Exhibit 10.2
Indemnification Agreement between Tribeworks, Inc., a Delaware
corporation, and Xxxxxx Xxxxxx,
dated May 26, 2000
INDEMNITY AGREEMENT
This INDEMNITY AGREEMENT is made and entered into as of May 26, 2000 by and
between Tribeworks, Inc., a Delaware corporation (the "CORPORATION") and Xxxxxx
Xxxxxx ("AGENT").
RECITALS
WHEREAS, Agent performs a valuable service to the Corporation in his
capacity as a director of the Corporation;
WHEREAS, the shareholders of the Corporation have adopted bylaws (the
"BYLAWS") providing for the indemnification of the directors, officers,
employees and other agents of the Corporation, including persons serving at the
request of the Corporation in such capacities with other corporations or
enterprises, as authorized by the California General Corporation Law, as amended
(the "Code");
WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit
contracts between the Corporation and its directors, officers, employees and
other agents with respect to indemnification of such persons; and
WHEREAS, in order to induce Agent to continue to serve in the capacity set
forth above, the Corporation has determined and agreed to enter into this
Agreement with Agent.
NOW, THEREFORE, in consideration of Agent's continued service in the
capacity set forth above after the date hereof, the parties hereto agree as
follows:
AGREEMENT
1. Service to the Corporation. Agent will serve, at the will of
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the Corporation or under separate contract, if any such contract exists, as a
director, officer or agent of the Corporation or as a director, officer or other
fiduciary of an affiliate of the Corporation (including any employee benefit
plan of the Corporation) faithfully and to the best of his ability so long as he
is duly elected and qualified in accordance with the provisions of the Bylaws or
other applicable charter documents of the Corporation or such affiliate;
provided, however, that Agent may at any time and for any reason resign from
such position (subject to any contractual obligation that Agent may have assumed
apart from this Agreement) and that the Corporation or any affiliate shall have
no obligation under this Agreement to continue Agent in any such position.
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2. Maintenance of Liability Insurance.
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(a) The Corporation hereby covenants and agrees that, so long as
the Agent shall continue to serve as an agent of the Corporation and thereafter
so long as the Agent shall be subject to any possible action, suit or proceeding
by reason of the fact that the Agent was an agent of the Corporation, the
Corporation, subject to Section 2(c), shall promptly obtain and maintain in full
force and effect directors' and officers' liability insurance ("D&O INSURANCE")
in reasonable amounts from established and reputable insurers.
(b) In all policies of D&O Insurance, the Agent shall be named
as an insured in such a manner as to provide the Agent the same rights and
benefits as are accorded to the most favorably insured of the Corporation's
directors, if the Agent is a director; or of the Corporation's officers, if the
Agent is not a director of the Corporation but is an officer; or of the
Corporation's key employees, if the Agent is not an officer or director but is a
key employee or other agent.
(c) Notwithstanding the foregoing, the Corporation shall have
no obligation to obtain or maintain D&O Insurance if the Corporation determines
in good faith that such insurance is not available at a reasonable price, the
premium costs for such insurance are disproportionate to the amount of coverage
provided, the coverage provided by such insurance is limited by exclusions so as
to provide an insufficient benefit, or the Agent is covered by similar insurance
maintained by a subsidiary of the Corporation.
3. Indemnity of Agent. The Corporation hereby agrees to hold
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harmless and indemnify Agent to the fullest extent authorized or permitted by
the provision of the Bylaws and the Code.
4. Additional Indemnity. In addition to and not in limitation of
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the indemnification otherwise provided for herein, and subject only to the
exclusions set forth in Section 5 hereof, the Corporation hereby further agrees
to hold harmless and indemnify Agent:
(a) against any and all expenses (including attorneys' fees),
witness fees, damages, judgments, fines and amounts paid in settlement and any
other amounts that Agent becomes legally obligated to pay because of any claim
or claims made against or by him in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative (including an action by or in the right of the
Corporation) to which Agent is, was or at any time becomes a party, or is
threatened to be made a party, by reason of the fact that Agent is, was or at
any time becomes a director, officer, employee or other agent of the
Corporation, or is or was serving or at any time serves at the request of the
Corporation as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or was a director, officer, employee or agent of a corporation which
was a predecessor corporation of the Corporation or of another enterprise at the
request of such predecessor corporation; and
(b) otherwise to the fullest extent as may be provided to Agent
by the Corporation under the non-exclusivity provisions of the Bylaws and the
Code.
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5. Limitations on Additional Indemnity. No indemnity pursuant to
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Section 4 hereof shall be paid by the Corporation:
(a) on account of any claim against Agent for an accounting of
profits made from the purchase or sale by Agent of securities of the Corporation
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934 and amendments thereto or similar provisions of any federal, state or local
statutory law;
(b) for which payment is actually made to Agent under a valid
and collectible insurance policy or under a valid and enforceable indemnity
clause, by-law or agreement, except in respect of any excess beyond payment
under such insurance, clause, by-law or agreement;
(c) if indemnification is not lawful (and, in this respect,
both the Corporation and Agent have been advised that the Securities and
Exchange Commission believes that indemnification for liabilities arising under
the federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication);
(d) in connection with any proceeding (or part thereof)
initiated by Agent, or any proceeding by Agent against the Corporation or its
directors, officers, employees or other agents, unless (i) such indemnification
is expressly required to be made by law, (ii) the proceeding was authorized by
the Board of Directors of the Corporation, (iii) such indemnification is
provided by the Corporation, in its sole discretion, pursuant to the powers
vested in the Corporation under the Code, or (iv) the proceeding is initiated
pursuant to Section 10 hereof;
(e) on account of Agent's acts or omissions that involve
intentional misconduct or a knowing and culpable violation of law;
(f) on account of Agent's acts or omissions that Agent
believes to be contrary to the best interests of the Corporation or its
shareholders or that involve the absence of good faith on the part of the Agent;
(g) in respect of any action brought by or in the right of the
Corporation for breach of Agent's duties to the Corporation and its
shareholders:
(i) on account of any transaction from which Agent
derived an improper personal benefit.
(ii) on account of Agent's acts or omissions that show
a reckless disregard for the Agent's duty to the Corporation or its shareholders
in circumstances in which Agent was aware, or should have been aware, in the
ordinary course of performing Agent's duties, of a risk of serious injury to the
Corporation or its shareholders.
(iii) on account of Agent's acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
Agent's duty to the Corporation or its shareholders.
(iv) on account of any liability of Agent under Section
310 of the Code.
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(v) on account of any liability of Agent under Section
316 of the Code.
(vi) on account of any act or omission of Agent
occurring prior to the date when a provision in the Corporation's Articles of
Incorporation eliminating or limiting the personal liability of the
Corporation's directors for monetary damages in actions brought by or in the
right of the Corporation, as authorized by Section 204(a)(10) of the Code, first
became effective;
(h) in respect of any action by or in the right of the
Corporation to procure a judgment in its favor:
(i) in respect of any claim, issue or matter as to which
Agent shall have been adjudged to be liable to the Corporation in the
performance of Agent's duty to the Corporation and its shareholders, unless and
only to the extent that the court in which such proceeding is or was pending
shall determine upon application that, in view of all of the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for
expenses and then only to the extent the court shall determine.
(ii) of amounts paid in settling or otherwise disposing
of a pending action without court approval.
(iii) of expenses incurred in defending a pending action
which is settled or otherwise disposed of without court approval; or
(i) except as provided in subdivision (d) or paragraph (4) of
subdivision (e) of Section 317 of the Code, in any circumstance where it
appears:
(i) that it would be inconsistent with a provision of
the Corporation's Articles of Incorporation or Bylaws, a resolution of the
Corporation's shareholders or an agreement in effect at the time of the accrual
of the alleged cause of action asserted in the proceeding in which the expenses
were incurred or other amounts were paid, which prohibits or otherwise limits
indemnification.
(ii) that it would be inconsistent with any condition
expressly imposed by a court in approving a settlement.
6. Continuation of Indemnity. All agreements and obligations of the
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Corporation contained herein shall continue during the period Agent is a
director, officer, employee or other agent of the Corporation (or is or was
serving at the request of the Corporation as a director, officer, employee or
other agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise) and shall continue thereafter so long as Agent
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative, by reason of the fact that Agent was serving in
the capacity referred to herein.
7. Partial Indemnification. Agent shall be entitled under this
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Agreement to indemnification by the Corporation for a portion of the expenses
(including attorneys' fees), witness fees, damages, judgments, fines and amounts
paid in settlement and any other amounts
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that Agent becomes legally obligated to pay in connection with any action, suit
or proceeding referred to in Section 4 hereof even if not entitled hereunder to
indemnification for the total amount thereof, and the Corporation shall
indemnify Agent for the portion thereof to which Agent is entitled.
8. Notice and Other Indemnification Procedures.
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(a) Promptly after receipt by the Agent of notice of the
commencement of or the threat of commencement of any action, suit or proceeding,
the Agent shall, if the Agent believes that indemnification with respect thereto
may be sought from the Corporation under this Agreement, notify the Corporation
of the commencement or threat of commencement thereof; provided, however, that
failure of Agent to provide such notice will not relieve the Corporation of its
liability hereunder if the Corporation receives notice of such action, suit or
proceeding from any other source.
(b) If, at the time of the receipt of a notice of commencement
of an action, suit or proceeding pursuant to Section 8(a) hereof, the
Corporation has D&O Insurance in effect, the Corporation shall give prompt
notice of the commencement of such action, suit or proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The
Corporation shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Agent, all amounts payable as a result of
such action, suit or proceeding in accordance with the terms of such policies.
(c) In the event the Corporation shall be obligated to pay the
expenses of any action, suit or proceeding against the Agent, the Corporation,
if appropriate, shall be entitled to assume the defense of such action, suit or
proceeding, with counsel approved by the Agent, upon the delivery to the Agent
of written notice of its election so to do. After delivery of such notice,
approval of such counsel by the Agent and the retention of such counsel by the
Corporation, the Corporation will not be liable to the Agent under this
Agreement for any fees of counsel subsequently incurred by the Agent with
respect to the same action, suit or proceeding except for reasonable costs of
investigation, provided that (i) the Agent shall have the right to employ his
counsel in any such action, suit or proceeding at the Agent's expense; and (ii)
if (A) the employment of counsel by the Agent has been previously authorized by
the Corporation, (B) the Agent shall have reasonably concluded that there may be
a conflict of interest between the Corporation and the Agent in the conduct of
any such defense or (C) the Corporation shall not, in fact, have employed
counsel to assume the defense of such action, suit or proceeding, the fees and
expenses of Agent's counsel shall be at the expense of the Corporation.
(d) the Corporation shall not be liable to indemnify Agent
under this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent, which shall not be unreasonably withheld.
The Corporation shall be permitted to settle any action except that it shall not
settle any action or claim in any manner which would impose any penalty or
limitation on Agent without Agent's written consent, which may be given or
withheld in Agent's sole discretion.
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9. Expenses. The Corporation shall advance, prior to the final
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disposition of any proceeding, promptly following request therefor, all expenses
incurred by Agent in connection with such proceeding upon receipt of an
undertaking by or on behalf of Agent to repay said amounts if it shall be
determined ultimately by a court of last resort that Agent is not entitled to be
indemnified under the provisions of this Agreement, the Bylaws, the Code or
otherwise; provided, however, that no advance shall be paid by the Corporation
in circumstances in which no indemnity shall be payable by the Corporation under
Section 5(i) hereof.
10. Enforcement. Any right to indemnification or advances granted by
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this Agreement to Agent shall be enforceable by or on behalf of Agent in any
court of competent jurisdiction if (i) the claim for indemnification or advances
is denied, in whole or in part, or (ii) no disposition of such claim is made
within ninety (90) days of request therefor. Agent, in such enforcement action,
if successful in whole or in part, shall be entitled to be paid also the expense
of prosecuting his claim. It shall be a defense to any action for which a claim
for indemnification is made under Section 4 hereof (other than an action brought
to enforce a claim for expenses pursuant to Section 9 hereof, provided that the
required undertaking has been tendered to the Corporation) that Agent is not
entitled to indemnification because of the limitations set forth in Section 5
hereof. Neither the failure of the Corporation (including its Board of Directors
or its shareholders) to have made a determination prior to the commencement of
such enforcement action that indemnification of Agent is proper in the
circumstances, nor an actual determination by the Corporation (including its
Board of Directors or its shareholders) that such indemnification is improper
shall be a defense to the action or create a presumption that Agent is not
entitled to indemnification under this Agreement or otherwise.
11. Subrogation. In the event of payment under this Agreement, the
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Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Agent, who shall execute all documents required and shall
do all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.
12. Non-Exclusivity of Rights. The rights conferred on Agent by this
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Agreement shall not be exclusive of any other right which Agent may have or
hereafter acquire under any statute, provision of the Corporation's Articles of
Incorporation or Bylaws, agreement, vote of shareholders or directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office.
13. Survival of Rights.
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(a) The rights conferred on Agent by this Agreement shall
continue after Agent has ceased to be a director, officer, employee or other
agent of the Corporation or to serve at the request of the Corporation as a
director, officer, employee or other agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise and shall inure
to the benefit of Agent's heirs, executors and administrators.
(b) The Corporation shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation, expressly to
assume and agree to perform this Agreement in the same manner
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and to the same extent that the Corporation would be required to perform if no
such succession had taken place.
14. Interpretation of Agreement. It is understood that the parties
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hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Agent to the fullest extent permitted by law.
15. Severability. If any provision or provisions of this Agreement
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shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
(i) the validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portion of any paragraph of this agreement containing any such provision held to
be invalid, illegal or unenforceable, that are not themselves invalid, illegal
or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 14 hereof.
16. Successors and Assigns. The terms of this Agreement shall bind,
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and shall inure to the benefit of, the successors and assigns of the parties
hereto.
17. Governing Law. This Agreement shall be governed exclusively by
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and construed according to the laws of the State of California as applied to
contracts between California residents entered into and to be performed entirely
within California.
18. Amendment and Termination. No amendment, modification,
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termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.
19. Identical Counterparts. This Agreement may be executed in one
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or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute but one and the same
Agreement. Only one such counterpart need be produced to evidence the existence
of this Agreement.
20. Headings. The headings of the sections of this Agreement are
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inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
21. Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered by hand to the party to whom such communication was
directed or (ii) upon the third business day after the date on which such
communication was mailed if mailed by certified or registered mail with postage
prepaid:
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If to Agent, at the address indicated on the signature page hereof.
If to the Corporation, to
Tribeworks, Inc.
c/x Xxxxxxxxxxxx, Xxxxxxxx & Prince, LLP
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
(000) 000-0000
or to such other address as may have been furnished to Agent by the Corporation.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first above written.
TRIBEWORKS, INC.
By:/s/XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx, President
AGENT
/s/XXXXXX XXXXXX
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Xxxxxx Xxxxxx
Agent Address:
00 Xxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
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