Exhibit 10.29
INDEMNIFICATION AGREEMENT
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INDEMNIFICATION AGREEMENT (this "Agreement") dated as of May 17, 2000
among Synapse Group, Inc., a Delaware corporation (together with any successor
entity, "Synapse"), Xx. Xxx X. Xxxxxx, an individual residing in the State of
Connecticut ("Xxxxxx"), and NSSI Holdings Inc., a Delaware corporation (together
with any successor entity, "Time") and an indirect wholly owned subsidiary of
Time Inc., a Delaware corporation.
WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as
of May 17, 2000 ("Synapse Agreement"), by and between Synapse and Time, Time is
acquiring from Synapse 3,125,000 shares of Series C Preferred Stock, par value
$0.001 per share, of Synapse for an aggregate purchase price of $25 million (the
"Synapse Purchase Price"); and
WHEREAS, pursuant to that certain Securities Purchase Agreement, dated
as of May 17, 2000 ("Xxxxxx Agreement"), by and between Xxxxxx and Time, Time is
acquiring from Xxxxxx 1,511,592.507 shares of Class A Common Stock, par value
$0.001 per share, of Synapse and 5,363,407.493 shares of Class B Common Stock,
par value $0.001 per share, of Synapse for an aggregate purchase price of $55
million (the "Xxxxxx Purchase Price"); and
WHEREAS, as a condition to Time's entering into the Synapse Agreement
and the Xxxxxx Agreement, Time has required that each of Synapse and Xxxxxx
indemnify Time against Losses (as hereinafter defined);
WHEREAS, Synapse has agreed to provide such indemnification to Time,
on the terms and subject to the conditions of the Synapse Agreement; and
WHEREAS, Xxxxxx has agreed to provide such indemnification to Time, on
the terms and subject to the conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the parties agree as follows:
ARTICLE I
INDEMNIFICATION
Section 1.1 Indemnification by Xxxxxx.
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(a) Subject to the terms of this Article I, Xxxxxx agrees to
indemnify, defend and hold harmless Time and its Affiliates (as defined in Rule
12b-2 under the Securities Exchange Act of 1934, as amended) and their
respective officers, directors, employees, subsidiaries, partners, members and
controlling persons (each, a "Time Indemnified Party") to the fullest extent
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permitted by law from and against any and all losses and any and all actions,
proceedings, claims, complaints, disputes, arbitrations or investigations or
written threats thereof (collectively, "Claims") (including any Claim by a third
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party), damages, expenses (including reasonable fees, disbursements and other
charges of counsel incurred by the Time Indemnified Party) or other liabilities
(collectively, "Losses") resulting from, arising out of or relating to (i) the
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breach by Xxxxxx of any representation, warranty or covenant of Xxxxxx set forth
in Section 2 of the Xxxxxx Agreement or relating to the breach of any other
agreement by Xxxxxx in the Xxxxxx Agreement or (ii) a Synapse Loss (as
hereinafter defined); provided, that if and to the extent that such
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indemnification is unenforceable for any reason, Xxxxxx shall make the maximum
contribution to the payment and satisfaction of such Losses which shall be
permissible under applicable laws. In connection with the obligation of Xxxxxx
to indemnify the Time Indemnified Parties for expenses as set forth above,
Xxxxxx shall, upon presentation of appropriate invoices containing reasonable
detail, reimburse each Time Indemnified Party for all such expenses (including
reasonable fees, disbursements and other charges of counsel incurred by the Time
Indemnified Party, provided that Xxxxxx shall not be liable for the fees and
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expenses of more than one counsel for all Time Indemnified Parties); provided,
that such Time Indemnified Party undertakes in writing to repay Xxxxxx for such
expenses in the event it is ultimately determined that the Time Indemnified
Party was not entitled to indemnification pursuant to this Agreement.
(b) Notwithstanding anything to the contrary contained herein
and subject to the terms of this Article I, Xxxxxx shall not be obligated to
indemnify any Time Indemnified Party with respect to Synapse Losses unless:
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(i) Synapse has made payments to the Time Indemnified
Parties pursuant to Article 7 of the Synapse Agreement in an aggregate
amount equal to the Synapse Purchase Price or Synapse Losses exceed the
Synapse Purchase Price, in either of which events Xxxxxx shall indemnify
the Time Indemnified Parties for Synapse Losses only to the extent in
excess of the Synapse Purchase Price (subject to subsection (c) below); or
(ii) prior to such time as Synapse shall have made
payments to the Time Indemnified Parties pursuant to Article 7 of the
Synapse Agreement in an aggregate amount equal to the Synapse Purchase
Price (x) Synapse has failed to make any payment to a Time Indemnified
Party within 90 days after demand has been duly made by the Time
Indemnified Party in accordance with Article 7 of the Synapse Agreement and
(y) such failure to pay is as a result of a Synapse Insolvency (as
hereinafter defined), in which event Xxxxxx shall indemnify the Time
Indemnified Parties for the full amount of such Synapse Losses (subject to
subsection (c) below).
(c) Notwithstanding anything to the contrary contained
herein, the aggregate amount of all payments made by Xxxxxx to the Time
Indemnified Parties in respect of any and all Losses (including Synapse Losses)
shall not exceed the Xxxxxx Purchase Price.
(d) As used herein, "Synapse Losses" means Losses arising as
a result of the breach by Synapse of any representation, warranty or covenant
set forth in Section 3 of the Synapse Agreement, other than those set forth in
Section 3.1, 3.2, 3.3, 3.4, 3.11, and 3.18 thereof, for which Synapse is liable
to indemnify Time pursuant to Article 7 of the Synapse Agreement; provided,
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however, that, notwithstanding anything to the contrary contained in the Synapse
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Agreement, Synapse Losses shall not include any Consequential Damages (as
hereinafter defined).
(e) As used herein, "Synapse Insolvency" means (i) Synapse
shall commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
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liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for Synapse or for all or any substantial part of its
assets or Synapse shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Synapse any case, proceeding
or other action of a nature referred to in clause (i) above that (A) results in
the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 30 days; or (iii)
Synapse shall fail to pay, or shall admit in writing its inability to pay, or
shall be unable to pay its debts generally as they become due; or (iv) the
making of any levy on or judicial seizure or attachment of a material part of
the assets of Synapse or the taking of possession by a receiver, custodian,
trustee, liquidator or similar official of or for Synapse of a material part of
its assets, and such levy, seizure, attachment or taking has the effects set
forth in clause (iii) above, or the entry of an order for any of the foregoing,
if such order has not been vacated, discharged, or stayed or bonded within 30
days from the entry thereof; or (v) the liabilities of Synapse shall exceed its
assets (excluding for this purpose, all deferred subscription revenues and
associated deferred charges); or (vi) the dissolution or liquidation of Synapse.
Section 1.2 Indemnification by Time.
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(a) Subject to the terms of this Article I, Time agrees to
indemnify, defend and hold harmless Xxxxxx to the fullest extent permitted by
law from and against any and all Losses resulting from, arising out of or
relating to any breach of any representation, warranty or covenant of Time set
forth in Section 3 of the Xxxxxx Agreement or relating to the breach of any
other agreement of Time in the Xxxxxx Agreement; provided, that if and to the
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extent that such indemnification is unenforceable for any reason, Time shall
make the maximum contribution to the payment and satisfaction of such Losses
which shall be permissible under applicable laws. In connection with the
obligation of Time to indemnify for expenses set forth above, Time shall, upon
presentation of appropriate invoices containing reasonable detail, reimburse
Xxxxxx for all such expenses (including reasonable fees, disbursements and other
charges of counsel incurred by Xxxxxx); provided, that Xxxxxx undertakes in
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writing to repay Time for such expenses in the event it is ultimately determined
that Xxxxxx was not entitled to indemnification pursuant to this Agreement.
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(b) Notwithstanding anything to the contrary contained
herein, the aggregate amount of all payments made by Time to Xxxxxx in respect
of any and all Losses shall not exceed the Xxxxxx Purchase Price.
Section 1.3 Notification by the Parties.
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(a) Each Time Indemnified Party or Xxxxxx, as the case may be
(for purposes of this Section 1.3, an "Indemnified Party"), under this Article I
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shall, promptly after the receipt of notice of the commencement of any action,
investigation, claim or other proceeding against such Indemnified Party in
respect of which indemnity may be sought from Xxxxxx, in the case of a Time
Indemnified Party, or Time, in the case of Xxxxxx (for purposes of this Section
1.3, an Indemnifying Party), under this Article I, notify the Indemnifying Party
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in writing of the commencement thereof; provided, however, that with respect to
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any Synapse Losses, a Time Indemnified Party shall notify both Synapse and
Xxxxxx, and both Synapse and Xxxxxx shall be deemed Indemnifying Parties with
respect thereto for purposes of this Section 1.3. The omission of any
Indemnified Party to so notify the Indemnifying Party of any such action shall
not relieve the Indemnifying Party from any liability which it may have to such
Indemnified Party except to the extent that the Indemnifying Party is actually
prejudiced thereby. Subject to Section 1.4, in case any such action, claim or
other proceeding shall be brought against any Indemnified Party, and it shall
notify the Indemnifying Party of the commencement thereof, the Indemnifying
Party shall be entitled to assume the defense thereof at its own expense, with
counsel satisfactory to such Indemnified Party in its reasonable judgment;
provided, however, that any Indemnified Party may retain separate counsel to
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participate in such defense at its own expense. Notwithstanding the foregoing,
in any action, claim or proceeding in which both the Indemnifying Party, on the
one hand, and an Indemnified Party, on the other hand, are, or are reasonably
likely to become, a party, such Indemnified Party shall have the right to employ
separate counsel at the expense of the Indemnifying Party and to control its own
defense of such action, claim or proceeding if, in the reasonable opinion of
counsel to such Indemnified Party, a conflict or potential conflict exists
between the Indemnifying Party, on the one hand, and such Indemnified Party, on
the other hand, that would warrant such separate representation; provided,
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however, that the Indemnifying Party shall not be liable for the fees and
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expenses of more than one counsel to all Indemnified Parties.
(b) Subject to Section 1.5, the Indemnifying Party agrees
that it will not, without the prior written consent of the Indemnified Party,
settle, compromise or consent to the entry of any judgment in any pending or
threatened claim, action or
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proceeding relating to the matters contemplated hereby (if any Indemnified Party
is a party thereto or has been actually threatened to be made a party thereto)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Party from all liability arising or that may arise out of
such claim, action or proceeding. The Indemnifying Party shall not be liable for
any settlement of any claim, action or proceeding effected against an
Indemnified Party without the Indemnifying Party's written consent. The rights
accorded to an Indemnified Party hereunder shall be the exclusive rights and
remedies of any Indemnified Party, regardless of any rights that may arise under
common law, separate agreement or otherwise; provided, however, that
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notwithstanding the foregoing or anything to the contrary contained in this
Agreement, nothing in this Article I shall restrict or limit any rights that any
Indemnified Party may have to seek equitable relief.
Section 1.4 Xxxxxx/Synapse Procedures. Synapse shall, promptly after
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the receipt of notice of the commencement or threatened commencement of any
action, investigation, claim or other proceeding against a Time Indemnified
Party that may result in Synapse Losses or any other request by a Time
Indemnified Party for indemnification pursuant to the Synapse Agreement that may
result in Synapse Losses, notify Xxxxxx in writing of the commencement thereof.
In the event of any such action, investigation, claim or other proceeding or any
such other request for indemnification by a Time Indemnified Party, Xxxxxx and
his counsel shall be entitled to participate in all negotiations and meetings
with Synapse, Time and third-party litigants, as applicable, and in all court
proceedings and other events relating to the defense thereof, at Xxxxxx'x
expense, as if Xxxxxx were a party to such action, investigation, claim or other
proceeding, and to have an opportunity to review, discuss and comment upon all
correspondence with Time and third-party litigants, as applicable, and court
filings of or on behalf of Synapse in connection therewith; provided, however,
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that (i) upon the occurrence of a Synapse Insolvency or (ii) if Xxxxxx shall be
liable for the entire amount of such Synapse Loss pursuant to Section 1.1(b)(i),
Xxxxxx shall be entitled to unilaterally assume the defense of such action,
investigation, claim or other proceeding.
Section 1.5 Consent to Settlements/Collateral Estoppel. Each of
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Synapse and Time agrees that it will not, without the prior written consent of
Xxxxxx, which consent shall not be unreasonably withheld or delayed, settle,
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating in any way to a Synapse Loss.
Notwithstanding any other provision hereof, any finding of fact or law and any
judgment, ruling, order or other disposition by a tribunal having jurisdiction
in the matter shall be binding upon Xxxxxx to the full extent as if
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he were a party to the relevant proceeding. The failure of Synapse to give
Xxxxxx any notice required hereunder or to permit Xxxxxx to exercise his rights
pursuant to Section 1.4 above shall not affect the rights of any Time
Indemnified Party under this Agreement; provided, that such Time Indemnified
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Party has complied with its obligations to provide notice under this Agreement
and Article 7 of the Synapse Agreement (but no failure of a Time Indemnified
Party to so comply shall affect the rights of such Time Indemnified Party
hereunder, except to the extent that Xxxxxx is actually prejudiced thereby) ;
and provided, further, that nothing contained herein shall affect the rights of
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Xxxxxx against Synapse for any breach by Synapse of this Agreement, including
Section 1.4 hereof.
Section 1.6 Consequential Damages. Notwithstanding anything to the
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contrary contained herein, neither Xxxxxx nor Time shall be obligated to
indemnify the other for any special damages, consequential damages, punitive
damages or lost profits (collectively "Consequential Damages").
ARTICLE II
MISCELLANEOUS
Section 2.1 Notices. All notices, demands and other communications
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provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, courier
service or personal delivery to the addresses set forth below:
(a) if to Synapse:
Synapse Group, Inc.
0 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxxx Xxxx
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
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(b) if to Time:
NSSI Holdings Inc.
c/o Time Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxx
with copies to:
Time Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
and
Patterson, Belknap, Xxxx & Tyler LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
(c) If to Xxxxxx:
Xxx X. Xxxxxx
c/x Xxxxxx Digital, LLC
Five Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx Chuff, Esq.
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All such notices and communications shall be deemed to have been duly given when
delivered by hand, if personally delivered; when delivered by courier, if
delivered by commercial courier service; five (5) business days after being
deposited in the mail, postage prepaid, if mailed.
Section 2.2 Successors and Assigns; Third-Party Beneficiaries. This
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Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto. No Party hereto may assign any of its
rights under this Agreement without the written consent of the other parties.
Except as provided in Article I, no one other than the parties hereto and their
successors and permitted assigns is intended to be a beneficiary of this
Agreement.
Section 2.3 Amendment and Waiver.
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(a) No failure or delay on the part of Xxxxxx, Synapse or
Time in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are the
exclusive remedies available to Xxxxxx and Time against each other in connection
with the transactions contemplated hereby and by the Xxxxxx Agreement, other
than remedies of specific performance and injunctive relief.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by Xxxxxx, Synapse or Time from the terms of any
provision of this Agreement, shall be effective only if it is made or given in
writing and signed by Xxxxxx, Synapse and Time.
Section 2.4 Counterparts. This Agreement may be executed in any
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number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
Section 2.5 Headings. The headings in this Agreement are for
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convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
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Section 2.6 Pronouns. All pronouns and any variations thereof refer
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to the masculine, feminine or neuter, singular or plural, as the context may
require.
Section 2.7 GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE
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GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION. The
parties hereto agree that any suit, action or proceeding instituted against
either of them with respect to this Agreement (including any exhibits hereto)
shall be brought in any federal or state court located in New York, New York.
The parties hereto, by the execution and delivery of this Agreement, irrevocably
waive any objection or defense to the institution of any action in New York, New
York based on improper venue, the convenience of the forum or the jurisdiction
of such courts, or to the execution of judgments resulting therefrom, and the
parties hereto irrevocably accept and submit to the jurisdiction of the
aforesaid courts in any suit, action or proceeding and consent to the service of
process by certified mail at the address set forth in Section 2.1 hereof.
Section 2.8 Entire Agreement. This Agreement and the Xxxxxx
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Agreement are intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein. This
Agreement, together with Xxxxxx Agreement, supersede all prior agreements and
understandings between the parties with respect to such subject matter.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed, or have cause to be
executed, this Indemnification Agreement on the date first written above.
/s/ Xxx X. Xxxxxx
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XXX X. XXXXXX
NSSI HOLDINGS INC.
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: President
SYNAPSE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx Xxxx
Title: President
