INDEMNIFICATION AGREEMENT
Exhibit 10.9
THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as of [ ], 2008
between Liberty Lane Acquisition Corp., a Delaware corporation (the “Company”), and [ ] (the
“Indemnitee”).
WHEREAS, it is essential to the Company to retain and attract as directors and officers the
most capable persons available;
WHEREAS, Indemnitee is a director and/or officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of public companies in today’s environment;
WHEREAS, basic protection against undue risk of personal liability of directors and officers
heretofore has been provided through insurance coverage providing reasonable protection at
reasonable cost, and Indemnitee has relied on the availability of such coverage; but as a result of
substantial changes in the marketplace for such insurance it has become increasingly more difficult
to obtain such insurance on terms providing reasonable protection at reasonable cost;
WHEREAS, the By-Laws of the Company and the Certificate of Incorporation of the Company
require the Company to indemnify and advance expenses to its directors and officers to the fullest
extent permitted by law and the Indemnitee has been serving and continues to serve as a director or
officer of the Company in part in reliance on such By-Laws and Certificate of Incorporation;
WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance the Indemnitee’s continued service to the Company in an effective
manner, the increasing difficulty in obtaining satisfactory director and officer liability
insurance coverage, and the Indemnitee’s reliance on the aforesaid By-Laws and Certificate of
Incorporation, and in part to provide the Indemnitee with specific contractual assurance that the
protection promised by such By-Laws and Certificate of Incorporation will be available to
Indemnitee (regardless of, among other things, any amendment to or revocation of such By-Laws or
Certificate of Incorporation or any change in the composition of the Company’s Board of Directors
or acquisition transaction relating to the Company), the Company wishes to provide in this
Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest
extent (whether partial or complete) permitted by law and as set forth in this Agreement, and, to
the extent insurance is maintained, for the continued coverage of Indemnitee under the Company’s
directors’ and officers’ liability insurance policies;
NOW, THEREFORE, in consideration of the premises and of Indemnitee continuing to serve the
Company directly or, at its request, another enterprise, and intending to be legally bound hereby,
the parties hereto agree as follows:
| 1. | Certain Definitions: | ||
| (a) | Change in Control: shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or |
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| indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 20% or more of the total voting power represented by the Company’s then outstanding Voting Securities, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of transactions) all or substantially all the Company’s assets. | |||
| (b) | Claim: any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether instituted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other. | ||
| (c) | Expenses: include attorneys’ fees and all other professional or other fees, costs, expenses and obligations paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in, any Claim relating to any Indemnifiable Event. | ||
| (d) | Indemnifiable Event: any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or is or was serving at the request of the Company as a director, officer, employee, trustee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, or by reason of anything done or not done by Indemnitee in any such capacity. | ||
| (e) | Independent Legal Counsel: an attorney or firm of attorneys, selected in accordance with the provisions of Section 3, who shall not have otherwise performed services for the Company or Indemnitee within the last five years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements). | ||
| (f) | Potential Change in Control: shall be deemed to have occurred if (i) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (ii) any person (including the Company) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; (iii) any person, other than a |
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| trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, who is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 9.5% or more of the combined voting power of the Company’s then outstanding Voting Securities, increases his beneficial ownership of such securities by five percentage points (5%) or more over the percentage so owned by such person; or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. | |||
| (g) | Reviewing Party: any appropriate person or body consisting of a member or members of the Company’s Board of Directors or any other person or body appointed by the Board who is not a party to the particular Claim for which Indemnitee is seeking indemnification, or Independent Legal Counsel. | ||
| (h) | Voting Securities: any securities of the Company which vote generally in the election of directors. |
2. Basic Indemnification Arrangement. (a) In the event Indemnitee was, is or becomes
a party to or witness or other participant in, or is threatened to be made a party to or witness or
other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee to the fullest extent permitted by law as soon as practicable
but in any event no later than thirty days after written demand is presented to the Company,
against any and all Expenses, 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 Expenses, judgments, fines, penalties or amounts paid in settlement) of such Claim.
Notwithstanding anything in this Agreement to the contrary, except for proceedings to enforce
rights to Indemnification, Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Claim initiated by Indemnitee unless the Board of Directors has
authorized or consented to the initiation of such Claim. If so requested by Indemnitee, the
Company shall advance (within two business days of such request) any and all Expenses to Indemnitee
(an “Expense Advance”).
(b) Notwithstanding the foregoing, (i) the obligations of the Company under Section 2(a)
(other than as set forth in the last sentence thereof) shall be subject to the condition that the
Reviewing Party shall not have determined (based on an unqualified written legal opinion, in any
case in which the Independent Legal Counsel referred to in Section 3 hereof is involved) that
Indemnitee would not be permitted to be indemnified under applicable law construed in favor of
Indemnitee to the fullest extent permitted by law, and (ii) the obligation of the Company to make
an Expense Advance pursuant to Section 2(a) shall be subject to the condition that, if, when and to
the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be reimbursed 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 Reviewing Party 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 Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). If
there has not been a Change in Control, the Reviewing Party shall be selected by
the Board of Directors, and if there has been such a Change in Control (other than a Change in
Control which has been approved by a majority of the Company’s Board of Directors who were
directors
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immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 3 hereof. If there has been no determination by
the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not be
permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation in any court in the State of Delaware having subject matter
jurisdiction thereof and in which venue is proper seeking an initial determination by the court or
challenging any such determination by the Reviewing Party or any aspect thereof, including the
legal or factual bases therefor, and the Company hereby consents to service of process and to
appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.
3. Change in Control. The Company agrees that if there is a Change in Control of the
Company (other than a Change in Control which has been approved by a majority of the Company’s
Board of Directors who were directors immediately prior to such Change in Control) then with
respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity payments
and Expense Advances under this Agreement or any other agreement or Company By-Law or Certificate
of Incorporation Article now or hereafter in effect relating to Claims for Indemnifiable Events,
the Company shall seek legal advice only from Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld or delayed). Such
counsel, among other things, shall render its written opinion to the Company and Indemnitee as to
whether and to what extent the Indemnitee would be permitted to be indemnified under applicable
law. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to
above and to indemnify fully such counsel against any and all expenses (including attorneys’ fees),
claims, liabilities and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.
4. Indemnification for Additional Expenses. Subject to Section 2(b), the Company
shall indemnify Indemnitee against any and all Expenses (including attorneys’ fees) and, if
requested by Indemnitee, shall (within two business days of such request) advance such Expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee
for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any
other agreement or Company By-Law or Certificate of Incorporation Article now or hereafter in
effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any directors’ and
officers’ liability insurance policies maintained by the Company, in each case, regardless of
whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense
payment or insurance recovery, as the case may be.
5. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the Expenses, judgments,
fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all
Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter
therein, including dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
6. Burden of Proof. It is the intent of the parties that the Indemnitee shall be
indemnified hereunder to the fullest extent permitted by applicable law, and in connection with any
determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder the burden of proof shall be on the Company to establish that Indemnitee is
not so entitled.
7. No Presumptions. For purposes of this Agreement, the termination of any claim,
action, suit or proceeding, by judgment, order, settlement (whether with or without court approval)
or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption
that
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Indemnitee did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable law. In addition,
neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee
has met any particular standard of conduct or had any particular belief, nor an actual
determination by the Reviewing Party that Indemnitee has not met such standard of conduct or did
not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a
judicial determination that Indemnitee should be indemnified under applicable law shall be a
defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any particular
standard of conduct or did not have any particular belief.
8. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in addition
to any other rights Indemnitee may have under the Company’s By-Laws or Certificate of Incorporation
or the Delaware General Corporation Law or otherwise. To the extent that a change in the Delaware
General Corporation Law (whether by statute or judicial decision) permits greater indemnification
by agreement than would be afforded currently under the Company’s By-Laws, Certificate of
Incorporation 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.
9. Liability Insurance. To the extent the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum extent of the
coverage available for any Company director or officer.
10. Period of Limitations. No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s spouse, heirs,
executors or personal or legal representatives after the expiration of two years from the date of
accrual of such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal action within such
two-year period; provided, however, that if any shorter period of limitations is otherwise
applicable to any such cause of action such shorter period shall govern.
11. Amendments, Etc. No supplement, modification 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.
12. 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 Indemnitee, who shall
execute all papers required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company effectively to bring suit
to enforce such rights.
13. No Duplication of Payments. The Company shall not be liable under this Agreement
to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee
has otherwise actually received payment (under any insurance policy, By-Law, Certificate of
Incorporation Article or otherwise) of the amounts otherwise indemnifiable hereunder.
14. Binding Effect, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective successors, assigns,
including any
direct or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs, executors and
personal and legal
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representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or of any other enterprise
at the Company’s request.
15. Severability. The provisions of this Agreement shall be severable in the event
that any of the provisions hereof (including any provision within a single section, paragraph or
sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable in any respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way impaired and shall
remain enforceable to the fullest extent permitted by law.
16. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made and to be performed
in such state without giving effect to the principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this [ ] day of [ ],
2008.
| LIBERTY LANE ACQUISITION CORP. | ||||||
| By | ||||||
| Title: | ||||||
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