MSTI HOLDINGS, INC. DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
MSTI
HOLDINGS, INC.
This
Director and Officer Indemnification Agreement, dated as of May ___, 2007 (this
“Agreement”),
is
made by and between MSTI Holding, Inc., a Delaware corporation (the “Company”),
and
_______________ (the “Indemnitee”).
RECITALS:
A. Section
141 of the Delaware General Corporation Law provides that the business and
affairs of a corporation shall be managed by or under the direction of its
board
of directors.
B. By
virtue
of the managerial prerogatives vested in the directors and officers of a
Delaware corporation, directors and officers act as fiduciaries of the
corporation and its stockholders.
C. Thus,
it
is critically important to the Company and its stockholders that the Company
be
able to attract and retain the most capable persons reasonably available to
serve as directors and officers of the Company.
D. In
recognition of the need for corporations to be able to induce capable and
responsible persons to accept positions in corporate management, Delaware law
authorizes (and in some instances requires) corporations to indemnify their
directors and officers, and further authorizes corporations to purchase and
maintain insurance for the benefit of their directors and officers.
E. The
Delaware courts have recognized that indemnification by a corporation serves
the
dual policies of (1) allowing corporate officials to resist unjustified
lawsuits, secure in the knowledge that, if vindicated, the corporation will
bear
the expense of litigation, and (2) encouraging capable women and men to serve
as
corporate directors and officers, secure in the knowledge that the corporation
will absorb the costs of defending their honesty and integrity.
F.
The
number of lawsuits challenging the judgment and actions of directors and
officers of Delaware corporations, the costs of defending those lawsuits and
the
threat to personal assets have all materially increased over the past several
years, chilling the willingness of capable women and men to undertake the
responsibilities imposed on corporate directors and officers.
G. Recent
federal legislation and rules adopted by the Securities and Exchange Commission
and the national securities exchanges have exposed such directors and officers
to new and substantially broadened civil liabilities.
H. Under
Delaware law, a director’s or officer’s right to be reimbursed for the costs of
defense of criminal actions, whether such claims are asserted under state or
federal law, does not depend upon the merits of the claims asserted against
the
director or officer and is separate and distinct from any right to
indemnification the director may be able to establish.
I. Indemnitee
is, or will be, a director and/or officer of the Company and his or her
willingness to serve in such capacity is predicated, in substantial part, upon
the Company’s willingness to indemnify him or her in accordance with the
principles reflected above, to the fullest extent permitted by the laws of
the
State of Delaware, and upon the other undertakings set forth in this
Agreement.
J. Therefore,
in recognition of the need to provide Indemnitee with substantial protection
against personal liability, in order to procure Indemnitee’s continued service
as a director and/or officer of the Company and to enhance Indemnitee’s ability
to serve the Company in an effective manner, and in order to provide such
protection pursuant to express contract rights (intended to be enforceable
irrespective of, among other things, any amendment to the Company’s certificate
of incorporation or bylaws (collectively, the “Constituent
Documents”),
any
change in the composition of the Company’s Board of Directors (the “Board”)
or any
change-in-control or business combination transaction relating to the Company),
the Company wishes to provide in this Agreement for the indemnification and
advancement of Expenses to Indemnitee on the terms, and subject to the
conditions, set forth in this Agreement.
K. In
light
of the considerations referred to in the preceding recitals, it is the Company’s
intention and desire that the provisions of this Agreement be construed
liberally, subject to their express terms, to maximize the protections to be
provided to Indemnitee hereunder.
AGREEMENT:
NOW,
THEREFORE, the parties hereby agree as follows:
1. Certain
Definitions.
In
addition to terms defined elsewhere herein, the following terms have the
following meanings when used in this Agreement with initial capital
letters:
“Change
in Control”
shall
have occurred at such time, if any, as Incumbent Directors cease for any reason
to constitute a majority of Directors. For purposes of this Section 1(a),
“Incumbent
Directors”
means
the individuals who, as of the date hereof, are Directors of the Company and
any
individual becoming a Director subsequent to the date hereof whose election,
nomination for election by the Company’s stockholders, or appointment, was
approved by a vote of at least a majority of the then Incumbent Directors
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for director, without objection
to
such nomination); provided,
however,
that an
individual shall not be an Incumbent Director if such individual’s election or
appointment to the Board occurs as a result of an actual or threatened election
contest (as described in Rule 14a-12(c) of the Securities Exchange Act of 1934,
as amended) with respect to the election or removal of directors or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board.
“Claim”
means
(i) any threatened, asserted, pending or completed claim, demand, action, suit
or proceeding, whether civil, criminal, administrative, arbitrative,
investigative or other, and whether made pursuant to federal, state or other
law; and (ii) any inquiry or investigation, whether made, instituted or
conducted by the Company or any other Person, including, without limitation,
any
federal, state or other governmental entity, that Indemnitee reasonably
determines might lead to the institution of any such claim, demand, action,
suit
or proceeding. For the avoidance of doubt, the Company intends indemnity to
be
provided hereunder in respect of acts or failure to act prior to, on or after
the date hereof.
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“Controlled
Affiliate”
means
any corporation, limited liability company, partnership, joint venture, trust
or
other entity or enterprise, whether or not for profit, that is directly or
indirectly controlled by the Company. For purposes of this definition,
“control”
means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of an entity or enterprise, whether
through the ownership of voting securities, through other voting rights, by
contract or otherwise; provided
that
direct or indirect beneficial ownership of capital stock or other interests
in
an entity or enterprise entitling the holder to cast 15% or more of the total
number of votes generally entitled to be cast in the election of directors
(or
persons performing comparable functions) of such entity or enterprise shall
be
deemed to constitute control for purposes of this definition.
“Disinterested
Director”
means a
director of the Company who is not and was not a party to the Claim in respect
of which indemnification is sought by Indemnitee.
“Expenses”
means
attorneys’ and experts’ fees and expenses and all other costs and expenses paid
or payable in connection with investigating, defending, being a witness in
or
participating in (including on appeal), or preparing to investigate, defend,
be
a witness in or participate in (including on appeal), any Claim.
“Indemnifiable
Claim”
means
any Claim based upon, arising out of or resulting from (i) any actual, alleged
or suspected act or failure to act by Indemnitee in his or her capacity as
a
director, officer, employee or agent of the Company or as a director, officer,
employee, member, manager, trustee or agent of any other corporation, limited
liability company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, as to which Indemnitee is or was serving
at the request of the Company, (ii) any actual, alleged or suspected act or
failure to act by Indemnitee in respect of any business, transaction,
communication, filing, disclosure or other activity of the Company or any other
entity or enterprise referred to in clause (i) of this sentence, or (iii)
Indemnitee’s status as a current or former director, officer, employee or agent
of the Company or as a current or former director, officer, employee, member,
manager, trustee or agent of the Company or any other entity or enterprise
referred to in clause (i) of this sentence or any actual, alleged or suspected
act or failure to act by Indemnitee in connection with any obligation or
restriction imposed upon Indemnitee by reason of such status. In addition to
any
service at the actual request of the Company, for purposes of this Agreement,
Indemnitee shall be deemed to be serving or to have served at the request of
the
Company as a director, officer, employee, member, manager, trustee or agent
of
another entity or enterprise if Indemnitee is or was serving as a director,
officer, employee, member, manager, agent, trustee or other fiduciary of such
entity or enterprise and (i) such entity or enterprise is or at the time of
such
service was a Controlled Affiliate, (ii) such entity or enterprise is or at
the
time of such service was an employee benefit plan (or related trust) sponsored
or maintained by the Company or a Controlled Affiliate, or (iii) the Company
or
a Controlled Affiliate (by action of the Board, any committee thereof or the
Company’s Chief Executive Officer (“CEO”) (other than as the CEO him or
herself)) caused or authorized Indemnitee to be nominated, elected, appointed,
designated, employed, engaged or selected to serve in such
capacity.
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“Indemnifiable
Losses”
means
any and all Losses relating to, arising out of or resulting from any
Indemnifiable Claim; provided,
however,
that
Indemnifiable Losses shall not include Losses incurred by Indemnitee in respect
of any Indemnifiable Claim (or any matter or issue therein) as to which
Indemnitee shall have been adjudged liable to the Company, unless and only
to
the extent that the Delaware Court of Chancery or the court in which such
Indemnifiable Claim was brought shall have determined upon application that,
despite the adjudication of liability but in view of all the circumstances
of
the case, Indemnitee is fairly and reasonably entitled to indemnification for
such Expenses as the court shall deem proper.
“Independent
Counsel”
means a
nationally recognized law firm, or a member of a nationally recognized law
firm,
that is experienced in matters of Delaware corporate law and neither presently
is, nor in the past five years has been, retained to represent: (i) the Company
(or any subsidiary) or Indemnitee in any matter material to either such party
(other than with respect to matters concerning the Indemnitee under this
Agreement, or of other indemnitees under similar indemnification agreements)
or
(ii) any other named (or, as to a threatened matter, reasonably likely to be
named) party to the Indemnifiable Claim giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
“Losses”
means
any and all Expenses, damages, losses, liabilities, judgments, fines, penalties
(whether civil, criminal or other) and amounts paid or payable in settlement,
including, without limitation, all interest, assessments and other charges
paid
or payable in connection with or in respect of any of the foregoing.
“Person”
means
any individual, entity or group, within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended.
“Standard
of Conduct”
means
the standard for conduct by Indemnitee that is a condition precedent to
indemnification of Indemnitee hereunder against Indemnifiable Losses relating
to, arising out of or resulting from an Indemnifiable Claim. The Standard of
Conduct is (i) good faith and a reasonable belief by Indemnitee that his action
was in or not opposed to the best interests of the Company and, with respect
to
any criminal action or proceeding, that Indemnitee had no reasonable cause
to
believe that his conduct was unlawful, or (ii) any other applicable standard
of
conduct that may hereafter be substituted under Section 145(a) or (b) of the
Delaware General Corporation Law or any successor to such
provision(s).
2. Indemnification
Obligation.
Subject
only to Section 7 and to the proviso in this Section, the Company shall
indemnify, defend and hold harmless Indemnitee, to the fullest extent permitted
or required by the laws of the State of Delaware in effect on the date hereof
or
as such laws may from time to time hereafter be amended to increase the scope
of
such permitted indemnification, against any and all Indemnifiable Claims and
Indemnifiable Losses; provided,
however,
that,
except as provided in Section 5, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with (i) any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of
such
Claim, or (ii) the purchase and sale by Indemnitee of securities in violation
of
Section 16(b) of the Securities Exchange Act of 1934, as amended. The Company
acknowledges that the foregoing obligation may be broader than that now provided
by applicable law and the Company’s Constituent Documents and intends that it be
interpreted consistently with this Section and the recitals to this Agreement.
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3. Advancement
of Expenses.
Indemnitee shall have the right to advancement by the Company prior to the
final
disposition of any Indemnifiable Claim of any and all actual and reasonable
Expenses relating to, arising out of or resulting from any Indemnifiable Claim
paid or incurred by Indemnitee. Without limiting the generality or effect of
any
other provision hereof, Indemnitee’s right to such advancement is not subject to
the satisfaction of any Standard of Conduct. Without limiting the generality
or
effect of the foregoing, within five business days after any request by
Indemnitee that is accompanied by supporting documentation for specific
reasonable Expenses to be reimbursed or advanced, the Company shall, in
accordance with such request (but without duplication), (a) pay such Expenses
on
behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient
to
pay such Expenses, or (c) reimburse Indemnitee for such Expenses; provided
that
Indemnitee shall repay, without interest, any amounts actually advanced to
Indemnitee that, at the final disposition of the Indemnifiable Claim to which
the advance related, were in excess of amounts paid or payable by Indemnitee
in
respect of Expenses relating to, arising out of or resulting from such
Indemnifiable Claim. In connection with any such payment, advancement or
reimbursement, at the request of the Company, Indemnitee shall execute and
deliver to the Company an undertaking, which need not be secured and shall
be
accepted without reference to Indemnitee’s ability to repay the Expenses, by or
on behalf of the Indemnitee, to repay any amounts paid, advanced or reimbursed
by the Company in respect of Expenses relating to, arising out of or resulting
from any Indemnifiable Claim in respect of which it shall have been determined,
following the final disposition of such Indemnifiable Claim and in accordance
with Section 7, that Indemnitee is not entitled to indemnification
hereunder.
4. Indemnification
for Additional Expenses.
Without
limiting the generality or effect of the foregoing, the Company shall indemnify
and hold harmless Indemnitee against and, if requested by Indemnitee, shall
reimburse Indemnitee for, or advance to Indemnitee, within five business days
of
such request accompanied by supporting documentation for specific Expenses
to be
reimbursed or advanced, any and all actual and reasonable Expenses paid or
incurred by Indemnitee in connection with any Claim made, instituted or
conducted by Indemnitee for (a) indemnification or reimbursement or advance
payment of Expenses by the Company under any provision of this Agreement, or
under any other agreement or provision of the Constituent Documents now or
hereafter in effect relating to Indemnifiable Claims, and/or (b) recovery under
any directors’ and officers’ liability insurance policies maintained by the
Company; provided,
however,
if it is
ultimately determined that the Indemnitee is not entitled to such
indemnification, reimbursement, advance or insurance recovery, as the case
may
be, then the Indemnitee shall be obligated to repay any such Expenses to the
Company; provided
further,
that,
regardless in each case of whether Indemnitee ultimately is determined to be
entitled to such indemnification, reimbursement, advance or insurance recovery,
as the case may be, Indemnitee shall return, without interest, any such advance
of Expenses (or portion thereof) which remains unspent at the final disposition
of the Claim to which the advance related.
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5. Partial
Indemnity.
If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of any Indemnifiable Loss but not for
all
of the total amount thereof, the Company shall nevertheless indemnify Indemnitee
for the portion thereof to which Indemnitee is entitled.
6. Procedure
for Notification.
To
obtain indemnification under this Agreement in respect of an Indemnifiable
Claim
or Indemnifiable Loss, Indemnitee shall submit to the Company a written request
therefore, including a brief description (based upon information then available
to Indemnitee) of such Indemnifiable Claim or Indemnifiable Loss. If, at the
time of the receipt of such request, the Company has directors’ and officers’
liability insurance in effect under which coverage for such Indemnifiable Claim
or Indemnifiable Loss is potentially available, the Company shall give prompt
written notice of such Indemnifiable Claim or Indemnifiable Loss to the
applicable insurers in accordance with the procedures set forth in the
applicable policies. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee,
all
Indemnifiable Claims and Indemnifiable Losses in accordance with the terms
of
such policies. The Company shall provide to Indemnitee a copy of such notice
delivered to the applicable insurers, substantially concurrently with the
delivery thereof by the Company. The failure by Indemnitee to timely notify
the
Company of any Indemnifiable Claim or Indemnifiable Loss shall not relieve
the
Company from any liability hereunder unless, and only to the extent that, the
Company did not otherwise learn of such Indemnifiable Claim or Indemnifiable
Loss and to the extent that such failure results in forfeiture by the Company
of
substantial defenses, rights or insurance coverage.
7.
Determination of Right to Indemnification.
To
the
extent that Indemnitee shall have been successful on the merits or otherwise
in
defense of any Indemnifiable Claim or any portion thereof or in defense of
any
issue or matter therein, including, without limitation, dismissal without
prejudice, Indemnitee shall be indemnified against all Indemnifiable Losses
relating to, arising out of or resulting from such Indemnifiable Claim in
accordance with Section 2 and no Standard of Conduct Determination (as defined
in Section 7(b)) shall be required.
To
the
extent that the provisions of Section 7(a) are inapplicable to an Indemnifiable
Claim that shall have been finally disposed of, any determination of whether
Indemnitee has satisfied the applicable Standard of Conduct (a “Standard
of Conduct Determination”)
shall
be made as follows: (i) if a Change in Control shall not have occurred, or
if a
Change in Control shall have occurred but Indemnitee shall have requested that
the Standard of Conduct Determination be made pursuant to this clause (i),
(A)
by a majority vote of the Disinterested Directors, even if less than a quorum
of
the Board, (B) if such Disinterested Directors so direct, by a majority vote
of
a committee of Disinterested Directors designated by a majority vote of all
Disinterested Directors, or (C) if there are no such Disinterested Directors,
or
if a majority of the Disinterested Directors so direct, by Independent Counsel
in a written opinion addressed to the Board, a copy of which shall be delivered
to Indemnitee; and (ii) if a Change in Control shall have occurred and
Indemnitee shall not have requested that the Standard of Conduct Determination
be made pursuant to clause (i) above, by Independent Counsel in a written
opinion addressed to the Board, a copy of which shall be delivered to
Indemnitee.
6
If
(i)
Indemnitee shall be entitled to indemnification hereunder against any
Indemnifiable Losses pursuant to Section 7(a), (ii) no determination of whether
Indemnitee has satisfied any applicable standard of conduct under Delaware
law
is a legally required condition precedent to indemnification of Indemnitee
hereunder against any Indemnifiable Losses, or (iii) Indemnitee has been
determined or deemed pursuant to Section 7(b) to have satisfied the applicable
Standard of Conduct, then the Company shall pay to Indemnitee, within five
business days after the later of (x) the Notification Date in respect of the
Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are
related, out of which such Indemnifiable Losses arose or from which such
Indemnifiable Losses resulted, and (y) the earliest date on which the applicable
criterion specified in clause (i), (ii) or (iii) above shall have been
satisfied, an amount equal to the amount of such Indemnifiable Losses. Nothing
herein is intended to mean or imply that the Company is intending to use Section
145(f) of the Delaware General Corporation Law to dispense with a requirement
that Indemnitee meet the applicable Standard of Conduct where it is otherwise
required by such statute.
If
a
Standard of Conduct Determination is required to be, but has not been, made
by
Independent Counsel pursuant to Section 7(b)(i), the Independent Counsel shall
be selected by the Board or a committee of the Board, and the Company shall
give
written notice to Indemnitee advising him or her of the identity of the
Independent Counsel so selected. If a Standard of Conduct Determination is
required to be, or to have been, made by Independent Counsel pursuant to Section
7(b)(ii), the Independent Counsel shall be selected by Indemnitee, and
Indemnitee shall give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either case, Indemnitee or the
Company, as applicable, may, within five business days after receiving written
notice of selection from the other, deliver to the other a written objection
to
such selection; provided,
however,
that
such objection may be asserted only on the ground that the Independent Counsel
so selected does not satisfy the criteria set forth in the definition of
“Independent Counsel” in Section 1(h), and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the Person so selected shall act as Independent Counsel. If such
written objection is properly and timely made and substantiated, (i) the
Independent Counsel so selected may not serve as Independent Counsel unless
and
until such objection is withdrawn or a court has determined that such objection
is without merit and (ii) the non-objecting party may, at its option, select
an
alternative Independent Counsel and give written notice to the other party
advising such other party of the identity of the alternative Independent Counsel
so selected, in which case the provisions of the two immediately preceding
sentences and clause (i) of this sentence shall apply to such subsequent
selection and notice. If applicable, the provisions of clause (ii) of the
immediately preceding sentence shall apply to successive alternative selections.
If no Independent Counsel that is permitted under the foregoing provisions
of
this Section 7(d) to make the Standard of Conduct Determination shall have
been
selected within 30 calendar days after the Company gives its initial notice
pursuant to the first sentence of this Section 7(d) or Indemnitee gives its
initial notice pursuant to the second sentence of this Section 7(d), as the
case
may be, either the Company or Indemnitee may petition the Court of Chancery
of
the State of Delaware for resolution of any objection which shall have been
made
by the Company or Indemnitee to the other’s selection of Independent Counsel
and/or for the appointment as Independent Counsel of a person or firm selected
by the Court or by such other person as the Court shall designate, and the
person or firm with respect to whom all objections are so resolved or the person
or firm so appointed will act as Independent Counsel. In all events, the Company
shall pay all of the actual and reasonable fees and expenses of the Independent
Counsel incurred in connection with the Independent Counsel’s determination
pursuant to Section 7(b).
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8. Cooperation.
Indemnitee shall cooperate with reasonable requests of the Company in connection
with any Indemnifiable Claim and any individual or firm making such Standard
of
Conduct Determination, including providing to such Person documentation or
information which is not privileged or otherwise protected from disclosure
and
which is reasonably available to Indemnitee and reasonably necessary to defend
the Indemnifiable Claim or make any Standard of Conduct Determination without
incurring any unreimbursed cost in connection therewith. The Company shall
indemnify and hold harmless Indemnitee against and, if requested by Indemnitee,
shall reimburse Indemnitee for, or advance to Indemnitee, within five business
days of such request accompanied by supporting documentation for specific costs
and expenses to be reimbursed or advanced, any and all costs and expenses
(including attorneys’ and experts’ fees and expenses) actually and reasonably
incurred by Indemnitee in so cooperating with the Person defending the
Indemnifiable Claim or making such Standard of Conduct Determination.
9. Presumption
of Entitlement.
Notwithstanding any other provision hereof, in making any Standard of Conduct
Determination, the Person making such determination shall presume that
Indemnitee has satisfied the applicable Standard of Conduct.
10. No
Other Presumption.
For
purposes of this Agreement, the termination of any Claim by judgment, order,
settlement (whether with or without court approval) or conviction, or upon
a
plea of nolo contendere or its equivalent, will not create a presumption that
Indemnitee did not meet any applicable Standard of Conduct or that
indemnification hereunder is otherwise not permitted.
11. Non-Exclusivity.
The
rights of Indemnitee hereunder will be in addition to any other rights
Indemnitee may have under the Constituent Documents, or the substantive laws
of
the Company’s jurisdiction of incorporation, any other contract or otherwise
(collectively, “Other
Indemnity Provisions”);
provided,
however,
that (a)
to the extent that Indemnitee otherwise would have any greater right to
indemnification under any Other Indemnity Provision, Indemnitee will without
further action be deemed to have such greater right hereunder, and (b) to the
extent that any change is made to any Other Indemnity Provision which permits
any greater right to indemnification than that provided under this Agreement
as
of the date hereof, Indemnitee will be deemed to have such greater right
hereunder. The Company may not, without the consent of Indemnitee, adopt any
amendment to any of the Constituent Documents the effect of which would be
to
deny, diminish or encumber Indemnitee’s right to indemnification under this
Agreement.
12. Liability
Insurance and Funding.
For the
duration of Indemnitee’s service as a director and/or officer of the Company and
for a reasonable period of time thereafter, which such period shall be
determined by the Company in its sole discretion, the Company shall use
commercially reasonable efforts (taking into account the scope and amount of
coverage available relative to the cost thereof) to cause to be maintained
in
effect policies of directors’ and officers’ liability insurance providing
coverage for directors and/or officers of the Company, and, if applicable,
that
is substantially comparable in scope and amount to that provided by the
Company’s current policies of directors’ and officers’ liability insurance. Upon
reasonable request, the Company shall provide Indemnitee or his or her counsel
with a copy of all directors’ and officers’ liability insurance applications,
binders, policies, declarations, endorsements and other related materials.
In
all policies of directors’ and officers’ liability insurance obtained by the
Company, Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits, subject to the same limitations, as
are
accorded to the Company’s directors and officers most favorably insured by such
policy. Notwithstanding the foregoing, (i) the Company may, but shall not be
required to, create a trust fund, grant a security interest or use other means,
including, without limitation, a letter of credit, to ensure the payment of
such
amounts as may be necessary to satisfy its obligations to indemnify and advance
expenses pursuant to this Agreement and (ii) in renewing or seeking to renew
any
insurance hereunder, the Company will not be required to expend more than 2.0
times the premium amount of the immediately preceding policy period (equitably
adjusted if necessary to reflect differences in policy periods).
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13. Subrogation.
In the
event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the related rights of recovery of Indemnitee
against other Persons (other than Indemnitee’s successors), including any entity
or enterprise referred to in clause (i) of the definition of “Indemnifiable
Claim” in Section 1(f). Indemnitee shall execute all papers reasonably required
to evidence such rights (all of Indemnitee’s reasonable Expenses, including
attorneys’ fees and charges, related thereto to be reimbursed by or, at the
option of Indemnitee, advanced by the Company).
14. No
Duplication of Payments.
The
Company shall not be liable under this Agreement to make any payment to
Indemnitee in respect of any Indemnifiable Losses to the extent Indemnitee
has
otherwise already actually received payment (net of Expenses incurred in
connection therewith) under any insurance policy, the Constituent Documents
and
Other Indemnity Provisions or otherwise (including from any entity or enterprise
referred to in clause (i) of the definition of “Indemnifiable Claim” in Section
1(f)) in respect of such Indemnifiable Losses otherwise indemnifiable
hereunder.
15. Defense
of Claims.
Subject
to the provisions of applicable policies of directors’ and officers’ liability
insurance, if any, the Company shall be entitled to participate in the defense
of any Indemnifiable Claim or to assume or lead the defense thereof with counsel
reasonably satisfactory to the Indemnitee; provided
that if
Indemnitee determines, after consultation with counsel selected by Indemnitee,
that (a) the use of counsel chosen by the Company to represent Indemnitee would
present such counsel with an actual or potential conflict, (b) the named parties
in any such Indemnifiable Claim (including any impleaded parties) include both
the Company and Indemnitee and Indemnitee shall conclude that there may be
one
or more legal defenses available to him or her that are different from or in
addition to those available to the Company, (c) any such representation by
such
counsel would be precluded under the applicable standards of professional
conduct then prevailing, or (d) Indemnitee has interests in the claim or
underlying subject matter that are different from or in addition to those of
other Persons against whom the Claim has been made or might reasonably be
expected to be made, then Indemnitee shall be entitled to retain separate
counsel (but not more than one law firm plus, if applicable, local counsel
in
respect of any particular Indemnifiable Claim for all indemnitees in
Indemnitee’s circumstances) at the Company’s expense. The Company shall not be
liable to Indemnitee under this Agreement for any amounts paid in settlement
of
any threatened or pending Indemnifiable Claim effected without the Company’s
prior written consent. The Company shall not, without the prior written consent
of the Indemnitee, effect any settlement of any threatened or pending
Indemnifiable Claim which the Indemnitee is or could have been a party unless
such settlement solely involves the payment of money and includes a complete
and
unconditional release of the Indemnitee from all liability on any claims that
are the subject matter of such Indemnifiable Claim. Neither the Company nor
Indemnitee shall unreasonably withhold its consent to any proposed settlement;
provided
that
Indemnitee may withhold consent to any settlement that does not provide a
complete and unconditional release of Indemnitee.
9
16. Mutual
Acknowledgment. Both
the
Company and the Indemnitee acknowledge that in certain instances, Federal law
or
applicable public policy may prohibit the Company from indemnifying its
directors and officers under this Agreement or otherwise. Indemnitee understands
and acknowledges that the Company may be required in the future to undertake
to
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Company’s right
under public policy to indemnify Indemnitee and, in that event, the Indemnitee’s
rights and the Company’s obligations hereunder shall be subject to that
determination.
17. Successors
and Binding Agreement.
This
Agreement shall be binding upon and inure to the benefit of the Company and
any
successor to the Company, including, without limitation, any Person acquiring
directly or indirectly all or substantially all of the business or assets of
the
Company whether by purchase, merger, consolidation, reorganization or otherwise
(and such successor will thereafter be deemed the “Company” for purposes of this
Agreement), but shall not otherwise be assignable or delegatable by the
Company.
This
Agreement shall inure to the benefit of and be enforceable by the Indemnitee’s
personal or legal representatives, executors, administrators, heirs,
distributees, legatees and other successors.
This
Agreement is personal in nature and neither of the parties hereto shall, without
the consent of the other, assign or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Sections 17(a) and 17(b).
Without limiting the generality or effect of the foregoing, Indemnitee’s right
to receive payments hereunder shall not be assignable, whether by pledge,
creation of a security interest or otherwise, other than by a transfer by the
Indemnitee’s will or by the laws of descent and distribution, and, in the event
of any attempted assignment or transfer contrary to this Section 17(c), the
Company shall have no liability to pay any amount so attempted to be assigned
or
transferred.
18. Notices.
For all
purposes of this Agreement, all communications, including without limitation
notices, consents, requests or approvals, required or permitted to be given
hereunder must be in writing and shall be deemed to have been duly given when
hand delivered or dispatched by electronic facsimile transmission (with receipt
thereof orally confirmed), or one business day after having been sent for
next-day delivery by a nationally recognized overnight courier service,
addressed to the Company (to the attention of the Secretary of the Company)
and
to Indemnitee at the applicable address shown on the signature page hereto,
or
to such other address as any party may have furnished to the other in writing
and in accordance herewith, except that notices of changes of address will
be
effective only upon receipt.
10
19. Governing
Law. The
validity, interpretation, construction and performance of this Agreement shall
be governed by and construed in accordance with the substantive laws of the
State of Delaware, without giving effect to the principles of conflict of laws
of such State. The Company and Indemnitee each hereby irrevocably consent to
the
jurisdiction of the Chancery Court of the State of Delaware for all purposes
in
connection with any action or proceeding which arises out of or relates to
this
Agreement, waive all procedural objections to suit in that jurisdiction,
including, without limitation, objections as to venue or inconvenience, agree
that service in any such action may be made by notice given in accordance with
Section 18 and also agree that any action instituted under this Agreement shall
be brought only in the Chancery Court of the State of Delaware.
20. Validity.
If any
provision of this Agreement or the application of any provision hereof to any
Person or circumstance is held invalid, unenforceable or otherwise illegal,
the
remainder of this Agreement and the application of such provision to any other
Person or circumstance shall not be affected, and the provision so held to
be
invalid, unenforceable or otherwise illegal shall be reformed to the extent,
and
only to the extent, necessary to make it enforceable, valid or legal. In the
event that any court or other adjudicative body shall decline to reform any
provision of this Agreement held to be invalid, unenforceable or otherwise
illegal as contemplated by the immediately preceding sentence, the parties
thereto shall take all such action as may be necessary or appropriate to replace
the provision so held to be invalid, unenforceable or otherwise illegal with
one
or more alternative provisions that effectuate the purpose and intent of the
original provisions of this Agreement as fully as possible without being
invalid, unenforceable or otherwise illegal.
21. Miscellaneous.
No
provision of this Agreement may be waived, modified or discharged unless such
waiver, modification or discharge is agreed to in writing signed by Indemnitee
and the Company. No waiver by either party hereto at any time of any breach
by
the other party hereto or compliance with any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
or
subsequent time. No agreements or representations, oral or otherwise, expressed
or implied with respect to the subject matter hereof have been made by either
party that are not set forth expressly in this Agreement.
22. Certain
Interpretive Matters.
Unless
the context of this Agreement otherwise requires, (1) “it” or “its” or words of
any gender include each other gender, (2) words using the singular or plural
number also include the plural or singular number, respectively, (3) the terms
“hereof,” “herein,” “hereby” and derivative or similar words refer to this
entire Agreement, (4) the terms “Article,” “Section,” “Annex” or “Exhibit” refer
to the specified Article, Section, Annex or Exhibit of or to this Agreement,
(5)
the terms “include,” “includes” and “including” will be deemed to be followed by
the words “without limitation” (whether or not so expressed), and (6) the word
“or” is disjunctive but not exclusive. Whenever this Agreement refers to a
number of days, such number will refer to calendar days unless business days
are
specified and whenever action must be taken (including the giving of notice
or
the delivery of documents) under this Agreement during a certain period of
time
or by a particular date that ends or occurs on a non-business day, then such
period or date will be extended until the immediately following business day.
As
used herein, “business
day”
means
any day other than Saturday, Sunday or a United States federal
holiday.
11
23. Entire
Agreement.
This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, between the parties hereto with
respect to the subject matter of this Agreement. Any prior agreements or
understandings between the parties hereto with respect to indemnification are
hereby terminated and of no further force or effect. This Agreement is not
the
exclusive means of securing indemnification rights of Indemnitee and is in
addition to any rights Indemnitee may have under any Constituent
Documents.
24. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together shall constitute one and
the
same agreement.
[REMAINDER
OF PAGE INTENTIONALLY BLANK]
12
IN
WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly
authorized representative to execute this Agreement as of the date first above
written.
|
MSTI
HOLDINGS, INC.
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| |
|
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| By: | ||
|
Name:
Xxxxx X. Xxxxxxxxx
Title:
Chief Executive Officer
|
||
|
MSTI
HOLDINGS, INC.
|
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| INDEMNITEE: | ||
|
Name:
|
||
|
Address:
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||
Signature
Page to Director and Officer Indemnification
Agreement
13
