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INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement") dated as of October 28,
1998, by and between Dendrite International Inc. a New Jersey corporation (the
"Company"), and _________, a _________ of the Company (the "Indemnitee"):
WITNESSETH:
WHEREAS, the Indemnitee is presently serving as a __________ of the
Company, and the Company desires the Indemnitee to continue in such capacity;
WHEREAS, the Indemnitee is willing, subject to certain conditions
(including the execution and performance of this Agreement by the Company), to
continue in that capacity;
WHEREAS, in addition to the indemnification to which the Indemnitee is
entitled under the Company's certificate of incorporation (the "Certificate"),
the Company maintains at its sole expense insurance protecting its officers and
directors (including the Indemnitee) against certain losses arising out of
actual or threatened actions, suits or proceedings to which such persons may be
made or threatened to be made parties; and
WHEREAS, as a result of circumstances having no relation to, and beyond the
control of, the Company and the Indemnitee, there can be no assurance of the
continuation or renewal of that insurance;
NOW, THEREFORE, to induce the Indemnitee to continue to serve in his
present capacity and in consideration of these premises and the mutual
agreements set forth in this Agreement, the Company and the Indemnitee agree as
follows:
1. Continued Service. The Indemnitee will continue to serve as [a director
of the Company so long as he is duly elected and qualified in accordance with
the Company's by-laws (the "By-Laws") or until he resigns in writing in
accordance with applicable law] [an executive officer of the Company until
removal by the Board of Directors in accordance with the Company's by-laws (the
"By-Laws") or he resigns in writing in accordance with applicable law].
2. Initial Indemnity. (a) The Company shall indemnify the Indemnitee who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, administrative,
investigative or criminal (other than an action by or in the right of the
Company), by reason of the fact that he is or was or had agreed to become a
[director] [executive officer] of the Company, or is or was serving or had
agreed to serve at the request of the Company as a director, officer, trustee,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against any and all costs, charges and expenses
(including attorneys, and others' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by the Indemnitee in
connection therewith and any appeal therefrom if the Indemnitee acted in good
faith and in a manner he reasonably believed to
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be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent shall not, of itself, create a presumption that the Indemnitee did
not satisfy the foregoing standard of conduct to the extent applicable thereto.
(b) The Company shall indemnify the Indemnitee who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding by or in the right of the Company to procure a
judgment in its favor by reason of the fact that he is or was or had agreed to
become a [director] [executive officer] of the Company, or is or was serving or
had agreed to serve at the request of the Company as a director, officer,
trustee, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against costs, charges and expenses (including
attorneys' and others' fees and expenses) actually and reasonably incurred by
him in connection with the defense or settlement thereof or any appeal therefrom
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and except that no indemnification
shall be made in respect of any claim, issue or matter as to which the
Indemnitee shall have been adjudged to be liable to the Company unless and only
to the extent that the Superior Court or the court in which such action, suit or
proceeding was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, the
Indemnitee is fairly and reasonably entitled to indemnity for such expenses
which the Superior Court or such other court shall deem proper.
(c) To the extent that the Indemnitee has been successful on the
merits or otherwise, including without limitation the dismissal of an action
without prejudice, in any action, suit or proceeding referred to in Sections
2(a) or 2(b) or in defense of any claim, issue or matter therein, he shall be
indemnified against costs, charges and expenses (including attorneys' and
others' fees and expenses) actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under Sections 2(a) or 2(b) (unless ordered
by a court) shall be made by the Company only as authorized in the specific case
upon a determination in accordance with Section 4 or any applicable provision of
the Certificate, By-Laws, other agreement, resolution or otherwise. Such
determination shall be made (i) by the Board of Directors of the Company (the
"Board") by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, (ii) if such a quorum of
disinterested directors is not available or so directs, by independent legal
counsel (designated in the manner provided below in this subsection (d)) in a
written opinion or (iii) by a majority vote of a quorum of the stockholders of
the Company at a meeting duly called and held present (the "Stockholders").
Independent legal counsel shall be designated by vote of a majority of the
disinterested directors; provided, however, that if the Board is unable or fails
to so designate, such designation shall be made by the Indemnitee subject to the
approval of the Company (which approval shall not be unreasonably withheld).
Independent legal counsel shall not be any person or firm who, under the
applicable standards professional conduct then prevailing, would have a conflict
of interest in representing either the Company or the Indemnitee in an action to
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determine the Indemnitee's rights under this Agreement. The Company agrees to
pay the reasonable fees and expenses of such independent legal counsel and to
indemnify fully such counsel against costs, charges and expenses (including
attorneys' and others fees and expenses) actually and reasonably incurred by
such counsel in connection with this Agreement or the opinion of such counsel
pursuant hereto.
(e) A11 expenses (including attorneys' and others', fees and
expenses) incurred by the Indemnitee in his capacity as a [director] [executive
officer] of the Company in defending an actual or threatened civil or criminal
action, suit or proceeding shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding in the manner prescribed by
Section 4(b).
(f) The Company shall not adopt any amendment to the Certificate or
By-Laws the effect of which would be to deny, diminish or encumber the
Indemnitee's rights to indemnity or encumber the Indemnitee's rights to
indemnity pursuant to the Certificate, By-Laws, the New Jersey Business
Corporation Act (the "Corporation Act") or any other applicable law as applied
to any act or failure to act occurring in whole or in part prior to the date
(the "Effective Date") upon which the amendment was approved by the Board of
Stockholders, as the case may be. If the Company shall adopt any amendment to
the Certificate or By-Laws the effect of which would be to so deny, diminish or
encumber the Indemnitee's rights to indemnity, such amendment shall apply only
to acts or failures to act occurring entirely after the Effective Date thereof.
3. Additional Indemnification. (a) Pursuant to Section 14A:3-5 of the
Corporation Act, without limiting any right which the Indemnitee may have
pursuant to Section 2, the Certificate, the By-Laws, the Corporation Act, any
policy of insurance or otherwise, but subject to the limitations on the maximum
permissible indemnity which may exist under applicable law at the time of any
request for indemnity hereunder determined as contemplated by Section 3(a), the
Company shall indemnify the Indemnitee against any amount which he is or becomes
legally obligated to pay relating to or arising out of any claim made against
him because of any act, failure to act or neglect or breach of duty, including
any actual or alleged error, misstatement or misleading statement, which he
commits, suffers, permits or acquiesces in while acting in his capacity as a
[director] [executive officer] of the Company, or, at the request of the
Company, as a director, officer, trustee, employee or agent of another
corporations partnership, joint venture, trust or other enterprise. The payments
which the Company is obligated to make pursuant to this Section 3 shall include
without limitation damages, judgments, settlements and charges, costs, expenses,
expenses of investigation and expenses of defense of legal actions, suits,
proceedings or claims and appeals therefrom, and expenses of appeal, attachment
or similar bonds; provided, however, that the Company shall not be obligated
under this Section 3(a) to make any payment in connection with any claim against
the Indemnitee if a judgment or other final adjudication adverse to the
Indemnitee establishes that his acts or omissions (i) were in breach of his duty
of loyalty to the Company or the Stockholders, (ii) were not in good faith or
involved a knowing violation of law, or (iii) resulted in receipt by the
Indemnitee of an improper personal benefit. The determination of whether the
Indemnitee shall be entitled to indemnification under this
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Section 3(a) may be, but shall not be required to, be made in accordance with
Section 4(a). If that determination is so made, it shall be binding upon the
Company and the Indemnitee for all, purposes.
(b) Expenses (including without limitation attorneys' and others'
fees and expenses) incurred by Indemnitee in defending any actual or threatened
civil or criminal action, suit, proceeding or claim shall be paid by the Company
in advance of the final disposition thereof as authorized in accordance with
Section 4(b).
4. Certain Procedures Relating to Indemnification and Advancement of
Expenses. (a) Except as otherwise permitted or required by the Corporation Act,
for purposes of pursuing his rights to indemnification under Sections 2(a), 2(b)
or 3(a), as the case may be, the Indemnitee may, but shall not be required to,
(i) submit to the Board a sworn statement of request for indemnification
substantially in the form of Exhibit A attached hereto and made a part hereof
(the "Indemnification Statement") averring that he is entitled to
indemnification hereunder; and (ii) present to the Company reasonable evidence
of all expenses for which payment is requested, including appropriate invoices.
Submission of an Indemnification Statement to the Board shall create a
presumption that the Indemnitee is entitled to indemnification under Sections
2(a), 2(b) or 3(a), as the case may be, and the Board shall be deemed to have
determined that the Indemnitee is entitled to such indemnification unless within
30 calendar days after submission of the Indemnification Statement the Board
shall determine by vote of a majority of the directors at a meeting at which a
quorum is present, based upon clear and convincing evidence (sufficient to rebut
the foregoing presumption), and the Indemnitee shall have received notice within
such period in writing of such determination, that the Indemnitee is not so
entitled to indemnification, which notice shall disclose with particularity the
evidence in support of the Board's determination. The foregoing notice shall be
signed by the director presiding as chairman at the meeting at which the vote to
deny indemnification was taken or, if the action to deny indemnification was by
written consent without a meeting, signed by all persons who participated in the
determination and voted to deny indemnification. The provisions of this Section
4(a) are intended to be procedural only and shall not affect the right of the
Indemnitee to indemnification under this Agreement, and any determination by the
Board that the Indemnitee is not entitled to the indemnification and any failure
to make the payments requested in the Indemnification Statement shall be subject
to judicial review as provided in Section 7.
(b) For purposes of determining whether to authorize advancement of
expenses pursuant to Section 2(e), the Indemnitee shall submit to the Board a
sworn statement of request for advancement of expenses substantially in the form
of Exhibit B attached hereto and made a part hereof (the "Undertaking"),
averring that (i) he has reasonably incurred or will reasonably incur actual
expenses in defending an actual or threatened civil or criminal action, suit,
proceeding or claim and (ii) he undertakes to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Company under this Agreement or otherwise, which repayment shall be made within
180 days of a written request therefor by the Company. For purposes of
requesting advancement of expenses pursuant to Section 3(b), the Indemnitee may,
but shall not be required to, submit an Undertaking or such other form of
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request, as he determines to be appropriate (an "Expense Request"). Upon receipt
of an Undertaking or Expense Request, as the case may be, the Board may make
reasonable inquiries to determine whether such expenses relate to an action,
suit, proceeding or claim the subject matter of which is of the type for which
the Indemnitee may make a claim for indemnification under this Agreement. Unless
the Board determines within 10 calendar days after receipt of such Undertaking
or Expense Request that such expenses relate to an action, suit, proceeding or
claim the subject matter of which is not of the type for which the Indemnitee
may make a claim for indemnification under this Agreement, the Board shall
authorize immediate payment of the expenses stated in the Undertaking or Expense
Request, as the case may be, whereupon such payments shall immediately be made
by the Company. No security shall be required in connection with any Undertaking
or Expense Request and any Undertaking or Expense Request shall be accepted
without reference to the Indemnitee's ability to make repayment. For purposes of
pursuing his rights to advancement of expenses hereunder, the Indemnitee shall
present to the Company reasonable evidence of all expenses for which advancement
is requested, including appropriate invoices.
5. Subrogation; Duplication of Payments. (a) In the event of payment under
this Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of the Indemnitee, who shall execute all papers
required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.
(b) The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against the Indemnitee to the extent
the Indemnitee has actually received payment (under any insurance policy, the
Certificate, the By-Laws or otherwise) of the amounts otherwise payable
hereunder.
6. Enforcement. (a) if a claim for indemnification made to the Company
pursuant to Section 4 is not paid in full by the Company within 30 calendar days
after a written claim has been received by the Company, the Indemnitee may at
any time thereafter bring suit against the Company to recover the unpaid amount
of the claim.
(b) In any action brought under Section 6 (a), it shall be a defense
to a claim for indemnification pursuant to Sections 2(a) or 2(b) (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the Undertaking, if any is
required, has been tendered to the Company) that the Indemnitee has not met the
standards of conduct which make it permissible under the Corporation Act for the
Company to indemnify the Indemnitee for the amount claimed, but the burden or
proving such defense shall be on the Company. Neither the failure of the Company
(including the Board, independent legal counsel or the Stockholders) to have
made a determination prior to commencement of such action that indemnification
of the Indemnitee is proper in the circumstances because he has met the
applicable standard of conduct set forth in the Corporation Act, nor an actual
determination by the Company (including the Board, independent legal counsel or
the Stockholders) that the Indemnitee has not met such applicable standard of
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conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct.
(c) The Indemnitee shall not be required to incur the expenses
associated with the enforcement of his rights under thus Agreement by litigation
or other legal action because the cost and expense thereof would substantially
detract from the benefits intended to be extended to the Indemnitee hereunder.
Accordingly, if the Company has failed to comply with any of its obligations
under this Agreement or if the Company or any other person takes any action to
declare this Agreement void or unenforceable, or institutes any action, suit or
proceeding designed (or having the effect of being designed) to deny, or to
recover from, the Indemnitee the benefits intended to be provided to the
Indemnitee hereunder, the Company irrevocably authorizes the Indemnitee from
time to time, at the expense of the Company as hereinafter provided, to retain
counsel (in compliance with Section 7) to represent the Indemnitee in connection
with the initiation or defense of any such action, suit, or proceeding, whether
by or against the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction. The Company shall pay and be
solely responsible for any and all costs, charges and expenses (including
attorneys' and others' fees and expenses) reasonably incurred by the Indemnitee
(i) as a result of the Company's failure to perform this Agreement or any
provision hereof or (ii) as a result of the Company or any Person contesting the
validity or enforceability, of this Agreement or any, provision hereof as
aforesaid.
7. Counsel. With respect to any action, suit, proceeding or claim for
which indemnification or advancement of expenses may be sought pursuant to this
Agreement and upon request of the Indemnitee after the Indemnitee has submitted
an Indemnification Statement to the Board, the Company shall retain counsel
reasonably satisfactory to the Indemnitee to represent the Indemnitee and any
other the Company may designate (which may include the Company) in connection
with the action, suit, proceeding or claim to which the Indemnification
Statement relates. In connection with any such action, suit, proceeding or
claim, the Indemnitee shall have the right to retain his own counsel at his own
expense, except that the fees and expenses of such counsel retained by the
Indemnitee shall be expenses for which indemnification and advancement shall be
available under this Agreement if (i) the Company and the Indemnitee shall have
agreed to the retention of such counsel or (ii) the parties named or threatened
to be named in any such action, suit, proceeding or claim (including impleaded
parties) include, in addition to the Indemnitee, the Company or another party
who may be indemnified by the Company and representation of more than one party
by the same counsel would be inappropriate due to actual or, in the reasonable
opinion of the Company, potential conflicts of interests between them.
8. Merger or Consolidation. If the Company shall be a constituent
corporation in a consolidation, merger or other reorganization, the Company, if
it shall not be the surviving, resulting or other corporation therein, shall
require as a condition thereto the surviving, resulting or acquiring corporation
to agree to indemnify the Indemnitee to the full extent provided in this
Agreement. Whether or not the Company is the resulting, surviving or acquiring
corporation in any such transaction, the Indemnitee shall also stand in the same
position under this Agreement
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with respect to the resulting, acquiring corporation as he would have with
respect to the Company if its separate existence had continued.
9. Nonexclusivity and Severability. (a) The right to indemnification
provided by this Agreement shall not be exclusive of any other rights to which
the Indemnitee may be entitled under the Certificate, By-Laws, the Corporation
Act, any other statute, insurance policy, agreement, vote of stockholders or
directors or otherwise, both as to actions in his official capacity and as to
actions in another capacity while holding such office, and shall continue after
the indemnitee has ceased to be a director, officer, trustee, employee or agent
and shall inure to the benefit of his heirs, executors and administrators.
(b) If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid, unenforceable
or otherwise illegal, the remainder of this Agreement and the application of
such provision to other persons or circumstances 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 and legal.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without giving effect to
the principles of conflicts of law thereof.
11. Modification; Survival. This Agreement contains the entire agreement
of the parties relating to the subject matter hereof. This Agreement may be
modified only by an instrument in writing signed by both parties hereto. The
provisions of this Agreement shall survive the death, disability, or incapacity
of the Indemnitee or the termination of the Indemnitee's service as [a director]
[an executive officer] of the Company and shall inure to the benefit of the
Indemnitee's heirs, executors and administrators.
12. Certain Terms. For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to any employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, trustee, employee or agent of the
Company which imposes duties on, or involves services by, the Indemnitee with
respect to an employee benefit plan, its participants or beneficiaries;
references to the masculine shall include the feminine; references to the
singular shall include the plural and vice versa; and if the Indemnitee acted in
good faith and in a manner reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan he shall be deemed to
have acted in a manner "not opposed to the best interests of the Company" as
referenced to herein.
13. Headings and Interpretation. When a reference is made in this
Agreement to Sections or Exhibits, such references shall be to a Section or
Exhibit to this Agreement unless otherwise indicated.
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IN WITNESS WHEREOF, the Company and the Indemnitee have duly executed this
Agreement as of the date first above written.
DENDRITE INTERNATIONAL, INC.
By:_____________________________
Xxxx Xxxxxx, President
________________________________
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Exhibit A
INDEMNIFICATION STATEMENT
STATE OF ______________________ )
) SS
COUNTY OF _____________________ )
I, ______________________, being first duly sworn, do depose and say as
follows:
1. This Indemnification Statement is submitted pursuant to the
Indemnification Agreement dated as of October 28, 1998 between Dendrite
International, Inc., a New Jersey corporation (the "Company"), and the
undersigned.
2. 1 am requesting indemnification against charges, costs, expenses
(including attorneys' and others' fees and expenses), judgments, fines and
amounts paid in settlement, all of which (collectively, "Liabilities") have been
or will be incurred by me in connection with an actual or threatened action,
suit, proceeding or claim to which I am a party or am threatened to be made a
party.
3. With respect to all matters related to any action, suit, proceeding or
claim, I am entitled to be indemnified as herein contemplated pursuant to the
aforesaid Indemnification Agreement.
4. Without limiting any other rights which I have or may have, I am
requesting indemnification against Liabilities which have or may arise out of
________________________________________________________________________________
______________________________________________________________________________ .
Subscribed and sworn to before me, a Notary Public in and for said
County and State, this ____________ day of __________________, ____.
______________________________________
[Seal]
My commission expires the ____ day of ______________, ______.
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Exhibit B
UNDERTAKING
STATE OF _______________________ )
) SS
COUNTY OF ______________________ )
I, _______________________, being first duly sworn, do depose and say as
follows:
1. This Undertaking is submitted pursuant to the Indemnification Agreement
dated as of October 28, 1998 between Dendrite International, Inc., a New Jersey
corporation (the "Company"), and the undersigned.
2. I am requesting advancement of certain costs, charges and expenses
which I have incurred or will incur in defending an actual or threatened civil
or criminal action, suit, proceeding or claim.
3. I hereby undertake to repay this advancement of expenses if it shall
ultimately be determined that I am not entitled to be indemnified by the Company
under the aforesaid Indemnity Agreement or otherwise. Such repayment shall be
made within 180 days of a written request therefore by the Company.
4. The costs, charges and expenses for which advancement is requested are,
in general, all expenses related to_____________________________________________
________________________________________________________________________________
______________________________________________________________________________ .
Subscribed and sworn to before me, a Notary Public in and for said County and
State, this ___ day of _____________, _____.
____________________________________________
[Seal]
My commission expires the ______ day of __________________, ______.
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