EXHIBIT 10.7
FORM OF INDEMNIFICATION AGREEMENT
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THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered into
as of _________, 1997 by and between Synetic, Inc., a Delaware corporation
("Synetic"), and Porex Corporation, a Delaware corporation (together with its
subsidiaries, hereinafter referred to as, the "Company").
RECITALS
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The Company is a subsidiary of Synetic. Synetic and the Company desire to
enter into this Agreement to indemnify each other (and provide for contribution
to each other) against liabilities arising from the operation of the parties'
respective businesses.
AGREEMENT
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The parties therefore agree as follows:
1. Indemnification. (a) The Company agrees to indemnify and hold
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harmless Synetic against any and all claims, losses, damages, liabilities, costs
and expenses, joint or several (including reasonable attorneys' fees and costs
of investigation), to which Synetic may become subject insofar as such claims,
losses, damages, liabilities, costs and expenses (or actions in respect thereof)
arise from or are based on the operations of the business of the Company and its
subsidiaries before or after the consummation of the initial public offering of
the Company's Common Stock, par value $0.01 per share (the "Public Offering");
provided, however, that Synetic shall not be indemnified hereunder for
liabilities arising form its own intentional misconduct or gross negligence or
to the extent any liability arises from a breach by Synetic of its fiduciary
duty to other stockholders of the Company.
(b) Synetic agrees to indemnify and hold harmless the Company against
any and all claims, losses, damages, liabilities, costs and expenses, joint or
several (including reasonable attorneys' fees and costs of investigation), to
which the Company may become subject insofar as such claims, losses, damages,
liabilities, costs and expenses (or actions in respect thereof) arise from or
are based on the operations of the business of Synetic, other than the business
of the Company and its subsidiaries, before or after the consummation of the
Public Offering.
(c) The Company agrees to indemnify and hold harmless Synetic against
any and all claims, losses, damages, liabilities, costs and expenses, joint or
several (including reasonable attorneys' fees and costs of investigation), to
which Synetic may become subject
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insofar as such claims, losses, damages, liabilities, costs and expenses (or
actions in respect thereof) arise from or are based on guarantees or
undertakings made by Synetic to third parties in respect of liabilities or
obligations of the Company or its subsidiaries, whether such guarantees or
undertakings are made by Synetic before or after the consummation of the Public
Offering; provided, however, that Synetic shall not be indemnified hereunder for
liabilities arising from its own intentional misconduct or gross negligence or
to the extent any liability arises from a breach by Synetic of its fiduciary
duty to other stockholders of the Company; provided, further, however, that if
the events giving rise to a particular claim, loss, damages, liability, cost or
expenses occurred prior to the Offering, Synetic shall not be indemnified
pursuant to this Section.
2. Substitution. (a) With respect to any litigation, proceeding or
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investigation by or before any court or governmental agency or body which may be
commenced or threatened against Synetic after the date hereof which arises out
of or is based upon the future business or operations of the Company, but not of
Synetic, at Synetic's option, the Company and Synetic shall use their best
efforts to have the Company substituted in the place of and for Synetic and to
have Synetic removed as a party as promptly as is reasonably practicable.
Pending such substitution, and in cases where such substitution cannot be
effected, the Company shall promptly assume and direct the defense, prosecution
and/or settlement of the claims involved, employing for this purpose counsel
satisfactory to Synetic, and shall pay all expenses related thereto. To the
extent that any such expenses are paid by Synetic, the Company shall promptly
reimburse Synetic therefor.
(b) With respect to any litigation, proceeding or investigation by or
before any court or governmental agency or body which may be commenced or
threatened against the Company after the date hereof which arises out of or is
based upon the past, present or future business or operations of Synetic, but
not of the Company, at the Company's option, the Company and Synetic shall use
their best efforts to have Synetic substituted in the place of and for the
Company and to have the Company removed as a party as promptly as is reasonably
practicable. Pending such substitution, and in cases where such substitution
cannot be effected, Synetic shall promptly assume and direct the defense,
prosecution and/or settlement of the claims involved, employing for this purpose
counsel satisfactory to the Company, and shall pay all expenses related thereto.
To the extent that any such expenses are paid by the Company, Synetic shall
promptly reimburse the Company therefor.
3. Notice and Payment of Claim. If either party entitled to
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indemnification hereunder (an "Indemnified Party") is threatened in writing with
any claim, or any claim is presented in writing to, or any action or proceeding
formally commenced against, an Indemnified Party which may give rise to the
right of indemnification hereunder, the Indemnified Party will promptly give
written notice thereof to the other party (the "Indemnifying Party"), provided
that any delay by the Indemnified Party in so notifying the
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Indemnifying Party shall not relieve the Indemnifying Party of any liability to
the Indemnified Party hereunder except to the extent the Indemnifying Party is
materially and adversely prejudiced by such delay. The Indemnifying Party, by
delivery of written notice to the Indemnified Party within 30 days of receipt of
notice of claim to indemnity from the Indemnified Party, may elect to contest
such claim, action or proceeding at the Indemnifying Party's expense and by
counsel of its own choosing. If the Indemnified Party requests in writing that
such claim, action or proceeding not be contested, then it shall not be
contested but shall not be covered by the indemnities provided herein. The
Indemnifying Party may settle an indemnifiable matter which it has duly elected
to contest with the consent of the Indemnified Party, after delivering a written
description of the proposed settlement to, and receiving consent from, the
Indemnified Party. In the event that the Indemnified Party declines to consent
to a bona fide settlement acceptable to the claimant, then the Indemnified Party
shall have no right to indemnification beyond the amount of the proposed
settlement.
4. Dispute Resolution. In an effort to resolve informally and amicably
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any claim or controversy arising out of or related to the interpretation or
performance of this Agreement without resorting to litigation, each party shall
first notify the other of any differences or dispute hereunder that requires
resolution. Synetic and the Company shall each designate an employee to
investigate, discuss and seek to settle the matter between them. If the two are
unable to settle the matter within 30 days after such notification, the matter
shall be submitted to an independent director of each of Synetic and the Company
for consideration. If settlement cannot be reached through their efforts within
an additional 30 days, or such longer time period as they shall agree upon,
either party may initiate legal proceedings to resolve such matter.
5. Cooperation. So long as any books, records and files retained by
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Synetic or the Company or its subsidiaries relating to the business operations
or assets of the Company or its subsidiaries remain in existence and available,
Synetic and the Company shall have the right upon prior notice to inspect and
copy the same at any time during business hours for any proper purpose. Neither
Synetic nor the Company shall destroy or permit the destruction of (without
first having offered to deliver to the other) any such books, records and files
for the time period during which they would be required to retain such books,
records or files by applicable law. Synetic and the Company shall cooperate
with one another in a timely manner in any administrative or judicial proceeding
involving any matter affecting the potential liability of either Synetic or the
Company hereunder or with respect to any governmental authority. Such
cooperation shall include, without limitation, making available to the other
party, during normal business hours, all books, records and information,
officers and employees (without substantial interruption of employment)
necessary or useful in connection with any inquiry, audit, investigation or
dispute, any litigation or any other matter requiring any such books, records,
information, officers or employees for any reasonable business purpose. The
party requesting or otherwise entitled
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to any books, records, information, officers, or employees pursuant to this
Section shall bear all reasonable out-of-pocket costs and expenses (except
reimbursement of salaries, employee benefits and general overhead) incurred in
connection with providing such books, records, information, officers or
employees.
6. Assignment. Neither party shall assign or transfer any of its rights
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under this Agreement without the prior written consent of the other party.
7. Notices. All notices, requests, demands and other communications
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provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in any general or branch office of the United States Postal Service, enclosed in
a registered or certified postpaid envelope, or sent by Federal Express or other
similar overnight courier service, addressed to the address of the parties
stated below or to such changed address as such party may have fixed by notice
or, if given by telecopier, when such telecopy is transmitted and the
appropriate answerback is received.
If to Synetic:
Synetic, Inc.
000 Xxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
Attn: Chief Financial Officer
If to the Company:
Porex Corporation
000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000-0000
Attn: Chief Financial Officer
8. Further Assurances. Synetic and the Company shall execute,
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acknowledge and deliver or cause to be executed, acknowledged and delivered such
instruments and take such other action as may be necessary or advisable to
carry out their obligations under this Agreement and under any exhibit, document
or other instruments delivered pursuant hereto.
9. Governing Law. This Agreement shall be governed by the laws of the
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State of New York.
10. Entire Agreement. This Agreement, together with any other agreements
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between the parties, constitutes the entire understanding between the parties
and supersedes
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all proposals, commitments, writings, negotiations and understandings, oral and
written, and all other communications between the parties relating to the
subject matter of this Agreement. This Agreement may not be amended or
otherwise modified except in writing duly executed by all of the parties. A
waiver by any party of any breach or violation of this Agreement shall not be
deemed or construed as a waiver of any subsequent breach or violation thereof.
11. Counterparts. This Agreement may be executed in several counterparts,
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each of which shall be deemed an original, but all of which together shall
constitute one and the same document.
12. Severability. Should any part, term or condition hereof be declared
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illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of this Agreement shall be
and hereby are redrafted to conform with applicable law, while leaving the
remaining portions of this Agreement intact.
13. Successors and Assigns. Subject to the provisions of Section 6, this
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Agreement is solely for the benefit of the parties and their respective
successors and assigns. Nothing herein shall be construed to provide any rights
to any other entity or individual.
14. Headings. Section headings are for convenience only and do not
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control or affect the meaning or interpretation of any terms or provisions of
this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
Synetic, Inc.
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Name:
Title:
Porex Corporation
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Name:
Title:
