Exhibit 10.21
[FORM OF INDEMNIFICATION AGREEMENT]
HEALTH BENEFITS DIRECT CORPORATION
DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
This Director and Officer Indemnification Agreement, dated as of
November 10, 2005 (this "AGREEMENT"), is made by and between Health Benefits
Direct Corporation, a Delaware corporation (the "COMPANY"), and Xxxxxxx X. Xxxxx
(the "INDEMNITEE").
RECITALS:
A. Section 141 of the Delaware General Corporation Law provides that
the business and affairs of a corporation shall be managed by or under the
direction of its board of directors.
B. By virtue of the managerial prerogatives vested in the directors and
officers of a Delaware corporation, directors and officers act as fiduciaries of
the corporation and its stockholders.
C. Thus, it is critically important to the Company and its stockholders
that the Company be able to attract and retain the most capable persons
reasonably available to serve as directors and officers of the Company.
D. In recognition of the need for corporations to be able to induce
capable and responsible persons to accept positions in corporate management,
Delaware law authorizes (and in some instances requires) corporations to
indemnify their directors and officers, and further authorizes corporations to
purchase and maintain insurance for the benefit of their directors and officers.
E. The Delaware courts have recognized that indemnification by a
corporation serves the dual policies of (1) allowing corporate officials to
resist unjustified lawsuits, secure in the knowledge that, if vindicated, the
corporation will bear the expense of litigation, and (2) encouraging capable
women and men to serve as corporate directors and officers, secure in the
knowledge that the corporation will absorb the costs of defending their honesty
and integrity.
F. The number of lawsuits challenging the judgment and actions of
directors and officers of Delaware corporations, the costs of defending those
lawsuits and the threat to personal assets have all materially increased over
the past several years, chilling the willingness of capable women and men to
undertake the responsibilities imposed on corporate directors and officers.
G. Recent federal legislation and rules adopted by the Securities and
Exchange Commission and the national securities exchanges have exposed such
directors and officers to new and substantially broadened civil liabilities.
H. Under Delaware law, a director's or officer's right to be reimbursed
for the costs of defense of criminal actions, whether such claims are asserted
under state or federal law, does not depend upon the merits of the claims
asserted against the director or officer and is separate and distinct from any
right to indemnification the director may be able to establish.
I. Indemnitee is, or will be, a director and/or officer of the Company
and his or her willingness to serve in such capacity is predicated, in
substantial part, upon the Company's willingness to indemnify him or her in
accordance with the principles reflected above, to the fullest extent permitted
by the laws of the State of Delaware, and upon the other undertakings set forth
in this Agreement.
J. Therefore, in recognition of the need to provide Indemnitee with
substantial protection against personal liability, in order to procure
Indemnitee's continued service as a director and/or officer of the Company and
to enhance Indemnitee's ability to serve the Company in an effective manner, and
in order to provide such protection pursuant to express contract rights
(intended to be enforceable irrespective of, among other things, any amendment
to the Company's certificate of incorporation or bylaws (collectively, the
"CONSTITUENT DOCUMENTS"), any change in the composition of the Company's Board
of Directors (the "BOARD") or any change-in-control or business combination
transaction relating to the Company), the Company wishes to provide in this
Agreement for the indemnification and advancement of Expenses to Indemnitee on
the terms, and subject to the conditions, set forth in this Agreement.
K. In light of the considerations referred to in the preceding
recitals, it is the Company's intention and desire that the provisions of this
Agreement be construed liberally, subject to their express terms, to maximize
the protections to be provided to Indemnitee hereunder.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS. In addition to terms defined elsewhere herein,
the following terms have the following meanings when used in this Agreement with
initial capital letters:
(a) "CHANGE IN CONTROL" shall have occurred at such time, if any, as
Incumbent Directors cease for any reason to constitute a majority of Directors.
For purposes of this Section 1(a), "INCUMBENT DIRECTORS" means the individuals
who, as of the date hereof, are Directors of the Company and any individual
becoming a Director subsequent to the date hereof whose election, nomination for
election by the Company's stockholders, or appointment, was approved by a vote
of at least a majority of the then Incumbent Directors (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without objection to such nomination);
PROVIDED, HOWEVER, that an individual shall not be an Incumbent Director if such
individual's election or appointment to the Board occurs as a result of an
actual or threatened election contest (as described in Rule 14a-12(c) of the
Securities Exchange Act of 1934, as amended) with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board.
2
(b) "CLAIM" means (i) any threatened, asserted, pending or completed
claim, demand, action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, investigative or other, and whether made pursuant
to federal, state or other law; and (ii) any inquiry or investigation, whether
made, instituted or conducted by the Company or any other Person, including,
without limitation, any federal, state or other governmental entity, that
Indemnitee reasonably determines might lead to the institution of any such
claim, demand, action, suit or proceeding. For the avoidance of doubt, the
Company intends indemnity to be provided hereunder in respect of acts or failure
to act prior to, on or after the date hereof.
(c) "CONTROLLED AFFILIATE" means any corporation, limited liability
company, partnership, joint venture, trust or other entity or enterprise,
whether or not for profit, that is directly or indirectly controlled by the
Company. For purposes of this definition, "CONTROL" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of an entity or enterprise, whether through the ownership
of voting securities, through other voting rights, by contract or otherwise;
PROVIDED that direct or indirect beneficial ownership of capital stock or other
interests in an entity or enterprise entitling the holder to cast 15% or more of
the total number of votes generally entitled to be cast in the election of
directors (or persons performing comparable functions) of such entity or
enterprise shall be deemed to constitute control for purposes of this
definition.
(d) "DISINTERESTED DIRECTOR" means a director of the Company who is
not and was not a party to the Claim in respect of which indemnification is
sought by Indemnitee.
(e) "EXPENSES" means attorneys' and experts' fees and expenses and
all other costs and expenses paid or payable in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to investigate, defend, be a witness in or participate in (including
on appeal), any Claim.
(f) "INDEMNIFIABLE CLAIM" means any Claim based upon, arising out of
or resulting from (i) any actual, alleged or suspected act or failure to act by
Indemnitee in his or her capacity as a director, officer, employee or agent of
the Company or as a director, officer, employee, member, manager, trustee or
agent of any other corporation, limited liability company, partnership, joint
venture, trust or other entity or enterprise, whether or not for profit, as to
which Indemnitee is or was serving at the request of the Company, (ii) any
actual, alleged or suspected act or failure to act by Indemnitee in respect of
any business, transaction, communication, filing, disclosure or other activity
of the Company or any other entity or enterprise referred to in clause (i) of
this sentence, or (iii) Indemnitee's status as a current or former director,
officer, employee or agent of the Company or as a current or former director,
officer, employee, member, manager, trustee or agent of the Company or any other
entity or enterprise referred to in clause (i) of this sentence or any actual,
alleged or suspected act or failure to act by Indemnitee in connection with any
obligation or restriction imposed upon Indemnitee by reason of such status. In
addition to any service at the actual request of the Company, for purposes of
this Agreement, Indemnitee shall be deemed to be serving or to have served at
the request of the Company as a director, officer, employee, member, manager,
trustee or agent of another entity or enterprise if Indemnitee is or was serving
as a director, officer, employee, member, manager, agent, trustee or other
fiduciary of such entity or enterprise and (i) such entity or enterprise is or
3
at the time of such service was a Controlled Affiliate, (ii) such entity or
enterprise is or at the time of such service was an employee benefit plan (or
related trust) sponsored or maintained by the Company or a Controlled Affiliate,
or (iii) the Company or a Controlled Affiliate (by action of the Board, any
committee thereof or the Company's Chief Executive Officer ("CEO") (other than
as the CEO him or herself)) caused or authorized Indemnitee to be nominated,
elected, appointed, designated, employed, engaged or selected to serve in such
capacity.
(g) "INDEMNIFIABLE LOSSES" means any and all Losses relating to,
arising out of or resulting from any Indemnifiable Claim; PROVIDED, HOWEVER,
that Indemnifiable Losses shall not include Losses incurred by Indemnitee in
respect of any Indemnifiable Claim (or any matter or issue therein) as to which
Indemnitee shall have been adjudged liable to the Company, unless and only to
the extent that the Delaware Court of Chancery or the court in which such
Indemnifiable Claim was brought shall have determined upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnification for
such Expenses as the court shall deem proper.
(h) "INDEPENDENT COUNSEL" means a nationally recognized law firm, or
a member of a nationally recognized law firm, that is experienced in matters of
Delaware corporate law and neither presently is, nor in the past five years has
been, retained to represent: (i) the Company (or any subsidiary) or Indemnitee
in any matter material to either such party (other than with respect to matters
concerning the Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements) or (ii) any other named (or, as to a
threatened matter, reasonably likely to be named) party to the Indemnifiable
Claim giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee's rights under this Agreement.
(i) "LOSSES" means any and all Expenses, damages, losses,
liabilities, judgments, fines, penalties (whether civil, criminal or other) and
amounts paid or payable in settlement, including, without limitation, all
interest, assessments and other charges paid or payable in connection with or in
respect of any of the foregoing.
(j) "PERSON" means any individual, entity or group, within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended.
(k) "STANDARD OF CONDUCT" means the standard for conduct by
Indemnitee that is a condition precedent to indemnification of Indemnitee
hereunder against Indemnifiable Losses relating to, arising out of or resulting
from an Indemnifiable Claim. The Standard of Conduct is (i) good faith and a
reasonable belief by Indemnitee that his action was in or not opposed to the
best interests of the Company and, with respect to any criminal action or
proceeding, that Indemnitee had no reasonable cause to believe that his conduct
was unlawful, or (ii) any other applicable standard of conduct that may
hereafter be substituted under Section 145(a) or (b) of the Delaware General
Corporation Law or any successor to such provision(s).
4
2. INDEMNIFICATION OBLIGATION. Subject only to Section 7 and to the
proviso in this Section, the Company shall indemnify, defend and hold harmless
Indemnitee, to the fullest extent permitted or required by the laws of the State
of Delaware in effect on the date hereof or as such laws may from time to time
hereafter be amended to increase the scope of such permitted indemnification,
against any and all Indemnifiable Claims and Indemnifiable Losses; PROVIDED,
HOWEVER, that, except as provided in Section 5, Indemnitee shall not be entitled
to indemnification pursuant to this Agreement in connection with (i) any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of such
Claim, or (ii) the purchase and sale by Indemnitee of securities in violation of
Section 16(b) of the Securities Exchange Act of 1934, as amended. The Company
acknowledges that the foregoing obligation may be broader than that now provided
by applicable law and the Company's Constituent Documents and intends that it be
interpreted consistently with this Section and the recitals to this Agreement.
3. ADVANCEMENT OF EXPENSES. Indemnitee shall have the right to
advancement by the Company prior to the final disposition of any Indemnifiable
Claim of any and all actual and reasonable Expenses relating to, arising out of
or resulting from any Indemnifiable Claim paid or incurred by Indemnitee.
Without limiting the generality or effect of any other provision hereof,
Indemnitee's right to such advancement is not subject to the satisfaction of any
Standard of Conduct. Without limiting the generality or effect of the foregoing,
within five business days after any request by Indemnitee that is accompanied by
supporting documentation for specific reasonable Expenses to be reimbursed or
advanced, the Company shall, in accordance with such request (but without
duplication), (a) pay such Expenses on behalf of Indemnitee, (b) advance to
Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse
Indemnitee for such Expenses; PROVIDED that Indemnitee shall repay, without
interest, any amounts actually advanced to Indemnitee that, at the final
disposition of the Indemnifiable Claim to which the advance related, were in
excess of amounts paid or payable by Indemnitee in respect of Expenses relating
to, arising out of or resulting from such Indemnifiable Claim. In connection
with any such payment, advancement or reimbursement, at the request of the
Company, Indemnitee shall execute and deliver to the Company an undertaking,
which need not be secured and shall be accepted without reference to
Indemnitee's ability to repay the Expenses, by or on behalf of the Indemnitee,
to repay any amounts paid, advanced or reimbursed by the Company in respect of
Expenses relating to, arising out of or resulting from any Indemnifiable Claim
in respect of which it shall have been determined, following the final
disposition of such Indemnifiable Claim and in accordance with Section 7, that
Indemnitee is not entitled to indemnification hereunder.
4. INDEMNIFICATION FOR ADDITIONAL EXPENSES. Without limiting the
generality or effect of the foregoing, the Company shall indemnify and hold
harmless Indemnitee against and, if requested by Indemnitee, shall reimburse
Indemnitee for, or advance to Indemnitee, within five business days of such
request accompanied by supporting documentation for specific Expenses to be
reimbursed or advanced, any and all actual and reasonable Expenses paid or
incurred by Indemnitee in connection with any Claim made, instituted or
conducted by Indemnitee for (a) indemnification or reimbursement or advance
payment of Expenses by the Company under any provision of this Agreement, or
under any other agreement or provision of the Constituent Documents now or
hereafter in effect relating to Indemnifiable Claims, and/or (b) recovery under
any directors' and officers' liability insurance policies maintained by the
5
Company; PROVIDED, HOWEVER, if it is ultimately determined that the Indemnitee
is not entitled to such indemnification, reimbursement, advance or insurance
recovery, as the case may be, then the Indemnitee shall be obligated to repay
any such Expenses to the Company; PROVIDED FURTHER, that, regardless in each
case of whether Indemnitee ultimately is determined to be entitled to such
indemnification, reimbursement, advance or insurance recovery, as the case may
be, Indemnitee shall return, without interest, any such advance of Expenses (or
portion thereof) which remains unspent at the final disposition of the Claim to
which the advance related.
5. PARTIAL INDEMNITY. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of any
Indemnifiable Loss but not for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.
6. PROCEDURE FOR NOTIFICATION. To obtain indemnification under this
Agreement in respect of an Indemnifiable Claim or Indemnifiable Loss, Indemnitee
shall submit to the Company a written request therefore, including a brief
description (based upon information then available to Indemnitee) of such
Indemnifiable Claim or Indemnifiable Loss. If, at the time of the receipt of
such request, the Company has directors' and officers' liability insurance in
effect under which coverage for such Indemnifiable Claim or Indemnifiable Loss
is potentially available, the Company shall give prompt written notice of such
Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in
accordance with the procedures set forth in the applicable policies. The Company
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of the Indemnitee, all Indemnifiable Claims and Indemnifiable
Losses in accordance with the terms of such policies. The Company shall provide
to Indemnitee a copy of such notice delivered to the applicable insurers,
substantially concurrently with the delivery thereof by the Company. The failure
by Indemnitee to timely notify the Company of any Indemnifiable Claim or
Indemnifiable Loss shall not relieve the Company from any liability hereunder
unless, and only to the extent that, the Company did not otherwise learn of such
Indemnifiable Claim or Indemnifiable Loss and to the extent that such failure
results in forfeiture by the Company of substantial defenses, rights or
insurance coverage.
7. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) To the extent that Indemnitee shall have been successful on the
merits or otherwise in defense of any Indemnifiable Claim or any portion thereof
or in defense of any issue or matter therein, including, without limitation,
dismissal without prejudice, Indemnitee shall be indemnified against all
Indemnifiable Losses relating to, arising out of or resulting from such
Indemnifiable Claim in accordance with Section 2 and no Standard of Conduct
Determination (as defined in Section 7(b)) shall be required.
(b) To the extent that the provisions of Section 7(a) are
inapplicable to an Indemnifiable Claim that shall have been finally disposed of,
any determination of whether Indemnitee has satisfied the applicable Standard of
Conduct (a "STANDARD OF CONDUCT DETERMINATION") shall be made as follows: (i) if
a Change in Control shall not have occurred, or if a Change in Control shall
have occurred but Indemnitee shall have requested that the Standard of Conduct
Determination be made pursuant to this clause (i), (A) by a majority vote of the
Disinterested Directors, even if less than a quorum of the Board, (B) if such
6
Disinterested Directors so direct, by a majority vote of a committee of
Disinterested Directors designated by a majority vote of all Disinterested
Directors, or (C) if there are no such Disinterested Directors, or if a majority
of the Disinterested Directors so direct, by Independent Counsel in a written
opinion addressed to the Board, a copy of which shall be delivered to
Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee
shall not have requested that the Standard of Conduct Determination be made
pursuant to clause (i) above, by Independent Counsel in a written opinion
addressed to the Board, a copy of which shall be delivered to Indemnitee.
(c) If (i) Indemnitee shall be entitled to indemnification hereunder
against any Indemnifiable Losses pursuant to Section 7(a), (ii) no determination
of whether Indemnitee has satisfied any applicable standard of conduct under
Delaware law is a legally required condition precedent to indemnification of
Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee has
been determined or deemed pursuant to Section 7(b) to have satisfied the
applicable Standard of Conduct, then the Company shall pay to Indemnitee, within
five business days after the later of (x) the Notification Date in respect of
the Indemnifiable Claim or portion thereof to which such Indemnifiable Losses
are related, out of which such Indemnifiable Losses arose or from which such
Indemnifiable Losses resulted, and (y) the earliest date on which the applicable
criterion specified in clause (i), (ii) or (iii) above shall have been
satisfied, an amount equal to the amount of such Indemnifiable Losses. Nothing
herein is intended to mean or imply that the Company is intending to use Section
145(f) of the Delaware General Corporation Law to dispense with a requirement
that Indemnitee meet the applicable Standard of Conduct where it is otherwise
required by such statute.
(d) If a Standard of Conduct Determination is required to be, but
has not been, made by Independent Counsel pursuant to Section 7(b)(i), the
Independent Counsel shall be selected by the Board or a committee of the Board,
and the Company shall give written notice to Indemnitee advising him or her of
the identity of the Independent Counsel so selected. If a Standard of Conduct
Determination is required to be, or to have been, made by Independent Counsel
pursuant to Section 7(b)(ii), the Independent Counsel shall be selected by
Indemnitee, and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected. In either case,
Indemnitee or the Company, as applicable, may, within five business days after
receiving written notice of selection from the other, deliver to the other a
written objection to such selection; PROVIDED, HOWEVER, that such objection may
be asserted only on the ground that the Independent Counsel so selected does not
satisfy the criteria set forth in the definition of "Independent Counsel" in
Section 1(h), and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the Person so
selected shall act as Independent Counsel. If such written objection is properly
and timely made and substantiated, (i) the Independent Counsel so selected may
not serve as Independent Counsel unless and until such objection is withdrawn or
a court has determined that such objection is without merit and (ii) the
non-objecting party may, at its option, select an alternative Independent
Counsel and give written notice to the other party advising such other party of
the identity of the alternative Independent Counsel so selected, in which case
the provisions of the two immediately preceding sentences and clause (i) of this
sentence shall apply to such subsequent selection and notice. If applicable, the
provisions of clause (ii) of the immediately preceding sentence shall apply to
successive alternative selections. If no Independent Counsel that is permitted
under the foregoing provisions of this Section 7(d) to make the Standard of
7
Conduct Determination shall have been selected within 30 calendar days after the
Company gives its initial notice pursuant to the first sentence of this Section
7(d) or Indemnitee gives its initial notice pursuant to the second sentence of
this Section 7(d), as the case may be, either the Company or Indemnitee may
petition the Court of Chancery of the State of Delaware for resolution of any
objection which shall have been made by the Company or Indemnitee to the other's
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person or firm selected by the Court or by such other person as the
Court shall designate, and the person or firm with respect to whom all
objections are so resolved or the person or firm so appointed will act as
Independent Counsel. In all events, the Company shall pay all of the actual and
reasonable fees and expenses of the Independent Counsel incurred in connection
with the Independent Counsel's determination pursuant to Section 7(b).
8. COOPERATION. Indemnitee shall cooperate with reasonable requests of
the Company in connection with any Indemnifiable Claim and any individual or
firm making such Standard of Conduct Determination, including providing to such
Person documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to defend the Indemnifiable Claim or make any Standard of
Conduct Determination without incurring any unreimbursed cost in connection
therewith. The Company shall indemnify and hold harmless Indemnitee against and,
if requested by Indemnitee, shall reimburse Indemnitee for, or advance to
Indemnitee, within five business days of such request accompanied by supporting
documentation for specific costs and expenses to be reimbursed or advanced, any
and all costs and expenses (including attorneys' and experts' fees and expenses)
actually and reasonably incurred by Indemnitee in so cooperating with the Person
defending the Indemnifiable Claim or making such Standard of Conduct
Determination.
9. PRESUMPTION OF ENTITLEMENT. Notwithstanding any other provision
hereof, in making any Standard of Conduct Determination, the Person making such
determination shall presume that Indemnitee has satisfied the applicable
Standard of Conduct.
10. NO OTHER PRESUMPTION. For purposes of this Agreement, the
termination of any Claim by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere or its
equivalent, will not create a presumption that Indemnitee did not meet any
applicable Standard of Conduct or that indemnification hereunder is otherwise
not permitted.
11. NON-EXCLUSIVITY. The rights of Indemnitee hereunder will be in
addition to any other rights Indemnitee may have under the Constituent
Documents, or the substantive laws of the Company's jurisdiction of
incorporation, any other contract or otherwise (collectively, "OTHER INDEMNITY
PROVISIONS"); PROVIDED, HOWEVER, that (a) to the extent that Indemnitee
otherwise would have any greater right to indemnification under any Other
Indemnity Provision, Indemnitee will without further action be deemed to have
such greater right hereunder, and (b) to the extent that any change is made to
any Other Indemnity Provision which permits any greater right to indemnification
than that provided under this Agreement as of the date hereof, Indemnitee will
be deemed to have such greater right hereunder. The Company may not, without the
8
consent of Indemnitee, adopt any amendment to any of the Constituent Documents
the effect of which would be to deny, diminish or encumber Indemnitee's right to
indemnification under this Agreement.
12. LIABILITY INSURANCE AND FUNDING. For the duration of Indemnitee's
service as a director and/or officer of the Company and for a reasonable period
of time thereafter, which such period shall be determined by the Company in its
sole discretion, the Company shall use commercially reasonable efforts (taking
into account the scope and amount of coverage available relative to the cost
thereof) to cause to be maintained in effect policies of directors' and
officers' liability insurance providing coverage for directors and/or officers
of the Company, and, if applicable, that is substantially comparable in scope
and amount to that provided by the Company's current policies of directors' and
officers' liability insurance. Upon reasonable request, the Company shall
provide Indemnitee or his or her counsel with a copy of all directors' and
officers' liability insurance applications, binders, policies, declarations,
endorsements and other related materials. In all policies of directors' and
officers' liability insurance obtained by the Company, 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 and officers most favorably insured by such policy. Notwithstanding
the foregoing, (i) the Company may, but shall not be required to, create a trust
fund, grant a security interest or use other means, including, without
limitation, a letter of credit, to ensure the payment of such amounts as may be
necessary to satisfy its obligations to indemnify and advance expenses pursuant
to this Agreement and (ii) in renewing or seeking to renew any insurance
hereunder, the Company will not be required to expend more than 2.0 times the
premium amount of the immediately preceding policy period (equitably adjusted if
necessary to reflect differences in policy periods).
13. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the related
rights of recovery of Indemnitee against other Persons (other than Indemnitee's
successors), including any entity or enterprise referred to in clause (i) of the
definition of "Indemnifiable Claim" in Section 1(f). Indemnitee shall execute
all papers reasonably required to evidence such rights (all of Indemnitee's
reasonable Expenses, including attorneys' fees and charges, related thereto to
be reimbursed by or, at the option of Indemnitee, advanced by the Company).
14. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment to Indemnitee in respect of any Indemnifiable
Losses to the extent Indemnitee has otherwise already actually received payment
(net of Expenses incurred in connection therewith) under any insurance policy,
the Constituent Documents and Other Indemnity Provisions or otherwise (including
from any entity or enterprise referred to in clause (i) of the definition of
"Indemnifiable Claim" in Section 1(f)) in respect of such Indemnifiable Losses
otherwise indemnifiable hereunder.
15. DEFENSE OF CLAIMS. Subject to the provisions of applicable policies
of directors' and officers' liability insurance, if any, the Company shall be
entitled to participate in the defense of any Indemnifiable Claim or to assume
or lead the defense thereof with counsel reasonably satisfactory to the
Indemnitee; PROVIDED that if Indemnitee determines, after consultation with
counsel selected by Indemnitee, that (a) the use of counsel chosen by the
Company to represent Indemnitee would present such counsel with an actual or
potential conflict, (b) the named parties in any such Indemnifiable Claim
9
(including any impleaded parties) include both the Company and Indemnitee and
Indemnitee shall conclude that there may be one or more legal defenses available
to him or her that are different from or in addition to those available to the
Company, (c) any such representation by such counsel would be precluded under
the applicable standards of professional conduct then prevailing, or (d)
Indemnitee has interests in the claim or underlying subject matter that are
different from or in addition to those of other Persons against whom the Claim
has been made or might reasonably be expected to be made, then Indemnitee shall
be entitled to retain separate counsel (but not more than one law firm plus, if
applicable, local counsel in respect of any particular Indemnifiable Claim for
all indemnitees in Indemnitee's circumstances) at the Company's expense. The
Company shall not be liable to Indemnitee under this Agreement for any amounts
paid in settlement of any threatened or pending Indemnifiable Claim effected
without the Company's prior written consent. The Company shall not, without the
prior written consent of the Indemnitee, effect any settlement of any threatened
or pending Indemnifiable Claim which the Indemnitee is or could have been a
party unless such settlement solely involves the payment of money and includes a
complete and unconditional release of the Indemnitee from all liability on any
claims that are the subject matter of such Indemnifiable Claim. Neither the
Company nor Indemnitee shall unreasonably withhold its consent to any proposed
settlement; PROVIDED that Indemnitee may withhold consent to any settlement that
does not provide a complete and unconditional release of Indemnitee.
16. MUTUAL ACKNOWLEDGMENT. Both the Company and the Indemnitee
acknowledge that in certain instances, Federal law or applicable public policy
may prohibit the Company from indemnifying its directors and officers under this
Agreement or otherwise. Indemnitee understands and acknowledges that the Company
may be required in the future to undertake to the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company's right under public policy to
indemnify Indemnitee and, in that event, the Indemnitee's rights and the
Company's obligations hereunder shall be subject to that determination.
17. SUCCESSORS AND BINDING AGREEMENT.
(a) This Agreement shall be binding upon and inure to the benefit
of the Company and any successor to the Company, including, without limitation,
any Person acquiring directly or indirectly all or substantially all of the
business or assets of the Company whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor will thereafter be deemed the
"Company" for purposes of this Agreement), but shall not otherwise be assignable
or delegatable by the Company.
(b) This Agreement shall inure to the benefit of and be enforceable
by the Indemnitee's personal or legal representatives, executors,
administrators, heirs, distributees, legatees and other successors.
(c) This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign or delegate this
Agreement or any rights or obligations hereunder except as expressly provided in
Sections 17(a) and 17(b). Without limiting the generality or effect of the
foregoing, Indemnitee's right to receive payments hereunder shall not be
10
assignable, whether by pledge, creation of a security interest or otherwise,
other than by a transfer by the Indemnitee's will or by the laws of descent and
distribution, and, in the event of any attempted assignment or transfer contrary
to this Section 17(c), the Company shall have no liability to pay any amount so
attempted to be assigned or transferred.
18. NOTICES. For all purposes of this Agreement, all
communications, including without limitation notices, consents, requests or
approvals, required or permitted to be given hereunder must be in writing and
shall be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof orally confirmed), or
one business day after having been sent for next-day delivery by a nationally
recognized overnight courier service, addressed to the Company (to the attention
of the Secretary of the Company) and to Indemnitee at the applicable address
shown on the signature page hereto, or to such other address as any party may
have furnished to the other in writing and in accordance herewith, except that
notices of changes of address will be effective only upon receipt.
19. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Delaware, without giving effect to the
principles of conflict of laws of such State. The Company and Indemnitee each
hereby irrevocably consent to the jurisdiction of the Chancery Court of the
State of Delaware for all purposes in connection with any action or proceeding
which arises out of or relates to this Agreement, waive all procedural
objections to suit in that jurisdiction, including, without limitation,
objections as to venue or inconvenience, agree that service in any such action
may be made by notice given in accordance with Section 18 and also agree that
any action instituted under this Agreement shall be brought only in the Chancery
Court of the State of Delaware.
20. VALIDITY. If any provision of this Agreement or the application
of any provision hereof to any Person or circumstance is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision to any other Person or circumstance shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise
illegal shall be reformed to the extent, and only to the extent, necessary to
make it enforceable, valid or legal. In the event that any court or other
adjudicative body shall decline to reform any provision of this Agreement held
to be invalid, unenforceable or otherwise illegal as contemplated by the
immediately preceding sentence, the parties thereto shall take all such action
as may be necessary or appropriate to replace the provision so held to be
invalid, unenforceable or otherwise illegal with one or more alternative
provisions that effectuate the purpose and intent of the original provisions of
this Agreement as fully as possible without being invalid, unenforceable or
otherwise illegal.
21. MISCELLANEOUS. No provision of this Agreement may be waived,
modified or discharged unless such waiver, modification or discharge is agreed
to in writing signed by Indemnitee and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject matter
hereof have been made by either party that are not set forth expressly in this
Agreement.
11
22. CERTAIN INTERPRETIVE MATTERS. Unless the context of this
Agreement otherwise requires, (1) "it" or "its" or words of any gender include
each other gender, (2) words using the singular or plural number also include
the plural or singular number, respectively, (3) the terms "hereof," "herein,"
"hereby" and derivative or similar words refer to this entire Agreement, (4) the
terms "Article," "Section," "Annex" or "Exhibit" refer to the specified Article,
Section, Annex or Exhibit of or to this Agreement, (5) the terms "include,"
"includes" and "including" will be deemed to be followed by the words "without
limitation" (whether or not so expressed), and (6) the word "or" is disjunctive
but not exclusive. Whenever this Agreement refers to a number of days, such
number will refer to calendar days unless business days are specified and
whenever action must be taken (including the giving of notice or the delivery of
documents) under this Agreement during a certain period of time or by a
particular date that ends or occurs on a non-business day, then such period or
date will be extended until the immediately following business day. As used
herein, "BUSINESS DAY" means any day other than Saturday, Sunday or a United
States federal holiday.
23. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, between the parties hereto with respect to the subject matter of this
Agreement. Any prior agreements or understandings between the parties hereto
with respect to indemnification are hereby terminated and of no further force or
effect. This Agreement is not the exclusive means of securing indemnification
rights of Indemnitee and is in addition to any rights Indemnitee may have under
any Constituent Documents.
24. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together shall constitute one and the same agreement.
12
IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused
its duly authorized representative to execute this Agreement as of the date
first above written.
HEALTH BENEFITS DIRECT CORPORATION
By: /s/ Xxxxx Xxxxxxx
---------------------
Name: Xxxxx Xxxxxxx
Title: CEO
INDEMNITEE:
/s/ Xxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxx
Address: 000 Xxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
SIGNATURE PAGE TO DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
