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EXHIBIT 10.24
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made and entered into as of the ____ day of ___________,
1996 and effective November 13, 1991 by and between XXXXXXX ENTERTAINMENT
COMPANY, a Delaware corporation (the "Company"), and the undersigned (the
"Indemnitee").
RECITALS
WHEREAS, it is essential to the Company that it attract and retain as
directors and officers the most capable persons available; and
WHEREAS, both the Company and the Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in the course of exercising their duties; and
WHEREAS, the Company and the Indemnitee are also aware of conditions in the
insurance industry that have affected the Company's ability to obtain adequate
directors' and officers' liability insurance coverage on an economically
acceptable basis;
WHEREAS, Section 145 of the Delaware General Corporation Law, Article X of
the Company's Certificate of Incorporation (the "Certificate of Incorporation")
and Article 52 of the Company's By-laws provide for the indemnification of the
Company's directors and officers under certain circumstances;
WHEREAS, the Company and the Indemnitee recognize the potential inadequacy
of the protection available to directors and officers under the Delaware General
Corporation Law, the Company's Certificate of Incorporation, the Company's
By-laws, and directors' and officers' liability insurance; and
WHEREAS, Section 145(f) of the Delaware General Corporation Law, the
Company's Certificate of Incorporation and the Company's By-laws specifically
provide that the indemnification provided thereunder is not exclusive and
contemplate that indemnification agreements may be entered into between the
Company and its directors and officers.
WHEREAS, in recognition of the Indemnitee's need for additional protection
against personal liability in order to enhance the Indemnitee's continued
service to the Company in an effective manner, and in order to induce the
Indemnitee to continue to provide services to the Company as a director or
officer thereof, the Company wishes to provide in this Agreement for the
indemnification of the Indemnitee to the fullest extent permitted by law and as
set forth in this Agreement;
NOW THEREFORE, in consideration of the foregoing, the covenants contained
herein and the Indemnitee's continued service to the Company, the Company and
the Indemnitee, intending to be legally bound, hereby agree as follows:
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Section 1. Definitions. The following terms, as used herein, shall have the
following respective meanings:
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings relative to the
foregoing.
"Change in Control" shall be deemed to have taken place if: (i) any person
or entity, including a "group" as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended ("Exchange Act") other than the Company or a
wholly-owned subsidiary thereof or any employee benefit plan of the Company or
any of its subsidiaries, becomes the beneficial owner of the Company's
securities having 40% or more of the combined voting power of the then
outstanding securities of the Company that may be cast for the election of
directors of the Company (other than as a result of an issuance of securities
initiated by the Company in the ordinary course of business); or (ii) as the
result of, or in connection with, any cash tender or exchange offer, merger or
other business combination, sale of substantially all of the assets or contested
election, or any combination of the foregoing transactions less than a majority
of the combined voting power of the then-outstanding securities of the Company
or any successor corporation or entity entitled to vote generally in the
election of the directors of the Company or such other corporation or entity
after such transaction is held in the aggregate by the holders of the Company's
securities entitled to vote generally in the election of directors of the
Company immediately prior to such transaction; or (iii) during any period of two
consecutive years, individuals who at the beginning of any such period
constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by the Company's stockholders, of each director of the Company
first elected during such period was approved by a vote of at least two-thirds
of the directors of the Company then still in office who were directors of the
Company at the beginning of any such period.
"Claim" means (a) any threatened, pending or completed action, suit,
proceeding or arbitration or other alternative dispute resolution mechanism, or
(b) any inquiry, hearing or investigation, whether conducted by the Company or
any other Person, that the Indemnitee in good faith believes might lead to the
institution of any such action, suit, proceeding or arbitration or other
alternative dispute resolution mechanism, in each case whether civil, criminal,
administrative or other (whether or not the claims or allegations therein are
groundless, false or fraudulent) and includes, without limitation, those brought
by or in the name of the Company or any director or officer of the Company.
"Company Agent" means any director, officer, partner, employee, agent,
trustee or fiduciary of the Company, any Subsidiary or any Other Enterprise.
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"Covered Event" means any event or occurrence on or after the effective
date of this Agreement related to the fact that the Indemnitee is or was a
Company Agent or related to anything done or not done by the Indemnitee in any
such capacity, and includes, without limitation, any such event or occurrence
(a) arising from performance of the responsibilities, obligations or duties
imposed by ERISA or any similar applicable provisions of state or common law, or
(b) arising from any merger, consolidation or other business combination
involving the Company, any Subsidiary or any Other Enterprise, including without
limitation any sale or other transfer of all or substantially all of the
business or assets of the Company, any Subsidiary or any Other Enterprise.
"Determination" means a determination made by (a) a majority vote of a
quorum of Disinterested Directors; (b) Independent Legal Counsel, in a written
opinion addressed to the Company and the Indemnitee; (c) the stockholders of the
Company; or (d) a decision by a court of competent jurisdiction which is not
subject to further appeal or not appealed in a timely manner.
"Disinterested Director" shall be a director of the Company who is not or
was not a party to the Claim giving rise to the subject matter of a
Determination.
"Expenses" includes attorneys' fees and all other costs, travel expenses,
fees of experts, transcript costs, filing fees, witness fees, telephone charges,
postage, copying costs, delivery service fees and other expenses and obligations
of any nature whatsoever paid or incurred in connection with investigating,
prosecuting or defending, being a witness in or participating in (including on
appeal), or preparing to prosecute or defend, be a witness in or participate in
any Claim, for which the Indemnitee is or becomes legally obligated to pay.
"Independent Legal Counsel" shall mean a law firm or a member of a law firm
that (a) neither is nor in the past five years has been retained to represent in
any material matter the Company, any Subsidiary, the Indemnitee or any other
party to the Claim, (b) under applicable standards of professional conduct then
prevailing would not have a conflict of interest in representing either the
Company or the Indemnitee in an action to determine the Indemnitee's rights to
indemnification under this Agreement and (c) is reasonably acceptable to the
Company and the Indemnitee.
"Loss" means any amount which the Indemnitee is legally obligated to pay as
a result of any Claim, including, without limitation (a) all judgments,
penalties and fines, and amounts paid or to be paid in settlement, (b) all
interest, assessments and other charges paid or payable in connection therewith
and (c) any federal, state, local or foreign taxes imposed (net of the value to
the Indemnitee of any tax benefits resulting from tax deductions or otherwise as
a result of the actual or deemed receipt of any payments under this Agreement,
including the creation of the Trust).
"Other Enterprise" means any corporation (other than the Company or any
Subsidiary), partnership, joint venture, association, employee benefit plan,
trust or other
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enterprise or organization to which the Indemnitee renders service at the
request of the Company or any Subsidiary.
"Parent" shall have the meaning set forth in the regulations of the
Securities and Exchange Commission under the Securities Act of 1933, as amended;
provided the term "Parent" shall not include the board of directors of a
corporation in its capacity as a board of directors, and provided further that
if the other party to any transaction referred to in Section 11.1.2 has no
Parent as so defined above, "Parent" shall mean such other party.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government (or any subdivision, department, commission or agency thereof), and
includes without limitation any "person", as such term is used in Sections 13(d)
and 14(d) of the Exchange Act.
"Potential Change in Control" shall be deemed to have occurred if (a) the
Company enters into an agreement or arrangement the consummation of which would
result in the occurrence of a Change in Control, (b) any Person (including the
Company) publicly announces an intention to take or to consider taking actions
which if consummated would constitute a Change in Control or (c) the Board of
Directors of the Company adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.
"Subsidiary" means any corporation of which more than 50% of the
outstanding stock having ordinary voting power to elect a majority of the board
of directors of such corporation is now or hereafter owned, directly or
indirectly, by the Company.
"Trust" has the meaning set forth in Section 8.2.
"Voting Securities" means any securities of the Company which vote
generally in the election of directors.
Section 2. Indemnification.
2.1. General Indemnity Obligation.
2.1.1. Subject to the remaining provisions of this Agreement,
the Company hereby indemnifies and holds the Indemnitee harmless for any Losses
or Expenses arising from any Claims relating to (or arising in whole or in part
out of) any Covered Event, including without limitation, any Claim the basis of
which is any actual or alleged breach of duty, neglect, error, misstatement,
misleading statement, omission or other act done or attempted by the Indemnitee
in the capacity as a Company Agent, whether or not the Indemnitee is acting or
serving in such capacity at the effective date of this Agreement, at the time
liability is incurred or at the time the Claim is initiated.
2.1.2. The obligations of the Company under this Agreement shall
apply to the fullest extent authorized or permitted by the provisions of
applicable law, as
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presently in effect or as changed after the effective date of this Agreement,
whether by statute or judicial decision (but, in the case of any subsequent
change, only to the extent that such change permits the Company to provide
broader indemnification than permitted prior to giving effect thereto).
2.1.3. The Indemnitee shall not be entitled to indemnification
pursuant to this Agreement in connection with any Claim initiated by the
Indemnitee against the Company or any director or officer of the Company, unless
the Company has joined in or consented to the initiation of such Claim;
provided, the provisions of this Section 2.1.3 shall not apply following a
Change in Control to Claims seeking enforcement of this Agreement, the Company's
Certificate of Incorporation the Company's By-laws or any other agreement now or
hereafter in effect relating to indemnification for Covered Events.
2.1.4. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the Losses
or Expenses paid with respect to a Claim but not, however, for the total amount
thereof, the Company shall nevertheless indemnify and hold the Indemnitee
harmless against the portion thereof to which the Indemnitee is entitled.
2.1.5. Notwithstanding any other provision of this Agreement, to
the extent that the Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating to (or arising in whole or in part out of)
a Covered Event or in defense of any issue or matter therein, including
dismissal without prejudice, the Company shall indemnify and hold the Indemnitee
harmless against all Expenses incurred in connection therewith.
2.2. Indemnification for Serving as Witness and Certain Other Claims.
Notwithstanding any other provision of this Agreement, the Company hereby
indemnifies and holds the Indemnitee harmless for all Expenses in connection
with (a) the preparation to serve or service as a witness in any Claim in which
the Indemnitee is not a party, if such actual or proposed service as a witness
arose by reason of the Indemnitee having served as a Company Agent on or after
the effective date of this Agreement and (b) any Claim initiated by the
Indemnitee on or after the effective date of this Agreement (i) for recovery
under any directors' and officers' liability insurance maintained by the Company
or (ii) following a Change in Control, for enforcement of the indemnification
obligations of the Company under this Agreement, the Company's Certificate of
Incorporation or Bylaws or any other agreement now or hereafter in effect
relating to indemnification for Covered Events, regardless of whether the
Indemnitee ultimately is determined to be entitled to such insurance recovery or
indemnification, as the case may be.
Section 3. Limitations on Indemnification.
3.1. Coverage Limitations. No indemnification is available pursuant
to the provisions of this Agreement:
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3.1.1. If such indemnification is not lawful;
3.1.2. If the Indemnitee's conduct giving rise to the Claim with
respect to which indemnification is requested was knowingly fraudulent, a
knowing violation of law, deliberately dishonest or in bad faith or constituted
willful misconduct;
3.1.3. In respect of any Claim based upon or attributable to the
Indemnitee's gaining any personal profit or advantage to which the Indemnitee
was not legally entitled;
3.1.4. In respect of any Claim for an accounting of profits made
from the purchase or sale by the Indemnitee of securities of the Company within
the meaning of Section 16(b) of the Exchange Act;
3.1.5. If the Indemnitee's conduct giving rise to the Claim with
respect to which indemnification is requested constituted a breach of the duty
of loyalty to the Company or its stockholders; or
3.1.6. In respect of any Claim based upon any violation of
Section 174 of the Delaware General Corporation Law, as amended.
3.2. No Duplication of Payments. The Company shall not be liable
under this Agreement to make any payment otherwise due and payable to the extent
the Indemnitee has otherwise actually received payment (whether under the
Company's Certificate of Incorporation, By-laws, any directors' and officers'
liability insurance or otherwise) of any amounts otherwise due and payable under
this Agreement.
Section 4. Payments and Determinations.
4.1. Advancement and Reimbursement of Expenses. If requested by the
Indemnitee, the Company shall advance to Indemnitee, no later than two business
days following any such request, any and all Expenses for which indemnification
is available under Section 2. In order to obtain such advancement or
reimbursement, the Indemnitee must also furnish to the Company a written
affirmation of his good faith belief that he has conducted himself in good faith
and that he reasonably believed that: (1) in the case of conduct in his official
capacity with the Company, that his conduct was in the Company's best interest;
and (2) in all other cases, that his conduct was at least not opposed to the
Company's best interests; and (3) in the case of any criminal action or
proceeding, he had no reasonable cause to believe his conduct was unlawful. In
addition, the Indemnitee must furnish to the Company a written undertaking,
executed personally or on his behalf, to repay the advance if it is ultimately
determined that he is not entitled to indemnification. Upon any Determination
that the Indemnitee is not permitted to be indemnified for any Expenses so
advanced, the Indemnitee hereby agrees to reimburse the Company (or, as
appropriate, any Trust established pursuant to Section 8.2) for all such amounts
previously paid. Such obligation of reimbursement shall be unsecured and no
interest shall be charged thereon.
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4.2. Payment and Determination Procedures.
4.2.1. To obtain indemnification under this Agreement, the
Indemnitee shall submit to the Company a written request, together with such
documentation and information as is reasonably available to the Indemnitee and
is reasonably necessary to determine whether and to what extent the Indemnitee
is entitled to indemnification. The Secretary of the Company shall, promptly
upon receipt of such a request for indemnification, advise the Board of
Directors in writing that the Indemnitee has requested indemnification.
4.2.2. Upon written request by the Indemnitee for
indemnification pursuant to Section 4.2.1, a Determination with respect to the
Indemnitee's entitlement to indemnification thereto shall be made in the
specific case (a) if a Change in Control shall have occurred, as provided in
Section 8.1; and (b) if a Change in Control shall not have occurred, by (i) the
Board of Directors by a majority vote of a quorum of Disinterested Directors,
(ii) Independent Legal Counsel, if either (A) a quorum of Disinterested
Directors is not obtainable or (B) a majority vote of a quorum of Disinterested
Directors otherwise so directs or (iii) the stockholders of the Company (if
submitted by the Board of Directors) but shares of stock owned by or voted under
the control of any Indemnitee who is at the time party to the proceeding may not
be voted. If a Determination is made that the Indemnitee is entitled to
indemnification, payment to the Indemnitee shall be made within 10 days after
such Determination.
4.2.3. If no Determination is made within 60 days after receipt
by the Company of a request for indemnification by the Indemnitee pursuant to
Section 4.2.1, a Determination shall be deemed to have been made that the
Indemnitee is entitled to the requested indemnification (and the Company shall
pay the related Losses and Expenses no later than 10 days after the expiration
of such 60-day period), except where such indemnification is not lawful;
provided, however, that (a) such 60-day period may be extended for a reasonable
time, not to exceed an additional 30 days, if the Person or Persons making the
Determination in good faith require such additional time for obtaining or
evaluating the documentation and information relating thereto; and (b) the
foregoing provisions of this Section 4.2.3 shall not apply (i) if the
Determination is to be made by the stockholders of the Company and if (A) within
15 days after receipt by the Company of the request by the Indemnitee pursuant
to Section 4.2.1 the Board of Directors has resolved to submit such
Determination to the stockholders at an annual meeting of the stockholders to be
held within 75 days after such receipt, and such Determination is made at such
annual meeting, or (B) a special meeting of stockholders is called within 15
days after such receipt for the purpose of making such Determination, such
meeting is held for such purpose within 60 days after having been so called and
such Determination is made at such special meeting, or (ii) if the Determination
is to be made by Independent Legal Counsel.
Section 5. Subrogation. In the event of any payment under this Agreement to
or on behalf of the Indemnitee, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of the Indemnitee against any
Person other than
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the Company or the Indemnitee in respect of the Claim giving rise to such
payment. The Indemnitee shall execute all papers reasonably required and shall
do everything reasonably necessary to secure such rights, including the
execution of such documents reasonably necessary to enable the Company
effectively to bring suit to enforce such rights and providing deposition or
oral testimony at trial.
Section 6. Notifications and Defense of Claims.
6.1. Notice by Indemnitee. The Indemnitee shall give notice in
writing to the Company as soon as practicable after the Indemnitee becomes aware
of any Claim with respect to which indemnification will or could be sought under
this Agreement; provided the failure of the Indemnitee to give such notice, or
any delay in giving such notice, shall not relieve the Company of its
obligations under this Agreement except to the extent the Company is actually
prejudiced by any such failure or delay.
6.2. Defense.
6.2.1. In the event any Claim relating to Covered Events is by
or in the right of the Company, the Indemnitee may, at the option of the
Indemnitee, either control the defense thereof or accept the defense provided;
provided, however, that the amounts expended by the Company shall be reimbursed
to the Company by the Indemnitee if the provisions of Section 145 of the
Delaware General Corporation Law so require.
6.2.2. In the event any Claim relating to Covered Events is
other than by or in the right of the Company, the Indemnitee may, at the option
of Indemnitee, either control the defense thereof or require the Company to
defend. In the event that the Indemnitee requires the Company to so defend, the
Company shall promptly undertake to defend any such Claim, at the Company's sole
cost and expense, utilizing counsel of the Indemnitee's choice who has been
approved by the Company. If appropriate, the Company shall have the right to
participate in the defense of any such Claim.
6.2.3. In the event the Company shall fail, as required by any
election by the Indemnitee pursuant to Section 6.2.2, to timely defend the
Indemnitee against any such Claim, the Indemnitee shall have the right to do so,
including without limitation, the right (notwithstanding Section 6.2.4) to make
any settlement thereof, and to recover from the Company, to the extent otherwise
permitted by this Agreement, all Expenses and Losses paid as a result thereof.
6.2.4. The Company shall have no obligation under this
Agreement with respect to any amounts paid or to be paid in settlement of any
Claim without the express prior written consent of the Company to any related
settlement. In no event shall the Company authorize any settlement imposing any
liability or other obligations on the Indemnitee without the express prior
written consent of the Indemnitee. Neither the Company nor the Indemnitee shall
unreasonably withhold consent to any proposed settlement.
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Section 7. Determinations and Related Matters.
7.1. Presumptions.
7.1.1. If a Change in Control shall have occurred, the
Indemnitee shall be entitled to a rebuttable presumption that the Indemnitee is
entitled to indemnification under this Agreement and the Company shall have the
burden of proof in rebutting such presumption.
7.1.2. The termination of any Claim by judgment, order,
settlement (whether with or without court approval), conviction, or upon a plea
of nolo contendere or its equivalent shall not adversely affect either the right
of the Indemnitee to indemnification under this Agreement or the presumptions to
which the Indemnitee is otherwise entitled pursuant to the provisions of this
Agreement nor create a presumption that the Indemnitee did not meet any
particular standard of conduct or have a particular belief or that a court has
determined that indemnification is not permitted by applicable law.
7.2. Appeals: Enforcement.
7.2.1. In the event that (a) a Determination is made that the
Indemnitee shall not be entitled to indemnification under this Agreement, (b)
any Determination to be made by Independent Legal Counsel is not made within 90
days of receipt by the Company of a request for indemnification pursuant to
Section 4.2.1 or (c) the Company fails to otherwise perform any of its
obligations under this Agreement (including, without limitation, its obligation
to make payments to the Indemnitee following any Determination made or deemed to
have been made that such payments are appropriate), the Indemnitee shall have
the right to commence a Claim in any court of competent jurisdiction, as
appropriate, to seek a Determination by the court, to challenge or appeal any
Determination which has been made, or to otherwise enforce this Agreement. If a
Change of Control shall have occurred, the Indemnitee shall have the option to
have any such Claim conducted by a single arbitrator pursuant to the rules of
the American Arbitration Association. Any such judicial proceeding challenging
or appealing any Determination shall be deemed to be conducted de novo and
without prejudice by reason of any prior Determination to the effect that the
Indemnitee is not entitled to indemnification under this Agreement. Any such
Claim shall be at the sole expense of the Indemnitee except as provided in
Section 8.3.
7.2.2. If a Determination shall have been made or deemed to
have been made pursuant to this Agreement that the Indemnitee is entitled to
indemnification, the Company shall be bound by such Determination in any
judicial proceeding or arbitration commenced pursuant to this Section 7.2,
except if such indemnification is unlawful.
7.2.3. The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 7.2 that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the
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provisions of this Agreement. The Company hereby consents to service of process
and to appear in any judicial or arbitration proceedings and shall not oppose
the Indemnitee's right to commence any such proceedings.
7.3. Procedures. The Indemnitee shall cooperate with the
Company and with any Person making any Determination with respect to any Claim
for which a request for indemnification under this Agreement has been made, as
the Company may reasonably require. The Indemnitee shall provide to the Company
or the Person making any Determination, upon reasonable advance request, any
documentation or information reasonably available to the Indemnitee and
necessary to (a) the Company with respect to any such Claim or (b) the Person
making any Determination with respect thereto.
Section 8. Change in Control Procedures.
8.1. Determinations. If there is a Change in Control, any
Determination to be made under Section 4 shall be made by Independent Legal
Counsel selected by the Indemnitee and approved by the Company, which approval
shall not be unreasonably withheld. The Company shall pay the reasonable fees of
the Independent Legal Counsel and indemnify fully such Independent Legal Counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or the engagement of
Independent Legal Counsel pursuant hereto.
8.2. Establishment of Trust. Following the occurrence of any
Potential Change in Control, the Company, upon receipt of a written request from
the Indemnitee, shall create a Trust (the "Trust") for the benefit of the
Indemnitee, the trustee of which shall be a bank or similar financial
institution with trust powers chosen by the Indemnitee. From time to time, upon
the written request of the Indemnitee, the Company shall fund the Trust in
amounts sufficient to satisfy any and all Losses and Expenses reasonably
anticipated at the time of each such request to be incurred by the Indemnitee
for which indemnification may be available under this Agreement. The amount or
amounts to be deposited in the Trust pursuant to the foregoing funding
obligation shall be determined by mutual agreement of the Indemnitee and the
Company or, if the Company and the Indemnitee are unable to reach such an
agreement or if, a Change in Control has occurred, by Independent Legal Counsel
(selected pursuant to Section 8.1). The terms of the Trust shall provide that,
except upon the prior written consent of the Indemnitee and the Company, (a) the
Trust shall not be revoked or the principal thereof invaded, other than to make
payments to unsatisfied judgment creditors of the Company if payment to such
judgement creditors cannot be made from any other source, (b) the Trust shall
continue to be funded by the Company in accordance with the funding obligations
set forth in this Section, (c) the Trustee shall promptly pay or advance to the
Indemnitee any amounts to which the Indemnitee shall be entitled pursuant to
this Agreement, and (d) all unexpended funds in the Trust shall revert to the
Company upon a Determination by Independent Legal Counsel (selected pursuant to
Section 8.1) or a court of competent jurisdiction that the Indemnitee has been
fully indemnified under the terms of this Agreement. All income earned on the
assets held in the trust shall be reported as income by the Company for federal,
state and local tax purposes.
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8.3. Expenses. Following any Change in Control, the Company
shall be liable for, and shall pay the Expenses paid or incurred by the
Indemnitee in connection with the making of any Determination (irrespective of
the determination as to the Indemnitee's entitlement to indemnification) or the
prosecution of any Claim pursuant to Section 7.2, and the Company hereby agrees
to indemnify and hold the Indemnitee harmless therefrom. If requested by counsel
for the Indemnitee, the Company shall promptly give such counsel an appropriate
written agreement with respect to the payment of its fees and expenses and such
other matters as may be reasonably requested by such counsel.
Section 9. Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company, any
Subsidiary, any Other Enterprise or any Affiliate of the Company against the
Indemnitee or the Indemnitee's spouse, heirs, executors, administrators or
personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, and any claim or cause of action of the
Company, any Subsidiary, any Other Enterprise or any Affiliate of the Company
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such two-year period; provided, however, that if any
shorter period of limitations, whether established by statute or judicial
decision, is otherwise applicable to any such cause of action, such shorter
period shall govern.
Section 10. Contribution. If the indemnification provisions of this
Agreement should be unenforceable under applicable law in whole or in part or
insufficient to hold the Indemnitee harmless in respect of any Losses and
Expenses incurred by the Indemnitee, then for purposes of this Section 10, the
Company shall be treated as if it were, or was threatened to be made, a party
defendant to the subject Claim and the Company shall contribute to the amounts
paid or payable by the Indemnitee as a result of such Losses and Expenses
incurred by the Indemnitee in such proportion as is appropriate to reflect the
relative benefits accruing to the Company on the one hand and the Indemnitee on
the other and the relative fault of the Company on the one hand and the
Indemnitee on the other in connection with such Claim, as well as any other
relevant equitable considerations. For purposes of this Section 10 the relative
benefit of the Company shall be deemed to be the benefits accruing to it and to
any Subsidiary, and other Enterprise, or any Affiliate of the Company and all of
their respective directors, officers, employees and agents (other than the
Indemnitee) on the one hand, as a group and treated as one entity, and the
relative benefit of the Indemnitee shall be deemed to be an amount not greater
than the Indemnitee's yearly base salary or the Indemnitee's compensation from
the Company during the first year in which the Covered Event forming the basis
for the subject Claim was alleged to have occurred. The relative fault shall be
determined by reference to, among other things, the fault of the Company and to
any Subsidiary, any other Enterprise, or any Affiliate of the Company and all of
their respective directors, officers, employees and agents (other than the
Indemnitee) on the one hand, as a group and treated as one entity, and the
Indemnitee's and such group's relative intent, knowledge, access to information
and opportunity to have altered or prevented the Covered Event forming the basis
for the subject Claim.
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Section 11. Miscellaneous Provisions.
11.1. Successors and Assigns. Etc.
11.1.1. This Agreement shall be binding upon and inure to the
benefit of (a) the Company, its successors and assigns (including any direct or
indirect successor by merger, consolidation or operation of law or by transfer
of all or substantially all of its assets) and (b) the Indemnitee and the heirs,
personal and legal representatives, executors, administrators or assigns of the
Indemnitee.
11.1.2. The Company shall not consummate any consolidation,
merger or other business combination, nor will it transfer 50% or more of its
assets (in one or a series of related transactions), unless the ultimate Parent
of the successor to the business or assets of the Company shall have first
executed an agreement, in form and substance satisfactory to the Indemnitee, to
expressly assume all obligations of the Company under this Agreement and agree
to perform this Agreement in accordance with its terms, in the same manner and
to the same extent that the Company would be required to perform this Agreement
if no such transaction had taken place; provided that, if the Parent is not the
Company, the legality of payment of indemnity by the Parent shall be determined
by reference to the fact that such indemnity is to be paid by the Parent rather
than the Company.
11.2. Severability. The provisions of this Agreement are severable.
If any provision of this Agreement shall be held by any court of competent
jurisdiction to be invalid, void or unenforceable, such provision shall be
deemed to be modified to the minimum extent necessary to avoid a violation of
law and, as so modified, such provision and the remaining provisions shall
remain valid and enforceable in accordance with their terms to the fullest
extent permitted by law.
11.3. Rights Not Exclusive: Continuation of Right of Indemnification.
Nothing in this Agreement shall be deemed to diminish or otherwise restrict the
Indemnitee's right to indemnification pursuant to any provision of the Company's
Certificate of Incorporation, By-laws, any agreement, vote of shareholders or
Disinterested Directors, applicable law or otherwise. This Agreement shall be
effective as of the effective date set forth above written and continue in
effect until no Claims relating to any Covered Event may be asserted against the
Indemnitee and until any Claims commenced prior thereto are finally terminated
and resolved, regardless of whether the Indemnitee continues to serve as a
director or officer of the Company, any Subsidiary or any Other Enterprise.
11.4. No Employment Agreement. Nothing contained in this Agreement
shall be construed as giving the Indemnitee any right to be retained in the
employ of the Company, any Subsidiary or any Other Enterprise.
11.5. Subsequent Amendment. No amendment, termination or repeal of any
provision of the Company's Certificate of Incorporation, or any respective
successor thereto, or of any relevant provision of any applicable law, shall
affect or diminish in any
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way the rights of the Indemnitee to indemnification, or the obligations of the
Company, arising under this Agreement, whether the alleged actions or conduct of
the Indemnitee giving rise to the necessity of such indemnification arose before
or after any such amendment, termination or repeal.
11.6. Notices. Notices required under this Agreement shall be given
in writing and shall be deemed given when delivered in person or sent by
certified or registered mail, return receipt requested, postage prepaid. Notices
shall be directed to the Company at Xxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx
00000, Attention: Secretary, and to the Indemnitee at (or such other address as
either party may designate in writing to the other).
11.7. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and performed in such state without giving effect
to the principles of conflict of laws.
11.8. Headings. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to discriminate part of
this Agreement or to affect the construction thereof.
11.9. Counterparts. This Agreement may be executed in any number of
counterparts all of which taken together shall constitute one instrument.
11.10. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by any
of the parties hereto. No waiver of this Agreement shall constitute, or be a
waiver of any other provisions hereof (whether or not similar) nor shall any
such waiver constitute a continuing waiver.
The parties hereto have caused this Agreement to be duly executed as of the
day and year first above written.
XXXXXXX ENTERTAINMENT COMPANY
By:_______________________________
Title:______________________________
INDEMNITEE
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