INDEMNITY AGREEMENT
(Form of)
By this INDEMNITY AGREEMENT (this "Agreement"), Ugly Duckling Corporation, a
Delaware corporation (the "Company"), and the undersigned officer or member of
its Board of Directors ("Indemnitee") warrant, covenant and agree as follows:
WHEREAS, Indemnitee is an officer and/or a member of the Board of
Directors of the Company and in such capacity is performing a valuable service
for the Company; and
WHEREAS, the Company's Certificate of Incorporation provides for
indemnification of officers and directors to the fullest extent authorized by
the Delaware General Corporation Law; and
WHEREAS, the Delaware General Corporation Law provides that the
indemnification rights provided thereunder are not exclusive, and that
agreements may be entered into between Company and its officers and the members
of its Board of Directors with respect to indemnification; and
WHEREAS, in order to induce Indemnitee to serve as an officer or member
of the Board of Directors of the Company, the Company desires to enter into this
contract with Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's continued service as
an officer and/or director after the date hereof the parties hereto agree as
follows:
1. Indemnification of Indemnitee. Subject to Section 2 below, the
Company shall hold harmless and indemnify Indemnitee against any and all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative to which Indemnitee is, was or at any
time becomes a party, or is threatened to be made a party, by reason of the fact
that Indemnitee is, was or at any time becomes a director, officer, employee or
agent of the Company, or is or was serving or at any time serves at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, to the extent set forth
from time to time in the Company's Certificate of Incorporation, Bylaws or
Indemnification Policies, if any. No amendment or termination of the Company's
Certificate of Incorporation, Bylaws or Indemnification Policies, if any, shall
affect or terminate the contracted rights granted to the Indemnitee hereunder.
2. Limitations on Indemnification. No indemnity pursuant to Section 1
hereof shall be paid by the Company:
a) Except to the extent the aggregate of losses to be indemnified
hereunder exceeds the amount of losses for which the Indemnitee
is indemnified pursuant to any policy of insurance purchased and
maintained by the Company;
b) In respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that
such remuneration was in violation of law;
c) On account of any suit in which final judgment is rendered
against Indemnitee or an accounting of profits made from the
pruchase or sale by Indemnitee of securities of the Company
pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions
of any law; or
d) If a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful.
3. Continuation of Indemnification. All obligations of the Company
hereunder shall continue during the period Indemnitee is a director, officer,
employee or agent of the Company (or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as Indemnitee shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Indemnitee was a director
of the Company or serving in any other capacity referred to herein.
4. Notification and Defense of Claim. Indemnitee shall promptly notify
the Company of any matter which is or may be the subject of any indemnification
claim hereunder. Promptly after receipt by Indemnitee of notice of the
commencement of any action, suit or proceeding, Indemnitee will notify the
Company thereof. With respect to any such action, suit or proceeding;
a) The Company will be entitled to participate therein at its own
expense;
b) Except as otherwise provided below, to the extent that it may
wish, the Company jointly with any other indemnifying party may
assume the defense thereof, with counsel reasonably satisfactory
to Indemnitee. After notice from the Company to Indemnitee of its
election so to assume the defense thereof, the Company will not
be liable to Indemnitee for any legal or other expense
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 counsel in such action, suit or 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 (I) the employment of counsel by
Indemnitee has been authorized by the Company, (ii) Indemnitee
shall have reasonably concluded that there may be a material
conflict of interest between the Company and Indemnitee in the
conduct of the defense of such action, in each of which cases the
fees and expenses of counsel shall be borne by the Company. The
Company shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of the Company
or as to which Indemnitee shall have made the determination
provided for in (ii) above.
c) The Company shall not be liable to indemnify Indemnitee under the
Agreement for any amounts paid in settlement of an action or claim
effected without its written consent. The Company shall not settle
any action or claim in any manner which would impose any material
penalty or limitation on Indemnitee without Indemnitee's written
consent. Neither the Company nor Indemnitee will unreasonably
withhold its or his consent to any settlement proposed by the
other of any matter for which indemnity is provided hereunder,
including any settlement including a penalty or limitation on the
Indemnitee.
5. Prepaid Expenses. The expenses (including attorneys' fees) incurred
by Indemnitee in investigating, defending, or appealing any threatened, pending
or completed action, suit or proceeding covered hereunder, whether civil,
criminal, administrative or investigative, including without limitation any
action by or in the right of the Company (other than expenses to be paid
directly by the Company in assuming the defense of any matter covered hereby
under Section 4(b) hereof), shall be paid in advance by the Company.
6. Repayment of Expenses. Indemnitee shall reimburse the Company for
all expenses paid by the Company in defending any civil or criminal action, suit
or proceeding against Indemnitee in the event and only to the extent that it
shall be finally determined that Indemnitee is not entitled to be indemnified by
the Company for such expenses under the Agreement or otherwise.
7. Other Rights and Remedies. The rights provided by any provision of
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under any provision of law or of the Company's
Certificate of Incorporation, any Bylaw, this or other agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while occupying any of
the positions or having any of the relationships referred to in Section 1 of
this Agreement, and shall continue after Indemnitee has ceased to occupy such
position or have such relationship.
8. Enforcement. In the event Indemnitee is required to bring any action
to enforce rights or to collect monies due under this Agreement and is
successful in such action, the Company shall reimburse Indemnitee for all of
Indemnitee's reasonable fees and expenses in bringing and pursuing such action.
9. Separability. Each of the provision of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.
10. Miscellaneous. This Agreement shall be interpreted and enforced in
accordance with the laws of Delaware. This Agreement shall be binding upon
Indemnitee and upon Company, its successors and assigns, and shall inure to the
benefit of Indemnitee, his heirs, personal representatives and assigns and to
the benefit of the Company, its successors and assigns. No amendment,
modification, termination or cancellation of this Agreement, other than pursuant
to Section 9, shall be effective unless in writing signed by both parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of _________.
UGLY DUCKLING CORPORATION
By: ___________________________________
[NAME]
Its: ___________________________________
Indemnitee
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[NAME]
[DIRECTOR AND/OR OFFICER TITLE]
