INDEMNIFICATION AGREEMENT
EXHIBIT
NO. 10.1
THIS
INDEMNIFICATION AGREEMENT
(“Agreement”)
is
made and entered into this ___ day of September, 2006, by and between
SUNTERRA
CORPORATION,
a
Maryland corporation (the “Company”),
and
(“Indemnitee”).
WHEREAS,
at
the
request of the Company, Indemnitee currently serves as a [director/officer]
of the
Company, and therefore may be subjected to claims, suits or proceedings arising
as a result of his service; and
WHEREAS,
as an inducement to Indemnitee to continue to serve as such [director/officer],
the
Company has agreed to indemnify and to advance expenses and costs incurred
by
Indemnitee in connection with any such claims, suits or proceedings, to the
fullest extent permitted by law; and
WHEREAS,
the parties by this Agreement desire to set forth their agreement regarding
indemnification and advance of expenses;
NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:
Section
1. Definitions.
For
purposes of this Agreement:
(a) “Affiliate”
shall
have the meaning set forth in Rule 12b-2 promulgated by the SEC under the
Act.
(b) “Associate”
shall
have the meaning set forth in Rule 12b-2 promulgated by the SEC under the
Act.
(c) “Change
in Control”
means
a
change in control of the Company occurring after the Effective Date of a
nature
that would be required to be reported in response to Item 6(e) of Schedule
14A
of Regulation 14A (or in response to any similar item on any similar schedule
or
form) promulgated under the Securities Exchange Act of 1934, as amended (the
“Act”),
whether or not the Company is then subject to such reporting requirement;
provided, however, that, without limitation, such a Change in Control shall
be
deemed to have occurred if after the Effective Date (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Act) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing more than 50% of the
combined voting power of the Company’s then outstanding securities without the
prior approval of at least two-thirds of the members of the Board of Directors
in office immediately prior to such person attaining such percentage interest;
(ii) there occurs a proxy contest, or the Company is a party to a merger,
consolidation, sale of assets, plan of liquidation or other reorganization
not
approved by at least two-thirds of the members of the Board of Directors
then in
office, as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or (iii) during any period of two
consecutive years, other than as a result of an event described in clause
(c)(ii) of this Section 1, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose any new director
whose election or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then still in
office
who were directors at the beginning of such period) cease for any reason
to
constitute at least a majority of the Board of Directors.
(d) "Corporate
Status"
means
the status of a person who is or was a director, trustee, officer, employee
or
agent of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise for which such person is
or was
serving at the request of the Company.
(e) "Disinterested
Director"
means a
director of the Company who is not and was not a party to the Proceeding
in
respect of which indemnification is sought by Indemnitee.
(f) "Effective
Date"
means
the date set forth in the first paragraph of this Agreement.
(g) "Expenses"
shall
include all reasonable attorneys' fees, retainers, court costs, transcript
costs, fees of experts, accountants and other professionals, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements or expenses
of the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, or being or preparing to
be a
witness in a Proceeding.
(h) "Independent
Counsel"
means a
law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither is, nor in the past five years has been, retained
to
represent: (i) the Company or Indemnitee in any matter material to either
such
party, or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any person who, under the applicable standards
of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement. Independent Counsel shall be selected
by Indemnitee, with the approval of the Board of Directors, which approval
will
not be unreasonably withheld.
(i) "Proceeding"
includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, regulatory inquiry,
administrative hearing or any other proceeding, whether civil, criminal,
administrative or investigative (including on appeal), except one initiated
by
an Indemnitee pursuant to Section 11 of this Agreement to enforce his rights
under this Agreement.
(j) "Representative"
means
Indemnitee's appraisers, independent accountants, legal counsel and other
agents, consultants and advisors.
(k) "Schedule
13D Group"
means
those parties that are members of a group,
of
which group Indemnitee is also a member,
that
identifies itself as such a group
for the
purposes of filing Schedule 13D with the SEC.
(l) "SEC"
means
the Securities and Exchange Commission.
Section
2. Services
by Indemnitee.
Indemnitee will serve as a [director/officer]
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.
2
Section
3. Indemnification
- General.
The
Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided
in
this Agreement and (b) otherwise to the fullest extent permitted by Maryland
law
in effect on the date hereof and as amended from time to time; provided,
however, that no change in Maryland law shall have the effect of reducing
the
benefits available to Indemnitee hereunder based on Maryland law as in
effect on
the date hereof. The rights of Indemnitee provided in this Section 3
shall
include, without limitation, the rights set forth in the other sections
of this
Agreement, including any additional indemnification permitted by Section
2-418(g) of the Maryland General Corporation Law ("MGCL").
Section
4. Proceedings
Other Than Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification provided
in this
Section 4 if, by reason of or related to his Corporate Status, he is,
or is
threatened to be, made a party to or a witness in any threatened, pending,
or
completed Proceeding, other than a Proceeding by or in the right of the
Company
to procure a judgment in its favor against Indemnitee. Pursuant to this
Section
4, Indemnitee shall be indemnified against all judgments, penalties,
fines and
amounts paid in settlement and all Expenses actually and reasonably incurred
by
him or on his behalf in connection with a Proceeding by reason of or
related to
his Corporate Status unless it is established that: (i) the act or omission
of
Indemnitee was material to the matter giving rise to the Proceeding and
(a) was
committed in bad faith, or (b) was the result of active and deliberate
dishonesty; (ii) Indemnitee actually received an improper personal benefit
in
money, property or services; or (iii) in the case of any criminal Proceeding,
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
Section
5. Proceedings
by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification provided
in this
Section 5 if, by reason of or related to his Corporate Status, he is,
or is
threatened to be, made a party to any threatened, pending or completed
Proceeding brought by or in the right of the Company to procure a judgment
in
its favor against Indemnitee. Pursuant to this Section 5, Indemnitee
shall be
indemnified against all judgments, penalties, fines and amounts paid
in
settlement and all Expenses actually and reasonably incurred by him or
on his
behalf in connection with such Proceeding unless: (i) the Indemnitee
is adjudged
liable to the Company; or (ii) it is established that: (a) the act or
omission
of Indemnitee was material to the matter giving rise to such a Proceeding
and
(1) was committed in bad faith, or (2) was the result of active and deliberate
dishonesty; or (b) Indemnitee actually received an improper personal
benefit in
money, property or services.
Section
6. Court-Ordered
Indemnification.
Notwithstanding any other provision of this Agreement, a court of appropriate
jurisdiction, upon application of Indemnitee and such notice as the court
shall
require, may order indemnification in the following circumstances:
(a) if
it
determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1)
of
the MGCL, the court shall order indemnification, in which case Indemnitee
shall
be entitled to recover the expenses of securing such reimbursement;
or
3
(b) if
it
determines that Indemnitee is fairly and reasonably entitled to indemnification
in view of all the relevant circumstances, whether or not Indemnitee
(i) has met
the standards of conduct set forth in Section 2-418(b) of the MGCL or
(ii) has
been adjudged liable for receipt of an improper personal benefit under
Section
2-418(c) of the MGCL, the court may order such indemnification as the
court
shall deem proper. However, indemnification with respect to any Proceeding
by or
in the right of the Company or in which liability shall have been adjudged
in
the circumstances described in Section 2-418(c) of the MGCL shall be
limited to
Expenses.
Section
7. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent
that
Indemnitee is, by reason of or related to his Corporate Status, made
a party to
and is successful, on the merits or otherwise, in the defense of any
Proceeding,
he shall be indemnified for all Expenses actually and reasonably incurred
by him
or on his 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 under this Section 7 for all Expenses actually
and
reasonably incurred by him or on his behalf in connection with each successfully
resolved claim, issue or matter, allocated on a reasonable and proportionate
basis. For purposes of this Section and without limitation, the termination
of
any claim, issue or matter in such a Proceeding by dismissal, with or
without
prejudice, shall be deemed to be a successful result as to such claim,
issue or
matter.
Section
8. Advance
of Expenses.
The
Company shall advance all reasonable Expenses incurred by or on behalf
of
Indemnitee in connection with any Proceeding to which Indemnitee is,
or is
threatened to be, made a party or a witness, within ten days after the
receipt
by the Company of a statement or statements from Indemnitee requesting
such
advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably
evidence the Expenses incurred by Indemnitee and shall include or be
preceded or
accompanied by a written affirmation by Indemnitee of Indemnitee's good
faith
belief that the standard of conduct necessary for indemnification by
the Company
as authorized by law and by this Agreement has been met and a written
undertaking by or on behalf of Indemnitee, in substantially the form
attached
hereto as Exhibit
A
or in
such form as may be required under applicable law as in effect at the
time of
the execution thereof, to reimburse the portion of any Expenses advanced
to
Indemnitee relating to claims, issues or matters in the Proceeding as
to which
it shall ultimately be established by a final decision of a court of
competent
jurisdiction, with no further right of appeal, that the standard of conduct
has
not been met and which have not been successfully resolved as described
in
Section 7. To the extent that Expenses advanced to Indemnitee do not
relate to a
specific claim, issue or matter in the Proceeding, such Expenses shall
be
allocated on a reasonable and proportionate basis. The undertaking required
by
this Section 8 shall be an unlimited general obligation by or on behalf
of
Indemnitee and shall be accepted without reference to Indemnitee's financial
ability to repay such advanced Expenses and without any requirement to
post
security therefor. For the avoidance of doubt, the Company agrees that
it shall
not condition any advancement of Expenses upon the Indemnitee posting
security
for such advanced Expenses.
4
Section
9. Procedure
for Determination of Entitlement to Indemnification.
(a) To
obtain
indemnification under this Agreement, Indemnitee shall submit to the
Company a
written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably
necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt
of
such a request for indemnification, advise the Board of Directors in
writing
that Indemnitee has requested indemnification.
(b) Upon
written request by Indemnitee for indemnification pursuant to the first
sentence
of Section 9(a) hereof, a determination, if required by applicable law,
with
respect to Indemnitee's entitlement thereto shall promptly be made in
the
specific case: (i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which
shall be
delivered to Indemnitee; or (ii) if a Change of Control shall not have
occurred,
(A) by the Board of Directors (or a duly authorized committee thereof)
by a
majority vote of a quorum consisting of Disinterested Directors (as herein
defined), or (B) if a quorum of the Board of Directors consisting of
Disinterested Directors is not obtainable or, even if obtainable, such
quorum of
Disinterested Directors so directs, by Independent Counsel in a written
opinion
to the Board of Directors, a copy of which shall be delivered to Indemnitee,
or
(C) if so directed by a majority of the members of the Board of Directors,
by
the stockholders of the Company, or (D) if requested by Indemnitee, by
Independent Counsel in a written opinion to the Board of Directors; and,
if it
is so determined that Indemnitee is entitled to indemnification, or if
no such
determination is required by applicable law, payment to Indemnitee shall
be made
within ten days after such determination (or, if no such determination
is
required, within ten days after Indemnitee's submission of a written
request for
indemnification). Indemnitee shall cooperate with the person, persons
or entity
making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity
upon
reasonable advance request any documentation or information which is
not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination.
Any
costs or Expenses incurred by Indemnitee in so cooperating with the person,
persons or entity making such determination, and any costs or Expenses
of the
Independent Counsel, shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and
the Company
shall indemnify and hold Indemnitee harmless therefrom.
Section
10. Presumptions
and Effect of Certain Proceedings.
(a) In
making
a determination with respect to entitlement to indemnification hereunder,
the
person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has
submitted a request for indemnification in accordance with Section 9(a)
of this
Agreement, and the Company shall have the burden of proof to overcome
that
presumption in connection with the making of any determination contrary
to that
presumption.
(b) The
termination of any Proceeding by judgment, order, settlement, conviction,
a plea
of nolo
contendere
or its
equivalent, or an entry of an order of probation prior to judgment, does
not
create a presumption that Indemnitee did not meet the requisite standard
of
conduct described herein for indemnification.
5
Section
11. Remedies
of Indemnitee.
(a) If
(i) a
determination is made pursuant to Section 9 of this Agreement that Indemnitee
is
not entitled to indemnification under this Agreement, (ii) advance of
Expenses
is not timely made pursuant to Section 8 of this Agreement, (iii) no
determination of entitlement to indemnification shall have been made
pursuant to
Section 9(b) of this Agreement within 30 days
after receipt by the Company of the request for indemnification, (iv)
payment of
indemnification is not made pursuant to Section 7 of this Agreement within
ten
days after receipt by the Company of a written request therefor, or (v)
payment
of indemnification is not made within ten days after a determination
has been
made that Indemnitee is entitled to indemnification, Indemnitee shall
be
entitled to an adjudication in an appropriate court of the State of Maryland,
or
in any other court of competent jurisdiction, of his entitlement (including
by reason of having met the applicable standard of conduct to be entitled
to
indemnification as set forth in this Agreement) to
such
indemnification or advance of Expenses. Alternatively, Indemnitee, at
his
option, may seek an award in arbitration to be conducted by a single
arbitrator
pursuant to the commercial Arbitration Rules of the American Arbitration
Association. Indemnitee shall commence such proceeding seeking an adjudication
or an award in arbitration within 180 days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to
this
Section 11(a); provided, however, that the foregoing clause shall not
apply to a
proceeding brought by Indemnitee to enforce his rights under Section
7 of this
Agreement.
(b) In
any
judicial proceeding or arbitration commenced pursuant to this Section
11 the
Company shall have the burden of proving that Indemnitee is not entitled
to
indemnification or advance of Expenses, as the case may be.
(c) If
a
determination shall have been made pursuant to Section 9(b) of this Agreement
that Indemnitee is entitled to indemnification, the Company shall be
bound by
such determination in any judicial proceeding or arbitration commenced
pursuant
to this Section 11, absent a misstatement by Indemnitee of a material
fact, or
an omission of a material fact necessary to make Indemnitee's statement
not
materially misleading, in connection with the request for
indemnification.
(d) In
the
event that Indemnitee, pursuant to this Section 11, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under,
or to
recover damages for breach of, this Agreement, Indemnitee shall be entitled
to
recover from the Company, and shall be indemnified by the Company for,
any and
all Expenses actually and reasonably incurred by him in such judicial
adjudication or arbitration. If it shall be determined in such judicial
adjudication or arbitration that Indemnitee is entitled to receive part
but not
all of the indemnification or advance of Expenses sought, the Expenses
incurred
by Indemnitee in connection with such judicial adjudication or arbitration
shall
be appropriately prorated.
6
Section
12. Defense
of the Underlying Proceeding.
(a) Indemnitee
shall notify the Company promptly upon being served with or receiving
any
summons, citation, subpoena, complaint, indictment, information, notice,
request
or other document relating to any Proceeding which may result in the
right to
indemnification or the advance of 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
indemnification or the advance of Expenses under this Agreement unless
the
Company's ability to defend in such Proceeding or to obtain proceeds
under any
insurance policy is materially and adversely prejudiced thereby, and
then only
to the extent the Company is thereby actually so prejudiced.
(b) Subject
to the provisions of the last sentence of this Section 12(b) and of Section
12(c) below, the Company shall have the right to defend Indemnitee in
any
Proceeding which may give rise to indemnification hereunder
using
counsel of the Company's choice, subject to the prior approval of Indemnitee,
which shall not be unreasonably withheld;
provided, however, that the Company shall notify Indemnitee of any such
decision
to defend within 15 calendar days following receipt of notice of any
such
Proceeding under Section 12(a) above. The Company may consent to the
entry of
any judgment against Indemnitee or enter into any settlement or compromise
pursuant to which
Indemnitee would have no obligations or liabilities, but
the
Company would be required to pay monetary damages. Notwithstanding the
foregoing, the Company shall not, without the prior written consent of
Indemnitee, which shall not be unreasonably withheld or delayed, consent
to the
entry of any judgment against Indemnitee or enter into any settlement
or
compromise; provided, however, that the Company shall not, without Indemnitee's
prior written consent, which consent shall be granted or withheld in
Indemnitee's sole discretion, 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, (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, or (iii) imposes or includes any other terms,
conditions or provisions which Indemnitee believes, in his good faith
judgment,
to be adverse to Indemnitee in any material respect. This Section 12(b)
shall
not apply to a Proceeding brought by Indemnitee under Section 11 above
or
Section 18 below.
(c) Notwithstanding
the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee
is
a party by reason of or related to Indemnitee's Corporate Status, (i)
Indemnitee
reasonably concludes, based upon an opinion of counsel approved by the
Company,
which approval shall not be unreasonably withheld, that he may have separate
defenses or counterclaims to assert with respect to any issue which may
not be
consistent with other defendants in such Proceeding, (ii) Indemnitee
reasonably
concludes, based upon an opinion of counsel approved by the Company,
which
approval shall not be unreasonably withheld, that an actual or apparent
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, or at any time thereafter fails to reasonably defend
such
Proceeding, Indemnitee shall be entitled to be represented by separate
legal
counsel of Indemnitee's choice, subject to the prior approval of the
Company,
which shall not be unreasonably withheld, 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 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, subject to the prior approval of the Company, which
shall
not be unreasonably withheld, at the expense of the Company (subject
to Section
11(d)), to represent Indemnitee in connection with any such
matter.
7
Section
13. Non-Exclusivity;
Survival of Rights; Subrogation; Insurance.
(a) The
rights of indemnification and advance of Expenses as provided by this
Agreement
shall not be deemed exclusive of any other rights to which Indemnitee
may at any
time be entitled under applicable law, the Charter or Bylaws of the Company,
any
agreement or a resolution of the stockholders entitled to vote generally
in the
election of directors or of the Board of Directors, or otherwise. No
amendment,
alteration or repeal of this Agreement or of any provision hereof shall
limit or
restrict any right of Indemnitee under this Agreement in respect of any
action
taken or omitted by such Indemnitee in his Corporate Status prior to
such
amendment, alteration or repeal.
(b) In
the
event of any payment under this Agreement, the Company shall be subrogated
to
the extent of such payment to all of the rights of recovery of Indemnitee,
who
shall execute all papers required and take all action necessary to secure
such
rights, including execution of such documents as are necessary to enable
the
Company to bring suit to enforce such rights.
(c) The
Company shall not be liable under this Agreement to make any payment
of amounts
otherwise indemnifiable or payable or reimbursable as expenses hereunder
if and
to the extent that Indemnitee has otherwise actually received such payment
under
any insurance policy, contract, agreement or otherwise; provided, however,
that
if and to the extent that Indemnitee is at any time thereafter required
to
return, refund or repay, or shall otherwise not be entitled to the benefit
of,
any such payment, then the Company's liability under this Agreement with
respect
to such payment shall be reinstated and the provisions of this Agreement
shall
continue to apply with respect thereto, and any applicable time periods
under
this Agreement shall automatically be extended for the period during
which
Indemnitee was entitled to the benefit of such payment.
Section
14. Insurance.
The
Company will use its reasonable best efforts to acquire directors and
officers
liability insurance, on terms and conditions deemed appropriate by the
Board of
Directors of the Company, with the advice of counsel, covering Indemnitee
or any
claim made against Indemnitee for service as a director or officer of
the
Company and covering the Company for any indemnification or advance of
Expenses
made by the Company to Indemnitee for any claims made against Indemnitee
for
service as a director or officer of the Company. Without in any way limiting
any
other obligation under this Agreement, the Company shall indemnify Indemnitee
for any payment by Indemnitee arising out of the amount of any deductible
or
retention and the amount of any excess of the aggregate of all judgments,
penalties, fines, settlements and reasonable Expenses incurred by Indemnitee
in
connection with a Proceeding over the coverage of any insurance referred
to in
the previous sentence.
8
Section
15. Indemnification
for Expenses of a Witness.
Notwithstanding any other provision of this Agreement, to the extent
that
Indemnitee is, by reason of or related to his Corporate Status, a witness
in any
Proceeding, whether instituted by the Company or any other party, and
to which
Indemnitee is not a party, he shall be advanced all reasonable Expenses
and
indemnified against all Expenses actually and reasonably incurred by
him or on
his behalf in connection therewith.
Section
16. Duration
of Agreement; Binding Effect.
(a) This
Agreement shall continue until and terminate upon the expiration of the
last to
expire of any applicable statute of limitations for claims against Indemnitee
which are subject to indemnification pursuant to this Agreement; provided,
that
the rights of Indemnitee hereunder shall continue until the final termination
of
any Proceeding then pending in respect of which Indemnitee is granted
rights of
indemnification or advance of Expenses hereunder and of any proceeding
commenced
by Indemnitee pursuant to Section 11 of this Agreement relating
thereto.
(b) The
indemnification and advance of Expenses provided by, or granted pursuant
to,
this Agreement shall be binding
upon
and be enforceable by the parties hereto and their respective successors
and
assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business
or assets
of the Company), shall continue as to an Indemnitee who has ceased to
be a
director, trustee, officer, employee or agent of the Company or of any
other
corporation, partnership, joint venture, trust, employee benefit plan
or other
enterprise which such person is or was serving at the written request
of the
Company, and shall inure to the benefit of Indemnitee and his spouse,
assigns,
heirs, devisees, executors and administrators and other legal
representatives.
(c) The
Company shall require and cause any successor (whether direct or indirect
by
purchase, merger, consolidation or otherwise) to all, substantially all
or a
substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to Indemnitee, expressly
to assume
and agree to perform this Agreement in the same manner and to the same
extent
that the Company would be required to perform if no such succession had
taken
place.
Section
17. Severability.
If any
provision or provisions of this Agreement shall be held to be invalid,
illegal
or unenforceable for any reason whatsoever: (a) the validity, legality
and
enforceability of the remaining provisions of this Agreement (including,
without
limitation, each portion of any section of this Agreement containing
any such
provision held to be invalid, illegal or unenforceable that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or
impaired
thereby; and (b) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any section
of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable)
shall be
construed so as to give effect to the intent manifested thereby.
Section
18. Exception
to Right of Indemnification or Advance of Expenses.
Notwithstanding any other provision of this Agreement, Indemnitee shall
not be
entitled to indemnification or advance of Expenses under this Agreement
with
respect to any Proceeding brought by Indemnitee or any member of a Schedule
13D
Group, Affiliate, Associate or Representative or by a third party at
the behest
of any of the aforementioned (provided that the foregoing shall not limit
or
otherwise affect Indemnitee's rights to indemnification or advance of
Expenses
in connection with any defenses or counterclaims asserted by Indemnitee
in any
Proceeding), unless (a) the Proceeding is brought to enforce indemnification
under this Agreement or otherwise or (b) the Company's Bylaws, as amended,
the
Charter, a resolution of the stockholders entitled to vote generally
in the
election of directors or of the Board of Directors or an agreement approved
by
the Board of Directors to which the Company is a party expressly provide
otherwise.
9
Section
19. Identical
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which
shall for
all purposes be deemed to be an original but all of which together shall
constitute one and the same Agreement. One such counterpart signed by
the party
against whom enforceability is sought shall be sufficient to evidence
the
existence of this Agreement.
Section
20. Headings.
The
headings of the paragraphs of this Agreement are inserted for convenience
only
and shall not be deemed to constitute part of this Agreement or to affect
the
construction thereof.
Section
21. 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 provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
Section
22. Notices.
All
notices, requests, demands and other communications hereunder shall be
in
writing and shall be deemed to have been duly given if (i) delivered
by hand and
receipted for by the party to whom said notice or other communication
shall have
been directed, or (ii) mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so
mailed:
(a) If
to
Indemnitee, to: The address set forth on the signature page hereto.
(b) If
to the
Company to:
Sunterra
Corporation
0000
Xxxx
Xxxxxxxx Xxxxxx
Xxxxx
Xxx
Xxxxx, Xxxxxx 00000
Attn:
General Counsel
or
to
such other address as may have been furnished to Indemnitee by the Company
or to
the Company by Indemnitee, as the case may be.
Section
23. Governing
Law.
The
parties agree that this Agreement shall be governed by, and construed
and
enforced in accordance with, the laws of the State of Maryland, without
regard
to its conflicts of laws rules.
10
Section
24. Miscellaneous.
Use of
the masculine pronoun shall be deemed to include usage of the feminine
pronoun
where appropriate.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day
and year first above written.
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ATTEST:
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COMPANY
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SUNTERRA
CORPORATION
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By:
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|
Name:
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Title:
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WITNESS:
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INDEMNITEE
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Name:
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Address:
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11
EXHIBIT
A
FORM
OF AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED
To
the Board of Directors of Sunterra Corporation:
Re:
Undertaking to Repay Expenses Advanced
Ladies
and Gentlemen:
This
undertaking is being provided pursuant to that certain Indemnification
Agreement
dated the ___ day of September, 2006, by and between Sunterra Corporation
(the
"Company")
and
the undersigned Indemnitee (the "Indemnification
Agreement"),
pursuant to which I am entitled to advance of expenses in connection
with
[Description
of Proceeding]
(the
"Proceeding").
Terms
used herein and not otherwise defined shall have the meanings specified
in the
Indemnification Agreement.
I
am
subject to the Proceeding by reason of or related to my Corporate Status
or by
reason of or related to alleged actions or omissions by me in such capacity.
I
hereby affirm that at all times, insofar as I was involved as [director/officer]
of the
Company, in any of the facts or events giving rise to the Proceeding,
I (1) did
not act in bad faith, (2) did not engage in active and deliberate dishonesty,
(3) did not receive any improper personal benefit in money, property
or services
and (4) in the case of any criminal proceeding, had no reasonable cause
to
believe that any act or omission by me was unlawful.
In
consideration of the advance of Expenses by the Company for reasonable
attorneys' fees and related expenses incurred by me in connection with
the
Proceeding (the "Advanced
Expenses"),
I
hereby agree that if, in connection with the Proceeding, it is ultimately
established by a final decision of a court of competent jurisdiction,
with no
further right of appeal, that (1) an act or omission by me was material
to the
matter giving rise to the Proceeding and (a) was committed in bad faith
or (b)
was the result of active and deliberate dishonesty or (2) I actually
received an
improper personal benefit in money, property or services or (3) in the
case of
any criminal proceeding, I had reasonable cause to believe that the act
or
omission was unlawful, then I shall promptly reimburse the portion of
the
Advanced Expenses relating to the claims, issues or matters in the Proceeding
as
to which the foregoing findings have been established and which have
not been
successfully resolved as described in Section 7 of the Indemnification
Agreement. To the extent that Advanced Expenses do not relate to a specific
claim, issue or matter in the Proceeding, I agree that such Expenses
shall be
allocated on a reasonable and proportionate basis.
IN
WITNESS WHEREOF, I have executed this Affirmation and Undertaking on
this ___
day of ____________________, 20___.
WITNESS:
Name: ____________________________
