INDEMNIFICATION AGREEMENT
Exhibit 10.6
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of _________,
20__ between RigNet Inc., a Delaware corporation (the “Company”), and _______________
(“Indemnitee”).
WITNESSETH THAT:
WHEREAS, highly competent persons have become more reluctant to serve corporations as
officers, directors or in other capacities unless they are provided with adequate protection
through insurance or adequate indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on behalf of such corporations;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in
order to attract and retain qualified individuals, the Company will attempt to maintain on an
ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and
its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and other business
enterprises, the Board believes that, given current market conditions and trends, such insurance
may be available to it in the future only at higher premiums and with more exclusions. At the same
time, officers, directors, and other persons in service to corporations or business enterprises are
being increasingly subjected to expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only against the Company or business
enterprise itself. The Bylaws and Certificate of Incorporation of the Company require
indemnification of the officers and directors of the Company. The Indemnitee may also be entitled
to indemnification pursuant to the General Corporation Law of the State of Delaware
(“DGCL”). The Bylaws and Certificate of Incorporation and the DGCL expressly provide that
the indemnification provisions set forth therein are not exclusive, and thereby contemplate that
contracts may be entered into between the Company and members of the Board, officers and other
persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining
such persons is detrimental to the best interests of the Company’s stockholders and that the
Company should act to assure such persons that there will be increased certainty of such protection
in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the Company free from
undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and Certificate of
Incorporation of the Company and any resolutions adopted pursuant thereto, and shall not be deemed
a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Company’s Bylaws and
Certificate of Incorporation and insurance as adequate in the present circumstances, and may not be
willing to serve as an officer or director without adequate protection, and the Company desires
Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take
on additional service for or on behalf of the Company on the condition that he be so indemnified;
and
[WHEREAS, Indemnitee has certain rights to indemnification and/or insurance provided by [name
of fund/sponsor] which Indemnitee and [name of fund/sponsor] intend to be secondary to the primary
obligation of the Company to indemnify Indemnitee as provided herein, with the Company’s
acknowledgement and agreement to the foregoing being a material condition to Indemnitee’s
willingness to serve on the Board.]
NOW, THEREFORE, in consideration of the foregoing and Indemnitee’s agreement to serve as an
officer or director from and after the date hereof, the parties hereto agree as follows:
1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify
Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In
furtherance of the foregoing indemnification, and without limiting the generality thereof:
(a) Proceedings Other Than Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by
reason of his or her Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened
to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a
Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be
indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by him or her, or on his or her behalf, in
connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in
good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to
believe the Indemnitee’s conduct was unlawful.
(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the
rights of indemnification provided in this Section 1(b) if, by reason of his or her Corporate
Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding
brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the
Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and
in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, if applicable law so
provides, no indemnification against such Expenses shall be made in respect of any claim,
issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to
the Company unless and to the extent that the Court of Chancery of the State of Delaware shall
determine that such indemnification may be made.
(c) Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his or her Corporate Status, a party to and is successful, on the
merits
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or otherwise, in any Proceeding, he or she shall be indemnified to the maximum extent permitted by
law, as such may be amended from time to time, against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or her or on his or her
behalf in connection with each successfully resolved claim, issue or matter. For purposes of this
Section and without limitation, the termination of any claim, issue or matter in such a Proceeding
by dismissal, with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
2. Additional Indemnity. In addition to, and without regard to any limitations on,
the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does
indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf
if, by reason of his or her Corporate Status, he or she is, or is threatened to be made, a party to
or participant in any Proceeding (including a Proceeding by or in the right of the Company),
including, without limitation, all liability arising out of the negligence or active or passive
wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations
pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to
Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set
forth in Sections 6 and 7 hereof) to be unlawful.
3. Contribution.
(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in
respect of any threatened, pending or completed action, suit or proceeding in which the Company is
jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the
Company shall pay, in the first instance, the entire amount of any judgment or settlement of such
action, suit or proceeding without requiring Indemnitee to contribute to such payment and the
Company hereby waives and relinquishes any right of contribution it may have against Indemnitee.
The Company shall not enter into any settlement of any action, suit or proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding) unless such settlement
provides for a full and final release of all claims asserted against Indemnitee.
(b) Without diminishing or impairing the obligations of the Company set forth in the preceding
subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion
of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in
which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion
to the relative benefits received by the Company and all officers, directors or employees of the
Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in
such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the
transaction or events from which such action, suit or proceeding arose; provided, however, that the
proportion determined on the basis of relative benefit may, to the extent necessary to conform to
law, be further adjusted by reference to the relative fault of the Company and all officers,
directors or employees of the Company other than
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Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the transaction
or events that resulted in such expenses, judgments, fines or settlement amounts, as well as any
other equitable considerations which the applicable law may require to be considered. The relative
fault of the Company and all officers, directors or employees of the Company, other than
Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference
to, among other things, the degree to which their actions were motivated by intent to gain personal
profit or advantage, the degree to which their liability is primary or secondary and the degree to
which their conduct is active or passive.
(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims
of contribution which may be brought by officers, directors or employees of the Company, other than
Indemnitee, who may be jointly liable with Indemnitee.
(d) To the fullest extent permissible under applicable law, if the indemnification provided
for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu
of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for
Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in
such proportion as is deemed fair and reasonable in light of all of the circumstances of such
Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as
a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the
relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in
connection with such event(s) and/or transaction(s).
4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of his or her
Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any
Proceeding to which Indemnitee is not a party, he or she shall be indemnified against all Expenses
actually and reasonably incurred by him or her or on his or her behalf in connection therewith.
5. Advancement of Expenses. Notwithstanding any other provision of this Agreement,
the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt
by the Company of a statement or statements from Indemnitee requesting such advance or advances
from time to time, whether prior to or after final disposition of such Proceeding. Such statement
or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be
indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section
5 shall be unsecured and interest free.
6. Procedures and Presumptions for Determination of Entitlement to
Indemnification. It is the intent of this Agreement to secure for Indemnitee rights of
indemnity that are as favorable as may be permitted under the DGCL and public policy of the State
of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall
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apply in the event of any question as to whether Indemnitee is entitled to indemnification under
this Agreement:
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board in writing that Indemnitee has
requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide
such a request to the Company, or to provide such a request in a timely fashion, shall not relieve
the Company of any liability that it may have to Indemnitee unless, and to the extent that, such
failure actually and materially prejudices the interests of the Company.
(b) Prior to any Change in Control, upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 6(a) hereof, a determination with respect to Indemnitee’s
entitlement thereto shall be made in the specific case by one of the following four methods, which
shall be at the election of the Board: (1) by a majority vote of the disinterested directors, even
though less than a quorum, (2) by a committee of disinterested directors designated by a majority
vote of the disinterested directors, even though less than a quorum, (3) if there are no
disinterested directors or if the disinterested directors so direct, by Independent Counsel in a
written opinion to the Board, a copy of which shall be delivered to the Indemnitee, or (4) if so
directed by the Board, by the stockholders of the Company. After a Change in Control, upon written
request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a
determination with
respect to Indemnitee’s entitlement thereto shall be made by Independent Counsel in a written
opinion to the Board, a copy of which shall be delivered to the Indemnitee. For purposes hereof,
disinterested directors are those members of the Board who are not parties to the action, suit or
proceeding in respect of which indemnification is sought by Indemnitee.
(c) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in
this Section 6(c). The Company shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b)
hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of
this Section 6(c), regardless of the manner in which such Independent Counsel was selected or
appointed.
(i) Prior to any Change in Control, the Independent Counsel shall be selected by the
Board. Indemnitee may, within ten (10) days after such written notice of selection shall
have been given, deliver to the Company 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 meet the requirements of “Independent Counsel” as defined in Section 13
of this Agreement, 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 a written objection is made and substantiated, the Independent
Counsel 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. If, within twenty
(20) days after
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submission by Indemnitee of a written request for indemnification pursuant to Section 6(a)
hereof, no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other
court of competent jurisdiction for resolution of any objection which shall have been made
by the Indemnitee to the Company’s selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the court or by such other person
as the court shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under Section 6(b)
hereof.
(ii) After a Change in Control, the Independent Counsel shall be selected by the
Indemnitee. The Company may, within ten (10) days after such written notice of selection
shall have been given, deliver to the Indemnitee 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 meet the requirements of “Independent Counsel” as
defined in Section 13 of this Agreement, 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 a written objection is made and
substantiated, the Independent Counsel 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. If, within twenty (20) days after submission by Indemnitee of a written
request for
indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been
selected and not objected to, either the Company or Indemnitee may petition the Court of
Chancery of the State of Delaware or other court of competent jurisdiction for resolution of
any objection which shall have been made by the Company to the Indemnitee’s selection of
Independent Counsel and/or for the appointment as Independent Counsel of a person selected
by the court or by such other person as the court shall designate, and the person with
respect to whom all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 6(b) hereof.
(d) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure
of the Company (including any failure by its directors or independent legal counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement that
indemnification is proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its directors or independent
legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that Indemnitee has not met the applicable standard of
conduct.
(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on
the records or books of account of the Enterprise (as hereinafter defined), including financial
statements, or on information supplied to Indemnitee by the officers of the Enterprise in the
course of their duties, or on the advice of legal counsel for the Enterprise or on information or
records given or reports made to the Enterprise by an independent certified public accountant or by
an appraiser or other expert selected with reasonable care by the
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Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer,
agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining
the right to indemnification under this Agreement. Whether or not the foregoing provisions of this
Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times
acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion by clear and convincing evidence.
(f) If the person, persons or entity empowered or selected under Section 6 to determine
whether Indemnitee is entitled to indemnification shall not have made a determination within sixty
(60) days after receipt by the Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled
to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission
of a material fact necessary to make Indemnitee’s statement not materially misleading, in
connection with the request for indemnification, or (ii) a prohibition of such indemnification
under applicable law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an
additional thirty (30) days, if the person, persons or entity making such determination with
respect to entitlement to indemnification in good faith requires such additional time to obtain or
evaluate documentation and/or information relating thereto; and provided, further, that the
foregoing provisions of this Section 6(g) shall not apply if the determination of entitlement to
indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if
(A) within fifteen (15) days after receipt by the Company of the request for such determination,
the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to
the stockholders for their consideration at an annual meeting thereof to be held within
seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special
meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of
making such determination, such meeting is held for such purpose within sixty (60) days after
having been so called and such determination is made thereat.
(g) Indemnitee shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such person,
persons or entity upon reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee
and reasonably necessary to such determination. Any Independent Counsel, member of the Board or
stockholder of the Company shall act reasonably and in good faith in making a determination
regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or
expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by the Company
(irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(h) The Company acknowledges that a settlement or other disposition short of final judgment
may be successful if it permits a party to avoid expense, delay, distraction, disruption and
uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is
resolved in any manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or proceeding with or without payment of money or
other consideration) it shall be presumed that Indemnitee has been
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successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to
overcome this presumption shall have the burden of proof and the burden of persuasion by clear and
convincing evidence.
(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to the best interests of the
Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his or her conduct was unlawful.
7. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is
not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to
indemnification is made pursuant to Section 6(b) of this Agreement within 90 days after
receipt by the Company of the request for indemnification, (iv) payment of indemnification is not
made pursuant to this Agreement within ten (10) days after receipt by the Company of a written
request therefor or (v) payment of indemnification is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification or such determination is
deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to
an adjudication in an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of Indemnitee’s entitlement to such indemnification. Indemnitee shall
commence such proceeding seeking an adjudication within 180 days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a). The
Company shall not oppose Indemnitee’s right to seek any such adjudication.
(b) In the event that a determination shall have been made pursuant to Section 6(b) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced
pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and
Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).
(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding commenced pursuant to this Section 7, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement
not materially misleading in connection with the application for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of
his or her rights under, or to recover damages for breach of, this Agreement, or to recover under
any directors’ and officers’ liability insurance policies maintained by the Company, the Company
shall pay on his or her behalf, in advance, any and all expenses (of the types described in the
definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him or
her in such judicial adjudication, regardless of whether
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Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses
or insurance recovery.
(e) The Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court that the Company is bound by all the
provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses
and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a
written request therefore) advance, to the extent not prohibited by law, such expenses to
Indemnitee, which are incurred by
Indemnitee in connection with any action brought by Indemnitee for indemnification or advance
of Expenses from the Company under this Agreement or under any directors’ and officers’ liability
insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advancement of Expenses or insurance recovery,
as the case may be.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding.
8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of
Indemnification; Subrogation.
(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable law, the
Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders, a resolution of
directors of the Company, or otherwise. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in
respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to
such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute
or judicial decision, permits greater indemnification than would be afforded currently under the
Certificate of Incorporation, Bylaws and this Agreement, it is the intent of the parties hereto
that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No
right or remedy herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or
of any other corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person serves at the request of the Company, Indemnitee shall be covered by
such policy or policies in accordance with its or their terms to the maximum extent of the coverage
available for any director, officer, employee, agent or fiduciary under such policy or policies.
If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has
director and officer liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take all necessary
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or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable
as a result of such proceeding in accordance with the terms of such policies.
(c) [The Company hereby acknowledges that Indemnitee has certain rights to indemnification,
advancement of expenses and/or insurance provided by [name of
fund/sponsor] and certain of [its/their] affiliates (collectively, the “Fund Indemnitors”).
The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to
Indemnitee are primary and any obligation of the Fund Indemnitors to advance expenses or to provide
indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii)
that it shall be required to advance the full amount of expenses incurred by Indemnitee and shall
be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in
settlement to the extent legally permitted and as required by the terms of this Agreement and the
Certificate of Incorporation or Bylaws of the Company (or any other agreement between the Company
and Indemnitee), without regard to any rights Indemnitee may have against the Fund Indemnitors,
and, (iii) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and
all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any
kind in respect thereof. The Company further agrees that no advancement or payment by the Fund
Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought
indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a
right of contribution and/or be subrogated to the extent of such advancement or payment to all of
the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that the
Fund Indemnitors and each of them are express third person beneficiaries of the terms of this
Section 8(c).]
(d) Except as provided in paragraph (c) above, in the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee (other than against the Fund Indemnitors), who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.
(e) Except as provided in paragraph (c) above, the Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.
(f) Except as provided in paragraph (c) above, the Company’s obligation to indemnify or
advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a
director, officer, employee or agent of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually
received as indemnification or advancement of expenses from such other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise.
9. Exception to Right of Indemnification. Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
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(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision, provided, that the foregoing shall not affect
the rights of Indemnitee or the Fund Indemnitors
set forth in Section 8(c) above; or
(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities
Exchange Act of 1934, as amended (“Exchange Act”), or similar provisions of state statutory
law or common law; or
(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the
Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized
the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides
the indemnification, in its sole discretion, pursuant to the powers vested in the Company under
applicable law.
10. Duration of Agreement. All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is an officer or director 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 for a period of three (3)
years after the end thereof and shall continue thereafter so long as Indemnitee shall be subject to
any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his or her
Corporate Status, whether or not he is acting or serving in any such capacity at the time any
liability or expense is incurred for which indemnification can be provided under this Agreement.
This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business or assets of the
Company), assigns, spouses, heirs, executors and personal and legal representatives.
11. Security. To the extent requested by Indemnitee and approved by the Board, the
Company may at any time and from time to time provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral.
Any such security, once provided to Indemnitee, may not be revoked or released without the prior
written consent of the Indemnitee.
12. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer
or director of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as an officer or director of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.
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(c) The Company shall not seek from a court, or agree to, a “bar order”
which would have the effect of prohibiting or limiting the Indemnitee’s rights to receive
advancement of expenses under this Agreement.
13. Definitions. For purposes of this Agreement:
(a) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under
the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise
becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the
Company with another entity.
(b) “Change in Control” shall be deemed to occur upon the earliest to occur after the
date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes
the Beneficial Owner (as defined below), directly or indirectly, of securities of the
Company representing fifteen percent (15%) or more of the combined voting power of the
Company’s then outstanding securities;
(ii) Change in Board. During any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the beginning of such
period constitute the Board, and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a transaction described
in Sections 13(b)(i), 13(b)(iii) or 13(b)(iv)) whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for any reason
to constitute a least a majority of the members of the Board;
(iii) Corporate Transactions. The effective date of a merger or consolidation of the
Company with any other entity, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 51% of the combined voting power
of the voting securities of the surviving entity outstanding immediately after such merger
or consolidation and with the power to elect at least a majority of the Board or other
governing body of such surviving entity;
(iv) Liquidation. The approval by the stockholders of the Company of a complete
liquidation of the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company’s assets; and
(v) Other Events. There occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any
similar item on any similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting requirement.
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(c) “Corporate Status” describes the status of a person who is or was a director,
officer, employee, agent or fiduciary of the Company or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise that such person is or was serving
at the express written request of the Company.
(d) “Disinterested Director” means a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) “Enterprise” shall mean the Company and any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the
express written request of the Company as a director, officer, employee, agent or fiduciary.
(f) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, participating, or being or preparing to be a witness in a
Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding.
Expenses also shall include Expenses incurred in connection with any appeal resulting from any
Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of
the actual or deemed receipt of any payments under this Agreement, including without limitation the
premium, security for, and other costs relating to any cost bond, supersede as bond, or other
appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by
Indemnitee or the amount of judgments or fines against Indemnitee.
(g) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the past five years has
been, retained to represent: (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding
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. The
Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully
indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of
or relating to this Agreement or its engagement pursuant hereto.
(h) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or
other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
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(i) “Proceeding” includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing
or any other actual, threatened or completed proceeding, whether brought by or in the right of the
Company or otherwise and whether civil, criminal, administrative or investigative, in which
Indemnitee was, is or will be involved as a party or otherwise, by reason of his or her Corporate
Status, by reason of any action taken by him or her or of any inaction on his or her part while
acting in his or her Corporate Status; in each case whether or not he is acting or serving in any
such capacity at the time any liability or expense is incurred for which indemnification can be
provided under this Agreement; including one pending on or before the date of this Agreement, but
excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his or
her rights under this Agreement.
14. Severability. The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision. Without limiting the
generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification
rights to the fullest extent permitted by applicable laws. In the event any provision hereof
conflicts with any applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such conflict.
15. Modification and Waiver. No supplement, modification, termination or amendment of
this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.
16. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing
upon being served with or otherwise receiving any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter which may be subject
to indemnification covered hereunder. The failure to so notify the Company shall not relieve the
Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless
and only to the extent that such failure or delay materially prejudices the Company.
17. Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the next business day, (c)
five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be
sent:
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(a) To Indemnitee at the address set forth below Indemnitee signature hereto.
With two copies to:
Attention: |
|
(b) To the Company at:
0000 Xxxxx Xxxxx Xxxxxxx, Xxx 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
or to such other address as may have been furnished to Indemnitee by the Company or to the Company
by Indemnitee, as the case may be.
18. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or
more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
19. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
20. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations
among the parties shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware, without regard to its conflict of laws rules. The Company and Indemnitee
hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in
connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware
(the “Delaware Court”), and not in any other state or federal court in the United States of
America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of
the Delaware Court for purposes of any action or proceeding arising out of or in connection with
this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding
in the Delaware Court, and (iv) waive, and agree not to plead or to make, any claim that any such
action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient
forum.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.
| COMPANY | |||||||||
| By: | |||||||||
| Name: | |||||||||
| Title: | |||||||||
| INDEMNITEE | |||||||||
| Name: | |||||||||
| Address: | |||||||||
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