INDEMNIFICATION AGREEMENT
This
Agreement made and entered into this 23rd
day of
January, 2008, (the “Agreement”), by and between Xxxxxx Equipment, Inc., a
Delaware corporation (the “Company,” which term shall include, where
appropriate, any Entity (as hereinafter defined) controlled directly or
indirectly by the Company) and Xxxxxxx X. Xxxxx (the “Indemnitee”):
WHEREAS,
it is essential to the Company that it be able to retain and attract as
directors and officers the most capable persons available;
WHEREAS,
increased corporate litigation has subjected directors and officers to
litigation risks and expenses, and the limitations on the availability of
directors and officers liability insurance have made it increasingly difficult
for the Company to attract and retain such persons;
WHEREAS,
the Company’s By-laws require
it to indemnify its directors
and officers to the fullest extent permitted by law and permit it to make other
indemnification arrangements and agreements;
WHEREAS,
the Company desires to provide Indemnitee with specific contractual assurance
of
Indemnitee’s rights to full indemnification against litigation risks and
expenses (regardless, among other things, of any amendment to or revocation
of
the Company’s By-laws Certificate
of Incorporation or
any
change in the ownership of the Company or the composition of its Board of
Directors);
WHEREAS,
the Company intends that this Agreement provide Indemnitee with greater
protection than that which is provided by the Company’s By-laws; and
WHEREAS,
Indemnitee is relying upon the rights afforded under this Agreement in
becoming a
director and officer of the Company.
NOW,
THEREFORE, in consideration of the promises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:
1. Definitions.
(a) “Corporate
Status” describes the status of a person who is serving or has served
(i) as a director or officer of the Company, (ii) in
any capacity with respect to any employee benefit plan of the Company, or
(iii) as a director, partner, trustee, officer, employee, or agent of any
other Entity at the request of the Company. For purposes of subsection (iii)
of
this Section 1(a), if Indemnitee is
serving or has served as a director, partner, trustee, officer, employee or
agent of a Subsidiary, Indemnitee shall be deemed to be serving at the request
of the Company.
(b) “Entity”
shall mean any corporation, partnership, limited liability company, joint
venture, trust, foundation, association, organization or other legal
entity.
(c) “Expenses”
shall mean all fees, costs and expenses incurred by Indemnitee in connection
with any Proceeding (as defined below), including, without limitation,
attorneys’ fees, disbursements and retainers (including, without limitation, any
such fees, disbursements and retainers incurred by Indemnitee pursuant to
Sections 11 and 12(c) of this Agreement), fees and disbursements of expert
witnesses, private investigators and professional advisors (including, without
limitation, accountants and investment bankers), court costs, transcript costs,
fees of experts, travel expenses, duplicating, printing and binding costs,
telephone and fax transmission charges, postage, delivery services, secretarial
services, and other disbursements and expenses.
(d) “Indemnifiable
Expenses,” “Indemnifiable Liabilities” and “Indemnifiable Amounts” shall have
the meanings ascribed to those terms in Section 3(a) below.
(e) “Liabilities”
shall mean judgments, damages, liabilities, losses, penalties, excise taxes,
fines and amounts paid in settlement.
(f) “Proceeding”
shall mean any threatened, pending or completed claim, action, suit,
arbitration, alternate dispute resolution process, investigation, administrative
hearing, appeal, or any other proceeding, whether civil, criminal,
administrative, arbitrative or investigative, whether formal or informal,
including a proceeding initiated by Indemnitee pursuant to Section 11 of
this Agreement to enforce Indemnitee’s rights hereunder.
(g) “Subsidiary”
shall mean any corporation, partnership, limited liability company, joint
venture, trust or other Entity of which the Company owns (either directly or
through or together with another Subsidiary of the Company) either (i) a general
partner, managing member or other similar interest or (ii) (A) 50% or more
of
the voting power of the voting capital equity interests of such corporation,
partnership, limited liability company, joint venture or other Entity, or (B)
50% or more of the outstanding voting capital stock or other voting equity
interests of such corporation, partnership, limited liability company, joint
venture or other Entity.
2. Services
of Indemnitee.
In
consideration of the Company’s covenants and commitments hereunder, Indemnitee
agrees to serve as a director and officer of the Company. However, this
Agreement shall not impose any obligation on Indemnitee or the Company to
continue Indemnitee’s service to the Company beyond any period otherwise
required by law or by other agreements or commitments of the parties, if
any.
3. Agreement
to Indemnify.
The
Company agrees to indemnify Indemnitee as follows:
(a) Proceedings
Other Than By or In the Right of the Company. Subject to the exceptions
contained in Section 4(a) below, if Indemnitee was or is a party or is
threatened to be made a party to any Proceeding (other than an action by or
in
the right of the Company) by reason of Indemnitee’s Corporate Status, Indemnitee
shall be indemnified by the Company against all Expenses and Liabilities
incurred or paid by Indemnitee in connection with such Proceeding (referred
to
herein as “Indemnifiable Expenses” and “Indemnifiable Liabilities,”
respectively, and collectively as “Indemnifiable Amounts”).
(b) Proceedings
By or In the Right of the Company. Subject to the exceptions contained in
Section 4(b) below, if Indemnitee was or is a party or is threatened to be
made
a party to any Proceeding by or in the right of the Company by reason of
Indemnitee’s Corporate Status, Indemnitee shall be indemnified by the Company
against all Indemnifiable Expenses.
(c) Conclusive
Presumption Regarding Standard of Care.
In
making any determination required to be made under Delaware law with respect
to
entitlement to indemnification hereunder, the person, persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee submitted a request therefor in accordance
with Section 5 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.
(d) Additional
Indemnity.
In
addition to, and without regard to any limitations on, the indemnification
provided for in Section
3(a) and 3(b)
of this
Agreement, the Company shall and hereby does indemnify and hold harmless
Indemnitee against all Expenses and Liabilities incurred by him or on his behalf
if, by reason of his Corporate Status, he is, or is threatened to be made,
a
party to or participant in any Proceeding (including a Proceeding by or in
the
right of the Company), including, without limitation, all liability arising
out
of the negligence or active or passive wrongdoing of Indemnitee. The only
limitation that shall exist upon the Company’s obligations pursuant to this
Agreement shall be that the Company shall not be obligated to make any payment
to Indemnitee that is finally determined to be unlawful by the Court of Chancery
of the State of Delaware.
4. Exceptions
to Indemnification.
Indemnitee shall be entitled to indemnification under Sections 3(a) and
3(b) above in all circumstances other than with respect to any specific claim,
issue or matter involved in the Proceeding out of which Indemnitee’s claim for
indemnification has arisen, as follows:
(a) Proceedings
Other Than By or In the Right of the Company. If indemnification is requested
under Section 3(a) and it has been finally adjudicated by the Court of
Chancery of the State of Delaware that, in connection with such specific claim,
issue or matter, Indemnitee failed to act (i) in good faith and (ii) in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests
of
the Company, or, with respect to any criminal Proceeding, Indemnitee had
reasonable cause to believe that Indemnitee’s conduct was unlawful, Indemnitee
shall not be entitled to payment of Indemnifiable Amounts
hereunder.
(b) Proceedings
By or In the Right of the Company. If indemnification is requested under Section
3(b) and
(i)
it
has been finally adjudicated by the Court of Chancery of the State of Delaware
that, in connection with such specific claim, issue or matter, Indemnitee failed
to act (A) in good faith and (B) in a manner Indemnitee reasonably believed
to
be in or not opposed to the best interests of the Company, Indemnitee shall
not
be entitled to payment of Indemnifiable Expenses hereunder; or
(ii)
it
has been finally adjudicated by the Court of Chancery of the State of Delaware
that Indemnitee is liable to the Company with respect to such specific claim,
Indemnitee shall not be entitled to payment of Indemnifiable Expenses hereunder
with respect to such claim, issue or matter unless the Court of Chancery of
the
State of Delaware or another court in which such Proceeding was brought shall
determine upon application that, despite the adjudication of liability, but in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnification for such Indemnifiable Expenses which such court
shall deem proper; or
(iii)
it
has been finally adjudicated by the Court of Chancery of the State of Delaware
that Indemnitee is liable to the Company for an accounting of profits made
from
the purchase or sale by the Indemnitee of securities of the Company pursuant
to
the provisions of Section 16(b) of the Securities Exchange Act of 1934, the
rules and regulations promulgated thereunder and amendments thereto or similar
provisions of any federal, state or local statutory law, Indemnitee shall not
be
entitled to payment of Indemnifiable Expenses hereunder.
(c) Insurance
Proceeds. To the extent payment is actually made to the Indemnitee under a
valid
and collectible insurance policy in respect of Indemnifiable Amounts in
connection with such specific claim, issue or matter, Indemnitee shall not
be
entitled to payment of Indemnifiable Amounts hereunder except in respect of
any
excess beyond the amount of payment under such insurance.
5. Procedure
for Payment of Indemnifiable Amounts.
Indemnitee shall submit to the Company a written request specifying the
Indemnifiable Amounts for which Indemnitee seeks payment under Section 3 of
this Agreement and the basis for the claim. The Company shall pay such
Indemnifiable Amounts to Indemnitee promptly upon receipt of its request. At
the
request of the Company, Indemnitee shall furnish such documentation and
information as are reasonably available to Indemnitee and necessary to establish
that Indemnitee is entitled to indemnification hereunder.
6. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding
any other provision of this Agreement, and without limiting any such provision,
to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a
party to and is successful, on the merits or otherwise, in any Proceeding,
Indemnitee shall be indemnified against all Expenses and Liabilities incurred
by
Indemnitee or on Indemnitee’s 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 and
Liabilities incurred by Indemnitee or on Indemnitee’s behalf in connection with
each successfully resolved claim, issue or matter. For purposes of this
Agreement, the termination of any claim, issue or matter in such a Proceeding
by
dismissal, with or without prejudice, by reason of settlement, judgment, order
or otherwise, shall be deemed to be a successful result as to such claim, issue
or matter.
7. Effect
of Certain Resolutions.
Neither
the settlement or termination of any Proceeding nor the failure of the Company
to award indemnification or to determine that indemnification is payable shall
create a presumption that Indemnitee is not entitled to indemnification
hereunder. In addition, the termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not create a presumption that Indemnitee did not act in good faith and
in
a manner which Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company or, with respect to any criminal Proceeding,
had
reasonable cause to believe that Indemnitee’s action was unlawful.
8. Agreement
to Advance Expenses; Undertaking.
The
Company shall advance all Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding, including a Proceeding by or in the right of
the
Company, in which Indemnitee is involved by reason of such Indemnitee’s
Corporate Status within ten (10) calendar days after the receipt by the Company
of a written statement from Indemnitee requesting such advance or advances
from
time to time, whether prior to or after final disposition of such Proceeding.
To
the extent required by Delaware law, Indemnitee hereby undertakes to repay
any
and all of the amount of Indemnifiable Expenses paid to Indemnitee if it is
finally determined by that Indemnitee is not entitled under this Agreement
to
indemnification with respect to such Expenses. This undertaking shall be
unsecured and made without reference to Indemnitee’s ability to repay any such
amounts.
9. Procedure
for Advance Payment of Expenses.
Indemnitee shall submit to the Company a written request specifying the
Indemnifiable Expenses for which Indemnitee seeks an advancement under Section
8
of this Agreement, together with documentation evidencing that Indemnitee has
incurred such Indemnifiable Expenses. Payment of Indemnifiable Expenses under
Section 8 shall be made no later than ten (10) calendar days after the Company’s
receipt of such request.
10. 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
by
incurred by him or on his behalf in connection therewith.
11. Remedies
of Indemnitee.
(a) Right
to
Petition Court. In the event that Indemnitee makes a request for payment of
Indemnifiable Amounts under Sections 3 and 5 above or a request for an
advancement of Indemnifiable Expenses under Sections 8 and 9 above and the
Company fails to make such payment or advancement in a timely manner pursuant
to
the terms of this Agreement, Indemnitee may petition the Court of Chancery
of
the State of Delaware to enforce the Company’s obligations under this
Agreement.
(b) Burden
of
Proof. In any judicial proceeding brought under Section 11(a) above, the
Company shall have the burden of proving that Indemnitee is not entitled to
payment of Indemnifiable Amounts hereunder.
(c) Expenses.
The Company agrees to reimburse Indemnitee in full for any Expenses incurred
by
Indemnitee in connection with investigating, preparing for, litigating,
defending or settling any action brought by Indemnitee under Section 11(a)
above, or in connection with any claim or counterclaim brought by the Company
in
connection therewith, whether or not Indemnitee is successful in whole or in
part in connection with any such action.
(d) Failure
to Act Not a Defense. The failure of the Company (including its Board of
Directors or any committee thereof, independent legal counsel, or stockholders)
to make a determination concerning the permissibility of the payment of
Indemnifiable Amounts or the advancement of Indemnifiable Expenses under this
Agreement shall not be a defense in any action brought under Section 11(a)
above, and shall not create a presumption that such payment or advancement
is
not permissible.
12. Defense
of the Underlying Proceeding.
(a) Notice
by Indemnitee.
Indemnitee agrees to notify the Company promptly upon being served with any
summons, citation, subpoena, complaint, indictment, information, or other
document relating to any Proceeding which may result in the payment of
Indemnifiable Amounts or the advancement of Indemnifiable Expenses hereunder;
provided, however, that the failure to give any such notice shall not disqualify
Indemnitee from the right, or otherwise affect in any manner any right of
Indemnitee, to receive payments of Indemnifiable Amounts or advancements of
Indemnifiable Expenses unless the Company’s ability to defend in such Proceeding
is materially and adversely prejudiced thereby.
(b) Defense
by Company.
Subject
to the provisions of the last sentence of this Section 12(b) and of Section
12(c) below, the Company shall have the right to defend Indemnitee in any
Proceeding which may give rise to the payment of Indemnifiable Amounts
hereunder; provided, however that the Company shall notify Indemnitee of any
such decision to defend within ten (10) calendar days of receipt of notice
of
any such Proceeding under Section 12(a) above. The Company shall not, without
the prior written consent of Indemnitee, consent to the entry of any judgment
against Indemnitee or enter into any settlement or compromise which (i) includes
an admission of fault of Indemnitee or (ii) does not include, as an
unconditional term thereof, the full release of Indemnitee from all liability
in
respect of such Proceeding, which release shall be in form and substance
reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to
a
Proceeding brought by Indemnitee under Section 11(a) above or pursuant to
Section 20 below.
(c) Indemnitee’s
Right to Counsel.
Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to
which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i)
Indemnitee reasonably concludes that he or she may have separate defenses or
counterclaims to assert with respect to any issue which may not be consistent
with the position of other defendants in such Proceeding, (ii) a conflict of
interest or potential conflict of interest exists between Indemnitee and the
Company, or (iii) if the Company fails to assume the defense of such proceeding
in a timely manner, Indemnitee shall be entitled to be represented by separate
legal counsel of Indemnitee’s choice at the expense of the Company. In addition,
if the Company fails to comply with any of its obligations under this Agreement
or in the event that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any action, suit or
proceeding to deny or to recover from Indemnitee the benefits intended to be
provided to Indemnitee hereunder, Indemnitee shall have the right to retain
counsel of Indemnitee’s choice, at the expense of the Company, to represent
Indemnitee in connection with any such matter.
13. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to Indemnitee as follows:
(a) Authority.
The
Company has all necessary power and authority to enter into, and be bound by
the
terms of, this Agreement, and the execution, delivery and performance of the
undertakings contemplated by this Agreement have been duly authorized by the
Company.
(b) Enforceability.
This
Agreement, when executed and delivered by the Company in accordance with the
provisions hereof, shall be a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the enforcement of
creditors’ rights generally.
14. Insurance.
The
Company shall maintain a policy or policies of insurance with a reputable
insurance company providing the Indemnitee with coverage for losses from
wrongful acts in the aggregate amount of at least $7 million. For so long as
Indemnitee shall remain an director or officer of the Company and with respect
to any such prior service, in all policies of director and officer liability
insurance, Indemnitee shall be named as an insured in such a manner as to
provide Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company’s officers and directors.
15. Contract
Rights Not Exclusive.
The
rights to payment of Indemnifiable Amounts and advancement of Indemnifiable
Expenses provided by this Agreement shall be in addition to, but not exclusive
of, any other rights which Indemnitee may have at any time under applicable
law,
the Company’s Certificate of Incorporation or By-laws, or any other agreement,
vote of stockholders or directors (or a committee of directors), or otherwise,
both as to action in Indemnitee’s official capacity and as to action in any
other capacity as a result of Indemnitee’s serving as an director or officer of
the Company.
16. Successors.
This
Agreement shall be (a) binding upon all successors and assigns of the Company
(including any transferee of all or a substantial portion of the business,
stock
and/or assets of the Company and any direct or indirect successor by merger
or
consolidation or otherwise by operation of law) and (b) binding on and shall
inure to the benefit of the heirs, personal representatives, executors and
administrators of Indemnitee. This Agreement shall continue for the benefit
of
Indemnitee and such heirs, personal representatives, executors and
administrators after Indemnitee has ceased to have Corporate
Status.
17. Subrogation.
In the
event of any payment of Indemnifiable Amounts under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
contribution or recovery of Indemnitee against other persons, and Indemnitee
shall take, at the request of the Company, all reasonable action necessary
to
secure such rights, including the execution of such documents as are necessary
to enable the Company to bring suit to enforce such rights.
18. Change
in Law.
To the
extent that a change in Delaware law (whether by statute or judicial decision)
shall permit broader indemnification or advancement of expenses than is provided
under the terms of the By-laws and this Agreement, Indemnitee shall be entitled
to such broader indemnification and advancements, and this Agreement shall
be
deemed to be amended to such extent.
19. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such
a manner as to be effective and valid under applicable law, but if any provision
of this Agreement, or any clause thereof, shall be determined by the Court
of
Chancery of the State of Delaware to be illegal, invalid or unenforceable,
in
whole or in part, such provision or clause shall be limited or modified in
its
application to the minimum extent necessary to make such provision or clause
valid, legal and enforceable, and the remaining provisions and clauses of this
Agreement shall remain fully enforceable and binding on the
parties.
20. Indemnitee
as Plaintiff.
Except
as provided in Section 10(c) of this Agreement and in the next sentence,
Indemnitee shall not be entitled to payment of Indemnifiable Amounts or
advancement of Indemnifiable Expenses with respect to any Proceeding brought
by
Indemnitee against the Company, any Entity which it controls, any director
or
officer thereof, or any third party, unless the Board of Directors of the
Company has consented to the initiation of such Proceeding. This Section shall
not apply to counterclaims or affirmative defenses asserted by Indemnitee in
an
action brought against Indemnitee.
21. Modifications
and Waiver.
Except
as provided in Section 18 above with respect to changes in Delaware law
which broaden the right of Indemnitee to be indemnified by the Company, no
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by each 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 of this Agreement (whether or not similar), nor shall such
waiver constitute a continuing waiver.
22. General
Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (a) when delivered by hand,
(b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed
by certified or registered mail with postage prepaid, on the third business
day
after the date on which it is so mailed:
|
(i)
|
If
to Indemnitee, to:
|
|
|
Xxxxxxx
X. Xxxxx
|
||
|
00000
Xxxxxxx Xxxxxx
|
||
|
Xxxxx,
XX 00000
|
||
|
(ii)
|
If
to the Company, to:
|
|
|
Xxxxxx
Equipment, Inc.
|
||
|
0000
Xxxxxxx Xxxx, Xxxxx 000
|
||
|
Xxxxxxxxxxx,
Xxxxxxx X0X 0X0
|
||
|
Attn:
Xxxxxx Xxxxxx, CEO
|
or
to
such other address as may have been furnished in the same manner by any party
to
the others.
23. Governing
Law; Consent to Jurisdiction; Service of Process.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware without regard to its rules of conflict of laws. Each of
the
Company and the Indemnitee hereby irrevocably and unconditionally consents
to
submit to the exclusive jurisdiction of the Court of Chancery of the State
of
Delaware and the courts of the United States of America located in the State
of
Delaware (the "Delaware Courts") for any litigation arising out of or relating
to this Agreement and the transactions contemplated hereby (and agrees not
to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Delaware Courts
and agrees not to plead or claim in any Delaware Court that such litigation
brought therein has been brought in an inconvenient forum. Each of the parties
hereto agrees, (a) to the extent such party is not otherwise subject to service
of process in the State of Delaware, to appoint and maintain an agent in the
State of Delaware as such party's agent for acceptance of legal process, and
(b)
that service of process may also be made on such party by prepaid certified
mail
with a proof of mailing receipt validated by the United States Postal Service
constituting evidence of valid service. Service made pursuant to (a) or (b)
above shall have the same legal force and effect as if served upon such party
personally within the State of Delaware. For purposes of implementing the
parties' agreement to appoint and maintain an agent for service of process
in
the State of Delaware, each such party does hereby appoint The Corporation
Trust
Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000,
as
such agent and each such party hereby agrees to complete all actions necessary
for such appointment.
[signature
page follows]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
|
XXXXXX
EQUIPMENT, INC.
|
|
By:
/s/ XXXXXX XXXXXX
|
|
Xxxxxx
Xxxxxx, CEO
|
|
/s/
XXXXXXX X. XXXXX
|
|
Xxxxxxx
X. Xxxxx
|
