INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into effective on the 8th day of August, 1996, by and between ELSINORE
CORPORATION, a Nevada corporation (the "Company"), and XXXXXX X. XXXXXXX (the
"Indemnitee").
In consideration of the mutual promises in this Agreement, and
intending to be legally bound, the Company and Indemnitee hereby covenant and
agree as follows:
Section 1. Indemnification. In consideration for Indemnitee's
continuing service on behalf of the Company and as Indemnitee's contract right,
the Company agrees to indemnify Indemnitee to the fullest extent permitted by
the Nevada General Corporation Law, as amended (the "Nevada Law"), and the
Articles of Incorporation and By-Laws of the Company, as they are in effect on
the date hereof or as they may from time to time be amended (but, in the case of
amendment, only to the extent amendment permits the Company to provide broader
indemnification rights than the Company was permitted to provide before the
amendment). Notwithstanding the generality of the foregoing, the Company agrees
to pay to Indemnitee any Expenses which he or she actually or reasonably incurs
as a party to or witness in any Proceeding by reason of the fact that he or she
is or was a director or officer of the Company or serves or served at the
request of the Company as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of anything
done or not done by him or her in that capacity.
"Expenses" shall be broadly construed and shall include, without
limitation, (i) all direct and indirect costs incurred, paid or accrued, of
investigation, defense and appeal of any Proceeding, (ii) all attorneys' fees,
retainers, court costs, transcripts, fees of experts, witness fees, travel
expenses, duplicating and printing costs, telephone and delivery charges, costs
of attachment of similar bonds, (iii) all other disbursements and out-of-pocket
expenses and (iv) amounts paid in settlement or for fines or judgments, to the
extent permitted by Nevada Law, actually and reasonably incurred in connection
with either the appearance at or investigation, defense, settlement or appeal of
a Proceeding or establishing or enforcing a right to indemnification under this
Agreement or applicable law or otherwise. "Expenses" will not include any
judgments or fines or excise taxes or penalties imposed under the Employee
Retirement Income Security Act of 1974, as amended, or other similar excise
taxes or penalties.
"Proceeding" means any pending, threatened or completed action,
hearing, suit or any other proceeding, whether civil, criminal, arbitrative,
administrative or investigative, or any alternative dispute resolution
mechanism, including without limitation any such Proceeding brought by or in the
right of the Company or any Proceeding brought to enforce Indemnitee's rights
under this Agreement.
Section 2. Advancement of Expenses. The Company shall advance to
Indemnitee all Expenses incurred by or on behalf of Indemnitee within 20 days
after the receipt by the Company of a written request for such advance that
reasonably describes the Expenses (unless there has been a final determination
by a court of competent jurisdiction that Indemnitee is not entitled to be
indemnified for such Expenses). If required by law at the time of such advance,
Indemnitee hereby agrees to repay the amounts advanced if it is ultimately
determined that Indemnitee is not entitled to be indemnified pursuant to the
terms of this Agreement.
Section 3. Procedures for Determination of Entitlement to
Indemnification.
(a) Whenever Indemnitee believes that he or she is entitled to
indemnification pursuant to this Agreement, Indemnitee shall deliver a written
request for indemnification to the Company. This request must include
documentation or information reasonably available to the Indemnitee which
supports his or her claim. Determination of Indemnitee's entitlement to
indemnification shall be made not later than 90 days after receipt of the
request in a forum selected by the Company from the following alternatives:
(i) The stockholders of the Company;
(ii) A quorum of the Board of Directors of the
Company (the "Board") consisting of directors who are not parties to the matter
for which indemnification is sought;
(iii) Independent counsel which has not represented
the Company or the Indemnitee in the past or any party in the matter in which
indemnification is sought, as selected by Indemnitee and reasonably approved
by the Board, which counsel shall make its determination in a written opinion;
or
(iv) A panel of three arbitrators, one of whom is
selected by the Company, another of whom is selected by Indemnitee and the last
of whom is selected by the first two arbitrators.
(b) In the determination of entitlement to indemnification,
Indemnitee shall be presumed to be entitled to indemnification and the Company
has the burden of proof to overcome that presumption. If the Company fails to
notify Indemnitee of the determination within 90 days after the indemnification
request, the Indemnitee shall be absolutely entitled to indemnification, except
as provided in Section 5. The termination of any Proceeding by judgment, order,
settlement, or arbitration, or upon a plea of nolo contendere or its equivalent,
shall not of itself adversely affect the rights of Indemnitee to
indemnification, create a presumption that Indemnitee did not act in good faith
and in a manner which he or she reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal action or
proceeding, create a presumption that Indemnitee had reasonable cause to believe
that his or her conduct was unlawful.
Section 4. Remedies of Indemnitee in Cases of Determination Not to
Indemnify or to Advance Expenses.
(a) In the event that (i) an initial determination is made
that Indemnitee is not entitled to indemnification, (ii) advances for Expenses
are not made when and as required by this Agreement, (iii) payment has not been
timely made following a determination of entitlement to indemnification pursuant
to this Agreement or (iv) Indemnitee otherwise seeks enforcement of this
Agreement, Indemnitee shall be entitled to a final adjudication in an
appropriate court. Alternatively, Indemnitee at his or her option may seek
arbitration pursuant to the commercial arbitration rules of the American
Arbitration Association now in effect, the arbitration to be completed within 90
days following the filing of the demand for arbitration. In any proceeding or
arbitration Indemnitee shall be presumed to be entitled to indemnification and
the Company shall have the burden of proof to overcome that presumption. The
Company agrees to stipulate in court or arbitration that the Company is bound by
all the provisions of this Agreement.
(b) If an initial determination is made or deemed to have been made
pursuant to the terms of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in the absence
of a misrepresentation of a material fact by Indemnitee in the request for
indemnification or a specific finding in a final judgment by a court of
competent jurisdiction that all or any part of such indemnification is expressly
prohibited by law.
(c) In the event an initial determination has been made, in whole or in
part, that Indemnitee is not entitled to indemnification, the decision in the
judicial proceeding or arbitration shall be made de novo the Indemnitee shall be
prejudiced by reason of any prior determination that he or she is not entitled
to indemnification.
Section 5. Limitations on Indemnification. No indemnification shall
be paid or Expenses advanced:
(a) Insurance. To the extent that Indemnitee has been
reimbursed by insurance coverage. Notwithstanding the availability of insurance,
Indemnitee also may claim indemnification from the Company pursuant to this
Agreement by assigning to the Company his or her rights to insurance.
(b) Section 16(b). To the extent of any wholly or partially
successful claim against Indemnitee pursuant to the provisions of section 16(b)
of the Securities Exchange Act of 1934, as amended, or similar provisions of any
federal, state or local law.
(c) Indemnitee's Proceedings. In connection with all or any
part of a Proceeding which is initiated or maintained by or on behalf of
Indemnitee, or any Proceeding by Indemnitee against the Company or its
directors, officers, employees or other agents, unless (i) such indemnification
is expressly required to be made by Nevada Law or this Agreement, (ii) the
Proceeding was authorized by the Board of Directors of the Company or (iii) such
indemnification is provided by the Company, in its sole discretion, pursuant to
the powers vested in the Company under Nevada Law.
Section 6. Duration and Scope of Agreement; Binding Effect. This
Agreement shall continue so long as Indemnitee is subject to any possible
Proceeding for acts or omissions occurring before or after execution of this
Agreement. This Agreement is binding upon the Company and its successors and
assigns and is for the benefit of Indemnitee and his or her spouse, assigns,
heirs, devisees, executors, administrators and other legal representatives.
Section 7. Miscellaneous.
(a) Severability; Partial Indemnity. If any provision or
provisions of this Agreement is held to be invalid, illegal or unenforceable for
any reason whatever: (a) the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby; and (b) to the fullest extent possible, the provisions of this
Agreement shall be construed to give effect to the intent of the provision held
invalid, illegal or unenforceable. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for only a portion of any
Expenses, the Company shall indemnify Indemnitee for the portion to which
Indemnitee is entitled.
(b) Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the
Company and Indemnitee. No Waiver of any provision of this Agreement will be
deemed to constitute a waiver of any other provision hereof (whether or not
similar) nor will such waiver constitute a continuing waiver.
(c) Notice by Indemnitee and Defense of Proceedings.
Indemnitee shall give the Company notice in writing, as soon as practicable, of
any claim made or Proceeding for which indemnity will or could be sought under
this Agreement, and the Indemnitee agrees not to make any statement or effect
any settlement with respect to any Proceeding without the Company's consent.
However, the Company may not deny indemnification for failure of Indemnitee to
provide prompt notification unless the Company has been adversely affected by
the delay.
With respect to any Proceeding as to which Indemnitee has notified the
Company:
(i) The Company shall be entitled to participate therein at
its own expense; and
(ii) The Company jointly with any other indemnifying party
similarly notified shall be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee; provided, however, that the Company shall
not be entitled to assume the defense of any Proceeding if Indemnitee reasonably
concludes that there may be a conflict of interest between the Company and
Indemnitee with respect to such Proceeding. After notice from the Company to
Indemnitee of its election to assume the defense thereof, the Company will not
be liable to Indemnitee under this Agreement for any Expenses subsequently
incurred by Indemnitee in
connection with the defense thereof, other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have the right to
employ its own counsel in such Proceeding but the fees and expenses of such
counsel incurred after notice from the Company of its assumption of the defense
thereof shall be at the expense of Indemnitee unless:
A. The employment of counsel by Indemnitee has been
authorized by the Company;
B. Indemnitee shall have reasonably concluded that counsel
engaged by the Company may not adequately represent Indemnitee;
C. The Company shall not in fact have employed counsel to
assume the defense in such Proceeding or shall not in fact have assumed such
defense and be acting in connection therewith with reasonable diligence;
in each of which cases the fees and expenses of such counsel shall be at the
expense of the Company.
The Company shall further have the right, in its sole
discretion, to settle any Proceeding, provided that no settlement may be made
without Indemnitee's prior consent if it will adversely affect Indemnitee.
Indemnitee agrees to give the Company such information and cooperation as it may
reasonably require to defend or settle any Proceeding.
(d) Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand to the addressee, (ii) received by facsimile
transmission if such transmission is thereafter confirmed or acknowledged in
writing or (iii) mailed by certified or registered mail with postage prepaid, on
the third business day after the date on which it is so mailed:
(a) If to Indemnitee, to:
Xxxxxx X. Xxxxxxx
c/o Elsinore Corporation
000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
(b) If to the Company, to
Elsinore Corporation
000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Corporate Secretary
or to such other address as may have been furnished by the parties.
(e) Governing Law. The parties agree that this Agreement will
be governed by, and construed and enforced in accordance with, the laws of the
State of Nevada, as applied to contracts between Nevada residents entered into
and to be performed entirely within Nevada.
(f) Subrogation. In the event of any payment under this
Agreement, the Company will be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who agrees to 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.
(g) Prior Agreements. This Agreement supersedes any prior
indemnification agreement between the Indemnitee and the Company, which shall
be of no further force and effect whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
ELSINORE CORPORATION
By_________________________________
XXXXX X. XXXXXXX, XX.
Title: Chairman of the Board of Directors
Indemnitee
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XXXXXX X. XXXXXXX
ATTEST:
By____________________________
