indemnitee.
16.9 Nonexclusitivity. The rights of indemnification and
reimbursement provided in this Agreement shall be in addition to any rights to
which the Indemnitee may otherwise be entitled by statute, bylaw, agreement,
vote of stockholders or otherwise.
16.10 Effective Date. The provisions of this Agreement shall cover
claims, actions, suits and proceedings whether now pending or hereafter
commenced and shall be retroactive to cover acts or omissions or alleged acts or
omissions which heretofore have taken place.
EXECUTED AS OF THE DATE FIRST ABOVE WRITTEN.
ADDRESS THE COMPANY
0000 Xxxxxxxx Xxxxxx MEGO MORTGAGE CORPORATION
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx By:
-----------------------
Vice President/Corporate Counsel Name:
--------------------
Title:
--------------------
ADDRESS THE INDEMNITEE
--------------------------
Name:
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