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EXHIBIT 10.9
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement") dated as of
_______________, 2000, is between Direct Alliance Corporation, a Delaware
corporation (the "Company"), and the undersigned (director and/or officer) of
the Company (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;
WHEREAS, Indemnitee has agreed to serve as a director and/or officer of
the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies in today's environment;
WHEREAS, the Bylaws (the "Bylaws") of the Company require the Company to
indemnify and advance expenses to its directors and officers to the fullest
extent provided by law, and the Indemnitee has agreed to serve as a director
and/or officer of the Company in part in reliance on such provisions in the
Bylaws;
WHEREAS, Section 145 of the General Corporation Law of the State of
Delaware, under which law the Company is organized, empowers a corporation to
indemnify a person serving as a director, officer, employee or agent of the
corporation and a person who serves at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, and such Section 145 and the Bylaws of the
Company specify that the indemnification set forth in said Section 145 and in
the Bylaws, respectively, shall not be deemed
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exclusive of any other rights to which those seeking indemnification may be
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise; and
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's continued service to
the Company in an effective manner and Indemnitee's reliance on the foregoing
provisions in the Bylaws and Certificate, and in part to provide Indemnitee with
specific contractual assurance that the protection promised by such provisions
in the Bylaws and Certificate will be available to Indemnitee (regardless of,
among other things, any amendment to or revocation of such provisions in the
Bylaws or Certificate or any change in the composition of the Company's Board of
Directors or acquisition transaction relating to the Company), the Company
wishes to provide in this Agreement for the indemnification of and the advancing
of expenses to Indemnitee to the fullest extent permitted by law and as set
forth in this Agreement and, to the extent insurance is maintained, for the
continued coverage of Indemnitee under the Company's directors' and officers'
liability insurance policies.
NOW, THEREFORE, in consideration of the premises and of Indemnitee
agreeing to serve as a director and/or officer of the Company and intending to
be legally bound hereby, the parties hereto agree as follows:
1. Indemnity. The Company shall indemnify the Indemnitee and his or her
executors, administrators or assigns, to the fullest extent permitted by
applicable law, for any Expenses (as defined below) that the Indemnitee is or
becomes legally obligated to pay in connection with any Proceeding. As used in
this Agreement the term "Proceeding" shall include any threatened, pending or
completed claim, action suit, investigation, inquiry or proceeding, whether
brought by or in the right of the Company or otherwise and whether of a civil,
criminal, administrative or investigative
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nature, in which the Indemnitee may be or may have been involved as a party,
witness or otherwise, by reason of the fact that Indemnitee is, was or has
agreed to become a director or officer of the Company, by reason of any actual
or alleged error or misstatement or misleading statement made or suffered by the
Indemnitee, by reason of any action taken by him or her or of any inaction on
his or her part while acting as such director or officer, or by reason of the
fact that he or she was serving at the request of the Company as a director,
trustee, officer, employee or agent of another corporation, partnership, joint
venture, employee benefit plan, trust or other enterprise; provided, however,
that in each such case Indemnitee acted in good faith and in a manner which he
or she reasonably believed to be in or not opposed to the best interests of the
Company, and, in the case of a criminal proceeding, in addition had no
reasonable cause to believe that his or her conduct was unlawful. As used in
this Agreement, the term "other enterprise" shall include (without limitation)
employee benefit plans and administrative committees thereof, and the term
"fines" shall include (without limitation) any excise tax assessed with respect
to any employee benefit plan. Any corporation, partnership, limited liability
company or other entity on behalf of which Indemnitee may be deemed to be acting
in connection with his or her service to the Company shall be entitled to the
benefits of the indemnity provided for by this Agreement to the same extent and
under the same conditions upon which Indemnitee is entitled to such indemnity.
2. Expenses. As used in this Agreement, the term "Expenses" shall
include, without limitation, damages, judgments, fines, penalties, excise taxes,
and amounts paid or to be paid in settlement (if such settlement is approved in
advance by the Company, which approval shall not be unreasonably withheld) and
costs, attorneys' fees and disbursements and costs of attachment or similar
bonds, investigations, and any expenses of establishing a right to
indemnification under this
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Agreement (including all interest, assessments and other charges paid or payable
in connection with or in respect of such Expenses, judgments, fines, penalties,
excise taxes or amounts paid or to be paid in settlement).
3. Enforcement. If Indemnitee makes a request to be indemnified under
this Agreement, the Board of Directors of the Company (acting by a quorum
consisting of directors who are not parties to the Proceeding or, if such a
quorum is not obtainable, acting upon an opinion in writing of independent legal
counsel) ("Board Action") shall, as soon as practicable but in no event later
than sixty (60) days after such request, authorize such indemnification. If a
claim or request under this Agreement is not paid by the Company, or on its
behalf, within sixty (60) calendar days after a written claim or request has
been received by the Company, then the Indemnitee may at any time thereafter
bring suit against the Company to recover the unpaid amount of the claim or
request and if successful in whole or in part, the Indemnitee shall be entitled
to be paid also the Expenses of prosecuting such suit. The burden of proving
that the Indemnitee is not entitled to indemnification for any reason shall be
upon the Company.
4. Subrogation. Upon any payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
the Indemnitee, who shall execute all papers required and shall do everything
that may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
5. No Presumption. For purposes of this Agreement, the termination of
any claim, action, suit or proceeding, by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that
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Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has delivered that indemnification is not
permitted by applicable law or this Agreement.
6. Exclusions. The Company shall not be liable under this Agreement
to pay any Expenses in connection with any claim made against the Indemnitee:
(a) to the extent that payment is actually made to the
Indemnitee under a valid, enforceable and collectible insurance policy;
(b) to the extent that the Indemnitee is indemnified and
actually paid otherwise than pursuant to this Agreement;
(c) in connection with a judicial action by or in the right of
the Company, in respect of any claim, issue or matter as to which the
Indemnitee shall have been adjudged to be liable to Company unless and
only to the extent that any court in which such action was brought shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, the Indemnitee is
fairly and reasonably entitled to indemnity for such expenses as such
court shall deem proper;
(d) if it is proved by final judgment in a court of law or other
final adjudication to have been based upon or attributable to the
Indemnitee's in fact having gained any personal profit or advantage to
which he or she was not legally entitled;
(e) for a disgorgement of profits made from the purchase and sale
by the Indemnitee of securities pursuant to Section 16(b) of the
Securities Exchange Act of
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1934, as amended, and amendments thereto or similar provisions of any
state statutory law or common law; or
(f) for any judgment, fine or penalty which the Company is
prohibited by applicable law from paying.
7. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any Proceeding or in defense
of any claim, issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against any and all Expenses incurred in
connection therewith.
8. Partial Indemnification. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for the portion of such Expenses to
which the Indemnitee is entitled.
9. Contribution. In the event that the indemnification provided for in
this Agreement is unavailable to Indemnitee for any reason whatsoever, the
Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes,
amounts paid or to be paid in settlement and/or for Expenses, in connection with
any Proceeding, in such proportion as is deemed fair and reasonable in light of
all of the circumstances of such action by Board Action or arbitration or by the
court before which such action was brought in order to reflect (i) the relative
benefits received by the Company and Indemnitee as a result of the event (s)
and/or transaction (s) giving cause to such action; and/or (ii) the relative
fault of the Company (and its other directors, officers, employees and agents)
and Indemnitee in
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connection with such event(s) and/or transaction(s). Indemnitee's right to
contribution under this Section 9 shall be determined in accordance with,
pursuant to and in the same manner as, the provisions in this Agreement relating
to Indemnitee's right to indemnification.
10. Notice to the Company by Indemnitee. Indemnitee agrees to promptly
notify the Company in writing upon being served with or having actual knowledge
of any citation, summons, compliant, indictment or any other similar document
relating to any action which may result in a claim of indemnification or
contribution hereunder.
11. Advance of Expenses. Notwithstanding anything in the Certificate,
Bylaws or this Agreement to the contrary, if so requested by Indemnitee,
expenses incurred by the Indemnitee in connection with any Proceeding, except
the amount of any settlement, shall be paid by the Company within twenty (20)
calendar days of such request of the Indemnitee that the Company pay such
expenses. The Indemnitee hereby undertakes to repay to the Company the amount of
any Expenses theretofore paid by the Company if a judgment or final adjudication
adverse to Indemnitee establishes that Indemnitee, with respect to such
Proceeding, is not entitled to indemnification.
12. Notice of Claim: Notice to Insurers.
(a) The Indemnitee, as a condition precedent to his or her right
to be indemnified under this Agreement, shall give to the Company notice
in writing as soon as practicable of any claim made against him or her
for which indemnity will or could be sought under this Agreement, but a
failure or delay in giving such notice will affect the obligations of
the Company hereunder only to the extent that the Company is prejudiced
thereby or the failure or delay to give such notice prejudices the
availability to the Company of insurance coverage for such claim. Such
notice
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shall contain the written affirmation of the Indemnitee that the
standard of conduct necessary for indemnification hereunder has been
satisfied. Notice to the Company shall be given at its corporate
headquarters and shall be directed to the corporate secretary (or such
other addressee as the Company shall designate in writing to the
Indemnitee); notice shall be deemed received if sent by prepaid mail
properly addressed, the date of such notice being the date postmarked.
In addition, the Indemnitee shall give the Company such information and
cooperation as it may reasonably require in connection with such claim.
(b) If, at the time of the receipt of a notice of a Claim
pursuant to Section 12(a) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with
the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of the Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such policies.
13. Selection of Counsel. In the event the Company shall be obligated
under this Agreement to pay the Expenses of any proceeding against Indemnitee,
the Company, unless the Indemnitee determines that a conflict of interest exists
between the Indemnitee and the Company with respect to a particular Claim, shall
be entitled to assume the defense of such proceeding, with counsel approved by
Indemnitee, which approval shall not be unreasonably withheld, upon the delivery
to Indemnitee of written notice of its election to do so. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel
by the Company, the
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Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same proceeding,
provided that (i) Indemnitee shall have the right to employ his or her own
separate counsel in any such proceeding in addition to or in place of any
counsel retained by the Company on behalf of Indemnitee at Indemnitee's expense;
and (ii) if (A) the employment of counsel by Indemnitee has been previously
authorized by the Company, (B) Indemnitee shall have concluded that there may be
a conflict of interest between the Company and Indemnitee in the conduct of any
such defense or (C) the Company shall not, in fact, have employed counsel to
assume the defense of such proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Company.
14. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one instrument.
15. Indemnification Hereunder Not Exclusive. The rights of the
Indemnitee hereunder shall be in addition to any other rights Indemnitee may
have under the Company's Certificate of Incorporation or Bylaws or applicable
law, and nothing herein shall be deemed to diminish or otherwise restrict
Indemnitee's right to indemnification under any such other provision. To the
extent applicable law or the Certificate of Incorporation or the Bylaws of the
Company, as in effect on the date hereof or at any time in the future, permit
greater indemnification than as provided for in this Agreement, the parties
hereto agree that Indemnitee shall enjoy by this Agreement the greater benefits
so afforded by such law or provision of the Certificate or Bylaws and this
Agreement shall be deemed amended without any further action by the Company or
Indemnitee to grant such greater benefits. Indemnitee may elect to have
Indemnitee's rights hereunder interpreted on the basis of
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applicable law in affect at the time of execution of this Agreement, at the time
of the occurrence of an identifiable event giving rise to a claim or at the time
indemnification is sought.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with Delaware law, without giving effect to the principles of
conflict of laws thereof.
17. Saving Clause. Wherever there is conflict between any provision of
this Agreement and any applicable present or future statute, law or regulation
pursuant to which the Company and the Indemnitee have no legal right to
contract, the latter shall prevail, but in such event the affected provisions of
this Agreement shall be curtailed and restricted only to the extent necessary to
bring them within applicable legal requirements.
18. Coverage. The provisions of this Agreement shall apply with respect
to the Indemnitee's service as a director and/or officer of the Company prior to
the date of this Agreement and with respect to all periods of such service after
the date of this Agreement, even though the Indemnitee may have ceased to be a
director and/or officer of the Company.
19. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legatees,
legal representatives, successors and permitted assigns. The Company shall
require and cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business and/or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first written above.
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Direct Alliance Corporation
By: ______________________________________
Its: _____________________________________
Indemnitee
__________________________________________
(Signature)
__________________________________________
(Printed Name)
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