INDEMNITY AGREEMENT
INDEMNITY
AGREEMENT
THIS INDEMNITY AGREEMENT (this
“Agreement”)
is made as of ____________, 2011, by and between RLJ ACQUISITION, INC., a Nevada
corporation (the “Company”),
and
(“Indemnitee”).
RECITALS
WHEREAS, highly competent
persons have become more reluctant to serve publicly-held corporations as
directors or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate
risks of claims and actions against them arising out of their service to and
activities on behalf of such corporations.
WHEREAS, the Board of
Directors of the Company (the “Board”)
has determined that, in order to attract and retain qualified individuals, the
Company will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its subsidiaries
from certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would have been
brought only against the Company or business enterprise itself. The Amended and
Restated Articles of Incorporation (the “Charter”)
and Bylaws of the Company require indemnification of the officers and directors
of the Company. Indemnitee may also be entitled to indemnification pursuant to
applicable provisions of the Nevada Revised Statutes (“NRS”). The
Charter, Bylaws and the NRS expressly provide that the indemnification
provisions set forth therein are not exclusive, and thereby contemplate that
contracts may be entered into between the Company and members of the board of
directors, officers and other persons with respect to indemnification, hold
harmless, exoneration, advancement and reimbursement rights.
WHEREAS, the uncertainties
relating to such insurance and to indemnification have increased the difficulty
of attracting and retaining such persons.
WHEREAS, the Board has
determined that the increased difficulty in attracting and retaining such
persons is detrimental to the best interests of the Company’s stockholders and
that the Company should act to assure such persons that there will be increased
certainty of such protection in the future.
WHEREAS, it is reasonable,
prudent and necessary for the Company contractually to obligate itself to
indemnify, hold harmless, exonerate and to advance expenses on behalf of, such
persons to the fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern that they will
not be so protected against liabilities.
WHEREAS, this Agreement is a
supplement to and in furtherance of the Charter and Bylaws of the Company and
any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder.
WHEREAS, Indemnitee may not be
willing to serve as an officer or director without adequate protection, and the
Company desires Indemnitee to serve in such capacity. Indemnitee is willing to
serve, continue to serve and to take on additional service for or on behalf of
the Company on the condition that he be so indemnified.
NOW, THEREFORE, in
consideration of the premises and the covenants contained herein, the Company
and Indemnitee do hereby covenant and agree as follows:
TERMS AND
CONDITIONS
1. SERVICES TO THE
COMPANY. Indemnitee
will serve or continue to serve as an officer, director or key employee of the
Company for so long as Indemnitee is duly elected or appointed or until
Indemnitee tenders his or her resignation.
2.
DEFINITIONS. As
used in this Agreement:
(a) References
to “agent”
shall mean any person who is or was a director, officer or employee of the
Company or a subsidiary of the Company or other person authorized by the Company
to act for the Company, to include such person serving in such capacity as a
director, officer, employee, fiduciary or other official of another corporation,
partnership, limited liability company, joint venture, trust or other enterprise
at the request of, for the convenience of, or to represent the interests of the
Company or a subsidiary of the Company.
(b) The
terms “Beneficial
Owner” and “Beneficial
Ownership” shall have the meanings set forth in Rule 13d-3
promulgated under the Exchange Act (as defined below) as in effect on the date
hereof.
(c) A
“Change in
Control” shall be deemed to occur upon the earliest to occur after the
date of this Agreement of any of the following events:
(i) Acquisition
of Stock by Third Party. Any Person (as defined below) is or becomes
the Beneficial Owner, directly or indirectly, of securities of the Company
representing fifteen percent (15%) or more of the combined voting power of the
Company’s then outstanding securities entitled to vote generally in the election
of directors, unless (1) the change in the relative Beneficial Ownership of
the Company’s securities by any Person results solely from
a reduction in the aggregate number of outstanding shares of
securities entitled to vote generally in the election of directors, or
(2) such acquisition was approved in advance by the Continuing Directors
(as defined below) and such acquisition would not constitute a Change in Control
under part (iii) of this definition;
(ii) Change
in Board of Directors. Individuals who, as of the date hereof, constitute the
Board, and any new director whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least two
thirds of the directors then still in office who were directors on the date
hereof or whose election for nomination for election was previously so approved
(collectively, the “Continuing
Directors”), cease for any reason to constitute at least a majority of
the members of the Board;
(iii) Corporate
Transactions. The effective date of a reorganization, merger or consolidation of
the Company (a “Business
Combination”), in each case, unless, following such Business Combination:
(1) all or substantially all of the individuals and entities who were the
Beneficial Owners of securities entitled to vote generally in the election of
directors immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 51% of the combined voting power of the then
outstanding securities of the Company entitled to vote generally in the election
of directors resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Company
or all or substantially all of the Company’s assets either directly or through
one or more Subsidiaries) in substantially the same proportions as their
ownership immediately prior to such Business Combination, of the securities
entitled to vote generally in the election of directors; (2) no Person
(excluding any corporation resulting from such Business Combination) is the
Beneficial Owner, directly or indirectly, of 15% or more of the combined voting
power of the then outstanding securities entitled to vote generally in the
election of directors of the surviving corporation except to the extent that
such ownership existed prior to the Business Combination; and (3) at least
a majority of the Board of Directors of the corporation resulting from such
Business Combination were Continuing Directors at the time of the execution of
the initial agreement, or of the action of the Board of Directors, providing for
such Business Combination;
(iv) Liquidation.
The approval by the stockholders of the Company of a complete liquidation of the
Company or an agreement or series of agreements for the sale or disposition by
the Company of all or substantially all of the Company’s assets, other than
factoring the Company’s current receivables or escrows due (or, if such approval
is not required, the decision by the Board to proceed with such a liquidation,
sale, or disposition in one transaction or a series of related transactions);
or
(v) Other
Events. There occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a
response to any similar item on any similar schedule or form) promulgated under
the Exchange Act (as defined below), whether or not the Company is then subject
to such reporting requirement.
(d) “Corporate
Status” describes the status of a person who is or was a director,
officer, trustee, general partner, managing member, fiduciary, employee or agent
of the Company or of any other Enterprise (as defined below) which such person
is or was serving at the request of the Company.
(f)
“Disinterested
Director” shall mean a director of the Company who is not and was not a
party to the Proceeding (as defined below) in respect of which indemnification
is sought by Indemnitee.
(g)
“Enterprise”
shall mean the Company and any other corporation, constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger to which the Company (or any of its wholly owned subsidiaries) is a
party, limited liability company, partnership, joint venture, trust, employee
benefit plan or other enterprise of which Indemnitee is or was serving at the
request of the Company as a director, officer, trustee, general partner,
managing member, fiduciary, employee or agent.
(h)
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended.
(i) “Expenses”
shall include all direct and indirect costs, fees and expenses of any type or
nature whatsoever, including, without limitation, all attorneys’ fees and costs,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, fees of private investigators and professional advisors, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, fax transmission charges, secretarial services and all other
disbursements, obligations or expenses in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, settlement or appeal of, or otherwise participating in, a
Proceeding (as defined below), including reasonable compensation for time spent
by the Indemnitee for which he or she is not otherwise compensated by the
Company or any third party. Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding (as defined below),
including without limitation the principal, premium, security for, and other
costs relating to any cost bond, supersedeas bond, or other appeal bond or its
equivalent. Expenses, however, shall not include amounts paid in settlement by
Indemnitee or the amount of judgments or fines against Indemnitee.
(j) “Independent
Counsel” shall mean a law firm or a member of a law firm with significant
experience in matters of corporation law and neither presently is, nor in the
past five years has been, retained to represent: (i) the Company 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
party to the Proceeding (as defined below) 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.
(k) References
to “fines”
shall include any excise tax assessed on Indemnitee with respect to any employee
benefit plan; references to “serving at the request of the Company” shall
include any service as a director, officer, employee, agent or fiduciary of the
Company which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee benefit plan,
its participants or beneficiaries; and if Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner “not opposed to the best interests of the
Company” as referred to in this Agreement.
(l) The
term “Person”
shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange
Act as in effect on the date hereof; provided, however, that “Person” shall
exclude: (i) the Company; (ii) any Subsidiaries (as defined below) of the
Company; (iii) any employment benefit plan of the Company or of a
Subsidiary (as defined below) of the Company or of any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company; and (iv) any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or of a Subsidiary (as defined below) of the Company or of a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company.
(m) The
term “Proceeding”
shall include any threatened, pending or completed action, suit, arbitration,
mediation, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding,
whether brought in the right of the Company or otherwise and whether of a civil
(including intentional or unintentional tort claims), criminal, administrative
or investigative nature, in which Indemnitee was, is, will or might be involved
as a party or otherwise by reason of the fact that Indemnitee is or was a
director or officer of the Company, by reason of any action (or failure to act)
taken by him or of any action (or failure to act) on his or her part while
acting as a director or officer of the Company, or by reason of the fact that he
or she is or was serving at the request of the Company as a director, officer,
trustee, general partner, managing member, fiduciary, employee or agent of any
other Enterprise, in each case whether or not serving in such capacity at the
time any liability or expense is incurred for which indemnification,
reimbursement, or advancement of expenses can be provided under this
Agreement.
(n) The
term “Subsidiary,”
with respect to any Person, shall mean any corporation or other entity of which
a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by that Person.
3.
INDEMNITY IN THIRD-PARTY
PROCEEDINGS. To the fullest extent permitted by
applicable law, the Company shall indemnify, hold harmless and exonerate
Indemnitee in accordance with the provisions of this Section 3 if
Indemnitee was, is, or is threatened to be made, a party to or a participant (as
a witness or otherwise) in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3,
Indemnitee shall be indemnified, held harmless and exonerated against all
Expenses, judgments, liabilities, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines,
penalties and amounts paid in settlement) actually and reasonably incurred by
Indemnitee or on his or her behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Company and, in the case of a criminal Proceeding, had no
reasonable cause to believe that his or her conduct was
unlawful.
4.
INDEMNITY IN PROCEEDINGS BY OR IN THE
RIGHT OF THE COMPANY. To the fullest extent permitted by applicable law,
the Company shall indemnify, hold harmless and exonerate Indemnitee in
accordance with the provisions of this Section 4 if
Indemnitee was, is, or is threatened to be made, a party to or a participant (as
a witness or otherwise) in any Proceeding by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4,
Indemnitee shall be indemnified, held harmless and exonerated against all
Expenses actually and reasonably incurred by him or her, or on his or her behalf
in connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the Company. No indemnification,
hold harmless or exoneration for Expenses shall be made under this Section 4 in
respect of any claim, issue or matter as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company, unless and only to the
extent that any court in which the Proceeding was brought or the Nevada Court
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, to be held harmless or to
exoneration.
5.
INDEMNIFICATION FOR EXPENSES OF A
PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL.
Notwithstanding any other provisions of this Agreement, to the extent that
Indemnitee is a party to (or a participant in) and is successful, on the merits
or otherwise, in any Proceeding or in defense of any claim, issue or matter
therein, in whole or in part, the Company shall, to the fullest extent permitted
by applicable law, indemnify, hold harmless and exonerate Indemnitee against all
Expenses actually and reasonably incurred by him or her in connection therewith.
If Indemnitee is not wholly successful in such Proceeding but is successful, on
the merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company shall, to the fullest extent permitted
by applicable law, indemnify, hold harmless and exonerate Indemnitee against all
Expenses actually and reasonably incurred by him or her, or on his or her behalf
in connection with each successfully resolved claim, issue or matter. If the
Indemnitee is not wholly successful in such Proceeding, the Company also shall,
to the fullest extent permitted by applicable law, indemnify, hold harmless and
exonerate Indemnitee against all Expenses reasonably incurred in connection with
a claim, issue or matter related to any claim, issue, or matter on which the
Indemnitee was successful. For purposes of this Section and without limitation,
the termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
6.
INDEMNIFICATION FOR EXPENSES OF A
WITNESS. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of his or her Corporate Status, a witness in any Proceeding to which
Indemnitee is not a party, Indemnitee shall, to the fullest extent permitted by
applicable law, be indemnified, held harmless and exonerated against all
Expenses actually and reasonably incurred by him or her, or on his or her behalf
in connection therewith.
7.
ADDITIONAL INDEMNIFICATION, HOLD
HARMLESS AND EXONERATION RIGHTS.
(a) Notwithstanding
any limitation in Sections 3,
4, or 5, the Company shall,
to the fullest extent permitted by applicable law, indemnify, hold harmless and
exonerate Indemnitee if Indemnitee is a party to or threatened to be made a
party to any Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses, judgments,
fines, penalties and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses, judgments, fines, penalties and amounts paid in settlement)
actually and reasonably incurred by Indemnitee in connection with the
Proceeding. No indemnification, hold harmless or exoneration rights shall be
available under this Section 7(a) on
account of Indemnitee’s conduct which constitutes a breach of Indemnitee’s duty
of loyalty to the Company or its stockholders or is an act or omission not in
good faith or which involves intentional misconduct or a knowing violation of
the law.
(b) Notwithstanding
any limitation in Sections 3,
4, 5 or 7(a), the Company
shall, to the fullest extent permitted by applicable law, indemnify, hold
harmless and exonerate Indemnitee if Indemnitee is a party to or threatened to
be made a party to any Proceeding (including a Proceeding by or in the right of
the Company to procure a judgment in its favor) against all Expenses, judgments,
fines, penalties and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses, judgments, fines, penalties and amounts paid in settlement)
actually and reasonably incurred by Indemnitee in connection with the
Proceeding.
8.
CONTRIBUTION IN THE EVENT
OF JOINT LIABILITY.
(a) To
the fullest extent permissible under applicable law, if the indemnification,
hold harmless and/or exoneration rights provided for in this Agreement are
unavailable to Indemnitee in whole or in part for any reason whatsoever, the
Company, in lieu of indemnifying, holding harmless or exonerating Indemnitee,
shall pay, in the first instance, the entire amount incurred by Indemnitee,
whether for judgments, liabilities, fines, penalties, amounts paid or to be paid
in settlement and/or for Expenses, in connection with any Proceeding without
requiring Indemnitee to contribute to such payment, and the Company hereby
waives and relinquishes any right of contribution it may have at any time
against Indemnitee.
(b) The
Company shall not enter into any settlement of any Proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in such
Proceeding) unless such settlement provides for a full and final release of all
claims asserted against Indemnitee.
(c) The
Company hereby agrees to fully indemnify, hold harmless and exonerate Indemnitee
from any claims for contribution which may be brought by officers, directors or
employees of the Company other than Indemnitee who may be jointly liable with
Indemnitee.
9.
EXCLUSIONS. Notwithstanding
any provision in this Agreement, the Company shall not be obligated under this
Agreement to make any indemnification, hold harmless or exoneration payment in
connection with any claim made against Indemnitee:
(a) for
which payment has actually been received by or on behalf of Indemnitee under any
insurance policy or other indemnity provision, except with respect to any excess
beyond the amount actually received under any insurance policy, contract,
agreement, other indemnity provision or otherwise;
(b) for
an accounting of profits made from the purchase and sale (or sale and purchase)
by Indemnitee of securities of the Company within the meaning of Section 16(b)
of the Exchange Act or similar provisions of state statutory law or common law;
or
(c) except
as otherwise provided in Sections 14(e)-(f)
hereof, prior to a Change in Control, in connection with any Proceeding (or any
part of any Proceeding) initiated by Indemnitee, including any Proceeding (or
any part of any Proceeding) initiated by Indemnitee against the Company or its
directors, officers, employees or other indemnitees, unless (i) the Board
authorized the Proceeding (or any part of any Proceeding) prior to its
initiation or (ii) the Company provides the indemnification, hold harmless
or exoneration payment, in its sole discretion, pursuant to the powers vested in
the Company under applicable law.
10.
ADVANCES OF EXPENSES; DEFENSE OF
CLAIM.
(a) Notwithstanding
any provision of this Agreement to the contrary, and to the fullest extent not
prohibited by applicable law, the Company shall pay the Expenses incurred by
Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee
within three months) in connection with any Proceeding within ten (10) days
after the receipt by the Company of a statement or statements requesting such
advances from time to time, prior to the final disposition of any Proceeding.
Advances shall be unsecured and interest free. Advances shall be made without
regard to Indemnitee’s ability to repay the Expenses and without regard to
Indemnitee’s ultimate entitlement to be indemnified, held harmless or exonerated
under the other provisions of this Agreement. Advances shall include any and all
reasonable Expenses incurred pursuing a Proceeding to enforce this right of
advancement, including Expenses incurred preparing and forwarding statements to
the Company to support the advances claimed. To the fullest extent required by
applicable law, such payments of Expenses in advance of the final disposition of
the Proceeding shall be made only upon the Company’s receipt of an undertaking,
by or on behalf of the Indemnitee, to repay the advance to the extent that it is
ultimately determined by a court of competent jurisdiction that Indemnitee is
not entitled to be indemnified by the Company under the provisions of this
Agreement, the Charter, the Bylaws of the Company, applicable law or otherwise.
This Section
10(a) shall not apply to any claim made by Indemnitee for which an
indemnification, hold harmless or exoneration payment is excluded pursuant to
Section 9.
(b) The
Company will be entitled to participate in the Proceeding at its own
expense.
(c) The
Company shall not settle any action, claim or Proceeding (in whole or in part)
which would impose any Expense, judgment, fine, penalty or limitation on the
Indemnitee without the Indemnitee’s prior written consent.
11.
PROCEDURE FOR NOTIFICATION AND
APPLICATION FOR INDEMNIFICATION.
(a) Indemnitee
agrees to notify promptly the Company in writing upon being served with any
summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter which may be subject to
indemnification, hold harmless or exoneration rights, or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation which it may have to the Indemnitee under
this Agreement, or otherwise.
(b) Indemnitee
may deliver to the Company a written application to indemnify, hold harmless or
exonerate Indemnitee in accordance with this Agreement. Such application(s) may
be delivered from time to time and at such time(s) as Indemnitee deems
appropriate in his or her sole discretion. Following such a written application
for indemnification by Indemnitee, the Indemnitee’s entitlement to
indemnification shall be determined according to Section 12(a) of this
Agreement.
12.
PROCEDURE UPON APPLICATION FOR
INDEMNIFICATION.
(a) A
determination, if required by applicable law, with respect to Indemnitee’s
entitlement to indemnification shall be made in the specific case by one of the
following methods, which shall be at the election of Indemnitee: (i) by the
stockholders; (ii) by a majority vote of the Disinterested Directors, even
though less than a quorum of the Board; (iii) if a majority vote of the
Disinterested Directors so orders, by Independent Counsel in a written opinion
to the Board, a copy of which shall be delivered to Indemnitee; or (iv) if a
quorum consisting of Disinterested Directors cannot be obtained, by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee. The Company promptly will advise Indemnitee in writing with respect
to any determination that Indemnitee is or is not entitled to indemnification,
including a description of any reason or basis for which indemnification has
been denied. If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days
after such determination. Indemnitee shall reasonably cooperate with the person,
persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any 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. Any
costs or Expenses (including attorneys’ fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee’s entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In
the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 12(a) hereof,
the Independent Counsel shall be selected as provided in this Section 12(b).
The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board), and Indemnitee shall give
written notice to the Company advising it of the identity of the Independent
Counsel so selected and certifying that the Independent Counsel so selected
meets the requirements of “Independent Counsel” as defined in Section 2 of
this Agreement. If the Independent Counsel is selected by the Board, the Company
shall give written notice to Indemnitee advising him of the identity of the
Independent Counsel so selected and certifying that the Independent Counsel so
selected meets the requirements of “Independent Counsel” as defined in Section 2 of
this Agreement. In either event, Indemnitee or the Company, as the case may be,
may, within ten (10) days after such written notice of selection shall have
been received, deliver to the Company or to Indemnitee, as the case may be, 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
meet the requirements of “Independent Counsel” as defined in Section 2 of
this Agreement, 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 so made
and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court of
competent jurisdiction has determined that such objection is without merit. If,
within twenty (20) days after submission by Indemnitee of a written request
for indemnification pursuant to Section 11(a) hereof,
no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the Nevada Court 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 selected by the Nevada Court, and the person with respect to
whom all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 12(a) hereof.
Upon the due commencement of any judicial proceeding or arbitration pursuant to
Section 14(a)
of this Agreement, Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
(c) The
Company agrees to pay the reasonable fees and expenses of Independent Counsel
and to fully indemnify and hold harmless such Independent Counsel against any
and all Expenses, claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto.
13.
PRESUMPTIONS AND EFFECT OF CERTAIN
PROCEEDINGS.
(a) In
making a determination with respect to entitlement to indemnification hereunder,
the person, persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee has
submitted a request for indemnification in accordance with Section 11(b) of this
Agreement, and the Company shall have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption. Neither the failure of the
Company (including by its directors or Independent Counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement
that indemnification is proper in the circumstances because Indemnitee has met
the applicable standard of conduct, nor an actual determination by the Company
(including by its directors or Independent Counsel) that Indemnitee has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that Indemnitee has not met the applicable standard of
conduct.
(b) If
the person, persons or entity empowered or selected under Section 12 of
this Agreement to determine whether Indemnitee is entitled to indemnification
shall not have made a determination within thirty (30) days after receipt
by the Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee’s statement not materially misleading, in connection with the
request for indemnification, or (ii) a final judicial determination that
any or all such indemnification is expressly prohibited under applicable law;
provided, however, that such 30-day period may be extended for a reasonable
time, not to exceed an additional fifteen (15) days, if the person, persons
or entity making the determination with respect to entitlement to
indemnification in good faith requires such additional time for the obtaining or
evaluating of documentation and/or information relating thereto.
(c) The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
(d) For
purposes of any determination of good faith, Indemnitee shall be deemed to have
acted in good faith if Indemnitee’s action is based on the records or books of
account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the directors or officers of the Enterprise in the
course of their duties, or on the advice of legal counsel for the Enterprise,
its Board, any committee of the Board or any director, or on information or
records given or reports made to the Enterprise, its Board, any committee of the
Board or any director, by an independent certified public accountant or by an
appraiser or other expert selected by the Enterprise, its Board, any committee
of the Board or any director. The provisions of this Section 13(d) shall
not be deemed to be exclusive or to limit in any way the other circumstances in
which the Indemnitee may be deemed or found to have met the applicable standard
of conduct set forth in this Agreement.
(e) The
knowledge and/or actions, or failure to act, of any other director, officer,
trustee, partner, managing member, fiduciary, agent or employee of the
Enterprise shall not be imputed to Indemnitee for purposes of determining the
right to indemnification under this Agreement.
14.
REMEDIES OF
INDEMNITEE.
(a) In
the event that (i) a determination is made pursuant to Section 12 of
this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses, to the fullest extent permitted by
applicable law, is not timely made pursuant to Section 10 of this
Agreement, (iii) no determination of entitlement to indemnification shall
have been made pursuant to Section 12(a) of this
Agreement within thirty (30) days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 5, 6, 7 or the last
sentence of Section
12(a) of this Agreement within ten (10) days after receipt by the
Company of a written request therefor, (v) a contribution payment is not
made in a timely manner pursuant to Section 8 of
this Agreement, (vi) payment of indemnification pursuant to Section 3 or 4 of this Agreement
is not made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification, or (vii) payment to Indemnitee
pursuant to any hold harmless or exoneration rights under this Agreement or
otherwise is not made within ten (10) days after receipt by the Company of
a written request therefor, Indemnitee shall be entitled to an adjudication by
the Nevada Court to such indemnification, hold harmless, exoneration,
contribution or advancement rights. Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. Except as set forth herein, the provisions of Nevada law (without
regard to its conflict of laws rules) shall apply to any such arbitration. The
Company shall not oppose Indemnitee’s right to seek any such adjudication or
award in arbitration.
(b) In
the event that a determination shall have been made pursuant to Section 12(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Section 14 shall
be conducted in all respects as a de novo trial, or arbitration, on the merits
and Indemnitee shall not be prejudiced by reason of that adverse determination.
In any judicial proceeding or arbitration commenced pursuant to this Section 14,
Indemnitee shall be presumed to be entitled to be indemnified, held harmless,
exonerated to receive advances of Expenses under this Agreement and the Company
shall have the burden of proving Indemnitee is not entitled to be indemnified,
held harmless, exonerated and to receive advances of Expenses, as the case may
be, and the Company may not refer to or introduce into evidence any
determination pursuant to Section 12(a) of this
Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a
judicial proceeding or arbitration pursuant to this Section 14,
Indemnitee shall not be required to reimburse the Company for any advances
pursuant to Section 10 until
a final determination is made with respect to Indemnitee’s entitlement to
indemnification (as to which all rights of appeal have been exhausted or
lapsed).
(c) If
a determination shall have been made pursuant to Section 12(a) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 14,
absent (i) a misstatement by Indemnitee of a material fact, or an omission
of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) The
Company shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 14 that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(e) The
Company shall indemnify and hold harmless Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company’s receipt of such written request)
pay to Indemnitee, to the fullest extent permitted by applicable law, such
Expenses which are incurred by Indemnitee in connection with any judicial
proceeding or arbitration brought by Indemnitee (i) to enforce his rights
under, or to recover damages for breach of, this Agreement or any other
indemnification, hold harmless, exoneration, advancement or contribution
agreement or provision of the Charter, or the Company’s Bylaws now or hereafter
in effect; or (ii) for recovery or advances under any insurance policy
maintained by any person for the benefit of Indemnitee, regardless of the
outcome and whether Indemnitee ultimately is determined to be entitled to such
indemnification, hold harmless or exoneration right, advancement, contribution
or insurance recovery, as the case may be (unless such judicial proceeding or
arbitration was not brought by Indemnitee in good faith).
(f) Interest
shall be paid by the Company to Indemnitee at the legal rate under Nevada law
for amounts which the Company indemnifies, holds harmless or exonerates, or is
obliged to indemnify, hold harmless or exonerate for the period commencing with
the date on which Indemnitee requests indemnification, to be held harmless,
exonerated, contribution, reimbursement or advancement of any Expenses and
ending with the date on which such payment is made to Indemnitee by the
Company.
15.
SECURITY. Notwithstanding
anything herein to the contrary, to the extent requested by the Indemnitee and
approved by the Board, the Company may at any time and from time to time provide
security to the Indemnitee for the Company’s obligations hereunder through an
irrevocable bank line of credit, funded trust or other collateral. Any such
security, once provided to the Indemnitee, may not be revoked or released
without the prior written consent of the Indemnitee, except as otherwise
provided by law.
16.
NON-EXCLUSIVITY; SURVIVAL OF RIGHTS;
INSURANCE; SUBROGATION.
(a) The
rights of Indemnitee as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under
applicable law, the Charter, the Company’s Bylaws, any agreement, a vote of
stockholders or a resolution of directors, or otherwise. No amendment,
alteration or repeal of this Agreement or of any provision hereof shall limit or
restrict any right of Indemnitee under this Agreement in respect of any
Proceeding (regardless of when such Proceeding is first threatened, commenced or
completed) arising out of, or related to, any action taken or omitted by such
Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal. To the extent that a change in applicable law, whether by statute or
judicial decision, permits greater indemnification, hold harmless or exoneration
rights or advancement of Expenses than would be afforded currently under the
Charter, the Company’s Bylaws or this Agreement, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change. No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, and every other right and remedy shall
be cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other right or
remedy.
(b) The
NRS, the Charter and the Company’s Bylaws permit the Company to purchase and
maintain insurance or furnish similar protection or make other arrangements
including, but not limited to, providing a trust fund, letter of credit, or
surety bond (“Indemnification
Arrangements”) on behalf of Indemnitee against any liability asserted
against him or incurred by or on behalf of him or in such capacity as a
director, officer, employee or agent of the Company, or arising out of his
status as such, whether or not the Company would have the power to indemnify him
against such liability under the provisions of this Agreement or under the NRS,
as it may then be in effect. The purchase, establishment, and maintenance of any
such Indemnification Arrangement shall not in any way limit or affect the rights
and obligations of the Company or of the Indemnitee under this Agreement except
as expressly provided herein, and the execution and delivery of this Agreement
by the Company and the Indemnitee shall not in any way limit or affect the
rights and obligations of the Company or the other party or parties thereto
under any such Indemnification Arrangement.
(c) To
the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, partners, managing
members, fiduciaries, employees, or agents of the Company or of any other
Enterprise which such person serves at the request of the Company, Indemnitee
shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any such director,
officer, trustee, partner, managing member, fiduciary, employee or agent under
such policy or policies. If, at the time the Company receives notice from any
source of a Proceeding as to which Indemnitee is a party or a participant (as a
witness or otherwise), the Company has director and officer liability insurance
in effect, the Company shall give prompt notice of such Proceeding to the
insurers in accordance with the procedures set forth in the respective policies.
The Company shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Indemnitee, all amounts payable as a
result of such Proceeding in accordance with the terms of such
policies.
(d) In
the event of any 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 take all action necessary to secure
such rights, including execution of such documents as are necessary to enable
the Company to bring suit to enforce such rights.
(e) The
Company’s obligation to indemnify, hold harmless, exonerate or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the Company as a
director, officer, trustee, partner, managing member, fiduciary, employee or
agent of any other Enterprise shall be reduced by any amount Indemnitee has
actually received as indemnification, hold harmless or exoneration payments or
advancement of expenses from such Enterprise. Notwithstanding any other
provision of this Agreement to the contrary, (i) Indemnitee shall have no
obligation to reduce, offset, allocate, pursue or apportion any indemnification,
hold harmless, exoneration, advancement, contribution or insurance coverage
among multiple parties possessing such duties to Indemnitee prior to the
Company’s satisfaction and performance of all its obligations under this
Agreement, and (ii) the Company shall perform fully its obligations under
this Agreement without regard to whether Indemnitee holds, may pursue or has
pursued any indemnification, advancement, hold harmless, exoneration,
contribution or insurance coverage rights against any person or entity other
than the Company.
17.
DURATION OF
AGREEMENT. All agreements and obligations of the
Company contained herein shall continue during the period Indemnitee serves as a
director or officer of the Company or as a director, officer, trustee, partner,
managing member, fiduciary, employee or agent of any other corporation,
partnership, joint venture, trust, employee benefit plan or other Enterprise
which Indemnitee serves at the request of the Company and shall continue
thereafter so long as Indemnitee shall be subject to any possible Proceeding
(including any rights of appeal thereto and any Proceeding commenced by
Indemnitee pursuant to Section 14 of
this Agreement) by reason of his or her Corporate Status, whether or not he is
acting in any such capacity at the time any liability or expense is incurred for
which indemnification can be provided under this Agreement.
18.
SEVERABILITY. If
any provision or provisions of this Agreement shall be held to be invalid,
illegal or unenforceable for any reason whatsoever: (a) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including, without limitation, each portion of any Section, paragraph or
sentence of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section, paragraph
or sentence of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested
thereby.
19.
ENFORCEMENT AND BINDING
EFFECT.
(a) The
Company expressly confirms and agrees that it has entered into this Agreement
and assumed the obligations imposed on it hereby in order to induce Indemnitee
to serve as a director, officer or key employee of the Company, and the Company
acknowledges that Indemnitee is relying upon this Agreement in serving as a
director, officer or key employee of the Company.
(b) Without
limiting any of the rights of Indemnitee under the Charter or Bylaws of the
Company as they may be amended from time to time, this Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter
hereof.
(c) The
indemnification, hold harmless, exoneration and advancement of expenses rights
provided by or granted pursuant to this Agreement shall be binding upon and be
enforceable by the parties hereto and their respective successors and assigns
(including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business or assets of the
Company), shall continue as to an Indemnitee who has ceased to be a director,
officer, employee or agent of the Company or of any other Enterprise at the
Company’s request, and shall inure to the benefit of Indemnitee and his or her
spouse, assigns, heirs, devisees, executors and administrators and other legal
representatives.
(d) The
Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation or otherwise) to all, substantially all or a
substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to the Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.
(e) The
Company and Indemnitee agree herein that a monetary remedy for breach of this
Agreement, at some later date, may be inadequate, impracticable and difficult of
proof, and further agree that such breach may cause Indemnitee irreparable harm.
Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement
by seeking, among other things, injunctive relief and/or specific performance
hereof, without any necessity of showing actual damage or irreparable harm and
that by seeking injunctive relief and/or specific performance, Indemnitee shall
not be precluded from seeking or obtaining any other relief to which he may be
entitled. The Company and Indemnitee further agree that Indemnitee shall be
entitled to such specific performance and injunctive relief, including temporary
restraining orders, preliminary injunctions and permanent injunctions, without
the necessity of posting bonds or other undertaking in connection therewith. The
Company acknowledges that in the absence of a waiver, a bond or undertaking may
be required of Indemnitee by the Court, and the Company hereby waives any such
requirement of such a bond or undertaking.
20.
MODIFICATION AND
WAIVER. No supplement, modification
or amendment of this Agreement shall be binding unless executed in writing by
the parties hereto. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions of this Agreement
nor shall any waiver constitute a continuing waiver.
21. NOTICES. All
notices, requests, demands and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given (i) if delivered
by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third (3rd) business day after the
date on which it is so mailed:
(a) If
to Indemnitee, at the address indicated on the signature page of this Agreement,
or such other address as Indemnitee shall provide in writing to the
Company.
(b) If
to the Company, to:
0
Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx,
Xxxxxxxx 00000
or to any
other address as may have been furnished to Indemnitee in writing by the
Company.
22.
APPLICABLE LAW AND CONSENT TO
JURISDICTION. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in
accordance with, the laws of the State of Nevada, without regard to its conflict
of laws rules. Except with respect to any arbitration commenced by Indemnitee
pursuant to Section
14(a) of this Agreement, the Company and Indemnitee hereby irrevocably
and unconditionally: (a) agree that any action or proceeding arising out of
or in connection with this Agreement shall be brought only in the Nevada Court
and not in any other state or federal court in the United States of America or
any court in any other country; (b) consent to submit to the exclusive
jurisdiction of the Nevada Court for purposes of any action or proceeding
arising out of or in connection with this Agreement; (c) waive any
objection to the laying of venue of any such action or proceeding in the Nevada
Court; and (d) waive, and agree not to plead or to make, any claim that any
such action or proceeding brought in the Nevada Court has been brought in an
improper or inconvenient forum, or is subject (in whole or in part) to a jury
trial.
23.
IDENTICAL
COUNTERPARTS. This Agreement may be
executed in one or more counterparts, each of which shall for all purposes be
deemed to be an original but all of which together shall constitute one and the
same Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
24.
MISCELLANEOUS. Use
of the masculine pronoun shall be deemed to include usage of the feminine
pronoun where appropriate. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
25.
PERIOD
OF LIMITATIONS. No legal action shall
be brought and no cause of action shall be asserted by or in the right of the
Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or
legal representatives after the expiration of two years from the date of accrual
of such cause of action, and any claim or cause of action of the Company shall
be extinguished and deemed released unless asserted by the timely filing of a
legal action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action such
shorter period shall govern.
26.
ADDITIONAL
ACTS. If for the validation of any of the
provisions in this Agreement any act, resolution, approval or other procedure is
required, the Company undertakes to cause such act, resolution, approval or
other procedure to be affected or adopted in a manner that will enable the
Company to fulfill its obligations under this Agreement.
[SIGNATURE PAGE
FOLLOWS]
IN WITNESS WHEREOF, the
parties hereto have caused this Indemnity Agreement to be signed as of the day
and year first above written.
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By:
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Name:
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Title:
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INDEMNITEE
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Name:
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Address:
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[Signature
Page to Indemnity Agreement]
