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EXHIBIT 10.5
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made as of this 23rd
day of December, 1997 between DTI HOLDINGS, INC., a Missouri corporation (the
"Company"), and Xxxxxx X. Xxxxxx (the "Director").
RECITALS
1. The Director is a member of the Board of Directors of the Company and
in such capacity is performing valuable services for the Company.
B. Section 6.5 of the By-laws of the Company (the "By-laws"), provides
for the indemnification of the officers, directors, agents and employees of the
Company to the full extent authorized by law.
C. The provisions of Section 351.355 of the General and Business
Corporation Laws of Missouri (the "Indemnification Statute") provides, among
other provisions, that a corporation shall have the power, subject to certain
exceptions, to give any further indemnity to its directors and officers,
including indemnification agreements, provided such indemnity is authorized,
directed and provided for in such corporation's articles of incorporation.
D. The Company presently maintains one or more policies of Directors and
Officers Liability Insurance ("D&O Insurance"), insuring against certain
liabilities which the Company's directors and officers may incur as they
perform services for the Company.
E. The Company deems it appropriate to enter into agreements with its
directors to provide them with greater indemnification against the liabilities
they incur in the performance of services for the Company.
TERMS
NOW, THEREFORE, in consideration of the Director's agreement to continue
service as a director of the Company, the parties hereto agree as follows:
1. Indemnity of Director. The Company agrees to indemnify the Director
and hold him harmless to the full extent authorized or permitted by the
provisions of the Indemnification Statute, or by any amendment thereof, or by
any other statutory provisions authorizing or permitting such indemnification
which may be adopted after the date hereof.
2. Maintenance of Insurance. The Company may, but shall not be required
to, continue all or any part of the D&O Insurance it has in force and
effect as of the date hereof. If the Company continues to maintain the D&O
Insurance, such insurance shall be primary, to the extent of the coverage
provided thereby, and the Company's agreement to provide the indemnification
set forth herein shall be effective only to the extent that the Director is not
reimbursed pursuant to the coverage
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maintained under the D&O Insurance or any comparable insurance. If the
Company does not maintain such insurance, the Company shall fully indemnify the
Director in accordance with the provisions of Section 1 and Section 3 of this
Agreement.
3. Additional Indemnity. Subject only to the exclusion set forth in
Section 4 hereof, the Company hereby agrees to indemnify the Director and hold
him harmless from and against any and all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by the Director in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (including any action by or in the right of the Company) to
which the Director is, was or at any time becomes a party (other than a party
plaintiff suing on his own behalf or derivatively on behalf of the Company), or
is threatened to be made a party (other than a party plaintiff suing on his own
behalf or derivatively on behalf of the Company) by reason of the fact that the
Director is or was at any time a director, officer, employee or agent of the
Company, or is or was serving or at any time serves at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including, without
limitation, Digital Teleport, Inc.
4. Limitation on Indemnity. Notwithstanding any other provision of this
Agreement to the contrary, the Company shall not indemnify any Director from or
on account of such person's conduct which is finally adjudged to have been
knowingly fraudulent or deliberately dishonest or to have constituted willful
misconduct.
5. Continuation of Indemnity. All of the Company's agreements and
obligations contained herein shall continue (a) during the period that the
Director is a director, officer, employee or 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,
including, without limitation, Digital Teleport, Inc. and (b) thereafter so
long as the Director shall be subject to any possible, claim or threatened,
pending or completed action, suit or proceeding, whether civil, criminal or
investigative, by reason of the fact that the Director is or was a director of
the Company or serving in any other capacity referred to herein.
6. Notification and Defense of Claim. Promptly after the Director
receives notice of the commencement of any action, suit or proceeding, the
Director will, if a claim in respect thereof is to be made against the Company
under this Agreement, notify the Company of the commencement thereof. The
failure to notify the Company will relieve the Company from any liability
hereunder to the extent the Company can show prejudice as a result of such
failure, and will not relieve the Company from any liability which it may have
to the Director otherwise than under this Agreement. With respect to any such
action, suit or proceeding as to which the Director notifies the Company of the
commencement thereof:
(a) The Company will be entitled to participate therein at its own
expense; and,
(b) Except as otherwise provided below, to the extent that it may
wish, the Company (jointly with any other indemnifying party similarly
notified) will be entitled to assume the
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defense thereof with counsel satisfactory to Director. After the
Company notifies the Director of its election to assume such defense, the
Company will not be liable to the Director under this Agreement for any legal
or other expenses the Director subsequently incurs in connection with the
defense thereof other than reasonable costs of investigation or as otherwise
provided below. The Director shall have the right to employ his counsel in
such action, suit or proceeding, provided that the fees and expenses of such
counsel incurred after the Company has provided the Director with notice that
it is assuming the defense shall be at the Director's expense, unless (i) the
Company has authorized the Director's employment of counsel, (ii) the Director
shall have reasonably concluded that there may be a conflict of interest
between the Company and the Director in the conduct of the defense of such
action, or (iii) the Company shall not in fact have employed counsel to assume
the defense of such action, in each of which cases the fees and expenses of
such counsel shall be at the Company's expense. The Company shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of the Company or as to which the Director shall have made the
conclusion provided for in (ii) above.
(c) The Company shall not be liable to indemnify the Director for any
amounts paid in settlement of any action or claim effected without the
Company's written consent. The Company shall not settle any action or claim in
any manner which would impose any penalty or limitation on the Director without
the Director's written consent. Neither the Company nor the Director will
unreasonably withhold his or its consent to any proposed settlement.
7. Repayment of Expenses. The Director shall reimburse the Company for
all reasonable expenses the Company pays in defending any civil or criminal
action, suit or proceeding against the Director in the event and to the extent
that it shall be ultimately determined that the Director is not entitled to be
indemnified by the Company for such expenses under the provisions of the
Indemnification Statute, the By-laws, this Agreement or otherwise. Prior to
such determination, the Company shall make such advances as shall be reasonably
necessary to pay such expenses of the Director, provided the Company receives
an undertaking from the Director to repay such advances in the event it is
ultimately determined that the Director is not entitled to be indemnified
therefor.
8. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed hereby in order to induce
the Director to continue as a director of the Company, and acknowledges that
the Director is relying upon this Agreement in continuing in such capacity.
(b) In the event that the Director is required to bring any action to
enforce any rights or to collect any money due under this Agreement and is
successful in such action, the Company shall reimburse the Director for all of
the Director's reasonable fees and expenses in bringing and pursuing
such action.
9. Separability. Each provision of this Agreement is a separate and
distinct agreement, independent of the others. If any provision shall be held
to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of any of the
other provisions.
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10. Governing Law; Binding Effect; Amendment and Termination.
(a) This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Missouri, without reference to its rules
governing conflicts of laws.
(b) This Agreement shall be binding upon the Director and the Company
and shall inure to the benefit of the Director, his heirs, personal
representatives and assigns and to the benefit of the Company, its successors
and assigns.
(c) In the event that the Company shall make any payment to or on
behalf of the Director under the terms of this Agreement, whether in
satisfaction of any judgment, payment in settlement, reimbursement of
expenses, or otherwise, the Company shall succeed to, and have by way of
subrogation, all of the rights theretofore possessed by the Director against
any other person, firm or corporation for or on account of the lawsuit, claim
or matter in respect of which the payment was made, including, without
limitation, full subrogation to any claim or right the Director had or may have
had against any insurance company providing D&O Insurance to the Company, its
officers and directors.
(d) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the day and year first above written.
DTI HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
/s/ X.X. Xxxxxx
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Xxxxxx X. Xxxxxx
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