INDEMNITY AGREEMENT
THIS AGREEMENT is made and entered into as of March 11, 2000 by and between
Omni Nutraceuticals, Inc., a Utah corporation (the "Corporation"), and R.
Xxxxxxx Xxxxxx ("Xxxxxx").
RECITALS
WHEREAS, Xxxxxx has performed a valuable service to the Corporation in his
capacity as Chairman of the Board of Directors of the Corporation; and
WHEREAS, the stockholders of the Corporation have adopted bylaws (the
"Bylaws"") and/or Articles of Incorporation (the "Articles") providing for the
indemnification of the current and former directors, officers, employees and
agents of the Corporation, including persons who have served or are serving at
the request of the Corporation in such capacities with other corporations or
enterprises, as authorized by the Utah Corporations Code, as amended (the
"Code");
WHEREAS, the Articles, Bylaws and/or the Code, by their non-exclusive
nature, permit contracts between the Corporation and its current and former
directors, officers, employees and others with respect to indemnification of
such persons; and
WHEREAS, in recognition of his past services as a Director and in
connection with the termination of his Employment Agreement with the Company,
the Corporation has determined and agreed to enter into this Agreement with
Xxxxxx.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confirmed, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. INDEMNITY OF XXXXXX. The Corporation hereby agrees to hold harmless
and indemnify Xxxxxx, his spouse, heirs, legal representatives, attorneys,
agents and assigns (each an "Indemnified Party") to the fullest extent
authorized or permitted by the provisions of the Articles, Bylaws and the Code,
as the same may be amended from time to time (but, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than
the Articles, Bylaws or the Code permitted prior to adoption of such amendment)
from any and all claims, liabilities, losses, damages, fines, penalties,
settlements, costs and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and expenses incurred in the investigation,
defense or settlement of any claim), herein referred to collectively as
"Losses", incurred by an Indemnified Party in connection with, attributable to
or arising from Xxxxxx'x past services in the capacities set forth in Section
2(a) hereof or such Indemnified Party's services to the Corporation.
2. ADDITIONAL INDEMNITY. In addition to and not in limitation of the
indemnification otherwise provided for herein, and subject only to the
exclusions set forth in Section 3 hereof, the Corporation hereby further agrees
to hold harmless and indemnify the Indemnified Party:
(A) against any and all expenses (including attorneys' fees), witness
fees, damages, judgments, fines and amounts paid in settlement and any other
amounts that an Indemnified Party becomes legally obligated to pay because of
any claim or claims made against him in connection with any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative (including an action by or in the right of the
Corporation) to which an Indemnified Party is, was or at any time becomes a
party, or is threatened to be made a party, by reason of the fact that an
Indemnified Party was a director, officer, shareholder, employee, attorney or
agent of the Corporation, was serving or at any time served at the request of
the Corporation as a director, officer, employee, attorney or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise (an "Other Entity") or otherwise was acting on behalf of the
Corporation or any Other Entity;
(C) against any Losses attributable to or resulting or arising from any
vote cast or written consent executed and delivered pursuant to any proxy
granted by an Indemnified Party in accordance with the the provisions of that
certain Agreement of even date herewith by and between the Corporation and
Xxxxxx; and
(D) otherwise to the fullest extent as may be provided to an
Indemnified Party by the Corporation under the non-exclusivity provisions of the
Code and the Bylaws.
3. LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to
Section 1 or 2 hereof shall be paid by the Corporation:
(A) on account of any claim against an Indemnified Party for an
accounting of profits made from the purchase or sale by an Indemnified Party of
securities of the Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law; or
(B) if such indemnification is not lawful, and in such case, only to
the extent such indemnification is not lawful.
4. CONTINUATION OF INDEMNITY. All agreements and obligations of the
Corporation contained herein shall continue so long as an Indemnified Party
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative.
5. PARTIAL INDEMNIFICATION. An Indemnified Party shall be entitled
under this Agreement to indemnification by the Corporation for a portion of the
expenses (including attorneys' fees), witness fees, damages, judgments, fines
and amounts paid in settlement and any other amounts that an Indemnified Party
becomes legally obligated to pay in connection with any action, suit or
proceeding referred to in Section 1 or 2 hereof in the event that an Indemnified
Party is not entitled hereunder to indemnification for the total amount
thereof, and the Corporation shall indemnify an Indemnified Party for the
maximum portion thereof to which an Indemnified Party is lawfully entitled.
6. NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30) days
after receipt by an Indemnified Party of notice of the commencement of any
action, suit or proceeding, an Indemnified Party will, if indemnity is sought
under this Agreement, notify the Corporation of the commencement thereof; but
the omission so to notify the Corporation will not relieve it from any liability
which it may have to an Indemnified Party otherwise than under this Agreement,
or under this Agreement, except to the extent the Corporation is directly
prejudiced by such failure to so notify the Corporation. With respect to any
such action, suit or proceeding:
(A) the Corporation will be entitled to participate therein at its own
expense;
(B) except as otherwise provided below, the Corporation may, at its
option and jointly with any other indemnifying party similarly notified and
electing to assume such defense, assume the defense thereof, with counsel
reasonably satisfactory to an Indemnified Party. After notice from the
Corporation to an Indemnified Party of its election to assume the defense
thereof, the Corporation will not be liable to an Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by an
Indemnified Party in connection with the defense thereof except for reasonable
costs of investigation or otherwise as provided below. An Indemnified Party
shall have the right to employ separate counsel in such action, suit or
proceeding, but the fees and expenses of such counsel incurred after notice from
the Corporation of its assumption of the defense thereof shall be at the expense
of an Indemnified Party unless (i) the employment of counsel by an Indemnified
Party has been authorized by the Corporation, (ii) an Indemnified Party shall
have reasonably concluded that there may be a conflict of interest between the
Corporation and an Indemnified Party in the conduct of the defense of such
action or (iii) the Corporation shall not in fact have employed counsel
reasonably satisfactory to an Indemnified Party to assume the defense of such
action, in each of which cases the fees and expenses of an Indemnified Party's
separate counsel shall be at the expense of the Corporation. The Indemnified
Party shall have the right to employ separate counsel for the defense of any
action, suit or proceeding brought by or on behalf of the Corporation or as to
which an Indemnified Party shall have made the conclusion provided for in clause
(ii) above; and
(C) the Corporation shall be liable to indemnify an Indemnified Party
under this Agreement for any amounts paid in settlement of any action or claim
effected without his written consent, which shall not be unreasonably withheld,
whether or not an Indemnified Party is otherwise entitled to indemnification
hereunder. The Corporation shall be permitted to settle any action except that
it shall not settle any action or claim in any manner which would impose any
penalty or limitation on an Indemnified Party, or any non-monetary obligation,
without an Indemnified Party's written consent, which may be given or withheld
in an Indemnified Party's sole and arbitrary discretion.
7. EXPENSES. The Corporation shall advance, prior to the final
disposition of any proceeding, promptly following request therefor, all
expenses, including, but not limited to attorneys fees and expenses incurred by
an Indemnified Party in connection with each threatened or pending claim,
action, cause of action, suit, investigation, arbitration or other proceeding
upon receipt of an undertaking by or on behalf of an Indemnified Party to repay
said amounts if it shall be determined ultimately that an Indemnified Party is
not entitled to be indemnified under the provisions of this Agreement, the
Articles, Bylaws or the Code.
8. ENFORCEMENT. Any right to indemnification or advances granted by
this Agreement to an Indemnified Party shall be enforceable by or on behalf of
an Indemnified Party in any court of competent jurisdiction if (i) the claim for
indemnification or advances is denied, in whole or in part, (ii) no disposition
of such claim is made within thirty (30) days of request therefor, or (iii) the
Corporation should fail to comply with the provisions of Section 7 hereof. an
Indemnified Party, in such enforcement action, if successful in whole or in
part, shall be entitled to be paid also the expense of prosecuting his claim.
It shall be a defense to any action for which a claim for indemnification is
made under Section 1 or 2 hereof (other than an action brought to enforce a
claim for expenses pursuant to Section 8 hereof, provided that the required
undertaking has been tendered to the Corporation) that an Indemnified Party is
not entitled to indemnification because of the limitations set forth in Section
3 hereof. Neither the failure of the Corporation (including its Board of
Directors or its stockholders) to have made a determination prior to the
commencement of such enforcement action that indemnification of an Indemnified
Party is proper in the circumstances, nor an actual determination by the
Corporation (including its Board of Directors or its stockholders) that such
indemnification is improper shall be a defense to the action or create a
presumption that an Indemnified Party is not entitled to indemnification under
this Agreement or otherwise.
9. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on an Indemnified
Party by this Agreement shall not be exclusive of any other right which an
Indemnified Party may have or hereafter acquire under any statute, provision of
the Corporation's Articles or Bylaws, agreement, vote of stockholders or
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity.
10. SURVIVAL OF RIGHTS.
(A) The rights of an Indemnified Party under this Agreement shall
continue after an Indemnified Party has ceased to be a director, officer,
employee, attorney or agent of the Corporation or to serve at the request of the
Corporation as a director, officer, employee, attorney or agent of an Other
Entity shall inure to the benefit of an Indemnified Party's heirs, executors and
administrators and assigns.
(B) The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform if no such succession
had taken place.
11. SEPARABILITY. Each of the provisions 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 for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof. Furthermore, if this Agreement shall be invalidated in its
entirety on any ground, then the Corporation shall nevertheless indemnify an
Indemnified Party to the fullest extent provided by the Articles, Bylaws, the
Code or any other applicable law.
12. JURISDICTION AND VENUE.
(A) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself or himself and its or his property, to the non-exclusive
jurisdiction of any California court or federal court of the United States of
America sitting in the State of California, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
state court or, to the extent permitted by law, in such federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Should any party institute any
action, suit or other proceeding arising out of or relating to this Agreement,
the prevailing party shall be entitled to receive from the losing party
reasonable attorneys' fees and costs incurred in connection therewith, along
with all costs of defense, investigation, preparation, experts and collection.
(B) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it or he may legally and effectively do so, any objection
that it or he may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any of the
courts referred to in Section 12(a). Each of the parties hereto irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(C) The parties further agree that the mailing by certified or
registered mail, return receipt requested, of any process required by any such
court shall constitute valid and lawful service of process against them, without
the necessity for service by any other means provided by law.
WAIVER OF JURY TRIAL
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE
MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND
THE PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER THIS AGREEMENT.
13. AMENDMENT AND TERMINATION. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
14. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute but one and the same
Agreement. Only one such counterpart need be produced to evidence the existence
of this Agreement.
15. HEADINGS. The headings of the sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
16. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered by hand to the party to whom such communication was
directed or (ii) upon the third business day after the date on which such
communication was mailed if mailed by certified or registered mail with postage
prepaid, if to an Indemnified Party, to his most recent address as set forth in
the Corporation's records, and if to the Corporation, to its principal executive
offices, or to such other address as may have been furnished to an Indemnified
Party by the Corporation.
17. INSURANCE. For so long as this Indemnity Agreement is in effect,
the Corporation agrees to secure and maintain in effect a Director's and
Officer's Liability Policy with a nationally recognized insurer with minimum
annual limits of coverage of five million dollars ($5,000,000.00), so long as
such policy is available to the Company on commercially reasonable terms. Such
policy shall name Mr. R. Xxxxxxx Xxxxxx and his spouse as additional insureds.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
OMNI NUTRACEUTCALS, INC.
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: President
/s/ R. Xxxxxxx Xxxxxx
R. Xxxxxxx Xxxxxx
