Exhibit 10.13
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement"), is entered into as of
_____, 2000, by and among Tumbleweed Communications Corp. (the "Company"),
Xxxxxxx X. Xxxxx, Xxxx-Xxxxxxxxxx X. Bandini (Messrs. Xxxxx and Bandini,
collectively, referred to herein as the "Founder Selling Stockholders"), Xxxxxx
X. Consul ("Mr. Consul"), and Hikari Tsushin, Inc. ("Hikari"). Capitalized terms
used herein but not otherwise defined shall have the meaning set forth in the
Underwriting Agreement (as defined below).
In consideration of the mutual promises, representations, warranties and
conditions set forth in this Agreement and as contemplated to be set forth in
that certain Underwriting Agreement (the "Underwriting Agreement"), to be
entered into by and among the Company, the Founder Selling Stockholders, Mr.
Consul, Hikari and certain other stockholders of the Company and certain
underwriters for the Company, on such date as the Company's Registration
Statement on Form S-1 (No. 333-41188) (the "Registration Statement") has been
declared effective by the Securities and Exchange Commission, the parties hereto
agree as follows:
1. To the extent permitted by law, the Company will indemnify and hold
harmless each of the Founder Selling Stockholders against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based on any inaccuracy in the representations and
warranties made on the part of the Company and each Founder Selling Stockholder
pursuant to Section 2(a) of the Underwriting Agreement; and the Company will
reimburse each such person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided however, that the indemnity agreement
contained in this Section 1 shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company, which consent shall not be unreasonably
withheld.
2. To the extent permitted by law, the Company will indemnify and hold
harmless each of the Founder Selling Stockholders, Mr. Consul and Hikari, the
partners, officers, directors and legal counsel of Hikari, and each person, if
any, who controls Hikari, against any losses, claims, damages, or liabilities
(joint or several) to
which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, or pursuant to the terms of the Underwriting
Agreement, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof), including a request for indemnification by an underwriter,
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company or the Registration Statement or any preliminary
prospectus of the Securities Act, the Exchange Act, any state securities law, or
any rule or regulation promulgated under the Securities Act, the Exchange Act or
any state securities law in connection with the public offering to be conducted
pursuant to the the Registration Statement; and the Company will reimburse each
such person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided however, that the indemnity agreement contained in
this Section 2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company, which consent shall not be unreasonably withheld, nor
shall the Company be liable in any such case for any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with the Registration by
such person, or partner, officer, director, or controlling person of such
person.
3. Promptly after receipt by an indemnified party under Sections 1 or 2
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under Sections 1 or 2, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; PROVIDED,
HOWEVER, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice
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to the indemnifying party within a reasonable time of the commencement of any
such action, if materially prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party
under Section 1 or 2, as applicable, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under Sections 1 or 2.
4. If the indemnification provided for in either Sections 1 or 2 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the violation that resulted in such loss,
claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, with respect to Violations under Section 2 whether the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, that in no event shall any contribution by each of the Founder Selling
Stockholders, Mr. Consul and Hikari hereunder exceed the net proceeds from the
offering received by such person.
5. The obligations of the parties to this Agreement shall survive
completion of any offering of securities pursuant to the Registration Statement.
No indemnifying party, in the defense of any such claim or litigation, shall,
except with the consent of each indemnifying party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation.
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In witness whereof, the parties hereto have executed this Agreement as of
the date set forth in the first paragraph hereof:
By:_______________________
Xxxxxxx X. Xxxxx
By:_______________________
Xxxx-Xxxxxxxxxx X. Bandini
By:_______________________
Xxxxxx X. Consul
Hikari Tsushin, Inc.
By:_______________________
Name:
Title:
Tumbleweed Communications Corp.
By:_______________________
Xxxxxxx X. Xxxxxxx
Vice President, General Counsel and Secretary
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