INDEMNIFICATION AGREEMENT
Exhibit 10.6
Execution Version
THIS
AGREEMENT is made as of December 27, 2010, by and among Irvine Sensors Corporation, a
Delaware corporation (the “Company”) and [_____] (the “Indemnitee”), a director of the Company.
RECITALS
WHEREAS, although the Certificate of Incorporation (“Certificate”) and the Bylaws of the
Company provide for indemnification of the officers and directors of the Company and the Indemnitee
may also be entitled to indemnification pursuant to the Delaware General Corporation Law (“DGCL”),
the DGCL expressly contemplates that contracts may be entered into between the Company and members
of the Board of Directors of the Company (the “Board”) with respect to indemnification of
directors; and
WHEREAS, the Indemnitee’s continued service to the Company substantially benefits the Company;
and
WHEREAS, the Board has determined that it is in the best interest of the Company and that it
is reasonably prudent and necessary for the Company contractually to obligate itself to indemnify,
and to advance expenses on behalf of, the Indemnitee to the fullest extent permitted by applicable
law in order to induce him to serve or continue to serve the Company free from undue concern that
he will not be so indemnified or that any indemnification obligation will not be met; and
WHEREAS, this Agreement is a supplement to and in furtherance of (a) the Certificate and
Bylaws of the Company, and (b) the certificate and bylaws or partnership agreement, as the case may
be, of any Enterprise (as defined below) and any resolutions adopted pursuant thereto, and shall
not be deemed a substitute therefor, nor to diminish or abrogate any rights of the Indemnitee
thereunder; and
WHEREAS, the Indemnitee does not regard the protection available under the Company’s or any
other Enterprise’s certificate, bylaws and insurance as adequate in the present circumstances, and
may not be willing to serve as a director of the Company without adequate protection, and the
Company desires the Indemnitee to serve in such capacity. The Indemnitee is willing to serve,
continue to serve and to take on additional service for or on behalf of the Company and certain
other Enterprises on the condition that he be so indemnified;
WHEREAS, Indemnitee may have certain rights to indemnification, advancement of expenses and/or
insurance provided by Costa Brava Partnership III LP or The Xxxxxxx Fund LP, as applicable (the
“Sponsor Fund”) (or its affiliates), which Indemnitee, Company and the Sponsor Fund (or its
affiliates) intend to be secondary to the primary obligation of the Company to indemnify Indemnitee
as provided herein, with the Company’s acknowledgement of and agreement to the foregoing being a
material condition to Indemnitee’s willingness to serve as a director of the Company.
NOW, THEREFORE, in consideration of the promises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:
AGREEMENT
1. Services to the Company and Certain Other Enterprises. The Indemnitee will serve
or continue to serve as a director of the Company for so long as the Indemnitee is duly elected or
appointed or until the Indemnitee tenders his resignation.
2. Definitions. As used in this Agreement:
“Corporate Status” describes the status of a person who is or was a director, trustee,
general partner, managing member, officer, employee, agent or fiduciary of the Company or of any
other Enterprise.
“Disinterested Director” shall mean a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification is sought by the Indemnitee.
“Enterprise” shall mean (i) the Company and (ii) any other corporation, partnership,
limited liability company, joint venture, trust, employee benefit plan or other enterprise which is
an affiliate or wholly or partially owned subsidiary of the Company and of which the Indemnitee is
or was serving as a director, trustee, general partner, managing member, officer, employee, agent
or fiduciary; and (iii) any other corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at
the request of the Company.
“Expenses” shall include 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, being or preparing to be a witness in, or otherwise participating in, a
Proceeding. Expenses shall include such fees and expenses, and costs incurred in connection with
any appeal resulting from any Proceeding, including without limitation the premium, security for,
and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its
equivalent. Expenses, however, shall not include amounts paid in settlement by the Indemnitee or
the amount of judgments or fines against the Indemnitee.
“Fines” shall mean any excise tax assessed with respect to any employee benefit plan;
references to “serving at the request of the Company” shall include any service as a director,
trustee, general partner, managing member, officer, employee, agent or fiduciary of the Company
which imposes duties on, or involves services by, such director, trustee, general partner, managing
member, officer, employee, agent or fiduciary with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably
believed to be in the best interests of the participants and beneficiaries 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.
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“Indemnitee” is defined in the preamble to this Agreement.
“Proceeding” shall include any threatened, pending or completed action, suit,
arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding, whether brought in
the right of the Company or otherwise and whether of a civil, criminal, administrative or
investigative nature, including without limitation any such proceeding pending as of the date of
this Agreement, in which the Indemnitee was, is or will be involved as a party or otherwise by
reason of the fact that the Indemnitee is or was a director of the Company, by reason of any action
taken by him or of any action on his part while acting as director of the Company, or by reason of
the fact that he is or was serving as a director, trustee, general partner, managing member,
officer, employee, agent or fiduciary of any other Enterprise, in each case whether or not serving
in such capacity at the time any Expense, judgment, fine or amount paid in settlement is incurred
for which indemnification, reimbursement, or advancement of Expenses can be provided under this
Agreement.
“Independent Counsel” means, at any time, any law firm, or a member of a law firm,
that (a) is experienced in matters of corporation law and (b) is not, at such time, or has not been
in the five years prior to such time, retained to represent: (i) the Company or the Indemnitee in
any matter material to either such party (other than with respect to matters concerning the
Indemnitee under this Agreement, or of other indemnities under similar indemnification agreements),
or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or the Indemnitee in an action to determine the
Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and
expenses of the Independent Counsel referred to above and to fully indemnify such counsel against
any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement
or its engagement pursuant hereto and to be jointly and severally liable therefor.
3. Indemnity in Third-Party Proceedings. The Company shall be liable to indemnify the
Indemnitee in accordance with the provisions of this Section 3 if the Indemnitee is, or is
threatened to be made, a party to or a participant (as a witness or otherwise) in any Proceeding,
other than a Proceeding by or in the right of the Company to procure a judgment in its favor.
Pursuant to this Section 3, the Indemnitee shall be indemnified against all Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee or on his
behalf in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee
acted in good faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause to
believe that his conduct was unlawful.
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4. Indemnity in Proceedings by or in the Right of the Company. The Company shall be
liable to indemnify the Indemnitee in accordance with the provisions of this Section 4 if the
Indemnitee is, or is threatened to be made, a party to or a participant (as a witness or
otherwise) in any Proceeding by or in the right of the Company to procure a judgment in its favor.
Pursuant to this Section 4, the Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection with such Proceeding (or any claim, issue
or matter therein) if the Indemnitee acted in good faith and in a manner he 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 the Indemnitee
shall have been finally adjudged by a court of competent jurisdiction 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, the Indemnitee is fairly and reasonably entitled to indemnification.
5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement, to the extent that the Indemnitee is a
party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or
in defense of any claim, issue or matter therein, in whole or in part, the Company shall be liable
to indemnify the Indemnitee against all Expenses actually and reasonably incurred by him in
connection therewith. If the Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company shall be liable to indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. If the Indemnitee is not wholly successful in such
Proceeding, the Company also shall be liable to indemnify the Indemnitee against all Expenses
reasonably incurred in connection with any claim, issue or matter that is related to any claim,
issue, or matter on which the Indemnitee was successful. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with
or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
6. Indemnification For Other Fees and Expenses.
(a) Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee
is, by reason of his Corporate Status, a witness in any Proceeding to which the Indemnitee is not a
party, the Company shall be liable to indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
(b) Notwithstanding any other provision of this Agreement, the Company shall be liable to
indemnify Indemnitee against all Expenses actually and reasonably incurred by or on behalf of the
Indemnitee in taking any action to enforce any provision of this Agreement, including all Expenses
incurred in bringing a claim, counterclaim or cross claim in a legal proceeding, arbitration or
otherwise to enforce this Agreement or any provision of this Agreement.
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7. Additional Indemnification
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall be liable to
indemnify the 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) against all Expenses, judgments, fines
and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with
the Proceeding. No indemnity shall be made under this Section 7(a) on account of the Indemnitee’s
conduct which has been adjudicated to constitute a breach of the Indemnitee’s duty of loyalty to
the Company or its shareholders or to constitute an act or omission not in good faith or involving
intentional misconduct or a knowing violation of the law.
(b) Notwithstanding any limitation in Sections 3, 4, 5 or 7(a), the Company shall be liable to
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) 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 7(a) and 7(b), the meaning of the phrase “to the fullest extent
permitted by law” shall include, but not be limited to:
(1) to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL; and
(2) to the fullest extent authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the extent to which a corporation may
indemnify its officers and directors.
8. Exclusions. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity payment in connection with any claim made
against the Indemnitee:
(a) for which payment has actually been received by or on behalf of Indemnitee under any
insurance policy of any Enterprise or other indemnity provision of any Enterprise, except with
respect to any excess beyond the amount actually received under any insurance policy or other
indemnity provision; or
(b) 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 or similar provisions of state statutory law or common law; provided
however, that notwithstanding any limitation on the Company’s obligation to provide
indemnification set forth in this Section 8(b) or elsewhere, Indemnitee shall be entitled to
receive advancement of Expenses hereunder with respect to any such Claim unless and until a court
having jurisdiction over the Claim shall have made a final judicial determination (as to which all
rights of appeal therefrom have been exhausted or lapsed) that Indemnitee has violated said
statute.
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9. Advancement of Expenses; Defense of Claim.
(a) Notwithstanding any provision of this Agreement to the contrary, the Company shall be
obligated to advance any and all Expenses incurred by the Indemnitee in connection with any
Proceeding within twenty (20) days after the receipt by the Company of a statement or statements
requesting such advances from time to time, whether prior to or after final disposition of any
Proceeding. Such advances (i) shall be unsecured and interest free; (ii) shall be made without
regard to the Indemnitee’s ability to repay the advances and without regard to the Indemnitee’s
ultimate entitlement to indemnification under the other provisions of this Agreement; and (iii)
shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of
advancement, including Expenses incurred preparing and forwarding statements to the Company to
support the advances claimed. The Indemnitee shall qualify for advancement of Expenses solely upon
the execution and delivery to the Company of undertaking providing that the Indemnitee undertakes
to repay the advance to the extent and only to the extent that it is ultimately determined that the
Indemnitee is not entitled to be indemnified by the Company.
(b) The Company will be entitled to participate reasonably in the Proceeding at its own
expense.
10. Procedure for Notification and Requests for Advancement and Indemnification.
(a) To obtain advancement and/or indemnification under this Agreement, the Indemnitee shall,
not later than sixty (60) days after receipt by the Indemnitee of notice of the commencement of any
Proceeding, except for Proceedings pending as of the date of this Agreement, submit to the Company
written notification of the Proceeding; with regard to Proceedings pending as of the date of this
Agreement, Indemnitee shall submit to the Company written notification not later than sixty (60)
days after the date of this Agreement. The omission to notify the Company will relieve the Company
of its advancement or indemnification obligations under this Agreement only to the extent the
Company can establish that such omission to notify resulted in actual prejudice to it, and the
omission to notify the Company will, in any event, not relieve the Company from any liability which
it may have to indemnify the Indemnitee otherwise than under this Agreement. The Secretary of the
Company shall, promptly upon receipt of notification from the Indemnitee pursuant to this Section
10(a), advise the Board in writing that the Indemnitee has provided such notification.
(b) To obtain advancement of Expenses under this Agreement, Indemnitee shall submit to the
Company a written request therefor, together with such invoices or other supporting information as
may be reasonably requested by the Company and reasonably available to Indemnitee, and, only to the
extent required by applicable law which cannot be waived, an unsecured written undertaking to repay
amounts advanced. The Company shall make advance payment of Expenses to Indemnitee no later than
twenty (20) days after receipt of the written request for advancement (and each subsequent request
for advancement) by Indemnitee. If, at the time of receipt of any such written request for
advancement of Expenses, the Company have director and officer insurance policies in effect, the
Company will promptly notify the relevant insurers in accordance with the procedures and
requirements of such policies. The
Company shall thereafter keep such director and officer insurers informed of the status of the
Proceeding or other claim, as appropriate to secure coverage of Indemnitee for such claim.
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(c) In order to obtain indemnification under this Agreement, the Indemnitee shall, anytime at
Indemnitee’s discretion following notification by the Indemnitee of the commencement of any
Proceeding pursuant to Section 10(a) of this Agreement and consistent with the time period for the
duration of this Agreement as set forth in Section 15 of this Agreement, submit to the Company a
written request for indemnification pursuant to this Section 10(c), including therein or therewith
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.
No determination of the Indemnitee’s entitlement to indemnification shall be made until such
written request for a determination is submitted to the Company pursuant to this Section 10(c).
The failure to submit a written request to the Company will relieve the Company of its
indemnification obligations under this Agreement only to the extent the Company can establish that
such failure to make a written request resulted in actual prejudice to it, and the failure to make
a written request will not relieve the Company from any liability which it may have to indemnify
the Indemnitee otherwise than under this Agreement. The Secretary of the Company shall, promptly
upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee
has requested indemnification. Upon submission of a written request for indemnification by the
Indemnitee pursuant to this Section 10(c), the Indemnitee’s entitlement to indemnification shall be
determined according to Section 11 of this Agreement.
11. Procedure Upon Application for Indemnification.
(a) Upon receipt of the Indemnitee’s written request for indemnification pursuant to Section
10(c), a determination with respect thereto shall be made in the specific case: (i) by the
Disinterested Directors, even though less than a quorum, so long as the Indemnitee does not request
that such determination be made by Independent Counsel; or (ii) if so requested by the Indemnitee,
in his sole discretion, by Independent Counsel in a written opinion to the Board, a copy of which
shall be delivered to the Indemnitee; and if it is so determined that the Indemnitee is entitled to
indemnification, payment to the Indemnitee shall be made within ten (10) days after such
determination. The Indemnitee shall reasonably cooperate with the person, persons or entity making
such determination with respect to the Indemnitee’s entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and which is reasonably
available to the Indemnitee and reasonably necessary to such determination. Any costs or expenses
(including attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating with the
Disinterested Directors or Independent Counsel, as the case may be, making such determination shall
be advanced and borne by the Company (irrespective of the determination as to the Indemnitee’s
entitlement to indemnification) and the Company is liable to indemnify and hold the Indemnitee
harmless therefrom.
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(b) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel shall be selected as
provided in this Section 11(b). The Independent Counsel shall be selected by the Indemnitee
(unless the Indemnitee shall request that such selection by made by the Board, in
which event the Board shall make such selection on behalf of the Company, subject to the
remaining provisions of this Section 11(b)), and the Indemnitee or the Company, as the case may be,
shall give written notice to the other, advising it or him of the identity of the Independent
Counsel so selected. The Company or the Indemnitee, as the case may be, may, within 10 days after
such written notice of selection shall have been received, deliver to the Indemnitee or the
Company, as the case may be, a written objection to such selection; provided, however, that
such objection may be asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the
objection shall set forth with particularity the factual basis of such assertion. Absent a proper
and timely objection, the person so selected shall act as Independent Counsel. If a written
objection is so made and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court of competent
jurisdiction has determined that such objection is without merit. If, within 20 days after
submission by the Indemnitee of a written request for indemnification pursuant to Section 10(c)
hereof, no Independent Counsel shall have been selected and not objected to, either the Company or
the Indemnitee may petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Company or the Indemnitee to the other’s selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by
such other person as the Court shall designate, and the person with respect to whom all objections
are so resolved or the person so appointed shall act as Independent Counsel under Section 11(a)
hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section
13(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of professional conduct then
prevailing).
12. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that the Indemnitee is entitled
to indemnification under this Agreement if the Indemnitee has submitted a notice and a request for
indemnification in accordance with Section 10 of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with the making by any person, persons
or entity of any determination contrary to that presumption. Neither the failure of the Company
(including by the Board) or of Independent Counsel to have made a determination prior to the
commencement of any judicial proceeding or arbitration pursuant to this Agreement that
indemnification is proper in the circumstances because the Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by the Board) or by
Independent Counsel that the Indemnitee has not met such applicable standard of conduct, shall be
admissible in evidence against the Indemnitee or otherwise referred to in any such judicial
proceeding or arbitration for any purpose (including without limitation to rebut the presumption in
favor of indemnification) or create a presumption that the Indemnitee has not met the applicable
standard of conduct.
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(b) If the person, persons or entity empowered or selected under Section 11 of this Agreement
to determine whether the Indemnitee is entitled to indemnification shall not have made a
determination within sixty (60) days after receipt by the Company of the Indemnitee’s written
request for indemnification pursuant to Section 10(c) of this Agreement, the requisite
determination of entitlement to indemnification shall be deemed to have been made and the
Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by the Indemnitee
of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement
not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law; provided, however, that such
60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days,
if the Independent Counsel making the determination with respect to entitlement to indemnification
in good faith requires such additional time for the obtaining or evaluating of documentation and/or
information relating thereto.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely affect the right of
the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to the best interests of
the Company or, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause
to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good faith, the
Indemnitee shall be deemed to have acted in good faith if the Indemnitee’s action or failure to act
is based on the records or books of account of the Enterprise, including financial statements, or
on information supplied to the Indemnitee by the officers of the Enterprise in the course of their
duties, or on the advice of legal counsel for the Enterprise or on information or records given or
reports made to the Enterprise by an independent certified public accountant or by an appraiser or
other expert selected by the Enterprise. The provisions of this Section 12(d) shall not be deemed
to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be
deemed or found to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any other
director, partner, managing member, officer, agent, employee or trustee of the Enterprise shall not
be imputed to the Indemnitee for purposes of determining his right to indemnification under this
Agreement.
13. Remedies of the Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 11 of this Agreement
that the Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of
Expenses is not timely made pursuant to Section 9 of this Agreement, (iii) payment of
indemnification is not made pursuant to Section 5, 6, 7 or the last sentence of Section 11(a) of
this Agreement within ten (10) days after receipt by the Company of a written request therefor, or
(iv) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within ten
(10) days after a determination has been made that the Indemnitee is entitled to indemnification,
or (v) the Indemnitee determines in its sole discretion that such action is appropriate or
desirable, the Indemnitee shall be entitled to seek an adjudication by a court of competent
jurisdiction as to his entitlement to such indemnification or advancement of Expenses.
Alternatively, the Indemnitee, at his option, may seek an award in arbitration to be conducted by
a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. The Company shall not oppose the Indemnitee’s right to seek any such adjudication or
award in arbitration.
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(b) In the event that a determination shall have been made pursuant to Section 11(a) of this
Agreement that the Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration, commenced pursuant to this Section 13, shall be conducted in all respects as a de novo
trial, or arbitration, on the merits, and the Indemnitee shall not be prejudiced by reason of that
adverse determination. In any judicial proceeding or arbitration commenced pursuant to this
Section 13, the Company shall have the burden of proving the Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or
introduce into evidence any determination pursuant to Section 11(a) adverse to the Indemnitee for
purposes of satisfying the Company’s burden of proof or for any other purpose. In any judicial
proceeding or arbitration commenced pursuant to this Section 13, in the event that the person,
persons or entity empowered or selected under Section 11 of this Agreement to determine whether the
Indemnitee is entitled to indemnification has not made such a determination within the time period
provided for under Section 12(b) of this Agreement, the Company shall stipulate and may not contest
that the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company, and, with respect to any criminal action or
Proceeding, had no reasonable cause to believe his conduct was unlawful.
(c) If a determination shall have been made pursuant to Section 11(a) of 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 13, absent (i) a
misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to
make the Indemnitee’s statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) In the event that the Indemnitee is a party to a judicial proceeding or arbitration
pursuant to this Section 13 concerning his rights under, or to recover damages for breach of, this
Agreement, the Indemnitee shall be entitled to recover from the Company, and shall be indemnified
by the Company against, any and all Expenses actually and reasonably incurred by him in such
judicial adjudication or arbitration. If it shall be determined in said judicial adjudication or
arbitration that the Indemnitee is entitled to receive part but not all of the indemnification or
advancement of Expenses sought, the Indemnitee shall be entitled to recover from the Company (who
shall be liable therefor), and shall be indemnified by the Company against, any and all Expenses
reasonably incurred by the Indemnitee in connection with such judicial adjudication or arbitration.
(e) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 13 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 provisions of this Agreement. The Company shall be
liable to indemnify the Indemnitee against any and all Expenses and, if requested by the
Indemnitee, shall (within ten (10) days after receipt by the Company of a
written request therefore) advance such Expenses to the Indemnitee that are incurred by
Indemnitee in connection with any judicial adjudication or arbitration involving the Indemnitee for
indemnification or advancement of Expenses from the Company under this Agreement or under any
directors’ and officers’ liability insurance policies maintained by the Company, regardless of
whether the Indemnitee ultimately is determined to be entitled to such indemnification, advancement
of Expenses or insurance recovery, as the case may be.
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14. Non-exclusivity; Survival of Rights; Insurance.
(a) The rights of indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time
be entitled under applicable law, the Company’s or any other Enterprise’s Articles of
Incorporation, the Company’s or any other Enterprise’s Bylaws, any agreement, a vote of
stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of
this Agreement or of any provision hereof shall limit or restrict any right of the Indemnitee under
this Agreement in respect to any action taken or omitted by such Indemnitee in his Corporate Status
prior to such amendment, alteration or repeal. To the extent that a change in Delaware law,
whether by statute or judicial decision, permits greater indemnification or advancement of Expenses
than would be afforded currently under the Company’s or any other Enterprise’s Bylaws and this
Agreement, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement
the greater benefits so afforded by such change. No right or remedy herein conferred is intended
to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative
and in addition to every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, partners, managing members, officers, employees, agents or
trustees of the Company or of any other Enterprise, the Indemnitee shall be covered by such policy
or policies in accordance with its or their terms to the maximum extent of the coverage available
for any such director, partner, managing member, officer, employee, agent or trustee under such
policy or policies. If, at the time of the receipt of a notice of a claim pursuant to Section
10(a) hereof, the Company has director and officer liability insurance in effect, the Company shall
give prompt notice of the commencement of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter take all necessary
or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable
as a result of such Proceeding in accordance with the terms of such policies.
(c) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and only to
the extent that the Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise, provided, however, that (i) the Company shall be the
indemnitor of first resort and any obligation of the Sponsor Fund (or any direct or indirect
subsidiary or affiliate thereof, other than the Company), and any obligation of any insurer
providing insurance coverage under any policy purchased or maintained by the
Sponsor Fund (or any direct or indirect subsidiary or affiliate thereof, other than the
Company), or under any personal umbrella liability insurance policy, to provide advancement or
indemnification for the same Expenses, liabilities, judgments, penalties, fines and
11
amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses, liabilities, judgments, penalties, fines and amounts paid in
settlement) incurred by the Indemnitee shall be secondary, and (ii) if Costa (or any direct or
indirect subsidiary or affiliate thereof, other than the Company) pays or causes to be paid, for
any reason, any amounts otherwise indemnifiable hereunder or under any other indemnification
agreement (whether pursuant to contract, by-laws or charter) with Indemnitee, then (a) the Sponsor
Fund (or such direct or indirect subsidiary or affiliate thereof, as the case may be) shall be
fully subrogated to all rights of Indemnitee with respect to such payment and (b) the Company shall
fully indemnify, reimburse and hold harmless Costa (or such direct or indirect subsidiary or
affiliate thereof, as the case may be) for all such payments actually made by the Sponsor Fund (or
such direct or indirect subsidiary or affiliate thereof, as the case may be).
(d) The Company’s obligation hereunder to indemnify, or advance Expenses to, the Indemnitee
who was, is or will be serving as a director, partner, managing member, officer, employee, agent or
trustee of any other Enterprise shall be reduced by any amount the Indemnitee has actually received
as indemnification or advancement of Expenses from such other Enterprise, provided, however, that
no right of advancement or recovery the Indemnitee may have from the Sponsor Fund (or any direct or
indirect subsidiary or affiliate thereof, other than the Company) or any right to coverage from any
insurer providing insurance coverage under any policy purchased or maintained by the Sponsor Fund
(or any direct or indirect subsidiary or affiliate thereof, other than the Company) shall reduce or
otherwise alter the rights of the Indemnitee or the obligations of the Company.
(e) The Company hereby unconditionally and irrevocably waives, relinquishes and releases, and
covenants and agrees not to exercise, any rights that the Company may now have or hereafter
acquires against the Sponsor Fund or Indemnitee that arise from or relate to the existence,
payment, performance or enforcement of the Company’s obligations under this Agreement or under any
other indemnification agreement (whether pursuant to contract, by-laws or charter) with any person
or entity, including, without limitation, any right of subrogation (whether pursuant to contract or
common law), reimbursement, exoneration, contribution or indemnification, or to be held harmless,
and any right to participate in any claim or remedy of Indemnitee against the Sponsor Fund or
Indemnitee, whether or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from the Sponsor Fund or
Indemnitee, directly or indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right.
15. Third-Party Beneficiary. The Sponsor Fund is an express third party beneficiary
of this Agreement, is entitled to rely upon this Agreement, and may specifically enforce the
Company’s obligations hereunder (including but not limited to the obligations specified in Section
14 of this Agreement) as though a party hereunder.
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16. Duration of Agreement. This Agreement shall continue until and terminate upon the
later of: (a) 10 years after the date that the Indemnitee shall have ceased to serve as a director
of the Company or as a director, partner, managing member, officer, employee, agent or trustee
of any other Enterprise; or (b) 1 year after the final termination (i) of any Proceeding (including
any rights of appeal) then pending in respect of which the Indemnitee requests indemnification or
advancement of Expenses hereunder and (ii) of any judicial proceeding or arbitration pursuant to
Section 13 of this Agreement (including any rights of appeal) involving the Indemnitee. This
Agreement shall be binding upon the Company and its successors and assigns and shall inure to the
benefit of the Indemnitee and his heirs, executors and administrators.
17. Severability. If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law;
(b) such provision or provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the
fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.
18. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce the Indemnitee to continue to serve
as a director of the Company, and the Company acknowledges that the Indemnitee is relying upon this
Agreement in serving as a director of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.
19. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a wavier of any other
provisions of this Agreement nor shall any waiver constitute a continuing waiver.
20. Notice by the Indemnitee. The Indemnitee agrees promptly to notify the Company in
writing upon being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder. The failure of the Indemnitee to so notify the Company
shall not relieve the Company of any obligation which it may have to the Indemnitee under this
Agreement or otherwise.
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21. 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) if delivered by hand
and receipted for by the party to whom said notice or other communication shall have been
directed, or (b) mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
(a) If
to the Indemnitee, at the address indicated below, or
such other address as the Indemnitee shall provide in writing to the Company,
| [address] | ||||||
| with a copy to: | ||||||
| Ropes & Xxxx LLP | ||||||
| Prudential Tower, 000 Xxxxxxxx Xxxxxx | ||||||
| Xxxxxx, XX 00000-0000 | ||||||
| Attn: Xxxxxxx Xxxx, Esq. | ||||||
| Facsimile No.: (000) 000-0000 |
(b) If to the Company to:
Irvine Sensors Corporation
0000 Xxx Xxxx Xxxxxx,
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Xx.
Facsimile No: (000) 000-0000
0000 Xxx Xxxx Xxxxxx,
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Xx.
Facsimile No: (000) 000-0000
with
a copy to:
Xxxxxx
& Whitney LLP
00 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx, Esq.
Facsimile No. (000) 000-0000
00 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx, Esq.
Facsimile No. (000) 000-0000
or to any other address as may have been furnished to the Indemnitee in writing by the Company.
22. Contribution. To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to the Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying the Indemnitee, shall contribute to the amount
incurred by the Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or
to be paid in settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion in order to reflect (i) the relative
benefits received by the Company and the Indemnitee as a result of the event(s) and/or
transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and
its directors, officer, employees and agents) and the Indemnitee in connection with such event(s)
and/or transaction(s).
23. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by the Indemnitee pursuant to Section 13(a) of this Agreement,
the Company and the Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or
federal court in the United States of America or any court in any other country (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not
a resident of the State of Delaware, irrevocably Incorporating
Services, Ltd., 0000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx, Xxxxxxxx 00000 as its agent in the State of Delaware as
such party’s agent for acceptance of legal process in connection with any such action or proceeding
against such party with the same legal force and validity as if served upon such party personally
within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or
proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the Delaware Court
has been brought in an improper or inconvenient forum.
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24. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.
25. Miscellaneous. Use of the masculine pronoun shall been deemed to include usage
of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.
| THE COMPANY: IRVINE SENSORS CORPORATION |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | President & CEO | |||
