INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement"), is between
Diversified Corporate Resources, Inc., a Texas corporation (the "Company") and
__________________(the "Indemnitee").
W I T N E S S E T H:
WHEREAS, the Indemnitee is an officer and/or director of the Company;
and
WHEREAS, the Company is a party to certain litigation proceedings (the
"Lawsuit") which (a) involves Xxxxxx X. Xxxxx, Xx. and Ditto Properties Company
(collectively referred to herein as "Ditto"), the Company and others, and (b) is
pending before the 298th Judicial District Court of Dallas County, Texas (Cause
No. 97-02079-M); and.
WHEREAS, the Board of Directors of the Company have determined that it
is in the best interests of the Company to indemnify the officers and directors
of the Company in connection with the Lawsuit and related matters; and
WHEREAS, the purpose of this Agreement is to document the Company's
commitment to indemnify the Indemnitee to the fullest extent permitted by law;
and
WHEREAS, the Company is willing to indemnify Indemnitee in order to
retain the services of Indemnitee.
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Indemnitee hereby agree as follows:
1. CERTAIN DEFINITIONS.
(a) CLAIM: any threatened, pending, or completed action, suit,
or proceeding or any inquiry or investigation (including discovery), whether
conducted by the Company or any other party, directly or indirectly related to
the Lawsuit, the fact and matters involved in the Lawsuit, and the actions and
inaction's of the Company and/or the Board of Directors of the Company in
connection with or related to the manner in which the Company (i) has pursued
its claims for damages against Ditto, and Ditto's claims, if any, for damages
against the Company, and (ii) has funded the payment of legal fees, expenses,
interest and bank debt payments by J. Xxxxxxx Xxxxx ("Xxxxx") and DCRI LP NO 2,
Inc., a Texas corporation, directly or indirectly related to the Lawsuit and
other disputes involving Xxxxx and Ditto.
(b) EXPENSES: all costs, expenses (including attorneys' and
expert witnesses' fees), judgments, fines, penalties, amounts paid in settlement
and obligations (including all interest, assessments, and other charges paid or
payable in connection with or in respect of such expenses, judgments, fines,
penalties, or amounts paid in settlement) paid or incurred in connection with
investigating, defending (including affirmative defenses and counterclaims),
settling, being a
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witness in, or participating in (including on appeal), or preparing to
defend, be a witness in, or participate in, any Claim relating to any
lndenmifiable Event.
(c) INDEFINABLE EVENT: any event or occurrence related to, or
arising out of, the fact that Indemnitee is or was a director, officer,
employee, trustee, or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee, trustee, or agent of mother
corporation, partnership, joint venture, employee benefit plan, trust, or other
enterprise, or by reason of any thing done or not done by Indemnitee in any such
capacity.
2. BASIC INDEMNIFICATION AND EXPENSE REIMBURSEMENT ARRANGEMENT.
(a) In the event Indemnitee was, is, or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reason of (or arising in part out
of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the
fullest extent permitted by law as soon as practicable but in any event no later
than thirty (30) days after written demand is presented to the Company, against
any and all Expenses of or with respect to that Claim.
(b) If so requested by Indemnitee, the Company shall pay any
and all Expenses incurred by Indemnitee (or, if applicable, reimburse Indemnitee
for any and all Expenses incurred by Indemnitee and previously paid by
Indeminitee) within ten days after such request (an "Expense Advance"). However,
such request must contain (i) a statement reasonably detailing the Expenses for
which advancement is requested, and (ii) an undertaking by Indemnitee, or on
Indemnitee's behalf, to repay such advancement of Expenses if it is ultimately
determined by a final judicial decision from which there is no further right to
appeal that Indemnitee is not entitled to be indemnified for such expenses under
this Agreement or otherwise. The Company shall be obligated to make or pay an
Expense Advance in advance of the final disposition or conclusion of any Claim
in accordance with this Section 2(b). Any dispute as to the reasonableness of
any Expense shall not delay an Expense Advance by the Company, and the Company
agrees that any such dispute shall be resolved only upon the disposition or
conclusion of the underlying Claim against the Indemnitee.
3. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall
indemnify Indemnitee against any and all costs and expenses (including
attorneys' and expert witnesses' fees), and, if requested by Indemnitee,
shall (within ten (10) business days of that request) advance or reimburse
those costs and expenses to Indemnitee, that are incurred by Indemnitee in
connection with (a) the negotiation and execution of this Agreement, which
shall include, without limitation, the review of the Company's Articles of
Incorporation, Bylaws and the directors' and officers' liability insurance
policies and (b) any claim, asserted against or action brought by Indemnitee
for (i) indemnification or advance payment of Expenses by the Company under
this Agreement or any other agreement or provision of the Company's Articles
of Incorporation or Bylaws now or hereafter in effect relating to Claims for
Indemnifiable Events, or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company; provided, however,
that Indemnitee shall repay such advancement of costs and expenses if it is
ultimately determined by a final judicial decision from which there is no
further right to appeal that
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Indemnitee is not entitled to be indemnified for such costs or expenses under
this Agreement or otherwise.
4. PARTIAL INDEMNITY. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
Expenses but not, however, for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Moreover, notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any or all claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter herein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
5. CONTRIBUTION.
(a) CONTRIBUTION PAYMENT. To the extent the indemnification
provided for under any provision of this Agreement is determined (in the manner
hereinabove provided) not to be permitted under applicable law, then in the
event Indemnitee was, is, or becomes a party to or witness or other participant
in, or is threatened to be made a party to or witness or other participant in, a
Claim by reason of (or arising in part out of) an Indemnifiable Event, to the
extent contribution with respect to such Indemnifiable Event is permitted under
applicable law, the Company, in lieu of indemnifying Indemnitee, shall
contribute to the amount of any and all Expenses assessed against or incurred or
paid by Indemnitee on account of or with respect to that Claim for which such
contribution is permitted ("Contribution Amounts"), in such proportion as is
appropriate to reflect the relative fault with respect to the Indemnifiable
Event giving rise to the Contribution Amounts of Indemnitee, on the one hand,
and of the Company and any and all other parties (including officers and
directors of the Company other than Indemnitee) who may be at fault with respect
to such Idemnifiable Event (collectively, such parties, including the Company,
are herein referred to as the "Third Parties") on the other hand.
(b) RELATIVE FAULT. The relative fault of the Third Parties and
the Indemnitee shall be determined (i) by reference to the relative fault of
lndemnitee as determined by the court or other governmental agency assessing the
Contribution Amounts or (ii) to the extent such court or other governmental
agency does not apportion relative fault, by a majority of the disinterested
members of the Company's Board of Directors after giving effect to, among other
things, the relative intent, knowledge, access to information, and opportunity
to prevent or correct the applicable Indemnifiable Event and other relevant
equitable considerations of each party. The Company and Indemnitee agree that it
would not be just and equitable if contribution pursuant to this Section 5(b)
were determined by pro rata allocation or by any other method of allocation
which does take account of the equitable considerations referred to in this
Section 5(b).
6. PRESUMPTION. Indemnitee shall be presumed to be entitled to
indemnification for any act or omission covered in this Agreement. The burden of
proof of establishing that Indemnitee is not entitled to indemnification because
of the failure to fulfill any legal requirement shall be on the Company.
7. NON-EXCLUSIVITY. The rights of lndemnitee hereunder shall be in
addition to
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any other rights Indemnitee may have under the Company's Bylaws or Articles
of Incorporation or the Texas Business Corporation Act ("TBCA") or otherwise.
To the extent that a change in the TBCA (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under the Company's Bylaws or Articles of Incorporation and this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits so afforded by that change.
8. LIABILITY INSURANCE. Except as otherwise agreed to by the
Company and Indemnitee in a written agreement, to the extent the Company
maintains an insurance policy or policies providing directors' and officers'
liability insurance, Indemnitee shall be covered by that policy or those
policies, in accordance with its or their terms, to the maximum extent of the
coverage available for any Company director or officer.
9. Miscellaneous.
(a) NOTICE PROVISION. Any notice, payment, demand or
communication required or permitted to be delivered or given by the provisions
of this Agreement shall be deemed to have been effectively delivered and
received (i) if personally delivered, upon receipt, (ii) if sent via facsimile,
upon mechanical confirmation of successful transmission thereof generated by the
sending telecopy machine only if such notice is also delivered by hand, or
deposited in the United States mail, postage prepaid, registered or certified
mail, on or before three (3) business days after its delivery by facsimile, or
(iii) if sent by registered or certified mail five (5) days after deposit
thereof in the U.S. mail and addressed to the parties at the addresses set forth
above their signatures to this Agreement.
(b) ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties and supersedes all prior understandings, whether
written or oral, between the parties with respect to the subject matter of this
Agreement.
(c) SEVERABILITY OF PROVISIONS. If any provision of this
Agreement is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term of this Agreement, such provision shall be
fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of each such illegal, invalid, or unenforceable provision there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid, and enforceable.
(d) APPLICABLE LAW. This Agreement shall be governed by and
construed under the laws of the State of Texas.
(e) EXECUTION IN COUNTERPARTS. This Agreement and any
amendment may be executed simultaneously or in two or more counterparts, each of
which together shall constitute one and the same instrument.
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(f) COOPERATION AND INTENT. The Company shall cooperate in
good faith with Indemnitee and use its best efforts to ensure that Indemnitee
is indemnified for liabilities described herein to the fullest extent
permitted by law.
(g) AMENDMENT. No amendment, modification or alteration of the
terms of this Agreement shall be binding unless in writing, dated subsequent
to the date of this Agreement, and executed by the parties hereto
(h) BINDING EFFECT. The obligations of the Company to
Indemnitee hereunder shall survive and continue as to Indemnitee even if
Indemnitee ceases to be a director, officer employee and/or agent of the
Company. Each and all of the covenants, terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the successors to the Company
and to the benefit of the estate, heirs, executors, administrators and personal
representatives of Indemnitee.
(i) EFFECTIVE DATE. The provisions of this Agreement shall
cover claims, actions, suits and proceedings whether now pending or hereafter
commenced and shall be retroactive to cover acts or omissions or alleged acts or
omissions which heretofore have taken place. By way of example but not of
limitation, this Agreement shall apply to all liabilities, known or unknown,
contingent or otherwise, that presently exist or arise in the future, regardless
whether the liabilities relate to activities of Indemnitee and/or the Company
preceding or subsequent to the date of this Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this
Indemnification Agreement as of the 15th day of March 2001.
THE COMPANY
DIVERSIFIED CORPORATE RESOURCES, INC.
By: /s/ XXXXXXX X. XXXXXXX
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XXXXXXX X. XXXXXXX
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Name
CHIEF FINANCIAL OFFICER
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Title
Address:
00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
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THE INDEMNITEE:
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Address
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