INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT ("Agreement") is made on June __,1999,
between eSynch Corporation, a Delaware corporation (the "Company"), and
_____________ ("Indemnitee"), an officer and/or member of the Board of
Directors of the Company.
WHEREAS, the Company desires the benefits of having Indemnitee serve as
an officer and/or director secure in the knowledge that expenses, liabilities
and losses incurred by him in his good faith service to the Company will be
borne by the Company or its successors and assigns in accordance with
applicable law; and
WHEREAS, the Company desires that Indemnitee resist and defend against
what Indemnitee may consider to be unjustified investigations, claims,
actions, suits and proceedings which have arisen or may arise in the future
as a result of Indemnitee's service to the Company notwithstanding that
conditions in the insurance markets may make directors' and officers'
liability insurance coverage unavailable or available only at premium levels
which the Company may deem inappropriate to pay; and
WHEREAS, the parties believe it appropriate to memorialize and reaffirm
the Company's indemnification obligations to Indemnitee and, in addition, set
forth the indemnification agreements contained herein;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties agree as follows:
1. INDEMNIFICATION. Indemnitee shall be indemnified and held
harmless by the Company to the fullest extent permitted by its Certificate of
Incorporation, Bylaws and applicable law, as the same exists or may hereafter
be amended, against all expenses, liabilities and loss (including attorneys'
fees, judgments, fines, and amounts paid or to be paid in any settlement
approved in advance by the Company, such approval not to be unreasonably
withheld) (collectively, "Indemnifiable Expenses") actually reasonably
incurred or suffered by Indemnitee in connection with any present or future
threatened, pending or contemplated investigation, claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative
(collectively, "Indemnifiable Litigation"), (i) to which Indemnitee is or was
a party or is threatened to be made a party by reason of any action or
inaction in Indemnitee's capacity as a director or officer of the Company, or
(ii) with respect to which Indemnitee is otherwise involved by reason of the
fact that Indemnitee is or was serving as a director, officer, employee or
agent of the Company, or of any subsidiary or division, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise.
Notwithstanding the foregoing, Indemnitee shall have no right to
indemnification for expenses and the payment of profits arising from the
purchase and sale by Indemnitee of securities in violation of Section 16(b)
of the Securities Exchange Act of 1934, as amended.
2. INTERIM EXPENSES. The Company agrees to pay Indemnifiable
Expenses incurred by Indemnitee in connection with any Indemnifiable
Litigation in advance of the final disposition thereof, provided that the
Company has received an undertaking by or on behalf of Indemnitee,
substantially in the form attached hereto as EXHIBIT A, to repay the amount
so advanced to the extent that it is ultimately determined that Indemnitee is
not entitled to be indemnified by the Company under this Agreement or
otherwise. The advances to be made hereunder shall be paid by the Company to
Indemnitee within twenty (20) days following delivery of a written request
therefor by Indemnitee to the Company.
3. PROCEDURE FOR MAKING DEMAND. Indemnitee shall, as a condition
precedent to his right to be indemnified under this Agreement, give the
Company notice in writing as soon as practicable of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address set forth in Section 10 hereof (or such
other address as the Company shall designate in writing to Indemnitee).
Notice shall be deemed received three business days after the date postmarked
and sent by certified or registered mail, properly addressed; otherwise
notice shall be deemed received when such notice shall actually be received
by the Company. In addition, Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be
within Indemnitee's power. Any indemnification provided for in Section 1
shall be made no later than forty-five (45) days after receipt of the written
request of Indemnitee.
4. FAILURE TO INDEMNIFY.
(a) If a claim under this Agreement, or any statute, or under any
provision of the Company's Certificate of Incorporation or Bylaws providing
for indemnification, is not paid in full by the Company, within forty-five
(45) days after a written request for payment thereof has been received by
the Company, Indemnitee may, but need not, at any time thereafter bring an
action against the Company to recover the unpaid amount of the claim and,
subject to Section 11 of this Agreement, if successful in whole or in part,
Indemnitee shall also be entitled to be paid for the expense (including
attorneys' fees) of bringing such action.
(b) It shall be a defense to such action (other than an action
brought to enforce a claim for expenses incurred in connection with any
action, suit or proceeding in advance of its final disposition) that
Indemnitee has not met the standard of conduct which make it permissible
under applicable law for the Company to indemnify Indemnitee for the amount
claimed, but the burden of proving such defense shall be on the Company and
Indemnitee shall be entitled to receive interim payments of interim expenses
pursuant to Section 2 hereof unless and until such defense may be finally
adjudicated by court order or judgment from which no further right of appeal
exists. It is the parties' intention that if the Company contests
Indemnitee's right to indemnification, the question of Indemnitee's right to
indemnification shall be for the court to decide, and neither the failure of
the Company (including its board of directors, independent legal counsel, or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its board of directors, any committee
or subgroup of the board of directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has or has not met the
applicable standard of conduct.
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5. NOTICE TO INSURERS. If, at the time of the receipt of a notice of
a claim pursuant to Section 3 thereof, the Company has director and/or
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.
6. RETENTION OF COUNSEL. In the event that the Company shall be
obligated to pay Indemnifiable Expenses as a result of any proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, which
approval shall not be unreasonably withheld, upon the delivery to Indemnitee
of written notice of its election to do so. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by
the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by that Indemnitee
with respect to that same proceeding, provided that (i) Indemnitee shall have
the right to employ his or her counsel in any such proceeding at Indemnitee's
expense, and (ii) if (A) the employment of counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense, or (C) the Company shall not,
in fact, have employed counsel to assume defense of such proceeding, then the
fees and expenses of Indemnitee's counsel shall be at the expense of the
Company.
7. SUCCESSORS. This Agreement establishes contract rights which shall
be binding upon, and shall inure to the benefit of, the successors, assigns,
heirs and legal representatives of the parties hereto.
8. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may
prohibit the Company from indemnifying its directors and officers under this
Agreement or otherwise. Indemnitee understands and acknowledges that the
Company may be required in the future to undertake to the Securities and
Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company's right under public
policy to indemnify Indemnitee, and, in that event, the Indemnitee's rights
and the Company's obligations hereunder shall be subject to that
determination.
9. CONTRACT RIGHTS NOT EXCLUSIVE. The contract rights conferred by
this Agreement shall be in addition to, but not exclusive of, any other right
which Indemnitee may have or may hereafter acquire under any statute,
provision of the Company's Certificate of Incorporation or Bylaws, agreement,
vote of shareholders or disinterested directors, or otherwise.
10. INDEMNITEE'S OBLIGATIONS. The Indemnitee shall promptly advise the
Company in writing of the institution of any investigation, claim, action,
suit or proceeding which is or may be subject to this Agreement and keep the
Company generally informed of, and consult with the Company with respect to,
the status of any such investigation, claim, action, suit or proceeding.
Notices to the Company shall be directed to the Company, at its principal
executive office, Attn: Chief Executive Officer (or other such address as
the Company shall designate in writing to Indemnitee). Notice shall be
deemed received three days after the date postmarked if sent by certified or
registered mail, properly addressed. In addition, Indemnitee shall give the
Company such information and cooperation as it may reasonably require and as
shall be within Indemnitee's
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power.
11. ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms
hereof, Indemnitee shall be entitled to be paid all court costs and expenses,
including reasonable attorneys' fees, incurred by Indemnitee with respect to
such action, unless as a part of such action, a court of competent
jurisdiction determines that each of the material assertions made by
Indemnitee as a basis for such action were not made in good faith or were
frivolous. In the event of an action instituted by or in the name of the
Company under this Agreement, or to enforce or interpret any other terms of
this Agreement, Indemnitee shall be entitled to be paid all court costs and
expenses, including attorneys' fees, incurred by Indemnitee in defense of
such action (including with respect to Indemnitee's counterclaims and
cross-claims made in such action), unless as a part of such action the court
determines that each of Indemnitee's material defenses to such action were
made in bad faith or were frivolous.
12. SEVERABILITY. Should any provision of this Agreement, or any
clause hereof, be held to be invalid, illegal or unenforceable, in whole or
in part, the remaining provisions and clauses of this Agreement shall remain
fully enforceable and binding on the parties.
13. MODIFICATION AND WAIVER. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions hereof
(whether of not similar) nor shall such waiver constitute a continuing waiver.
14. CHOICE OF LAW. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Delaware.
IN WITNESS WHEREOF, the parties have executed this Indemnification
Agreement as of the day and year first written above.
ESYNCH CORPORATION:
By:
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Its:
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INDEMNITEE:
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Name:
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EXHIBIT A
UNDERTAKING AGREEMENT
This UNDERTAKING AGREEMENT is made on _______________, 19__, between
eSynch Corporation, a Delaware corporation (the "Company") and _______________,
an officer and/or member of the board of directors of the Company
("Indemnitee").
WHEREAS, Indemnitee may become involved in investigations, claims,
actions, suits or proceedings which have arisen or may arise in the future as
a result of Indemnitee's service to the Company; and
WHEREAS, Indemnitee desires that the Company pay any and all expenses
(including, but not limited to, attorneys' fees and court costs) actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in defending or
investigating any such suits or claims and that such payment be made in
advance of the final disposition of such investigations, claims, actions,
suits or proceedings to the extent that Indemnitee has not been previously
reimbursed by insurance; and
WHEREAS, the Company is willing to make such payments but, in accordance
with Section 145 of the General Corporation Law of the State of Delaware, the
Company may make such payments only if it receives an undertaking to repay
from Indemnitee; and
WHEREAS, Indemnitee is willing to give such an undertaking;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:
1. In regard to any payments made by the Company to Indemnitee
pursuant to the terms of the Indemnification Agreement dated __________,
19__, between the Company and Indemnitee, Indemnitee hereby undertakes and
agrees to repay to the Company any and all amounts so paid promptly and in
any event within thirty (30) days after the disposition, including any
appeals, of any litigation or threatened litigation on account of which
payments were made, but only to the extent that Indemnitee is ultimately
found not entitled to be indemnified by the Company under the Bylaws of the
Company and Section 145 of the General Corporation Law of the State of
Delaware, or other applicable law.
2. This Agreement shall not affect in any manner rights which
Indemnitee may have against the Company, any insurer or any other person to
seek indemnification for or reimbursement of any expenses referred to herein
or any judgment which may be rendered in any litigation or proceeding.
IN WITNESS WHEREOF, the parties have caused this Undertaking Agreement
to be executed on the date first above written.
INDEMNITEE: ESYNCH CORPORATION:
SIGNATURE: By:
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PRINT NAME: Title:
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