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EXHIBIT 10.7
COLLECTORS UNIVERSE, INC.
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is made as of ___________ __, 1999, between
COLLECTORS UNIVERSE, INC., a Delaware corporation (the "Company"), and
_________________ ("Indemnitee"), an officer and/or member of the Board of
Directors of the Company.
WHEREAS, the Company desires the benefits of having Indemnitee serve as an
officer and/or director secure in the knowledge that expenses, liability and
losses incurred by him in his good faith service to the Company will be borne by
the Company or its successors and assigns in accordance with applicable law; and
WHEREAS, the Company desires that Indemnitee resist and defend against what
Indemnitee may consider to be unjustified investigations, claims, actions, suits
and proceedings which have arisen or may arise in the future as a result of
Indemnitee's service to the Company notwithstanding that conditions in the
insurance markets may make directors' and officers' liability insurance coverage
unavailable or available only at premium levels which the Company may deem
inappropriate to pay; and
WHEREAS, the parties believe it appropriate to memorialize and reaffirm the
Company's indemnification obligations to Indemnitee and, in addition, set forth
the indemnification agreements contained herein;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
parties agree as follows:
1. Indemnification. Indemnitee shall be indemnified and held harmless by
the Company to the fullest extent permitted by its Certificate of Incorporation,
Bylaws and applicable law, as the same exists or may hereafter be amended,
against all expenses, liability and loss (including attorneys' fees, judgments,
fines, and amounts paid or to be paid in any settlement approved in advance by
the Company, such approval not to be unreasonably withheld) (collectively,
"Indemnifiable Expenses") actually reasonably incurred or suffered by Indemnitee
in connection with any present or future threatened, pending or contemplated
investigation, claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative (collectively, "Indemnifiable Litigation"), (i)
to which Indemnitee is or was a party or is threatened to be made a party by
reason of any action or inaction in Indemnitee's capacity as a director or
officer of the Company, or (ii) with respect to which Indemnitee is otherwise
involved by reason of the fact that Indemnitee is or was serving as a director,
officer, employee or agent of the Company, or of any subsidiary or division, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise. Notwithstanding the foregoing, Indemnitee shall have no right to
indemnification for expenses and the payment of profits arising from the
purchase and sale by Indemnitee of securities in violation of Section 16(b) of
the Securities and Exchange Act of 1934, as amended.
2. Interim Expenses. The Company agrees to pay Indemnifiable Expenses
incurred by Indemnitee in connection with any Indemnifiable Litigation in
advance of the final disposition thereof, provided that the Company has received
an undertaking by or on behalf of Indemnitee, substantially in the form attached
hereto as Exhibit A, to repay the amount so advanced to the extent that it is
ultimately determined that Indemnitee is not entitled to be indemnified by the
Company under this Agreement or otherwise.
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3. Trust Fund.
(a) The Company may, but is not obligated to, establish a trust
(the "Trust") to fund certain of its obligations under this Agreement and
similar agreements with other directors and/or officers (collectively, including
Indemnitee, the "Beneficiaries"). Therefore, in such event, in addition to
Indemnitee's rights under this Indemnification Agreement and any applicable
insurance policy, Indemnitee shall also have the right to seek indemnification
payments from the trustee (the "Trustee") of any such trust that may be
established hereafter in accordance with the terms of this Agreement and of the
trust agreement.
(b) All communications or demands made by and among the Trustee
and the Beneficiaries of any such Trust are to be made through the individual
designated as the Beneficiaries' Representative. As of the date of this
Agreement, a Trust has not been established, nor has a Beneficiaries'
Representative been designated. The Beneficiaries' Representative shall be
designated and may be changed from time to time and at any time upon agreement
of two-thirds of the Beneficiaries at such time.
4. Procedure for Making Demand. In order to receive his rights to be
indemnified under this Agreement, including rights to receive advance payments
as set forth in Paragraph 2, Indemnitee shall make demand upon the Company to
honor its indemnity obligations and pay the Indemnifiable Expenses. If the
Company fails to do so within fifteen (15) days, the Indemnitee shall then have
the right and obligation to make demand under any applicable policy of
directors' and officers' liability insurance then in effect upon the insurance
company (the "Insurance Company") issuing such policy. If Insurance Company
fails to pay the demand within fifteen (15) days, then, if a Trust shall have
been established, the Indemnitee, through the Beneficiaries' Representative,
shall then be entitled and obligated to make demand upon the Trustee of the
Trust for such payment. Indemnitee shall not be required to institute a lawsuit
or take other actions against the Company, Insurance Company or any insurer to
recover the unpaid amount prior to the Beneficiaries' Representative making a
demand and receiving payment from the Trustee on his behalf, but the
Beneficiaries' Representative shall deliver a certificate to the Trustee at the
time of payment of each distribution from the Trust certifying that no part of
such payment has been previously received from the Company or any insurer.
5. Failure to Indemnify.
(a) If a claim under this Agreement, or any statute, or under any
provision of the Company's Certificate of Incorporation or Bylaws providing for
indemnification, is not paid in full by the Company, Insurance Company or, if
the Trust Fund shall have been established, by the Trustee, within forty-five
(45) days after a written request for payment thereof has been received by the
Company, Indemnitee may, but need not, at any time thereafter bring an action
against the Company to recover the unpaid amount of the claim and, if successful
in whole or in part, Indemnitee shall also be entitled to be paid for the
expense (including attorneys' fees) of bringing such action.
(b) It shall be a defense to such action (other than an action
brought to enforce a claim pursuant to Section 2 hereof for expenses incurred in
connection with any action, suit or proceeding in advance of its final
disposition) that Indemnitee has not met the standard of conduct which makes it
permissible under applicable law for the Company to indemnify Indemnitee for the
amount claimed, but the burden of proving such defense shall be on the Company
and Indemnitee shall be entitled to receive interim payments of interim expenses
pursuant to Section 2 hereof unless and until such defense may be finally
adjudicated by court order or judgment from which no further right of
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appeal exists. It is the parties' intention that if the Company contests
Indemnitee's right to indemnification, the question of Indemnitee's right to
indemnification shall be for the court to decide, and neither the failure of the
Company (including its board of directors, independent legal counsel, or its
stockholders) to have made a determination that indemnification of Indemnitee is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct required by applicable law, nor an actual determination by the
Company (including its board of directors, any committee or subgroup of the
board of directors, independent legal counsel, or its stockholders) that
Indemnitee has not met such applicable standard of conduct, shall create a
presumption that Indemnitee has or has not met the applicable standard of
conduct.
6. Notice to Insurers. If, at the time of the receipt of a notice of a
claim pursuant to Section 4 thereof, the Company has director and/or officer
liability insurance in effect, the Company shall give prompt notice of the
commencement 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.
7. Retention of Counsel.
(a) Whether Indemnitee is seeking payment of Indemnifiable
Expenses directly from the Company or from the Trustee of a Trust, the
Indemnitee or, if the Trust Fund shall have been established, then the
Beneficiaries' Representative, shall have the right and obligation on behalf of
Indemnitee and other Beneficiaries, in the case of the Beneficiaries'
Representative, to (i) seek counsel to represent Indemnitee with respect to any
matter subject to indemnification and payment hereunder; (ii) coordinate the
defense of any such matter; and (iii) approve the fees and other expenses of
such counsel.
(b) Notwithstanding the foregoing, Indemnitee may retain
different counsel than the other Indemnitees or Beneficiaries, or may incur
expenses not shared in common with the other Indemnitees or Beneficiaries, in
connection with any Indemnifiable Litigation if in the reasonable judgment of
Indemnitee there may be legal defenses available to him which are different from
or additional to those available to the other Indemnitees or Beneficiaries and,
as a consequence, an actual or potential conflict of interest with the other
Indemnitees or Beneficiaries exists. If the Trust Fund shall have been
established, Indemnitee must obtain the prior written approval of the
Beneficiaries' Representative to retain such counsel, which consent shall not be
unreasonably withheld. In the event that the Beneficiaries' Representative
withholds such consent, Indemnitee shall then have the right to seek approval
for such separate counsel from the Trustee, which approval shall not be
unreasonably withheld. Nothing contained herein shall prohibit Indemnitee from
retaining other counsel at Indemnitee's own expense.
8. Successors. This Agreement establishes contract rights which shall be
binding upon, and shall inure to the benefit of, the successors, assigns, heirs
and legal representatives of the parties hereto.
9. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors and officers under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company may be
required in the future to undertake to the Securities and Exchange Commission to
submit the question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee, and, in that event, the Indemnitee's rights and the Company's
obligations hereunder shall be subject to that determination.
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10. Contract Rights Not Exclusive. The contract rights conferred by this
Agreement shall be in addition to, but not exclusive of, any other right which
Indemnitee may have or may hereafter acquire under any statute, provision of the
Company's Certificate of Incorporation or Bylaws, agreement, vote of
shareholders or disinterested directors, or otherwise.
11. Indemnitee's Obligations. The Indemnitee shall promptly advise the
Company in writing of the institution of any investigation, claim, action, suit
or proceeding which is or may be subject to this Agreement and keep the Company
generally informed of, and consult with the Company with respect to, the status
of any such investigation, claim, action, suit or proceeding. Notices to the
Company shall be directed to Collectors Universe, Inc., 0000 X. Xxxxx Xxxxxx,
Xxxxx 000 Xxxxx Xxx, XX 00000, Attn: President (or other such address as the
Company shall designate in writing to Indemnitee). Notice shall be deemed
received three days after the date postmarked if sent by certified or registered
mail, properly addressed. In addition, Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
Indemnitee's power.
12. Attorneys' Fees. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, a court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement, or to enforce
or interpret any other terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
13. Severability. Should any provision of this Agreement, or any clause
thereof, be held to be invalid, illegal or unenforceable, in whole or in part,
the remaining provisions and clauses of this Agreement shall remain fully
enforceable and binding on the parties.
14. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of 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 hereof (whether of
not similar) nor shall such waiver constitute a continuing waiver.
15. Choice of Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Delaware.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
INDEMNITEE COLLECTORS UNIVERSE, INC.
_____________________________ By:_________________________________
Its:
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EXHIBIT A
UNDERTAKING AGREEMENT
This AGREEMENT is made as of _______________, 1999, between COLLECTORS UNIVERSE,
INC., a Delaware corporation (the "Company") and ______________, a member of the
board of directors and/or an officer of the Company ("Indemnitee").
WHEREAS, Indemnitee may become involved in investigations, claims, actions,
suits or proceedings which have arisen or may arise in the future as a result of
Indemnitee's service to the Company; and
WHEREAS, Indemnitee desires that the Company pay any and all expenses
(including, but not limited to, attorneys' fees and court costs) actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in defending or
investigating any such suits or claims and that such payment be made in advance
of the final disposition of such investigations, claims, actions, suits or
proceedings to the extent that Indemnitee has not been previously reimbursed by
insurance; and
WHEREAS, the Company is willing to make such payments but, in accordance with
the Bylaws of the Company and Section 145 of the General Corporation Law of the
State of Delaware, the Company may make such payments only if it receives an
undertaking to repay from Indemnitee; and
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties agree as follows:
1. In regard to any payments made by the Company to Indemnitee pursuant
to the terms of the Indemnification Agreement dated as of September __, 1999,
between the Company and Indemnitee, Indemnitee hereby undertakes and agrees to
repay to the Company any and all amounts so paid promptly and in any event
within thirty (30) days after the disposition, including any appeals, of any
litigation or threatened litigation on account of which payments were made, but
only to the extent that Indemnitee is ultimately found not to be entitled to be
indemnified by the Company under the Bylaws of the Company and Section 145 of
the General Corporation Law of the State of Delaware, or other applicable law.
2. This Agreement shall not affect in any manner rights which Indemnitee
may have against the Company, any insurer or any other person to seek
indemnification for or reimbursement of any expenses referred to herein or any
judgment which may be rendered in any litigation or proceeding.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date first above written.
INDEMNITEE COLLECTORS UNIVERSE, INC.
_____________________________ By:_________________________________
Its:
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