M2DIRECT, INC.
DIRECTOR'S AND OFFICER'S
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of _______________________ 1999, between
M2Direct, Inc., a Georgia corporation (the "Corporation"), and the member of the
Board of Directors and/or the officer of the Corporation named on the signature
page hereof (the "Executive").
WHEREAS, the Executive is a member of the Board of Directors and/or an
officer of the Corporation and in such capacity is performing a valuable service
to the Corporation; and
WHEREAS, the Corporation's Bylaws (the "Bylaws") and Sections 14-2-850
through 14-2-859 of the Georgia Business Corporation Code, as amended to date
(the "State Statute") provide for the indemnification of the directors and
officers of the Corporation; and
WHEREAS, the Bylaws and State Statute specifically contemplate that
contracts may be entered into between the Corporation and the members of its
Board of Directors and officers with respect to indemnification of such
directors and officers; and
WHEREAS, in order to provide to the Executive assurances with respect to
the protection provided against liabilities that he may incur in the performance
of his duties to the Corporation, and to thereby induce the Executive to serve
as a member of its Board of Directors and/or as an officer of the Corporation,
the Corporation has determined and agreed to enter into this contract with the
Executive.
NOW, THEREFORE, in consideration of the premises and the Executive's
continued service as a director and/or an officer after the date hereof, the
parties agree as follows:
1. Indemnification. Subject only to the exclusions set forth in Section
2 hereof, and in addition to any other indemnity to which the Executive may be
entitled under the State Statute or any bylaw, resolution or agreement (but
without duplication of payments with respect to indemnified amounts), the
Corporation hereby further agrees to hold harmless and indemnify the Executive,
to the fullest extent permitted by law, including, but not limited to, holding
harmless and indemnifying the Executive against any and all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by the Executive in connection with any threatened, pending,
or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (including an action by or in the right of the
Corporation), to which the Executive is, was, or at any time becomes a party, or
is threatened to be made a party, by reason of the fact that the Executive is,
was, or at any time becomes a director, officer, employee or agent of the
Corporation, or a predecessor corporation, or is or was serving or at any time
serves at the request of the Corporation as a director, officer, partner,
trustee, employee, or agent of another corporation, partnership, employee
benefit plan, joint
venture, trust, or other enterprise.
2. Limitations on Indemnity. No indemnity pursuant to Section 1 hereof
shall be paid by the Corporation:
(a) with respect to any proceeding in which the Executive
is adjudged, by final judgment not subject to further appeal,
liable to the Corporation or is subjected to injunctive relief in
favor of the Corporation:
(i) for any appropriation, in violation of his duties, of any
business opportunity of the Corporation;
(ii) for acts or omissions which involve intentional
misconduct or a knowing violation of law;
(iii) for the types of liability set forth in Section 14-2-832
of the Georgia Business Corporation Code; or
(iv) for any transaction from which the Executive received an
improper personal benefit;
(b) with respect to any suit in which final judgment is rendered
against the Executive for an accounting of profits, made from the
purchase or sale by the Executive of securities of the
Corporation, pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 or similar provisions of any
federal, state, or local statutory law, or on account of any
payment by the Executive to the Corporation in respect of any
claim for such an accounting; or
(c) if a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
3. Contribution. If the indemnification provided in Section 1 is
unavailable, then in respect of any threatened, pending, or completed action,
suit, or proceeding in which the Corporation is jointly liable with the
Executive (or would be if joined in such action, suit or proceeding), the
Corporation shall contribute, to the extent it is not lawfully prevented from
doing so, to the amount of expenses, judgments, fines, and settlements paid or
payable by the Executive in such proportion as is appropriate to reflect (i) the
relative benefits received by the Corporation on the one hand and the Executive
on the other hand from the transaction from which such action, suit, or
proceeding arose, and (ii) the relative fault of the Corporation on the one hand
and of the Executive on the other in connection with the events which resulted
in such expenses, judgments, fines, or settlement amounts, as well as any other
relevant equitable considerations. The relative fault of the Corporation on the
one hand and of the Executive on the other shall be determined by reference to,
among other things, the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent the circumstances resulting
in such expenses, judgments, fines, or settlement amounts. The Corporation
agrees that it would not be just and equitable if
contribution pursuant to this Section 3 were determined by pro rata allocation
or any other method of allocation that does not take account of the foregoing
equitable considerations.
4. Continuation of Obligations. All agreements and obligations of the
Corporation contained herein shall continue during the period the Executive is a
director, officer, employee, or agent of the Corporation (or is serving at the
request of the Corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise) and shall
continue thereafter for so long as the Executive shall be subject to any
possible claim or threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, or investigative, by reason of the fact that the
Executive was a director of the Corporation or serving in any other capacity
referred to herein.
5. Notification and Defense of Claim. Promptly after receipt by the
Executive of notice of the commencement of any action, suit, or proceeding, the
Executive will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation in writing of the
commencement thereof, but the omission to so notify the Corporation will not
relieve the Corporation from any liability which it may have to the Executive
otherwise than under this Agreement. With respect to any such action, suit, or
proceeding as to which the Executive so notifies the Corporation:
(a) the Corporation will be entitled to participate therein at its
own expense; and
(b) subject to Section 6 hereof, and if the Executive shall have
provided his written affirmation of his good faith belief that
his conduct did not constitute behavior of the kind described in
paragraph 2(a) hereof and that he is entitled to indemnification
hereunder, the Corporation may assume the defense thereof.
After notice from the Corporation to the Executive of its election so to
assume such defense, the Corporation will not be liable to the Executive under
this Agreement for any legal or other expenses subsequently incurred by the
Executive in connection with the defense thereof, other than reasonable costs of
investigation or as otherwise provided below. The Executive shall have the right
to employ his separate counsel in such action, suit, or proceeding, but the fees
and expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the Executive
unless (i) the employment of counsel by the Executive has been authorized by the
Corporation, (ii) counsel designated by the Corporation to conduct such defense
shall not be reasonably satisfactory to the Executive, or (iii) the Corporation
shall not in fact have employed counsel to assume the defense of such action, in
each of which cases the fees and expenses of such counsel shall be at the
expense of the Corporation. For the purposes of clause (ii) above, the Executive
shall be entitled to determine that counsel designated by the Corporation is not
reasonably satisfactory if, among other reasons, the Executive shall have been
advised by qualified counsel that, because of actual or potential conflicts of
interest in the matter between the Executive, other officers or directors
similarly indemnified by the Corporation, and/or the Corporation, representation
of the Executive by counsel designated by the Corporation is likely to
materially and adversely affect the Executive's
interest or would not be permissible under applicable canons of legal ethics.
The Corporation shall not be liable to indemnify the Executive under this
Agreement for any amounts paid in settlement of any action or claim effected
without the Corporation's written consent. The Corporation shall not settle any
action or claim in any manner which would impose any penalty or limitation on
the Executive without the Executive's written consent. Neither the Corporation
nor the Executive will unreasonably withhold consent to any proposed settlement.
6. Advancement and Repayment of Expenses. Upon request therefor
accompanied by reasonably itemized evidence of expenses incurred, and by the
Executive's written affirmation of his good faith belief that his conduct met
the standard applicable to indemnification pursuant to Section 1 hereof and did
not constitute behavior of the kind described in Section 2(a) hereof and that he
is entitled to indemnification hereunder, the Corporation shall advance to the
Executive the reasonable expenses (including attorneys' fees and costs of
investigation and defense (including the fees of expert witnesses, other
professional advisors, and private investigators)) incurred by him in defending
any civil or criminal suit, action, or proceeding for which the Executive is
entitled (assuming an applicable standard of conduct is met) to indemnification
pursuant to this Agreement. The Executive agrees to reimburse the Corporation
for all reasonable expenses paid by the Corporation, whether pursuant to this
Section or Section 5 hereof, in defending any action, suit, or proceeding
against the Executive in the event and to the extent that it shall ultimately be
determined that the Executive is not entitled to be indemnified by the
Corporation for such expenses under this Agreement. Any advances and the
Executive's agreement to repay shall be unsecured and interest-free.
7. Enforcement.
(a) The Corporation expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on
it hereby in order to induce the Executive to serve as a director
of the Corporation and acknowledges that the Executive will in the
future be relying upon this Agreement in continuing to serve in
such capacity.
(b) In the event the Executive is required to bring any action to
enforce rights or to collect moneys due under this Agreement and
is successful in such action, the Corporation shall reimburse the
Executive for all of the Executive's reasonable fees and expenses
in bringing and pursuing such action.
8. Separability. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable in whole or in part for any
reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.
9. Governing Law; Successors; Amendment and Termination.
(a) This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Georgia, without regard to its
conflict of law principles.
(b) This Agreement shall be binding upon the Executive and the
Corporation and its successors and assigns (including any
transferee of all or substantially all of its assets and any
successor by merger or otherwise by operation of law), and shall
inure to the benefit of the Executive, his heirs, personal
representatives, and assigns and to the benefit of the Corporation
and its successors and assigns.
(c) No amendment, modification, termination, or cancellation of
this Agreement shall be effective unless in writing signed by both
parties hereto.
(d) References to the male gender shall include the female gender,
and vice versa.
[Signatures appear on following page.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in
counterparts or otherwise, as of the day and year first above written.
EXECUTIVE M2DIRECT, INC.
By:
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Name: Name (Print):
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Title:
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