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EXHIBIT 10.11
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement"), made as of the 4th
day of March, 1994, by and between T/R SYSTEMS, INC., a Georgia corporation
(the "Company"), and XXXXXXX X. XXXXXX, a resident of the State of Texas (the
"Indemnitee");
W I T N E S S E T H:
WHEREAS, the Company desires to induce the Indemnitee to serve as a
director of the Company; and
WHEREAS, the Indemnitee is willing, subject to certain conditions,
including, without limitation, the execution and performance of this Agreement
by the Company, to serve as a director of the Company;
NOW, THEREFORE, in order to induce the Indemnitee to provide the
Services (as defined below), and in consideration of the premises, mutual
covenants and obligations contained herein, the Company and Indemnitee,
intending to be legally bound, hereby agree as follows:
1. Services. Effective on the date hereof, the Indemnitee agrees to
serve as a director of the Company and to provide the Company with the benefit
of his experience, insight, knowledge and reputation in order to assist the
Company in its management and governance of the Company, in each case until the
earliest to occur of the termination of this Agreement by agreement of the
Company and Indemnitee, the Indemnitee's resignation by delivery of written
notice thereof to the Board of Directors of the Company, or Indemnitee's death.
(The services described in this Section 1 are referred to hereinafter as the
"Services.")
2. Indemnification for Past and Future Services. The Company shall
indemnify and hold harmless the Indemnitee in the event he becomes a party or
is threatened to be made a party to any threatened, pending or completed
action, suit, claim or proceeding, or cause of action of whatever nature and
description (other than an action by or in the right of the Company, with
respect to which the applicable provisions of Georgia law shall
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apply and the Company shall indemnify Indemnitee to the maximum extent
permitted thereby), whether known or unknown, whether accrued or contingent,
whether existing now or in the future, whether civil, administrative or
investigative, whether sounding in contract, tort or equity or arising out of
or relating to his agreement hereunder to be a director, by reason of the fact
that he performed Services as a director, or, by agreement of the Company and
Indemnitee hereafter, officer, agent or employee of the Company, or by reason
of any action taken or alleged to have been taken or omitted or alleged to have
been omitted in such capacities (a "Proceeding"), against any and all costs,
charges, claims, losses, liabilities, expenses, damages and, including without
limitation, attorneys' and other fees and expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by the Indemnitee
in connection therewith (collectively, "Expenses") and any appeal therefrom if
the Indemnitee acted in a manner he believed in good faith to be in or not
opposed to the best interests of the Company; provided, however, that the
Company shall not be obligated under this Section 2 to make any payment in
connection with any action, claim or proceeding against the Indemnitee to the
extent based upon or attributable to or in connection with any threatened,
pending or completed criminal action, suit, claim or proceeding ("Criminal
Proceeding") unless the Indemnitee had no reasonable cause to believe his
conduct giving rise to the Criminal Proceeding was unlawful.
The termination of any Proceeding by judgment, order, settlement or its
equivalent shall not, of itself, create a presumption that the Indemnitee did
not satisfy the foregoing standard of conduct to the extent applicable thereto.
The determination of whether the Indemnitee shall be entitled to
indemnification under this Section 2 shall be made in accordance with Section 4
hereof. If that determination is so made, it shall be binding upon the Company
and the Indemnitee for all purposes.
3. Advancement of Expenses Incurred in Defense of Proceeding. The
Company shall promptly pay all Expenses as and when incurred by the Indemnitee
in advance of the final disposition of the Proceeding in connection with which
they were incurred, following receipt by the Company of the notice described in
Section 7(a) hereof, together with an Affirmation and Undertaking signed by
Indemnitee in the form of Exhibit A attached hereto, upon delivery of
reasonable evidence of such Expenses. Such Undertaking obligates Indemnitee to
repay all amounts advanced in the event it shall ultimately be determined in
accordance with the procedures specified in Sections 4 and 6 hereof that
Indemnitee is not entitled to be indemnified by the Company as authorized in
Section 2 above. The Company shall not require any security for the
Undertaking.
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4. Certain Procedures Relating to Indemnification. For purposes of
pursuing his rights to indemnification under Section 2 hereof, the Indemnitee
(i) shall submit to the Company a sworn statement of a request for
indemnification substantially in the form of Exhibit B attached hereto and made
a part hereof (the "Indemnification Statement") and (ii) shall present to the
Company reasonable evidence of all Expenses for which payment is requested and
that are not subject to Section 5(b) hereof, with the Company receiving credit
for all Expenses advanced pursuant to Section 3 above. Submission of an
Indemnification Statement to the Company shall create a presumption that the
Indemnitee is entitled to indemnification under Section 2 hereof, and the
Company shall be deemed to have determined that the Indemnitee is entitled to
such indemnification unless, within thirty (30) calendar days after submission
of the Indemnification Statement, the Company shall determine by vote of a
majority of the Board of Directors of the Company, based upon clear and
convincing evidence (sufficient to rebut the foregoing presumption), and the
Indemnitee shall have received notice in writing within such period of such
determination, that the Indemnitee is not so entitled to indemnification, which
notice shall disclose with particularity the evidence in support of the
Company's determination. The foregoing notice shall be sworn to by all persons
who participated in the determination and voted to deny indemnification. Any
determination by the Company that the Indemnitee is not entitled to
indemnification and any failure to make the payments requested in the
Indemnification Statement shall be subject to judicial review as provided in
Section 6 hereof.
5. Subrogation; Duplication of Payments.
(a) Upon payment of any amounts under this Agreement to which
it is finally determined that Indemnitee is entitled, the Company shall be
subrogated to the extent of such amounts to all the rights of recovery of the
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 the Company effectively to bring suit to enforce
such rights.
(b) The Company shall not be liable under this Agreement to
make any payment in connection with any claim made against the Indemnitee to
the extent the Indemnitee has actually received payment (under any insurance
policy or otherwise) of the amounts otherwise payable hereunder.
6. Enforcement.
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(a) If a claim for advancement of Expenses or indemnification
made to the Company pursuant to Section 3 or Section 4 hereof is not paid in
full by the Company within thirty (30) calendar days after receipt by the
Company of all documentation required by such section, the Indemnitee may at
any time thereafter bring suit against the Company to recover the unpaid amount
of the claim.
(b) In any action for indemnification pursuant to Section 2
hereof, brought under Section 6(a) hereof, it shall be a defense to the claim
for indemnification that the Indemnitee has not met the standards of conduct
that constitute conditions to the Company's obligation to indemnify the
Indemnitee for the amount claimed, but the burden of proving such defense shall
be on the Company. The failure of the Company (including independent legal
counsel) to have made a determination prior to commencement of such action that
indemnification of the Indemnitee is proper in the circumstances because he has
met the applicable standard of conduct set forth in this Agreement shall not be
a defense to the action or create a presumption that the Indemnitee has not met
the applicable standard of conduct.
(c) It is the intent of the Company that the Indemnitee not
be required to incur the expenses associated with the enforcement of his rights
under this Agreement by litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to the Indemnitee hereunder for the Indemnitee to serve as a director.
Accordingly, if it should appear to the Indemnitee that the Company has failed
to comply with any of its obligations under the Agreement, or in the event that
the Company or any other person takes any action to declare the Agreement void
or unenforceable, or institutes any action, suit or proceeding designed (or
having the effect of being designed) to deny, or to recover from, the
Indemnitee the benefits intended to be provided to the Indemnitee hereunder,
the Company irrevocably authorizes the Indemnitee from time to time to retain
counsel of his choice, at the expense of the Company as hereafter provided, to
represent the Indemnitee in connection with the initiation or defense of any
litigation or other legal action, whether by or against the Company, in any
jurisdiction. The Company shall pay and be solely responsible for any and all
costs, charges and expenses, including without limitation attorneys' and other
fees and expenses, reasonably incurred by the Indemnitee (i) as a result of the
Company's failure to perform this Agreement or any provision thereof, after the
duty to perform has been established or (ii) as a result of the Company or any
person contesting the validity or enforceability of this Agreement or any
provision thereof as aforesaid, after such validity and enforceability have
been established.
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7. Notification and Defense of Claim.
(a) Promptly after receipt by the Indemnitee of notice of any
pending or threatened Proceeding, the Indemnitee shall, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company of such threatened or pending Proceeding. To be effective, such notice
need only set forth the general basis upon which the Indemnitee became aware of
the Proceeding; provided, however, if the Indemnitee shall have been personally
served with a subpoena, summons, complaint, interrogatories or other papers,
documents or materials, a copy thereof shall be attached to such notice and
such notice shall be delivered to the Company within two (2) business days of
the date on which the Indemnitee was so served. No indemnification provided for
in Section 2 of this Agreement shall be available to the Indemnitee if he fails
to give an appropriate and timely notice and, as a direct result thereof, the
Company was unaware of the Proceeding to which such notice would have related
and was prejudiced by the failure to give such notice.
(b) With respect to any Proceeding as to which the Indemnitee
notifies the Company of the commencement thereof, the Company shall be entitled
to participate in the Proceeding at its own expense and, except as otherwise
provided below, to the extent the Company so desires, it may assume the defense
thereof with counsel mutually satisfactory to the Indemnitee and to the
Company. After notice from the Company to the Indemnitee of its election to
assume the defense thereof, the Company shall not be liable to the Indemnitee
under this Agreement or otherwise for any Expenses subsequently incurred by the
Indemnitee in connection with the defense of such Proceeding other than
reasonable costs of investigation or as otherwise provided below. The
Indemnitee shall have the right to employ his own counsel in such Proceeding,
but all Expenses related thereto incurred after notice from the Company of its
assumption of the defense shall be at the Indemnitee's expense unless: (i) the
employment of counsel by the Indemnitee has been authorized by the Company,
(ii) the Indemnitee has determined in good faith that there may be a conflict
of interest between the Indemnitee and the Company in the defense of the
Proceeding, or (iii) the Company shall not have employed counsel promptly to
assume the defense of such Proceeding; in each of which cases, after prompt
notice to the Company, all Expenses of the Proceeding shall be borne by the
Company and subject to payment pursuant to Sections 2, 3 and 4 of this
Agreement. The Company shall not be entitled to assume the defense of any
Proceeding brought by the Company against the Indemnitee or as to which the
Indemnitee shall have made the determination provided for in (ii) above.
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(c) The Indemnitee shall do everything that the Company reasonably
believes is necessary to defend against, settle, or both, any such Proceeding,
including the execution of such documents necessary to enable the Company to
effectively defend against such Proceeding, and the Indemnitee shall not make
any admission without the Company's written consent unless the Indemnitee shall
have determined to undertake his own defense in such matter and has waived the
benefits of this Agreement.
(d) The Company shall not be liable to indemnify the Indemnitee
under this Agreement or otherwise for any amounts paid in settlement of any
Proceeding effected without the Company's written consent. The Company shall
not settle any Proceeding in any manner that would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. Neither
the Company nor the Indemnitee shall unreasonably withhold its or his consent
to any proposed settlement. The Company shall not be liable to indemnify the
Indemnitee under this Agreement with regard to any judicial award if the
Company was not given a reasonable and timely opportunity, at its expense, to
participate in the defense of such action; however, the Company's liability
hereunder shall not be excused if participation in the Proceeding by the
Company was barred by this Agreement.
9. Nonexclusivity and Severability.
(a) The right to indemnification provided by this Agreement shall
not be exclusive of any other rights to which the Indemnitee may be entitled as
to action in his capacity as a director, officer, employee, or agent and the
rights of Indemnitee hereunder shall continue after the Indemnitee has ceased
to be a director, officer, employee, or agent.
(b) The right to indemnification provided by this Agreement is in
addition to, and not in lieu of, any rights conferred under the bylaws of the
Company as they may be amended from time to time and the Georgia Business
Corporation Code as it may be amended from time to time.
(c) If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid, unenforceable
or otherwise illegal, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid and legal.
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(d) This Agreement is not an agreement of employment, and
Indemnitee acknowledges that the Company has no obligation to employ Indemnitee
in any capacity by virtue hereof.
10. Governing Law. This Agreement shall in all respects be governed by
and construed in accordance with (a) the provisions of the Georgia Business
Corporation Code and judicial decisions thereunder as they apply to
indemnification of officers, directors, employees and agents and (b) the
internal laws of the state of Georgia, without giving effect to the principles
of conflict of laws thereof, as such laws apply to contract formation,
construction, interpretation and performance. Each party represents and
warrants to the other that this Agreement has been duly executed and delivered
by such party or on such party's behalf and constitutes the valid and binding
obligation of such party, enforceable against it or him in accordance with its
terms.
11. Modification; Survival. Subject to Section 9(b) above, this
Agreement contains the entire agreement of the parties relating to the subject
matter hereof. This Agreement may be modified only by an instrument in writing
signed by all parties hereto that refers to this Agreement. The provisions of
this Agreement shall survive the death, disability, or incapacity of the
Indemnitee or the termination of the Indemnitee's service as a director,
officer, employee, or agent and shall inure to the benefit of the Indemnitee's
heirs, executors and administrators.
12. Notices. Unless expressly provided to the contrary herein, all
notices or other communications required or permitted herein will be given in
writing (which may be in the form of an electronic facsimile transmission)
addressed as follows:
(a) If to the Company:
T/R Systems, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: President
Fax No.: (000) 000-0000
(b) If to the Indemnitee:
Xxxxxxx X. Xxxxxx
Xxxxx Xxxxx Fund IV, L.P.
Two Galleria Tower
00000 Xxxx Xxxx
Xxxxx 0000, XX-0
Xxxxxx, Xxxxx 00000
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Notice of change of address shall be effective only when provided in accordance
with this section. All notices complying with this section shall be deemed to
have been received on the date of delivery or on the third business day after
mailing.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
T/R SYSTEMS, INC.
(the "Company")
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Xxxxxxx X. Xxxx
Chairman
/s/ Xxxxxxx X. Xxxxxx
----------------------------------
XXXXXXX X XXXXXX
("Indemnitee")
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EXHIBIT A
AFFIRMATION AND UNDERTAKING
The Board of Directors
T/R Systems, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Gentlemen:
I am a defendant in ______________________________, presently pending in
_____________________________________ [court], brought by ______________________
against me and ______________________ [name others], by reason of the fact that
I was a director of T/R Systems, Inc. (the "Company") at the time of the
matters complained of. I hereby affirm my good faith belief that in my capacity
as a director of the Company with respect to the matters, actions or events
from which the foregoing proceeding arose, I acted in a manner I believed to be
in, or not opposed to, the best interests of the Company [add in the event the
proceeding specified is a criminal one: and I had no reasonable cause to
believe my conduct was unlawful].
Pursuant to that certain Indemnification Agreement between the Company and
me dated March 4, 1994, I am entitled to have the Company pay all expenses
incurred by me in the defense of the above described proceeding. Please accept
this letter as my undertaking to repay to the Company all expenses paid by it
on my behalf in advance of the final disposition of the above described action
in the event it shall ultimately be determined that I am not entitled to be
indemnified by the Company as authorized by said Indemnification Agreement, the
bylaws of the Company, or the Georgia Business Corporation Code.
Very truly yours,
--------------------------
XXXXXXX X. XXXXXX
Dated:
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STATE OF
------------------------------)
COUNTY OF ) SS
------------------------------)
On ______________________, 19__, before me, _____________________________,
a Notary Public in and for said County and State, personally appeared Xxxxxxx
X. Xxxxxx, personally known to me or proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same and that by his signature on such
instrument such person executed such instrument.
-----------------------------------------
Notary Public
My commission expires the ___ day of _________________, 19__.
[NOTARIAL SEAL]
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Exhibit B
INDEMNIFICATION STATEMENT
STATE OF )
-----------------------
) SS
COUNTY OF )
----------------------
I, Xxxxxxx X. Xxxxxx being first duly sworn, do depose and say as follows:
1. This Indemnification Statement is submitted pursuant to that certain
Indemnification Agreement dated as of March 4, 1994, by and between T/R
Systems, Inc. (the "Company") and the undersigned.
2. I am requesting indemnification against costs, charges, claims, losses,
liabilities, expenses, and damages, including, without limitation, attorneys'
and other fees and expenses, judgments, fines and amounts paid in settlement,
all of which (collectively, "Expenses") have been or will be incurred by me in
connection with an actual or threatened civil, administrative or investigative
action, suit, claim or proceeding ("Proceeding") to which I am a party or am
threatened to be made a party, to the extent not previously paid or reimbursed
by the Company.
3. With respect to all matters related to any such Proceeding, I am
entitled to be indemnified as herein contemplated pursuant to the aforesaid
Indemnification Agreement.
4. Without limiting any other rights that I have or may have, I am
requesting indemnification against Expenses that have or may arise out of
_______________________________________________________________________________
_______________________________________________________________________________.
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XXXXXXX X. XXXXXX
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On ______________________, 19__, before me, _____________________________,
a Notary Public in and for said County and State, personally appeared Xxxxxxx
X. Xxxxxx, personally known to me or proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same and that by his signature on such
instrument such person executed such instrument.
-----------------------------------------
Notary Public
My commission expires the ___ day of _________________, 19__.
[NOTARIAL SEAL]
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