EXHIBIT 10.1
INDEMNITY AGREEMENT
This Indemnity Agreement (this "Agreement") is made as of October 21, 1997
by and between Virtual Mortgage Network, Inc., (the "Company"), and __________
______ (the "Indemnitee"), a director [officer] of the Company.
W I T N E S S E T H:
WHEREAS, the Indemnitee is currently serving [has agreed to serve] as a
director [officer] of the Company and in such capacity has rendered valuable
services to the Company.
WHEREAS, 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 directors and officers are
subject due to their position with the Company and has concluded that insurance
and statutory provisions may provide inadequate and unacceptable protection to
certain individuals requested to serve as its directors and officers.
WHEREAS, in order to induce and encourage highly experienced and capable
persons such as the Indemnitee [to continue] to serve as a director [officer] of
the Company, the Board of Directors has determined, after due consideration and
investigation of the terms and provisions of this Agreement and the various
other options available to the Company and the Indemnitee in lieu of this
Agreement, that 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 [continued] services of the
Indemnitee and in order to induce the Indemnitee [to continue] to serve as a
director [officer], the Company and the Indemnitee agree as follows:
SECTION 1. DEFINITIONS
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As used in this Agreement:
(a) The term "Expenses" includes, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, expenses of investigations, judicial or administrative proceedings or
appeals, amounts paid in settlement by or on behalf of Indemnitee, 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 is not otherwise compensated by the
Company or any third party. The term "Expenses" does not include the amount of
judgments, fines, liabilities, penalties or ERISA excise taxes actually levied
against the Indemnitee.
(b) The term "Indemnified Costs" shall mean all Expenses, judgments, fines,
liabilities, penalties and ERISA excise taxes actually incurred by the
Indemnitee in connection with the investigation, defense, appeal or settlement
of any Proceeding.
(c) The term "Proceeding" shall include any threatened, pending or
completed action, suit or proceeding, whether brought by or 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 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 the Indemnitee is serving in such capacity at the
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time any Indemnified Cost is incurred for which indemnification or reimbursement
is to be provided under this Agreement.
SECTION 2. AGREEMENT TO SERVE
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The Indemnitee agrees to continue to serve as a director [officer] of the
Company at the will of the Company for so long as he is duly elected or
appointed or until such time as he tenders his resignation in writing. Any
present or future employment agreement between the Indemnitee and the Company is
not modified by this Agreement and nothing contained herein creates in the
Indemnitee any right of continued employment.
2.1 Repayment of Indemnified Costs. The Indemnitee will reimburse the
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Company for all Indemnified Costs paid by the Company if and only to the extent
that a court of competent jurisdiction finally decides that the Indemnitee is
not entitled to be indemnified by the Company for such Indemnified Costs under
the provisions of applicable law, the Company's Articles or Certificate of
Incorporation, as applicable, its Bylaws, this Agreement, or otherwise. The
burden of proving by clear and convincing evidence that indemnification or
advances are not appropriate shall be on the Company.
2.2 Repayment. The Indemnitee will promptly repay to the Company any
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amounts paid to the Indemnitee pursuant to other rights of indemnification or
under any insurance policy, to the extent those payments are duplicative of
payments under this Agreement.
SECTION 3. INDEMNIFICATION
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3.1 Indemnification. The Company shall indemnify the Indemnitee if the
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Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any Proceeding, by reason of the fact that the Indemnitee is or was
a director [officer] of the Company, or is or was serving at the request of
the Company as a director, officer,
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employee or agent of another enterprise against all Indemnified Costs, to the
fullest extent permitted by applicable law.
3.2 Partial Indemnification. If the Indemnitee is entitled under any
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provision of this Agreement to indemnification by the Company for some or a
portion of, but not the total amount of, the Indemnified Costs, the Company
shall nevertheless indemnify the Indemnitee for the portion of the Indemnified
Costs to which the Indemnitee is entitled.
3.3 Indemnification Hereunder Not Exclusive. The indemnification provided
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by this Agreement shall not be deemed exclusive of any other rights to which the
Indemnitee may be entitled under the Articles or Certificate of Incorporation,
as applicable, the Bylaws, any other agreement, any vote of stockholders or
disinterested directors, applicable law, or otherwise, both as to action in the
Indemnitee's official capacity and as to action in another capacity on behalf of
the Company while holding office.
3.4 Indemnification of Expenses of Successful Party. Notwithstanding any
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other provisions of this 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, the Indemnitee shall be indemnified against all
Expenses incurred in connection therewith to the fullest extent permitted by
applicable law.
SECTION 4. PRESUMPTIONS
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4.1 Presumption Regarding Standard of Conduct. The Indemnitee shall be
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conclusively presumed to have met the relevant standards of conduct as defined
by applicable law for indemnification pursuant to this Agreement.
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4.2 Determination of Right to Indemnification. The Company shall pay all
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claims under this Agreement within 15 days of receipt of written notice by the
Indemnitee. The Company agrees that it has no defense to the nonpayment of such
claims and that its remedies are limited to reimbursement as provided in Section
2.1 of this Agreement. The Indemnitee's Expenses incurred in connection with
any Proceeding concerning his right to indemnification or advances in whole or
in part pursuant to this Agreement shall also be indemnified by the Company
regardless of the outcome of the Proceeding.
SECTION 5. ADVANCES OF EXPENSES
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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 law; provided that as long as applicable law requires an undertaking,
the Indemnitee shall undertake in writing to repay such amount to the extent
that it is ultimately determined that the Indemnitee is not entitled to
indemnification.
SECTION 6. INDEMNIFICATION PROCEDURE
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6.1 Notice. Promptly after receipt by the Indemnitee of notice of the
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commencement of any Proceeding, the Indemnitee will, if a claim is to be made
against the Company under this Agreement, notify the Company of the commencement
thereof. The omission to so notify the Company will not relieve the Company
from any liability which the Company may have to the Indemnitee otherwise than
under this Agreement.
6.2 Company Participation. With respect to any Proceeding for which
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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
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Company may assume the defense of the Proceeding, with counsel satisfactory to
the Indemnitee. After notice from the Company to the Indemnitee of its election
to assume the defense of a Proceeding, the Company will not be liable to the
Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by the Indemnitee with the defense thereof, other than reasonable costs
of investigation or as otherwise provided below. The Indemnitee shall have the
right to employ the Indemnitee's counsel in any Proceeding but the fees and
expenses of the 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, or (iii) the Company shall not in fact have
employed counsel to assume the defense of a Proceeding, in each of which cases
the fees and expenses of the Indemnitee's counsel shall be at the expense of 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 made the conclusion that there may be a conflict of interest between the
Company and the Indemnitee.
6.3 Settlement. Neither the Company nor the Indemnitee shall settle or
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compromise any Proceeding in any manner which would impose any penalty or
limitation on either the Indemnitee or the Company without the written consent
of either the Company or the Indemnitee, as the case may be; provided, however,
that neither the Company nor the Indemnitee shall unreasonably withhold such
consent.
6.4 Subrogation. If the Company pays Indemnified Costs, the Company will
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be subrogated to the extent of such payment to all of the rights of recovery of
the Indemnitee against third parties. The Indemnitee will do all things
reasonably necessary to secure such rights, including the execution of documents
necessary to enable the Company effectively to bring suit to enforce such
rights.
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SECTION 7. LIMITATIONS ON INDEMNIFICATION
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No payments pursuant to this Agreement shall be made by the Company:
(a) to indemnify or advance Expenses to the Indemnitee with respect to
Proceedings initiated or brought voluntarily by the Indemnitee 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 law, but the 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 indemnify the Indemnitee for any Indemnified Costs for which
payment is actually made to the Indemnitee under a valid and collectible
insurance policy, except in respect of any excess beyond the amount of payment
under such policy;
(c) to indemnify the Indemnitee for any Indemnified Costs sustained in any
Proceeding for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder and amendments thereto or similar provisions
of any federal, state or local statutory law; or
(d) if a court of competent jurisdiction shall finally determine that any
indemnification hereunder is unlawful.
SECTION 8. MAINTENANCE OF LIABILITY INSURANCE
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8.1 Affirmative Covenant of the Company. The Company hereby covenants and
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agrees that, as long as the Indemnitee shall continue to serve as a director of
the Company and thereafter so long as the Indemnitee shall be subject to any
possible Proceeding, the Company, subject to subsection 8.3 of this Agreement,
shall promptly
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obtain and maintain in full force and effect directors' and officers' liability
insurance ("D&O Insurance") in reasonable amounts from established and reputable
insurers.
8.2 Indemnitee Named as Insured. In all D&O Insurance policies, the
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Indemnitee shall be named as an insured in a manner that provides the Indemnitee
the same rights and benefits as are accorded to the most favorably insured of
the Company's directors and officers.
8.3 Exemption from Maintenance of Insurance. Notwithstanding the
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foregoing, the Company shall have no obligation to obtain or maintain D&O
Insurance if the Company determines in good faith that insurance is not
reasonably available, the premium costs for insurance are, in the opinion of the
Company, disproportionate to the amount of coverage provided, the coverage
provided by such insurance is so limited by exclusions that it provides an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary of the Company. If the Company provides D&O
Insurance for any officer or director of the Company, the Company shall provide
D&O Insurance for the Indemnitee under terms at least as favorable to the
Indemnitee as those secured for such other officers or directors.
SECTION 9. MISCELLANEOUS
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9.1 Successors and Assigns. This Agreement shall be binding upon, and
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shall inure to the benefit of the Indemnitee and the Indemnitee's heirs,
personal representatives and assigns, and the Company and its successors and
assigns.
9.2 Separability. Each provision of this Agreement is a separate and
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distinct agreement and independent of the others, so that if any provision of
this Agreement shall be held to be invalid or unenforceable for any reason, the
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof. To the extent required, any provision of this
Agreement may be modified by a
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court of competent jurisdiction to preserve its validity and to provide the
Indemnitee with the broadest possible indemnification permitted under applicable
law.
9.3 Savings Clause. If this Agreement or any portion hereof shall be
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invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify Indemnitee as to Indemnified Costs with
respect to any Proceeding to the full extent permitted by any applicable portion
of this Agreement that shall not have been invalidated or by any applicable
provision of applicable law.
9.4 Interpretation; Governing Law. This Agreement shall be construed as a
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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 by and interpreted in accordance with the laws of the State of Nevada;
provided that, in the event the Company should reincorporate in the State of
Delaware, this Agreement shall be governed by and interpreted in accordance with
the laws of the State of Delaware. Any claims made pursuant to this Agreement
shall be governed by the governing law in effect on the date such claim is made.
9.5 Amendments. No amendment, waiver, modification, termination or
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cancellation of this Agreement shall be effective unless in writing signed by
the party against whom enforcement is sought. The indemnification rights
afforded to the Indemnitee by this Agreement are contract rights and may not be
diminished, eliminated or otherwise affected by amendments to the Company's
Articles or Certificate of Incorporation, as applicable, Bylaws or other
agreements, including D&O Insurance policies.
9.6 Counterparts. This Agreement may be executed in one or more
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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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9.7 Notices. Any notice required to be given under this Agreement shall
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be directed to Virtual Mortgage Network, Inc. at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, and to Indemnitee at
the address set forth below or to another address as either shall designate in
writing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
INDEMNITEE
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Name:
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Address:
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VIRTUAL MORTGAGE NETWORK, INC.
By:
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Name:
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Title:
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