EXHIBIT 10.16
FORM OF INDEMNITY AGREEMENT
This Indemnity Agreement (this "Agreement") is made and entered into
---------
this _____ day of ____, 2000, between Catalytica Energy Systems, Inc., a
Delaware corporation (the "Company"), and ______________________ ("Indemnitee").
------- ----------
RECITALS:
--------
A. Indemnitee, as a member of the Company's Board of Directors
and/or an officer of the Company, performs valuable services for the Company.
B. The Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for corporate directors, officers, employees,
controlling persons, agents and fiduciaries, the significant increases in the
cost of such insurance and the general reductions in the coverage of such
insurance.
C. The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, controlling persons, agents and fiduciaries to expensive litigation
risks at the same time as the availability and coverage of liability insurance
has been severely limited.
D. The stockholders of the Company have adopted Bylaws (the
"Bylaws") providing for the indemnification of the officers, directors, agents
------
and employees of the Company to the maximum extent authorized by Section 145 of
the Delaware General Corporation Law, as amended ("DGCL").
----
E. Indemnitee does not regard the current protection available for
the Company's directors, officers, employees, controlling persons, agents and
fiduciaries as adequate under the present circumstances, and Indemnitee and
other directors, officers, employees, controlling persons, agents and
fiduciaries of the Company may not be willing to serve or continue to serve in
such capacities without additional protection.
F. The Bylaws and the DGCL, by their non-exclusive nature, permit
contracts between the Company and its directors, officers, employees,
controlling persons, agents or fiduciaries with respect to indemnification of
such directors.
G. The Company (a) desires to attract and retain the involvement of
highly qualified individuals, such as Indemnitee, to serve the Company and, in
part, in order to induce Indemnitee to be involved with the Company and (b)
wishes to provide for the indemnification and advancing of expenses to
Indemnitee to the maximum extent permitted by law.
H. In view of the considerations set forth above, the Company
desires that Indemnitee be indemnified by the Company as set forth herein.
AGREEMENT:
---------
Now, Therefore, in consideration of Indemnitee's service to the Company,
the parties hereto agree as follows:
1. Indemnity of Indemnitee. The Company hereby agrees to indemnify
-----------------------
Indemnitee to the fullest extent permitted by law, even if such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation (the "Certificate"), the Company's Bylaws
-----------
or by statute. In the event of any change after the date of this Agreement in
any applicable law, statute or rule which expands the right of a Delaware
corporation to indemnify a member of its Board of Directors or an officer,
employee, controlling person, agent or fiduciary, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits afforded by such change. In the event of any change in any applicable
law, statute or rule which narrows the right of a Delaware corporation to
indemnify a member of its Board of Directors or an officer, employee, agent or
fiduciary, such change, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations hereunder except as set forth
in Section 9(a) hereof.
2. Additional Indemnity. The Company hereby agrees to hold
--------------------
harmless and indemnify the Indemnitee:
(a) Against any and all expenses incurred by Indemnitee,
as set forth in Section 3(a) below; and
(b) Otherwise to the fullest extent not prohibited by the
Certificate, the Bylaws or the DGCL.
3. Indemnification Rights.
----------------------
(a) Indemnification of Expenses. The Company shall
---------------------------
indemnify and hold harmless Indemnitee, together with Indemnitee's partners,
affiliates, employees, agents and spouse and each person who controls any of
them or who may be liable within the meaning of Section 15 of the Securities
Act of 1933, as amended (the "Securities Act"), or Section 20 of the
--------------
Securities Exchange Act of 1934, as amended (the "Exchange Act"), to the
------------
fullest extent permitted by law if Indemnitee was or is or becomes a party
to or witness or other participant in, or is threatened to be made a party
to or witness or other participant in, any threatened, pending or completed
action, suit, proceeding or alternative dispute resolution mechanism, or any
hearing, inquiry or investigation that Indemnitee and the Company believe
might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a "Claim") against (i)
-----
any and all expenses (including attorneys' fees) and all other costs,
expenses and obligations incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in, a Claim, (ii)
judgments, fines, penalties and amounts paid in settlement (if such
settlement is approved in advance by the Company, which approval shall not
be unreasonably
2
withheld) of a Claim and (iii) any federal, state, local or foreign taxes
imposed on Indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement (collectively, hereinafter "Expenses"),
--------
including all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, incurred by Indemnitee by
reason of (or arising in part out of) any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, controlling
person, agent or fiduciary of the Company or any subsidiary of the Company,
or is or was serving at the request of the Company as a director, officer,
employee, controlling person, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any
action or inaction on the part of Indemnitee while serving in such capacity
including, without limitation, any and all losses, claims, damages, expenses
and liabilities, joint or several (including any investigation, legal and
other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit, proceeding or any claim asserted) under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, which relate directly or indirectly
to the registration, purchase, sale or ownership of any securities of the
Company or to any fiduciary obligation owed with respect thereto
(hereinafter an "Indemnification Event"). The Company shall make such
---------------------
payment of Expenses as soon as practicable but in any event no later than
25 days after written demand by Indemnitee therefor is presented to the
Company.
(b) Reviewing Party. Notwithstanding the foregoing, (i) the
---------------
obligations of the Company under Section 2 shall be subject to the
condition that the Reviewing Party (as described in Section 11(e) hereof)
shall not have determined (in a written opinion, in any case in which the
Independent Legal Counsel as defined in Section 11(d) hereof is involved)
that Indemnitee would not be permitted to be indemnified under applicable
law and (ii) and Indemnitee acknowledges and agrees that the obligation of
the Company to make an advance payment of Expenses to Indemnitee pursuant
to Section 4(a) (an "Expense Advance") shall be subject to the condition
---------------
that, if, when and to the extent that the Reviewing Party determines that
Indemnitee would not be permitted to be so indemnified under applicable
law, the Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore
paid; provided, however, that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to secure
a determination that Indemnitee should be indemnified under applicable law,
any determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto
(as to which all rights of appeal therefrom have been exhausted or lapsed).
Indemnitee's obligation to reimburse the Company for any Expense Advance
shall be unsecured and no interest shall be charged thereon. If there has
not been a Change in Control (as defined in Section 11(c) hereof), the
Reviewing Party shall be selected by the Board of Directors, and if there
has been such a Change in Control (other than a Change in Control which has
been approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control), the Reviewing Party
shall be the Independent Legal Counsel referred to in Section 3(e) hereof.
If there has been no determination by the Reviewing
3
Party or if the Reviewing Party determines that Indemnitee substantively
would not be permitted to be indemnified in whole or in part under
applicable law, Indemnitee shall have the right to commence litigation
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the
legal or factual bases therefor, and the Company hereby consents to service
of process and to appear in any such proceeding. Any determination by the
Reviewing Party otherwise shall be conclusive and binding on the Company
and Indemnitee.
(c) Contribution. If the indemnification provided for in
------------
Section 3(a) above for any reason is held by a court of competent
jurisdiction to be unavailable to an Indemnitee in respect of any losses,
claims, damages, expenses or liabilities referred to therein, then the
Company, in lieu of indemnifying Indemnitee thereunder, shall contribute to
the amount paid or payable by Indemnitee as a result of such losses,
claims, damages, expenses or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
Indemnitee or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and Indemnitee in connection with
the action or inaction which resulted in such losses, claims, damages,
expenses or liabilities, as well as any other relevant equitable
considerations. In connection with the registration of the Company's
securities, the relative benefits received by the Company and Indemnitee
shall be deemed to be in the same respective proportions that the net
proceeds from the offering (before deducting expenses) received by the
Company and the Indemnitee, in each case as set forth in the table on the
cover page of the applicable prospectus, bear to the aggregate public
offering price of the securities so offered. The relative fault of the
Company and Indemnitee shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or Indemnitee and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and Indemnitee agree that it would not be just and
equitable if contribution pursuant to this Section 3(c) were determined by
pro rata or per capita allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in
the immediately preceding paragraph. In connection with the registration
of the Company's securities, in no event shall an Indemnitee be required to
contribute any amount under this Section 3(c) in excess of the lesser of
(i) that proportion of the total of such losses, claims, damages or
liabilities indemnified against equal to the proportion of the total
securities sold under such registration statement which is being sold by
Indemnitee or (ii) the proceeds received by Indemnitee from its sale of
securities under such registration statement. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the
Securities Act) shall be entitled to contribution from any person who was
not found guilty of such fraudulent misrepresentation.
(d) Survival Regardless of Investigation. The
------------------------------------
indemnification and contribution provided for herein will remain in full
force and effect regardless of any
4
investigation made by or on behalf of Indemnitee or any officer, director,
employee, agent or controlling person of Indemnitee.
(e) Change in Control. After the date hereof, the Company
-----------------
agrees that if there is a Change in Control of the Company (other than a
Change in Control which has been approved by a majority of the Company's
Board of Directors who were directors immediately prior to such Change in
Control) then, with respect to all matters thereafter arising concerning
the rights of Indemnitee to payments of Expenses under this Agreement or
any other agreement or under the Company's Certificate or Bylaws as now or
hereafter in effect, Independent Legal Counsel (as defined in Section 11(d)
hereof) shall be selected by Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld). Such counsel, among other
things, shall render its written opinion to the Company and Indemnitee as
to whether and to what extent Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to abide by such
opinion and to pay the reasonable fees of the Independent Legal Counsel
referred to above and to fully indemnify such counsel against any and all
reasonable expenses (including attorneys' fees), claims, liabilities and
damages arising out of or relating to this Agreement or its engagement
pursuant hereto.
(f) Mandatory Payment of Expenses. Notwithstanding any
-----------------------------
other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in the defense of any action,
suit, proceeding, inquiry or investigation referred to in Section 3(a)
hereof or in the defense of any claim, issue or matter therein, Indemnitee
shall be indemnified against all Expenses incurred by Indemnitee in
connection herewith.
4. Expenses; Indemnification Procedure.
-----------------------------------
(a) Advancement of Expenses. The Company shall advance all
-----------------------
Expenses incurred by Indemnitee. The advances to be made hereunder shall
be paid by the Company to Indemnitee as soon as practicable but in any
event no later than ten business days after written demand by Indemnitee
therefor to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall
--------------------------------
give the Company notice in writing in accordance with Section 15 of this
Agreement as soon as practicable of any Claim made against Indemnitee for
which indemnification will or could be sought under this Agreement.
(c) No Presumptions; Burden of Proof. For purposes of this
--------------------------------
Agreement, the termination of any Claim by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of
nolo contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is
not permitted by applicable law. In addition, neither the failure of the
Reviewing Party to have made a determination as to whether Indemnitee has
met any particular standard of conduct or had any particular belief, nor an
actual determination by
5
the Reviewing Party that Indemnitee has not met such standard of conduct or
did not have such belief, prior to the commencement of legal proceedings by
Indemnitee to secure a judicial determination that Indemnitee should be
indemnified under applicable law, shall be a defense to Indemnitee's claim
or create a presumption that Indemnitee has not met any particular standard
of conduct or did not have any particular belief. In connection with any
determination by the Reviewing Party or otherwise as to whether Indemnitee
is entitled to be indemnified hereunder, the burden of proof shall be on
the Company to establish that Indemnitee is not so entitled.
(d) Notice to Insurers. If, at the time of the receipt by
------------------
the Company of a notice of a Claim pursuant to Section 4(b) hereof, the
Company has liability insurance in effect which may cover such Claim, the
Company shall give prompt notice of the commencement of such Claim to the
insurers in accordance with the procedures set forth in each of the
Company's policies. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of Indemnitee,
all amounts payable as a result of such action, suit, proceeding, inquiry
or investigation in accordance with the terms of such policies.
(e) Selection of Counsel. In the event the Company shall
--------------------
be obligated hereunder to pay the Expenses of any Claim, the Company shall
be entitled to assume the defense of such Claim, with counsel approved by
the 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 Indemnitee with respect to the same Claim; provided that (i)
Indemnitee shall have the right to employ Indemnitee's counsel in any such
Claim 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 is a conflict of interest
between the Company and Indemnitee in the conduct of any such defense or
(C) the Company shall not continue to retain such counsel to defend such
Claim, then the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company.
5. Nonexclusivity. The indemnification provided by this Agreement
--------------
shall be in addition to any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its Bylaws, any agreement, any vote of
stockholders or disinterested directors, the DGCL, or otherwise. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action Indemnitee took or did not take while serving in an indemnified
capacity even though Indemnitee may have ceased to serve in such capacity.
6. No Duplication of Payments. The Company shall not be liable
--------------------------
under this Agreement to make any payment in connection with any Claim made
against any Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, Certificate of Incorporation, Bylaw or
otherwise) of the amounts otherwise indemnifiable hereunder.
6
7. Partial Indemnification. If any Indemnitee is entitled under
-----------------------
any provision of this Agreement to indemnification by the Company for any
portion of Expenses incurred in connection with any Claim, but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
8. Mutual Acknowledgement. The Company and Indemnitee acknowledge
----------------------
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, controlling
persons, agents or fiduciaries under this Agreement or otherwise. Each
Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company's rights under public policy to
indemnify Indemnitee.
9. Exceptions. Any other provision herein to the contrary
----------
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Claims Initiated by Indemnitee. To indemnify or
------------------------------
advance expenses to any Indemnitee with respect to Claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except (i)
with respect to actions or proceedings to establish or enforce a right to
indemnify under this Agreement or any other agreement or insurance policy
or under the Company's Certificate of Incorporation or Bylaws now or
hereafter in effect relating to Claims for Indemnifiable Events, (ii) in
specific cases if the Board of Directors has approved the initiation or
bringing of such Claim or (iii) as otherwise required under Section 145 of
the DGCL, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance expense payment or insurance
recovery, as the case may be;
(b) Claims Under Section 16(b). To indemnify Indemnitee
--------------------------
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 Exchange
Act or any similar successor statute; or
(c) Claims Excluded Under Section 145 of the Delaware
-------------------------------------------------
General Corporation Law. To indemnify Indemnitee if (i) Indemnitee did not
-----------------------
act in good faith or in a manner reasonably believed by such Indemnitee to
be in or not opposed to the best interests of the Company, (ii) with
respect to any criminal action or proceeding, Indemnitee had reasonable
cause to believe Indemnitee's conduct was unlawful or (iii) Indemnitee
shall have been adjudged to be liable to the Company unless and only to the
extent the court in which such action was brought shall permit
indemnification as provided in Section 145(b) of the DGCL.
10. Period of Limitations. No legal action shall be brought and no
---------------------
cause of action shall be asserted by or in the right of the Company against any
Indemnitee, any Indemnitee's estate, spouse, heirs, executors or personal or
legal representatives after the expiration of five years from the date of
accrual of such cause of action, and any claim or cause of action of the Company
shall be extinguished and deemed released unless asserted by the
7
timely filing of a legal action within such five-year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any such
cause of action, such shorter period shall govern.
11. Construction of Certain Phrases.
-------------------------------
(a) For purposes of this Agreement, references to the
"Company" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, employees, agents or fiduciaries, so that if Indemnitee is or was
a director, officer, employee, agent, control person or fiduciary of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee, control person,
agent or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, Indemnitee shall stand in
the same position under the provisions of this Agreement with respect to
the resulting or surviving corporation as Indemnitee would have with
respect to such constituent corporation if its separate existence had
continued.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on any Indemnitee with respect to
an employee benefit plan; and references to "serving at the request of the
Company" shall include any service as a director, officer, employee, agent
or fiduciary of the Company which imposes duties on, or involves services
by, such director, officer, employee, agent or fiduciary with respect to an
employee benefit plan, its participants or its beneficiaries; and if any
Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in the interests of the participants and beneficiaries of an
employee benefit plan, Indemnitee shall be deemed to have acted in a manner
"not opposed to the best interests of the Company" as referred to in this
Agreement.
(c) For purposes of this Agreement a "Change in Control"
shall be deemed to have occurred if (i) any "person" (as such term is used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other than a
trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, (A) who is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing
10% or more of the combined voting power of the Company's then outstanding
Voting Securities, increases his or her beneficial ownership of such
securities by 5% or more over the percentage so owned by such person or (B)
becomes the "beneficial owner" (as defined in Rule 13d-3 under said
Exchange Act), directly or indirectly, of securities of the Company
representing more than 20% of the total voting power represented by the
Company's then outstanding Voting Securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the
Company's stockholders was approved by a vote of at
8
least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute
a majority thereof or (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation other
than a merger or consolidation which would result in the Voting Securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in
one transaction or a series of transactions) all or substantially all of
the Company's assets.
(d) For purposes of this Agreement, "Independent Legal
Counsel" shall mean an attorney or firm of attorneys, selected in
accordance with the provisions of Section 3(d) hereof, who shall not have
otherwise performed services for the Company or any Indemnitee within the
last three years (other than with respect to matters concerning the right
of any Indemnitee under this Agreement, or of other indemnitees under
similar indemnity agreements).
(e) For purposes of this Agreement, a "Reviewing Party"
shall mean any appropriate person or body consisting of a member or members
of the Company's Board of Directors or any other person or body appointed
by the Board of Directors who is not a party to the particular Claim for
which Indemnitee are seeking indemnification, or Independent Legal Counsel.
(f) For purposes of this Agreement, "Voting Securities"
shall mean any securities of the Company that vote generally in the
election of directors.
12. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original.
13. Binding Effect; Successors and Assigns. This Agreement shall be
--------------------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
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
continue in effect with respect to Claims relating to Indemnifiable Events
regardless of whether any Indemnitee continues to serve as a director, officer,
employee, agent, controlling person or fiduciary of the Company or of any other
enterprise, including subsidiaries of the Company, at the Company's request.
9
14. Attorneys' Fees. In the event that any action is instituted by
---------------
an Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, any Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action if Indemnitee is ultimately successful in
such action, and shall be entitled to the advancement of Expenses with respect
to such action, unless, as a part of such action, a court of competent
jurisdiction over such action determines that 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 to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee in defense of such action (including costs and expenses incurred with
respect to Indemnitee counterclaims and cross-claims made in such action), and
shall be entitled to the advancement of Expenses with respect to such action,
unless, as a part of such action, a court having jurisdiction over such action
determines that the Indemnitee's material defenses to such action were made in
bad faith or were frivolous.
15. Notice. All notices and other communications required or
------
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given (a) five calendar days after deposit
with the U.S. Postal Service or other applicable postal service, if delivered by
first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c)
one business day after the business day of deposit with Federal Express or
similar overnight courier, freight prepaid, or (d) one day after the business
day of delivery by facsimile transmission, if deliverable by facsimile
transmission, with copy by first class mail, postage prepaid, and shall be
addressed if to Indemnitee, at Indemnitee's address as set forth beneath
Indemnitee's signature to this Agreement and if to the Company at the address of
its principal corporate offices (attention: Chief Executive Officer) or at such
other address as such party may designate by ten calendar days' advance written
notice to the other party hereto.
16. Consent to Jurisdiction. The Company and Indemnitee each hereby
-----------------------
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.
17. Severability. The provisions of this Agreement shall be
------------
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted by
law. Furthermore, to the fullest extent possible, the provisions of this
Agreement (including, without limitations, each portion of this Agreement
containing any provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal or
unenforceable.
18. Choice of Law. This Agreement shall be governed by and its
-------------
provisions construed and enforced in accordance with the laws of the State of
Delaware, as applied to
10
contracts between Delaware residents, entered into and to be performed entirely
within the State of Delaware, without regard to the conflict of laws principles
thereof.
19. 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 documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
20. Amendment and Termination. No amendment, modification,
-------------------------
termination or cancellation of this Agreement shall be effective unless it is in
writing signed by all 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 or not similar) nor shall such waiver constitute a
continuing waiver.
21. Integration and Entire Agreement. This Agreement sets forth the
--------------------------------
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.
22. No Construction as Employment Agreement. Nothing contained in
---------------------------------------
this Agreement shall be construed as giving the Indemnitee any right to be
retained in the employ of the Company or any of its subsidiaries.
23. Corporate Authority. The Board of Directors of the Company has
-------------------
approved the terms of this Agreement.
[Signature Page Follows]
11
In Witness Whereof, the parties hereto have executed this Agreement on
and as of the day and year first above written.
COMPANY:
-------
CATALYTICA ENERGY SYSTEMS, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
INDEMNITEE:
----------
-----------------------------------------
Printed Name:
---------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
[Signature Page to Indemnity Agreement]