EXHIBIT 10.9
JMAR TECHNOLOGIES, INC.
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is effective as of this 1st day of April, 2004, by and
between JMAR Technologies, Inc., a Delaware corporation ("JMAR"), and the
undersigned ("Director").
WITNESSETH:
WHEREAS, Director is currently serving or intends to serve as a
director of JMAR and in such capacity performs a valuable service for
JMAR;
WHEREAS, the Delaware General Business Law, as now in effect or
hereafter amended (the "DGBL"), as well as JMAR's Bylaws (the "Bylaws"),
specifically provide that the indemnification provided thereunder is not
exclusive of any other rights with respect to indemnification or otherwise
to which those seeking indemnification may be entitled under any
resolution approved by the affirmative vote of the holders of a majority
of the shares entitled to vote thereon;
WHEREAS, the DGBL and the Bylaws contemplate that contracts may be
entered into between JMAR and its officers and directors with respect to
indemnification of such persons;
WHEREAS, JMAR has purchased and maintained, and will continue to
purchase and maintain, a policy of directors' and officers' liability
insurance ("D&O Insurance") covering certain liabilities that may be
incurred by its officers and directors in the performance of their
services to JMAR;
WHEREAS, in order to supplement the protections provided by the D&O
Insurance and the indemnification provisions of JMAR's Bylaws and thereby
encourage Director to continue his service or begin to serve as a director
of JMAR, JMAR has determined and agreed to enter into this Agreement with
Director;
NOW, THEREFORE, in consideration of Director's service or continued
service to JMAR as a director from and after the date hereof, the parties
hereby agree as follows:
1. INDEMNITY OF DIRECTOR. JMAR shall defend, hold harmless and
indemnify Director to the full extent permitted by the provisions of the DGBL,
as currently in effect or as it may hereafter be amended, or by the provisions
of any other applicable statute authorizing or permitting such indemnification,
whether currently in effect or hereafter adopted.
2. INSURANCE POLICIES.
(a) JMAR represents that it has obtained D&O Insurance with an
established insurance carrier in amounts that it believes are appropriate
for a company of JMAR's size. Subject to the provisions of Section 2(b)
hereof, for so long as Director shall continue in such capacity and
thereafter if Director shall then be subject to any threatened, pending or
completed action, suit or proceeding (whether civil, criminal,
administrative or investigative), by reason of the fact that Director was
a director of JMAR, JMAR will use reasonable efforts to maintain in effect
for the benefit of Director one or more policies of D&O Insurance
providing coverage comparable to that presently in effect.
(b) JMAR shall not be required to maintain said policy or policies
of D&O Insurance in effect if said insurance is not reasonably available
or if, in the reasonable business judgment of the then directors of JMAR,
the premium cost for such insurance is disproportionate to the amount or
extent of coverage.
3. ADDITIONAL INDEMNITY. Subject to the provisions of Section 4 hereof
and without limiting the effect of the Bylaws, JMAR shall defend, hold harmless
and indemnify Director as follows:
(a) In any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of JMAR), by reason of the fact
that he is or was an officer or director of JMAR, or is or was serving at
the request of JMAR as a director, officer, partner, trustee, employee or
agent of another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, from and
against all costs, liabilities, obligations, expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding, if he acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of JMAR, and, with
respect to any criminal action or proceeding, if he had no reasonable
cause to believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that Director did not act in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of JMAR
and, with respect to any criminal action or proceeding, that Director had
no reasonable cause to believe that his conduct was unlawful.
(b) In any threatened, pending or completed action, suit or
proceeding by or in the right of JMAR to procure a judgment in its favor,
by reason of the fact he is or was an officer or director of JMAR or is or
was serving at the request of JMAR as a director, officer, partner,
trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, from and against all costs and expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action, suit or proceeding, if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of JMAR; provided, however, that no
indemnification shall be made in respect to any claim, issue or matter as
to which he shall have been adjudged liable to the corporation unless and
only to the extent that the Delaware Court of Chancery or the court in
which such action or suit was brought shall have determined that such
person is fairly and reasonably entitled to indemnity for such expenses.
4. LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to
Section 3 hereof shall be paid by JMAR:
(a) to the extent it would reduce or eliminate any payments under
any D&O Insurance covering Director;
(b) to the extent of any liability for which Director is indemnified
pursuant to Section 1 of this Agreement or pursuant to any D&O Insurance
carried by JMAR;
(c) on account of any claim against Director for an accounting of
profits made from the purchase or sale of securities of JMAR pursuant to
the provisions of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or the similar provisions of any other applicable law;
(d) on account of any claim against Director arising out of the
trading of JMAR stock while possessing material non-public information,
whether pursuant to the Xxxxxxx Xxxxxxx Sanctions Act of 1984 or
otherwise;
(e) if a final judgment or other final adjudication by a court
having jurisdiction in the matter shall determine that such indemnity is
not lawful;
(f) in respect to remuneration paid to a Director if a final
judgment or other final adjudication by a court having jurisdiction in the
matter shall determine that such remuneration was not lawful;
(g) for any appropriation, in violation of his duties, of any
business opportunity of JMAR;
(h) for acts or omissions which involve fraud, intentional
misconduct or a knowing violation of law;
(i) for unlawful distributions as set forth in DGBL Section 174 (or
any successor provision); or
(j) for any transaction from which he received an improper personal
benefit.
5. NOTIFICATION AND DEFENSE OF CLAIM.
(a) Promptly after receipt by Director of notice of the
commencement of any action, suit or proceeding, Director will, if a claim
in respect thereto is to be made against JMAR under this Agreement, notify
JMAR of the commencement thereof. The failure so to notify JMAR will not
relieve JMAR from any liability which it may have to Director otherwise
than under this Agreement. With respect to any such action, suit or
proceeding as to which Director so notifies JMAR:
(1) JMAR will be entitled to participate therein at its own
expense; and
(2) except as otherwise provided below, to the extent that it may
wish, JMAR may assume the defense thereof.
(b) After notice from JMAR to Director of its election to assume
the defense thereof, JMAR will not be liable to Director under this
Agreement or otherwise for any legal or other 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 employ counsel of his choosing in such action,
suit or proceeding but the fees and expenses of such counsel incurred
after notice from JMAR of its assumption of the defense thereof shall be
at the expense of Director unless (i) the employment of counsel by
Director has been authorized in writing by JMAR, (ii) JMAR and Director
shall have reasonably concluded that there may be a conflict of interest
between JMAR and Director in the conduct of the defense of such action, or
(iii) JMAR shall have failed or refused to employ counsel to assume the
defense of such action, in each of which cases the reasonable fees and
expenses of Director's counsel shall be paid by JMAR.
(c) JMAR shall not be liable to Director under this Agreement for
any amounts paid in settlement of any threatened or pending action, suit
or proceeding without its prior written consent. JMAR shall not settle any
such action, suit or proceeding in any manner which would impose any
penalty or limitation on Director without Director's prior written
consent. Neither JMAR nor Director will unreasonably withhold his or its
consent to any proposed settlement.
6. PREPAYMENT OF EXPENSES. Unless Director otherwise elects, expenses
incurred in defending any civil or criminal action, suit or proceeding will be
paid by JMAR in advance of the final disposition of such action, suit or
proceeding upon receipt of a written agreement from Director in form and
substance satisfactory to JMAR (i) affirming the Director's good faith belief
that his conduct does not constitute behavior of the kind described in Sections
4(c) through (j) of this Agreement, and (ii) agreeing to repay any advances if
it shall be ultimately determined that he is not entitled to be indemnified by
JMAR under this Agreement.
7. CONTINUATION OF INDEMNITY. All agreements and obligations of JMAR
contained in this Agreement shall continue during the period Director is an
director of
JMAR and shall continue thereafter so long as Director shall be subject to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that Director
was a director of JMAR, or is or was serving at the request of JMAR as a
director, officer, partner, trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise.
8. ALLOWANCE FOR COMPLIANCE WITH SEC REQUIREMENTS. Director
acknowledges that the Securities and Exchange Commission ("SEC") has expressed
the opinion that indemnification of directors and officers from liabilities
under the Securities Act of 1933 (the "Act") is against public policy and
therefore unenforceable. Director hereby agrees that it will not be a breach of
this Agreement for JMAR to agree with the SEC in connection with the
registration for sale of any stock or other securities of JMAR from time to time
that, in the event a claim for indemnification against such liabilities (other
than the payment by JMAR of expenses incurred or paid by a director or officer
of JMAR in the successful defense of any action, suit or proceeding) is asserted
in connection with such stock or other securities being registered, JMAR will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of competent jurisdiction the question of whether
or not such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue. Director
further agrees that such submission to a court of competent jurisdiction shall
not be a breach of this Agreement.
9. RELIANCE. JMAR has entered into this Agreement in order to induce
Director to serve or continue as a director of JMAR, and acknowledges that
Director is relying upon this Agreement with respect thereto.
10. SEPARABILITY. Each of the provisions 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 or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.
11. GOVERNING LAW; ASSIGNMENT; BINDING EFFECT; AMENDMENT AND
TERMINATION;GENDER.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
(b) Neither this Agreement nor any rights or obligations hereunder shall
be assigned or transferred by Director.
(c) This Agreement shall be binding upon Director and upon JMAR, its
successors and assigns, including successors by merger or
consolidation, and shall inure to the benefit of Director, his
heirs, personal representatives and permitted assigns and to the
benefit of JMAR, its successors and assigns.
(d) No amendment, modification or termination of this Agreement shall be
effective unless in writing signed by both parties hereto.
(e) References herein to the male gender herein shall include references
to the female gender.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
JMAR TECHNOLOGIES, INC.
By: ________________________________
Xxxxxx X. Xxxxxxxx, Senior Vice
President & General Counsel
DIRECTOR
____________________________________
Print Name: ________________________
Title: _____________________________
