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EXHIBIT 10.18
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") made and entered into
this ___ day of _________, 1998 by and between INSIGNIA/ESG HOLDINGS, INC., a
Delaware corporation (the "Company"), and _________ (the "Indemnitee"):
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as executive officers, directors or in other
capacities unless they are provided with adequate protection through insurance
and indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of such corporations;
and
WHEREAS, the current difficulties or virtual impossibility of
obtaining adequate insurance and uncertainties relating to indemnification have
increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board of Directors of the Company has determined that the
inability to attract and retain such persons is detrimental to the best
interests of the Company's stockholders and that the Company should act to
assure such persons that there will be increased certainty of such protection in
the future; and
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and
WHEREAS, the Indemnitee is willing to serve, continue to serve and to
take on additional service for or on behalf of the Company on the condition that
he be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and the Indemnitee do hereby covenant and agree as
follows:
Section 1. Services by Indemnitee. The Indemnitee agrees to serve as a
director and/or executive of the Company. Subject to other agreements,
arrangements and understandings between the Indemnitee and the Company, the
Indemnitee may at any time and for any reason resign from such position (subject
to any other contractual obligation or other obligation imposed by operation of
law). Notwithstanding the foregoing, this Agreement shall not impose any
employment obligation upon the Company, provide Indemnitee with any right to
continuance of employment, or amend, modify or alter any agreement, arrangement
or understanding concerning the employment of Indemnitee. If the Indemnitee is
an executive of the Company, the Indemnitee's employment is and shall continue
to be at will (subject to any other agreements, arrangements or understandings
between the Company and the Indemnitee).
Section 2. Indemnification. The Company shall indemnify the Indemnitee
to the fullest extent permitted by applicable law in effect on the date hereof
or as such laws may from time to time be amended. Without diminishing the scope
of the indemnification provided by this Section 2, the rights of indemnification
of the Indemnitee provided hereunder shall
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include but shall not be limited to those rights set forth hereunder, except to
the extent expressly prohibited by applicable law.
Section 3. Action or Proceeding Other Than an Action By or in the
Right of the Company. The Indemnitee shall be entitled to the indemnification
rights provided in this Section 3 if he is or was a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative in nature, other than
an action by or in the right of the Company, by reason of the fact that he is or
was, either prior to or after the execution of this Agreement, a director,
officer, employee, agent or fiduciary of the Company or any of its subsidiaries
or is or was, either prior to or after the execution of this Agreement, serving
at the request of the Company as a director, officer, employee, agent or
fiduciary of any other entity or by reason of anything done or not done by him,
either prior to or after the execution of this Agreement, in any such capacity.
Pursuant to this Section 3, the Indemnitee shall be indemnified against all
expenses (including attorneys' fees), costs, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding (including, but not limited to, the
investigation, defense or appeal thereof), if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful.
Section 4. Actions By or in the Right of the Company. The Indemnitee
shall be entitled to the indemnification rights provided in this Section 4 if he
is or was a party or is threatened to be made a party to any threatened, pending
or completed action or suit brought by or in the right of the Company to procure
a judgment in its favor by reason of the fact that he is or was, either prior to
or after the execution of this Agreement, a director, officer, employee, agent
or fiduciary of the Company or any of its subsidiaries or is or was, either
prior to or after the execution of this Agreement, serving at the request of the
Company as a director, officer, employee, agent or fiduciary of any other entity
by reason of anything done or not done by him, either prior to or after the
execution of this Agreement, in any such capacity. Pursuant to this Section 4,
the Indemnitee shall be indemnified against all expenses (including attorneys'
fees) and costs actually and reasonably incurred by him in connection with such
action or suit (including, but not limited to, the investigation, defense,
settlement or appeal thereof) if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, that no such indemnification shall be made in
respect of any claim, issue or matter as to which applicable law expressly
prohibits such indemnification by reason of an adjudication of liability of the
Indemnitee to the Company, unless, and only to the extent that, the Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite such adjudication of
liability but in view of all the circumstances of the case, the Indemnitee is
fairly and reasonably entitled to indemnification for such expenses and costs as
such court shall deem proper.
Section 5. Indemnification for Costs, Charges and Expenses of
Successful Party. Notwithstanding the other provisions of this Agreement and in
addition to the rights to
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indemnification set forth in Sections 3 and 4 hereof, to the extent that the
Indemnitee has served as a witness on behalf of the Company or has been
successful on the merits or otherwise, including without limitation the
dismissal of an action without prejudice, in defense of any action, suit or
proceeding referred to in Sections 3 and 4 hereof, or in defense of any claim,
issue or matter therein, he shall be indemnified against all costs, charges and
expenses (including attorneys' fees) actually and reasonably incurred by him or
on his behalf in connection therewith.
Section 6. Partial Indemnification. In addition to the rights to
indemnification set forth in Sections 3 and 4 hereof, if the Indemnitee is only
partially successful in the defense, investigation, settlement or appeal of any
action, suit, investigation or proceeding described in Section 3 or 4 hereof,
and as a result is not entitled under Section 3, 4 or 5 hereof to
indemnification by the Company for the total amount of the expenses (including
attorneys' fees), costs, judgments, penalties, fees and amounts paid in
settlement actually and reasonably incurred by him, the Company shall
nevertheless indemnify the Indemnitee, as a matter of right pursuant to Section
5 hereof, to the extent that the Indemnitee has been partially successful.
Section 7. Determination of Entitlement to Indemnification. (a) Upon
written request by the Indemnitee for indemnification pursuant to Section 3 or 4
hereof, the entitlement of the Indemnitee to indemnification pursuant to the
terms of this Agreement shall be determined by the following person or persons
who shall be empowered to make such determination: (i) the Board of Directors of
the Company by a majority vote of a quorum consisting of Disinterested Directors
(as hereinafter defined); or (ii) by a committee of Disinterested Directors
designated by majority vote of such Disinterested Directors, even though less
than a quorum; or (iii) if such a quorum referred to in clause (i) is not
obtainable or, even if obtainable, if the Board of Directors by the majority
vote of Disinterested Directors so directs, by Independent Counsel (as
hereinafter defined) in a written opinion to the Board of Directors, a copy of
which shall be delivered to the Indemnitee; or (iv) by the stockholders.
Independent Counsel shall be selected by the Disinterested Directors and
approved by the Indemnitee. Upon failure of the Board so to select Independent
Counsel or upon failure of the Indemnitee so to approve Independent Counsel,
Independent Counsel shall be selected by a Chancellor of the State of Delaware
or such other person as such Chancellor shall designate to make such selection.
Such determination of entitlement to indemnification shall be made not later
than 60 days after receipt by the Company of a written request for
indemnification. Such request shall include documentation or information which
is necessary for such determination and which is reasonably available to the
Indemnitee. Any costs or expenses (including attorneys' fees) incurred by the
Indemnitee in connection with his request for indemnification hereunder shall be
borne by the Company. The Company hereby indemnifies and agrees to hold the
Indemnitee harmless from such costs and expenses irrespective of the outcome of
the determination of the Indemnitee's entitlement to indemnification.
(b) Notwithstanding any other provision of this Agreement to the
contrary, if there is a Change in Control of the Company (as defined below),
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
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concerning the rights of Indemnitee to indemnity payments and advances of
expenses under this Agreement or any other agreement, the Company's Certificate
of Incorporation or the Company's by-laws relating to claims for
indemnification, the Company shall seek legal advice only from Independent
Counsel selected by Indemnitee and approved by the Company (which approval shall
not be unreasonably withheld). Such Independent Counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to whether and
to what extent the Indemnitee would be permitted to be indemnified under
applicable law. The Company agrees to pay the reasonable fees of the Independent
Counsel referred to above and, to the extent permitted by applicable law, may
fully indemnify such Independent Counsel against any and all expenses (including
attorneys' fees), claims, liabilities and damages arising out of or relating to
this Agreement.
Section 8. Presumptions and Effect of Certain Proceedings. The
Secretary of the Company shall, promptly upon receipt of the Indemnitee's
request for indemnification, advise in writing the Board of Directors or such
other person or persons empowered to make the determination as provided in
Section 7 that the Indemnitee has made such request for indemnification. Upon
making such request for indemnification, the Indemnitee shall be presumed to be
entitled to indemnification hereunder and the Company shall have the burden of
proof in the making of any determination contrary to such presumption. If the
person or persons so empowered to make such determination shall have failed to
make the requested indemnification within 60 days after receipt by the Company
of such request, except as otherwise expressly prohibited by applicable law, the
requisite determination of entitlement to indemnification shall be deemed to
have been made and the Indemnitee shall be absolutely entitled to such
indemnification, absent actual and material fraud in the request for
indemnification. The termination of any action, suit, investigation or
proceeding described in Section 3 or 4 hereof by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself: (a) create a presumption that the Indemnitee did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, that the Indemnitee had reasonable cause to believe that his conduct
was unlawful; or (b) otherwise adversely affect the rights of the Indemnitee to
indemnification except as may be provided herein.
Section 9. Advancement of Expenses and Costs. All reasonable expenses
and costs incurred by the Indemnitee (including attorneys' fees, retainers and
advances of disbursements required of the Indemnitee) shall be paid by the
Company upon incurrence, in advance of the final disposition of such action,
suit or proceeding, at the request of the Indemnitee within 20 days after the
receipt by the Company of a statement or statements from the Indemnitee
requesting such advance or advances from time to time. The Indemnitee's
entitlement to such expenses shall include those incurred in connection with any
proceeding by the Indemnitee seeking an adjudication or award in arbitration
pursuant to this Agreement. Such statement or statements shall reasonably
evidence the expenses and costs incurred by him in connection therewith. The
Indemnitee hereby undertakes to repay such amount if it is ultimately determined
that the Indemnitee is not entitled to be indemnified against such expenses and
costs
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by the Company as provided by this Agreement or otherwise.
Section 10. Remedies of Indemnitee in Cases of Determination not to
Indemnify or to Advance Expenses. In the event that a determination is made that
the Indemnitee is not entitled to indemnification hereunder or if payment has
not been timely made following a determination of entitlement to indemnification
pursuant to Sections 7 and 8, or if expenses are not advanced pursuant to
Section 9, the Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Delaware or any other court of competent
jurisdiction of his entitlement to such indemnification or advance.
Alternatively, the Indemnitee at his option may seek an award in arbitration to
be conducted by a single arbitrator pursuant to the rules of the American
Arbitration Association, such award, if determined by the arbitrator to be
merited, to be made within 60 days following the filing of the demand for
arbitration. The Company shall not oppose the Indemnitee's right to seek any
such adjudication or award in arbitration or any other claim. Such judicial
proceeding or arbitration shall be made de novo and the Indemnitee shall not be
prejudiced by reason of a determination (if so made) that he is not entitled to
indemnification. If a determination is made or deemed to have been made pursuant
to the terms of Section 7 or Section 8 hereof that the Indemnitee is entitled to
indemnification, the Company shall be bound by such determination and is
precluded from asserting that such determination has not been made or that the
procedure by which such determination was made is not valid, binding and
enforceable. The Company further agrees to stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement and is precluded from making any assertion to the contrary. If the
court or arbitrator shall determine that the Indemnitee is entitled to any
indemnification hereunder, the Company shall pay all reasonable expenses
(including attorneys' fees) and costs actually incurred by the Indemnitee in
connection with such adjudication or award in arbitration (including, but not
limited to, any appellate proceedings).
Section 11. Other Rights to Indemnification. The indemnification and
advancement of expenses (including attorney's fees) and costs provided by this
Agreement shall not be deemed exclusive of any other rights to which the
Indemnitee may now or in the future be entitled under any provision of the
by-laws, Certificate of Incorporation, vote of stockholders or disinterested
directors, provision of law, other agreement or otherwise.
Section 12. Attorneys' Fees and Other Expenses to Enforce Agreement
and Other Matters. (a) In the event that the Indemnitee is subject to or
intervenes in any proceeding in which the validity or enforceability of this
Agreement is at issue or seeks an adjudication or award in arbitration to
enforce his rights under, or to recover damages for breach of, this Agreement,
the Indemnitee, if he prevails in whole or in part in such action, shall be
entitled to recover from the Company and shall be indemnified by the Company
against, any actual expenses for attorneys' fees and disbursements reasonably
incurred by him.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, partners,
venturers, employees, agents or fiduciaries of the Company or of any other
corporation, partnership, joint venture, trust,
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employee benefit plan or other enterprise which person serves at the request of
the Company, Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, partner, venturer, employee or agent
under the policy or policies.
(c) In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of the payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure the rights, including execution of documentation
necessary to enable the Company to bring suit to enforce these rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable if and to the extent that Indemnitee
has otherwise actually received such payment under any insurance policy,
contract, agreement, arrangement, understanding or otherwise.
Section 13. Duration of Agreement. This Agreement shall continue until
and terminate upon the later of: (a) 10 years after the Indemnitee has ceased to
occupy any of the positions or have any of the relationships described in
Sections 3 and 4 of this Agreement; or (b) the final termination of all pending
or threatened actions, suits proceedings or investigations commenced prior to or
during such 10-year period with respect to the Indemnitee. Notwithstanding the
foregoing, this Agreement shall terminate and the Indemnitee shall have no
further rights under this Agreement, including but not limited to any rights to
indemnification or advancement of expenses, upon the commencement, directly or
indirectly, by or on behalf of the Indemnitee, of any suit or proceeding against
the Company other than (i) a suit or proceeding seeking a final adjudication of
the Indemnitee's right to indemnification under Section 10 of this Agreement or
(ii) a suit or proceeding seeking indemnification or contribution from the
Company where the Company is or may be liable for all or part of a claim against
the Indemnitee or (iii) a class action where the Indemnitee is not a class
representative. This Agreement shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of the Indemnitee's
spouse, assigns, heirs, devises, estate, executors, administrators or other
legal representatives, and the Company's successors and assigns.
Section 14. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality, and enforceability of the remaining
provisions of this Agreement (including without limitation all portions of any
paragraphs of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and (b) to
the fullest extent possible, the provisions of this Agreement (including without
limitation all portions of any paragraph of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested by the provision held invalid, illegal or unenforceable.
Section 15. Identical Counterparts. This Agreement may be executed in
one or
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more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
Section 16. Headings. The headings of the sections of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
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Section 17. Definitions. For purposes of this Agreement:
(a) Change in Control." A Change in Control shall be deemed
to have occurred if (i) any "person" (as such term is used in Section 13 (d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than (x) unless otherwise determined by the Board of Directors of the
Company or a duly authorized committee thereof, Xxxxxx X. Xxxxxx, his associates
or affiliates, or any group of which he is a member (within the meaning of such
terms under the Exchange Act and rules thereunder), or (y), 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,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
20% or more of the total voting power represented by the Company's then
outstanding Voting Securities; or (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 least two-thirds (2/3) 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 of the Board of Directors; 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 to such a merger
or consolidation 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 or an agreement for the sale
or disposition by the Company (in one transaction or a series of related
transactions) of all or substantially all the Company's assets.
(b) "Disinterested Director" shall mean a director of the
Company who is not or was not a party to the action, suit, investigation or
proceeding in respect of which indemnification is being sought by the
Indemnitee.
(c) "Independent Counsel" shall mean a law firm or a member
of a law firm that neither is presently nor in the past five years has been
retained to represent: (i) the Company or the Indemnitee in any matter material
to either such party, or (ii) any other party to the action, suit, investigation
or proceeding 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 the Indemnitee in an action to determine the Indemnitee's right to
indemnification under this Agreement.
(d) "Voting Securities" shall mean any securities of the
Company which vote generally in the election of directors.
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Section 18. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
Section 19. Notice by the Indemnitee. The Indemnitee agrees promptly
to notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
matter which may be subject to indemnification covered hereunder, either civil,
criminal or investigative.
Section 20. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (i) if delivered by hand, on the date of delivery, (ii) if sent by a
nationally recognized overnight courier, on the second business day after the
date on which it was sent, or (ii) if mailed by certified or registered mail
with postage prepaid, on the third business day after the date on which it is so
mailed. Such notices, requests, demands and other communications will be sent to
the address indicated below:
(a) If to the Indemnitee, to:
(b) If to the Company to:
Secretary
Insignia/ESG Holdings, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as may have been furnished to the Indemnitee by the
Company or to the Company the Indemnitee, as the case may be.
Section 21. Governing Law. The parties agree that this Agreement shall
be governed by, and construed and enforced in accordance with, the laws of the
State of Delaware, in that giving effect to the conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
INSIGNIA/ESG HOLDINGS, INC.
By:
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Xxxx X. Xxxxxxx
Secretary
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Indemnitee
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SCHEDULE TO FORM OF INDEMNIFICATION AGREEMENT
Directors and Officers of Insignia/ESG, Holdings, Inc.
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X.X. Xxxxxxx
Xxxxxx X. Xxxx
Xxxxxxx X. Xxxxxx
H. Xxxxxxx Xxxxxxx
Xxxxx X. Aston
Xxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx Xxxxxx
