EXHIBIT 10.11
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into
as of January 18, 2000 by and between Surety Capital
Corporation, a Delaware corporation (the "Corporation"), and
_____________ ("Indemnitee").
WITNESSETH THAT:
WHEREAS, Indemnitee performs a valuable service for the
Corporation;
WHEREAS, the Board (as hereinafter defined) has adopted
Articles of Incorporation (the "Articles") and Bylaws (the
"Bylaws") providing for the indemnification of the officers and
directors of the Corporation to the maximum extent authorized by
applicable laws ("Law");
WHEREAS, pursuant to 12 USC 1828(k) of the Federal Deposit
Insurance Act ("FDIA") and the implementing regulations
thereunder, a bank holding company may only make or agree to
make indemnification payments to an officer or director of the
bank holding company with respect to a Federal Proceeding (as
hereinafter defined) that are reasonable and consistent with the
requirements of 12 USC 1828(k) of the FDIA and the implementing
regulations thereunder;
WHEREAS, the Articles, Bylaws and the Law, by their
nonexclusive nature, permit contracts between the Corporation
and the officers or directors of the Corporation with respect to
indemnification of such officers or directors;
WHEREAS, the Corporation has designated in its Bylaws the
law of the State of Delaware (the state in which the Corporation
is incorporated) as the body of law selected for making
indemnification payments to an officer or director of the
Corporation in all cases involving an administrative proceeding
or civil action other than a Federal Proceeding;
WHEREAS, in accordance with the authorization as provided
by the Law, the Corporation may purchase and maintain a policy
or policies of directors' and officers' liability insurance ("D
& O Insurance"), covering certain liabilities which may be
incurred by its officers or directors in the performance of
their obligations to the Corporation; and
WHEREAS, in order to induce Indemnitee to continue to serve
as an officer or director of the Corporation, the Corporation
has determined and agreed to enter into this Agreement with
Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's service as
an officer or director after the date hereof, the parties hereto
agree as follows:
1. Indemnity of Indemnitee. The Corporation hereby
agrees to hold harmless and indemnify Indemnitee to the full
extent authorized or permitted by the provisions of the Law, as such
may be amended from time to time, and Section 6.04 of the Bylaws, as
such may be amended. In furtherance of the foregoing indemnification,
and without limiting the generality thereof:
(a) Proceedings Other Than Proceedings by or in the
Right of the Corporation. Indemnitee shall be entitled to the
rights of indemnification provided in this Section 1(a) if, by
reason of his Corporate Status (as hereinafter defined), he 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 Corporation. 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 on
his behalf in connection with such Proceeding or any claim,
issue or matter therein, 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 Corporation and, with respect to any
criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
(b) Proceedings by or in the Right of the
Corporation. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 1(b) if, by reason of
his Corporate Status, he is, or is threatened to be made, a
party to or participant in any Proceeding brought by or in the
right of the Corporation. Pursuant to this Section 1(b),
Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred by him or on his behalf in connection
with such Proceeding 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 Corporation; provided, however, that, 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 Corporation 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 Corporate Status, a party to and is successful,
on the merits or otherwise, in any Proceeding, he shall be
indemnified to the maximum extent permitted by law against all
Expenses actually and reasonably incurred by him or on his
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 Corporation shall indemnify
Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection with each successfully
resolved claim, issue or matter. For purposes of this Section
1(c) 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 and Limitations on Indemnity. In
addition to, and without regard to any limitations on, the
indemnification provided for in Section 1, the Corporation 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 on his
behalf if, by reason of his Corporate Status, he 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
Corporation), including, without limitation, all liability
arising out of the negligence or active or passive wrongdoing of
Indemnitee. The only limitations that shall exist upon the
Corporation's obligations pursuant to this Agreement shall be
that the Corporation 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 under Delaware law, and with respect to a
Federal Proceeding only, that is not reasonable and consistent
with the requirements of 12 USC 1828(k) of the FDIA and the
implementing regulations thereunder.
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3. Contribution in the Event of Joint Liability.
(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 Corporation is jointly liable with Indemnitee (or
would be if joined in such action, suit or proceeding), the
Corporation 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 Corporation hereby waives and relinquishes any right of
contribution it may have against Indemnitee. The Corporation
shall not enter into any settlement of any action, suit or
proceeding in which the Corporation 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 Corporation 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
Corporation is jointly liable with Indemnitee (or would be if
joined in such action, suit or proceeding), the Corporation
shall contribute to the amount of expenses (including attorneys'
fees), 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 Corporation
and all officers, directors or employees of the Corporation
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 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 Corporation and all officers, directors or employees of the
Corporation 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,
in connection with the events that resulted in such expenses,
judgments, fines or settlement amounts, as well as any other
equitable considerations which the law may require to be
considered. The relative fault of the Corporation and all
officers, directors or employees of the Corporation 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.
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(c) The Corporation 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
Corporation other than Indemnitee who may be jointly liable with
Indemnitee.
4. Indemnification for Expenses of a Witness.
Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of his Corporate Status, a
witness in any Proceeding to which Indemnitee is not a party, he
shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection
therewith.
5. Advancement of Expenses. Notwithstanding any other
provision of this Agreement, the Corporation shall advance all
Expenses incurred by or on behalf of Indemnitee in connection
with any Proceeding by reason of Indemnitee's Corporate Status
within ten (10) days after the receipt by the Corporation 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 an
undertaking by or on behalf of Indemnitee (a) to repay any
Expenses advanced if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified against such
Expenses and (b) to repay, with respect to a Federal Proceeding
only, that portion of the advances which subsequently become a
Prohibited Indemnification Payment (as hereinafter defined).
Any advances and undertakings to repay pursuant to this Section
5 shall be unsecured and interest free. Notwithstanding the
foregoing, the obligation of the Corporation to advance Expenses
pursuant to this Section 5 shall be subject to the condition
that, if, when and to the extent that the Corporation determines
that Indemnitee would not be permitted to be indemnified under
applicable law, the Corporation shall be entitled to be
reimbursed, within thirty (30) days of such determination, by
Indemnitee (who hereby agrees to reimburse the Corporation) for
all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal
proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under
applicable law, any determination made by the Corporation that
Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding and Indemnitee shall not be
required to reimburse the Corporation for any advance of
Expenses until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed).
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 law and public policy
of the State of Delaware. Accordingly, the parties agree that
the following procedures and presumptions shall apply in the
event of any question as to whether Indemnitee is entitled to
indemnification under this Agreement:
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(a) To obtain indemnification (including, but not
limited to, the advancement of Expenses and contribution by the
Corporation) under this Agreement, Indemnitee shall submit to
the Corporation 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 Corporation shall,
promptly upon receipt of such a request for indemnification,
advise the Board in writing that Indemnitee has requested
indemnification.
(b) Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 6(a)
hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall be made in the
specific case by one of the following three methods, which shall
be at the election of Indemnitee: (1) by a majority vote of the
Disinterested Directors, even though less than a quorum, or (2)
by Independent Counsel (as hereinafter defined) in a written
opinion, or (3) by the stockholders.
(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 Independent Counsel shall
be selected by Indemnitee (unless Indemnitee shall request that
such selection be made by the Board). Indemnitee or the
Corporation, as the case may be, may, within ten (10) days after
such written notice of selection shall have been given, deliver
to the Corporation or to Indemnitee, as the case may be, 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 Corporation 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 Corporation or Indemnitee to the other'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. The Corporation 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 Corporation 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.
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(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
if Indemnitee has submitted a request for indemnification in
accordance with Section 6(a) of this Agreement. Anyone seeking
to overcome this presumption shall have the burden of proof and
the burden of persuasion, by clear and convincing evidence.
(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 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 reasonably believed to be
in or not opposed to the best interests of the Corporation.
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 thirty (30) days after receipt by the Corporation 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 thirty (30)
day period may be extended for a reasonable time, not to exceed
an additional fifteen (15) days, if the person, persons or
entity making the determination with respect to entitlement to
indemnification in good faith requires such additional time for
the obtaining or evaluating documentation and/or information
relating thereto; and provided, further, that the foregoing
provisions of this Section 6(f) 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 Corporation
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.
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(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 Corporation shall act reasonably and in good
faith in making a determination under the Agreement of the
Indemnitee's entitlement to indemnification. 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
Corporation (irrespective of the determination as to
Indemnitee's entitlement to indemnification) and the Corporation
hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(h) The Corporation 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
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) Anything herein to the contrary notwithstanding,
the determination with respect to entitlement by Indemnitee to
indemnification in connection with a Federal Proceeding shall be
subject to the following terms and conditions:
(1) the determination shall be made by the Board
in good faith and in writing after due investigation and
consideration that Indemnitee acted in good faith and in a
manner Indemnitee believed to be in the best interests of the
Corporation and that the payment will not materially adversely
affect the Corporation's safety and soundness;
(2) Indemnitee must agree in writing to reimburse
the Corporation for that portion of the advanced indemnification
payments which subsequently become Prohibited Indemnification
Payments (as hereinafter defined);
(3) Indemnitee shall not participate in any way
in the discussion and approval of such indemnification payments
by the Board, but Indemnitee may present Indemnitee's request to
the Board and respond to any inquiries from the Board concerning
Indemnitee's involvement in the circumstances giving rise to the
Federal Proceeding;
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(4) in the event that a majority of the members
of the Board are named as respondents in the Federal Proceeding
and request indemnification, the Disinterested Directors may
authorize Independent Counsel to review the indemnification
request and provide the Disinterested Directors with a written
opinion of counsel as to whether the conditions delineated in
Section 6(i) have been met and if Independent Counsel opines
that such conditions have been met, the Disinterested Directors
may rely on such opinion in authorizing the requested
indemnification;
(5) in the event that all of the members of the
Board are named as respondents in the Federal Proceeding and
request indemnification, the Board shall authorize Independent
Counsel to review the indemnification request and provide the
Board with a written opinion of counsel as to whether the
conditions delineated in Section 6(i) have been met and if
Independent Counsel opines that such conditions have been met,
the Board may rely on such opinion in authorizing the requested
indemnification; and
(6) to the extent not inconsistent with the terms
and provisions of this Section 6, the other terms and provisions
of this Agreement shall apply.
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 shall have been made pursuant to Section 6(b) of
this Agreement within ninety (90) days after receipt by the
Corporation of the request for indemnification, (iv) payment of
indemnification is not made pursuant to this Agreement within
ten (10) days after receipt by the Corporation 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 his entitlement to such
indemnification. Indemnitee shall commence such proceeding
seeking an adjudication within one hundred eighty (180) days
following the date on which Indemnitee first has the right to
commence such proceeding pursuant to this Section 7(a). The
Corporation 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 that 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 Corporation shall be bound by such
determination in any judicial proceeding commenced pursuant to
this Section 7, absent a prohibition of such indemnification
under applicable law.
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(d) In the event that Indemnitee, pursuant to this
Section 7, seeks a judicial adjudication of his rights under, or
to recover damages for breach of, this Agreement, or to recover
under any D & O Insurance policies maintained by the
Corporation, the Corporation shall pay on his 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 in such judicial adjudication,
regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of expenses or
insurance recovery.
(e) The Corporation 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 Corporation is bound by all the provisions of
this Agreement.
8. Non-Exclusivity; Survival of Rights; Insurance;
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 Articles, the Bylaws, any agreement, a vote of
stockholders or a resolution of directors, 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 Corporate Status prior to such
amendment, alteration or repeal. To the extent that a change in
the Law, whether by statute or judicial decision, permits
greater indemnification than would be afforded currently under
the 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 Corporation maintains an
insurance policy or policies providing liability insurance for
directors, officers, employees, or agents or fiduciaries of the
Corporation or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which
such person serves at the request of the Corporation, 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 such director, officer, employee or agent
under such policy or policies.
(c) In the event of any payment under this Agreement,
the Corporation shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, 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 Corporation to bring suit to enforce
such rights.
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(d) The Corporation 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.
9. Exception to Right of Indemnification.
Notwithstanding any other provision of this Agreement,
Indemnitee shall not be entitled to indemnification under this
Agreement with respect to any Proceeding brought by Indemnitee,
or any claim therein, unless (a) the bringing of such Proceeding
or making of such claim shall have been approved by the Board or
(b) such Proceeding is being brought by the Indemnitee to
assert, interpret or enforce his rights under this Agreement.
10. Duration of Agreement. All agreements and obligations
of the Corporation contained herein shall continue during the
period Indemnitee is an officer or director of the Corporation
(or is or was 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 so long as Indemnitee shall be subject to
any Proceeding (or any proceeding commenced under Section 7
hereof) by reason of his 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 Corporation), assigns, spouses, heirs, executors and
personal and legal representatives. This Agreement shall
continue in effect regardless of whether Indemnitee continues to
serve as an officer or director of the Corporation or any other
Enterprise at the Corporation's request.
11. Security. To the extent requested by the Indemnitee
and approved by the Board, the Corporation may at any time and
from time to time provide security to the Indemnitee for the
Corporation's obligations hereunder through an irrevocable bank
line of credit, funded trust or other collateral. Any such
security, once provided to the Indemnitee, may not be revoked or
released without the prior written consent of the Indemnitee.
12. 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 Indemnitee
to serve as an officer or director of the Corporation, and the
Corporation acknowledges that Indemnitee is relying upon this
Agreement in serving as an officer or director of the
Corporation.
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(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.
13. Definitions. For purposes of this Agreement:
(a) "Board" means the Board of Directors of the
Corporation.
(b) "Corporate Status" describes the status of a
person who is or was a director, officer, employee or agent or
fiduciary of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or
other enterprise which such person is or was serving at the
express written request of the Corporation.
(c) "Disinterested Director" means a director of the
Corporation who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee.
(d) "Enterprise" shall mean the Corporation and any
other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise of which Indemnitee is or was
serving at the express written request of the Corporation as a
director, officer, employee, agent or fiduciary.
(e) "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.
(f) "Federal Proceeding" means an administrative
proceeding or civil action initiated by a Federal banking
agency.
(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 Corporation or
Indemnitee in any matter material to either such party (other
than with respect to matters concerning the 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 Corporation or Indemnitee
in an action to determine Indemnitee's rights under this
Agreement. The Corporation 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.
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(h) "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 Corporation 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 the fact that Indemnitee
is or was a director of the Corporation, by reason of any action
taken by him or of any inaction on his part while acting as an
officer or director of the Corporation, or by reason of the fact
that he is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other Enterprise; 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; and
excluding one initiated by an Indemnitee pursuant to Section 7
of this Agreement to enforce his rights under this Agreement.
(i) "Prohibited Indemnification Payment" means any
payment by the Corporation for the benefit of Indemnitee to pay
or reimburse Indemnitee for any civil monetary payment or
judgment resulting from any Federal Proceeding or any other
Expense with regard to any Federal Proceeding which results in a
final order or settlement pursuant to which Indemnitee: (a) is
assessed a civil money penalty; (b) is removed from office or
prohibited from participating in the conduct of the affairs of
the Corporation; or (c) is required to cease and desist from or
take any affirmative action described in Section 8(b) of the
FDIA with respect to the Corporation. The term "Prohibited
Indemnification Payment" does not include any reasonable payment
by the Corporation which is used to purchase any commercial
insurance policy or fidelity bond, provided that such insurance
policy or bond shall not be used to pay or reimburse Indemnitee
for the cost of any judgment or civil money penalty assessed
against Indemnitee in a Federal Proceeding, but may pay any
legal or professional expenses incurred in connection with such
a Federal Proceeding or the amount of any restitution to the
Corporation or a receiver. Additionally, the term "Prohibited
Indemnification Payment" does not include any reasonable payment
by the Corporation that represents partial indemnification for
legal or professional expenses specifically attributable to
particular charges for which there has been a formal and final
adjudication or finding in connection with a settlement that
Indemnitee has not violated certain banking laws or regulations
or has not engaged in certain unsafe or unsound banking
practices or breaches of fiduciary duty, unless the Federal
Proceeding has resulted in a final prohibition order against
Indemnitee.
14. Severability. If any provision or provisions of this
Agreement shall be held by a court of competent jurisdiction to
be invalid, void, illegal or otherwise unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability
of the remaining provisions of this Agreement (including without
limitation, each portion of any section of this Agreement
containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired
thereby and shall remain enforceable to the fullest extent
permitted by law; and (b) to the fullest extent possible, the
provisions of this Agreement (including, without limitation,
each portion of any section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable,
that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.
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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 Corporation in writing upon being served with 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 Corporation shall not relieve the Corporation of
any obligation which it may have to the Indemnitee under this
Agreement or otherwise unless and only to the extent that such
failure or delay materially prejudices the Corporation.
17. 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 mail with
postage prepaid, on the third business day after the date on
which it is so mailed:
(a) If to Indemnitee, to the address set forth below
Indemnitee's signature hereto.
(b) If to the Corporation, to:
Surety Capital Corporation
Attention: Chairman of the Board
0000 Xxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
or to such other address as may have been furnished to
Indemnitee by the Corporation or to the Corporation by
Indemnitee, as the case may be.
18. 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 enforceability
is sought needs to be produced to evidence the existence of this
Agreement.
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. 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.
21. Gender. Use of the masculine pronoun shall be deemed
to include usage of the feminine pronoun where appropriate.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the day and year first above written.
CORPORATION: SURETY CAPITAL CORPORATION
By:_______________________________
INDEMNITEE:
__________________________________
Address:
__________________________________
__________________________________
