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EXHIBIT 10.11
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EXECUTION COPY
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement") is made this eleventh
day of March, 1999, between Xxxxx Corporation (the "Corporation"), a New York
corporation, and Xxxxx X. Xxxxx ("Indemnitee").
WHEREAS, Xxxxx & Company Inc., controlled by Indemnitee, holds 420,920 shares
of common stock of the Corporation.
WHEREAS, pursuant to two agreements, the first of which is dated as of March
18, 1997, among Xxxxx & Company, Inc., 3287858 Canada Inc., and Xxxxx Xxxxx
Holdings Inc. (the "First Voting Trust") and the second of which is dated as of
March 14, 1997 and which holds the shares of 3323986 Canada, Inc. (the "Second
Voting Trust"), Indemnitee has the right to vote 1,304,253 shares of common
stock of the Corporation.
WHEREAS, the Corporation has requested that Indemnitee, as the majority
shareholder of the Corporation, vote all of the shares which he has the right
to vote in favor of the Asset Purchase Agreement between the Corporation and
Paper-Pak Products, Inc. ("Paper-Pak"), dated February 23, 1999 (subject to any
fiduciary obligation on the part of Indemnitee) and the transactions
contemplated thereby (the "Sale"). Indemnitee is willing to so vote but only so
long as the Corporation enters into this Agreement.
WHEREAS, each party hereto has the good faith belief that consummation of the
sale is in the best interests of the Corporation and its shareholders.
NOW, THEREFORE, in consideration of Indemnitee's willingness to agree to
vote and to vote in favor of the sale in that Paper-Pak has insisted that the
agreement of the Indemnitee to vote shares as provided for herein is a
condition precedent to Paper-Pak agreeing to the sale (the "Indemnified
Service"), the Corporation and Indemnitee agree as follows:
1. The Corporation shall to the maximum extent permitted by law assume
liability for, and indemnify, protect and hold harmless, Indemnitee,
from and against any and all liabilities, obligations, damages,
costs, expenses and disbursements (including reasonable legal fees
and costs, expenses and disbursements) of whatsoever kind and nature,
which may be incurred by, imposed upon, or asserted against
Indemnitee in defending or responding to any claims, actions or
proceedings against Indemnitee in connection with the Indemnified
Service (collectively, "Claims").
2. Expenses (including attorneys' fees) incurred by Indemnitee in
defending any civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by Indemnitee to repay such amount if
it shall ultimately be
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determined that Indemnitee is not entitled to be indemnified by the
Corporation as provided in this Agreement.
3. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Agreement shall not be deemed to be
exclusive of any other rights to which Indemnitee may be entitled
under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in such person's official
capacity and as to action in another capacity while holding such
office.
4. This Agreement shall apply to any action or proceeding, wherever
brought, which arises out of acts or omissions relating to the
Indemnified Service, occurring before or after the date first written
above and whether Indemnitee is still a shareholder of the Corporation
or not.
5. The provisions of Sections 1 and 2 above are subject to the provisions
of Section 6 below.
6. The indemnity provided under this Agreement shall not be provided to
Indemnitee if a final non-appealable judgment determines that the
Claim arose due to the willful misconduct by Indemnitee. For purposes
hereof, the term "willful misconduct" shall mean that the Indemnitee's
acts were committed in bad faith or were the result of active and
deliberate dishonesty and, in either case, were material to the cause
of action so adjudicated.
7. Indemnitee's rights hereunder shall inure to the benefit of the heirs,
executors and administrators of Indemnitee and shall be binding on the
successors of the Corporation.
8. This Agreement shall be governed by the laws of the State of New York
without regard to the conflicts of laws principles thereof. Neither
party may assign its rights or obligations hereunder without the prior
written consent of the other party.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
XXXXX CORPORATION
By:____________________________
Name: Xxxxxx X. XxxXxxxxx
Title: President, Chairman and Chief Executive Officer
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Xxxxx X. Xxxxx, Indemnitee
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