Indemnification
Agreement with
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INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made as of December 6, 1995,
by and between FIDELITY HOLDINGS, INC., a Nevada corporation ("Company"), and
▇▇▇▇▇▇▇ ▇. ▇▇▇ ("Indemnitee"), a director and/or officer or key executive,
employee or consultant of the Company, or a person serving at the request of the
Company as a director officer, employee or agent of another enterprise.
RECITALS
A. The Indemnitee is currently serving or has agreed to serve as a
director and/or officer of the Company and in such capacity has rendered and/or
will render valuable services to the Company.
B. The Company has investigated the availability and sufficiency of
liability insurance and applicable statutory indemnification provisions to
provide its directors and officers with adequate protection against various
legal risks and potential liabilities to which such individuals are subject due
to their positions with the Company and has concluded that such insurance may be
unavailable or too costly, and even if purchased it, and the statutory
provisions, may provide inadequate and unacceptable protection to certain
individuals requested to serve as its directors and/or officers.
C. It is essential to the Company that it attract and retain as
officers and directors the most capable persons available and in order to induce
and encourage highly experienced and capable persons such as the Indemnitee to
serve or continue to serve as a director and/or officer of the Company, the
Board of Directors has determined, after due consideration and investigation of
the terms and provisions of the Agreement and the various other options
available to the Company and the Indemnitee in lieu this Agreement is not only
reasonable and prudent but necessary to promote and ensure the best interests of
the Company and its stockholders.
NOW, THEREFORE, in consideration of the services or continued services
of the Indemnitee and in order to induce the Indemnitee to serve or continue to
serve as
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director and/or officer, the Company and the Indemnitee do hereby agree as
follows:
1. Definitions. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened, pending or
completed inquiry, hearing, investigation, action, suit, arbitration or other
alternative dispute resolution mechanism or proceeding, formal or informal,
whether brought in the name of the Company or otherwise and whether of a civil,
criminal or administrative or investigative nature, by reason of the fact that
the Indemnitee is or was a director and/or officer of the Company, or is or was
serving at the request of the Company as a director, officer, employee or agent
of another enterprise, whether or not he/she is serving in such capacity at the
time any liability or expense is incurred for which indemnification or
reimbursement is to be provided under this Agreement.
(b) The term "Expenses" includes, without limitation: attorneys'
fees, costs, disbursements and retainers; accounting and witness fees; fees of
experts; travel and deposition costs; transcript costs, filing fees, telephone
charges, postage, copying costs, delivery service fees and other expenses and
obligations of any nature whatsoever paid or incurred in connection with any
investigations, judicial or administrative proceedings and appeals, amounts paid
in settlement by or on behalf of 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/she is not otherwise compensated by the Company or any third party.
The term "Expenses" does not include the amount of judgments, fines, penalties
or ERISA excise taxes actually levied against the Indemnitee.
2. Agreement to Serve. The Indemnitee agrees to serve or to continue
to serve as a director and/or officer of the Company for so long as he/she is
duly elected or appointed or until such time as he/she tenders his/her
resignation in writing or is removed as a director and/or officer. However,
nothing contained in this Agreement shall be construed as giving Indemnitee any
right to be retained in the employ of the Company, any subsidiary or any other
person.
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3. Indemnification in Third Party Actions. The Company shall indemnify
the Indemnitee if the Indemnitee is a party to or threatened to be made a party
to or is otherwise involved in any Proceeding (other than a Proceeding by or in
the name of the Company to procure a judgment in its favor), be reason of the
fact that the Indemnitee is or was a director and/or officer of the Company, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another enterprise, against all Expenses, judgments, fines,
penalties and ERISA excise taxes actually and reasonably incurred by the
Indemnitee in connection with the defense or settlement of such a Proceeding, to
the fullest extent permitted by applicable corporate law and the Company's
Articles of Incorporation; provided that any settlement of a Proceeding be
approved in writing by the Company.
4. Indemnification in Proceedings by or In the Name of the Company.
The Company shall indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or is otherwise involved in any Proceeding by
or in the name of the Company to procure a judgment in its favor by reason of
the fact that the Indemnitee was or is a director and/or officer of the Company,
or is or was serving at the request of the Company as a director, officer,
employee or agent of another enterprise, against all Expenses, judgments, fines,
penalties and ERISA excise taxes actually and reasonably incurred by the
Indemnitee in connection with defense or settlement of such a Proceeding, to the
fullest extent permitted by applicable corporate law and the Company's Articles
of Incorporation.
5. Conclusive Presumption Regarding Standards of Conduct. The
Indemnitee shall be conclusively presumed to have met the relevant standards of
conduct, if any, as defined by applicable corporate law, for indemnification
pursuant to this Agreement, unless a determination is made that the Indemnitee
has not met such standards (I) by the Board of Directors by a majority vote of a
quorum thereof consisting of directors who were not parties to the Proceeding
due to which a claim is made under this Agreement, (ii) by the shareholders of
the Company by majority vote of a quorum thereof consisting of shareholders who
are not parties to the Proceeding due to which a claim is made
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under this Agreement, (iii) in a written opinion by independent counsel,
selection of whom has been approved by the Indemnitee in writing, or (iv) by a
court of competent jurisdiction.
6. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of the Agreement, to the extent that the Indemnitee has been
successful in defense of any Proceeding or in defense of any claim, issue or
matter therein, on the merits or otherwise, including the dismissal of a
Proceeding without prejudice or the settlement of a Proceeding without an
admission of liability, the Indemnitee shall be indemnified against all Expenses
incurred in connection therewith to the fullest extent permitted by applicable
corporate law.
7. Advances of Expenses. The Expenses incurred by the Indemnitee in any
Proceeding shall be paid promptly by the Company in advance of the final
disposition of the Proceeding at the written request of the Indemnitee to the
fullest extent permitted by applicable corporate law; provided that the
Indemnitee shall undertake in writing to repay any advances if it is ultimately
determined that the Indemnitee is not en titled to indemnification.
8. Partial Indemnification. If the Indemnitee is entitled under any
provision of the Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties or ERAS excise taxes actually and
reasonably incurred by him/her in the investigation, defense, appeal or
settlement of any Proceeding but not, however, for the total amount of his/her
Expenses, judgments, fines, penalties or ERISA excise taxes, the Company shall
nevertheless indemnify the Indemnitee for the portion of Expenses, judgments,
fines, penalties or ERISA excise taxes to which the Indemnitee is entitled.
9. Indemnification Procedure, Determination of Right to Indemnification.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of any Proceeding, the Indemnitee shall, if a claim in respect
thereof is
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to be made against the Company under this Agreement, notify the Company of the
commencement thereof in writing. The omission to so notify the Company, however,
shall not relieve it from any liability which it may have to the Indemnitee
otherwise than under this Agreement.
(b) If a claim for indemnification or advances under this Agreement
is not paid by the Company within thirty (30) days of receipt of written notice,
the rights provided by this Agreement shall be enforceable by the Indemnitee in
any court of competent jurisdiction. The burden of proving by clear and
convincing evidence that indemnification or advances are not appropriate shall
be on the Company. Neither the failure of the directors or stockholders of the
Company or its independent legal counsel to have made a determination prior to
the commencement of such action that indemnification or advances are proper in
the circumstances because the Indemnitee has met the applicable standard of
conduct, if any, nor an actual determination by the directors or shareholders of
the Company or independent legal counsel that the Indemnitee has not met the
applicable standard of conduct, shall be a defense to the action or create a
presumption for the purpose of an action that the Indemnitee has not been the
applicable standard of conduct.
(c) The Indemnity's Expenses incurred in connection with any
Proceeding concerning his/her right to indemnification or advances in whole or
part pursuant to this Agreement shall also be indemnified by the Company
regardless of the outcome of such Proceeding.
(d) With respect to any Proceeding for which indemnification is
requested, the Company will be entitled to participate therein at its own
expense and, except as otherwise provided below, to the extent that it may wish,
the Company may assume the defense thereof, with counsel satisfactory to the
Indemnitee. After notice from the Company to the Indemnitee of its election to
assume the defense of a Proceeding, the Company will not be liable to the
Indemnitee for any Expenses subsequently incurred by the Iiideiiiiiitee in
connection with the defense thereof, other than as provided below. The Company
shall not settle any Proceeding in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. The
Indemnitee shall have the right to employee his/her counsel in any Proceeding,
but the
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fees and expenses of such counsel incurred after notice from the Company of its
assumption of the defense of the Proceeding shall be at the expense of the
Indemnitee, unless (i) the employment of counsel by the Indemnitee has been
authorized by the Company, (ii) the Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
in the conduct of the defense of a Proceeding, in each of which cases the fees
and expenses of the Indemnitee's counsel shall be advances by the Company. The
Company shall not be entitled to assume the defense of any Proceeding brought by
or on behalf of the Company or as to which the Indemnitee has concluded that
there may be a conflict of interest between the Company and the Indemnitee.
10. Limitations on Indemnification. No payments pursuant to this Agreement shall
be made by the Company:
(a) To indemnify or advance funds to the Indemnitee expenses with
respect to Proceeding initiated or brought voluntarily by the 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 corporate law, but such
indemnification or advancement of expenses may be provided by the Company in
specific cases if the Board of Directors finds it to be appropriate;
(b) To indemnify the Indemnitee for any Expenses, judgment, fines,
penalties or ERISA excise taxes sustained in any Proceeding 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
insurance;
(c) To indemnify the Indemnitee for any Expenses, judgment, fines,
and/or penalties sustained in any Proceeding for an accounting of profits made
from the purchase or sale by the Indemnitee of securities of the Company
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934, the rules and regulations promulgated thereunder and amendments thereto or
similar provisions of any federal, state or local statutory law; and
(d) If a court of competent jurisdiction finally determines that any
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indemnification hereunder is unlawful.
11. Maintenance of Liability Insurance.
(a) The Company hereby covenants and agrees that, as long as the
Indemnitee continues to serve as a director and/or officer of the Company and
thereafter as long as the Indemnitee may be subject to any possible Proceeding,
the Company, subject to subsection (c), shall promptly obtain and maintain in
full force and effect directors' and officers' liability insurance ("D&O
Insurance") in reasonable amounts from established and reputable insurers.
(b) In all D&O insurance policies, the Indemnitee shall be named as
an insured in such a manner as to provide the Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company's
directors and/or officers.
(c) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines, in its
sole discretion, that such insurance is not reasonably available, the premium
costs for such insurance is so limited by exclusions that it provides an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary of the Company.
12. Indemnification Hereunder Not Exclusive. The indemnification provided by
this Agreement shall not be deemed exclusive of any other rights to which the
Indemnitee may be entitled under the Articles of Incorporation, Bylaws, any
agreement, vote of shareholders or disinterested directors, provision of
applicable corporate law, or otherwise, both as to action in his/her official
capacity and as to action in another capacity on behalf of the Company while
holding such office.
13. Successors and Assigns. This Agreement shall be binding upon, and shall
inure to the benefit of the Indemnitee and his/her heirs, executors,
administrators and assigns, whether or not Indemnitee has ceased to be a
director or officer, and the Company and its successors and assigns.
14. Severability. Each and every paragraph, sentence, term and. provision hereof
is
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separate and distinct so that if any paragraph, sentence, term or provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of any other paragraph, sentence, term or provision hereof. To the extent
required, any paragraph, sentence, term or provision of this Agreement shall be
modified by a court of competent jurisdiction to preserve its validity and to
provide the Indemnitee with the broadest possible indemnification permitted
under applicable corporate law.
15. Savings Clause. If this Agreement or any paragraph, sentence, term or
provision hereof is invalidated on any ground by any court of competent
jurisdiction, the Company shall nevertheless indemnify the Indemnitee as to any
Expenses, judgments, fines, penalties for ERISA excise taxes incurred with
respect to any Proceeding to the full extent permitted by any applicable
paragraph, sentence, term or provision of this Agreement that has not been
invalidated or by any other applicable provision of applicable corporate law.
16. Interpretation: Governing Law. This Agreement shall be construed as a whole
and in accordance with its fair meaning. Headings are for convenience only and
shall not be used in construing meaning. This Agreement shall be governed and
interpreted in accordance with the laws of the State of Nevada.
17. Amendments. No amendment, waiver, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
the party against whom enforcement is sought. The indemnification rights
afforded to the Indemnitee hereby are contract rights and may not be diminished,
eliminated or otherwise affected by amendments to the Articles of Incorporation,
Bylaws, or by other agreements, including D&O Insurance policies.
18. Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each party and
delivered to the other.
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in any such notice, the Class "B" Preference Shares called for redemption shall
cease to be entitled to dividends and the holders thereof shall not be entitled
to exercise any of the rights of shareholders in respect thereof unless payment
of the Redemption Price shall not be made upon presentation of certificates in
accordance with the foregoing provisions, in which case the rights of the
holders shall remain unaffected. The Corporation shall have the right, at any
time after the mailing of notice of its intention to redeem any Class "B"
Preference Shares as aforesaid, to deposit the Redemption Price of the Class "B"
Preference Shares so called for redemption, or for such of the said shares as
are represented by certificates which have not at the date of such deposit been
surrendered by the holders thereof in connection with such redemption, to a
special account in any chartered bank or any trust company in Canada named in
such notice to be paid without interest to or to the order of the respective
holders of such Class "B" Preference Shares called for redemption upon
presentation and surrender to such bank or trust company of the certificates
representing the same, and upon such deposit being made or upon the date
specified for redemption in such notice, whichever is the later, the Class "B"
Preference Shares in respect whereof such -deposit shall have been made shall be
redeemed and the rights of the holders thereof after such deposit or such
redemption date, as the case may be , shall be limited to receiving without
interest their proportionate part of the total Redemption Price so deposited
against presentation and surrender of the said certificates held by them
respectively.
(e) The Corporation may, subject to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇, at any time and from time to time purchase (if obtainable) for
cancellation the whole or any portion of the Class "B" Preference Shares
outstanding from time to time by invitation for tenders addressed to all the
holders of record of the Class "B" Preference Shares outstanding, or (with the
consent of all the holders of Class "B" Preference Shares) by private contract
at the lowest price or prices at which, in the opinion of the directors, such
shares are obtainable but not exceeding for each share to be purchased for
cancellation the Redemption Price for Share plus costs of purchase and an amount
equal to all dividends declared thereon and remaining unpaid. Where, in response
to any invitation for tenders, two or more shareholders submit tenders at
19. Notices. Any notice required to be given under this Agreement shall be
directed:
TO: FIDELITY HOLDINGS, INC.
▇▇-▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and;
or to such other address as either shall designate in writing.
IN WITNESS WHEREOF, The parties have executed this Indemnity Agreement
as of the date first written above.
INDEMNITY
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FIDELITY HOLDINGS, INC.
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