Exhibit 10.37
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement") is executed on and entered
into as of to be effective as of (the "Effective Date") by
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and between Monitronics International, Inc., a Texas corporation (the
"Company"), and ("Director").
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The Company is required or permitted under certain circumstances to
indemnify directors of the Company against liability incurred by them in such
capacities or by reason of occupying such position. The Company desires to have
Director serve as a director of the Company, and Director desires to serve,
provided that he is indemnified by the Company. This is the Indemnification
Agreement referred to in the Second Amended and Restated Shareholders Agreement
(the "Shareholders Agreement") entered into on March 9, 1999 by the Company and
the Shareholders named therein.
The parties agree as follows:
1. Definitions.
Unless the context requires otherwise, for purposes of this Agreement:
(a) "Act" shall mean the Texas Business Corporation Act, as in effect on
the date of this Agreement and as hereafter amended, and any successor statute;
(b) the terms "proceedings," "expenses" and other terms defined in Article
2.02-1 of the Act are used herein with the meanings as so defined under the Act;
and
(c) the phrase "serving in a representative capacity at the request of the
Company" means serving at the request of the Company as a director, Director,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise.
2. Indemnity.
(a) The Company agrees to indemnify Director to the fullest extent
permitted by the Act, as soon as practicable but in any event no later than 30
days after receipt by the Company of any claim for indemnity hereunder against
expenses, judgments, penalties, fines 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 proceeding) incurred by or on behalf of Director in
connection with any proceeding in which Director was, is or is threatened to be
a named a party to or witness or other participant in such proceeding because he
is or was a director or officer of the Company or because he is or was serving
in a representative capacity at the request of the Company.
(b) Reasonable expenses incurred by Director in connection with a
proceeding referred to in paragraph 2A in advance of the final disposition of
the proceeding and without the
determination specified in Sections F or G of Article 2.02-1 of the Act,
promptly upon receipt by the Company of:
(i) a written affirmation by Director of his good faith belief that he
has met the standard of conduct necessary for indemnification under the Act; and
(ii) a written undertaking by or on behalf of the Director to repay
the amount paid or reimbursed pursuant to this paragraph 2(b) if it is
ultimately determined that he has not met the standard of conduct necessary for
indemnification under the Act or if it is ultimately determined that
indemnification of Director against expenses incurred by him in connection with
that proceeding is prohibited by Section E of Article 2.02-1 of the Act.
(c) This Agreement makes mandatory the indemnification permitted under
Section B of Article 2.02-1 of the Act with respect to expenses incurred in
connection with a proceeding described in such provision and shall be deemed to
constitute authorization of indemnification in the manner required by the Act.
3. Notification and Defense of Claim.
(a) Promptly after receipt by Director of notice of the commencement of any
proceeding in which Director was, is or is threatened to be a named a party to
or witness or other participant in such proceeding, if a claim for indemnity in
connection with such proceeding is to be made against the Company under this
Agreement, will promptly notify the Company of the commencement thereof. With
respect to any such proceeding other than a proceeding brought by or on behalf
of the Company or as to which Director shall have made the determination
provided for in (ii) below, the Company will be entitled to participate therein
at its own expense, and the Company may assume the defense thereof with counsel
satisfactory to Director. After notice from the Company to Director of its
election to assume the defense thereof, the Company will not be liable to
indemnify Director under this Agreement against 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 select and employ counsel in a proceeding, but the fees and expenses of such
counsel incurred after notice from the Company of its assumption of the defense
thereof shall be borne by Director unless (i) the employment of such counsel by
Director has been authorized by the Company, (ii) Director shall have reasonably
concluded that there may be a conflict of interest between the Company and
Director in the conduct of the defense of such proceeding, or (iii) the Company
shall not in fact have employed counsel to assume the defense of such action,
and in each case the fees and expenses of counsel shall be subject to the
indemnity provided hereunder by the Company; provided, however, that in the
event any other person indemnified by the Company is also named or threatened to
be named defendant or respondent in a proceeding referred to in (ii) above, the
fees and expenses of only one counsel employed by Director and all such other
persons shall be subject to indemnity hereunder.
(b) Promptly following receipt by the Company from Director of any claim
for indemnity hereunder, the Company shall in good faith make or cause to be
made any determination as to reasonableness of expenses and determination that
indemnification is permissible as may be required pursuant to the Act and, as
soon as practicable, but in any event no later than 30 days after receipt by the
Company of any claim for indemnity hereunder, following such determination, the
Company shall pay or cause to be paid to Director in cash the amount of the
expenses indemnified
hereunder and so determined to be reasonable and permissible. Such payment shall
be made out of the assets of the Company.
4. Miscellaneous.
(a) The Company expressly confirms and agrees that it has entered into this
Agreement in order to induce Director to serve or continue to serve as a
director or in a representative capacity at the request of the Company, and
acknowledges that Director is relying upon this Agreement in continuing in such
capacity and in serving as a director of the Company or in a representative
capacity at the request of the Company hereafter, whether or not Director serves
in any such capacity on the date of this Agreement. All agreements and
obligations of the Company contained herein shall continue during the period
that Director serves as a director of the Company or in a representative
capacity at the request of the Company and thereafter so long as Director shall
be subject to any possible claim or pending, threatened or completed proceeding
by reason of the fact that Director was a Director or served in any other
representative capacity.
(b) In the event Director is required to bring any action to enforce his
rights or to collect any amount due him under this Agreement and is successful
in such action, the Company shall reimburse Director for all of Director's fees
and expenses (including, without limitation, reasonable attorney's fees) in
bringing and pursuing such action.
(c) Each of the provisions (including any provision within a single
paragraph or sentence) of this Agreement is a separate and distinct agreement
and independent of the others, so that if any provision hereof shall be held to
be invalid, illegal or unenforceable for any reason whatsoever, such invalidity
or unenforceability shall not affect the validity or enforceability of the other
provisions hereof and such remaining provisions shall remain enforceable to the
fullest extent permitted by law.
(d) This Agreement shall be interpreted and enforced in accordance with the
internal laws but not the law of conflicts of the State of Texas.
(e) This Agreement and the terms hereof shall be binding upon and inure to
the benefit of the Company and Director, and their respective successors and
assigns.
(f) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both 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.
(g) The indemnification provided by this Agreement shall not be deemed
exclusive of any other rights to which Director may be entitled under any
provision of the Act, the Articles of Incorporation or bylaws of the Company or
of any other corporation, or any other agreement or otherwise. To the extent
that a change in the Act (whether by statute or judicial decision) permits
greater indemnification by agreement than would be affording currently under the
Company's bylaws and this Agreement, it is the intent of parties hereto that
Director shall enjoy by this Agreement the greater benefits so afforded by such
change.
(h) All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement will be in writing and
will be deemed to have been given when delivered personally or by telex,
facsimile transmission, telegram or overnight delivery service, or 72 hours
after having been mailed by certified or registered mail, return receipt
requested and postage prepaid, to the recipient. Such notices, demands and other
communications will be sent to each party at the address indicated below:
If to the Director:
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Attn:
Facsimile:
If to the Company:
Monitronics International, Inc.
00000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
Facsimile: (000) 000-0000
or to such other address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party.
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date.
The Company:
Monitronics International, Inc.
By:
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Xxxxx X. Xxxx, President
Director:
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