EXHIBIT 2.1.4
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (the "Agreement"), made and entered
into this ___ day of _______, 2003 ("Agreement"), by and between Centennial
Specialty Foods Corporation, a Delaware corporation (the "Company") and Xxxxx X.
and Xxxxx X. Xxxxx (collectively, the "Indemnitee").
WHEREAS, concurrent with the execution of this Agreement, the parties
are closing the sale by Indemnitee to the Company all of the shares of
outstanding stock of Xxxxx Foods, Inc. (the "Stock") pursuant to the terms and
conditions of that certain Stock Purchase Agreement dated February 28, 2003 (the
"Stock Purchase Agreement"); and
WHEREAS, Section 9.9 of the Stock Purchase Agreement requires that the
Company enter into this Agreement as further consideration to Indemnitee for the
sale of Stock to the Company;
WHEREAS, pursuant to the Loan Agreement, as defined under the Stock
Purchase Agreement, Indemnitee has rights to attend and observe board of
director meetings of the Company and to become a director upon the occurrence of
certain events;
NOW, THEREFORE, in consideration of the promises, conditions,
representations and warranties set forth herein, and the sale of Stock to the
Company under the Stock Purchase Agreement, the Company and Indemnitee hereby
covenant and agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meaning given here:
1.01 "Board" shall mean the Board of Directors of the Company.
1.02 "Corporate Status" describes the status of a person who is or
was a director, officer, employee, agent, observer, shareholder, creditor,
fiduciary or other representative of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit or other enterprise which
such person is or was serving at the express written request of the Company.
1.03 "Covered Act" means any breach of duty, neglect, error,
misstatement, misleading statement, omission or other act done or wrongfully
attempted by Indemnitee or any claim against Indemnitee solely by reason of
being a director, officer, employee, agent, observer, shareholder, creditor,
fiduciary or other representative of the Company.
1.04 "D&O Insurance" means any directors' and officers' liability
insurance issued by an insurer(s), and having the policy number(s), amount(s)and
deductible(s) set forth within such policy and any replacement or substitute
policies issued by one or more reputable insurers providing in any respects such
coverage.
1.05 "Determination" means a determination, based on the facts
known at the time, made by:
(a) A majority vote of a quorum of disinterested
directors; or
(b) Independent Counsel in a written opinion prepared at
the request of a majority of a quorum of Disinterested Directors; or
(c) A majority of the disinterested stockholders of the
Company; or
(d) A final adjudication by a court of competent
jurisdiction.
"Determined" shall have a correlative meaning.
1.06 "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.
1.07 "Effective Date" means _________, 2003.
1.08 "Excluded Claim" means any payment for Losses or Expenses in
connection with any claim:
(a) Based upon or attributable to Indemnitee gaining in
fact any personal profit or advantage to which Indemnitee is not
entitled; or
(b) For the return by Indemnitee of any remuneration paid
to Indemnitee which is illegal without the previous approval of the
stockholders of the Company; or
(c) For an accounting of profits in fact made from the
purchase or sale by Indemnitee of securities of the Company within the
meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, or similar provisions of any state law; or
(d) Resulting from Indemnitee's knowingly fraudulent,
dishonest or willful misconduct; or
(e) The payment of which by the Company under this
Agreement is not permitted by applicable law.
1.09 "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, or being or preparing to be a witness in
a Proceeding, but shall not include Fines.
1.10 "Fines" mean any fine, penalty or, with respect to an employee
benefit plan, any excise tax or penalty assessed with respect thereto.
1.11 "Good Faith" shall mean Indemnitee having acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company and, with respect to any criminal Proceeding,
having had no reasonable cause to believe Indemnitee's conduct was unlawful.
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1.12 "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 three years has been, retained to represent (i) the Company
or Indemnitee in any matter material to either such party 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.
1.13 "Loss" means any amount which Indemnitee is legally obligated
to pay as a result of a claim or claims made against him for Covered Acts
including, without limitation, damages and judgments and sums paid in settlement
of a claim or claims, but shall not include Fines.
1.14 "Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any other
actual, threatened or completed proceeding whether civil, criminal,
administrative or investigative, other than one initiated by Indemnitee. For
purposes of the foregoing sentence, a "Proceeding" shall not be deemed to have
been initiated by Indemnitee where Indemnitee seeks pursuant to Article IX of
this Agreement to enforce Indemnitee's rights under this Agreement relating
thereto.
ARTICLE II
SERVICES BY INDEMNITEE
Pursuant to the Loan Agreement, Indemnitee may attend and observe board
of director meetings of the Company. In addition, Indemnitee has the right to
become a director under the Loan Agreement upon the occurrence of certain events
set forth therein. If Indemnitee elects to become a director, Indemnitee may at
any time thereafter and for any reason resign from such positions, subject to
any other contractual obligation or any obligation imposed by operation of law.
ARTICLE III
MAINTENANCE OF D&O INSURANCE
3.01 Description of D&O Insurance. The Company intends to obtain,
and will use its best efforts to do so, a directors' and officers' liability
insurance policy, the premiums for which will be paid by the Company.
3.02 Named Insured. In any policies of D&O Insurance which are
maintained by the Company, Indemnitee shall be named as an insured in such a
manner as to provide Indemnitee the same rights and benefits, subject to the
same limitations, as are accorded to the Company's directors and officers most
favorably insured by such policy.
3.03 No Obligation. Nothing herein shall impose upon the Company
the obligation to maintain D&O Insurance if the Company determines in good faith
that such insurance is not reasonably available, the premium costs for such
insurance are disproportionate to the amount of coverage provided, or the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit.
ARTICLE IV
INDEMNIFICATION
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4.01 Indemnification in General. To the greatest extent permitted
under applicable law in effect from time to time, the Company shall indemnify
and hold Indemnitee harmless for any Losses, Expenses, judgments, penalties,
Fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection with any Proceeding or any
claim, issue or matter therein, if Indemnitee acted in Good Faith.
4.02 Excluded Coverage. The Company shall have no obligation to
indemnify and hold Indemnitee harmless from any Losses or Expense which has been
Determined to constitute an Excluded Claim. Notwithstanding the provisions of
Section 4.01, no such indemnification 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 if applicable law prohibits such
indemnification; provided, however, that, if applicable law so permits,
indemnification shall nevertheless be made by the Company in such event if and
only to the extent that the Court of Chancery of the State of Delaware, or the
court in which such Proceeding shall have been brought or pending, shall
Determine.
4.03 Indemnification 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 Indemnitee's Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be
indemnified to the maximum extent permitted by law, against all Losses,
Expenses, judgments, penalties, Fines and amounts paid in settlement, actually
and 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 to the maximum extent permitted by law, against all Losses, Expenses,
judgments, penalties, Fines and amounts paid in settlement, actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with
each successfully resolved claim, issue or matter. For purposes this Section
4.03 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, so long as there has been
no finding (either adjudicated or pursuant to Article VI) Indemnitee did not act
in Good Faith.
4.04 Indemnification For Expenses of a Witness. Notwithstanding any
other provision of this Agreement to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a witness in a Proceeding, Indemnitee shall be
indemnified against all Losses and Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection therewith.
ARTICLE V
ADVANCEMENT OF EXPENSES
Notwithstanding any provision to the contrary in this Agreement, the
Company shall advance all reasonable Expenses which, by reason of Indemnitee's
Corporate Status, are incurred by or on behalf of Indemnitee in connection with
any Proceeding, within twenty (20) days after the receipt by the Company of a
statement or statements from Indemnitee requesting such advance or advances,
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 an undertaking by or on behalf of
Indemnitee to repay any Expenses if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified against such
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Expenses. Such statements may be redacted to the extent necessary to preserve
attorney-client confidentiality, work product or other applicable privileges, if
any. Any advance and undertakings to repay pursuant to this Article V shall be
unsecured and interest free.
ARTICLE VI
PROCEDURES FOR DETERMINATION OF ENTITLEMENT
6.01 Initial Notice. Promptly after receipt by Indemnitee of notice
of the commencement of or the threat of commencement of any Proceeding,
Indemnitee shall, if indemnification with respect thereto may be sought from the
Company under this Agreement, notify the Company of the commencement thereof.
Indemnitee shall include 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 advise the Board in writing that
Indemnitee has requested indemnification.
6.02 D&O Insurance. If, at the time of the receipt of such notice
the Company has D&O 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 in favor of Indemnitee. The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of Indemnitee, all Losses and Expenses payable as a
result of such Proceeding in accordance with the terms of such policies.
6.03 Employment of Counsel. To the extent the Company does not, at
the time of the commencement of or the threat of commencement of a Proceeding,
have applicable D&O Insurance, or if a Determination is made that any Expenses
arising out of such Proceeding will not be payable under the D&O Insurance then
in effect, the Company shall be obligated to pay the Expenses of any such
Proceeding in advance of the final disposition thereof as provided in Article V
and the Company, if appropriate, shall be entitled to assume the defense of such
Proceeding, with counsel satisfactory to Indemnitee, upon the delivery to
Indemnitee of written notice of its election so to do. After delivery of such
notice, the Company will not be liable to Indemnitee under this Agreement for
any legal or other Expenses subsequently incurred by Indemnitee in connection
with such defense other than reasonable Expenses of investigation provided that
Indemnitee shall have the right to employ its counsel in any such Proceeding but
the fees and expenses of such counsel incurred after delivery of notice from the
Company of its assumption of such defense shall be at Indemnitee's expense and
provided further that if (i) the employment of counsel by Indemnitee has been
previously authorized by the Company, (ii) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense or (iii) the Company shall not, in
fact, have employed counsel to assume the defense of such Proceeding, the fees
and expenses of counsel shall be paid by the Company.
6.04 Payment. All payments on account of the Company's
indemnification obligations under this Agreement shall be made within thirty
(30) days of Indemnitee's written request therefor unless a Determination is
made that the claims giving rise to Indemnitee's request are Excluded Claims or
otherwise not payable under this Agreement or applicable law.
6.05 Reimbursement by Indemnitee. Indemnitee agrees that he will
reimburse the Company for all Losses and Expenses paid by the Company in
connection with any Proceeding against Indemnitee in the event and only to the
extent that a Determination shall have been made by a court in a final
adjudication from which there is no further right of appeal that Indemnitee is
not
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entitled to be indemnified by the Company for such Expenses because the claim is
an Excluded Claim or because Indemnitee is otherwise not entitled to payment
under this Agreement.
6.06 Cooperation. Indemnitee and the Company shall cooperate with
the person, persons or entity making the Determination with respect to
Indemnitee's entitlement to indemnification under this Agreement, 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 or Company and
reasonably necessary to such Determination. 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.
ARTICLE VII
SETTLEMENT
The Company shall have no obligation to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding effected without
the Company's prior written consent. The Company shall not settle any claim in
any manner which would impose any Fine or other obligation on Indemnitee or
admit any wrongdoing or liability on the part of Indemnitee without Indemnitee's
written consent. Neither the Company nor Indemnitee shall unreasonably withhold
their consent to any proposed settlement.
ARTICLE VIII
RIGHTS NOT EXCLUSIVE
The rights provided hereunder shall not be deemed exclusive of any
other rights to which Indemnitee may be entitled under any bylaw, agreement,
vote of stockholders or of Disinterested Directors or otherwise, both as to
action in his official capacity and as to action in any other capacity by
holding such office, and shall continue after Indemnitee ceases to serve the
Corporation as a director, officer, employee, agent, observer, shareholder,
creditor, fiduciary or other representative of the Company.
ARTICLE IX
ENFORCEMENT
9.01 Burden of Proof. Indemnitee's right to indemnification shall
been enforceable by Indemnitee only in the state courts of the State of Delaware
and shall be enforceable notwithstanding any adverse Determination. In any such
action, if a prior adverse Determination has been made, the burden of proving
that indemnification is required under this Agreement shall be on Indemnitee.
The Company shall have the burden of proving that indemnification is not
required under this Agreement if no prior adverse Determination shall have been
made.
9.02 Costs And Expenses. In the event that any action is instituted
by Indemnitee under this Agreement, or to enforce or interpret any of the terms
of this Agreement, Indemnitee shall be entitled to be paid all court costs and
expenses, including reasonable counsel fees, incurred by Indemnitee with respect
to such action, unless the court determines that each of the material
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assertions made by Indemnitee as a basis for such action were not made in Good
Faith or were frivolous.
ARTICLE X
GENERAL PROVISIONS
10.01 Successors And Assigns. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee's agents, representatives, heirs, executors, personal
representatives and administrators.
10.02 Severability. If any provision or provisions of this Agreement
is determined by a court to be invalid, illegal or unenforceable for any reason
whatsoever, such provision shall be limited or modified in its application to
the minimum extent necessary to avoid a violation of law, and, as so limited or
modified, such provision and the balance of this Agreement shall be enforceable
in accordance with its terms.
10.03 Identical Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforce ability is
sought needs to be produced to evidence the existence of this Agreement.
10.04 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.
10.05 Modification and Waiver. No supplement, modification 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.
10.06 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed.
If to Indemnitee to: As shown with Indemnitee's signature below
If to the Company to: Centennial Specialty Foods Corporation
000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: J. Xxxxxxx Xxxxxx, C.E.O.
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.
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10.07 Governing Law. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware without application of the conflict of laws principles
thereof.
10.08 Consent to Jurisdiction. The Company and Indemnitee each
hereby irrevocably consent to the jurisdiction of the courts of the State of
Delaware for all purposes in connection with any Proceeding which arises out of
or relates to this Agreement, and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of Delaware.
10.09 Payments. Any payments becoming due hereunder for which no
time period for payment is expressly stated shall be paid within 30 days after
the date it becomes due.
10.10 Applicable Law. Notwithstanding any other provisions of this
Agreement, if applicable law in effect from time to time would provide
Indemnitee with greater indemnification than that provided by this Agreement,
the Company shall be obligated to provide Indemnitee with such greater
indemnification in accordance with such applicable law.
10.11 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties hereto in reference to all the
matters herein agreed upon. This Agreement replaces in full all prior
indemnification agreements or understandings of the parties hereto, and any and
all such prior agreements or understandings are hereby rescinded by mutual
agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
CENTENNIAL SPECIALTY FOODS CORPORATION
A Delaware corporation:
By:____________________________________
Name:__________________________________
Title:_________________________________
INDEMNITEE:
By:____________________________________
Print Name: ___________________________
Address:_______________________________
_______________________________
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