EXHIBIT 10.1
FORM OF INDEMNITY AGREEMENT
THIS AGREEMENT is made as of [______________], 2000 by and between Ironside
Technologies, Inc. a Yukon corporation (Company), and [_______________]
(Indemnitee), an officer of the Company.
RECITALS
A. It is essential to the Company to retain and attract as directors
and officers the most capable persons available.
B. The increase in corporate litigation subjects directors and officers
to expensive litigation risks at the same time that the availability and
coverage of directors' and officers' liability insurance has been reduced.
C. The Company desires to indemnify its directors and officers so as to
provide them with the maximum possible protection permitted by law.
D. The Business Corporation Act (Yukon) (the "Act") contemplates that
contracts may be entered into between the Company and members of the board of
directors and officers with respect to indemnification of directors and
officers.
E. Indemnitee does not regard the protection available under the
Company's bylaws and insurance adequate in the present circumstances, and may
not be willing to serve as a director or officer without adequate protection,
and the Company wants Indemnitee to serve in that capacity.
NOW, THEREFORE, the Company and Indemnitee agree as follows:
1. Services to the Company. Indemnitee will serve or continue to serve,
at the will of the Company, as a director or officer of the Company for so long
as Indemnitee is duly elected or appointed or until Indemnitee tenders a
resignation in writing.
2. Definitions. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened, pending or
completed action, suit or proceeding, whether brought in the right of the
Company or otherwise and whether of a civil, criminal, administrative or
investigative nature, during the threat or pendency of which Indemnitee is
or was a director or officer of the Company or is or was serving at the
request of the Company as a director, officer, or agent of another
corporation, partnership, joint venture, trust or other enterprise, whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification or reimbursement can be provided under
this Agreement.
(b) The term "Expenses" includes, without limitation, expense of
investigations, judicial or administrative proceedings or appeals,
attorneys' fees and disbursements and any expenses of establishing a right
to indemnification under Section 11 of this Agreement, but shall not
include amounts paid in settlement by Indemnitee or the amount of judgments
or fines against Indemnitee.
(c) References to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed with
respect to any employee benefit plan; reference to "serving at the request
of the Company" shall include any service as a director, officer, employee
or agent of the Company which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in
good faith and in a manner reasonably believed to be in the best interest
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Company" as referred to in this
Agreement.
3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is
a party to or threatened to be made a party to any Proceeding (other than a
Proceeding by or in the right of the Company to procure a judgment in its favor)
against all Expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee in connection with the Proceeding, but
only if Indemnitee acted honestly and in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company and, in the case of a criminal proceeding, in addition, had no
reasonable cause to believe that Indemnitee's conduct was unlawful.
4. Indemnity in Proceedings by or in the Right of the Company. The
Company shall indemnify Indemnitee in accordance with the provisions of this
Section 4 if Indemnitee is a party to or threatened to be made a party to any
Proceeding by or in the right of Company to procure a judgment in its favor
against all Expenses actually and reasonably incurred by Indemnitee in
connection with the defense or settlement of the Proceeding, but only if
Indemnitee acted honestly and in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company. No indemnification for Expenses shall be made under this Section 4 in
respect of any claim, issue or matter as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company, unless and only to the
extent that any court in which the Proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity.
5. Indemnification of Expenses of Successful Party. Notwithstanding any
other provisions of this Agreement, to the extent that Indemnitee has been
successful, on the merits or otherwise, in defense of any Proceeding or in
defense of any claim, issue or matter therein, including the dismissal of an
action without prejudice, the Company shall indemnify Indemnitee against all
Expenses incurred in connection therewith.
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6. Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4 or 5, the Company
shall indemnify Indemnitee to the fullest extent permitted by law if
Indemnitee is a party to or threatened to be made a party to any
Proceeding, against all Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection
with the Proceeding. In any Proceeding by or in the right of the Company
to procure a judgment in its favor, the Company shall obtain the approval
of the Yukon Supreme Court or other court of competent jurisdiction before
the Company may indemnify Indemnitee in such action. No indemnity shall be
made under this Section 6(a) on account of Indemnitee's conduct which
constitutes a breach of Indemnitee's duty of loyalty to the Company or its
shareholders or is an act or omission not in good faith or which involves
intentional misconduct or a violation of the law.
(b) Notwithstanding any limitation in Sections 3, 4, 5 or 6(a), the
Company shall indemnify Indemnitee to the fullest extent permitted by law
if Indemnitee is a party to or threatened to be made a party to any
Proceeding (including a Proceeding by or in the right of the Company to
procure a judgment in its favor in the event that the Yukon Supreme Court
or other court of competent jurisdiction approves indemnification relating
to such Proceedings) against all Expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred by Indemnitee in
connection with the Proceeding.
(c) For purposes of Sections 6(a) and 6(b), the meaning of the phrase
"to the fullest extent permitted by law" shall include, but not be limited
to:
(i) to the fullest extent permitted by the provision of the Act
that authorizes or contemplates additional indemnification by
agreement, or the corresponding provision of any amendment to or
replacement of the Act, and
(ii) to the fullest extent authorized or permitted by any
amendments to or replacements of the Act adopted after the date of
this Agreement that increase the extent to which a corporation may
indemnify its officers and directors.
7. Exclusions. Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except
with respect to any excess beyond the amount paid under any insurance
policy or other indemnity provision;
(b) for any transaction from which Indemnitee derived an improper
personal benefit;
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(c) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the
meaning of Section 16(b) of the Securities Exchange Act of 1934, as
amended, or similar provisions of state statutory law or common law;
(d) if a court having jurisdiction in the matter shall finally
determine that such indemnification is not lawful under any applicable
statute or public policy (and, in this respect, both the Company and
Indemnitee have been advised that the Securities and Exchange Commission
believes that indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore, unenforceable
and that claims for indemnification should be submitted to appropriate
courts for adjudication); or
(e) in connection with any Proceeding (or part of any Proceeding)
initiated by Indemnitee, or any Proceeding by Indemnitee against the
Company or its directors, officers, employees or other indemnitees, unless
(i) the Company is expressly required by law to make the indemnification,
(ii) the Proceeding was authorized by the Board of Directors of the
Company, (iii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable
law, or (iv) Indemnitee initiated the Proceeding pursuant to Section 11 of
this Agreement and Indemnitee is successful in whole or in part in the
Proceeding.
8. Advances of Expenses. The Company shall pay the Expenses incurred by
Indemnitee in any Proceeding in advance at the written request of Indemnitee, if
Indemnitee:
(a) furnishes the Company a written affirmation of the Indemnitee's
good faith belief that Indemnitee is entitled to be indemnified by the
Company under this Agreement; and
(b) furnishes the Company a written undertaking to repay the advance
to the extent that it is ultimately determined that Indemnitee is not
entitled to be indemnified by the Company. Advances shall be made without
regard to Indemnitee's ability to repay the Expenses and without regard to
Indemnitee's ultimate entitlement to indemnification under the other
provisions of this Agreement.
9. Notification and Defense of Claim. Not later than thirty (30) days
after receipt by Indemnitee of notice of the commencement of any Proceeding,
Indemnitee will, if a claim in respect of the Proceeding is to be made against
the Company under this Agreement, notify the Company of the commencement of the
Proceeding. The omission to notify the Company will not relieve the Company from
any liability which it may have to Indemnitee other than under this Agreement.
With respect to any Proceeding as to which Indemnitee notifies the Company of
the commencement:
(a) The Company will be entitled to participate in the Proceeding at
its own expense.
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(b) Except as otherwise provided below, the Company may, at its
option and jointly with any other indemnifying party similarly notified and
electing to assume such defense, assume the defense of the Proceeding, with
legal counsel reasonably satisfactory to the Indemnitee. Indemnitee shall
have the right to use separate legal counsel in the Proceeding, but the
Company shall not be liable to Indemnitee under this Agreement, including
Section 8 above, for the fees and expenses of separate legal counsel
incurred after notice from the Company of its assumption of the defense,
unless (i) Indemnitee reasonably concludes that there may be a conflict of
interest between the Company and Indemnitee in the conduct of the defense
of the Proceeding or (ii) the Company does not use legal counsel to assume
the defense of such Proceeding. The Company shall not be entitled to assume
the defense of any Proceeding brought by or on behalf of the Company or as
to which Indemnitee shall have made the conclusion provided for in (i)
above.
(c) If two or more persons who may be entitled to indemnification
from the Company, including the Indemnitee, are parties to any Proceeding,
the Company may require Indemnitee to use the same legal counsel as the
other parties. Indemnitee shall have the right to use separate legal
counsel in the Proceeding, but the Company shall not be liable to
Indemnitee under this Agreement, including Section 8 above, for the fees
and expenses of separate legal counsel incurred after notice from the
Company of the requirement to use the same legal counsel as the other
parties, unless the Indemnitee reasonably concludes that there may be a
conflict of interest between Indemnitee and any of the other parties
required by the Company to be represented by the same legal counsel.
(d) The Company shall not be liable to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any Proceeding
effected without its written consent, which shall not be unreasonably
withheld. Indemnitee shall permit the Company to settle any Proceeding the
defense of which it assumes, except that the Company shall not settle any
action or claim in any manner which would impose any penalty or limitation
on Indemnitee without Indemnitee's written consent, which may be given or
withheld in Indemnitee's sole discretion.
10. Procedure Upon Application for Indemnification. Any indemnification
under Sections 3, 4, 5 or 6 of this Agreement shall be made no later than 90
days after receipt of the written request of Indemnitee for indemnification.
However, unless it is ordered by a court in an enforcement action under Section
11 of this Agreement, no such indemnification shall be made if a determination
is made within such 90-day period by (a) the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to the Proceeding,
or (b) independent legal counsel in a written opinion (which counsel shall be
appointed if a quorum is not obtainable), that the Indemnitee is not entitled to
indemnification under this Agreement.
11. Enforcement. The Indemnitee may enforce any right to indemnification
or advances granted by this Agreement to Indemnitee in any court of competent
jurisdiction if (a) the Company denies the claim for indemnification or
advances, in whole or in part, or (b) the Company does not dispose of the claim
within 90 days of a written request for indemnification or advances. Indemnitee,
in the enforcement action, if successful in whole or in part, shall be
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entitled to be paid also the expense of prosecuting the claim. It shall be a
defense to any such enforcement action (other than an action brought to enforce
a claim for advancement of Expenses pursuant to Section 8 above, if Indemnitee
has tendered to the Company the required affirmation and undertaking) that
Indemnitee is not entitled to indemnification under this Agreement, but the
burden of proving this defense shall be on the Company. Neither a failure of the
Company (including its Board of Directors or its shareholders) to make a
determination prior to the commencement of the enforcement action that
indemnification of Indemnitee is proper in the circumstances, nor an actual
determination by the Company (including its Board of Directors or its
shareholders) that indemnification is improper shall be a defense to the action
or create a presumption that Indemnitee is not entitled to indemnification under
this Agreement or otherwise. The termination of any Proceeding by judgment,
order of court, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not, of itself, create a presumption that Indemnitee is not
entitled to indemnification under this Agreement or otherwise.
12. Partial Indemnification. If Indemnitee is entitled under any
provisions of this Agreement to indemnification by the Company for some or part
of the Expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in the investigation, defense, appeal or
settlement of any Proceeding but not, however, for the total amount, the Company
shall indemnify Indemnitee for the portion of the Expenses, judgments, fines and
amounts paid in settlement to which Indemnitee is entitled.
13. Nonexclusivity and Continuity of Rights. The indemnification provided
by this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under the articles, the bylaws, any other agreement,
any vote of shareholders or directors, the Act, or otherwise, both as to action
in Indemnitee's official capacity and as to action in other capacity while
holding office. The indemnification under this Agreement shall continue as to
Indemnitee even though Indemnitee ceases to be a director or officer and shall
inure to the benefit of the heirs and personal representatives of Indemnitee.
14. Severability. If this Agreement or any portion of it is invalidated on
any ground by any court of competent jurisdiction, the Company shall indemnify
Indemnitee as to Expenses, judgments, fines and amounts paid in settlement with
respect to any Proceeding to the full extent permitted by any applicable portion
of this Agreement that is not invalidated or by any other applicable law.
15. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee. Indemnitee shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such rights.
16. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both parties. No
waiver of any of the provisions of this Agreement shall constitute a waiver of
any other provisions of this Agreement
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(whether or not similar) nor shall any waiver constitute a continuing waiver,
unless expressly stated in any waiver.
17. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
(a) upon delivery if delivered by hand to the party to whom the notice or other
communication shall have been directed or (b) if mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(i) If to Indemnitee, at the address indicated on the signature page
of this Agreement.
(ii) If to the Company to
Ironside Technologies, Inc.
0000 Xxxx Xxxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
or to any other address as may have been furnished to Indemnitee by
the Company.
18. Counterparts. The parties may execute this Agreement in two
counterparts, each of which shall constitute the original.
19. Applicable Law. This Agreement shall be governed by and construed in
accordance with the law of the Yukon Territory.
20. Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as
of the day and year first above written.
IRONSIDE TECHNOLOGIES, INC. INDEMNITEE
By:________________________________ By:_______________________________
Xxxxxx X. Fairfax [employee name]
Chief Financial Officer [employee address]
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