MERIDIAN WASTE SOLUTIONS, INC. DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
Exhibit 10.2
This
Director and Officer Indemnification Agreement, dated as of
November _____, 2016 (the “Agreement”),
is made by and between Meridian Waste Solutions, Inc., a New York
corporation (the “Company”),
and ____________________ (the “Indemnitee”).
RECITALS:
A. The
New York Business Corporation Law provides that the business and
affairs of a corporation shall be managed by or under the direction
of its board of directors.
B. By
virtue of the managerial prerogatives vested in the directors and
officers of a New York corporation, directors and officers act as
fiduciaries of the corporation and its stockholders.
C. It
is critically important to the Company and its stockholders that
the Company be able to attract and retain the most capable persons
reasonably available to serve as directors and officers of the
Company.
D. In
recognition of the need for corporations to be able to induce
capable and responsible persons to accept positions in corporate
management, New York law authorizes (and in some instances
requires) corporations to indemnify their directors and officers,
and further authorizes corporations to purchase and maintain
insurance for the benefit of their directors and
officers.
E. Courts
have recognized that indemnification by a corporation serves the
dual policies of (1) allowing corporate officials to resist
unjustified lawsuits, secure in the knowledge that, if vindicated,
the corporation will bear the expense of litigation, and (2)
encouraging capable women and men to serve as corporate directors
and officers, secure in the knowledge that the corporation will
absorb the costs of defending their honesty and
integrity.
F. The
number of lawsuits challenging the judgment and actions of
directors and officers of corporations, the costs of defending
those lawsuits and the threat to personal assets have all
materially increased over the past several years, chilling the
willingness of capable women and men to undertake the
responsibilities imposed on corporate directors and
officers.
G. Recent
federal legislation and rules adopted by the Securities and
Exchange Commission and the national securities exchanges have
exposed such directors and officers to new and substantially
broadened civil liabilities.
H. Under
New York law, a director’s or officer’s right to be
reimbursed for the costs of defense of criminal actions, whether
such claims are asserted under state or federal law, does not
depend upon the merits of the claims asserted against the director
or officer and is separate and distinct from any right to
indemnification the director may be able to establish.
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I. Indemnitee
is, or will be, a director of the Company and his or her
willingness to serve in such capacity is predicated, in substantial
part, upon the Company’s willingness to indemnify him or her
in accordance with the principles reflected above, to the fullest
extent permitted by the laws of the State of New York, and upon the
other undertakings set forth in this Agreement.
J.
In recognition of the need to provide Indemnitee with substantial
protection against personal liability, in order to procure
Indemnitee’s service as a director of the Company and to
enhance Indemnitee’s ability to serve the Company in an
effective manner, and in order to provide such protection pursuant
to express contract rights (intended to be enforceable irrespective
of, among other things, any amendment to the Company’s
certificate of incorporation or bylaws (collectively, the
“Constituent
Documents”), any change in the composition of the
Company’s Board of Directors (the “Board”)
or any change-in-control or business combination transaction
relating to the Company), the Company wishes to provide in this
Agreement for the indemnification and advancement of Expenses (as
defined herein) to Indemnitee on the terms, and subject to the
conditions, set forth in this Agreement.
K. In
light of the considerations referred to in the preceding recitals,
it is the Company’s intention and desire that the provisions
of this Agreement be construed liberally, subject to their express
terms, to maximize the protections to be provided to Indemnitee
hereunder.
AGREEMENT:
NOW,
THEREFORE, the parties hereto hereby agree as follows:
1. Certain Definitions. In
addition to terms defined elsewhere herein, the following terms
have the following meanings when used in this Agreement with
initial capital letters:
(a) “Change in
Control” shall have occurred at such time, if any, as
Incumbent Directors cease for any reason to constitute a majority
of the directors. For purposes of this Section 1(a), “Incumbent
Directors” means the individuals who, as of the date
hereof, are directors of the Company and any individual becoming a
director subsequent to the date hereof whose election, nomination
for election by the Company’s stockholders, or appointment,
was approved by a vote of at least a majority of the then Incumbent
Directors (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee
for director, without objection to such nomination); provided, however, that an individual
shall not be an Incumbent Director if such individual’s
election or appointment to the Board occurs as a result of an
actual or threatened election contest (as described in Rule
14a-12(c) of the Securities Exchange Act of 1934, as amended) with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board.
(b) “Claim”
means (i) any threatened, asserted, pending or completed claim,
demand, action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, investigative or other, and whether
made pursuant to federal, state or other law; and (ii) any inquiry
or investigation, whether made, instituted or conducted by the
Company or any other Person, including, without limitation, any
federal, state or other governmental entity, that Indemnitee
reasonably determines might lead to the institution of any such
claim, demand, action, suit or proceeding. For the avoidance of
doubt, the Company intends the indemnity to be provided hereunder
in respect of acts or failure to act prior to, on or after the date
hereof.
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(c) “Controlled
Affiliate” means any corporation, limited liability
company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, that is directly or
indirectly controlled by the Company. For purposes of this
definition, “control”
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of an
entity or enterprise, whether through the ownership of voting
securities, through other voting rights, by contract or otherwise;
provided that direct or
indirect beneficial ownership of capital stock or other interests
in an entity or enterprise entitling the holder to cast 15% or more
of the total number of votes generally entitled to be cast in the
election of directors (or persons performing comparable functions)
of such entity or enterprise shall be deemed to constitute control
for purposes of this definition.
(d) “Disinterested
Director” means a director of the Company who is not
and was not a party to the Claim in respect of which
indemnification is sought by Indemnitee.
(e) “Expenses”
means reasonable attorneys’ and experts’ fees and
expenses and all other costs and expenses paid or payable in
connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to
investigate, defend, be a witness in or participate in (including
on appeal), any Claim.
(f) “Indemnifiable
Claim” means any Claim based upon, arising out of or
resulting from (i) any actual, alleged or suspected act or failure
to act by Indemnitee in his capacity as a director, officer,
employee or agent of the Company or as a director, officer,
employee, member, manager, trustee or agent of any other
corporation, limited liability company, partnership, joint venture,
trust or other entity or enterprise, whether or not for profit, as
to which Indemnitee is or was serving at the request of the
Company, (ii) any actual, alleged or suspected act or failure to
act by Indemnitee in respect of any business, transaction,
communication, filing, disclosure or other activity of the Company
or any other entity or enterprise referred to in clause (i) of this
sentence, or (iii) Indemnitee’s status as a current or former
director, officer, employee or agent of the Company or as a current
or former director, officer, employee, member, manager, trustee or
agent of the Company or any other entity or enterprise referred to
in clause (i) of this sentence or any actual, alleged or suspected
act or failure to act by Indemnitee in connection with any
obligation or restriction imposed upon Indemnitee by reason of such
status. In addition to any service at the actual request of the
Company, for purposes of this Agreement, Indemnitee shall be deemed
to be serving or to have served at the request of the Company as a
director, officer, employee, member, manager, trustee or agent of
another entity or enterprise if Indemnitee is or was serving as a
director, officer, employee, member, manager, agent, trustee or
other fiduciary of such entity or enterprise and (i) such entity or
enterprise is, or at the time of such service was, a Controlled
Affiliate, (ii) such entity or enterprise is or at the time of such
service was an employee benefit plan (or related trust) sponsored
or maintained by the Company or a Controlled Affiliate, or (iii)
the Company or a Controlled Affiliate (by action of the Board, any
committee thereof or the Company’s Chief Executive Officer
(“CEO”) (other than as the CEO himself)) caused or
authorized Indemnitee to be nominated, elected, appointed,
designated, employed, engaged or selected to serve in such
capacity.
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(g) “Indemnifiable
Losses” means any and all Losses relating to, arising
out of or resulting from any Indemnifiable Claim; provided, however, that Indemnifiable
Losses shall not include Expenses incurred by Indemnitee in respect
of any Indemnifiable Claim (or any matter or issue therein) as to
which Indemnitee shall have been adjudged liable to the Company,
unless and only to the extent that the court in which such
Indemnifiable Claim was brought shall have determined upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnification for such Expenses as the
court shall deem proper.
(h) “Independent
Counsel” means a nationally recognized law firm, or a
member of a nationally recognized law firm, that is experienced in
matters of New York corporate law and neither presently is, nor in
the past five years has been, retained to represent: (i) the
Company (or any subsidiary) or Indemnitee in any matter material to
either such party (other than with respect to matters concerning
the Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements) or (ii) any other named (or, as
to a threatened matter, reasonably likely to be named) party to the
Indemnifiable Claim giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
(i) “Losses”
means any and all Expenses, damages, losses, liabilities,
judgments, fines, penalties (whether civil, criminal or other) and
amounts paid or payable in settlement, including, without
limitation, all interest, assessments and other charges paid or
payable in connection with or in respect of any of the
foregoing.
(j) “Person”
means any individual, entity or group, within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended.
(k) “Standard of
Conduct” means the standard for conduct by Indemnitee
that is a condition precedent to indemnification of Indemnitee
hereunder against Indemnifiable Losses relating to, arising out of
or resulting from an Indemnifiable Claim. The Standard of Conduct
is (i) good faith and a reasonable belief by Indemnitee that his
action was in or not opposed to the best interests of the Company
and, with respect to any criminal action or proceeding, that
Indemnitee had no reasonable cause to believe that his conduct was
unlawful, or (ii) any other applicable standard of conduct that may
hereafter be substituted under the New York Business Corporation
Law.
2. Indemnification Obligation.
Subject only to Section 7 and to the proviso in this Section, the
Company shall indemnify, defend and hold harmless Indemnitee, to
the fullest extent permitted by the laws of the State of New York
in effect on the date hereof or as such laws may from time to time
hereafter be amended to increase the scope of such permitted
indemnification, against any and all Indemnifiable Claims and
Indemnifiable Losses; provided,
however, that, except as provided in Section 5, Indemnitee
shall not be entitled to indemnification pursuant to this Agreement
in connection with (i) any Claim initiated by Indemnitee against
the Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such Claim
or the Claim relates to or arises from the enforcement or
prosecution of a right to indemnification under this Agreement, or
(ii) the purchase and sale by Indemnitee of securities in violation
of Section 16(b) of the Securities Exchange Act of 1934, as
amended. Nothing herein is intended to limit the scope of permitted
indemnification to Indemnitee under the laws of the State of New
York
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3. Advancement of
Expenses.
Indemnitee shall have the right to advancement by the Company prior
to the final disposition of any Indemnifiable Claim of any and all
actual and reasonable Expenses relating to, arising out of or
resulting from any Indemnifiable Claim paid or incurred by
Indemnitee. Without limiting the generality or effect of any other
provision hereof, Indemnitee’s right to such advancement is
not subject to the satisfaction of any Standard of Conduct. Without
limiting the generality or effect of the foregoing, within five
business days after any request by Indemnitee that is accompanied
by supporting documentation for specific reasonable Expenses to be
reimbursed or advanced, the Company shall, in accordance with such
request (but without duplication), (a) pay such Expenses on behalf
of Indemnitee, (b) advance to Indemnitee funds in an amount
sufficient to pay such Expenses, or (c) reimburse Indemnitee for
such Expenses; provided
that Indemnitee shall repay, without interest, any amounts actually
advanced to Indemnitee that, at the final disposition of the
Indemnifiable Claim to which the advance related, were in excess of
amounts paid or payable by Indemnitee in respect of Expenses
relating to, arising out of or resulting from such Indemnifiable
Claim. In connection with any such payment, advancement or
reimbursement, at the request of the Company, Indemnitee shall
execute and deliver to the Company an undertaking, which need not
be secured and shall be accepted without reference to
Indemnitee’s ability to repay the Expenses, by or on behalf
of the Indemnitee, to repay any amounts paid, advanced or
reimbursed by the Company in respect of Expenses relating to,
arising out of or resulting from any Indemnifiable Claim in respect
of which it shall have been determined, following the final
disposition of such Indemnifiable Claim and in accordance with
Section 7, that Indemnitee is not entitled to indemnification
hereunder.
4. Indemnification for Additional
Expenses.
Without limiting the generality or effect of the foregoing, the
Company shall indemnify and hold harmless Indemnitee against and,
if requested by Indemnitee, shall reimburse Indemnitee for, or
advance to Indemnitee, within five business days of such request
accompanied by supporting documentation for specific Expenses to be
reimbursed or advanced, any and all actual and reasonable Expenses
paid or incurred by Indemnitee in connection with any Claim made,
instituted or conducted by Indemnitee for (a) indemnification or
reimbursement or advance payment of Expenses by the Company under
any provision of this Agreement, or under any other agreement or
provision of the Constituent Documents now or hereafter in effect
relating to Indemnifiable Claims, and/or (b) recovery under any
directors’ and officers’ liability insurance policies
maintained by the Company; provided, however, if it is ultimately
determined that the Indemnitee is not entitled to such
indemnification, reimbursement, advance or insurance recovery, as
the case may be, then the Indemnitee shall be obligated to repay
any such Expenses to the Company; provided further, that, regardless in
each case of whether Indemnitee ultimately is determined to be
entitled to such indemnification, reimbursement, advance or
insurance recovery, as the case may be, Indemnitee shall return,
without interest, any such advance of Expenses (or portion thereof)
which remains unspent at the final disposition of the Claim to
which the advance related.
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5. Partial Indemnity. If
Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of any
Indemnifiable Loss but not for the entire amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled.
6. Procedure for Notification. To
obtain indemnification under this Agreement in respect of an
Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall submit
to the Company a written request therefore, including a brief
description (based upon information then available to Indemnitee)
of such Indemnifiable Claim or Indemnifiable Loss. If, at the time
of the receipt of such request, the Company has directors’
and officers’ liability insurance in effect under which
coverage for such Indemnifiable Claim or Indemnifiable Loss is
potentially available, the Company shall give prompt written notice
of such Indemnifiable Claim or Indemnifiable Loss to the applicable
insurers in accordance with the procedures set forth in the
applicable policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on
behalf of the Indemnitee, all Indemnifiable Claims and
Indemnifiable Losses in accordance with the terms of such policies.
The Company shall provide to Indemnitee a copy of such notice
delivered to the applicable insurers, substantially concurrently
with the delivery thereof by the Company. The failure by Indemnitee
to timely notify the Company of any Indemnifiable Claim or
Indemnifiable Loss shall not relieve the Company from any liability
hereunder unless, and only to the extent that, the Company did not
otherwise learn of such Indemnifiable Claim or Indemnifiable Loss
and to the extent that such failure results in forfeiture by the
Company of substantial defenses, rights or insurance
coverage.
7. Determination of Right to
Indemnification.
(a) To the extent that
Indemnitee shall have been successful on the merits or otherwise in
defense of any Indemnifiable Claim or any portion thereof or in
defense of any issue or matter therein, including, without
limitation, dismissal without prejudice, Indemnitee shall be
indemnified against all Indemnifiable Losses relating to, arising
out of or resulting from such Indemnifiable Claim in accordance
with Section 2 and no Standard of Conduct Determination (as defined
in Section 7(b)) shall be required.
(b) To the extent that
the provisions of Section 7(a) are inapplicable to an Indemnifiable
Claim that shall have been finally disposed of, any determination
required to be made under the laws of the State of New York as to
whether Indemnitee has satisfied the applicable Standard of Conduct
(a “Standard of Conduct
Determination”) shall be made as follows: (i) if a
Change in Control shall not have occurred, or if a Change in
Control shall have occurred but Indemnitee shall have requested
that the Standard of Conduct Determination be made pursuant to this
clause (i), (A) by a majority vote of the Disinterested Directors,
even if less than a quorum of the Board, (B) if such Disinterested
Directors so direct, by a majority vote of a committee of
Disinterested Directors designated by a majority vote of all
Disinterested Directors, or (C) if there are no such Disinterested
Directors, or if a majority of the Disinterested Directors so
direct, by Independent Counsel in a written opinion addressed to
the Board, a copy of which shall be delivered to Indemnitee; and
(ii) if a Change in Control shall have occurred and Indemnitee
shall not have requested that the Standard of Conduct Determination
be made pursuant to clause (i) above, by Independent Counsel in a
written opinion addressed to the Board, a copy of which shall be
delivered to Indemnitee.
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(c) If (i) Indemnitee
shall be entitled to indemnification hereunder against any
Indemnifiable Losses pursuant to Section 7(a), (ii) no
determination of whether Indemnitee has satisfied any applicable
standard of conduct under New York law is a legally required
condition precedent to indemnification of Indemnitee hereunder
against any Indemnifiable Losses, or (iii) Indemnitee has been
determined or deemed pursuant to Section 7(b) to have satisfied the
applicable Standard of Conduct, then the Company shall pay to
Indemnitee, within five business days after the later of (x) the
notification date in respect of the Indemnifiable Claim or portion
thereof to which such Indemnifiable Losses are related, out of
which such Indemnifiable Losses arose or from which such
Indemnifiable Losses resulted, and (y) the earliest date on which
the applicable criterion specified in clause (i), (ii) or (iii)
above shall have been satisfied, an amount equal to the amount of
such Indemnifiable Losses. Nothing herein is intended to mean or
imply that the Company is intending to use the New York Business
Corporations Law to dispense with a requirement that Indemnitee
meet the applicable Standard of Conduct where it is otherwise
required by such statute.
(d) If a Standard of
Conduct Determination is required to be, but has not been, made by
Independent Counsel pursuant to Section 7(b)(i), the Independent
Counsel shall be selected by the Board or a committee of the Board,
and the Company shall give written notice to Indemnitee advising
him or her of the identity of the Independent Counsel so selected.
If a Standard of Conduct Determination is required to be, or to
have been, made by Independent Counsel pursuant to Section
7(b)(ii), the Independent Counsel shall be selected by Indemnitee,
and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected. In either
case, Indemnitee or the Company, as applicable, may, within five
business days after receiving written notice of selection from the
other, deliver to the other a written objection to such selection;
provided, however, that
such objection may be asserted only on the ground that the
Independent Counsel so selected does not satisfy the criteria set
forth in the definition of “Independent Counsel” in
Section 1(h), and the objection shall set forth with particularity
the factual basis of such assertion. Absent a proper and timely
objection, the Person so selected shall act as Independent Counsel.
If such written objection is properly and timely made and
substantiated, (i) the Independent Counsel so selected may not
serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without
merit and (ii) the non-objecting party may, at its option, select
an alternative Independent Counsel and give written notice to the
other party advising such other party of the identity of the
alternative Independent Counsel so selected, in which case the
provisions of the two immediately preceding sentences and clause
(i) of this sentence shall apply to such subsequent selection and
notice. If applicable, the provisions of clause (ii) of the
immediately preceding sentence shall apply to successive
alternative selections. If no Independent Counsel that is permitted
under the foregoing provisions of this Section 7(d) to make the
Standard of Conduct Determination shall have been selected within
30 calendar days after the Company gives its initial notice
pursuant to the first sentence of this Section 7(d) or Indemnitee
gives its initial notice pursuant to the second sentence of this
Section 7(d), as the case may be, either the Company or Indemnitee
may petition the courts of the State of New York for resolution of
any objection which shall have been made by the Company or
Indemnitee to the other’s selection of Independent Counsel
and/or for the appointment as Independent Counsel of a person or
firm selected by such court or by such other person as such Court
shall designate, and the person or firm with respect to whom all
objections are so resolved or the person or firm so appointed will
act as Independent Counsel. In all events, the Company shall pay
all of the actual and reasonable fees and expenses of the
Independent Counsel incurred in connection with the Independent
Counsel’s determination pursuant to Section
7(b).
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8. Cooperation. Indemnitee shall
cooperate with reasonable requests of the Company in connection
with any Indemnifiable Claim and any individual or firm making such
Standard of Conduct Determination, including providing to such
Person documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to defend the
Indemnifiable Claim or make any Standard of Conduct Determination
without incurring any unreimbursed cost in connection therewith.
The Company shall indemnify and hold harmless Indemnitee against
and, if requested by Indemnitee, shall reimburse Indemnitee for, or
advance to Indemnitee, within five business days of such request
accompanied by supporting documentation for specific costs and
expenses to be reimbursed or advanced, any and all costs and
expenses (including reasonable attorneys’ and experts’
fees and expenses) actually and reasonably incurred by Indemnitee
in so cooperating with the Person defending the Indemnifiable Claim
or making such Standard of Conduct Determination.
9. Presumption of Entitlement.
Notwithstanding any other provision hereof, in making any Standard
of Conduct Determination, the Person making such determination
shall presume that Indemnitee has satisfied the applicable Standard
of Conduct.
10. No Other Presumption. 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, will not create a presumption that Indemnitee did not
meet any applicable Standard of Conduct or that indemnification
hereunder is otherwise not permitted.
11. Non-Exclusivity. The rights of
Indemnitee hereunder will be in addition to any other rights
Indemnitee may have under the Constituent Documents, or the
substantive laws of the State of New York, any other contract or
otherwise (collectively, “Other Indemnity
Provisions”); provided, however, that (a) to the
extent that Indemnitee otherwise would have any greater right to
indemnification under any Other Indemnity Provision, Indemnitee
will without further action be deemed to have such greater right
hereunder, and (b) to the extent that any change is made to any
Other Indemnity Provision which permits any greater right to
indemnification than that provided under this Agreement as of the
date hereof, Indemnitee will be deemed to have such greater right
hereunder. The Company may not, without the consent of Indemnitee,
adopt any amendment to any of the Constituent Documents the effect
of which would be to deny, diminish or encumber Indemnitee’s
right to indemnification under this Agreement.
12. Liability Insurance and
Funding. For the duration of Indemnitee’s service as a
director of the Company and for a reasonable period of time
thereafter, which such period shall be determined by the Company in
its sole discretion, the Company shall use commercially reasonable
efforts (taking into account the scope and amount of coverage
available relative to the cost thereof) to cause to be maintained
in effect policies of directors’ and officers’
liability insurance providing coverage for directors and/or
officers of the Company, and, if applicable, that is substantially
comparable in scope and amount to that provided by the
Company’s current policies of directors’ and
officers’ liability insurance. Upon reasonable request, the
Company shall provide Indemnitee or his or her counsel with a copy
of all directors’ and officers’ liability insurance
applications, binders, policies, declarations, endorsements and
other related materials. In all policies of directors’ and
officers’ liability insurance obtained by the Company,
Indemnitee shall be named as an insured in such a manner as to
provide Indemnitee the same rights and benefits, subject to the
same limitations, as are accorded to the Company’s directors
and officers most favorably insured by such policy. Notwithstanding
the foregoing, (i) the Company may, but shall not be required to,
create a trust fund, grant a security interest or use other means,
including, without limitation, a letter of credit, to ensure the
payment of such amounts as may be necessary to satisfy its
obligations to indemnify and advance expenses pursuant to this
Agreement and (ii) in renewing or seeking to renew any insurance
hereunder, the Company will not be required to expend more than 2.0
times the premium amount of the immediately preceding policy period
(equitably adjusted if necessary to reflect differences in policy
periods).
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13. Subrogation. In the event of
payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the related rights of recovery
of Indemnitee against other Persons (other than Indemnitee’s
successors), including any entity or enterprise referred to in
clause (i) of the definition of “Indemnifiable Claim”
in Section 1(f). Indemnitee shall execute all papers reasonably
required to evidence such rights (all of Indemnitee’s
reasonable Expenses, including reasonable attorneys’ fees and
charges, related thereto to be reimbursed by or, at the option of
Indemnitee, advanced by the Company).
14. No Duplication of
Payments.
(a) The Company shall
not be liable under this Agreement to make any payment to
Indemnitee in respect of any Indemnifiable Losses to the extent
Indemnitee has otherwise already actually received payment (net of
Expenses incurred in connection therewith) under any insurance
policy, the Constituent Documents and Other Indemnity Provisions or
otherwise (including from any entity or enterprise referred to in
clause (i) of the definition of “Indemnifiable Claim”
in Section 1(f)) in respect of such Indemnifiable Losses otherwise
indemnifiable hereunder.
(b) Notwithstanding
anything to the contrary contained in Section 14(a) above, the
Company hereby acknowledges that Indemnitee may have certain rights
to indemnification, advancement of expenses and/or insurance
provided by one or more venture capital funds, the general
partners, managing members or other control persons and/or any
affiliated management companies of such venture capital funds, and
certain of its or their affiliates (collectively, the
“Fund
Indemnitors”). The Company hereby agrees that in
connection with any Indemnifiable Claim, (i) it is the indemnitor
of first resort (i.e., its obligations to Indemnitee are primary
and any obligation of the Fund Indemnitors to advance expenses or
to provide indemnification for the same expenses or liabilities
incurred by Indemnitee are secondary), (ii) it shall be required to
advance the full amount of expenses incurred by Indemnitee and
shall be liable for the full amount of all Expenses, judgments,
penalties, fines and amounts paid in settlement to the extent
legally permitted and as required by the terms of this Agreement
and the Company’s Constituent Documents (or any other
agreement between the Company and Indemnitee), without regard to
any rights Indemnitee may have against the Fund Indemnitors, and,
(iii) it irrevocably waives, relinquishes and releases the Fund
Indemnitors from any and all claims against the Fund Indemnitors
for contribution, subrogation or any other recovery of any kind in
respect thereof. The Company further agrees that no advancement or
payment by the Fund Indemnitors on behalf of Indemnitee with
respect to any claim for which Indemnitee has sought
indemnification from the Company shall affect the foregoing and the
Fund Indemnitors shall have a right of contribution and/or be
subrogated to the extent of such advancement or payment to all of
the rights of recovery of Indemnitee against the Company. The
Company and Indemnitee agree that the Fund Indemnitors are express
third party beneficiaries of the terms of this Section
14(b).
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15. Defense of Claims. Subject to
the provisions of applicable policies of directors’ and
officers’ liability insurance, if any, the Company shall be
entitled to participate in the defense of any Indemnifiable Claim
or to assume or lead the defense thereof with counsel reasonably
satisfactory to the Indemnitee; provided that if Indemnitee determines,
after consultation with counsel selected by Indemnitee, that (a)
the use of counsel chosen by the Company to represent Indemnitee
would present such counsel with an actual or potential conflict,
(b) the named parties in any such Indemnifiable Claim (including
any impleaded parties) include both the Company and Indemnitee and
Indemnitee shall conclude that there may be one or more legal
defenses available to him or her that are different from or in
addition to those available to the Company, (c) any such
representation by such counsel would be precluded under the
applicable standards of professional conduct then prevailing, or
(d) Indemnitee has interests in the claim or underlying subject
matter that are different from or in addition to those of other
Persons against whom the Claim has been made or might reasonably be
expected to be made, then Indemnitee shall be entitled to retain
separate counsel (but not more than one law firm plus, if
applicable, local counsel in respect of any particular
Indemnifiable Claim for all indemnitees in Indemnitee’s
circumstances) at the Company’s expense. The Company shall
not be liable to Indemnitee under this Agreement for any amounts
paid in settlement of any threatened or pending Indemnifiable Claim
effected without the Company’s prior written consent. The
Company shall not, without the prior written consent of the
Indemnitee, effect any settlement of any threatened or pending
Indemnifiable Claim which the Indemnitee is or could have been a
party unless such settlement solely involves the payment of money
and includes a complete and unconditional release of the Indemnitee
from all liability on any claims that are the subject matter of
such Indemnifiable Claim. Neither the Company nor Indemnitee shall
unreasonably withhold its consent to any proposed settlement;
provided that Indemnitee
may withhold consent to any settlement that does not provide a
complete and unconditional release of Indemnitee.
16. Mutual
Acknowledgment. Both the Company and the
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.
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17. Successors and Binding
Agreement.
(a) This Agreement
shall be binding upon and inure to the benefit of the Company and
any successor to the Company, including, without limitation, any
Person acquiring directly or indirectly all or substantially all of
the business or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor will
thereafter be deemed the “Company” for purposes of this
Agreement), but shall not otherwise be assignable or delegatable by
the Company.
(b) This Agreement
shall inure to the benefit of and be enforceable by the
Indemnitee’s personal or legal representatives, executors,
administrators, heirs, distributees, legatees and other
successors.
(c) This Agreement is
personal in nature and neither of the parties hereto shall, without
the consent of the other, assign or delegate this Agreement or any
rights or obligations hereunder except as expressly provided in
Sections 17(a) and 17(b). Without limiting the generality or effect
of the foregoing, Indemnitee’s right to receive payments
hereunder shall not be assignable, whether by pledge, creation of a
security interest or otherwise, other than by a transfer by the
Indemnitee’s will or by the laws of descent and distribution,
and, in the event of any attempted assignment or transfer contrary
to this Section 17(c), the Company shall have no liability to pay
any amount so attempted to be assigned or transferred.
18. Notices. For all purposes of
this Agreement, all communications, including without limitation
notices, consents, requests or approvals, required or permitted to
be given hereunder must be in writing and shall be deemed to have
been duly given when hand delivered or dispatched by electronic
facsimile transmission (with receipt thereof orally confirmed), or
one business day after having been sent for next-day delivery by a
nationally recognized overnight courier service, addressed to the
Company (to the attention of the Secretary of the Company) and to
Indemnitee at the applicable address shown on the signature page
hereto, or to such other address as any party hereto may have
furnished to the other in writing and in accordance herewith,
except that notices of changes of address will be effective only
upon receipt.
19. Governing Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by
and construed in accordance with the substantive laws of the State
of New York, without giving effect to the principles of conflict of
laws of such State. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State
of New York for all purposes in connection with any action or
proceeding which arises out of or relates to this Agreement, waive
all procedural objections to suit in that jurisdiction, including,
without limitation, objections as to venue or inconvenience, agree
that service in any such action may be made by notice given in
accordance with Section 18 and also agree that any action
instituted under this Agreement shall be brought only in the courts
of the State of New York.
20. Validity. If any provision of
this Agreement or the application of any provision hereof to any
Person or circumstance is held invalid, unenforceable or otherwise
illegal, the remainder of this Agreement and the application of
such provision to any other Person or circumstance shall not be
affected, and the provision so held to be invalid, unenforceable or
otherwise illegal shall be reformed to the extent, and only to the
extent, necessary to make it enforceable, valid or legal. In the
event that any court or other adjudicative body shall decline to
reform any provision of this Agreement held to be invalid,
unenforceable or otherwise illegal as contemplated by the
immediately preceding sentence, the parties hereto shall take all
such action as may be necessary or appropriate to replace the
provision so held to be invalid, unenforceable or otherwise illegal
with one or more alternative provisions that effectuate the purpose
and intent of the original provisions of this Agreement as fully as
possible without being invalid, unenforceable or otherwise
illegal.
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21. Miscellaneous. No provision of
this Agreement may be waived, modified or discharged unless such
waiver, modification or discharge is agreed to in writing signed by
Indemnitee and the Company. No waiver by either party hereto at any
time of any breach by the other party hereto or compliance with any
condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have
been made by either party hereto that is not set forth expressly in
this Agreement.
22. Certain Interpretive Matters.
Unless the context of this Agreement otherwise requires, (1)
“it” or “its” or words of any gender
include each other gender, (2) words using the singular or plural
number also include the plural or singular number, respectively,
(3) the terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this
entire Agreement, (4) the terms “Article,”
“Section,” “Annex” or “Exhibit”
refer to the specified Article, Section, Annex or Exhibit of or to
this Agreement, (5) the terms “include,”
“includes” and “including” will be deemed
to be followed by the words “without limitation”
(whether or not so expressed), and (6) the word “or” is
disjunctive but not exclusive. Whenever this Agreement refers to a
number of days, such number will refer to calendar days unless
business days are specified and whenever action must be taken
(including the giving of notice or the delivery of documents) under
this Agreement during a certain period of time or by a particular
date that ends or occurs on a non-business day, then such period or
date will be extended until the immediately following business day.
As used herein, “business
day” means any day other than Saturday, Sunday or a
United States federal holiday.
23. Entire Agreement. This
Agreement constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the
parties hereto with respect to the subject matter of this
Agreement. Any prior agreements or understandings between the
parties hereto with respect to indemnification are hereby
terminated and of no further force or effect. This Agreement is not
the exclusive means of securing indemnification rights of
Indemnitee and is in addition to any rights Indemnitee may have
under any Constituent Documents.
24. Counterparts. This Agreement
may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together shall constitute
one and the same agreement.
25. Duration of Agreement. This
Agreement shall continue until and terminate upon the later of: (a)
six years after the date that the Indemnitee shall have ceased to
serve as a director, officer, employee, agent or fiduciary of the
Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which the
Indemnitee served at the request of the Company; (b) the expiration
of the applicable statutes of limitations pertaining to any and all
potential proceedings covered by the indemnification provided for
herein; or (c) the final termination of all pending proceedings in
respect of which the Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any
proceeding commenced by the Indemnitee pursuant to this Agreement
relating thereto.
[REMAINDER OF PAGE
INTENTIONALLY BLANK]
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IN
WITNESS WHEREOF, Indemnitee has executed and the Company has caused
its duly authorized representative to execute this Agreement as of
the date first above written.
By:
____________________________
▇▇▇▇▇▇▇
▇▇▇▇▇▇
Chief
Executive Officer
INDEMNITEE:
_________________________________
____________________,
an individual
[Signature
page to Indemnification Agreement]
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