DIRECTOR INDEMNIFICATION AGREEMENT
This DIRECTOR INDEMNIFICATION AGREEMENT
(the “Agreement”) made and entered into as of the 8th day of May, 2009, by and between Haights Cross
Communications, Inc., a Delaware corporation (the “Company”), and Xxxxx XxXxx (the “Indemnitee”).
WHEREAS, it is essential that the
Company be able to retain and attract as directors, officers and employees the
most capable persons available;
WHEREAS, increased corporate litigation
has subjected directors to litigation risks and expenses, and the limitations on
the availability of director and officer liability insurance has made it
increasingly difficult for the Company to attract and retain such
persons;
WHEREAS, the Company’s By-laws permit it
to enter into indemnification arrangements and agreements;
WHEREAS, the Company desires to provide
the Indemnitee with specific contractual assurances of the Indemnitee’s rights
to full indemnification against litigation risks and expenses (regardless, among
other things, of any amendment to or revocation of the Company’s By-laws or any
change in the ownership of the Company or the composition of its Board of
Directors), which indemnification is intended to be greater than that which is
afforded by the Company’s Certificate of Incorporation and By-laws and, to the
extent insurance is available, the coverage of the Indemnitee under the
Company’s directors and officers liability insurance policies;
and
WHEREAS, the Indemnitee is relying upon
the rights afforded under this Agreement in accepting Indemnitee’s position as a
director, officer or employee of the Company.
NOW, THEREFORE, in consideration of the
mutual promises and covenants contained herein, the Company and Indemnitee do
hereby covenant and agree as follows:
1. Definitions
(a) “Corporate Status” describes the status
of a person who is serving or has served (i) as a director, officer or employee
of the Company, (ii) in any capacity with respect to any employee benefit plan
of the Company, or (iii) as a director, partner, member, trustee, officer,
employee, or agent of any other Entity at the request of the
Company.
(b) “Entity” shall mean any corporation,
partnership, limited liability company, joint venture, trust, foundation,
association, organization or other legal entity and any group or division of the
Company or any of its subsidiaries.
(c) “Expenses” shall mean all reasonable
fees, costs and expenses incurred in connection with any Proceeding (as defined
below), including, without limitation, attorneys’ fees, disbursements and
retainers (including, without limitation, any such fees, disbursements and
retainers incurred by Indemnitee pursuant to Section 10 of this Agreement), fees
and disbursements of expert witnesses, private investigators and professional
advisors (including, without limitation, accountants and investment bankers),
court costs, transcript costs, fees of experts, travel expenses, duplicating,
printing and binding costs, telephone and fax transmission charges, postage,
delivery services, secretarial services, and other disbursements and
expenses.
(d) “Indemnifiable Expenses,” “Indemnifiable
Liabilities” and “Indemnifiable Amounts” shall have the meanings ascribed to
those terms in Section 3(a) below.
(e) “Liabilities” shall mean judgments,
damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in
settlement.
(f) “Proceeding” shall mean any threatened,
pending or completed claim, action, suit, arbitration, alternate dispute
resolution process, investigation, administrative hearing, appeal, or any other
proceeding, whether civil, criminal, administrative or investigative, whether
formal or informal, including a proceeding initiated by Indemnitee pursuant to
Section 10 of this Agreement to enforce Indemnitee’s rights
hereunder.
2. Services of
Indemnitee. In consideration of the
Company’s covenants and commitments hereunder, Indemnitee agrees to serve or
continue to serve as a director, officer or employee of the Company. However,
this Agreement shall not impose any obligation on Indemnitee or the Company to
continue Indemnitee’s service to the Company beyond any period otherwise
required by law or by other agreements or commitments of the parties, if
any.
3. Agreement to
Indemnify. The Company agrees to
indemnify Indemnitee as follows:
(a) Subject to the exceptions contained in
Section 4(a) below, if Indemnitee was or is a party or is threatened to be made
a party to any Proceeding (other than an action by or in the right of the
Company) by reason of Indemnitee’s Corporate Status, Indemnitee shall be
indemnified by the Company against all Expenses and Liabilities incurred or paid
by Indemnitee in connection with such Proceeding (referred to herein as
“Indemnifiable Expenses” and “Indemnifiable Liabilities,” respectively, and
collectively as “Indemnifiable Amounts”).
(b) Subject to the exceptions contained in
Section 4(b) below, if Indemnitee was or is a party or is threatened to be made
a party to any Proceeding by or in the right of the Company to procure a
judgment in its favor by reason of Indemnitee’s Corporate Status, Indemnitee
shall be indemnified by the Company against all Indemnifiable
Expenses.
4. Exceptions
to Indemnification. Indemnitee shall be
entitled to indemnification under Sections 3(a) and 3(b) above in all
circumstances other than the following:
(a) If indemnification is requested under
Section 3(a) and it has been adjudicated finally by a court of competent
jurisdiction that, in connection with the subject of the Proceeding out of which
the claim for indemnification has arisen, (i) Indemnitee failed to act in good
faith and in a manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, (ii) with respect to any criminal action or
proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s conduct
was unlawful or (iii) Indemnitee’s conduct constituted willful misconduct or
recklessness, then Indemnitee shall not be entitled to payment of Indemnifiable
Amounts hereunder.
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(b) If indemnification is requested under
Section 3(b) and
(i) it has been adjudicated finally by a
court of competent jurisdiction that, in connection with the subject of the
Proceeding out of which the claim for indemnification has arisen, Indemnitee
failed to act in good faith and in a manner Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company, Indemnitee shall not be
entitled to payment of Indemnifiable Expenses hereunder; or
(ii) it has been adjudicated finally by a
court of competent jurisdiction that Indemnitee is liable to the Company with
respect to any claim, issue or matter involved in the Proceeding out of which
the claim for indemnification has arisen, including, without limitation, a claim
that Indemnitee received an improper personal benefit or improperly took
advantage of a corporate opportunity, Indemnitee shall not be entitled to
payment of Indemnifiable Expenses hereunder with respect to such claim, issue or
matter unless the court in which such Proceeding was brought shall determine
upon application that, despite the adjudication of liability, but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such Indemnifiable Expenses which such court shall deem
proper.
5. Procedure
for Payment of Indemnifiable Amounts. Indemnitee shall submit to
the Company a written request specifying the Indemnifiable Amounts for which
Indemnitee seeks payment under Section 3 of this Agreement and the basis for the
claim. The Company shall pay such Indemnifiable Amounts to Indemnitee within
twenty (20) calendar days of receipt of the request. At the request of the
Company, Indemnitee shall furnish such documentation and information as are
reasonably available to Indemnitee and necessary to establish that Indemnitee is
entitled to indemnification hereunder.
6. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other
provision of this Agreement, and without limiting any such provision, to the
extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a party
to and is successful, on the merits or otherwise, in any Proceeding, Indemnitee
shall be indemnified against all Expenses reasonably incurred by Indemnitee or
on Indemnitee’s 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 those Expenses reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Agreement,
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.
7. Effect of
Certain Resolutions. Neither the settlement nor
termination of any Proceeding nor the failure of the Company to award
indemnification or to determine that indemnification is payable shall create an
adverse presumption that Indemnitee is not entitled to indemnification
hereunder. In addition, the termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not create a presumption that Indemnitee did not act in good faith and in
a manner which Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company or, with respect to any criminal action or
proceeding, had reasonable cause to believe that Indemnitee’s action was
unlawful.
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8. Agreement to
Advance Interim Expenses; Conditions. The Company shall pay to
Indemnitee all Indemnifiable Expenses incurred by Indemnitee in connection with
any Proceeding, including a Proceeding by or in the right of the Company, in
advance of the final disposition of such Proceeding, if Indemnitee furnishes the
Company with a written undertaking to repay the amount of such Indemnifiable
Expenses advanced to Indemnitee if it is finally determined by a court of
competent jurisdiction that Indemnitee is not entitled under this Agreement to
indemnification with respect to such Indemnifiable Expenses. Such undertaking
shall be an unlimited general obligation of Indemnitee, shall be accepted by the
Company without regard to the financial ability of Indemnitee to make repayment,
and in no event shall be required to be secured.
9. Procedure
for Payment of Interim Expenses. Indemnitee shall submit to
the Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks an advancement under Section 8 of this Agreement, together with
documentation evidencing that Indemnitee has incurred such Indemnifiable
Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no
later than twenty (20) calendar days after the Company’s receipt of such request
and the undertaking required by Section 8.
10. Remedies of
Indemnitee.
(a) Right to Petition Court. In
the event that Indemnitee makes a request for payment of Indemnifiable Amounts
under Sections 3 and 5 above or a request for an advancement of Indemnifiable
Expenses under Sections 8 and 9 above and the Company fails to make such payment
or advancement in a timely manner pursuant to the terms of this Agreement,
Indemnitee may petition the appropriate judicial authority to enforce the
Company’s obligations under this Agreement.
(b) Burden of Proof. In any
judicial proceeding brought under Section 10(a) above, the Company shall have
the burden of proving that Indemnitee is not entitled to payment of
Indemnifiable Amounts hereunder.
(c) Expenses. The Company agrees
to reimburse Indemnitee in full for any Expenses incurred by Indemnitee in
connection with investigating, preparing for, litigating, defending or settling
any action brought by Indemnitee under Section 10(a) above, or in connection
with any claim or counterclaim brought by the Company in connection
therewith.
(d) Validity of Agreement. The
Company shall be precluded from asserting in any Proceeding, including, without
limitation, an action under Section 10(a) above, that the provisions of this
Agreement are not valid, binding and enforceable or that there is insufficient
consideration for this Agreement and shall stipulate in court that the Company
is bound by all the provisions of this Agreement.
(e) Failure to Act Not a
Defense. The failure of the Company (including its Board of Directors
or any committee thereof, independent legal counsel, or stockholders) to make a
determination concerning the permissibility of the payment of Indemnifiable
Amounts or the advancement of Indemnifiable Expenses under this Agreement shall
not be a defense in any action brought under Section 10(a) above, and shall not
create a presumption that such payment or advancement is not
permissible.
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11. Representations
and Warranties of the Company. The Company hereby
represents and warrants to Indemnitee as follows:
(a) Authority. The Company has
all necessary corporate power and authority to enter into, and be bound by the
terms of, this Agreement, and the execution, delivery and performance of the
undertakings contemplated by this Agreement have been duly authorized by the
Company.
(b) Enforceability. This
Agreement, when executed and delivered by the Company in accordance with the
provisions hereof, shall be a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the enforcement of
creditors’ rights generally.
12. Insurance. The Company will use
commercially reasonable efforts to obtain and maintain a policy or policies of
insurance in an amount not less than $1,000,000 with a deductible of not greater
than $50,000, with reputable insurance companies providing the Indemnitee with
coverage for losses from wrongful acts, and to ensure the Company’s performance
of its indemnification obligations under this Agreement. In all policies of
director and officer liability insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee at least the same rights and
benefits as are accorded to the most favorably insured of the Company’s officers
and directors. Notwithstanding the foregoing, if the Company, after employing
commercially reasonable efforts as provided in this Section, determines in good
faith that such insurance is not reasonably available, if the premium costs for
such insurance are disproportionate to the amount of coverage provided, or if
the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit, the Company shall use its commercially
reasonable efforts to obtain and maintain a policy or policies of insurance with
coverage having features as similar as practicable to those described
above.
13. Fees and
Expenses. During the term of the
Indemnitee’s service as a director, the Company shall promptly reimburse the
Indemnitee for all expenses incurred by him in connection with her service as a director or member of any
board committee or otherwise in connection with the Company’s business and shall
pay or provide the Indemnitee with fees and other compensation, including stock
options or awards, in amounts and value which are at least equal to those
provided to any of the Company’s other directors from time to
time.
14. Contract
Rights Not Exclusive. The rights to payment of
Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by this
Agreement shall be in addition to, but not exclusive of, any other rights which
Indemnitee may have at any time under applicable law, the Company’s By-laws or
Certificate of Incorporation, or any other agreement, vote of stockholders or
directors, or otherwise, both as to action in Indemnitee’s official capacity and
as to action in any other capacity as a result of Indemnitee’s serving as a
director of the Company.
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15. Successors. This Agreement shall be (a)
binding upon all successors and assigns of the Company (including any transferee
of all or a substantial portion of the business, stock and/or assets of the
Company and any direct or indirect successor by merger or consolidation or
otherwise by operation of law) and (b) binding on and shall inure to the benefit
of the heirs, personal representatives, executors and administrators of
Indemnitee. This Agreement shall continue for the benefit of Indemnitee and such
heirs, personal representatives, executors and administrators after Indemnitee
has ceased to have Corporate Status.
16. Subrogation. In the event of any payment
of Indemnifiable Amounts under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the rights of contribution or recovery
of Indemnitee against other persons, and Indemnitee shall take, at the request
of the Company, all reasonable action necessary to secure such rights, including
the execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.
17. Change in
Law. To the extent that a change
in applicable law (whether by statute or judicial decision) shall permit broader
indemnification than is provided under the terms of the Certificate of
Incorporation or By-laws of the Company and this Agreement, Indemnitee shall be
entitled to such broader indemnification and this Agreement shall be deemed to
be amended to such extent.
18. Severability. Whenever possible, each
provision of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this
Agreement, or any clause thereof, shall be determined by a court of competent
jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such
provision or clause shall be limited or modified in its application to the
minimum extent necessary to make such provision or clause valid, legal and
enforceable, and the remaining provisions and clauses of this Agreement shall
remain fully enforceable and binding on the parties.
19. Indemnitee
as Plaintiff. Except as provided in
Section 10(c) of this Agreement and in the next sentence, Indemnitee shall not
be entitled to payment of Indemnifiable Amounts or advancement of Indemnifiable
Expenses with respect to any Proceeding brought by Indemnitee against the
Company, any Entity which it controls, any director or officer thereof, or any
third party, unless the Company has consented to the initiation of such
Proceeding. This Section shall not apply to counterclaims or affirmative
defenses asserted by Indemnitee in an action brought against
Indemnitee.
20. Modifications
and Waiver. Except as provided in
Section 17 above with respect to changes in applicable law which broaden the
right of Indemnitee to be indemnified by the Company, no supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by each 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 of this Agreement (whether or not similar), nor shall such waiver
constitute a continuing waiver.
21. General
Notices. All notices, requests,
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, (b) when transmitted by
facsimile and receipt is acknowledged, or (c) if mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
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(a) If to Indemnitee,
to:
|
Xxxxx
XxXxx
|
|
000 Xxxx 00xx Xx.,
Xxx. 00X
Xxx Xxxx, XX
00000-0000
Phone: (000)
000-0000
Facsimile: (000)
000-0000
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(b) If to the Company,
to:
|
Haights Cross Communications,
Inc.
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00 Xxx Xxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX
00000
Facsimile: (000)
000-0000
Attn: President
or to such other address as may have
been furnished in the same manner by any party to the
others.
22. Governing
Law. This Agreement shall be
governed by and construed and enforced under the laws of the State of New York
without giving effect to the provisions thereof relating to conflicts of
law.
23. Consent to
Jurisdiction. The Company hereby
irrevocably and unconditionally consents to the jurisdiction of the courts
located in the State of New York to construe and enforce the covenants contained
in this Agreement. The Company hereby irrevocably and unconditionally waives any
objection to the laying of venue of any Proceeding arising out of or relating to
this Agreement in the courts located in the State of New York, and hereby
irrevocably and unconditionally waives and agrees not to plead or claim that any
such Proceeding brought in any such court has been brought in an inconvenient
forum.
24. Agreement
Governs. This Agreement is to be
deemed consistent wherever possible with relevant provisions of the Company’s
Amended and Restated By-laws and Certificate of Incorporation; however, in the
event of a conflict between this Agreement and such provisions, the provisions
of this Agreement shall control.
[End of Text]
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IN WITNESS WHEREOF, the parties hereto
have executed this Director Indemnification Agreement as of the day and year
first above written.
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THE
COMPANY:
HAIGHTS CROSS COMMUNICATIONS,
INC.
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By:
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/s/ Xxxx X. Xxxxxx | |
| Name: Xxxx X. Xxxxxx | |||
| Title: President and Chief Executive Officer | |||
| INDEMNITEE: | |||
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By:
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/s/ Xxxxx XxXxx | ||
| Name: Xxxxx XxXxx | |||
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