INDEMNIFICATION AGREEMENT
Exhibit10.3
This
INDEMNIFICATION AGREEMENT (this “Agreement”) is made
and entered into this ____ day of _____________, 20___ (the
“Effective Date”) by and between Betawave Corporation, a Delaware corporation
(the “Company”),
and [_______] (the “Indemnitee”).
WHEREAS,
the Company believes it is essential to retain and attract qualified directors
and officers;
WHEREAS,
the Indemnitee is a director and/or officer of the Company;
WHEREAS,
both the Company and the Indemnitee recognize the increased risk of litigation
and other claims being asserted against directors and officers of public
companies;
WHEREAS,
the Company’s Certificate of Incorporation (the “Certificate of
Incorporation”) and Bylaws (the “Bylaws”) provide for
indemnification (to the fullest extent authorized by the DGCL (as hereinafter
defined) and advancement of expenses to its directors and officers;
WHEREAS,
the Indemnitee has been serving and intends to continue serving as a director
and/or officer of the Company in part in reliance on the Certificate of
Incorporation and the Bylaws; and
WHEREAS,
in recognition of the Indemnitee’s need for (i) substantial protection
against personal liability based on the
Indemnitee’s reliance on the Certificate of Incorporation and Bylaws,
(ii) specific contractual assurance that the protection promised by the
Certificate of Incorporation and Bylaws will be available to the Indemnitee,
regardless of, among other things, any amendment to or revocation of the Bylaws
or any change in the composition of the Company’s Board of Directors (the “Board”) or
acquisition transaction relating to the Company, and (iii) an inducement to
continue to provide effective services to the Company as a director and/or
officer thereof, the Company wishes to provide for the indemnification of the
Indemnitee and to advance expenses to the Indemnitee to the fullest extent
permitted by law and as set forth in this Agreement, and, to the extent
insurance is maintained by the Company, to provide for the continued coverage of
the Indemnitee under the Company’s directors’ and officers’ liability insurance
policies; and
WHEREAS,
the Indemnitee is relying upon the rights afforded under this Agreement in
continuing Indemnitee’s position as a director, officer or employee of the
Company.
NOW,
THEREFORE, in consideration of the premises contained herein and of the
Indemnitee continuing to serve the Company directly or, at its request, with
another enterprise, and intending to be legally bound hereby, the parties hereto
agree as follows:
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1. Certain
Definitions.
(a) A “Change in Control”
shall be deemed to have occurred if:
(i) any
“person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the “Exchange Act”), other
than (a) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company; (b) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company; or (c) any current
beneficial stockholder or group, as defined by Rule 13d-5 of the Exchange Act,
including the heirs, assigns and successors thereof, of beneficial ownership,
within the meaning of Rule 13d-3 of the Exchange Act, of securities
possessing more than 50% of the total combined voting power of the Company’s
outstanding securities; hereafter becomes the “beneficial owner,” as defined in
Rule 13d-3 of the Exchange Act, directly or indirectly, of securities of
the Company representing 20% or more of the total combined voting power
represented by the Company’s then outstanding Voting Securities;
(ii) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board and any new director whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of
at least two-thirds of the directors then in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or
(iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least 80% of the
total voting power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company, in one
transaction or a series of transactions, of all or substantially all of the
Company’s assets.
(b) “DGCL” shall mean the
General Corporation Law of the State of Delaware, as the same exists or may
hereafter be amended or interpreted; provided, however, that in the case of any
such amendment or interpretation, only to the extent that such amendment or
interpretation permits the Company to provide broader indemnification rights
than were permitted prior thereto.
(c) “Expense” shall mean
attorneys’ fees and all other costs, expenses and obligations paid or incurred
in connection with investigating, defending, being a witness in or participating
in (including on appeal), or preparing for any of the foregoing, any Proceeding
relating to any Indemnifiable Event.
(d) “Indemnifiable Event”
shall mean any event or occurrence that takes place either prior to or after the
execution of this Agreement, related to the fact that the Indemnitee is or was a
director or officer of the Company, or is or was serving at the request of the
Company as a director, officer, employee, or agent of another corporation or of
a partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, or by reason of anything done or not done by
the Indemnitee in any such capacity.
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(e) “Proceeding” shall
mean any threatened, pending or completed action, suit, investigation or
proceeding, and any appeal thereof, whether civil, criminal, administrative or
investigative and/or any inquiry or investigation, whether conducted by or in
the right of the Company or any other party, that the Indemnitee in good faith
believes might lead to the institution of any such action.
(f) “Reviewing Party”
shall mean any appropriate person or body consisting of a member or members of
the Company’s Board or any other person or body appointed by the Board
(including the special independent counsel referred to in Section 6) who is
not a party to the particular Proceeding with respect to which the Indemnitee is
seeking indemnification.
(g) “Voting Securities”
shall mean any securities of the Company which vote generally in the election of
directors.
2. Indemnification. In
the event the Indemnitee was or is a party to or is involved (as a party,
witness, or otherwise) in any Proceeding by reason of (or arising in part out
of) an Indemnifiable Event, whether the basis of the Proceeding is the
Indemnitee’s alleged action in an official capacity as a director or officer or
in any other capacity while serving as a director or officer, the Company shall
indemnify the Indemnitee to the fullest extent permitted by the DGCL against any
and all Expenses, liability, and loss (including judgments, fines, ERISA excise
taxes or penalties, and amounts paid or to be paid in settlement, and any
interest, assessments, or other charges imposed thereon, and any federal, state,
local, or foreign taxes imposed on any director or officer as a result of the
actual or deemed receipt of any payments under this Agreement) (collectively,
“Liabilities”)
reasonably incurred or suffered by such person in connection with such
Proceeding. As a condition to Indemnitee’s right to indemnification
under this Agreement, Indemnitee shall submit to the Company a written demand
therefor. The Company shall provide indemnification pursuant to this
Section 2 as soon as practicable, but in no event later than 30 days after
it receives the written demand from the Indemnitee. The Company will
be entitled to participate in the Proceeding at its own expense. Notwithstanding
anything in this Agreement to the contrary and except as provided in
Section 5 below, the Indemnitee shall not be entitled to indemnification
pursuant to this Agreement (i) in connection with any Proceeding initiated
by the Indemnitee against the Company or any director or officer of the Company
unless the Company has joined in or consented to the initiation of such
Proceeding or (ii) on account of any suit in which judgment is rendered
against the Indemnitee pursuant to Section 16(b) of the Exchange Act for an
accounting of profits made from the purchase or sale by the Indemnitee of
securities of the Company.
3. Advancement of
Expenses. The Company shall advance Expenses to the Indemnitee
within 30 business days of such request (an “Expense Advance”);
provided, however, that if required by applicable corporate laws such Expenses
shall be advanced only upon delivery to the Company of an undertaking by or on
behalf of the Indemnitee to repay such amount if it is ultimately determined
that the Indemnitee is not entitled to be indemnified by the Company; and
provided further, that the Company shall make such advances only to the extent
permitted by law. Expenses incurred by the Indemnitee while not
acting in his/her capacity as a director or officer, including service with
respect to employee benefit plans, may be advanced upon such terms and
conditions as the Board, in its sole discretion, deems appropriate.
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4. Review Procedure for
Indemnification. Notwithstanding the foregoing, (i) the
obligations of the Company under Sections 2 and 3 above shall be subject to
the condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the special independent counsel referred to in
Section 6 hereof is involved) that the Indemnitee would not be permitted to
be indemnified under applicable law, and (ii) the obligation of the Company
to make an Expense Advance pursuant to Section 3 above shall be subject to
the condition that, if, when and to the extent that the Reviewing Party
determines that the Indemnitee would not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by the Indemnitee
(who hereby agrees to reimburse the Company) for all such amounts theretofore
paid; provided, however, that if the Indemnitee has commenced legal proceedings
in a court of competent jurisdiction pursuant to Section 5 below to secure
a determination that the Indemnitee should be indemnified under applicable law,
any determination made by the Reviewing Party that the Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and the
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or have
lapsed). The Indemnitee’s obligation to reimburse the Company for
Expense Advances pursuant to this Section 4 shall be unsecured and no
interest shall be charged thereon. The Reviewing Party shall be
selected by the Board, unless there has been a Change in Control, other than a
Change in Control which has been approved by a majority of the Company’s Board
who were directors immediately prior to such Change in Control, in which case
the Reviewing Party shall be the special independent counsel referred to in
Section 6 hereof.
5. Enforcement of Indemnification
Rights. If the Reviewing Party determines that the Indemnitee
substantively would not be permitted to be indemnified in whole or in part under
applicable law, or if the Indemnitee has not otherwise been paid in full
pursuant to Sections 2 and 3 above within 30 days after a written
demand has been received by the Company, the Indemnitee shall have the right to
commence litigation in any court in the State of Delaware having subject matter
jurisdiction thereof and in which venue is proper to recover the unpaid amount
of the demand (an “Enforcement
Proceeding”) and, if successful in whole or in part, the Indemnitee shall
be entitled to be paid any and all Expenses in connection with such Enforcement
Proceeding. The Company hereby consents to service of process for
such Enforcement Proceeding and to appear in any such Enforcement
Proceeding. Any determination by the Reviewing Party otherwise shall
be conclusive and binding on the Company and the Indemnitee.
6. Change in
Control. The Company agrees that if there is a Change in
Control of the Company, other than a Change in Control which has been approved
by a majority of the Company’s Board who were directors immediately prior to
such Change in Control, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under applicable law or
the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect
relating to indemnification for Indemnifiable Events, the Company shall seek
legal advice only from special independent counsel selected by the Indemnitee
and approved by the Company, which approval shall not be unreasonably
withheld. Such special independent counsel shall not have otherwise
performed services for the Company or the Indemnitee, other than in
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connection
with such matters, within the last five years. Such 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 the Indemnitee in an action to determine the
Indemnitee’s rights under this Agreement. Such counsel, among other
things, shall render its written opinion to the Company and the Indemnitee as to
whether and to what extent the Indemnitee would be permitted to be indemnified
under applicable law. The Company agrees to pay the reasonable fees
of the special independent counsel referred to above and to indemnify fully such
counsel against any and all expenses (including attorneys’ fees), claims,
liabilities and damages arising out of or relating to this Agreement or the
engagement of special independent counsel pursuant to this
Agreement.
7. Partial
Indemnity. If the Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
Expenses and Liabilities, but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify the Indemnitee for the portion thereof
to which the Indemnitee is entitled. Moreover, 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 or all Proceedings
relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, including dismissal without prejudice, the Indemnitee
shall be indemnified against all Expenses incurred in connection
therewith. In connection with any determination by the Reviewing
Party or otherwise as to whether the Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that the
Indemnitee is not so entitled.
8. Non-exclusivity. The
rights of the Indemnitee hereunder shall be in addition to any other rights the
Indemnitee may have under any statute, provision of the Company’s Certificate of
Incorporation or Bylaws, vote of stockholders or disinterested directors or
otherwise, both as to action in an official capacity and as to action in another
capacity while holding such office. To the extent that a change in
the DGCL permits greater indemnification by agreement than would be afforded
currently under the Company’s Certificate of Incorporation and Bylaws and this
Agreement, it is the intent of the parties hereto that the Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such
change.
9. Liability
Insurance. To the extent the Company maintains an insurance
policy or policies providing directors’ and officers’ liability insurance, the
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for any director
or officer of the Company.
10. Settlement of
Claims. The Company shall not be liable to indemnify the
Indemnitee under this Agreement (a) for any amounts paid in settlement of
any action or claim effected without the Company’s written consent, which
consent shall not be unreasonably withheld; or (b) for any judicial award
if the Company was not given a reasonable and timely opportunity, at its
expense, to participate in the defense of such action.
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11. No Presumption. For
purposes of this Agreement, to the fullest extent permitted by law, the
termination of any Proceeding, action, suit or claim, by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption that
the Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
12. Period of
Limitations. No legal action shall be brought and no cause of
action shall be asserted by or on behalf of the Company or any affiliate of the
Company against the Indemnitee, the Indemnitee’s spouse, heirs, executors or
personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, or such longer period as may be
required by state law under the circumstances, and any claim or cause of action
of the Company or its affiliate shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such period; provided,
however, that if any shorter period of limitations is otherwise applicable to
any such cause of action, such shorter period shall govern.
13. Consent and Waiver by Third
Parties. The Indemnitee hereby represents and warrants that he
or she has obtained all waivers and/or consents from third parties which are
necessary for his or her employment with the Company on the terms and conditions
set forth herein and to execute and perform this Agreement without being in
conflict with any other agreement, obligation or understanding with any such
third party. The Indemnitee represents that he or she is not bound by
any agreement or any other existing or previous business relationship which
conflicts with, or may conflict with, the performance of his or her obligations
hereunder or prevent the full performance of his or her duties and obligations
hereunder.
14. Amendment of this
Agreement. 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. Except as specifically provided herein, no failure to
exercise or any delay in exercising any right or remedy hereunder shall
constitute a waiver thereof.
15. Primacy of
Indemnification. Notwithstanding that the Indemnitee may have
certain rights to indemnification, advancement of expenses and/or insurance
provided by other persons (collectively, the “Other Indemnitors”), the
Company: (i) shall be the indemnitor of first resort (i.e., its
obligations to the Indemnitee are primary and any obligation of the Other
Indemnitors to advance expenses or to provide indemnification for the same
expenses or liabilities incurred by the Indemnitee are secondary);
(ii) shall required to advance the full amount of expenses incurred by the
Indemnitee and shall be liable for the full amount of all Expenses, without
regard to any rights the Indemnitee may have against any of the Other
Indemnitors; and (iii) irrevocably waives, relinquishes and releases the
Other Indemnitors for any and all claims against the Other Indemnitors for
contribution, subrogation or any other recovery of any kind in respect
thereof. No advancement or payment by the Other Indemnitors on behalf
of the Indemnitee with respect to any claim for which the Indemnitee has sought
indemnification from the corporation shall affect the immediately preceding
sentence, and the Other Indemnitors shall have a right of contribution and/or be
subrogated to the extent of such advancement or payment to all of the rights of
recovery of the Indemnitee against the Company. The Company and the
Indemnitee agree that the Other Indemnitors are express third party
beneficiaries of the terms of this Section 15.
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16. Subrogation. In the
event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of the Indemnitee (other
than against the Other Indemnitors), who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.
17. No Duplication of
Payments. Except as otherwise set forth in Section 15
above, the Company shall not be liable under this Agreement to make any payment
in connection with any claim made against Indemnitee to the extent the
Indemnitee has otherwise actually received payment (under any insurance policy,
Bylaw, vote, agreement or otherwise) of the amounts otherwise indemnifiable
hereunder.
18. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, and personal and legal
representatives. 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 the
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. This Agreement shall continue in
effect regardless of whether the Indemnitee continues to serve as a director or
officer of the Company or of any other enterprise at the Company’s
request.
19. Severability. The
provisions of this Agreement shall be severable in the event that any of the
provisions hereof (including any provision within a single section, paragraph or
sentence) is held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, and the remaining provisions shall remain enforceable
to the fullest extent permitted by law. Furthermore, to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of this Agreement containing any provision held to be
invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
20. Governing Law. This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware applicable to contracts made and to be performed
in such State without giving effect to the principles of conflicts of
laws.
21. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
22. Notices. All
notices, demands, and other communications required or permitted hereunder shall
be made in writing and shall be deemed to have been duly given if delivered by
hand, against receipt, or mailed, postage prepaid, certified or registered mail,
return receipt requested, and addressed to the Company at:
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Betawave
Corporation
Attn:
General Counsel
000
Xxxxxxx Xx., 00xx
Xxxxx
Xxx
Xxxxxxxxx, XX 00000
and to
the Indemnitee at:
________________
________________
________________
________________
Notice of
change of address shall be effective only when done in accordance with this
Section 22. All notices complying with this Section shall be deemed
to have been received on the date of delivery or on the third business day after
mailing.
IN
WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the day first set forth above.
THE
COMPANY:
BETAWAVE
CORPORATION
By:
Name:
Title:
INDEMNITEE:
Signature
Print
Name:
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