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EXHIBIT 10.11
AGREEMENT TO INDEMNIFY
THIS AGREEMENT TO INDEMNIFY (this "Agreement") is made and entered into
as of this 16th day of November, 1998, by and between AremisSoft Corporation, a
Nevada corporation ("AremisSoft"), and Dr. Lycourgos X. Xxxxxxxxx ("Xx.
Xxxxxxxxx").
WHEREAS, Xx. Xxxxxxxxx has agreed to continue to serve, as an officer
and director of AremisSoft; and
WHEREAS, as an inducement for Xx. Xxxxxxxxx to continue serving as an
officer and director, AremisSoft desires to provide indemnification to the
greatest extent permissible under the law; and
WHEREAS, the parties to this Agreement intend to conduct their
relationships hereunder on an arm's length basis.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and as an inducement for Xx. Xxxxxxxxx'x continued service as
an officer and director, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions.
a. "Expenses" shall mean any:
(1) With respect to 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 (i) above;
(3) Any federal, state, or local taxes and/or penalties
imposed 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 Xx. Xxxxxxxxx shall
incur or suffer, which arise, result from, or relate to any breach or inaccuracy
of any of the representations and warranties of AremisSoft or the failure of
AremisSoft to perform any
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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 Xx. Xxxxxxxxx is or was a director,
officer, employee or agent of AremisSoft, or while a director, officer or agent
is or was serving at the request of AremisSoft 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 Xx. Xxxxxxxxx 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 AremisSoft.
c. "Proceeding" shall mean any threatened, pending, or completed
action, claim, demand, suit, arbitration or proceeding, or any claim, demand,
inquiry, hearing, or investigation, whether conducted by AremisSoft or any other
party, that Xx. Xxxxxxxxx in good faith believes might lead to the institution
of any such action, suit, arbitration or proceeding, whether civil, criminal, in
equity, administrative, investigative or other.
2. Indemnification of Xx. Xxxxxxxxx. In the event Xx. Xxxxxxxxx was, is,
or becomes a participant in, or is threatened to be made a participant in, a
Proceeding by reason of (or arising in part out of) an Indemnifiable Event,
AremisSoft shall indemnify Xx. Xxxxxxxxx from and against any and all Expenses
to the fullest extent permitted by law, as the same exists or may hereafter be
amended or interpreted (but in the case of any such amendment or interpretation,
only to the extent that such amendment or interpretation permits AremisSoft to
provide broader indemnification rights than were permitted prior thereto).
AremisSoft's obligation to indemnify Xx. Xxxxxxxxx shall apply whether or not
there is any allegation that Xx. Xxxxxxxxx was acting beyond or outside his
scope of authority as an officer, director or agent of AremisSoft. It is
intended that this covenant of indemnification shall be construed as broadly as
possible to include any claim, action, suit, proceeding or arbitration against
Xx. Xxxxxxxxx without regard to whether or not Xx. Xxxxxxxxx was at fault.
3. Payment of Expenses.
a. If so requested by Xx. Xxxxxxxxx, AremisSoft shall from time
to time, within ten (10) business days of such request, advance up to Ten
Thousand Dollars ($10,000) in expenses to Xx. Xxxxxxxxx ("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 AremisSoft's
obligation to indemnify Xx. Xxxxxxxxx.
b. The AremisSoft shall promptly pay Xx. Xxxxxxxxx'x Expenses
reasonably incurred within thirty (30) days from Xx. Xxxxxxxxx'x tender of
invoices reflecting such Expenses.
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c. If AremisSoft fails to pay any such Expenses within thirty
(30) days, AremisSoft shall pay to Xx. Xxxxxxxxx a late fee of one and one
percent (1%) per month or part thereof until all such expenses are paid in full,
in addition to all other damage suffered by Xx. Xxxxxxxxx.
d. To the extent it is ultimately found that Xx. Xxxxxxxxx is not
entitled to indemnification under the terms of this Agreement, AremisSoft shall
be entitled to be reimbursed by Xx. Xxxxxxxxx for all such amounts (the
"Reimbursed Amounts"), and Xx. Xxxxxxxxx hereby agrees to reimburse AremisSoft
promptly for the same. Xx. Xxxxxxxxx'x obligation to reimburse AremisSoft for
the Reimbursed Amounts shall be unsecured and no interest shall be charged
thereon.
4. Notice and Opportunity to Defend. Xx. Xxxxxxxxx shall receive
indemnification from AremisSoft in accordance with this Agreement as soon as
practicable after Xx. Xxxxxxxxx has made written demand on AremisSoft for
indemnification. If any Proceeding is initiated, or any claim or demand is made,
against Xx. Xxxxxxxxx with respect to an Indemnifiable Event, then the Xx.
Xxxxxxxxx shall give prompt written notice of such Proceeding to AremisSoft.
AremisSoft shall, at its own expense and with its own counsel, if Xx. Xxxxxxxxx
so chooses, defend or settle such Proceeding; provided, however, that: i)
AremisSoft shall keep Xx. Xxxxxxxxx informed of all material developments and
events relating to such Proceeding; ii) Xx. Xxxxxxxxx shall have the right to
participate, at his own expense, provided that Xx. Xxxxxxxxx has requested that
AremisSoft defend Xx. Xxxxxxxxx, in the defense of such Proceeding, and shall
cooperate as reasonably requested by AremisSoft in the defense thereof; and iii)
AremisSoft shall not settle such Proceeding without the prior written consent of
Xx. Xxxxxxxxx, which consent shall not be unreasonably withheld. If AremisSoft
defends Xx. Xxxxxxxxx under a reservation of rights with respect to any
Proceeding, under such circumstances, the rights, duties and obligations of the
parties and counsel shall be governed by San Diego Federal Credit Union v. Cumis
Insurance Society, Inc. (1984) 162 Cal.App.3d 358 and California Civil Code
Section 2778 and AremisSoft shall provide to Xx. Xxxxxxxxx separate counsel paid
for by AremisSoft.
5. Partial Indemnification. If Xx. Xxxxxxxxx is entitled under any
provision of this Agreement to indemnification by AremisSoft for a portion of
Expenses, but not for the total amount of Expenses, AremisSoft shall indemnify
Xx. Xxxxxxxxx for the portion to which Xx. Xxxxxxxxx is entitled.
6. Limitation on AremisSoft. AremisSoft shall not settle any Proceeding
in any manner that would impose any penalty or limitation on Xx. Xxxxxxxxx
without Xx. Xxxxxxxxx'x written consent. Xx. Xxxxxxxxx will not unreasonably
withhold consent to a proposed settlement.
7. Limitation on Xx. Xxxxxxxxx. Xx. Xxxxxxxxx shall not settle any
Proceeding in any manner that would impose any penalty or limitation on
AremisSoft without AremisSoft's written consent. AremisSoft will not
unreasonably withhold consent to a proposed settlement.
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AremisSoft shall not be liable to indemnify Xx. Xxxxxxxxx under this
Agreement with regard to any judicial award if AremisSoft was not given a
reasonable and timely opportunity, at its expense, to participate in the defense
of such action.
8. Non-Exclusivity. The rights of Xx. Xxxxxxxxx under this Agreement
shall be in addition to any other indemnification rights Xx. Xxxxxxxxx may have
under AremisSoft's articles of incorporation, bylaws, applicable law, or
otherwise. To the extent that a change in applicable law (whether by statute or
judicial decision) permits greater indemnification than afforded currently under
AremisSoft's articles of incorporation, bylaws, applicable law, or this
Agreement, it is the intent of the parties that Xx. Xxxxxxxxx enjoy by this
Agreement the greater benefits afforded by such change.
9. Indemnification Not a Waiver. Xx. Xxxxxxxxx'x 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 AremisSoft to perform any of its covenants or obligations
contained in this Agreement; and the exercise by Xx. Xxxxxxxxx of his 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 AremisSoft maintains an insurance
policy or policies providing directors' and officers' liability insurance, to
the extent that Xx. Xxxxxxxxx may be covered by such policy or policies, Xx.
Xxxxxxxxx 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,
AremisSoft shall be subrogated to the extent of such payment to all of the
rights of recovery of Xx. Xxxxxxxxx, 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 AremisSoft effectively to bring
suit to enforce such rights.
12. No Duplication of Payments. AremisSoft shall not be liable under
this Agreement to make any payment in connection with any claim made against Xx.
Xxxxxxxxx to the extent Xx. Xxxxxxxxx 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. AremisSoft shall have no right to set off the
amount of any Expense with respect to which Xx. Xxxxxxxxx may be indemnified by
AremisSoft hereunder against the amount of any obligation of Xx. Xxxxxxxxx to
AremisSoft.
14. Accounting of Profits Under Section 16(b). AremisSoft shall not be
liable under this Agreement to make any payment in connection with any claim
made against Xx. Xxxxxxxxx for an accounting of profits made from the purchase
or sale by Xx. Xxxxxxxxx of securities of AremisSoft 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.
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15. Authorization; Binding Nature of Agreement. AremisSoft 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 AremisSoft and
its officers, directors and shareholders. No authorization, consent or approval
of or filing with any governmental authority or any other person is required to
be obtained or made by AremisSoft in connection with the execution, delivery or
performance of this Agreement.
16. Confidentiality. Unless otherwise required by law, including
required disclosure under federal and state securities laws, AremisSoft 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 Xx. Xxxxxxxxx.
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. Binding Effect. 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 AremisSoft), assigns, spouses, heirs and personal and legal
representatives. AremisSoft 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 AremisSoft would be required to perform if no such succession had
taken place. The indemnification provided under this Agreement shall continue
for Xx. Xxxxxxxxx for any action taken or not taken while serving in an
indemnified capacity pertaining to an Indemnifiable Event even though Xx.
Xxxxxxxxx may have ceased to serve in such capacity at the time of any
Proceeding.
19. Maintenance of Obligation to Indemnify. AremisSoft hereby covenants
and agrees that it shall not permit the indemnification provided to Xx.
Xxxxxxxxx as set forth in this Agreement to be compromised, restricted, limited,
or eliminated in any manner, including by way of amendment of AremisSoft'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. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California applicable to
contracts made and to be
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performed in such state without giving effect to the principles of conflicts of
laws, except that California law shall be applied in determining the scope and
extent of the phrase "to the fullest extent permitted by law," in Section 2 of
this Agreement.
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. Binding Arbitration. Any claim, dispute, or controversy arising out
of this Agreement, or breach thereof, shall be resolved by submission to binding
arbitration.
a. Arbitration Notice. The arbitration shall commence upon any
party sending to any other party to this Agreement a notice in writing (the
"Arbitration Notice") demanding arbitration and specifying the issue(s) to be
arbitrated and all relief sought (the "Arbitration Matter").
b. Selection of Arbitrators. The arbitrators shall be chosen as
follows:
(1) The parties, or their legal representatives, may agree
in writing upon a sole arbitrator. In the event they cannot so agree each side
shall, within fifteen (15) days after the giving of the Arbitration Notice,
exchange a list of acceptable arbitrators consisting of attorneys at law, and
from that list each side may reject all but one arbitrator from each list. The
acceptable arbitrators shall constitute a new list and the process shall be
repeated until three (3) acceptable arbitrators are designated who shall
constitute the "Arbitration Panel." If three (3) acceptable arbitrators are not
appointed within thirty (30) days after giving the Arbitration Notice, Superior
Court of the State of California for the County of Sacramento shall, upon the
filing of a petition by any of the parties hereto pursuant to the provisions of
California Code of Civil Procedure Section 1281.6 (or any successor section),
and after a hearing at which all parties are afforded an opportunity to be
present and be heard, select a the neutral arbitrator from a list of five (5)
persons obtained by the court from the parties jointly or, if they cannot agree,
from the Sacramento County office of the American Arbitration Association.
c. Books and Records. The parties agree to make available to the
Arbitration Panel all books, records, schedules, and other information requested
by it. Such matters are to be made available to the Arbitration Panel at such
times as are deemed necessary by it to make its decision as herein provided. The
Arbitration panel shall have all those powers set forth in Section 1282.6 of
California Code of Civil Procedure including, but not limited to, those powers
relating to the production of books, records, documents and other evidence.
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d. Discovery. The parties may conduct such discovery, and the
Arbitration Panel shall have such discovery powers, as are set forth in the
California Code of Civil Procedure Section 1283.05. The Arbitration Panel shall
be empowered to grant all provisional relief permitted by the California Code of
Civil Procedure. In addition to all other arbitration rights hereby provided,
the provisions of Sections 1282.2, 1282.4 and 1282.6 of the California Civil
Code shall apply. In addition to any and all arbitration rights hereby provided,
the arbitration proceedings and discovery shall be conducted pursuant to
Sections 1282 et seq. of California Code of Civil Procedure, including, without
limitation, the provisions of Sections 1282.2, 1282.4, 1283 and 1283.5.
e. Enforcement. Enforcement of the Arbitration Panel's award
shall be effected pursuant to California Civil Code Sections 1281 et seq.
However, the provisions of California Code of Civil Procedure Section 1281.8
shall not apply and the Arbitration Panel shall be specifically empowered to
grant all provisional remedies permitted under the California Code of Civil
Procedure.
f. Location. The arbitration shall take place in the County of
Sacramento, State of California, at a time and place selected by the Arbitration
Panel or at such other time and location as is acceptable to all parties. Notice
in writing of such time and place shall be given by the Arbitration Panel to
each party at least thirty (30) days prior to the date so fixed.
g. Time Periods. The Arbitration Panel shall diligently,
expeditiously, and in good faith hear and decide the Arbitration Matter under
consideration, within the limits and subject to the standards set forth in this
Agreement. In any event, such decision shall be rendered not later than thirty
(30) days after the arbitration hearing is conducted. If there is only one (1)
arbitrator, his decision shall be final and binding; if there are three (3)
arbitrators, the agreed decision of any two (2) of them shall be final and
binding. If no two (2) of the arbitrators are able to agree upon a decision, the
decision of the neutral third arbitrator shall be final and binding. The
Arbitration Panel shall prepare an award in writing which reflects the final
decision of the Arbitration Panel and a copy of same shall be delivered to each
party hereto. Judicial confirmation, correction, or vacation of the decision of
the Arbitration Panel shall be sought only in the Marin County Superior Court,
which judgment may be enforced and shall be accorded full faith and credit in
any court of competent jurisdiction, including any jurisdiction in which is
located any real property which is the subject matter of the dispute.
h. Binding Effect. The arbitration award shall be final,
conclusive and binding on all parties thereto and shall be non-appealable. The
costs of the arbitrators shall be borne by the losing party.
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:
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To AremisSoft: Roys Poyiadjis, President
AremisSoft Corporation
00 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
With a copy to: Xxxxx X. Xxxxxx, Esq.
Xxxxxx Eng Linn & Xxxxxxxx
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
To Xx. Xxxxxxxxx: Dr. Lycourgos X. Xxxxxxxxx
00 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
26. Effectiveness. This Agreement shall immediately become effective
upon adoption by AremisSoft's Board of Directors. Notwithstanding the
effectiveness of this Agreement, AremisSoft shall use its best efforts to have
its Board of Directors approve this Agreement.
27. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AREMISSOFT: AremisSoft Corporation
By:/s/ Roys Poyiadjis
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Roys Poyiadjis, President
XX. XXXXXXXXX:
/s/ Dr. Lycourgos X. Xxxxxxxxx
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Dr. Lycourgos X. Xxxxxxxxx, an individual
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