Exhibit 10.7
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is effective as of September 18, 2000, among Precept
Business Services, Inc., a Texas corporation (the "Corporation"), and X.X.
Xxxxxxx ("Indemnitee" ).
WHEREAS, the Corporation has adopted Bylaws (the "Bylaws") providing
for indemnification of the Corporation's directors and officers in accordance
with Texas Business Corporation Act (the "Statute"); and
WHEREAS, such Bylaws and Statute contemplate that contracts and
other arrangements may be entered into with respect to indemnification of
directors and officers; and
WHEREAS, it is reasonable, prudent and necessary for the Corporation
to obligate itself contractually to indemnify Indemnitee so that he will
consent to be elected and to serve as an officer of the Corporation and will
be able to serve the Corporation free from undue concern that he will not be
adequately protected.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree
as follows:
I. DEFINITIONS. As used in this Agreement:
A. The term "Proceeding" shall include any threatened, pending or
completed action, suit or proceeding against the Corporation or the
Indemnitee, whether brought by or in the right of the Corporation or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party, as a
witness or otherwise, by reason of the fact that Indemnitee is or was a
director, officer, agent or advisor of the Corporation, by reason of any
action taken by him or of any inaction on his part while acting as a
director, officer, agent or advisor of the Corporation, or by reason of the
fact that he is or was serving at the request of the Corporation as a
director, officer, employee, agent or advisor of another corporation,
partnership, joint venture, trust, limited liability company or other entity
or enterprise, in each case whether or not he is acting or serving in any
such capacity at the time any liability or expense is incurred for which
indemnification or reimbursement can be provided under this Agreement;
provided that any such action which is brought by Indemnitee against the
Corporation or directors or officers of the Corporation, other than an action
brought by Indemnitee to enforce his rights under this Agreement, shall not
be deemed a Proceeding without prior approval by a majority of the Board of
Directors of the Corporation.
B. The term "Expenses" shall include, without limitation, any
liabilities, judgments, fines and penalties against Indemnitee in connection
with a Proceeding; and all reasonable attorneys' fees and disbursements,
accountants' fees and disbursements, private investigation fees and
disbursements, retainers, court costs, transcript costs, fees of experts,
fees and expenses of witnesses, travel expenses, duplicating costs, printing
and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses reasonably incurred by or for
Indemnitee in connection with prosecuting, defending, preparing to prosecute
or defend, investigating, or being or preparing to be a witness in a
Proceeding or establishing Indemnitee's right or entitlement to
indemnification for any of the foregoing.
D. The term "substantiating documentation" shall mean copies of
bills or invoices for costs incurred by or for Indemnitee, or copies of court
or agency orders or decrees or settlement agreements, as the case may be,
accompanied by a sworn statement from Indemnitee that such bills, invoices,
court or agency orders or decrees or settlement agreements, represent costs
or liabilities meeting the definition of "Expenses" herein.
E. The terms "he" and "his" have been used for convenience and
mean "she" and "her" if Indemnitee is female.
II. INDEMNITY OF DIRECTOR OR OFFICER. The Corporation hereby
agrees to hold harmless and indemnify Indemnitee against any and all Expenses
incurred by reason of the fact that Indemnitee is or was a director, officer,
agent or advisor of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee, agent or advisor of another
corporation, partnership, joint venture, trust, limited liability company or
other entity or enterprise, but only if Indemnitee acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interest
of the Corporation and, in the case of a criminal proceeding, did not believe
that his conduct was unlawful. The termination of any Proceeding by judgment,
order of the court, settlement, conviction or upon a plea of nolo contendere,
or its equivalent, shall not, of itself, create a presumption that Indemnitee
did not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interest of the Corporation, and with respect
to any criminal proceeding, that such person believed that his conduct was
unlawful. The indemnification provided herein shall not be applicable in the
event that the Expenses are finally adjudicated to have resulted from the
gross negligence or willful misconduct of the Indemnitee.
III. ADVANCES OF EXPENSES. Expenses (other than judgments,
penalties, fines and settlements) incurred by Indemnitee shall be paid by the
Corporation, in advance of the final disposition of the Proceeding and after
receipt of Indemnitee's written request accompanied by substantiating
documentation and Indemnitee's unsecured undertaking to repay such amount to
the extent it is ultimately determined that Indemnitee is not entitled to
indemnification.
IV. UNDERTAKING BY INDEMNITEE. Indemnitee hereby undertakes to
repay to the Corporation any advances of Expenses pursuant to Section III
hereof to the extent that it is ultimately determined that Indemnitee is not
entitled to indemnification.
V. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification
and advancement of expenses provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may be entitled under the
Articles of Incorporation and Bylaws of the Corporation, the Statute, any
policy or policies of directors' and officers' liability insurance, any
agreement, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office. However, Indemnitee
shall reimburse the Corporation for amounts paid to him pursuant
to such other rights to the extent such payments duplicate any payments
received pursuant to this Agreement.
VI. SETTLEMENT OF CLAIMS. The Corporation shall not be liable to
indemnify Indemnitee under this Agreement for any amounts paid in settlement
of any Proceeding effected without the Corporation's written consent which
shall not be unreasonably withheld; provided, that consent will be deemed
given if the Corporation does not object to any such settlement by written
notice to Indemnitee within ten (10) days following Indemnitee's request for
consent; and provided further, that in the event the Corporation does not
consent to any such settlement, the Corporation's indemnification of Indemnitee
hereunder shall become absolute and not subject to any defenses or counter
claims arising under paragraph II hereunder or otherwise. The Corporation
shall not be liable to indemnify Indemnitee under this Agreement with regard
to any judicial award if the Corporation was not given a reasonable and timely
opportunity, at its expense, to participate in the defense of such action.
VII. GOVERNING LAW; BINDING EFFECT; AMENDMENT AND TERMINATION.
A. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Texas.
B. This Agreement shall be binding upon the Corporation, its
successors and assigns, and shall inure to the benefit of Indemnitee, his
heirs, personal representatives and assigns and to the benefit of the
Corporation, its successors and assigns.
C. No amendment, modification, termination or cancellation of
this Agreement shall be effective unless in writing signed by the Corporation
and Indemnitee.
VII. NOTICE. Notice to the Corporation shall be directed to 0000
Xxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, XX 00000. Attention: Secretary.
Notice to Indemnitee shall be directed to Indemnitee at his address most
recently furnished to the Corporation. The foregoing addresses may be
changed from time to time by the addressee upon notice to the other parties.
Notice shall be deemed received three days after the date postmarked if sent
by prepaid mail, properly addressed.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the day and year first above written.
CORPORATION:
PRECEPT BUSINESS SERVICES, INC.
By: /s/ Xxxxxx Xxxxxx
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Its: Chairman
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INDEMNITEE:
/s/ X.X. Xxxxxxx
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X.X. Xxxxxxx
