[FORM]
AGREEMENT TO INDEMNIFY ___________
BY
DUNES HOTELS AND CASINOS INC.
THIS AGREEMENT is executed this day of , 2000, by and between DUNES
HOTELS AND CASINOS, INC., a New York corporation (hereinafter referred to as the
"Corporation"), and __________ (hereinafter referred to as "Indemnitee").
WHEREAS, the Amended and Restated Bylaws (the "Bylaws") of the
Corporation provide that the Corporation may indemnify, to the fullest extent
permitted by New York law, certain persons, including directors, officers,
employees or agents of the Corporation, against specified expenses and losses
arising out of certain threatened, pending or completed actions, suits or
proceedings;
WHEREAS, Section 721 of the New York Business Corporation Law (the
"BCL") expressly recognizes that the indemnification provided by the other
subsections of the BCL shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in an official capacity and as to action in another
capacity while holding such office;
WHEREAS, as an inducement for Indemnitee to serve, or continue serving
as an officer and/or director, the Corporation desires to provide its officers
and directors with indemnification to the greatest extent permissible under the
law; and
WHEREAS, Indemnitee is an officer and/or director of the Corporation and
is willing to continue to serve in such capacity for or on behalf of the
Corporation on the condition that the indemnitee be so indemnified;
WHEREAS, this agreement is in addition to, and not in lieu of, any other
agreement to indemnify by reason of the fact that Indemnitee is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise.
WHEREAS, the purpose of this agreement is to advance and indemnify
officers and/or directors for expenses in connection with proceedings arising
out of their service or continued service for the Corporation or any of its
subsidiaries or joint ventures.
NOW THEREFORE, in consideration for the mutual promises, conditions, and
forebearances contained herein, and as an inducement for the Indemnitee's
continued service as an officer and director, the parties agree as follows:
1. Definitions.
a. "Expenses" means, for the purposes of this Agreement, any:
(1) Costs, direct and indirect, of any type incurred in connection
with any Indemnifiable Event, any expense, liability, lien, cost, assessment,
penalty, damage, tax, demand, or loss, including attorneys' fees, judgments,
fines, ERISA excise taxes and penalties, and amounts paid or to be paid in
settlement thereof;
(2) Any interest, assessments, or other charges imposed on any of the
items in part (1) above;
(3) Any federal, state, local or foreign taxes and/or penalties
imposed on the indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement, and any Expense paid or incurred in connection
with investigating, defending, being a witness in, or participating in
(including on appeal), or preparing for any of the foregoing in, any Proceeding
relating to any Indemnifiable Event; and
(4) All claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries and deficiencies, including interest, penalties
and reasonable attorneys' fees that Indemnitee shall incur or suffer, which
arise, result from, or relate to any breach or inaccuracy of any of the
representations and warranties of Corporation or the failure of Corporation to
perform any of its covenants, agreements or obligations contained in this
Agreement or in any instrument or other document delivered hereunder or in
connection herewith.
b. "Indemnifiable Event" shall mean any event or occurrence that takes
place either before or after execution of this Agreement that is
related to:
(1) The fact that Indemnitee is or was a director, officer, employee
or agent of Corporation, or while a director, officer or agent is or was serving
at the request of Corporation as a director, officer, employee, trustee, agent,
or fiduciary of another corporation, partnership, joint venture, employment
benefit plan, trust or other enterprise; or
(2) Anything done or not done by Indemnitee in any such
capacity, whether or not the basis of the Proceeding is an alleged action in an
official capacity as a director, officer, employee, or agent, or in any other
capacity while serving as a director, officer or agent of Corporation.
c. "Proceeding" means, for the purposes of this Agreement, any
threatened, pending or completed action, suit, claim, demand arbitration or
proceeding whether civil, criminal, administrative or investigative (including
actions, suits or proceedings brought by or in the right of the Corporation) in
which Indemnitee may be or may have been involved as a party, or otherwise, by
reason of the fact that Indemnitee is or was a director or officer of the
Corporation, by reason of any action taken by him or of any inaction on his part
while acting as such director or officer or by reason of the fact that he is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise, whether or not he is serving in such capacity at the
time any liability or expense is incurred for which indemnification or
reimbursement can be provided under this Agreement.
2. Indemnification of Indemnitee.
a. In General. In connection with any Proceeding, whether
relating to events occurring before or after the date hereof, the Corporation
shall indemnify, and advance Expenses, to the Indemnitee as provided in this
Agreement and to the fullest extent permitted by applicable law in effect on the
date hereof and to such greater extent as applicable law may thereafter from
time to time permit.
b. Proceeding Other Than Proceedings by or in the Right of the
Corporation. The Indemnitee shall be entitled to the rights of indemnification
provided in this Section if, because the Indemnitee is or was a director of the
Corporation, the Indemnitee is, or is threatened to be made, a party to any
Proceeding, other than a Proceeding by or in the right of the Corporation.
Subject to this Section 2, the Indemnitee shall be indemnified against Expenses,
judgments, penalties, fines and amounts paid in settlement, actually and
reasonably incurred by the Indemnitee or on the Indemnitee's behalf in
connection with such Proceeding.
c. Proceedings by or in the Right of the Corporation. The
Indemnitee shall be entitled to the rights of indemnification provided in this
Section if, because the Indemnitee is or was a director of the Corporation, the
Indemnitee is, or is threatened to be made, a party to any Proceeding brought by
or in the right of the Corporation to procure a judgment in its favor. Subject
to this Section 2, the Indemnitee shall be indemnified against Expenses,
judgments, penalties, fines and amounts paid in settlement, actually and
reasonably incurred by the Indemnitee or on the Indemnitee's behalf in
connection with such Proceeding. Notwithstanding the foregoing, no such
indemnification shall be made in respect of any claim, issue or matter in such
Proceeding as to which the Indemnitee shall have been adjudged to be liable
to the Corporation if applicable law prohibits such indemnification or if such
claim, issue or matter involves an accounting of profits by the Indemnitee to
the Corporation pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended ("Section 16").
d. Indemnification of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee is, because the Indemnitee is or was a director of the Corporation, a
party to and is successful, on the merits or otherwise, in any Proceeding, the
Indemnitee shall be indemnified to the fullest extent permitted by law, against
all Expenses, judgments, penalties, fines, and amounts paid in settlement,
actually and reasonably incurred by the Indemnitee or on the Indemnitee's behalf
in connection therewith. If the 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 Corporation
shall indemnify the Indemnitee to the fullest extent permitted by law, against
all Expenses, judgments, penalties, fines, and amounts paid in settlement,
actually and reasonably incurred by the Indemnitee or on the Indemnitee's behalf
in connection with each successfully resolved claim, issue or matter. 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.
e. Limitations on Indemnification. The Corporation shall not be
obligated pursuant to the terms of this Agreement for, (i) any acts or omissions
or transactions from which a director may not be relieved of liability under
Section 402(b) of the BCL; (ii) Proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 722 of the BCL, but such indemnification or advancement of Expenses may
be provided by the Corporation in specific cases if a majority of the
disinterested directors has approved the initiation or bringing of such suit;
(iii) if a court of competent jurisdiction determines that each of the material
assertions made by Indemnitee in such proceeding was not made in good faith or
was frivolous; (iv) for judgments, fines or penalties, and amounts paid in
settlement) which have been paid directly to or on behalf of Indemnitee by an
insurance carrier under a policy of directors' and officers' liability insurance
maintained by the Corporation or any other policy of insurance maintained by the
Corporation or Indemnitee; (v) 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 Exchange Act of 1934, as amended, or any similar
successor statute.
f. Indemnification for Expenses of a Witness. Notwithstanding any
other provision of this Agreement, to the extent that the Indemnitee is, because
the Indemnitee is or was a director of the Corporation, a witness in any
Proceeding, the Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred by the Indemnitee or on the Indemnitee's behalf in
connection therewith.
3. Payment of Expenses.
a. If so requested by Indemnitee, the Corporation shall from time
to time, within ten (10) business days of such request, advance up to Ten
Thousand Dollars ($10,000.00) in expenses to Indemnitee ("Expense Advance") for
the purpose of paying legal retainers and deposits against anticipated Expenses.
The provisions of this Section shall not in any way limit the Corporation's
obligation to indemnify Indemnitee.
b. The Corporation shall promptly pay Indemnitee's Expenses
reasonably incurred within thirty (30) days from Indemnitee's tender of invoices
reflecting such Expenses.
c. If Corporation fails to pay any such Expenses within thirty
(30) days, the Corporation shall pay to Indemnitee a late fee of one and
one-half percent (1-1/2%) per month or part thereof until all such expenses are
paid in full, in addition to all other damage suffered by Indemnitee.
d. To the extent it is ultimately found that Indemnitee is not
entitled to indemnification under the terms of this Agreement, Corporation shall
be entitled to be reimbursed by Indemnitee for all such amounts (the "Reimbursed
Amounts"), and Indemnitee hereby agrees to reimburse Corporation promptly for
the same. Indemnitee's obligation to reimburse Corporation for the Reimbursed
Amounts shall be unsecured and no interest shall be charged thereon.
4. Notice and Opportunity to Defend. Indemnitee shall receive
indemnification from Corporation in accordance with this Agreement as soon as
practicable after Indemnitee has submitted to the Corporation a written request
for indemnification. If any Proceeding is initiated, or any claim or demand is
made, against Indemnitee with respect to an Indemnifiable Event, then the
Indemnitee shall give prompt written notice of such Proceeding to the
Corporation. In the event that the Corporation shall be obligated under Section
2 hereof to pay the Expenses of any Proceeding against Indemnitee, the
Corporation, if appropriate, shall be entitled to assume the defense of such
Proceeding, with the Corporation's counsel or such other counsel as may be
approved by Indemnitee, which approval shall not be unreasonably withheld, upon
the delivery to Indemnitee of written notice of its election to do so. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Corporation, the Corporation will not be liable
to Indemnitee under this Agreement for any fees of counsel subsequently incurred
by Indemnitee with respect to the same Proceeding; provided that (i) Indemnitee
shall have the right to employ Indemnitee's own counsel in any such Proceeding
at Indemnitee's expense, and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Corporation, or (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Corporation and Indemnitee in the conduct of such defense or (C) the Corporation
shall not, in fact, have employed counsel to assume the defense of such
Proceeding, then the fees and expenses of Indemnitee's counsel shall be paid by
the Corporation.
5. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by Corporation for a portion of
Expenses, but not for the total amount of Expenses, Corporation shall
nevertheless indemnify or pay advancements to Indemnitee for the portion of such
Expenses or liabilities to which Indemnitee is entitled.
6. Limitation on Corporation. Corporation shall not settle any
Proceeding in any manner that would impose any penalty or limitation on
Indemnitee without Indemnitee's written consent. Indemnitee will not
unreasonably withhold consent to a proposed settlement.
7. Limitation on Indemnitee. Indemnitee shall not settle any Proceeding
in any manner that would impose any penalty or limitation on Corporation without
Corporation's written consent. Corporation will not unreasonably withhold
consent to a proposed settlement.
Corporation shall not be liable to indemnify Indemnitee under this
Agreement with regard to any judicial award if Corporation was not given a
reasonable and timely opportunity, at its expense, to participate in the defense
of such action.
8. Non-Exclusivity.
a. The provisions for indemnification and advancement of expenses
set forth in this Agreement shall not be deemed to be exclusive of any other
rights that Indemnitee may have under any provision of law, the Certificate of
Incorporation or Bylaws, the vote of the Corporation's shareholders or
disinterested directors, other agreements or otherwise, both as to action in his
official capacity and action in another capacity while occupying his position as
a director or officer of the Corporation.
b. In the event of any changes, after the date of this Agreement,
in any applicable law, statute, or rule that expand the right of a New York
corporation to indemnify its directors and officers, Indemnitee's rights and the
Corporation's obligations under this Agreement shall be expanded to the fullest
extent permitted by such changes. In the event of any changes in any applicable
law, statute or rule, that narrow the right of a New York corporation to
indemnify a director and officer, such changes, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder.
9. Indemnification Not a Waiver. Indemnitee's right to indemnification
pursuant to this Agreement shall not be deemed to be his exclusive remedy in
connection with or arising from any Indemnifiable Event or the failure of
Corporation to perform any of its covenants or obligations contained in this
Agreement; and the exercise by Indemnitee of his/her right to demand and receive
such indemnification shall not be deemed to prejudice, or to operate as a waiver
of, any remedy to which he may be entitled at law or equity.
10. Liability Insurance. To the extent Corporation maintains an
insurance policy or policies providing directors' and officers' liability
insurance, to the extent that Indemnitee may be covered by such policy or
policies, 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
corporate director or officer.
11. Subrogation. In the event of payment under this Agreement,
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable Corporation effectively to bring
suit to enforce such rights.
12. No Duplication of Payments. Corporation shall not be liable under
this Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise received payment (under any
insurance policy, bylaw, or otherwise) of the amounts otherwise indemnifiable
under this Agreement.
13. No Right to Set-Off. Corporation shall have no right to set off the
amount of any Expense with respect to which Indemnitee may be indemnified by
Corporation hereunder against the amount of any obligation of Indemnitee to
Corporation.
14. Accounting of Profits Under Section 16(b). The Corporation shall not
be liable under this Agreement to make any payment in connection with any claim
made against Indemnitee for an accounting of profits made from the purchase or
sale by the Indemnitee of securities of the Corporation within the meaning of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto, or
similar provisions of any state statute or common law.
15. Authorization; Binding Nature of Agreement. Corporation has all
necessary power and authority to enter into and perform its obligations under
this Agreement, and the execution, delivery and performance of this Agreement
have been duly authorized by all necessary action on the part of Corporation and
its officers and directors. No authorization, consent or approval of or filing
with any governmental authority or any other person is required to be obtained
or made by Corporation in connection with the execution, delivery or performance
of this Agreement.
16. Confidentiality. Unless otherwise required by law, Corporation
agrees to, and shall undertake all necessary action required to, keep
confidential all information which relates to any Indemnifiable Event, Expense
or any other transaction or defense or indemnity arising out of this Agreement
which relates to Indemnitee.
17. Amendment of this Agreement. 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
operate as a waiver of any other provisions hereof, nor shall such waiver
constitute a continuing waiver.
18. Survival of Agreement. This Agreement shall be binding on and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger,
consolidation, or otherwise to all or substantially all of the business and/or
assets of the Corporation), assigns, spouses, heirs and personal and legal
representatives. Corporation shall require and cause its successor to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that Corporation would be required to perform if no such succession had
taken place. The indemnification provided under this Agreement shall continue
for Indemnitee for any action taken or not taken while serving in an indemnified
capacity pertaining to an Indemnifiable Event even though Indemnitee may have
ceased to serve in such capacity at the time of any Proceeding.
19. Maintenance of Obligation to Indemnify. Corporation hereby covenants
and agrees that it shall not permit the indemnification provided to Indemnitee
as set forth in this Agreement to be compromised, restricted, limited, or
eliminated in any manner, including by way of amendment of Corporation's bylaws
and other governing documents.
20. Severability. If any portion of this Agreement shall be held by
a court of competent jurisdiction to be invalid, void, or otherwise
unenforceable, the remaining provisions shall remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of
this Agreement containing any provision held to be invalid, void or otherwise
unenforceable, that is not itself invalid, void or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, void or unenforceable.
21. Governing Law. Governing Law. This Agreement shall be interpreted
and enforced in accordance with the laws of the State of New York without regard
to its rules pertaining to conflicts of laws. To the extent permitted by
applicable law, the parties hereby waive any provisions of law that render any
provision of this Agreement unenforceable in any respect.
22. Further Assurances. Each party shall execute such instruments and
other documents, and take such action as may be required, as the other party may
reasonably request, for the purpose of carrying out or evidencing the
transactions contemplated hereby.
23. Attorneys' Fees. In the event of the bringing of any action, suit or
arbitration by a party hereto against another party hereunder by reason of any
breach of any of the covenants or agreements or any inaccuracies in any of the
representations and warranties on the part of any party arising out of this
Agreement, then in that event, the prevailing party in such action, suit,
arbitration or dispute, whether by final judgment, or out of court settlement
shall be entitled to have and recover of and from the other parties all costs
and expenses of suit, including actual attorneys' fees.
24. Remedies of Indemnitee.
a. This Section 24 shall apply in the event of a Dispute. For
purposes of this Section, "Dispute" shall mean any of the following events:
(i) a determination is made by the Corporation that the
Indemnitee is not entitled to indemnification under this Agreement;
(ii) advance of Expenses is not timely made by the Corporation
pursuant to Section 3 of this Agreement; or
(iii)payment of indemnification is not made by the Corporation
pursuant to Section 3 of this Agreement within 30 days after receipt by the
Corporation of a written request therefor.
b. In the event of a Dispute, the Indemnitee shall be entitled to
an adjudication in an appropriate court in the State of residence of Indemnitee,
or in any other court of competent jurisdiction, of the Indemnitee's entitlement
to such indemnification or advancement of Expenses. Alternatively, the
Indemnitee, at the Indemnitee's option, shall be entitled to seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association. The Indemnitee shall
commence such proceeding seeking an adjudication or an award in arbitration
within 180 days following the date on which a Dispute arises. The Corporation
may not oppose the Indemnitee's right to seek any such adjudication or award in
arbitration.
c. In the event that a determination shall have been made by the
Corporation pursuant to Section 24a.(i) of this Agreement that the Indemnitee is
not entitled to indemnification, any judicial proceeding or arbitration
commenced pursuant to this Section 24 shall be conducted in all respects as an
independent issue in a de novo trial, or arbitration, on the merits and the
Indemnitee shall not be prejudiced by reason of that adverse determination or by
reason of the absence of a determination pursuant to Section 24a.(i). In any
such proceeding or arbitration, the Corporation shall have the burden of proving
that the Indemnitee is not entitled to indemnification or advancement of
Expenses, as the case may be.
d. If a determination shall have been made or deemed to have been
made pursuant to this Agreement that the Indemnitee is entitled to
indemnification, the Corporation shall be bound by such determination in any
judicial proceeding or arbitration absent (i) a misstatement by the Indemnitee
of a material fact, or an omission of a material fact necessary to make the
Indemnitee's statement not materially misleading, in connection with the request
for indemnification or (ii) a prohibition of such indemnification under
applicable law.
e. The Corporation shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 24 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 Corporation is bound by all the provisions of this Agreement.
f. In the event that the Indemnitee, pursuant to this Section 24,
seeks a judicial adjudication of, or an award in arbitration to enforce the
Indemnitee's rights under, or to recover damages for breach of, this Agreement,
the Indemnitee shall be entitled to recover from the Corporation, and shall be
indemnified by the Corporation against, any and all expenses (of the types
described in the definition of Expenses in Section 1 of this Agreement) actually
and reasonably incurred by the Indemnitee in such adjudication or arbitration,
but only if the Indemnitee prevails therein. If it shall be determined in such
adjudication or arbitration that the Indemnitee is entitled to receive part, but
not all of the indemnification or advancement of expenses sought, the expenses
incurred by the Indemnitee in connection with such adjudication or arbitration
shall be appropriately prorated.
25. Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
To Corporation: THE SECRETARY OF DUNES HOTELS AND
CASINOS, INC.
0000 XXXXXXXXX XXXX., XXXXX 000
XXXXXXXXXX, XX 00000
or
C T CORPORATION SYSTEM
0000 XXXXXXXX
XXX XXXX, XXX XXXX 00000
To Indemnitee:
If there is a change in the corporation's mailing address, or change in
the registered agent, the corporation must give notice of such changes to
Indemnitee within thirty days.
26. Effectiveness. This Agreement shall immediately become effective
upon adoption by Corporation's Board of Directors. Notwithstanding the
effectiveness of this Agreement, Corporation shall use its best efforts to have
its Board of Directors approve this Agreement.
IN WITNESS WHEREOF, Corporation and Indemnitee have executed this
Agreement as of the date specified above.
Corporation:
DUNES HOTELS AND CASINOS, INC.
a New York Corporation
By:
INDEMNITEE: