INDEMNIFICATION AGREEMENT
Training Devices Incorporated
1. EFFECTIVE DATE: July 27, 1999
2. PARTIES: Training Devices Incorporated
0000 X. Xxxxxx Xxxxxxx, Xxxx. 0X
Xxxxxxxxx, XX 00000
a Colorado corporation ("Corporation")
Xxxxxx X. Xxxxxxxxx
0000 X. Xxxxxx Xxxxxxx, Xxxx. 0X
Xxxxxxxxx, XX 00000
("Xxxxxxxxx")
3. RECITALS/AGREEMENT:
(a) At the request of the Corporation, Xxxxxxxxx currently serves as a
director and/or officer (as defined below) of the Corporation.
(b) Xxxxxxxxx has indicated that it was and is a condition of Xxxxxxxxx'x
acceptance and continuing in such service that, among other things, the
Corporation agree to (i) indemnify Xxxxxxxxx against liabilities, expenses and
costs incurred in connection with any claims, suits or proceedings related to
Xxxxxxxxx'x service to or for the Corporation and (ii) advance to him such
expenses and costs incurred in connection with such claims, suits or
proceedings, all in accordance with, and to the fullest extent permitted by,
the Colorado Business Corporation Act.
(c) The Corporation's Articles of Incorporation and the Colorado Business
Corporation Act contemplate that contracts may be made between the Corporation
and members of its Board of Directors and officers with respect to
indemnification and advancement of expenses and costs.
(d) In consideration of Xxxxxxxxx'x acceptance and continuation of service
as a director of the Corporation after the date of this Agreement, and in
consideration of the mutual covenants stated herein, the parties agree as
follows.
4. DEFINITIONS: As used in this Agreement, the following terms have the
following meanings:
(a) ACT. The term "Act" means the Colorado Business Corporation Act as it
exists on the date of this Agreement and as it may be hereafter amended from
time to time. In the case of any amendment of the Colorado Business Corporation
Act after the date of this Agreement, when used in reference to an act or
omission occurring prior to
effectiveness of such amendment, the term "Act" shall include such amendment
only to the extent that the amendment can apply to a prior act or omission
and the amendment permits the Corporation to provide broader indemnification
rights than the Colorado Business Corporation Act permitted the Corporation
to provide at the date of this Agreement and prior to the amendment.
(b) DIRECTOR. The term "director and/or officer" means an individual who
is or was a director or an officer, or both, of a corporation or an individual
who, while a director and/or officer of a corporation, is or was serving at the
corporation's request as a director, an officer, an agent, an associate, an
employee, a fiduciary, a manager, a member, a partner, a promoter, or a trustee
of, or to hold any similar position with, another corporation or other person or
of an employee benefit plan. A director or officer is considered to be serving
an employee benefit plan at the corporations' request if the director's or
officer's duties to the corporation also impose duties on, or otherwise involve
services by, the director or officer to the plan or to participants in or
beneficiaries of the plan. The term "director and/or officer" includes (i)
unless the context requires otherwise, the estate or personal representative of
a director or officer and (ii) any broader definition as may be provided in the
Act from time to time.
(c) EXPENSES. The term "expenses" includes counsel fees.
(d) LIABILITY. The term "liability" means the obligation incurred with
respect to a proceeding to pay a judgment, settlement, penalty, fine, including
an excise tax assessed with respect to an employee benefit plan, or reasonable
expenses.
(e) PARTY. The term "party" includes a person who was, is, or is
threatened to be made a defendant or respondent in a proceeding.
(f) PROCEEDING. The term "proceeding" means any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, and whether formal or informal.
5. AGREEMENT TO INDEMNIFY: The Corporation shall indemnify and hold harmless
Xxxxxxxxx in accordance with, and to the fullest extent permitted and/or
required by, the express provisions of the Act from and against any liability,
judgment, penalty, fine (including but not limited to excise taxes with respect
to an employee benefit plan), amounts paid in settlement and reasonable expenses
(including but not limited to expenses of investigation and preparation and fees
and disbursements of Xxxxxxxxx'x counsel, accountants or other experts) actually
incurred by Xxxxxxxxx in connection with any proceeding in which Xxxxxxxxx was
or is made a party or was or is involved (for example, as a witness) because
Xxxxxxxxx is or was a director or an officer of the Corporation.
6. INSURANCE: So long as Xxxxxxxxx may be subject to any possible proceeding
by reason of the fact that Xxxxxxxxx is or was a director or officer of the
Corporation, to the extent the Corporation maintains an insurance policy or
policies providing directors'
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and officers' liability insurance, Xxxxxxxxx shall be covered by such policy
or policies, in accordance with its or their terms, to the maximum extent of
the coverage applicable to any then current director or officer of the
Corporation.
7. ADVANCES: In the event of any proceeding in which Xxxxxxxxx is a party or
is involved and which may give rise to a right of indemnification from the
Corporation pursuant to this Agreement, following written request to the
Corporation by Xxxxxxxxx, the Corporation shall pay to Xxxxxxxxx, in accordance
with and to the fullest extent permitted and/or required by express provisions
of the Act, amounts to cover reasonable expenses incurred by Xxxxxxxxx in such
proceeding in advance of its final disposition upon (a) receipt by the
Corporation of (i) a written affirmation by Xxxxxxxxx of Xxxxxxxxx'x good faith
belief that Xxxxxxxxx has met any applicable standard of conduct described in
the Act and (ii) a written undertaking executed by or on behalf of Xxxxxxxxx to
repay the advance if it shall ultimately be determined that Xxxxxxxxx did not
meet such standard of conduct and (b) the making of a determination on behalf of
the Corporation (in the manner prescribed in the Act) that, based on the facts
then known to the persons making the determination would not preclude
indemnification under the Act. If a requested is made by Xxxxxxxxx to the
Corporation for advancement of any expenses incurred in connection with any
claim, suit or proceeding for which Xxxxxxxxx has claimed indemnification under
this Agreement, Xxxxxxxxx shall furnish to the Corporation satisfactory evidence
as to the amount of such expenses. The undertaking required by clause (a) must
be an unlimited general obligation of Xxxxxxxxx, but it need not be secured, and
it shall be accepted without reference to the financial ability of Xxxxxxxxx to
make repayment.
8. BURDEN OF PROOF: If under applicable law, the entitlement of Xxxxxxxxx to
be indemnified by the Corporation or to receive the advancement of expenses
hereunder depends upon whether a standard of conduct has been met, the
Corporation shall have the burden of proof of establishing that Xxxxxxxxx did
not act in accordance with such standard. Xxxxxxxxx shall be presumed to have
acted in accordance with such standard and to be entitled to indemnification or
the advancement of expenses (as the case may be) unless, based upon a
preponderance of the evidence, it shall be determined that Xxxxxxxxx has not met
such standard. Such determination and any evaluation as to the reasonableness
of amounts claimed by Xxxxxxxxx shall be made by the Board of Directors of the
Corporation, or such other body or persons as may be permitted by the Act,
acting in good faith. For purposes of this Agreement, unless otherwise
expressly stated, the termination of any proceeding by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption, and
is not determinative, that Xxxxxxxxx did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
9. NOTICE TO THE CORPORATION: Xxxxxxxxx shall notify the Secretary of the
Corporation in writing of any matter for which Xxxxxxxxx intends to seek
indemnification hereunder as soon as reasonably practicable following the
receipt by Xxxxxxxxx of written
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notice thereof; PROVIDED, however, that delay in so notifying the Corporation
shall not constitute a waiver or release by Xxxxxxxxx or rights hereunder.
10. COUNSEL FOR PROCEEDING: In the event of any proceeding in which Xxxxxxxxx
is a party or is involved and which may give rise to a right of indemnification
hereunder, the Corporation shall have the right to retain counsel reasonably
satisfactory to Xxxxxxxxx to represent Xxxxxxxxx and any others the Corporation
may designate in such proceeding. In any such proceeding, Xxxxxxxxx shall have
the right to retain Xxxxxxxxx'x own counsel, but the fees and expenses of such
counsel shall be at the expense of Xxxxxxxxx unless (a) the retention of such
counsel has been specifically authorized by the Corporation; (b) representation
of Xxxxxxxxx and another party by the same counsel as proposed by the
Corporation would be inappropriate, in the reasonable judgment of Xxxxxxxxx, due
to actual or potential differing interests between (as might be the case for
representation of both the Corporation and Xxxxxxxxx in a proceeding by or in
the right of the Corporation); (c) the counsel retained by the Corporation and
satisfactory to Xxxxxxxxx has advised Xxxxxxxxx, in writing, that such counsel's
representation of Xxxxxxxxx would be likely inappropriate due to actual or
potential different interests, whether it be a conflicting, inconsistent,
diverse or other interest; or (d) the Corporation shall fail to retain counsel
for Xxxxxxxxx in such proceeding. Notwithstanding the foregoing, if an
insurance carrier has supplied directors' and officers' liability insurance
covering the liability which is the subject of a proceeding and is entitled to
retain counsel for the defense of such proceeding, then the insurance carrier
shall retain counsel to conduct the defense of such proceeding unless Xxxxxxxxx
and the Corporation concur in writing that the insurance carrier's doing so is
undesirable. The Corporation shall not be liable under this Agreement for any
settlement of any proceeding effected without its written consent. The
Corporation shall not settle any proceeding in any manner which would impose any
penalty or limitation on Xxxxxxxxx without Xxxxxxxxx'x prior written consent.
Consent to a proposed settlement of any proceeding shall not be unreasonably
withheld or delayed by either the Corporation or Xxxxxxxxx.
11. ENFORCEMENT: The Corporation acknowledges that Xxxxxxxxx is relying upon
this Agreement in serving as a director and/or officer of the Corporation, as
well as any serving in the future in any capacity as a director and/or officer
of the Corporation. If a claim for indemnification or advancement of expenses
is not paid in full by the Corporation within 30 days after a written claim has
been received from Xxxxxxxxx by the Corporation, Xxxxxxxxx may at any time bring
suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in such suit, Xxxxxxxxx shall also be entitled to
be paid all reasonable fees and expenses (including without limitation fees of
counsel) in bringing and prosecuting such claim. Whether or not Xxxxxxxxx has
met any applicable standard of conduct, the Court in such suit may order
indemnification or the advancement of expenses as the Court deems proper
(subject to any express limitation of the Act). Further, the Corporation shall
indemnify Xxxxxxxxx from and against any and all expenses (including attorneys'
fees) and, if requested by Xxxxxxxxx, shall (within 10 business days of such
request) advance such expenses to Xxxxxxxxx, which are incurred by Xxxxxxxxx in
connection with any claim asserted against or suit brought by Xxxxxxxxx for
recovery under any directors' and officers' liability insurance
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policies maintained by the Corporation, regardless of whether Xxxxxxxxx is
unsuccessful in whole or in part in such claim or suit.
12. PROCEEDINGS BY XXXXXXXXX: The Corporation shall indemnify Xxxxxxxxx and
advance expenses to Xxxxxxxxx in connection with any proceeding (or part
thereof) initiated by Xxxxxxxxx only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.
13. NONEXCLUSIVITY: The rights of Xxxxxxxxx for indemnification and
advancement of expenses under this Agreement shall not be deemed exclusive of,
or in limitation of, any rights to which Xxxxxxxxx may be entitled under any
applicable law, the Corporation's Articles of Incorporation or Bylaws, vote of
stockholders or otherwise.
14. MISCELLANEOUS:
(a) EFFECTIVENESS. This Agreement is effective for, and shall apply to,
(i) any claim which is asserted or threatened before, on or after the date of
this Agreement but for which no action, suit or proceeding has actually been
brought prior to the date of this Agreement and (ii) any proceeding which is
threatened before, on or after the date of this agreement but which is not
pending prior to the date of this Agreement. Thus, this Agreement shall not
apply to any action, suit or proceeding which has actually been brought before
the date of this Agreement. So long as the foregoing standard of effectiveness
has been satisfied, this Agreement shall be effective for and shall be applied
to acts or omissions prior to, on or after the date of this Agreement.
(b) SURVIVAL; CONTINUATION. The rights of Xxxxxxxxx hereunder shall inure
to the benefit of Xxxxxxxxx (even after Xxxxxxxxx ceases to be a director or
officer), Xxxxxxxxx'x personal representative, heirs, executors, administrators
and beneficiaries; and this Agreement shall be binding upon the Corporation, its
successors and assigns. The rights of Xxxxxxxxx under this Agreement shall
continue so long as Xxxxxxxxx may be subject to any possible proceeding because
of the fact that Xxxxxxxxx was a director or officer of the Corporation. If the
Corporation sells, leases, exchanges or otherwise disposes of, in a single
transaction or series of related transactions, all or substantially all of its
property and assets, the Corporation shall, as a condition precedent to such
transaction, cause effective provision to be made so that the person or entity
acquiring such property and assets shall become bound by and replace the
Corporation under this Agreement.
(c) GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Colorado.
(d) SEVERABILITY. If any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be deemed
amended to accomplished the objectives of the provision as originally written
and to the fullest extent permitted by law and all other provisions shall remain
in full force and effect.
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(e) AMENDMENT. No amendment, termination or cancellation of this
Agreement shall be effective unless in writing signed by the Corporation and
Xxxxxxxxx.
(f) SUBROGATION. In the event of payment under this Agreement the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Xxxxxxxxx, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Corporation effectively to
bring suit to enforce such rights.
(g) HEADINGS. The headings in this Agreement are for convenience only and
are not to be considered in construing this Agreement.
(h) COUNTERPARTS. This Agreement may be executed in counterparts, both of
which shall be deemed an original, and together shall constitute one document.
The parties have executed this Agreement as of the effective date first
above stated.
TRAINING DEVICES INCORPORATED XXXXXX X. XXXXXXXXX
By: __________________________________ __________________________________
Xxxxx X. Xxxxxxxxx
President and Chief Operating
Officer
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