EXHIBIT 10.8
RESTATED INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 17th day
of May, 2002 between J2 Communications, a California corporation (the "Company")
and Xxxxx X. Xxxxxxx ("Indemnitee").
WITNESSETH THAT:
WHEREAS, Indemnitee performs a valuable service for the Company; and
WHEREAS, the Board of Directors of the Company having adopted the Second
Amended and Restated Articles of Incorporation (the "Certificate") permitting
the Board of Directors to indemnify certain agents and employees designated by
the Board of Directors (the "Officers") and directors (the "Directors") of the
Company; and
WHEREAS, the Certificate and Section 317 of the California General
Corporation Law, as amended ("Law"), permits the Company to indemnify its
Officers and Directors; and
WHEREAS, as a result of recent developments affecting the terms, scope
and availability of D & O Insurance there exists general uncertainty as to the
extent of protection afforded the Company's Officers and Directors by such D&O
Insurance and said uncertainty also exists under statutory and bylaw
indemnification provisions; and
WHEREAS, in recognition of past services and in order to induce
Indemnitee to continue to serve as an officer and/or a director of the Company,
the Company has determined and agreed to enter into this contract with
Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's continued service as an
Officer and/or a Director after the date hereof, the parties hereto agree as
follows:
1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless
and indemnity Indemnitee to the fullest extent authorized or permitted by the
provisions of the Law, as such may be amended from time to time, and Article IV
of the Certificate, as such may be amended. The benefits afforded hereby may not
be reduced at a subsequent date without the express written permission of the
Indemnitee. In furtherance of the foregoing indemnification, and without
limiting the generality thereof:
(a) 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 1(a) if, by reason of his Corporate Status (as
hereinafter defined), he is, or is threatened to be made, a party to or
participant in any Proceeding (as hereinafter defined) other than a
Proceeding by or in the right of the Company. Pursuant to this Section
1(a), Indemnitee shall be indemnified against all Expenses (as
hereinafter defined), judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection
with such Proceeding or any claim, issue or matter therein, if he acted
in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any
criminal Proceeding, had no reasonable cause to believe his conduct was
unlawful.
(b) Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this
Section 1(b) if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or participant in any Proceeding
brought by or in the right of the Company to procure a judgment in its
favor. Pursuant to this Section 1(b), Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by him or on his
behalf in connection with such Proceeding if be acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Company; provided, however, that, if applicable law so
provides, no indemnification against such Expenses shall be made in
respect of any claim, issue or matter in such Proceeding as to which
Indemnitee shall have been adjudged to be liable to the Company unless
and to the extent that the Superior Court of the State of California, or
the court in which such Proceeding shall have been brought or is
pending, shall determine that such indemnification may be made.
(c) 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 his Corporate
Status, a party to and is successful, on the merits or otherwise, in any
Proceeding, he shall be indemnified to the tiniest extent permitted by
law against 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 against all
Expenses actually and reasonably incurred by him or on his behalf in
connection with each successfully resolved claim, issue or matter. 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.
2. Additional Indemnity.
(a) Subject only to the exclusions set forth in Section 2(b)
hereof, the Company hereby further agrees to hold harmless and indemnify
Indemnitee against any and all Expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred by Indemnitee in
connection with any Proceeding (including an action by or on behalf of
the Company) to which Indemnitee is, was or at any time becomes a party,
or is threatened to be made a party, by reason of his Corporate Status;
provided, however, that with respect to actions by or on behalf of the
Company, indemnification of Indemnitee against
any judgments shall be made by the Company only as authorized in the
specific case upon a determination that Indemnitee acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company; and
(b) No indemnity pursuant to this Section 2 shall be paid by the
Company:
(i) In 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;
(ii) On account of any suit in which judgment is rendered
against Indemnitee for an accounting of profits made from the
purchase or sale by Indemnitee of securities of the Company
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;
(iii) On account of Indemnitee's conduct which is finally
adjudged to have been knowingly fraudulent or deliberately
dishonest, or to constitute willful misconduct; or
(iv) If a final decision by a court having jurisdiction in
the matter shall determine that such indemnification is not
lawful.
3. Contribution. If the indemnification provided in Sections 1 and 2 is
unavailable and may not be paid to Indemnitee for any reason other than those
set forth in paragraphs (i), (ii) and (iii) of Section 2(b), then in respect to
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
Expenses, judgments, fines and amounts paid in settlement 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 by the Indemnitee on the other hand from the transaction from which
such Proceeding arose, and (ii) the relative fault of the Company on the one
hand and of the Indemnitee on the other hand in connection with the events which
resulted in such Expenses, judgments, fines or settlement amounts, as well as
any other relevant equitable considerations. The relative fault of the Company
on the one band and of the Indemnitee on the other hand shall be determined by
reference to, among other things, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent the circumstances
resulting in such Expenses, judgments, fines or settlement amounts. The Company
agrees that it would not be just and equitable if contribution pursuant to this
Section 3 were determined by pro rata allocation or any other method of
allocation which does not take account of the foregoing equitable
considerations.
4. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith.
5. Advancement of Expenses. Notwithstanding any other provision of this
Agreement, the Company shall advance all reasonable Expenses incurred by or on
behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee's
Corporate Status 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 an undertaking by
or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately
be determined that Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this Section 5
shall be unsecured and interest free. Notwithstanding the foregoing, the
obligation of the Company to advance Expenses pursuant to this Section 5 shall
be subject to the condition that, if, when and to the extent that the Company
determines that Indemnitee would not be permitted to be indemnified under
applicable law, the Company shall be entitled to be reimbursed, within thirty
(30) days of such determination, by Indemnitee (who hereby agrees to reimburse
the Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Company that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to .reimburse the Company
for any advance of Expenses until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed).
6. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification (including, but not limited to, the
advancement of Expenses and contribution by the Company) under this
Agreement, Indemnitee shall submit to the Chief Executive Officer (if
Indemnitee is not then serving as the Chief Executive Officer) or Chief
Financial Officer 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 or any
Assistant 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 6(a) hereof, a determination,
if required by applicable law, with respect to Indemnitee's entitlement
thereto shall be made in the specific case:
(i) if a Change in Control (as hereinafter defined)
shall have
occurred, by Independent Counsel (as hereinafter defined) in a
written opinion to the Board of Directors, a copy of which shall
be delivered to Indemnitee (unless Indemnitee shall request that
such determination be made by the Board of Directors or the
stockholders, in which case the determination shall be made in
the manner provided in Clause (ii) below), or
(ii) if a Change in Control shall not have occurred, (A)
by the Board of Directors by a majority vote of a quorum
consisting of Disinterested Directors (as hereinafter defined),
or (B) if a quorum of the Board of Directors consisting of
Disinterested Directors is not obtainable or, even if
obtainable, said Disinterested Directors so direct, 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 said Disinterested Directors, by the
stockholders of the Company. If it is determined that Indemnitee
is entitled to indemnification, payment to Indemnitee shall be
made within ten (10) days after such determination. 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 Independent
Counsel, member of the Board of Directors, or stockholder of the
Company shall act reasonably and in good faith in making a
determination under the Agreement of the Indemnitee's
entitlement to indemnification. Any Expenses incurred by
Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company
(irrespective of the determination as to Indemnitee's
entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
(c) If the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 6(b) hereof, the
Independent Counsel shall be selected as provided in this Section 6(c).
If a Change in Control shall not have occurred, the Independent Counsel
shall be selected by the Board of Directors, and the Company shall give
written notice to Indemnitee advising him of the identity of the
Independent Counsel so selected. If a Change in Control shall have
occurred, the Independent Counsel shall be selected by Indemnitee
(unless Indemnitee shall request that such selection be made by the
Board of Directors, in which event the preceding sentence shall apply),
and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Company, as the case may be, may, within 10 days after
such written notice of selection shall have been given, deliver to the
Company or to Indemnitee, as the case may be, a written objection to
such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected
does not meet the requirements of "Independent Counsel" as defined in
Section 14 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and
timely objection, the person so selected shall act as Independent
Counsel. If a written objection is made and substantiated, the
Independent Counsel selected may not serve as Independent Counsel unless
and until such objection is withdrawn or a court has determined that
such objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section
6(a) hereof, no Independent Counsel shall have been selected and not
objected to, either the Company or Indemnitee may petition the Superior
Court of the State of California or other court of competent
jurisdiction for resolution of any objection which shall have been made
by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as independent Counsel of a person
selected by the court or by such other person as the court shall
designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel
under Section 6(b) hereof. The Company shall pay any and all reasonable
fees and expenses of Independent Counsel incurred by such Independent
Counsel in connection with acting pursuant to Section 6(b) hereof, and
the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 6(c), regardless of the manner in which such
Independent Counsel was selected or appointed. Upon the due commencement
of any judicial proceeding or arbitration pursuant to Section 8(a)(iii)
of this Agreement, Independent Counsel shall be discharged and relieved
of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).
(d) The Company shall not be required to obtain the consent of
the Indemnitee to the settlement of any Proceeding which the Company has
undertaken to defend if the Company assumes full and sole responsibility
for such settlement and the settlement grants the Indemnitee a complete
and unqualified release in respect of the potential liability.
7. 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 6(a) of this
Agreement, and the Company shall have the burden of proof to overcome
that presumption in connection with the making by any person, persons or
entity of any determination contrary to that presumption.
(b) If the person, persons or entity empowered or selected under
Section 5 of this Agreement to determine whether Indemnitee is entitled
to indemnification shall not have made a determination within thirty
(30) days after receipt by the
Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and
Indemnitee shall be entitled to such indemnification, absent
(i) 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, or
(ii) a prohibition of such indemnification under
applicable law; provided, however, that such 30 day period may be
extended for a reasonable time, not to exceed an additional
fifteen (15) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in
good faith requires such additional time for the obtaining or
evaluating documentation and/or information relating thereto; and
provided, further, that the foregoing provisions of this Section
7(b) shall not apply if the determination of entitlement to
indemnification is to be made by the stockholders pursuant to
Section 5(b) of this Agreement and if (A) within fifteen (15)
days after receipt by the Company of the request for such
determination the Board of Directors or the Disinterested
Directors, if appropriate, resolve to submit such determination
to the stockholders for their consideration at an annual meeting
thereof to be held within seventy-five (75) days after such
receipt and such determination is made thereat, or (B) a special
meeting of stockholders is called within fifteen (15) days after
such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after
having been so called and such determination is made thereat, or
(iii) if the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 6(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement (with or without court
approval), conviction, or upon a plea of nolo contendre or its
equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any
criminal Proceeding, that Indemnitee had reasonable cause to believe
that his conduct was unlawful.
(d) For purposes of any determination of good faith, Indemnitee
shall be deemed to have acted in good faith if Indemnitee's action is
based on the records or books of account of the Enterprise (as
hereinafter defined), including financial statements, or on information
supplied to Indemnitee by the Officers and Directors of the Enterprise
in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports
made to the Enterprise by an independent certified public accountant or
by an appraiser or other expert selected with reasonable care by the
Enterprise. In addition, the knowledge and/or actions, or failure to
act, of any director, officer, agent or employee of the Enterprise shall
not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement. The provisions of this Section
7(d) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed to have met
the applicable standard of conduct set forth in this Agreement.
8. Remedies of Indemnitee.
(a)In the event that:
(i) a determination is made pursuant to Section 6 of
this Agreement that Indemnitee is not entitled to
indemnification under this Agreement,
(ii) advancement of Expenses is not timely made pursuant
to Section 5of this Agreement,
(iii) no determination of entitlement to indemnification
shall have been made pursuant to Section 6(b) of this Agreement
within ninety (90) days after receipt by the Company of the
request for indemnification,
(iv) payment of indemnification is not made pursuant to
Section 3 or 4 of this Agreement within ten (10) days after
receipt by the Company of a written request therefor, or
(v) payment of indemnification is not made within ten
(10) days after a determination has been made that Indemnitee is
entitled to indemnification or such determination is deemed to
have been made pursuant to Section 6 or 7 of this Agreement,
Indemnitee shall be entitled to an adjudication in an
appropriate court of the State of California, or in any other
court of competent jurisdiction, of his entitlement to such
indemnification. 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 one hundred eighty (180) days following the date on which
Indemnitee first has the right to commence such proceeding
pursuant to this Section 8(a). The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in
arbitration.
(b) In the event that a determination shall have been made
pursuant to Section 6(b) of this Agreement that Indemnitee is not
entitled to indemnification, any judicial proceeding or arbitration
commenced pursuant to this Section 8 shall
be conducted in all respects as a de novo trial, or arbitration, on the
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination.
(c) If a determination shall have been made pursuant to Section
6(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 8, absent:
(i) 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, or
(ii) a prohibition of such indemnification under
applicable law.
(d) In the event that Indemnitee, pursuant to this Section 8,
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 against, any and all expenses (of the types
described in the definition of Expenses in Section 14 of this Agreement)
actually and reasonably incurred by him in such judicial adjudication or
arbitration, but only if he prevails therein. If it shall be determined
in said judicial adjudication or arbitration that Indemnitee is entitled
to receive part but not all of the indemnification sought, the expenses
incurred by Indemnitee in connection with such judicial adjudication or
arbitration shall be appropriately prorated. The Company shall indemnify
Indemnitee against any and all expenses and, if requested by Indemnitee,
shall (within ten (10) days after receipt by the Company of a written
request therefor) advance such expenses to Indemnitee, which are
incurred by Indemnitee in connection with any action brought by
Indemnitee to recover under any Directors' and Officers' liability
insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of expenses or insurance recovery, as the
case may be.
(e) The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 8
that the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of
this Agreement.
9. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification as provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee
may at anytime be entitled under applicable law, the Certificate, any
agreement, a vote of
stockholders or a resolution 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. To the
extent that a change in the Law, whether by statute or judicial
decision, permits greater indemnification than would be afforded
currently under the Certificate and this Agreement, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change. No right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy
or policies providing liability insurance for Directors, Officers,
employees, or agents or fiduciaries of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which such person serves at the request of the Company,
Indemnitee shall be covered by such policy or policies in accordance
with its or their terms to the maximum extent of the coverage available
fir any such director, officer, employee or agent under such policy or
policies. A minimum of One Million Dollars ($1,000,000) of insurance
shall be maintained at all times.
(c) 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; provided, however, the Company may not be
subrogated to any rights until Indemnitee has been paid in full all
amounts owed to him hereunder, or unless Indemnitee shall have secured
all benefits owing to him hereunder.
(d) The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the
extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
10. Exception to Right of Indemnification. Notwithstanding any other
provision of this Agreement, Indemnitee shall nor be entitled to indemnification
under this Agreement with respect to any Proceeding brought by Indemnitee, or
any claim therein, unless
(a) the bringing of such Proceeding or making of such claim
shall have been approved by the Board of Directors or
(b) such Proceeding is being brought by the Indemnitee to assert
his rights under this Agreement.
11. Duration of Agreement. All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is an officer
and/or a director of the Company (or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as Indemnitee shall be subject to any Proceeding (or any
proceeding commenced under Section 3 hereof) by reason of his Corporate Status,
whether or not he is acting or serving in any such capacity at the time any
liability or expense is incurred for which indemnification can be provided under
this Agreement. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors
(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), assigns, spouses, heirs, executors and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer and/or a director of the Company or
any other enterprise at the Company's request.
12. Security. The Company acknowledges and agrees that its obligations
to Indemnitee pursuant to this Agreement are secured by all of the Company's
assets pursuant to that certain Security Agreement dated as of May 17, 2002. To
the extent requested by the Indemnitee and approved by the Board of Directors,
the Company may at any time and from time to time provide additional security to
the Indemnitee for the Company's obligations hereunder through an irrevocable
bank line of credit, funded trust or other collateral. Any and all such
security, once provided to the Indemnitee, may not be revoked or released
without the prior written consent of the Indemnitee.
13. Enforcement.
(a) The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on it
hereby in order to induce Indemnitee to serve as an officer and/or a
director of the Company, and the Company acknowledges that Indemnitee is
relying upon this Agreement in serving as an officer and/or a director
of the Company.
(b) This Agreement constitutes the entire agreement between the
pates hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings, oral, written and implied,
between the parties hereto with respect to the subject matter hereof.
14. Definitions. For purposes of this Agreement:
(a) "Change in Control" means a change in control of the Company
occurring after the date of this Agreement of a nature that would
constitute a Change in Control under that certain Employment Agreement,
dated as of May
17, 2002 between the Company and Xxxxx X. Xxxxxxx
(b) "Corporate Status" describes the status of a person who is or
was a director, officer, employee or agent or fiduciary 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
in such capacity at the express request of the Company.
(c) "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; provided, however, that neither
Indemnitee nor Xxxxxx Xxxxxx shall be "Disinterested Directors"
hereunder, and both Indemnitee and Xxxxxx Xxxxxx shall recuse themselves
from any determinations made or to be made by the Board of Directors
pursuant to this Agreement.
(d) "Enterprise" shall mean the Company and any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise of which Indemnitee is or was serving at the express
written request of the Company as a director, officer, employee, agent
or fiduciary.
(e) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, fees of
accountants, 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, participating, or being or preparing
to be a witness in a Proceeding.
(f) "Independent Counsel" means a law firm of national
reputation, that is experienced in matters of California corporation law
and neither presently is, nor in the past five years has been, retained
to represent:
(i) the Company or Indemnitee in any matter including
with respect to matters concerning other indemnitees under
similar indemnification agreements, 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. Without
limiting the foregoing, the term "Independent Counsel" shall not
include Xxxxxxxxx Traurig LLP or any other law firm in which
Xxxx X. Xxxxxxxx is a partner or with which he is otherwise
affiliated or associated. The Company agrees to pay the
reasonable fees of the Independent Counsel referred to above and
to fully indemnify such counsel against any and all Expenses,
claims, liabilities and damages arising our of or relating to
this
Agreement or its engagement pursuant hereto.
(g) "Proceeding" includes any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual,
threatened or completed proceeding, whether brought by or in the right
of the Company or otherwise and whether civil, criminal, administrative
or investigative, in which Indemnitee was, is or will be involved as a
party or otherwise, by reason of the fact that Indemnitee is or was an
officer and/or a director of the Company, by reason of any action taken
by him or of any inaction on his part while acting as an officer and/or
a director of the Company, or by reason of the fact that he is or was
serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or
other enterprise; in each case whether or not he is acting or serving in
any such capacity at the time any liability or expense is incurred for
which indemnification can be provided under this Agreement, and in each
case whether or not based on any fact or facts occurring before, on or
after the date of this Agreement, including one pending before, on or
after the date of this Agreement, and excluding one initiated by an
Indemnitee pursuant to Section 8 of this Agreement to enforce his rights
under this Agreement.
15. Severability. If any provision or provisions of this Agreement shall
be held by a court of competent jurisdiction to be invalid, void, illegal or
otherwise 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 shall remain enforceable to the fullest extent permitted by
law; 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.
16. Modification and Waiver. No supplement, modification, termination 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.
17. Notice by Indemnitee. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification covered hereunder. The failure
to so notify the Company shall not
relieve the Company of any obligation which it may have to the Indemnitee under
this Agreement or otherwise.
18. Notices. All notices, requests, demands and other communications
hereunder stall 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:
Xxxxx X. Xxxxxxx
00000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
(b) If to the Company, to:
J2 Communications
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
or to such other address as may have been furnished in writing to Indemnitee by
the Company or in writing to the Company by Indemnitee, as the case may be.
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.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
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.
21. 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 California without application of the conflict of laws principles
thereof.
22. Gender. 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 on
and as of the day and year first above written.
COMPANY:
J2 COMMUNICATIONS,
a California corporation
By: _______________________________
Name: Xxxxx X. Xxxxxxx
Title: President
INDEMNITEE:
-----------------------------------
XXXXX X. XXXXXXX
