Exhibit 10.7
EDGE PETROLEUM CORPORATION
INDEMNIFICATION AGREEMENT
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This Indemnification Agreement (this "Agreement"), made and entered
into as of the ____ day of __________, 1997 by and between Edge Petroleum
Corporation, a Delaware corporation (the "Corporation"), and
___________________________________ ("Indemnitee"),
W I T N E S S E T H:
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WHEREAS, Indemnitee is currently serving or is about to begin serving
as a director and/or officer of the Corporation and/or in another Corporate
Status, and Indemnitee is willing, subject to, among other things, the
Corporation's execution and performance of this Agreement, to continue in or
assume such capacity or capacities; and
WHEREAS, the Bylaws of the Corporation provide that the Corporation
shall indemnify and advance expense to all directors and officers of the
Corporation in the manner set forth therein and to the fullest extent permitted
by applicable law, and to such greater extent as applicable law may thereafter
permit, and the Corporation's Certificate of Incorporation provides for
limitation of liability for directors; and
WHEREAS, in order to induce Indemnitee to provide services as
contemplated hereby, the Corporation has deemed it to be in its best interest to
enter into this Agreement with Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's agreement to provide
services to the Corporation and/or certain of its affiliates as contemplated
hereby, the mutual agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto stipulate and agree as follows:
ARTICLE I
Certain Definitions
-------------------
As used herein, the following words and terms shall have the following
respective meanings (whether singular or plural):
"Change of Control" means a change in control of the Corporation after
both the date of the closing of the initial public offering (the "IPO") of the
Corporation's Common Stock to the
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public for cash that has been registered on a registration statement that has
been filed with and declared effective by the Securities and Exchange Commission
and after the date Indemnitee acquired his Corporate Status, which shall be
deemed to have occurred in any one of the following circumstances occurring
after such date: (i) there shall have occurred an event required to be reported
with respect to the Corporation in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item or any similar schedule or
form) promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether or not the Corporation is then subject to such
reporting requirement; (ii) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) shall have become the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 40% or more of the combined voting
power of the Corporation's then outstanding voting securities without prior
approval of at least two-thirds of the members of the Board of Directors in
office immediately prior to such person attaining such percentage interest;
(iii) the Corporation is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of which members of
the Board of Directors in office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors thereafter; or (iv)
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors (including, for this purpose, any
new director whose election or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board of Directors.
"Corporate Status" describes the status of Indemnitee as a director,
officer, employee, agent or fiduciary of the Corporation or of any other
corporation, partnership, limited liability company, association, joint venture,
trust, employee benefit plan or other enterprise that Indemnitee is or was
serving at the request of the Corporation.
"Court" means the Court of Chancery of the State of Delaware or any
other court of competent jurisdiction.
"DGCL" means the Delaware General Corporation Law.
"Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a witness in a
Proceeding.
"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 five years previous to his selection or appointment has been, retained to
represent: (i) the Corporation or Indemnitee in any matter material to either
such party or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder.
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"Matter" is a claim, a material issue or a substantial request for
relief.
"Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except one
initiated by Indemnitee pursuant to Section 6.1 of this Agreement to enforce his
rights under this Agreement.
ARTICLE II
Services by Indemnitee
----------------------
Section 2.1. Services by Indemnitee. Indemnitee agrees to serve or
continue to serve in his current capacity or capacities as a director, officer,
employee, agent or fiduciary of the Corporation. Indemnitee also agrees to
serve, as the Corporation may request from time to time, as a director, officer,
employee, agent or fiduciary of any other corporation, partnership, limited
liability company, association, joint venture, trust or other enterprise in
which the Corporation has an interest. Indemnitee and the Corporation each
acknowledge that they have entered into this Agreement as a means of inducing
Indemnitee to serve the Corporation in such capacities. Indemnitee may at any
time and for any reason resign from such position or positions (subject to any
other contractual obligation or any obligation imposed by operation of law).
The Corporation shall have no obligation under this Agreement to continue
Indemnitee in any such position for any period of time and shall not be
precluded by the provisions of this Agreement from removing Indemnitee from any
such position at any time.
ARTICLE III
Indemnification
---------------
Section 3.1. General. The Corporation shall, to the fullest extent
permitted by applicable law in effect on the date hereof, and to such greater
extent as applicable law may thereafter permit, indemnify and hold Indemnitee
harmless from and against any and all losses, liabilities, claims, damages and,
subject to Section 3.2, Expenses (as this and all other capitalized words are
defined in Article I of this Agreement), whatsoever arising out of any event or
occurrence related to the fact that Indemnitee is or was a director or officer
of the Corporation or is or was serving in another Corporate Status.
Section 3.2. Expenses. If 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 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 any Matter in such Proceeding, the Corporation shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf relating to such Matter. The termination of any Matter in such a
Proceeding by dismissal, with or without prejudice, shall be
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deemed to be a successful result as to such Matter. To the extent that the
Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding,
he shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith.
ARTICLE IV
Advancement of Expenses
-----------------------
Section 4.1. Advances. In the event of any threatened or pending
action, suit or proceeding in which Indemnitee is a party or is involved and
that may give rise to a right of indemnification under this Agreement, following
written request to the Corporation by Indemnitee, the Corporation shall promptly
pay to Indemnitee amounts to cover expenses reasonably incurred by Indemnitee in
such proceeding in advance of its final disposition upon the receipt by the
Corporation of (i) a written undertaking executed by or on behalf of Indemnitee
providing that Indemnitee will repay the advance if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Corporation
as provided in this Agreement and (ii) satisfactory evidence as to the amount of
such expenses.
Section 4.2. Repayment of Advances or Other Expenses. Indemnitee
agrees that Indemnitee shall reimburse the Corporation for all expenses paid by
the Corporation in defending any civil, criminal, administrative or
investigative action, suit or proceeding against Indemnitee in the event and
only to the extent that it shall be determined pursuant to the provisions of
this Agreement or by final judgment or other final adjudication under the
provisions of any applicable law that Indemnitee is not entitled to be
indemnified by the Corporation for such expenses.
ARTICLE V
Procedure for Determination of Entitlement
------------------------------------------
to Indemnification
------------------
Section 5.1. Request for Indemnification. To obtain indemnification,
Indemnitee shall submit to the Secretary of the Corporation a written claim or
request. Such written claim or request shall contain sufficient information to
reasonably inform the Corporation about the nature and extent of the
indemnification or advance sought by Indemnitee. The Secretary of the
Corporation shall promptly advise the Board of Directors of such request.
Section 5.2. Determination of Entitlement; No Change of Control. If
there has been no Change of Control at the time the request for indemnification
is submitted, Indemnitee's entitlement to indemnification shall be determined in
accordance with Section 145(d) of the DGCL. If entitlement to indemnification is
to be determined by Independent Counsel, the Corporation shall furnish notice to
Indemnitee within 10 days after receipt of the request for indemnification,
specifying the identity and address of Independent Counsel. The Indemnitee may,
within 14 days after receipt of such written notice of selection, deliver to the
Corporation a written objection to such
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selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of Independent
Counsel and the objection shall set forth with particularity the factual basis
for such assertion. If there is an objection to the selection of Independent
Counsel, either the Corporation or Indemnitee may petition the Court for a
determination that the objection is without a reasonable basis and/or for the
appointment of Independent Counsel selected by the Court.
Section 5.3. Determination of Entitlement; Change of Control. If
there has been a Change of Control at the time the request for indemnification
is submitted, Indemnitee's entitlement to indemnification shall be determined in
a written opinion by Independent Counsel selected by Indemnitee. Indemnitee
shall give the Corporation written notice advising of the identity and address
of the Independent Counsel so selected. The Corporation may, within seven days
after receipt of such written notice of selection, deliver to the Indemnitee a
written objection to such selection. Indemnitee may, within five days after the
receipt of such objection from the Corporation, submit the name of another
Independent Counsel and the Corporation may, within seven days after receipt of
such written notice of selection, deliver to the Indemnitee a written objection
to such selection. Any objections referred to in this Section 5.3 may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of Independent Counsel and such objection shall set forth
with particularity the factual basis for such assertion. Indemnitee may
petition the Court for a determination that the Corporation's objection to the
first and/or second selection of Independent Counsel is without a reasonable
basis and/or for the appointment as Independent Counsel of a person selected by
the Court.
Section 5.4. Procedures of Independent Counsel. If a Change of
Control shall have occurred before the request for indemnification is sent by
Indemnitee, Indemnitee shall be presumed (except as otherwise expressly provided
in this Agreement) to be entitled to indemnification upon submission of a
request for indemnification in accordance with Section 5.1 of this Agreement,
and thereafter the Corporation shall have the burden of proof to overcome the
presumption in reaching a determination contrary to the presumption. The
presumption shall be used by Independent Counsel as a basis for a determination
of entitlement to indemnification unless the Corporation provides information
sufficient to overcome such presumption by clear and convincing evidence or the
investigation, review and analysis of Independent Counsel convinces him by clear
and convincing evidence that the presumption should not apply.
Except in the event that the determination of entitlement to
indemnification is to be made by Independent Counsel, if the person or persons
empowered under Section 5.2 or 5.3 of this Agreement to determine entitlement to
indemnification shall not have made and furnished to Indemnitee in writing a
determination within 60 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 unless Indemnitee knowingly misrepresented a material fact in
connection with the request for indemnification or such indemnification is
prohibited by applicable law. The termination of any Proceeding or of any
Matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its
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equivalent, shall not (except as otherwise expressly provided in this Agreement)
of itself adversely affect the right of Indemnitee to indemnification or create
a presumption that Indemnitee did not act in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests of the
Corporation, or with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful. A person who acted in
good faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan of the Corporation
shall be deemed to have acted in a manner not opposed to the best interests of
the Corporation.
For purposes of any determination hereunder, a person shall be deemed
to have acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation, or, with respect to any
criminal action or Proceeding, to have had no reasonable cause to believe his
conduct was unlawful, if his action is based on the records or books of account
of the Corporation or another enterprise or on information supplied to him by
the officers of the Corporation or another enterprise in the course of their
duties or on the advice of legal counsel for the Corporation or another
enterprise or on information or records given or reports made to the Corporation
or another enterprise by an independent certified public accountant or by an
appraiser or other expert selected with reasonable care by the Corporation or
another enterprise. The term "another enterprise" as used in this Section shall
mean any other corporation or any partnership, limited liability company,
association, joint venture, trust, employee benefit plan or other enterprise of
which such person is or was serving at the request of the Corporation as a
director, officer, employee or agent. The provisions of this paragraph shall
not be deemed to be exclusive or to limit in any way the circumstances in which
an Indemnitee may be deemed to have met the applicable standards of conduct for
determining entitlement to rights under this Agreement.
Section 5.5. Independent Counsel Expenses. The Corporation shall pay
any and all reasonable fees and expenses of Independent Counsel incurred acting
pursuant to this Article and in any proceeding to which it is a party or witness
in respect of its investigation and written report and shall pay all reasonable
fees and expenses incident to the procedures in which such Independent Counsel
was selected or appointed. No Independent Counsel may serve if a timely
objection has been made to his selection until a court has determined that such
objection is without a reasonable basis.
ARTICLE VI
Certain Remedies of Indemnitee
------------------------------
Section 6.1. Adjudication. In the event that (i) a determination is
made pursuant to Section 5.2 or 5.3 hereof that Indemnitee is not entitled to
indemnification under this Agreement; (ii) advancement of Expenses is not timely
made pursuant to Section 4.1 of this Agreement; (iii) Independent Counsel has
not made and delivered a written opinion determining the request for
indemnification (a) within 90 days after being appointed by the Court, or (b)
within 90 days after objections to his selection have been overruled by the
Court or (c) within 90 days after the time for
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the Corporation or Indemnitee to object to his selection; or (iv) payment of
indemnification is not made within five days after a determination of
entitlement to indemnification has been made or deemed to have been made
pursuant to Section 5.2, 5.3 or 5.4 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 or advancement of Expenses. In the event that a determination
shall have been made that Indemnitee is not entitled to indemnification, any
judicial proceeding or arbitration commenced pursuant to this Section 6.1 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. If a Change of
Control shall have occurred, in any judicial proceeding commenced pursuant to
this Section 6.1, the Corporation shall have the burden of proving that
Indemnitee is not entitled to indemnification or advancement of Expenses, as the
case may be. If a determination shall have been made or deemed to have been
made that Indemnitee is entitled to indemnification, the Corporation shall be
bound by such determination in any judicial proceeding commenced pursuant to
this Section 6.1, or otherwise, unless Indemnitee knowingly misrepresented a
material fact in connection with the request for indemnification, or such
indemnification is prohibited by law.
The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 6.1 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable, and shall
stipulate in any such proceeding that the Corporation is bound by all provisions
of this Agreement. In the event that Indemnitee, pursuant to this Section 6.1,
seeks a judicial adjudication to enforce his rights under, or to recover damages
for breach of, this Agreement, Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation against, any and all
Expenses actually and reasonably incurred by him in such judicial adjudication,
but only if he prevails therein. If it shall be determined in such judicial
adjudication that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, the Expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall be
appropriately prorated.
ARTICLE VII
Participation by the Corporation
--------------------------------
Section 7.1. Participation by the Corporation. With respect to any
such claim, action, suit, proceeding or investigation as to which Indemnitee
notifies the Corporation of the commencement thereof: (a) the Corporation will
be entitled to participate therein at its own expense; (b) except as otherwise
provided below, to the extent that it may wish, the Corporation (jointly with
any other indemnifying party similarly notified) will be entitled to assume the
defense thereof, with counsel reasonably satisfactory to Indemnitee. After
receipt of notice from the Corporation to Indemnitee of the Corporation's
election so to assume the defense thereof, the Corporation will not be liable to
Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof other than
reasonable costs of investigation or as otherwise provided below. Indemnitee
shall have the right to employ his own counsel in such
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action, suit, proceeding or investigation but the fees and expenses of such
counsel incurred after notice from the Corporation of its assumption of the
defense thereof shall be at the expense of Indemnitee unless (i) the employment
of counsel by Indemnitee has been authorized by the Corporation, (ii) Indemnitee
shall have reasonably concluded that there is a conflict of interest between the
Corporation and Indemnitee in the conduct of the defense of such action or (iii)
the Corporation shall not in fact have employed counsel to assume the defense of
such action, in each of which cases the fees and expenses of counsel employed by
Indemnitee shall be subject to indemnification pursuant to the terms of this
Agreement. The Corporation shall not be entitled to assume the defense of any
action, suit, proceeding or investigation brought in the name of or on behalf of
the Corporation or as to which Indemnitee shall have made the conclusion
provided for in (ii) above; and (c) the Corporation shall not be liable to
indemnify Indemnitee under this Agreement for any amounts paid in settlement of
any action or claim effected without its written consent, which consent shall
not be unreasonably withheld. The Corporation shall not settle any action or
claim in any manner that would impose any limitation or unindemnified penalty on
Indemnitee without Indemnitee's written consent, which consent shall not be
unreasonably withheld.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Nonexclusivity of Rights. The rights of indemnification
and advancement of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled to
under applicable law, the Corporation's Certificate of Incorporation, the
Corporation's Bylaws, any agreement, a vote of stockholders or a resolution of
directors, or otherwise. No amendment, alteration or repeal of this Agreement
or any provision hereof shall be effective as to any Indemnitee for acts, events
and circumstances that occurred, in whole or in part, before such amendment,
alteration or repeal. The provisions of this Agreement shall continue as to an
Indemnitee whose Corporate Status has ceased for any reason and shall inure to
the benefit of his heirs, executors and administrators.
Section 8.2. Insurance and Subrogation. The Corporation shall not be
liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder if, but only to the extent that, Indemnitee has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.
In the event of any payment hereunder, the Corporation shall be
subrogated to the extent of such payment to all the rights of recovery of
Indemnitee, who shall execute all papers required and take all action reasonably
requested by the Corporation to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights.
Section 8.3. Acknowledgment of Certain Matters. Both the Corporation
and Indemnitee acknowledge that in certain instances, applicable law or public
policy may prohibit
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indemnification of Indemnitee by the Corporation under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Corporation has
undertaken or may be required in the future to undertake, by the Securities and
Exchange Commission, to submit the question of indemnification to a court in
certain circumstances for a determination of the Corporation's right under
public policy to indemnify Indemnitee.
Section 8.4. Amendment. This Agreement may not be modified or
amended except by a written instrument executed by or on behalf of each of the
parties hereto.
Section 8.5. Waivers. The observance of any term of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party entitled to enforce such term only
by a writing signed by the party against which such waiver is to be asserted.
Unless otherwise expressly provided herein, no delay on the part of any party
hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party hereto of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.
Section 8.6. Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement between the parties hereto
with respect to the matters covered hereby, and any other prior or
contemporaneous oral or written understandings or agreements with respect to the
matters covered hereby are superseded by this Agreement.
Section 8.7. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby; and, to the
fullest extent possible, the provisions of this Agreement shall be construed so
as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
Section 8.8. Certain Actions For Which Indemnification Is Not
Provided. Notwithstanding any other provision of this Agreement, Indemnitee
shall not be entitled to indemnification or advancement of Expenses under this
Agreement with respect to any Proceeding, or any Matter therein, brought or made
by Indemnitee against the Corporation.
Section 8.9. Notices. Promptly after receipt by Indemnitee of notice
of the commencement of any action, suit or proceeding, Indemnitee shall, if he
anticipates or contemplates making a claim for expenses or an advance pursuant
to the terms of this Agreement, notify the Corporation of the commencement of
such action, suit or proceeding; provided, however, that any delay in so
notifying the Corporation shall not constitute a waiver or release by Indemnitee
of rights hereunder and that any omission by Indemnitee to so notify the
Corporation shall not relieve the Corporation from any liability that it may
have to Indemnitee otherwise than under this Agreement. Any communication
required or permitted to the Corporation shall be addressed to the Secretary of
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the Corporation and any such communication to Indemnitee shall be addressed to
the Indemnitee's address as shown on the Corporation's records unless the
Indemnitee specifies otherwise and shall be personally delivered or delivered by
overnight mail delivery. Any such notice shall be effective upon receipt.
SECTION 8.10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD
TO ANY PRINCIPLES OF CONFLICT OF LAWS THAT, IF APPLIED, MIGHT PERMIT OR REQUIRE
THE APPLICATION OF THE LAWS OF A DIFFERENT JURISDICTION.
Section 8.11. Headings. The Article and Section headings in this
Agreement are for convenience of reference only, and shall not be deemed to
alter or affect the meaning or interpretation of any provisions hereof.
Section 8.12. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
Section 8.13. Use of Certain Terms. As used in this Agreement, the
words "herein," "hereof," and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular paragraph,
subparagraph, section, subsection, or other subdivision. Whenever the context
may require, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns, pronouns
and verbs shall include the plural and vice versa.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered to be effective as of the date first above written.
EDGE PETROLEUM CORPORATION
By:
---------------------------
Name:
Title:
INDEMNITEE
______________________________
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