Contract
Exhibit
10.1
This
Director and Officer Indemnification Agreement, dated as of ___________ ___,
2008 (this “Agreement”),
is made by and between HSW International, Inc., a Delaware corporation (the
“Company”),
and _____________________ (“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. Section 142 of the Delaware General Corporation Law
authorizes the appointment of persons to serve as officers of a
corporation.
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 directors’ 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 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 or officer may be able to establish.
I. Indemnitee
is, or will be, a director and/or officer of the Company and his willingness to
serve in such capacity is predicated, in substantial part, upon the Company’s
willingness to indemnify him 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 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 of and the advancement of Expenses to Indemnitee as set forth in
this Agreement and for the continued coverage of Indemnitee under the Company’s
directors’ and officers’ liability insurance policies.
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 purpose 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 two-thirds 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,
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.
(b) “Claim”
means (i) any threatened, asserted, pending or completed claim, demand,
action, suit, arbitration, alternate dispute resolution mechanism,
administrative hearing or any other proceeding, whether civil, criminal,
administrative or investigative (including on
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appeal),
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 any federal, state or other governmental entity,
that Indemnitee 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, agent, trustee or other fiduciary 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 (A) such entity or enterprise is or at the time of such service was a
Controlled Affiliate, (B) 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
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(C) 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,
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 determine 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 law firm, or a member of a law firm, that is experienced
in matters of corporation 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 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 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).
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
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indemnification,
against any and all Indemnifiable Claims and Indemnifiable Losses; provided,
that, except as provided in Sections 4 and 20, Indemnitee shall not be
entitled to indemnification pursuant to this Agreement in connection with 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. The Company acknowledges that the foregoing obligation is
substantially 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 Expenses relating to, arising out of or resulting from any Indemnifiable
Claim paid or incurred by Indemnitee or which Indemnitee determines in good
faith are reasonably likely to be paid or incurred by Indemnitee and as to which
Indemnitee’s counsel provides supporting
documentation. 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 ten business days
after any request by Indemnitee that is accompanied by supporting documentation
for specific 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 ten business days of such request
accompanied by supporting documentation for specific Expenses to be reimbursed
or advanced, any and all Expenses paid or incurred by Indemnitee or which
Indemnitee determines in good faith are reasonably likely to be 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 Company,
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; provided,
that Indemnitee shall return,
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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 therefor, 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 provide to Indemnitee a copy
of such notice delivered to the applicable insurers and, upon Indemnitee’s
request, copies of all subsequent correspondence between the Company and such
insurers regarding the Indemnifiable Claim or Indemnifiable Loss, in each case
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 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 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,
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(B) if
such 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 (who shall be selected in accordance
with Section 7(e) below) 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),
by Independent Counsel (who shall be selected in accordance with Section 7(e)
below) in a written opinion addressed to the Board, a copy of which shall be
delivered to Indemnitee.
Indemnitee
shall cooperate with reasonable requests of the 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 such 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 ten 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) incurred by Indemnitee in so cooperating with the
Person making such Standard of Conduct Determination.
(c) The
Company shall use its reasonable efforts to cause any Standard of Conduct
Determination required under Section 7(b) to be made as promptly as
practicable. If (i) the Person empowered or selected under
Section 7 to make the Standard of Conduct Determination
shall not have made a determination within 30 calendar days after the later
of (A) receipt by the Company of written notice from Indemnitee advising
the Company of the final disposition of the applicable Indemnifiable Claim (the
date of such receipt being the “Notification
Date”) and (B) the selection of an Independent Counsel, if such
determination is to be made by Independent Counsel, that is permitted under the
provisions of Section 7(e) to make such determination, and
(ii) Indemnitee shall have fulfilled his/her obligations set forth in the
second sentence of Section 7(b), then Indemnitee shall be deemed to have
satisfied the applicable Standard of Conduct; provided,
that such 30-day period may be extended for a reasonable time, not to exceed an
additional 30 calendar days, if the Person making such determination in
good faith requires such additional time for the obtaining or evaluation or
documentation and/or information relating thereto.
(d) 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) or (c) to have
satisfied the applicable Standard of Conduct, then the Company shall pay to
Indemnitee, within ten 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
IndemnifiableLosses 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.
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(e) 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 Board Committee, 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,
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(e) to
make the Standard of 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(e) or Indemnitee gives its initial notice
pursuant to the second sentence of this Section 7(e), 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. 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, and the Company may overcome such presumption only by its
adducing clear and convincing evidence to the contrary.
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Any
Standard of Conduct Determination that is adverse to Indemnitee may be
challenged by the Indemnitee in the Court of Chancery of the State of
Delaware. No determination by the Company (including by its directors
or any Independent Counsel) that Indemnitee has not satisfied any applicable
Standard of Conduct shall be a defense to any Claim by Indemnitee for
indemnification or reimbursement or advance payment of Expenses by the Company
hereunder or create a presumption that Indemnitee has not met any applicable
Standard of Conduct.
9. 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.
10. 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,
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 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.
11. Liability
Insurance and Funding. For the duration of Indemnitee’s
service as a director and/or officer of the Company and for not less than five
years thereafter, 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 Indemnitee that is at least
as favorable in scope and amount to that provided by the Company’s current
policies of directors’ and officers’ liability insurance. Upon
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 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 3.0
times the premium amount of the immediately preceding policy period (equitably
adjusted if necessary to reflect differences in policy
periods).
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12. 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).
13. 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.
14. Defense
of Claims. Subject to the provisions of applicable policies of
directors’ and officers’ liability insurance, 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 (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.
15. Successors
and Binding Agreement.
(a) The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) to all or substantially all
of the business or assets of the Company expressly to assume and agree to
perform this Agreement in
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the same
manner and to the same extent the Company would be required to perform if no
such succession had taken place. This Agreement shall be binding upon
and inure to the benefit of the Company and any successor to the Company,
including 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
delegable 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 15(a) and 15(b). Without limiting the generality or
effect of the foregoing, Indemnitee’s right to receive payments hereunder shall
not be 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 15(c), the Company shall have no
liability to pay any amount so attempted to be assigned or
transferred.
16. Notices. For
all purposes of this Agreement, all communications, including 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.
17. 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 objections as to
venue or inconvenience, agree that service in any such action may be made by
notice given in accordance with Section 16 and also agree that any action
instituted under this Agreement shall be brought only in the Chancery Court of
the State of Delaware.
18. 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
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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.
19. 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. 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.
20. Legal
Fees and Expenses. It is the intent of the Company that
Indemnitee not be required to incur legal fees and or other Expenses associated
with the interpretation, enforcement or defense of Indemnitee’s rights under
this Agreement by litigation or otherwise because the cost and expense thereof
would substantially detract from the benefits intended to be extended to
Indemnitee hereunder. Accordingly, without limiting the generality or
effect of any other provision hereof, if it should reasonably appear to
Indemnitee that the Company has failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other Person takes
or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or
proceeding designed to improperly deny, or to improperly recover from,
Indemnitee the benefits provided or intended to be provided to Indemnitee
hereunder, the Company irrevocably authorizes the Indemnitee from time to time
to retain counsel of Indemnitee’s choice, at the expense of the Company as
hereafter provided, to advise and represent Indemnitee in connection with any
such interpretation, enforcement or defense, including the initiation or defense
of any litigation or other legal action, whether by or against the Company or
any director, officer, stockholder or other Person affiliated with the Company,
in any jurisdiction. Without limiting the generality or effect of any
other provision hereof or respect to whether Indemnitee prevails, in whole or in
part, in connection with any of the foregoing, the Company will pay and be
solely financially responsible for any and all attorneys’ and related fees and
expenses actually and reasonably incurred by Indemnitee in connection with any
of the foregoing.
21. 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.
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22. Entire
Agreement. This Agreement and the Constituent Documents
constitute the entire agreement, and supersede 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.
23. 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.
[signature
page follows]
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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.
By: ________________________________
Name:______________________________
Title:_______________________________
INDEMNITEE
___________________________________
Name: ______________________________
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