EXHIBIT 10.7
FORM OF
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT dated as of May 20, 2005, between CENUCO,
INC., a Delaware corporation (the "Company") and ___________ ("Indemnitee").
A. At the request of the Company, Indemnitee is serving or has agreed
to serve as an officer and/or director and/or employee of one or more
Corporations (as defined below), or otherwise as an Agent (as defined below) of
the Company; and
B. Indemnitee is willing to serve, or to continue to serve, and may
take on additional service for or on behalf of the Company and its Affiliates
(as defined below), on the condition that he is indemnified as provided in this
Agreement; and
C. In recognition of Indemnitee's need for substantial protection
against personal liability in connection with his service, the Company wishes to
provide for the indemnification of, and the advancing of expenses to Indemnitee,
to the full extent permitted by applicable law and in accordance with the terms
and conditions of this Agreement.
The parties, intending to be legally bound, agree as follows:
1. Certain Definitions.
"Affiliate" shall mean any entity (including, without limitation, any
employee benefit plan or trust) controlling, controlled by or under common
control with the Company.
"Agent" shall mean a person who serves in the capacity of director,
officer, employee, agent, trustee, fiduciary, joint venturer, partner, manager
or other official of the Corporation or an Affiliate of the Corporation, either
at the request of, for the convenience of, or otherwise to benefit the
Corporation or an Affiliate of the Corporation.
"Corporation" shall mean, as the case may be, the Company, any
Affiliate (including any subsidiary corporation or limited liability company) of
the Company and any other entity for which Indemnitee at any time serves as an
Agent. "Corporation" shall include all predecessors of the Company or any
Affiliates by merger, sale of assets transaction or otherwise.
"Determining Entity" shall mean the entity making the determination in
accordance with Section 5(b) as to whether Indemnitee is entitled to
indemnification hereunder.
"Disinterested Director" shall mean a director of the Company who is
not or was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.
"Expenses" shall include all direct and indirect costs (including,
without limitation, attorneys' fees, retainers, court costs, transcripts, fees
of experts, accountants' fees, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees
and all other disbursements or out-of-pocket expenses actually and reasonably
incurred in connection with either the investigation, defense, settlement or
appeal of a Proceeding or establishing or enforcing a right to indemnification
or advancement of Expenses under this Agreement, applicable law or otherwise;
provided, however, that "Expenses" shall not include any Liabilities.
"Final Adverse Determination" shall mean a determination that
Indemnitee is not entitled to indemnification made pursuant to Section 5 and (i)
a final, nonappealable adjudication in a court of competent jurisdiction shall
have denied Indemnitee's right to indemnification hereunder, or (ii) Indemnitee
shall have failed to file a complaint in a court of competent jurisdiction for a
period of 60 days after the determination made pursuant to Section 5.
"Indemnification Period" shall mean the time period during which
Indemnitee serves as an Agent of the Corporation (including all service prior to
the date of this Agreement) and any subsequent period during which Indemnitee is
potentially subject to any possible Proceeding.
"Independent Legal Counsel" shall mean a law firm or a member of a law
firm selected by the Company and approved by Indemnitee (which approval shall
not be unreasonably withheld) that neither currently is nor in the past five
years has been retained to represent (i) the Company or any Affiliates in any
material matter, or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder or under any similar agreement to which the
Company or any of its Affiliates is a party.
"Liabilities" shall mean liabilities of any type whatsoever, including,
without limitation, any judgments, fines, penalties and amounts paid in
settlement (including all interest assessments and other charges paid or payable
in connection with or in respect of such judgments, fines, penalties or amounts
paid in settlement) arising out of or resulting from any Proceeding.
"Proceeding" shall mean any threatened, pending or completed action,
claim, suit, arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding (whether civil, criminal,
administrative or investigative and whether formal or informal) to which
Indemnitee is made a party or is threatened to be made a party, or in connection
with which he is called as a witness or is asked to provide documentary evidence
or otherwise participate, by reason of the fact that he is or was an Agent on or
after the date of this Agreement or by reason of any actual or alleged acts or
omissions of Indemnitee in his capacity as an Agent.
2. Indemnification. Subject to the limitations set forth in this
Section and in Section 6, the Company hereby agrees to indemnify Indemnitee and
hold him harmless from and against Expenses and Liabilities with respect to any
Proceeding to the fullest extent not prohibited by applicable law in effect on
the date of this Agreement or as such law may from time to time be amended (but,
in the case of any such amendment, only to the extent such amendment permits the
Company to provide broader indemnification rights than such law permitted the
Company to
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provide before such amendment). The right to indemnification conferred under
this Agreement shall be presumed to have been relied upon by Indemnitee in
serving or continuing to serve the Company and its Affiliates as an Agent and
shall be enforceable as a contract right. Without in any way diminishing the
scope of the indemnification provided by this Section 2, the Company agrees to
indemnify Indemnitee if and whenever he is or was a party or is threatened to be
made a party to any Proceeding, including, without limitation, any such
Proceeding brought by or in the right of the Corporation, against Expenses and
Liabilities incurred by Indemnitee or on his behalf in connection with such
Proceeding. In addition to, and not as a limitation of, the foregoing, the
rights of indemnification of Indemnitee provided under this Agreement shall
include those rights set forth in Section 3.
3. Advancement of Expenses. Expenses incurred by Indemnitee shall be
paid by the Company within 30 days after receipt by the Company of a written
request for an advance of Expenses, if Indemnitee shall undertake in writing to
repay any such advances in the event that it is ultimately determined that
Indemnitee is not entitled to indemnification under this Agreement or otherwise.
Each written request for an advancement of any Expenses under this Section 3
shall contain reasonable detail of the Expenses incurred by Indemnitee.
4. Presumptions and Effect of Certain Proceedings. Upon making a
request for indemnification, Indemnitee shall be presumed to be entitled to
indemnification under this Agreement. The Determining Entity shall be deemed to
have determined that Indemnitee is entitled to such indemnification unless,
within the time specified in Section 5(a)(i) the Determining Entity shall
affirmatively determine in good faith and in accordance with Section 5(b), based
upon a preponderance of the facts known at the time, that Indemnitee is not
entitled to indemnification, and (ii) Indemnitee shall have received written
notice within such period of such determination. The notice to Indemnitee
specified in the preceding sentence shall disclose with particularity the facts
in support of the Determining Entity's determination. The termination of any
Proceeding by judgment, order, settlement, arbitration award or conviction, or
upon a plea of nolo contendere or its equivalent, shall not affect this
presumption or establish a presumption with regard to any factual matter
relevant to determining Indemnitee's rights to indemnification hereunder.
5. Procedure for Determination of Entitlement to Indemnification. (a)
Whenever Indemnitee believes that he is entitled to indemnification pursuant to
this Agreement, Indemnitee shall submit a written request for indemnification to
the Company. Any request for indemnification shall include reasonably sufficient
documentation or information reasonably available to Indemnitee for the
determination of entitlement to indemnification. In any event, Indemnitee shall
submit his claim for indemnification with respect to any Proceeding for which
Indemnitee requests indemnification not later than three months after any
judgment, order, settlement, dismissal, arbitration award, conviction,
acceptance of a plea of nolo contendere or its equivalent, or final
determination in connection with such Proceeding, whichever is the later to
occur. The president, secretary, general counsel or other appropriate officer of
the Company shall, promptly upon receipt of Indemnitee's request for
indemnification, advise the Board of Directors of the Company in writing that
Indemnitee has made such request. Determination of Indemnitee's entitlement to
indemnification for Expenses and for Liabilities not previously reimbursed shall
be made not later than 30 days after the Company's receipt of his written
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request for such indemnification. Payment of Expenses and Liabilities entitled
to indemnification shall be made within 10 days after such determination.
(b) Determination of Indemnitee's entitlement to
indemnification shall be made:
(i) by the Board of Directors of the Company by a
majority vote of a quorum consisting of Disinterested
Directors; or
(ii) if such a quorum cannot be obtained, by majority
vote of a committee duly designated by the Board of Directors
of the Company (in which designation directors who are parties
to the Proceeding may participate), consisting solely of two
or more Disinterested Directors; or
(iii) if such a quorum cannot be obtained and such a
committee cannot be designated, if the Board of Directors of
the Company otherwise elects, or if the Corporation has been
dissolved or liquidated, by Independent Legal Counsel.
6. Limitations on Indemnification. Notwithstanding anything in this
Agreement to the contrary, the Company shall not be obligated under this
Agreement to make any payment to Indemnitee to the extent that:
(a) Payment is actually made to Indemnitee of amounts
otherwise payable hereunder under any insurance policy or is made to
Indemnitee by the Corporation or an Affiliate of the Corporation
otherwise than pursuant to this Agreement;
(b) A court of competent jurisdiction in a final,
nonappealable judgment determines that Indemnitee is not entitled to
such payment; or
(c) The payment is for Liabilities in connection with
Proceedings settled without the Company's consent, which consent shall
not be unreasonably withheld.
7. Fees and Expenses of Independent Legal Counsel. The Company agrees
to pay the reasonable fees and expenses of any Independent Legal Counsel
retained to make a determination of Indemnitee's entitlement to indemnification
pursuant to Section 5(b).
8. Modification and Termination. No modification or termination of this
Agreement shall be binding unless executed in writing by the parties. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions (whether or not similar), nor shall any such
waiver constitute a continuing waiver.
9. Notice by Indemnitee and Defense of Claim. Indemnitee shall, as
promptly as practicable, notify the Company in writing upon being served with
any summons, subpoena, complaint, indictment, information or other document
relating to any matter, whether civil, criminal, administrative or
investigative, but the omission so to notify the Company will not relieve the
Company from any liability that it may have to Indemnitee if and to the extent
that such omission does not demonstrably prejudice its rights. If such omission
does prejudice its
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rights, the Company will be relieved from liability only to
the extent of such demonstrable prejudice. With respect to any Proceeding for
which Indemnitee seeks indemnification:
(a) The Corporation and the Company will be entitled to
participate therein at their own expense; and
(b) The Corporation and/or the Company will be entitled to
assume the defense thereof, with counsel reasonably satisfactory to
Indemnitee; provided, however, that the Corporation and/or the Company
shall not be entitled to assume the defense of any Proceeding if
Indemnitee shall have reasonably concluded that there may be a conflict
of interest between the Corporation and/or the Company and Indemnitee
with respect to such Proceeding. After notice from the Corporation or
the Company to Indemnitee of its election to assume the defense
thereof, the Corporation and/or the Company will not be liable to the
Indemnitee under this Agreement for any Expenses subsequently incurred
by Indemnitee in connection with the defense thereof, other than
reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ his own counsel in such
Proceeding but the fees and expenses of such counsel incurred after
notice from the Corporation or the Company of its assumption of the
defense thereof shall be at the expense of Indemnitee, unless:
(i) The employment of counsel by Indemnitee has been
authorized by the Company; or
(ii) Neither the Corporation nor the Company have in
fact employed counsel to assume the defense in such Proceeding
or shall not in fact have assumed such defense and be acting
in connection therewith with reasonable diligence;
in each of which cases the fees and expenses of such counsel shall be an Expense
subject to advance payment and indemnification under this Agreement by the
Company.
(c) Neither the Corporation nor the Company shall settle any
Proceeding in any manner that would impose any cost, penalty or limitation on
Indemnitee without Indemnitee's written consent; provided, however, that
Indemnitee shall not unreasonably withhold his consent to any proposed
settlement.
10. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if (a) delivered by hand and
receipted for by the party to whom the notice or other communication shall have
been directed, or (b) mailed by certified or registered or express mail with
postage prepaid, or (c) sent by prepaid recognized overnight courier,
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If to the Company, to:
Cenuco, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
If to Indemnitee, to:
---------------------
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or to such other address as may have been furnished in writing to the other
party as provided in this Section. Notices shall be effective only upon receipt.
11. Nonexclusivity. The rights of Indemnitee hereunder shall not be
deemed exclusive of any other rights to which Indemnitee may be entitled under
the corporation law of the jurisdiction of incorporation of the Corporation, the
Corporation's Certificate of Incorporation or By-laws, or any agreements, vote
of stockholders, resolution of the Board of Directors, or otherwise, and to the
extent that during the Indemnification Period the rights of the then existing
directors and officers are more favorable to such directors or officers than the
rights currently provided to Indemnitee thereunder or under this Agreement,
Indemnitee shall be entitled to the full benefit of such more favorable rights.
12. Binding Effect; Duration and Scope of Agreement. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties and their respective successors and assigns (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), legatees,
distributees and personal and legal representatives. This Agreement shall
continue in effect during the Indemnification Period, regardless of whether
Indemnitee continues to serve as an Agent.
13. Severability. If any provision or provisions of this Agreement (or
any portion thereof) shall be held to be invalid, illegal or unenforceable for
any reason whatsoever:
(a) The validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or
impaired thereby; and
(b) To the fullest extent legally possible, the provisions of
this Agreement shall be construed so as to give effect to the intent of
any provision held invalid, illegal or unenforceable.
14. Governing Law. This Agreement is entered into in, and shall be
governed by and construed and enforced in accordance with the laws of, the State
of New York, without regard to
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its principles of conflicts of laws, and to the extent applicable to a
Corporation, the corporate or limited liability company law of the state of its
organization.
15. Representations and Warranties of the Company. The Company
represents and warrants that this Agreement has been duly authorized and validly
executed and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
16. Entire Agreement. This Agreement represents the entire agreement
between the parties with respect to its subject matter, and there are no other
oral or written agreements or understandings between the parties with respect to
the subject matter of this Agreement, except as provided in Section 11. If a
dispute arises under this Agreement, the parties agree that proper jurisdiction
and venue for the resolution of any such dispute shall be the state and federal
courts located in New York, New York and, in addition, as to any Corporation
incorporated in the State of Delaware, the State of Delaware. The parties each
irrevocably submit to the jurisdiction of such courts. Each party irrevocably
waives any objection which it may have based upon improper venue or forum
nonconveniens to the conduct of any proceeding in any such court, and
irrevocably waives personal service of any process upon it, and consents that
all such service of process may be made in the manner provided in Section 10.
17. No Employment Contract. This Agreement does not constitute a
contract of employment between Indemnitee and the Company or any Affiliate.
18. Counterparts. This Agreement may be executed in any number of
original or facsimile counterparts, each of which shall be deemed an original
and all of which together shall constitute but one and the same instrument.
Facsimile signatures on this Agreement shall be valid and effective for all
purposes.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed individually or by its respective duly authorized officer
as of the date first written above.
CENUCO, INC.
By:
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Name: Xxxxxx Xxxxxxxxx
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Title: Chief Executive Officer
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INDEMNITEE
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