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EXHIBIT 10.29
DIRECTOR'S INDEMNIFICATION AGREEMENT
THIS DIRECTOR'S INDEMNIFICATION AGREEMENT ("Agreement") is made and
entered into as of _______, 1999 by and between ARTISTdirect, Inc., a Delaware
corporation (the "Company"), and _______________ ("Director").
R E C I T A L S
A. Director, as the [______________] and a member of the Board of
Directors of the Company, performs a valuable service in such capacity for the
Company;
B. The stockholders of the Company have adopted Bylaws (the
"Bylaws") providing for the indemnification of the officers, directors, agents
and employees of the Company to the maximum extent authorized by Section 145 of
the Delaware General Corporation Law, as amended (the "Delaware Law");
C. The Bylaws and the Delaware Law, by their non-exclusive nature,
permit contracts between the Company, its officers and the members of its Board
of Directors with respect to indemnification of such persons;
D. In accordance with the authorization as provided by the Delaware
Law, the Company has purchased and presently maintains or will shortly hereafter
purchase and thereafter maintain, a policy or policies of directors and officers
liability insurance ("D & O Insurance"), covering certain liabilities which may
be incurred by its directors and officers in the performance as directors of the
Company;
E. As a result of developments affecting the terms, scope and
availability of D & O Insurance, there exists general uncertainty as to the
extent of protection afforded members of the Board of Directors and officers of
the Company by such D & O Insurance and by statutory and Bylaw indemnification
provisions; and
F. In order to induce Director to continue to serve as [an executive
officer and] a member of the Board of Directors of the Company, the Company has
determined and agreed to enter into this contract with Director.
NOW, THEREFORE, in consideration of Director's continued service to
the Company after the date hereof, the parties hereto agree as follows:
1. Indemnity of Director. The Company hereby agrees to hold harmless
and indemnify Director to the fullest extent authorized or permitted by the
provisions of the Delaware Law, as may be amended from time to time, and by the
Bylaws as they exist as of the date hereof.
2. Additional Indemnity. Subject only to the exclusions set forth in
Section 3 hereof, the Company hereby further agrees to hold harmless and
indemnify Director:
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(a) against any and all expenses (including reasonable
attorneys' fees), witness fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by Director in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including an action by or in the right of the
Company) to which Director is, was or at any time becomes a party, or is
threatened to be made a party, by reason of the fact that Director is or was an
officer or director of the Company, or is or was serving or at any time serves
at the request of the Company as an officer or director of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise;
and
(b) otherwise to the fullest extent as may be provided to
Director by the Company under the non-exclusivity provisions of Section 6 of
Article VII of the Bylaws of the Company.
3. Limitations on Additional Indemnity. No indemnity pursuant to
Section 2 hereof shall be paid by the Company:
(a) except to the extent the aggregate of losses to be
indemnified thereunder exceeds the sum of such losses for which the Director is
indemnified pursuant to Section 1 hereof or pursuant to any directors and
officers liability insurance purchased and maintained by the Company;
(b) in respect to remuneration paid to Director if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(c) on account of any suit in which judgment is rendered
against Director for an accounting of profits, made from the purchase or sale by
Director 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;
(d) on account of Director's conduct which is finally adjudged
to have been knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct;
(e) on account of Director's conduct which is the subject of
an action, suit or proceeding described in Section 7(c)(ii) hereof;
(f) on account of any action, claim or proceeding (other than
a proceeding referred to in Section 8(b) hereof) initiated by the Director
unless such action, claim or proceeding was authorized in the specific case by
action of the Board of Directors; and
(g) if a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful (and, in this
respect, both the Company and Director 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
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is, therefore, unenforceable and that claims for indemnification should be
submitted to appropriate courts for adjudication).
4. Contribution. If the indemnification provided in Sections 1 and 2
hereof is unavailable by reason of a court decision described in Section 3(g)
hereof based on grounds other than any of those set forth in paragraphs (b)
through (f) of Section 3 hereof, then in respect of any threatened, pending or
completed action, suit or proceeding in which the Company is jointly liable with
Director (or would be if joined in such action, suit or proceeding), the Company
shall contribute to the amount of expenses (including reasonable attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred and paid or payable by Director in such proportion as is appropriate to
reflect (i) the relative benefits received by the Company on the one hand and
Director on the other hand from the transaction from which such action, suit or
proceeding arose, and (ii) the relative fault of the Company on the one hand and
of Director on the other 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 hand and
of Director 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 expenses,
judgments, fines or settlement amounts. The Company agrees that it would not be
just and equitable if contribution pursuant to this Section 4 were determined by
pro rata allocation or any other method of allocation which does not take
account of the foregoing equitable considerations.
5. Continuation of Obligations. All agreements and obligations of
the Company contained herein shall continue during the period Director is an
executive officer or director of the Company (or is or was serving at the
request of the Company as an executive officer or director of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) and shall continue thereafter so long as Director shall be subject
to any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of the fact that
Director was an executive officer or director of the Company or serving in any
other capacity referred to herein.
6. Notification and Defense of Claim. Not later than thirty (30)
days after receipt by Director of notice of the commencement of any action, suit
or proceeding, Director will, 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 relieve the Company
from any liability which it may have to Director otherwise than under this
Agreement. With respect to any such action, suit or proceeding as to which
Director notifies the Company of the commencement thereof:
(a) the Company will be entitled to participate therein
at its own expense;
(b) except as otherwise provided below, to the extent that it
may wish, the Company jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Director. After notice from
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the Company to Director of its election so as to assume the defense thereof, the
Company will not be liable to Director under this Agreement for any legal or
other expenses subsequently incurred by Director in connection with the defense
thereof other than reasonable costs of investigation or as otherwise provided
below. Director shall have the right to employ its counsel in such action, suit
or proceeding, but the fees and expenses of such counsel incurred after notice
from the Company of its assumption of the defense thereof shall be at the
expense of Director unless (i) the employment of counsel by Director has been
authorized by the Company, (ii) Director shall have reasonably concluded, based
on the advice of counsel, that there may be a conflict of interest between the
Company and Director 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 Director's separate
counsel shall be at the expense of the Company. The Company shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of the Company or as to which Director shall have made the conclusion
provided for in (ii) above; and
(c) the Company shall not be liable to indemnify Director
under this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. Company 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 Director without Director's written
consent. Neither the Company nor Director will unreasonably withhold its consent
to any proposed settlement.
7. Advancement and Repayment of Expenses.
(a) In the event that Director employs his own counsel
pursuant to Section 6(b)(i) through (iii) above, the Company shall advance to
Director, prior to any final disposition of any threatened or pending action,
suit or proceeding, whether civil, criminal, administrative or investigative,
any and all reasonable expenses (including legal fees and expenses) incurred in
investigating or defending any such action, suit or proceeding within ten (10)
days after receiving copies of invoices presented to Director for such expenses.
(b) Director agrees that Director will reimburse the Company
for all reasonable expenses paid by the Company in defending any civil or
criminal action, suit or proceeding against Director in the event and only to
the extent it shall be ultimately determined by a final judicial decision (from
which there is no right of appeal) that Director is not entitled, under the
provisions of the Delaware Law, the Bylaws, this Agreement or otherwise, to be
indemnified by the Company for such expenses.
(c) Notwithstanding the foregoing, the Company shall not be
required to advance such expenses to Director if Director (i) commences any
action, suit or proceeding as a plaintiff unless such advance is specifically
approved by a majority of the Board of Directors or (ii) is a party to an
action, suit or proceeding brought by the Company and approved by a majority of
the Board which alleges willful misappropriation of corporate assets by
Director, wilfull disclosure of confidential information in bad faith and in
violation of Director's fiduciary or contractual obligations to the Company, or
any other willful and deliberate breach in bad faith
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of Director's duty to the Company or its stockholders.
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8. Enforcement.
(a) The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on the Company
hereby in order to induce Director to continue as a director of the Company, and
acknowledges that Director is relying upon this Agreement in continuing in such
capacity.
(b) In the event Director is required to bring any action to
enforce rights or to collect moneys due under this Agreement and is successful
in such action, the Company shall reimburse Director for all Director's
reasonable fees and expenses in bringing and pursuing such action.
9. 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 Director, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
10. Non-Exclusivity of Rights. The rights conferred on Director by
this Agreement shall not be exclusive of any other right which Director may have
or hereafter acquire under any statute, provision of the Company's Certificate
of Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office.
11. Survival of Rights. The rights conferred on Director by this
Agreement shall continue after Director has ceased to be a director, officer,
employee or other agent of the Company and shall inure to the benefit of
Director's heirs, executors and administrators.
12. Severability. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any or
all of the provisions hereof shall be held to be invalid or unenforceable for
any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof or the obligation of the Company
to indemnify the Director to the full extent provided by the Bylaws or the
Delaware Law.
13. Governing Law; Venue and Jurisdiction. This Agreement shall be
interpreted and enforced in accordance with the laws of the State of Delaware,
without regard to the conflicts of law provisions thereof. The Company and
Director hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Court of Chancery of the State of Delaware (the "Delaware Court"),
and not in any other State or federal court in the United States of America or
any court in any other country, (ii) consent to submit to the exclusive
jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) waive any objection
to the laying of venue of any such action or proceeding in the Delaware Court,
and (iv) waive, and agree not to plead or to make, any claim that any such
action or proceeding brought in the Delaware Court has been brought in an
improper or otherwise
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inconvenient forum.
14. Binding Effect. This Agreement shall be binding upon Director
and upon the Company, its successors and assigns, and shall inure to the benefit
of Director, his heirs, personal representatives and assigns and to the benefit
of the Company, its successors and assigns.
15. Amendment and Termination. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on and as of the day and year first above written.
ARTISTdirect, Inc.
a Delaware corporation
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By: Xxxx X. Xxxxxx
Its Chief Executive Officer
DIRECTOR
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Name:
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