Indemnification
Agreement with
Xxxxx Xxxxx
10.9
INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made as of November 7, 1995,
by and between FIDELITY HOLDINGS, INC., a Nevada corporation ("Company"), and
XXXXX XXXXX ("Indemnitee"), a director and/or officer or key executive, employee
or consultant of the Company, or a person serving at the request of the Company
as a director, officer, employee or agent of another enterprise.
RECITALS
A. The Indemnitee is currently serving or has agreed to serve as a
director and/or officer of the Company and in such capacity has rendered and/or
will render valuable services to the Company.
B. The Company has investigated the availability and sufficiency of
liability insurance and applicable statutory indemnification provisions to
provide its directors and officers with adequate protection against various
legal risks and potential liabilities to which such individuals are subject due
to their positions with the Company and has concluded that such insurance may be
unavailable or too costly, and even if purchased it, and the statutory
provisions, may provide inadequate and unacceptable protection to certain
individuals requested to serve as its directors and/or officers.
C. It is essential to the Company that it attract and retain as
officers and directors the most capable persons available and in order to induce
and encourage highly experienced and capable persons such as the Indemnitee to
serve or continue to serve as a director and/or officer of the Company, the
Board of Directors has determined, after due consideration and investigation of
the terms and provisions of the Agreement and the various other options
available to the Company and the Indemnitee in lieu liereof,tliat this Agreement
is not only reasonable and prudent but necessary to promote and ensure the best
interests of the Company and its stockholders.
NOW, THEREFORE, in consideration of the services or continued services
of the Indeninitee and in order to induce the Indemnitee to serve or continue to
serve as
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director and/or officer, the Company and the Indemnitee do hereby agree as
follows:
1. Definitions. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened, pending or
completed inquiry, hearing, investigation, action, suit, arbitration or other
alternative dispute resolution mechanism or proceeding, formal or informal,
whether brought in the name of the Company or otherwise and whether of a
civil, criminal or administrative or investigative nature, by reason of the fact
that the Indemnitee is or was a director and/or officer of the Company, or is or
was serving at the request of the Company as a director, officer, employee or
agent of another enterprise, whether or not he/she is serving in such capacity
at the time any liability or expense is incurred for which indemnification or
reimbursement is to be provided under this Agreement.
(b) The term "Expenses" includes, without limitation: attorneys'
fees, costs, disbursements and retainers; accounting and witness fees; fees of
experts; travel and deposition costs; transcript costs, filing fees, telephone
charges, postage, copying costs, delivery service fees and other expenses and
obligations of any nature whatsoever paid or incurred in connection with any
investigations, judicial or administrative proceedings and appeals, amounts paid
in settlement by or on behalf of Imdemnitee, and any expenses of establishing a
right to indemnification, pursuant to this Agreement or otherwise, including
reasonable compensation for time spent by the Indemnitee in connection with the
investigation, defense or appeal of a Proceeding or action for indemnification
for which he/she is not otherwise compensated by the Company or any third
party. The term "Expenses" does not include the amount of judgments, fines,
penalties or ERISA excise taxes actually levied against the Indemnitee.
2. Agreement to Serve. The Indemnitee agrees to serve or to continue to
serve as a director and/or officer of the Company for so long as he/she is duly
elected or appointed or until such time as lie/she tenders his/her resignation
in writing or is removed as a director and/or officer. However, nothing
contained in this Agreement shall be construed as giving Indeiniiitee any right
to be retained in the employ of the Company, any subsidiary or any other person.
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3. Indemnification in Third Party Actions. The Company shall indemnify
the Indemnitee if the Indemnitee is a party to or threatened to be made a party
to or is otherwise involved in any Proceeding (other that a Proceeding by or in
the name of the Company to procure a judgment in its favor), by reason of the
fact that the Indemnitee is or was a director and/or officer of the Company, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another enterprise, against all Expenses, judgments, lines,
penalties and ERISA excise taxes actually and reasonably incurred by the
Indei-nnitee in connection with the defense or settlement of such a Proceeding,
to the fullest extent permitted by applicable corporate law and the Company's
Articles of Incorporation; provided that any settlement of a Proceeding be
approved in writing by the Company.
4. Indemnification in Proceedings by or In the Name of the Company. The
Company shall indemnify the Iiideinnitee if the Indeinnitee is a party to or
threatened to be made a party to or is otherwise involved in any Proceeding by
or in the name of the Company to procure a judgment in its favor by reason of
the fact that the Indemnitee was or is a director and/or officer of the Company,
or is or was serving at the request of the Company as a director, officer,
ei-nployee or agent of another enterprise, against all Expenses, judgments,
fines penalties and ERISA excise taxes actually and reasonably incurred by the
Indemnitee in connection with the defense or settlement of such a Proceeding, to
the fullest extent permitted by applicable corporate law and the Company's
Articles of Incorporation.
5. Conclusive Presuml2tion Repardiniz Standards of Conduct. The
Indemnitee shall be conclusively presumed to have met the relevant standards of
conduct, if any, as defined by applicable corporate law, for indemnification
pursuant to this Agreement, unless a determination is made that the Indemnitee
has not met such standards (i) by the Board of Directors by a majority vote of a
quorum thereof consisting of directors who were not parties to the Proceeding
due to which a claim is made under this Agreement, (ii) by the shareholders of
the Company by majority vote of a quorum thereof consisting of shareholders who
are not parties to the Proceeding due to which a claim is made
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under this Agreement, (iii) in a written opinion by independent counsel,
selection of whom has been approved by the Indemnitee in writing, or (iv) by a
court of competent jurisdiction.
6. Indemnification of Expenses of Successful Party. Notwithstanding any
other, provision of the Agreement, to the extent that the Indemnitee has been
successful in defense of any Proceeding or in defense of any claim, issue or
matter therein, on the merits or otherwise, including the dismissal of a
Proceeding without prejudice or the settlei,nent of a Proceeding without an
adi-nission of liability, the Indemnitee shall be indemnified against all
Expenses incurred in connection therewith to the fullest extent peri-nitted by
applicable corporate law.
7. Advances of Exl2enses. The Expenses incurred by the Indemnitee in
any Proceeding shall be paid promptly by the Company in advance of the final
disposition of the Proceeding at the written request of the Indemnitee to the
fullest extent permitted by applicable corporate law; provided that the
Indemnitee shall undertake in writing to repay any advances if it is ultimately
determined that the Indemnitee is not entitled to Indemnification.
8. Partial Indemnification. If the Indemnitee is entitled under any
provision of the Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties or ERISA excise taxes actually and
reasonably incurred by him/her in the investigation, defense, appeal or
settlement of any Proceeding but not, however, for the total amount of his/her
Expenses, judgments, fines, penalties or ERISA excise taxes, the Company shall
nevertheless indemnify the Indemnitee for the portion of Expenses, judgments,
fines, penalties or ERISA excise taxes to which the Iiideiiinitee is entitled.
9. Indemnification Procedure: Determination of Riplit to
Indemnification.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of any Proceeding, the Indemnitee shall, if a claim in respect
thereof is
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to be made against the Coi-npaiiy under this Agreet-nent, notify the Company of
the comi-nencement thereof in writing. The omission to so notify the Company,
however, shall not relieve it from any liability which it may have to the
Indemnitee otherwise than under this Agreement.
(b) lf a claim for indemnification or advances under this Agreement
is not paid by the Coi-npaiiy within thirty (30) days of receipt of written
notice, the rights provided by this Agreement shall be enforceable by the
Indemnitee in any court of competent jurisdiction. The burden of proving by
clear and convincing evidence that indei-nnificatioti or advances are not
appropriate shall be on the Company. Neither the failure of the directors or
stockholders of the Company or its independent legal counsel to have made a
determination prior to the commencement of such action that indei-nnification or
advances are proper in the circumstances because the Indemnitee has met the
applicable standard of conduct, if any, nor an actual determination by the
directors or shareholders of the Coi-npany or independent legal counsel that the
Indemnitee has not met the applicable standard of conduct, shall be a defense to
the action or create a presumption for the purpose of an action that the
Indemnitee has not been the applicable standard of conduct.
(c) The Indemnitee's Expenses incurred in connection with any
Proceeding concerning his/her right to indemnification or advances in whole or
part pursuant to this Agreement shall also be indemnified by the Company
regardless of the outcome of such Proceeding.
(d) With respect to any Proceeding for which indemnification is
requested, the Company will be entitled to participate therein at its own
expense and, except as otherwise provided below, to the extent that it may wish,
the Company may assume the defense thereof, with counsel satisfactory to the
Indemnitee. After notice from the Company to the Itidemiiitee of its election to
assume the defense of a Proceeding, the Company will not be liable to the
Indei-nnitee for any Expenses subsequently incurred by the Iiidemiiitee in
connection with the defense thereof, other than as provided below. The Company
shall not settle any Proceeding in any manner which would impose any penalty or
limitation oil the Iiideiiiilitee without the Indeiiiiiitee's written consent.
The Indei-nnitee shall have the right to employee his/her counsel in any
Proceeding, but the
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fees and expenses of such counsel incurred after notice from the Company of its
assumption of the defense of the Proceeding shall be at the expense of the
Indemnitee, unless (i) the employment of counsel by the Indemnitee has been
authorized by the Company, (ii) the Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
in the conduct of the defense of a Proceeding, in each of which cases the fees
and expenses of the Indemnitee's counsel shall be advances by the Company. 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 the Indemnitee has concluded that
there may be a conflict of interest between the Company and the Indemnitee.
10. Limitations on Indemnification. No payments pursuant to this Agreement shall
be made by the Company:
(a) To indemnify or advance funds to the Indemnitee expenses
with respect to Proceeding initiated or brought voluntarily by the Indemiiitee
and not by way of defense, except with respect to Proceedings brought to
establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under applicable corporate law,
but such indemnification or advancement of expenses may be provided by the
Company in specific cases if the Board of Directors finds it to be appropriate;
(b) To iiidei-nnify the Indemnitee for any Expenses, judgment,
fines, penalties or ERISA excise taxes sustained in any Proceeding for which
payment is actually made to the Indeniiiitee under a valid and collectible
insurance policy, except in respect of any excess beyond the amount of payment
under such insurance;
(c) To indemnify the Indemnitee for any Expenses, judgment, fines,
and/or penalties sustained in any Proceeding for an accounting of profits made
from the purchase or sale by the Indemnitee of securities of the Company
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934, the rules and regulations promulgated thereunder and amendments thereto or
similar provisions of any federal, state or local statutory law; and
(d) If a court of competent jurisdiction finally determines that
any
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indemnification hereunder is unlawful.
11. Maintenance of Liability Insurance.
(a) The Company hereby covenants and agrees that, as long as the
Indei,nnitee continues to serve as a director and/or officer of the Company and
thereafter as long as the Indemnitee may be subject to any possible Proceeding,
the Company, subject to subsection (c), shall promptly obtain and maintain in
full force and effect directors' and officers' liability insurance ("D&O
Insurance") in reasonable amounts from established and reputable insurers.
(b) In all D&O insurance policies, the Indemnitee shall be named as
an insured in such a iiianner as to provide the Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company's
directors and/or officers.
(c) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines, in its
sole discretion, that such insurance is not reasonably available, the premium
costs for such insurance is so limited by exclusions that it provides an
insufficient benefit, or the Indemnitee is covered by similar insurance
i-naintained by a subsidiary of the Company-
12. Indemnification Hereunder Not Exclusive. The indemnification provided by
this Agreement shall not be deemed exclusive of any other rights to which the
Indemnitee may be entitled under the Articles of Incorporation, Bylaws, any
agreement, vote of shareholders or disinterested directors, provision of
applicable corporate law, or otherwise, both as to action in his/her official
capacity and as to action in another capacity on behalf of the Company while
holding such office.
13. Successors and Assip-tis. This Agreement shall be binding upon, and shall
inure to the benefit of the Itidemiiitee and his/her heirs, executors,
administrators and assigns, whether or not Indeilinitee has ceased to be a
director or officer, and the Company and its successors and assigns.
14. Severability. Each and every paragraph, sentence, term and provision hereof
is
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separate and distinct so that if any paragraph, sentence, term or provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of any other paragraph, sentence, term or provision hereof. To the extent
required, any paragraph, sentence, term or provision of this Agreement shall be
modified by a court of competent jurisdiction to preserve its validity and to
provide the Indei-nnitee with the broadest possible indemnification permitted
under applicable corporate law.
15. Savings Clause. If this Agreement or any paragraph, sentence, term or
provision hereof is invalidated on any ground by any court of competent
jurisdiction, the Company shall nevertheless indemnify the Indemnitee as to any
Expenses, judgments, fines, penalties for ERISA excise taxes incurred with
respect to any Proceeding to the full extent permitted by any applicable
paragraph, sentence, term or provision of this Agreement that has not been
invalidated or by any other applicable provision of applicable corporate law.
16. Interpretation, Governing Law. This Agreement shall be construed as a whole
and in accordance with its fair meaning. Headings are for convenience only and
shall not be used in construing meaning. This Agreement shall be governed and
interpreted in accordance with the laws of the State of Nevada.
17. Amendments. No amendment, waiver, modification, termination or cancellation
of this Agreement shall be effective unless in writing signed by the party
against whom enforcei-neiit is sought. The indei-niiification rights afforded to
the Indemnitee hereby are contract rights and may not be diminished, eliminated
or otherwise affected by amendments to the Articles of Incorporation, Bylaws, or
by other agreements, including D&O Insurance policies.
18. Counterparts. This Agreei-neiit may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each party and
delivered to the other.
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19. Notices. Any notice required to be given under this Agreement shall be
directed:
TO: FIDELITY HOLDINGS, INC.
00-00 Xxx Xxxxxxx Xx.
Xxx Xxxxxxx, Xxxxxx, XX 00000
With a copy to: Xxxxxxx X. Xxx, Esq.
0000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
and
TO: XXXXX XXXXX c/o Xxxx X. Bank, Esq.
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
or to such other address as either shall designate in writing.
IN WITNESS WHEREOF, The parties leave executed this Indemnity Agreement
as of the date first written above.
INDEMNITEE:
/s/ Xxxxx Xxxxx
-----------------------------------
XXXXX XXXXX
FIDELITY HOLDINGS, INC.
BY: /s/
--------------------------------
President
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