OH&S DRAFT
12/10/96
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement") is made as of the
____ day of December, 1996, by and between Aramex International Limited, a
Bermuda corporation (the "Company") and Xxxx Xxxxxxxx ("Indemnitee").
W I T N E S S E T H:
WHEREAS, the Company has been advised that there can be no assurance
that directors' and officers' liability insurance will continue to be available
to the Company and Indemnitee, and believes that it is possible that the cost of
such insurance, if obtainable, may not be acceptable to the Company; and
WHEREAS, the Company and the Indemnitee recognize the substantial
increase in corporate litigation in general, subjecting officers and directors
to expensive litigation risks; and
WHEREAS, Indemnitee is unwilling to serve, or continue to serve, the
Company or any of its subsidiaries or affiliated companies as an officer and/or
director without assurances that adequate liability insurance, indemnification
or a combination thereof is, and will continue to be, provided; and
WHEREAS, the Company, in order to induce Indemnitee to serve or to
continue to serve the Company or any of its subsidiaries or affiliated
companies has agreed to provide Indemnitee with the benefits contemplated by
this Agreement; and
WHEREAS, as a result of the provision of such benefits, Indemnitee has
agreed to serve or to continue to serve as an officer and/or director of the
Company or any of its subsidiaries or affiliated companies.
NOW, THEREFORE, in consideration of the promises, conditions,
representations and warranties set forth herein, the Company and Indemnitee
hereby agree as follows:
1. DEFINITIONS. The following terms, as used herein, shall have the
following respective meanings:
"Covered Amount" means Losses and Expenses which, in type or amount,
are not insured under any directors' and officers' liability insurance
maintained by the Company from time to time.
"Covered Act" means any past, present or future breach of duty, neglect,
error, misstatement, misleading statement, omission or other act done or
wrongfully attempted by Indemnitee or any of the foregoing alleged by any
claimant or any claim against Indemnitee by reason of him at any time being
a director or officer or other agent of the Company or any of its
subsidiaries or affiliated companies or a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise at the request of the Company.
"Determination" means a determination, based on the facts known at the
time, made by:
(i) An award of a neutral arbitrator selected by the parties; or
(ii) A final adjudication by a court of competent jurisdiction.
"Determined" shall have a correlative meaning.
"Excluded Claim" means any payment for Losses or Expenses in
connection with any claim:
(i) Based upon or attributable to Indemnitee gaining in fact any
personal profit or advantage to which Indemnitee is not
entitled; or
(ii) 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 U.S. Securities Exchange Act
of 1934 as amended, or similar provisions of any applicable
law; or
(iii) Resulting from Indemnitee's knowingly fraudulent,
deliberately dishonest or willful misconduct unless
Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best
interests of the Company as determined by (i) the Board of
Directors of the Company by majority vote of a quorum
consisting of directors who were not parties to the
proceeding for which indemnification is sought, (ii) if a
quorum of disinterested directors so directs or if such
quorum is not obtainable, by independent legal counsel in a
written opinion, or (iii) by a vote of the holders of a
2
majority of the Company's common stock, excluding the shares
held by Indemnitee; or
(iv) The payment of which by the Company under this Agreement is
not permitted by applicable law; or
(v) Which are not within the Covered Amount, i.e., which are
insured in type and amount under any directors' and
officers' liability insurance maintained by the Company from
time to time.
"Expenses" means any reasonable expenses incurred by Indemnitee as a
result of a claim or claims made or threatened against him for Covered
Acts including, without limitation, counsel fees and costs of
investigative, judicial or administrative proceedings (including an
action by or in the right of the Company), whether civil or criminal,
or appeals and costs of attachment or similar bonds.
"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, judgments, fines and other
sums paid in settlement of a claim or claims.
2. INDEMNIFICATION. The Company shall indemnify, defend Indemnitee
and hold him harmless from the Covered Amount of any and all Losses and Expenses
subject, in each case, to the further provisions of this Agreement.
3. EXCLUDED COVERAGE. The Company shall have no obligation to
indemnify Indemnitee for and defend and hold him harmless from any Loss or
Expense which has been Determined to constitute an Excluded Claim.
4. INDEMNIFICATION PROCEDURES.
(a) Promptly after receipt by Indemnitee of notice of the
commencement of or the threat of commencement of any action, suit or proceeding,
Indemnitee shall, if indemnification with respect thereto may be sought from the
Company under this Agreement, notify the Company of the commencement thereof.
(b) If, at the time of the receipt of such notice, the Company
has directors' and officers' liability insurance in effect, the Company shall
give prompt notice of the commencement of such action, suit or 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 action, suit or proceeding in
accordance with the terms of such policies.
3
(c) To the extent the Company does not, at the time of the
commencement of or the threat of commencement of such action, suit or
proceeding, have applicable directors' and officers' liability insurance, or if
a Determination is made that any Expenses arising out of such action, suit or
proceeding will not be payable under the directors' and officers' liability
insurance then in effect, the Company shall be obligated to pay the Expenses of
any such action, suit or proceeding in advance of the final disposition thereof;
and the Company, if appropriate, shall be entitled to assume the defense of such
action, suit or 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
action, suit or 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, PROVIDED FURTHER THAT if (i) the employment of
counsel by Indemnitee has been previously authorized by the Company, (ii)
Indemnitee shall have reasonably concluded, based upon a written opinion of
independent legal counsel, that there may be a conflict of interest between the
Company and Indemnitee in the conduct of any such defense, (iii) the Company
shall not, in fact, have employed counsel to assume the defense of such action,
or (iv) Indemnitee necessarily had to consult with counsel or counsel had to act
on Indemnitee's behalf prior to the time that Company-retained outside counsel
was able to act, in each of which cases the fees and expenses of counsel shall
be at the expense of the Company. The Company will not be entitled to assume
the defense of any such action, suit or proceedings brought by or on behalf of
the Company or as to which Indemnitee shall have made the conclusion described
in (ii) above.
(d) 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, PROVIDED THAT all payments on account of the
Company's obligations to pay Expenses under Paragraph 4(c) of this Agreement
prior to the final disposition of an action, suit or proceeding shall be made
within ten (10) days of Indemnitee's written request therefor and such
obligation shall not be subject to any such Determination but shall be subject
to Paragraph 4(e) of this Agreement.
(E) INDEMNITEE AGREES THAT HE WILL REIMBURSE THE COMPANY FOR ALL
LOSSES AND EXPENSES PAID BY THE COMPANY IN CONNECTION WITH ANY ACTION, SUIT OR
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 OR BY
FINAL AND BINDING ARBITRATION FROM WHICH THERE IS NO FURTHER RIGHT OF APPEAL
THAT THE INDEMNITEE IS NOT ENTITLED TO BE INDEMNIFIED BY THE COMPANY FOR SUCH
EXPENSES IN RESPECT OF FRAUD OR DISHONESTY.
4
5. SETTLEMENT. The Company shall have no obligation to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any
action, suit or proceeding effected without the Company's prior written consent.
The Company shall not settle any claim in any manner which would impose any
obligation on Indemnitee without Indemnitee's written consent. Neither the
Company nor Indemnitee shall unreasonably withhold or delay their consent to any
proposed settlement.
6. RIGHTS NOT EXCLUSIVE. The rights provided hereunder shall not be
deemed exclusive of any other rights to which the Indemnitee may be entitled
under any byelaw, 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 the Indemnitee
ceases to serve the Company as an officer and/or director.
7. ENFORCEMENT.
(a) In any action for indemnification, the burden of proving
that indemnification is not required under this Agreement shall be on the
Company.
(b) 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 and arbitrator's
costs and expenses, including reasonable counsel fees, incurred by Indemnitee
with respect to such action, unless the court or an arbitrator determines that
each of the material assertions made by Indemnitee as a basis for such action
were not made in good faith or were frivolous.
(c) Indemnitee may elect to submit any action under this
Agreement to final and binding arbitration. Any reference to arbitration herein
shall include the rights of the parties to move to vacate or confirm an
arbitrator's award under Bermuda law.
8. SEVERABILITY. In the event that any provision of this Agreement
is determined by a court to require the Company to do or to fail to do any act
which is in violation of applicable law, 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 their terms.
9. CHOICE OF LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of Bermuda.
10. CONTINUATION OF INDEMNIFICATION. All agreements and obligations
of the Company contained herein shall continue during the period that Indemnitee
is an officer, and/or director or other Agent of the Company (or is or was
serving at the request of the Company 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
5
subject to any possible Loss or Expense by reason of the fact that Indemnitee
was an officer and/or director of the Company or serving in any other capacity
referred to above.
11. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents and take all actions
reasonably requested by the Company to implement such right of subrogation.
12. SUCCESSOR AND ASSIGNS. This Agreement shall be (i) binding upon
all successors and assigns of the Company (including any transferee of all or
substantially all of its assets and any successor by merger or otherwise by
operation of law), and (ii) shall be binding on and inure to the benefit of the
heirs, personal representatives and estate of Indemnitee. In the event that the
Company or any of its assets are sold or in the event that Company is merged
with any other entity, the Company shall insure that a term and condition of the
sale or merger shall be that all of Company's obligations under this Agreement
shall be assumed by the buyer or successor.
13. AMENDMENT. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless made in writing signed
by each of the parties hereto.
14. AUTHORIZATION AND APPROVAL. The Company confirms and agrees that
it has entered into this Agreement and assumed the obligations imposed on it
under this Agreement to induce Indemnitee to continue as a director and/or
officer of the Company, and acknowledges that Indemnitee is relying upon the
full enforcement and binding nature of this Agreement in continuing in such
capacity. The Company represents and warrants to Indemnitee that all requisite
corporate action has or will be taken promptly to authorize and approve this
Agreement, including obtaining Board and/or shareholder approval of this
Agreement.
IN WITNESS WHEREOF, the Company and Indemnitee have executed this
Agreement as of the day and year first above written.
ARAMEX INTERNATIONAL LIMITED
By: _______________________________
Title:
INDEMNITEE
___________________________________
6
