INDEMNIFICATION AGREEMENT
EXHIBIT
10.2
INDEMNIFICATION
AGREEMENT,
dated as of the 9th day of August 2006, by and between Western Goldfields,
Inc., an Idaho corporation with its principal office located at 0000 X. Xxxxxxx
00, Xxxxxxx, XX 00000 (the "Company"), and __________, a director and/or officer
of the Company residing at _________________ (the "Indemnitee").
W
I T N E S S E T H :
WHEREAS,
the
Company seeks to attract and retain the most capable persons available to serve
as its directors and officers; and
WHEREAS,
such
persons require substantial protection against personal liability arising out
of
their faithful service to the Company; and
WHEREAS,
the
Company and the Indemnitee believe it desirable to enter into agreements to
reflect indemnifi-cation and advancement of expenses arrangements;
and
WHEREAS,
in
recognition of the Company's desire to retain the services of the Indemnitee
and
in furtherance of the Company's policy, the Company desires to provide the
Indemnitee with the right to indemnification and advancement of expenses and
the
Indemnitee desires to receive such right, all upon the terms and subject to
the
conditions contained herein; and
NOW,
THEREFORE,
in
consideration of the foregoing premises, the Indemnitee's continued service
to
the Company and the mutual covenants contained herein, the parties hereby agree
as follows:
1. Certain
Terms Defined.
As used
in this Agreement, the following terms shall have the following
meanings:
(a) The
term
"Action" shall mean any action or proceeding, whether civil, criminal,
administrative or investigative, and including, but not limited to, one by
or in
the right of the Company or by or in the right of any other Entity, which the
Indemnitee served in any capacity at the request of the Company.
(b) The
term
"Agreement" shall mean this Indemnification Agreement, as the same may be
amended from time to time.
(c) The
term
"Entity" shall mean any company of any type or kind, domestic or foreign, or
any
partnership, limited liability company, joint venture, trust, employee benefit
plan or any other enterprise or entity.
2. Indemnification.
Subject
to the terms set forth in this Agreement, the Company shall defend, indemnify
and save harmless the Indemnitee if the Indemnitee is made, or is threatened
to
be made, a party to any Action or a witness on behalf of the Company or any
affiliate thereof, in any Action, by reason of the fact that the Indemnitee
(or
the Indemnitee's testator or intestate) served as a member on the Board of
Directors of the Company, served as an officer of the Company, or served another
Entity in any capacity at the request of the Company, against judgments, fines,
amounts paid in settlement and expenses, including reasonable attorneys' fees
and expenses and costs of investigation, incurred as a result of such Action
or
any appeal relating thereto.
3. Limitation
on Indemnification.
The
Indemnitee shall be entitled to indemnification under Section 2 except if a
judgment or other final adjudication adverse to the Indemnitee establishes
that
(i) the Indemnitee's acts were committed in bad faith, by gross negligence
or
were the result of active and deliberate dishonesty and, in either case, were
material to the cause of action so adjudicated, or (ii) as a result of such
acts, the Indemnitee personally gained in fact a financial profit or other
advantage to which the Indemnitee was not legally entitled.
4. Partial
Indemnification.
Except
as otherwise provided in Section 3, if the Indemnitee is only partially
successful in the defense, investigation, settlement or appeal of any Action
described in Section 2 hereof, and as a result is not entitled under Section
7(b) hereof to indemnification by the Company for the total amount of the
expenses (including reasonable attorneys’ fees and expenses), costs, judgements,
penalties, fines, and amounts paid in settlement actually and reasonably
incurred by him, the Company shall nevertheless indemnify the Indemnitee, as
a
matter of right pursuant to Section 7(b) hereof, to the extent the Indemnitee
has been partially successful.
5. Advances
of Expenses.
(a) At
the written request of the Indemnitee, the Company will advance to the
Indemnitee the expenses (including reasonable attorneys' fees and expenses
and
costs of investigation) incurred by the Indemnitee in defending any Action
in
advance of the final disposition of such Action.
(b) The
Indemnitee hereby agrees and undertakes to repay such advanced amounts (or
appropriate portions thereof) if a court of competent jurisdiction ultimately
determines that the Indemnitee was not entitled to such amounts.
6. Payment
by Company.
The
Company shall pay the indemnification requested under Section 2 and advance
the
expenses requested under Section 5 promptly following receipt by the Company
of
the Indemnitee's written request therefor and, in any event, no later than
five
(5) days after such receipt.
7. Enforcement.
(a) The
right of the Indemnitee to indemnification and advancement of expenses provided
by this Agreement shall be enforceable by the Indemnitee in any court of
competent jurisdiction. In such an enforcement action, the burden shall be
on
the Company to prove that the indemnification and advancement of expenses being
sought are not appropriate. Neither the failure of the Company to determine
whether indemnification or the advancement of expenses is proper in the
circumstances nor an actual determination by the Company thereon adverse to
the
Indemnitee shall constitute a defense to the action or create a presumption
that
the Indemnitee is not so entitled.
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(b) Without
limiting the scope of indemnification to which the Indemnitee is entitled under
this Agreement, (i) if the Indemnitee has been successful on the merits or
otherwise in the defense of an Action, the Indemnitee shall be entitled to
indemnification as authorized in Section 2 and (ii) the termination of any
Action by judgment, settlement, conviction or plea of nolo contendere or its
equivalent shall not in itself create a presumption that the Indemnitee has
not
met the standard of conduct required for indemnification under this Agreement.
(c) The
Indemnitee's reasonable expenses (including, but not limited to, attorneys’ fees
and expenses) incurred in connection with successfully establishing or enforcing
the Indemnitee's right to indemnification or advancement of expenses, in whole
or in part, in any such proceeding under this section also shall be indemnified
by the Company.
8. Non-Exclusivity.
Nothing
contained in this Agreement shall limit the right to indemnification and
advancement of expenses to which the Indemnitee would be entitled by law in
the
absence of this Agreement, or shall be deemed exclusive of any other rights
which the Indemnitee, in seeking indemnification or advancement of expenses,
may
have or to which he hereafter may be entitled under any law, provision of the
certificate of incorporation, by-law, agreement approved by, or resolution
of,
the Board, or resolution of stockholders of the Company.
9. Subrogation.
(a) 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 otherwise actually received payment (under any insurance policy,
by-law or otherwise) of the amounts otherwise subject to indemnification or
expense advance under this Agreement.
(b) In
the
event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of the Indemnitee other
than from the Company, and the Indemnitee shall execute all papers that
reasonably are required and shall do everything that reasonably 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.
10. Notice
of Claim.
As a
condition precedent to the right to be indemnified under this Agreement, the
Indemnitee shall give the Company written notice as soon as practicable after
learning about any claim made against the Indemnitee for which indemnification
or expense advances will or could be sought under this Agreement. In addition,
the Indemnitee shall give the Company such information and cooperation as the
Company reasonably may require to enable the Company to perform its obligations
hereunder. Failure to give notice shall not deprive the Indemnitee of a right
to
indemnification hereunder, if the Company has actual knowledge of the claim
or
is not adversely affected in its ability to defend the claim as a result of
such
failure.
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11. Severability.
If this
Agreement or any portion hereof shall be invalidated or held unenforceable
on
any ground by any court of competent jurisdiction, the Company nevertheless
shall indemnify the Indemnitee to the fullest extent permitted by any applicable
portion of this Agreement that shall not have been so invalidated or held
unenforceable.
12. Continuity
of Rights.
(a) The
right of the Indemnitee to indemnification and advancement of expenses under
this Agreement shall (i) continue after the Indemnitee has ceased to serve
in a
capacity which would entitle the Indemnitee to indemnification or advancement
of
expenses pursuant to this Agreement with respect to acts or omissions occurring
prior to such cessation, (ii) inure to the benefit of the heirs, executors
and
administrators of the Indemnitee, (iii) apply with respect to acts or omissions
occurring prior to the execution and delivery of this Agreement to the fullest
extent permitted by law and (iv) survive any restrictive amendment or
termination of this Agreement with respect to events occurring prior to such
amendment or termination.
13. Proceedings
Initiated by Indemnitee.
Other
than to the extent provided in Section 7(c), above, the Indemnitee shall not
be
entitled to indemnification or advancement of expenses under this Agreement
with
respect to any Action initiated by the Indemnitee, but shall be entitled to
indemnification and advancement of expenses with respect to any counterclaim
or
third-party claim in any such Action.
14. Binding
Effect.
This
Agreement shall be binding upon all successors and assigns of the Company
(including any transferee of all or substantially all of its assets and any
successor by merger or operation of law) and shall inure to the benefit of
the
heirs, personal representatives, successors, assigns, rep-resentatives and
estate of the Indemnitee.
15. Governing
Law.
This
Agreement shall be governed by, and be construed and enforced in accordance
with, the laws of the State of Idaho applicable to contracts made and to be
performed in such state, without giving effect to the principles of conflicts
of
laws that would defer to the substantive laws of another
jurisdiction.
16. Duration
of Agreement.
This
Agreement shall continue until and terminate upon the later of (a) six (6)
years
after the Indemnitee has ceased to occupy any of the positions or have any
of
the relationships described in Section 2 of this Agreement or (b) the final
termination of all pending or threatened Actions with respect to the Indemnitee.
17. Effect
of Headings.
The
Section headings herein are for convenience only and shall not affect the
construction hereof.
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18. Notices.
All
notices, demands, consents, requests, instructions and other communications
hereunder to or on behalf of the Company or the Indemnitee shall be in writing
and shall be deemed to be delivered and received by the intended recipient
as
follows: (a) if personally delivered, on the day of such delivery, such day
being any day other than Saturday, Sunday and any day upon which banking
institutions in The City of New York are required or authorized by law or other
governmental action to close (a “Business Day”) (as evidenced by the receipt of
the personal delivery service); (b) if mailed by certified or registered mail
return receipt requested, four (4) Business Days after the aforesaid mailing;
(c) if delivered by overnight courier (with all charges having been prepaid),
on
the second Business Day after such delivery (as evidenced by the receipt of
the
overnight courier service of recognized standing); or (d) if delivered by
facsimile transmission, on the Business Day of such delivery if sent by 6:00
p.m. in the time zone of the recipient, or if sent after that time, on the
next
succeeding Business Day (as evidenced by the printed confirmation of delivery
generated by the sending party's telecopier machine). If any notice, demand,
consent, request, instruction or other communication cannot be delivered because
of a changed address of which no notice was given to the sender, or the refusal
by the party to whom the notice is directed to accept same, the notice shall
be
deemed received on the fourth Business Day after the Business Day the notice
is
sent or on the day on which such acceptance is refused (as evidenced by a sworn
affidavit of the sender). All such notices, demands, consents, requests,
instructions and other communications will be sent to the following addresses
or
facsimile numbers as applicable:
| If to the Indemnitee: | |
| ______________ | |
| ______________ | |
|
Tel: __________
|
|
| Fax: __________ | |
| If to the Company: | |
|
Western
Goldfields, Inc.
0000
X. Xxxxxxx 00
Xxxxxxx,
XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
|
|
|
Attn:
Xxxxx
Xxxxx
Chief
Financial Officer
|
|
| with copies to: | |
|
Xxxxx
X. Xxxxxxx, Esq.
Xxxxxxxx
Xxxxxxx LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
|
or
to
such other address as any party may specify by notice given to the other party
in accordance with this Section 18.
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19. Counterparts.
This
Agreement may be executed in any number of counterparts. Each counterpart of
an
agreement so executed shall be deemed an original, but all such counterparts
shall together constitute but one and the same instrument. In making proof
of
this Agreement, it shall not be necessary to produce or account for more than
one counterpart.
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IN
WITNESS WHEREOF,
the
parties have caused this Agreement to be duly executed as of the date first
written above.
WESTERN
GOLDFIELDS, INC.
By:_________________________
Name:
Title:
INDEMNITEE
____________________________
Name:
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