Online Xxxxxxxx.xxx, Inc. ("OLP") hereby agrees to defend, indemnify and
hold harmless Xxxx Xxxxxxxx, Xxxxxxx Xxxxxxx, Pridecom Productions, L.L.C., and
Pridecom Productions, Inc. (collectively "the Indemnified Defendants") in the
case of Xxxxxxxxx x. Xxxxxxx, et. al, San Francisco County Superior Court Case
No. 316724 ("the Litigation") as set forth in this Agreement.
INDEMNITY FOR COST OF DEFENSE
OLP will defend the Indemnified Defendants in the Litigation. OLP will pay
all reasonable costs of such defense incurred by Xxxxxxxx & Xxxxxxxx, LLP
("Xxxxxxxx & Xxxxxxxx"). Additionally, OLP will pay all reasonable costs
incurred by the law firm of LeBoeuf, Lamb, Xxxxxx & XxxXxx ("LLGM"), counsel for
the Indemnified Defendants, to defend the Litigation, such amount not to exceed
$3,500 per month. Although predicting the costs of legal services in a given
month can not be done with precision, LLGM agrees to notify OLP as soon as
reasonably practical if it anticipates that its xxxxxxxx for the Litigation will
exceed $3,500 in any calendar month. With such notification, LLGM agrees to
provide to OLP an estimate for the amount by which it reasonably believes it may
exceed the cap for that month. Upon such notification, OLP will review the
status and xxxxxxxx in this matter and inform LLGM whether it will agree to pay
the additional costs LLGM may incur in excess of the cap for that month, said
payment not to be unreasonably withheld.
At this time there does not appear to be any conflict of interest between
OLP and the Indemnified Defendants regarding the legal issues involved in the
Litigation. However, as the Litigation progresses, there is always the
possibility that a conflict or potential conflict may develop that would impair
or prevent a single firm from adequately representing both of their interests.
To that end, the Indemnified Defendants have retained LLGM to monitor the
Litigation and advise them in the matter as necessary.
To permit LLGM to represent the Indemnified Defendants, OLP will instruct
Xxxxxxxx & Xxxxxxxx to inform counsel at LLGM of any actions it takes that could
affect the Indemnified Defendants' position in the Litigation. OLP will further
instruct Xxxxxxxx & Xxxxxxxx to provide LLGM with copies of final pleadings,
motions, and/or other documents to be filed or submitted to the court that could
affect the Indemnified Defendants' position in the Litigation prior to filing or
submitting such documents. Further, OLP will instruct Xxxxxxxx & Xxxxxxxx to
provide LLGM copies of all substantive correspondence regarding the Litigation
as it pertains to the Indemnified Defendants.
OLP's payment for the cost of defense shall also include settlement
discussions between the Indemnified Defendants and the plaintiff, subject to the
condition that any settlement must be pre-approved by OLP.
INDEMNITY FOR DAMAGES
In addition to the defense indemnity described above, OLP agrees to
indemnify the Indemnified Defendants in their capacities as individuals (Xxxx
Xxxxxxxx and Xxxx Xxxxxxx) or entities (Pridecom Productions, Inc. or Pridecom
Productions, LLC) for all damages, costs, and/or attorneys' fees awarded against
them in the Litigation for actions taken within the
scope of their respective agencies or employment with OLP, or where reasonably
required pursuant to the OLP Bylaws or Articles of Incorporation, the Pridecom
Productions, Inc. Bylaws or Articles of Incorporation, or the obligations
assumed through the Merger Agreement between OLP and Pridecom Productions, Inc.
(the "Merger Agreement"), provided that any settlement involving any of the
Indemnified Defendants must be pre-approved by OLP, Xxxxxxxx & Xxxxxxxx, and
LLGM. To the extent that Xxxxxxx Xxxxxxx may not, for any reason, be
encompassed by the indemnification provisions of the Merger Agreement or of the
OLP Bylaws or Articles of Incorporation, OLP agrees to indemnify him pursuant
to this agreement, or where required, to the same extent that he would be
indemnified if he were so encompassed.
ATTORNEY-CLIENT PRIVILEGE ISSUES
Xxxxxxxx & Xxxxxxxx cannot effectively represent multiple parties if
information disclosed by one party must be preserved in confidence from another
party. Thus, Xxxxxxxx & Xxxxxxxx reserves the right to disclose to each of the
parties that it represents all information received from the other parties
relating to the Litigation. Xxxxxxxx & Xxxxxxxx'x joint representation of OLP
and the Indemnified Defendants will be governed by the express understanding
that each party has waived the lawyer-client privilege to the extent, but only
to the extent, that the privilege would otherwise require Xxxxxxxx & Xxxxxxxx to
keep information disclosed by one party confidential from other parties
regarding this Litigation, and any subsequent legal proceeding involving the
Litigation asserted by one of the parties against another party. Additionally,
Xxxxxxxx & Xxxxxxxx recognizes that, to the extent permitted by California law,
all communications between the various defendants related to the action and
between counsel for OLP and counsel for the Indemnified Defendants are protected
by the joint defense privilege.
CONFLICTS OF INTEREST
If OLP determines, or if the Indemnified Defendants determine and OLP
agrees, that a conflict or potential conflict has arisen such that Xxxxxxxx &
Xxxxxxxx can no longer represent the interests of both OLP and the Indemnified
Defendants, LLGM will substitute into the Litigation as counsel of record for
the Indemnified Defendants. Such a substitution, alone, will not necessarily but
may, in OLP's reasonable discretion, terminate OLP's obligation to indemnify the
Indemnified Defendants for cost of defense as set forth herein.
If Xxxxxxxx & Xxxxxxxx determines that there are material differences
between the interests of the Indemnified Defendants and OLP that cannot be
resolved on an amicable basis, then Xxxxxxxx & Xxxxxxxx will withdraw from the
representation of one or more of the Indemnified Defendants. If Xxxxxxxx &
Xxxxxxxx determines that it must withdraw from the joint representation, it
alone may determine whether it can continue to represent OLP while complying
with its ethical obligations.
If Xxxxxxxx & Xxxxxxxx withdraws from representing any or all of the
Indemnified Defendants, such defendants will not seek to disqualify Xxxxxxxx &
Xxxxxxxx from continuing to represent OLP or other defendants.
Finally, except as otherwise discussed in this letter, if Xxxxxxxx &
Xxxxxxxx ceases its representation of OLP, its duties to represent the
Indemnified Defendants likewise cease.
I hereby consent to joint representation on the terms and conditions set forth
in this letter.
Dated: June 28, 2001 /s/ XXXX XXXXXXXX
Xxxx Xxxxxxxx, on behalf of himself as an
individual defendant, and on behalf of
defendants Pridecom Productions, LLC, and
Pridecom Productions, Inc.
Dated: June 28, 2001 /s/ XXXXXXX XXXXXXX
Xxxxxxx Xxxxxxx, an individual Defendant
Dated: June 28, 2001 /s/ XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx, CEO for Online Xxxxxxxx.xxx, Inc.