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EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made as of March
31, 2000 by and between CEREUS TECHNOLOGY PARTNERS, INC., a Delaware corporation
(the "Company"), and XXXX X. ARENA ("Indemnitee"), a director and/or officer of
the Company.
WHEREAS, Article Sixth of the Certificate of Incorporation of
the Company (the "Certificate") provides that the Company, among other things,
may indemnify and hold harmless all persons whom it shall have the power to
indemnify under Section 145 of the General Corporation Law of the State of
Delaware to the fullest extent permitted thereunder; and
WHEREAS, in recognition of Indemnitee's desire for protection
against personal liability in connection with the transaction (the
"Transaction") contemplated by that certain Stock Purchase Agreement dated as of
March 31, 2000 by and between the Company and Arena Acquisition Corp., a
Delaware corporation wholly-owned by Indemnitee, the Company has agreed to
provide indemnification to Indemnitee pursuant to this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. RIGHT TO INDEMNIFICATION. The Company shall to the
fullest extent permitted by applicable law as then in effect indemnify and hold
harmless the Indemnitee from and against all expenses, liabilities and losses
(including attorneys' fees, judgments, fines, taxes, penalties and amounts paid
or to be paid in settlement) reasonably incurred by him in connection with any
Third Party Claim (as hereinafter defined) arising out of or related to the
Transaction (a "Proceeding"). Such indemnification shall be a contract right and
shall include the right to receive payment in advance of any expenses incurred
by the Indemnitee in connection with such Proceeding, consistent with the
provisions of applicable law as then in effect. For purposes hereof, "Third
Party Claim" shall mean any claim, suit or proceeding, including, without
limitation, any civil, administrative or investigative proceeding, that is
instituted or threatened against the Indemnitee by a person other than the
Company.
SECTION 2. INDEMNIFICATION NOT EXCLUSIVE RIGHT. The right of
indemnification provided in this Agreement shall not be exclusive of and shall
be in addition to, and not in lieu of, any other rights to which the Indemnitee
may otherwise be entitled under applicable law, the Company's Bylaws or
otherwise. Nothing in this Agreement shall diminish or otherwise restrict the
Indemnitee's right to indemnification under applicable law, the Certificate or
otherwise. The provisions of this Agreement shall inure to the benefits of the
heirs, executors, administrators and other legal representatives of the
Indemnitee and shall be
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applicable to Proceedings commenced or continuing after the adoption of this
Agreement, whether arising from acts or omissions occurring before or after its
execution and delivery.
SECTION 3. ADVANCEMENT OF EXPENSES; PROCEDURES; PRESUMPTIONS
AND EFFECT OF CERTAIN PROCEEDINGS; REMEDIES. In furtherance, but not in
limitation of the foregoing provisions, the following procedures, presumptions
and remedies shall apply with respect to the advancement of expenses and the
right to indemnification under this Agreement:
3.1. ADVANCEMENT OF EXPENSES. All reasonable expenses incurred
by or on behalf of the Indemnitee in the defense of or other involvement in or
otherwise in connection with any Proceeding shall be advanced to the Indemnitee
by the Company within twenty (20) days after the receipt by the Company of a
statement or statements from the Indemnitee requesting such advance or advances
from time to time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence the expenses
incurred by the Indemnitee and, if required by law at the time of such advance,
shall include or be accompanied by an undertaking by or on behalf of the
Indemnitee to repay the amounts advanced if it should ultimately be determined
that the Indemnitee is not entitled to be indemnified against such expenses
pursuant to this Agreement.
3.2. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION.
3.2.1. To obtain indemnification under this Agreement, the
Indemnitee shall submit to the Secretary of the Company a written request,
including such documentation and information as is reasonably available to the
Indemnitee and reasonably necessary to determine whether and to what extent the
Indemnitee is entitled to indemnification (the "Supporting Documentation"). The
determination of the Indemnitee's entitlement to indemnification shall be made
not later than sixty (60) days after receipt by the Company of the written
request for indemnification, together with the Supporting Documentation. The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors of the Company (the "Board of
Directors") in writing that the Indemnitee has requested indemnification.
3.2.2. The Indemnitee's entitlement to indemnification under
this Agreement shall be determined in one of the following ways: (A) by a
majority vote of the Disinterested Directors (as hereinafter defined), even
though less than a quorum of the Board of Directors; (B) by a written opinion of
Independent Counsel (as hereinafter defined) if (x) a Change of Control (as
hereinafter defined) shall have occurred and the Indemnitee so requests or (y)
there are no Disinterested Directors, or a majority of Disinterested Directors,
even though less than a quorum, so directs; (C) by the stockholders of the
Company (but only if a majority of the Disinterested Directors, even though less
than a quorum of the Board of Directors, presents the issue of entitlement to
indemnification to the stockholders for their determination); or (D) as provided
in Section 3.3.
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3.2.3. In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 3.2.2,
a majority of the Disinterested Directors, or in the absence of any
Disinterested Directors, a majority of the Board of Directors, shall select the
Independent Counsel, but only an Independent Counsel to which the Indemnitee
does not reasonably object; provided, however, that if a Change of Control shall
have occurred, the Indemnitee shall select such Independent Counsel, but only an
Independent Counsel to which the Board of Directors does not reasonably object.
3.3. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. Except
as otherwise expressly provided in this Agreement, the Indemnitee shall be
presumed to be entitled to indemnification under this Agreement upon submission
of a request for indemnification, together with the Supporting Documentation in
accordance with Section 3.2.1, and thereafter the Company shall have the burden
of proof to overcome that presumption in reaching a contrary determination. In
any event, if the person or persons empowered under Section 3.2 to determine
entitlement to indemnification shall not have been appointed or shall not have
made a determination within sixty (60) days after receipt by the Company of the
request therefor together with the Supporting Documentation, the Indemnitee
shall be deemed to be entitled to indemnification and shall be entitled to such
indemnification unless (A) Indemnitee misrepresented or failed to disclose a
material fact in making the request for indemnification or in the Supporting
Documentation or (B) such indemnification is prohibited by law. The termination
of any Proceeding described in Section 1, or of any claim, issue or matter
herein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, adversely affect the right
of the Indemnitee to indemnification or create a presumption that the Indemnitee
did 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.
3.4. REMEDIES OF INDEMNITEE.
3.4.1. In the event that a determination is made pursuant to
Section 3.2 that the Indemnitee is not entitled to indemnification under this
Agreement, the Indemnitee shall be entitled to seek an adjudication of his
entitlement to such indemnification either, at the Indemnitee's sole option, in
(x) an appropriate court of the State of Delaware or any other court of
competent jurisdiction or (y) an arbitration to be conducted by a single
arbitrator pursuant to the rules of the American Arbitration Association; it
being understood that any such judicial proceeding or arbitration shall be de
novo and the Indemnitee shall not be prejudiced by reason of such adverse shall
have the burden of proving that the Indemnitee is not entitled to
indemnification under this Agreement.
3.4.2. If a determination shall have been made or deemed to
have been made, pursuant to Sections 3.2 or 3.3, that the Indemnitee is entitled
to indemnification, the Company shall be obligated to pay the amounts
constituting such indemnification within five (5) days after such determination
has been made or deemed to have been made and shall be conclusively
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bound by such determination unless (A) the Indemnitee misrepresented or failed
to disclose a material fact in making the request for indemnification or in the
Supporting Documentation or (B) such indemnification is prohibited by law. In
the event that advancement of expenses is not timely made pursuant to Section
3.1 or payment of indemnification is not made within five (5) days after a
determination of entitlement to indemnification has been made or deemed to have
been made pursuant to Section 3.2 or 3.3, the Indemnitee shall be entitled to
seek judicial enforcement of the Company's obligation to pay to the Indemnitee
such advancement of expenses or indemnification. Notwithstanding the foregoing,
the Company may bring an action, in an appropriate court in the State of
Delaware or any other court of competent jurisdiction, contesting the right of
the Indemnitee to receive indemnification hereunder due to the occurrence of an
event described in subclause (A) or (B) of this subsection 3.4.2 (a
"Disqualifying Event"); provided, however, that in any such action the Company
shall have the burden of proving the occurrence of such Disqualifying Event.
3.4.3. In the event that the Indemnitee, pursuant to this
Section 3.4, seeks a judicial adjudication of or an award in arbitration to
enforce 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 if the Indemnitee prevails in such judicial adjudication or
arbitration. If it shall be determined in such judicial adjudication or
arbitration that the Indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, all such expenses incurred by
the indemnitee in connection with such judicial adjudication or arbitration
shall be paid.
3.5. DEFINITIONS. For the purposes of this Section 3:
3.5.1. "Change in Control" means a change in control of the
Company of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Act"), whether or not the Company is then subject
to such reporting requirement; provided that, without limitation, such a change
in control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Act) becomes after the date hereof the
"beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing twenty percent (20%) or
more of the combined voting power of the Company's then outstanding securities
without the prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such acquisition; (B) the Company is a
party to a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; or (C) during any period of two
(2) consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose any new director
whose election or nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then still in office
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who were directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board of Directors.
3.5.2. "Disinterested Director" means a director of the
Company who is not or was not a party to the Proceeding in respect of which
indemnification is sought by the Indemnitee.
3.5.3. "Independent Counsel" means a law firm or a member of a
law firm that neither presently is, nor in the past five (5) years has been,
retained to represent (A) the Company or the Indemnitee in any matter material
to either such party or (B) any other party to the Proceeding giving rise to a
claim for indemnification under this Agreement. Notwithstanding the foregoing,
the term "Independent Counsel" shall not include any person who, under the
applicable standards of professional conduct then prevailing under the law of
the State of Delaware, 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.
SECTION 4. NOTIFICATION AND DEFENSE OF CLAIM.
4.1. Promptly after receipt of notice of the commencement of
any action, suit or proceeding, Indemnitee will, if a claim in respect thereof
is to be made against the Company under this Agreement, notify the Company of
the commencement thereof, but the omission so to notify the Company will not
relieve the Company from any liability that the Company may have to Indemnitee
under this Agreement unless the Company is materially prejudiced thereby. With
respect to any such action, suit or proceeding as to which Indemnitee notifies
the Company of the commencement thereof, (A) the Company will be entitled to
participate therein at its own expense, and (B) except as otherwise provided
below, the Company, jointly with any other indemnifying party similarly
notified, will be entitled to assume the defense thereof with counsel reasonably
satisfactory to Indemnitee. After notice from the Company to Indemnitee of the
Company's election so to assume the defense thereof, the Company will not be
liable to Indemnitee under this Agreement for any legal or other expenses
subsequently incurred by Indemnitee in connection with the defense thereof other
than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ Indemnitee's own counsel in such
action, suit or proceeding, but the fees and disbursements of such counsel
incurred after notice from the Company of the Company's assumption of the
defense thereof shall be at the expense of Indemnitee unless (i) the employment
by counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee
shall have reasonably concluded that there may be a conflict of interest between
the Company and Indemnitee in the conduct of the defense of such action, (iii)
such action, suit or proceeding seeks penalties or other relief against
Indemnitee with respect to which the Company could not provide monetary
indemnification to Indemnitee (such as injunctive relief or incarceration), or
(iv) the Company shall not in fact have employed counsel to assume the defense
of such action, in each of which cases the fees and disbursements of counsel
shall be at the expense of the Company. The Company shall not be entitled to
assume the defense of any action, suit or proceeding brought by or on behalf of
the Company, or as to which Indemnitee shall have reached the conclusion
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specified in (ii) above, or which involves penalties or other relief against
Indemnitee of the type referred to in (iii) above.
4.2. The Company shall not be liable to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any action or claim
effected without the Company's written consent. The Company shall not settle any
action or claim in any manner that would impose any penalty or limitation on
Indemnitee without Indemnitee's written consent. Neither the Company nor
Indemnitee will unreasonably withhold consent to any proposed settlement.
SECTION 5. 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, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby,
and (B) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, all portions of any section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
are not themselves invalid, illegal or unenforceable) shall be construed so as
to give effect to the intent manifested by the provision held invalid, illegal
or unenforceable.
SECTION 6. COMPANY'S RIGHT TO INDEMNIFICATION. Nothing in this
Agreement shall diminish, limit or otherwise restrict or modify in any way the
Company's right to indemnification or contribution from an Indemnitee or an
Indemnitee's obligation to indemnify or hold harmless the Company under any
agreement, instrument, commitment or understanding now or hereafter in effect.
SECTION 7. AMENDMENTS AND WAIVER. No amendment, modification
or discharge or this Agreement, and no waiver hereunder, shall be valid or
binding unless set forth in writing and duly executed by both of the parties
hereto. Neither the waiver by any of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure of any of
the parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any of such provisions, rights or privileges hereunder. No
delay or failure on the part of any party in exercising any right, power or
privilege under this Agreement or under any other instruments given in
connection with or pursuant to this Agreement shall impair any such right, power
or privilege or be construed as a waiver of any default or any acquiescence
therein. No single or partial exercise of any such right, power or privilege
shall preclude the further exercise of any other right, power or privilege.
SECTION 8. 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, who shall execute all papers required
and shall do everything that may be
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necessary to secure such rights, including the execution and delivery of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
SECTION 9. NO DUPLICATION OF PAYMENT. The Company shall not
be liable under this Agreement to make any payment in connection with any claim
made against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, the Certificate or otherwise) of the
amounts otherwise indemnifiable hereunder.
SECTION 10. GOVERNING LAW; HEADINGS. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Georgia applicable to contracts made and to be performed in such state
without giving effect to the principles-of conflicts of laws. The section and
other headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning of interpretation of this Agreement.
SECTION 11. SUCCESSORS; BINDING AGREEMENT. The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance reasonably
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
inure to the benefit of and be enforceable by Indemnitee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Indemnitee should die while any amounts would still be
payable to Indemnitee hereunder if Indemnitee had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Indemnitee's devisee, legatee, or other designee, or
if there be no such designee, to Indemnitee's estate.
SECTION 12. NOTICE. For the purposes of this Agreement,
notices and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage prepaid, as
follows:
If to Indemnitee:
Xxxx X. Arena
0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxx X. Arena
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If to the Company:
Cereus Technology Partners, Inc.
0000 Xxxxxxxxx Xxxx
400 Northpark, Suite 1000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
SECTION 13. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument.
[Signatures on next page]
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IN WITNESS WHEREOF, Indemnitee has executed and delivered this
Agreement, and the Company has caused this Agreement to be executed and
delivered, all as of the day and year first above written.
CEREUS TECHNOLOGY PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
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Title: Chief Executive Officer
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INDEMNITEE
/s/ XXXX X. ARENA
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XXXX X. ARENA
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