1
EXHIBIT 10.17
FORM OF
INDEMNIFICATION AGREEMENT
-------------------------
INDEMNIFICATION AGREEMENT, made as of the ___ day of ________,
1998, by and between Office Centre Corporation, a Delaware corporation, located
at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and _________
___________, an individual, residing at _____________________________,
_________________ (the "Indemnitee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires to have Indemnitee serve the
Company as a director and/or executive officer;
WHEREAS, Indemnitee is concerned about serving the Company as
a director and/or executive officer without assurance that indemnities will be
available to him and will be adequate to protect him against the risks
associated with his service to the Company;
WHEREAS, the Company, in order to induce Indemnitee to serve
the Company and in order to attract new directors to serve the Company, has
agreed to provide Indemnitee with the benefits contemplated by this Agreement,
which benefits are intended to provide Indemnitee with the maximum possible
protection permitted by law; and
WHEREAS, as a result of the provision of such benefits and in
reliance thereon, Indemnitee will serve as a director and/or executive officer
of the Company.
NOW, THEREFORE, in consideration of the foregoing and the
promises, conditions, representations and warranties set forth herein, the
Company and Indemnitee hereby agree as follows:
1. DEFINITIONS. The following terms, as used herein, shall
have the following respective meanings:
(a) "Covered Act" means: (i) any actual or alleged
action taken or attempted by Indemnitee (including, without limitation, any
breach of duty, neglect, error, misstatement or misleading statement) (A) in his
capacity as, or otherwise by reason of, or arising out of his being, a director,
or officer, of the Company or any subsidiary of the Company, or (B) by reason of
the fact that he is or was serving at the request of the Company as a director,
officer, employee, agent or trustee of another corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other
enterprise; or (ii) any inaction or omission on Indemnitee's part while acting
in any of the foregoing capacities.
2
(b) "D&O Insurance" means directors' and officers'
liability insurance issued by one or more reputable insurers with a Best
Insurance Reports rating.
(c) "Excluded Claim" means any payment for Losses or
Expenses in connection with any claim: (i) for the return by Indemnitee of any
remuneration which is illegal; (ii) resulting from Indemnitee's knowingly
fraudulent, deliberately dishonest or intentional misconduct; (iii) for an
accounting of profits in fact made from the purchase or sale by Indemnitee of
securities of the Company within the meaning of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or similar provisions of
any state law, if the Company is in fact entitled to recover such profits; or
(iv) the payment of which by the Company under this Agreement is not permitted
by applicable law. Any facts pertaining to any other director, officer, employee
or agent of the Company shall not be imputed to Indemnitee for the purpose of
determining an Excluded Claim.
(d) "Expenses" means any reasonable expenses incurred
by Indemnitee as a result of a claim or claims whether brought by or in the
right of the Company (e.g., derivatively by stockholders of the Company for the
benefit of the Company) or otherwise and whether of a civil, criminal,
administrative or investigative nature made against him for, or being a witness
in, or otherwise in respect of, Covered Acts including, without limitation,
counsel fees, costs of bonds, and other costs of proceedings or appeals.
(e) "Loss" means any amount which Indemnitee pays or
is obligated to pay as a result of a claim or claims whether brought by or in
the right of the Company (e.g., derivatively by stockholders of the Company for
the benefit of the Company) or otherwise and whether of a civil, criminal,
administrative or investigative nature made against him for, or otherwise in
respect of, Covered Acts including, without limitation, damages, judgments, sums
paid in settlement of such claim or claims, sums paid in respect of any
deductible under any applicable policy of D&O Insurance, counsel fees, experts'
fees, travel expenses and fines and penalties other than fines and penalties for
which indemnification is not permitted by applicable law.
2. D&O INSURANCE. The Company shall maintain D&O Insurance so
long as Indemnitee shall continue as a director or officer of the Company and
thereafter so long as Indemnitee shall be subject to any possible claim for
which a claim for indemnification may be sought. In all policies of D&O
Insurance, Indemnitee shall be named as an insured in such a manner as to
provide Indemnitee the same rights and benefits, subject to the same
limitations, as are accorded to the Company's directors or officers most
favorably insured by such policy.
3. INDEMNIFICATION.
(a) OBLIGATION. The Company, at the request of
Indemnitee, shall indemnify Indemnitee and hold him harmless to the full extent
authorized or permitted by the applicable provisions of the Delaware General
Corporation Law and the Company's Certificate of Incorporation and By-laws, as
the same exists or may hereafter be amended.
-2-
3
(b) REQUESTED. In addition, the Company, at the
request of Indemnitee, shall indemnify Indemnitee and hold him harmless from any
and all Losses and Expenses subject, in each case, to the further provisions of
this Agreement.
(c) SOURCE. If indemnification is sought by
Indemnitee under this Agreement, Indemnitee may seek such indemnification under
statutory law, a policy of D&O Insurance, the provisions of SECTION 3(b) above,
or otherwise as Indemnitee sees fit, and concurrently or in such sequence as
Indemnitee may choose, in his sole discretion.
(d) 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
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.
4. EXCLUDED COVERAGE. The Company shall have no obligation to
indemnify Indemnitee for and hold him harmless from any Loss or Expense which
constitutes an Excluded Claim.
5. INDEMNIFICATION PROCEDURES.
(a) NOTIFICATION. Promptly after receipt by
Indemnitee of notice of any claim or threatened claim of any action, suit or
proceeding, Indemnitee shall notify the Company of the commencement or threat
thereof, but the omission so to notify or delay in notifying the Company will
not relieve it from any liability which it may have to Indemnitee except to the
extent that the Company is actually prejudiced by any such omission or delay.
(b) TO INSURERS. The Company shall give prompt notice
of the commencement of such action, suit or proceeding to the insurers on the
D&O Insurance, if any, in accordance with the procedures set forth in the
respective policies in favor of Indemnitee. The Company shall thereafter take
all necessary or desirable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable as a result of such action, suit or proceeding
in accordance with the terms of such policies.
(c) DEFENSE. In the event such action, suit or
proceeding is other than by or in the right of the Company, Indemnitee may, at
his option, either control the defense thereof himself, require the Company to
defend him, or accept the defense provided under the D&O Insurance, if any;
PROVIDED, HOWEVER, that Indemnitee may not control the defense thereof himself
or require the Company to defend him if such decision would jeopardize the
coverage provided by the D&O Insurance, if any, to the Company and/or the other
directors and officers covered thereby. In the event that Indemnitee requires
the Company to defend him, or in the event that Indemnitee proceeds under a
policy of D&O Insurance but Indemnitee determines that the insurers under such
D&O Insurance are unable or unwilling to adequately defend, contest and
protect Indemnitee against any such action, suit or proceeding, the Company
shall promptly undertake to defend any such
-3-
4
action, suit or proceeding, at the Company's sole cost and expense, utilizing
counsel of Indemnitee's choice who has been approved by the Company. If
appropriate, the Company shall have the right to participate in the defense of
such action, suit or proceeding.
(d) COMPANY ACTION. In the event such action, suit or
proceeding is by or in the right of the Company, Indemnitee may, at his option,
either control the defense thereof himself or accept the defense provided under
the D&O Insurance, if any; PROVIDED, HOWEVER, that Indemnitee may not control
the defense himself if such decision would jeopardize the coverage provided by
the D&O Insurance, if any, to the Company and/or the other directors and
officers covered thereby.
(e) COMPROMISE. In the event the Company shall fail
timely to defend, contest or otherwise protect Indemnitee against any such
action, suit or proceeding which is not by or in the right of the Company,
Indemnitee shall have the right to do so, including without limitation, the
right to make any compromise or settlement thereof, and to recover from the
Company all counsel fees, reimbursements and all amounts paid as a result
thereof.
(f) PAYMENT. Expenses and Losses incurred or to be
incurred by Indemnitee from time to time as a result of any action, suit or
proceeding covered by the indemnity provisions of this Agreement (including,
without limitation, an action, suit or proceeding by or in the right of the
Company) which have not been paid by the insurers under the D&O Insurance, if
any, shall be paid or advanced by the Company within 30 days of the written
request of the Indemnitee, whether or not the Company believes that such
Expenses and Losses may constitute an Excluded Claim. Advances of Losses and
Expenses to Indemnitee in his capacity as an officer or director of the Company
shall be made upon receipt of an undertaking by or on behalf of Indemnitee to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Company under this Agreement. Advances of Losses and
Expenses to Indemnitee in his capacity as an employee or agent of the Company
shall be made upon such terms and conditions, if any, as the Board of Directors
of the Company deems appropriate.
6. SETTLEMENT. Except as otherwise provided in SECTION 5(e)
above, Indemnitee shall not settle any action, suit or proceeding without the
Company's prior written consent. The Company shall not settle any action, suit
or proceeding, in any manner which would impose any obligation on Indemnitee
which is not covered by indemnification hereunder without Indemnitee's prior
written consent. Neither the Company nor Indemnitee shall unreasonably withhold
its or his consent to any proposed settlement.
7. RIGHTS NOT EXCLUSIVE. The rights provided hereunder shall
not be deemed exclusive of any other rights to which Indemnitee may be entitled
under any D&O Insurance, the Company's Certificate of Incorporation or By-Laws,
agreement, vote of stockholders or Board of Directors or otherwise. The
protection afforded to Indemnitee hereunder is intended to supplement the other
protections presently available to Indemnitee under statutory law, the Company's
Certificate of Incorporation, By-Laws, and any D&O Insurance or otherwise, and
all of such protections are intended to be cumulative. Nothing herein shall be
deemed to diminish or otherwise
-4-
5
restrict Indemnitee's right to reimbursement under any D&O Insurance or
indemnification under statutory law, the Company's Certificate of Incorporation,
By-Laws, agreements or otherwise.
8. ENFORCEMENT; CHOICE OF FORUM; CONSENT TO JURISDICTION.
(a) DELAWARE. Any action, suit or proceeding under
this Agreement shall be enforceable only in the state courts of the State of
Delaware. Indemnitee and the Company each hereby consent to the jurisdiction of
the state courts of the State of Delaware for all purposes in connection with
any action, suit or proceeding which arises out of or relates to this Agreement.
The burden of proving that indemnification is not appropriate shall be on the
Company and any actual determination by the Company (including any determination
made by its Board of Directors or stockholders, or by independent legal counsel)
that Indemnitee is not entitled to indemnification hereunder shall not be a
defense to such action, suit or proceeding or create a presumption that
Indemnitee has not met the applicable standard for indemnification. If
Indemnitee commences an action, suit or proceeding in any such court to enforce
this Agreement, or the Company commences an action, suit or proceeding for an
adjudication that Indemnitee is not entitled to indemnification under this
Agreement, the Company shall nevertheless be obligated, subject to Indemnitee's
obligation to reimburse the Company contained in SECTION 5(f) above, to pay
Expenses and Losses from time to time as incurred by Indemnitee until a
determination shall have been made by a final judgment or other final
adjudication of such court that Indemnitee is not entitled to be indemnified by
the Company for such Losses and Expenses.
(b) FEES. In the event of any action, suit or
proceeding under this Agreement, all court costs and expenses, including
reasonable counsel fees, incurred or to be incurred by Indemnitee with respect
to such action, suit or proceeding shall be paid by the Company to Indemnitee
within 30 days of written request by Indemnitee, unless and until the court
determines that each of the material assertions made by Indemnitee as a basis
for such action, suit or proceeding were not made in good faith or were
frivolous.
(c) PERIOD OF COVERAGE. All agreements and
obligations of the Company contained herein shall continue during the period
Indemnitee is a director, officer, employee or agent of the Company (or is
serving at the request of the Company as a director, officer, employee, agent or
trustee of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise), and shall continue thereafter so long as
Indemnitee shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal or investigative,
by reason of the fact that Indemnitee was a director, officer, employee, agent
or trustee of the Company or serving in any other capacity referred to herein.
(d) TIME OF CLAIM. The Company's indemnity
obligations hereunder shall be applicable to any and all claims made after the
date hereof regardless of when the facts upon which such claims are based
occurred, including times prior to the date hereof.
(e) COMPANY AGREEMENT. The Company expressly confirms
and agrees that it has entered into this Agreement and assumed the obligations
imposed on the Company hereby,
-5-
6
in order to induce Indemnitee to serve as a director or officer of the Company,
and acknowledges that Indemnitee is relying upon this Agreement in agreeing to
serve or in continuing to serve in such capacity.
9. PROVISIONS OF AGREEMENT NOT TO INURE TO BENEFIT OF
INSURERS. It is the intention of the parties in entering into this Agreement
that the insurers under the D&O Insurance, if any, shall be obligated ultimately
to pay any claims by Indemnitee which are covered by such D&O Insurance, and
nothing herein shall be deemed to diminish or otherwise restrict the Company's
or Indemnitee's right to proceed or collect against any insurers under such D&O
Insurance or to give such insurers any rights against the Company under or with
respect to this Agreement, including, without limitation, any right to be
subrogated to Indemnitee's rights hereunder, unless otherwise expressly agreed
to by the Company in writing and the obligation of such insurers to the Company
and Indemnitee shall not be deemed reduced or impaired in any respect by virtue
of the provisions of this Agreement. 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.
10. SEVERABILITY. In the event that any provision of this
Agreement is determined by a court to require the Company to do or to fail to do
any act which is in violation of applicable law, such provision shall be limited
or modified in its application to the minimum extent necessary to avoid a
violation of law and, as so limited or modified, such provision and the balance
of this Agreement shall be enforceable in accordance with their terms. Without
limiting the generality of the foregoing, if this Agreement or any portion
thereof shall be invalidated on any ground, the Company shall nevertheless
indemnify Indemnitee to the full extent permitted by any applicable portion of
this Agreement that shall not have been invalidated.
11. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses and Losses but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such Expenses and Losses to which Indemnitee is entitled to indemnification.
12. CHOICE OF LAW. The validity, construction, performance and
enforcement of this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
13. NOTICES. All notices, consents, requests, instructions,
approvals and other communications provided for in this Agreement and all legal
process in regard to this Agreement will be validly given, made or served, if in
writing and delivered personally, by telecopy (except for legal process) or sent
by overnight delivery service providing a receipt for delivery or by registered
mail postage paid to the appropriate address set forth in the preamble hereto or
to such other address or telecopy number as any party may, from time to time,
designate in a written notice given in a like manner. Notice by telecopy shall
be deemed delivered on the day telephone confirmation of receipt is given.
-6-
7
14. SUCCESSORS AND ASSIGNS. This Agreement shall be (i)
binding upon and enforceable by the Company and all successors and assigns of
the Company (including any transferee of all or substantially all of its assets
and any successor by merger or otherwise by operation of law) and (ii) binding
on and inure to the benefit of Indemnitee and the heirs, personal
representatives and estate of Indemnitee. This Agreement shall continue in
effect regardless of whether Indemnitee continues to serve as an officer or
director of the Company.
15. AMENDMENT. This Agreement sets forth the entire agreement
between the parties hereto as to the subject matter herein, and supersedes any
prior agreements or understandings as to the subject matter herein. No
amendment, modification, termination or cancellation of this Agreement shall be
effective unless made in a writing signed by each of the parties hereto.
16. COUNTERPARTS. This Agreement may be executed in
counterparts, all of which taken together shall constitute one instrument.
IN WITNESS WHEREOF, the Company and Indemnitee have executed
this Agreement as of the day and year first above written.
OFFICE CENTRE CORPORATION
By:
-----------------------------------
Name:
Title:
-----------------------------------
-7-
