Exhibit 10.40
INDEMNIFICATION AGREEMENT
This Agreement made and entered into this ____ day of March 2000,
("Agreement"), by and between Moldflow Corporation, a Delaware corporation (the
"Company," which term shall include, where appropriate, any Entity (as
hereinafter defined) controlled directly or indirectly by the Company) and
____________ ("Indemnitee"):
WHEREAS, it is essential to the Company that it be able to retain and
attract as directors the most capable persons available;
WHEREAS, increased corporate litigation has subjected directors 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 Certificate of Incorporation, as amended from
time to time, and By-laws, as amended from time to time, require it to indemnify
its directors 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 any such Certificate of Incorporation or By-laws 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 Certificate
of Incorporation or By-laws; and
WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in continuing as a director 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 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. [It is a good idea to put an agency
agreement in writing so that there will be no question
whether or not such person was acting as agent 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 10 and 11(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 10 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 or continue to serve as a
director 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.
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3. AGREEMENT TO INDEMNIFY. The Company agrees to indemnify Indemnitee
as follows:
(a) 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) 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 to procure a judgment in its favor by reason of
Indemnitee's Corporate Status, Indemnitee shall be indemnified
by the Company against all Indemnifiable Expenses.
4. EXCEPTIONS TO INDEMNIFICATION. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances other
than the following:
(a) If indemnification is requested under Section
3(a) and it has been adjudicated finally by a court of
competent jurisdiction that, in connection with the subject of
the Proceeding out of which the claim for indemnification has
arisen, 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 action or 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) If indemnification is requested under Section
3(b) and
(i) it has been adjudicated finally
by a court of competent jurisdiction that,
in connection with the subject of the
Proceeding out of which the claim for
indemnification has arisen, 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 adjudicated finally
by a court of competent jurisdiction that
Indemnitee is liable to the Company with
respect to any claim, issue or matter
involved in the Proceeding out of which the
claim for indemnification has arisen,
including, without limitation, a claim that
Indemnitee received an improper personal
benefit, no Indemnifiable Expenses shall be
paid with respect to such claim, issue or
matter unless the Court of Chancery 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
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reasonably entitled to indemnity for such
Indemnifiable Expenses which such court
shall deem proper.
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
within sixty (60) calendar days of receipt of the 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 reasonably 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 reasonably 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, 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 an adverse 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 action or 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 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
thirty (30) 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 the amount of Indemnifiable
Expenses paid to Indemnitee if it is finally determined by a court of competent
jurisdiction that Indemnitee is not entitled under this Agreement to
indemnification with respect to such Expenses. This undertaking is an unlimited
general obligation of Indemnitee.
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
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Indemnitee has incurred such Indemnifiable Expenses. Payment of Indemnifiable
Expenses under Section 8 shall be made no later than thirty (30) calendar days
after the Company's receipt of such request.
10. 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 to
enforce the Company's obligations under this Agreement.
(b) BURDEN OF PROOF. In any judicial proceeding
brought under Section 10(a) above, the Company shall have the
burden of proving that Indemnitee is not entitled to payment
of Indemnifiable Amounts hereunder.
(c) EXPENSES. If Indemnitee is successful in whole or
in part in connection with any action brought by Indemnitee
under Section 10(a) above, 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 such action, or in connection with
any claim or counterclaim brought by the Company in connection
therewith.
(d) VALIDITY OF AGREEMENT. The Company shall be
precluded from asserting in any Proceeding, including, without
limitation, an action under Section 10(a) above, that the
provisions of this Agreement are not valid, binding and
enforceable or that there is insufficient consideration for
this Agreement and shall stipulate in court that the Company
is bound by all the provisions of this Agreement.
(e) 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 10(a) above, and shall not create
a presumption that such payment or advancement is not
permissible.
11. 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 to receive payments of Indemnifiable
Amounts or advancements of Indemnifiable Expenses unless the
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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 11(b) and of Section 11(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) days of receipt of notice of any such
Proceeding under Section 11(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 11(b) shall not apply to a
Proceeding brought by Indemnitee under Section 10(a) above or
pursuant to Section 19 below.
(c) INDEMNITEE'S RIGHT TO COUNSEL. Notwithstanding
the provisions of Section 11(b) above, if in a Proceeding to
which Indemnitee is a party by reason of Indemnitee's
Corporate Status, Indemnitee reasonably concludes that it 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, or 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.
12. 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.
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13. INSURANCE. The Company shall, from time to time, make the good
faith determination whether or not it is practicable for the Company to obtain
and maintain a policy or policies of insurance with a reputable insurance
company providing the Indemnitee with coverage for losses from wrongful acts,
and to ensure the Company's performance of its indemnification obligations under
this Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. 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. Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, or if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit. The Company
shall promptly notify Indemnitee of any good faith determination not to provide
such coverage.
14. 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 By-laws or
Certificate of Incorporation, 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 a director of the Company.
15. 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.
16. 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.
17. 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 of the
Company 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.
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18. 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 a court of competent jurisdiction 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.
19. 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.
20. MODIFICATIONS AND WAIVER. Except as provided in Section 17 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.
21. 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:
(ii) If to the Company, to:
Moldflow Corporation
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Corporate Counsel
or to such other address as may have been furnished in the same manner by any
party to the others.
22. 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
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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.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MOLDFLOW CORPORATION
By: ______________________________
Marc X. X. Xxxxxx
President and Chief Executive Officer
INDEMNITEE
________________________________
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