Exhibit 10.2
GENESIS MEDIA GROUP, INC.
FORM OF
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT, dated as of , is between GENESIS MEDIA
GROUP, INC., a Delaware corporation (the "COMPANY"), and _________________
("Indemnitee").
RECITALS
A. Indemnitee is a director or officer of the Company and in such
capacity is performing valuable services for the Company.
B. The Company and Indemnitee recognize the difficulty in obtaining
directors' and officers' liability insurance, the significant cost of such
insurance and the periodic reduction in the coverage of such insurance.
C. The Company and Indemnitee further recognize the substantial increase
in litigation subjecting directors and officers to expensive litigation risks at
the same time such liability insurance is being severely limited.
D. The Company has adopted and its stockholders have approved bylaws (the
"BYLAWS") providing for the indemnification of the Company's directors and
officers to the full extent permitted by Section 145 of the General Corporation
Law of Delaware (the "STATUTE").
E. The Bylaws and the Statute specifically provide that they are not
exclusive, and they thereby contemplate that contracts may be entered into
between the Company and its directors and officers with respect to
indemnification of such directors and officers.
F. To induce Indemnitee to serve or continue to serve the Company, the
Company desires to confirm the contract indemnification rights provided in the
Bylaws and agrees to provide Indemnitee with the benefits contemplated by this
Agreement.
AGREEMENTS
1. INDEMNITY OF INDEMNITEE
1.1. SCOPE
The Company agrees to hold harmless and indemnify Indemnitee to
the full extent permitted by law, notwithstanding that the basis for such
indemnification is not specifically enumerated in this Agreement, the
Company's Certificate of Incorporation, the Bylaws, any other statute or
otherwise. In the event of any change, after the date of this Agreement, in
any applicable law, statute or rule regarding the right of a Delaware
corporation to indemnify a member of its Board of Directors or an officer,
such change, to the extent it would expand Indemnitee's rights hereunder,
shall be included within Indemnitee's rights and the Company's obligations
hereunder, and, to the extent it would narrow Indemnitee's rights or the
Company's obligations hereunder, shall be excluded from this Agreement;
PROVIDED, HOWEVER, that any change required by applicable laws, statutes or
rules to be applied to this Agreement shall be so applied regardless of
whether the effect of such
change is to narrow Indemnitee's rights or the Company's obligations hereunder.
1.2. NONEXCLUSIVITY
The indemnification provided by this Agreement shall not be deemed
exclusive of any rights to which Indemnitee may be entitled under the Company's
Certificate of Incorporation, the Bylaws, any agreement, any vote of
stockholders or disinterested directors, the Statute or otherwise, whether as to
action in Indemnitee's official capacity or otherwise.
1.3. INCLUDED COVERAGE
If Indemnitee was or is made a party, or is threatened to be made a
party, to or is otherwise involved (including, without limitation, as a witness)
in any Proceeding (as defined below), the Company shall hold harmless and
indemnify Indemnitee from and against any and all losses, claims, damages,
liabilities or expenses, including, without limitation, attorneys' fees,
judgments, fines, ERISA excise taxes or penalties, witness fees, amounts paid
in settlement and other expenses incurred in connection with such Proceeding
(collectively, "DAMAGES").
1.4. DEFINITION OF PROCEEDING
For purposes of this Agreement, "PROCEEDING" shall mean any
completed, actual, pending or threatened action, suit, claim or proceeding,
whether civil, criminal, administrative or investigative (including an action by
or in the right of the Company) and whether formal or informal, in which
Indemnitee is, was or becomes involved by reason of the fact that Indemnitee is
or was a director, officer, employee, trustee or agent of the Company or that,
being or having been such a director, officer, employee, trustee or agent,
Indemnitee is or was serving at the request of the Company as a director,
officer, employee, trustee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise (collectively, a "RELATED COMPANY"),
including service with respect to an employee benefit plan, whether the basis of
such proceeding is alleged action (or inaction) by Indemnitee in an official
capacity as a director, officer, employee, trustee or agent or in any other
capacity while serving as a director, officer, employee, trustee or agent;
provided, however, that, except with respect to an action to enforce the
provisions of this Agreement, "Proceeding" shall not include any action, suit,
claim or proceeding instituted by or at the direction of Indemnitee, unless
such action, suit, claim or proceeding is or was authorized by the Company's
Board of Directors.
1.5. DETERMINATION OF ENTITLEMENT
In the event that a determination of Indemnitee's entitlement to
indemnification is required pursuant to Section 145(d) of the Statute or a
successor statute or pursuant to other applicable law, the appropriate decision
maker shall make such determination; provided, however, that Indemnitee shall
initially be presumed in all cases to be entitled to indemnification, that
Indemnitee may establish a conclusive presumption of any fact necessary to such
a determination by delivering to the Company a declaration made under penalty of
perjury that such fact is true and that, unless the Company shall deliver to
Indemnitee a written notice that Indemnitee is not entitled to indemnification
within 20 days after the Company's receipt of Indemnitee's initial written
request for indemnification, such determination shall conclusively be deemed to
have been made in favor of the Company's provision of indemnification, and that
the Company hereby agrees not to assert otherwise.
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1.6. CONTRIBUTION
If the indemnification provided under Section 1.1 is unavailable
by reason of a court decision, based on grounds other than any of those set
forth in paragraphs (b) through (d) of Section 4.1, then, in respect of any
Proceeding in which the Company is jointly liable with Indemnitee (or would
be if joined in such Proceeding), the Company shall contribute to the amount
of Damages (including attorneys' fees) actually and reasonably incurred and
paid or payable by Indemnitee 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 from the transaction from which such Proceeding arose
and (ii) the relative fault of the Company on the one hand and of Indemnitee
on the other in connection with the events that resulted in such Damages as
well as any other relevant equitable considerations. The relative fault of
the Company on the one hand and of Indemnitee on the other 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 Damages. The Company agrees that it would not
be just and equitable if contribution pursuant to this Section 1.6 were
determined by pro rata allocation or any other method of allocation that does
not take account of the foregoing equitable considerations.
1.7. SURVIVAL
The indemnification and contribution provided under this
Agreement shall apply to any and all Proceedings, notwithstanding that
Indemnitee has ceased to serve the Company or a Related Company, and shall
continue so long as Indemnitee shall be subject to any possible Proceeding,
whether civil, criminal or investigative, by reason of the fact that
Indemnitee was a director or officer of the Company or serving in any other
capacity referred to in Section 1.4 of this Agreement.
2. EXPENSE ADVANCES
2.1. GENERALLY
The right to indemnification of Damages conferred by Section 1 shall
include the right to have the Company pay Indemnitee's expenses in any
Proceeding as such expenses are incurred and in advance of such Proceeding's
final disposition (such right, an "EXPENSE ADVANCE").
2.2. CONDITIONS TO EXPENSE ADVANCE
The Company's obligation to provide an Expense Advance is subject
to the following conditions:
2.2.1. UNDERTAKING
If the Proceeding arose in connection with Indemnitee's service as a
director or officer of the Company (and not in any other capacity in which
Indemnitee rendered service, including service to any Related Company), then
Indemnitee or Indemnitee's representative shall have executed and delivered to
the Company an undertaking, which need not be secured and shall be accepted
without reference to Indemnitee's financial ability to make repayment, by or on
behalf of Indemnitee, to repay all Expense Advances if it shall ultimately be
determined by a final, unappealable decision rendered by a court having
jurisdiction over the parties that Indemnitee is not entitled to be indemnified
by the Company.
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2.2.2. COOPERATION
Indemnitee shall give the Company such information and cooperation as it
may reasonably request and as shall be within Indemnitee's power.
3. PROCEDURES FOR ENFORCEMENT
3.1. ENFORCEMENT
In the event that any claim for indemnity, whether an Expense
Advance or otherwise, is made hereunder and is not paid in full within 60 days
after written notice of such claim is delivered to the Company, Indemnitee may,
but need not, at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim (an "ENFORCEMENT ACTION").
3.2. PRESUMPTIONS IN ENFORCEMENT ACTION
In any Enforcement Action, the following presumptions (and
limitation on presumptions) shall apply:
(a) The Company expressly affirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereunder to
induce Indemnitee to continue as a director or officer of the Company;
(b) Neither (i) the failure of the Company (including the
Company's Board of Directors, independent or special legal counsel or the
Company's stockholders) to have made a determination prior to the
commencement of the Enforcement Action that indemnification of Indemnitee is
proper in the circumstances nor (ii) an actual determination by the Company,
its Board of Directors, independent or special legal counsel or stockholders
that Indemnitee is not entitled to indemnification shall be a defense to the
Enforcement Action or create a presumption that Indemnitee is not entitled to
indemnification hereunder; and
(c) If Indemnitee is or was serving as a director or officer of a
corporation of which a majority of the shares entitled to vote in the election
of its directors is held by the Company or in an Indemnitee or management
capacity in a partnership, joint venture, trust or other enterprise of which the
Company or a wholly owned subsidiary of the Company is a general partner or has
a majority ownership, then such corporation, partnership, joint venture, trust
or other enterprise shall conclusively be deemed a Related Company and
Indemnitee shall conclusively be deemed to be serving such Related Company at
the Company's request.
3.3. ATTORNEYS' FEES AND EXPENSES FOR ENFORCEMENT ACTION
In the event Indemnitee is required to bring an Enforcement Action,
the Company shall pay all of Indemnitee's fees and expenses in bringing and
pursuing the Enforcement Action (including attorneys' fees at any stage,
including on appeal); provided, however, that the Company shall not be required
to provide such payment for such attorneys' fees or expenses if a court of
competent jurisdiction determines that each of the material assertions made by
Indemnitee in such Enforcement Action was not made in good faith.
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4. LIMITATIONS ON INDEMNITY; MUTUAL ACKNOWLEDGMENT
4.1. LIMITATIONS ON INDEMNITY
No indemnity pursuant to this Agreement shall be provided by the Company:
(a) On account of any suit in which a final, unappealable
judgment is rendered against Indemnitee for an accounting of profits made
from the purchase or sale by Indemnitee of securities of the Company in
violation of the provisions of Section 16(b) of the Securities Exchange Act
of 1934, as amended;
(b) For Damages that have been paid directly to Indemnitee by an
insurance carrier under a policy of directors' and officers' liability insurance
maintained by the Company;
(c) With respect to remuneration paid to Indemnitee if it
shall be determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(d) On account of Indemnitee's conduct which is finally
adjudged to have been intentional misconduct, a knowing violation of law, a
violation of Section 174 of the Statute or a transaction from which
Indemnitee derived an improper personal benefit; or
(e) If a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
4.2. SEC UNDERTAKING
Indemnitee understands and acknowledges that the Company may be
required in the future to undertake with the Securities and Exchange Commission
(the "SEC") to submit in certain circumstances the question of indemnification
to a court for a determination of the Company's right under public policy to
indemnify Indemnitee.
5. NOTIFICATION AND DEFENSE OF CLAIM
5.1. NOTIFICATION
Promptly after receipt by Indemnitee of notice of the
commencement of any Proceeding, Indemnitee shall, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company of the commencement thereof; but the omission so to notify the
Company will not, however, relieve the Company from any liability which it
may have to Indemnitee under this Agreement unless and only to the extent
that such omission can be shown to have prejudiced the Company's ability to
defend the Proceeding.
5.2. DEFENSE OF CLAIM
With respect to any such Proceeding as to which Indemnitee notifies
the Company of the commencement thereof:
(a) The Company may participate therein at its own expense;
(b) The Company, jointly with any other indemnifying party
similarly notified, may assume the defense thereof, with counsel satisfactory to
Indemnitee. After notice from the Company to Indemnitee of its election so to
assume the defense thereof, the Company shall not be liable to
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Indemnitee under this Agreement for any legal or other expenses (other than
reasonable costs of investigation) subsequently incurred by Indemnitee in
connection with the defense thereof unless (i) the employment of counsel by
Indemnitee has been authorized by the Company, (ii) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company (or any other person or persons included in the joint defense) and
Indemnitee in the conduct of the defense of such action, or (iii) the Company
shall not, in fact, have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of counsel shall be at
the Company's expense. The Company shall not be entitled to assume the
defense of any Proceeding brought by or on behalf of the Company or as to
which Indemnitee shall have reasonably made the conclusion provided for in
(ii) above;
(c) The Company shall not be liable to Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding effected without
its written consent;
(d) The Company shall not settle any action or claim in any
manner that would impose any penalty or limitation on Indemnitee without
Indemnitee's written consent; and
(e) Neither the Company nor Indemnitee shall unreasonably
withhold its consent to any proposed settlement, provided that Indemnitee may
withhold consent to any settlement that does not provide a complete release
of Indemnitee.
6. SEVERABILITY
Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or to fail to do any act in
violation of applicable law. The Company's inability, pursuant to court
order, to perform its obligations under this Agreement shall not constitute a
breach of this Agreement. The provisions of this Agreement shall be
severable, as provided in this Section 6, and if this Agreement or any
portion hereof shall be invalidated on any ground by any court of competent
jurisdiction, the Company shall nevertheless indemnify or make contribution
to Indemnitee to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated, and the balance of this
Agreement not so invalidated shall be enforceable in accordance with its
terms.
7. GOVERNING LAW; BINDING EFFECT; AMENDMENT AND TERMINATION
(a) This Agreement shall be interpreted and enforced in
accordance with the laws of Delaware.
(b) This Agreement shall be binding on Indemnitee and on the
Company and its successors and assigns (including any transferee of all or
substantially all of its assets and any successor by merger or otherwise by
operation of law), and shall inure to the benefit of Indemnitee and Indemnitee's
heirs, personal representatives and assigns and to the benefit of the Company
and its successors and assigns. The Company shall not effect any sale of
substantially all of its assets, merger, consolidation or other reorganization
in which it is not the surviving entity, unless the surviving entity agrees in
writing to assume all such obligations of the Company under this Agreement.
(c) No amendment, modification, termination or cancellation of
this Agreement shall be effective unless in writing signed by both parties
hereto.
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Exhibit 10.2
8. NOTICES
All notices, claims and other communications hereunder shall be in writing
and made by hand delivery, registered or certified mail (postage prepaid, return
receipt requested), facsimile or overnight air courier guaranteeing next-day
delivery:
(a) If to the Company, to: with copies to:
Genesis Media Group, Inc. Genesis Media Group, Inc.
00000 Xxxxxxx Xxxxxxxxx 0000 Xxxxx Xxxxxxxx Xxxxx #0000
Xxxxxx Xxxx, XX 00000-0000 Xxxxx, Xxxxxxx 00000
Attn: Ramy El-Batrawi Attn: Ramy El-Batrawi
and:
Nida & Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
(b) If to Indemnitee, to the address specified on the last
page of this Agreement or to such other address as either party may from time
to time furnish to the other party by a notice given in accordance with the
provisions of this Section 8. All such notices, claims and communications
shall be deemed to have been duly given if (i) personally delivered, at the
time delivered, (ii) mailed, five days after dispatched, (iii) sent by
facsimile transmission, upon confirmation of receipt, and (iv) sent by any
other means, upon receipt.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on and as of the day and year first above written.
GENESIS MEDIA GROUP, INC.,
a Delaware corporation
By: ___________________________________
Name: Ramy El-Batrawi
Title: President
INDEMNITEE:
By: ___________________________________
Name: __________________________________
Address:________________________________
________________________________
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