INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is made and entered into as of
_______________, 199__, by and between SOUTHERN ELECTRONICS CORPORATION, a
Delaware corporation (the "Corporation"), and ________________________, a
member of the Board of Directors of the Corporation ("Indemnitee").
WHEREAS, the Corporation desires that Indemnitee oppose and defend
against what Indemnitee may consider to be unjustified investigations, claims,
actions, suits and proceedings which have arisen or may arise in the future as
a result of Indemnitee's service to the Corporation notwithstanding that
conditions in the insurance markets may make directors' and officers'
liability insurance coverage unavailable or available only at premium levels
which the Corporation may deem inappropriate to pay; and
WHEREAS, the parties believe it appropriate to memorialize and reaffirm
the Corporation's indemnification obligation to Indemnitee and, in addition,
set forth the indemnification agreements contained herein;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties agree as follows:
1. Indemnification.
(a) Indemnitee shall be indemnified and held harmless by the
Corporation to the fullest extent permitted by its Certificate of
Incorporation, By-laws and the General Corporation Law of the State of
Delaware, as the same exists or as may hereafter be amended, against all
expenses, liabilities and losses (including attorneys' fees, judgments,
fines and amounts paid or to be paid in any settlement approved in
advance by the Corporation, such approval not to be unreasonably
withheld) (collectively, "Indemnifiable Expenses") actually and
reasonably incurred or suffered by Indemnitee in connection with any
present or future threatened, pending or contemplated investigation,
claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative (collectively, "Indemnifiable
Litigation"), (i) to which Indemnitee is or was a party or is threatened
to be made a party by reason of any action or inaction in Indemnitee's
capacity as a director or officer of the Corporation, or (ii) with
respect to which Indemnitee is otherwise involved by reason of the fact
that Indemnitee is or was serving as a director, officer, employee or
agent of the Corporation, or of any subsidiary or division, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
(b) In the event of payment under this Agreement, the
Corporation 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 Corporation effectively to bring suit to enforce such rights.
(c) The Corporation shall not be liable under this Agreement to
make any payment in connection with any claim made against the
Indemnitee:
(i) for which payment is actually made to the Indemnitee
under a valid and collectible insurance policy, except in respect
of any excess beyond the amount of payment under such insurance;
(ii) for which the Indemnitee is entitled to indemnity
and/or payment by reason of having given notice of any
circumstance which might give rise to a claim under any policy of
insurance, the terms of which have expired prior to the effective
date of this Agreement;
(iii) for which the Indemnitee is indemnified by the
Corporation otherwise than pursuant to this Agreement;
(iv) based upon or attributable to the Indemnitee gaining
in fact any personal profit or advantage to which he was not
legally entitled;
(v) for an accounting of profits made from the purchase or
sale by the Indemnitee of securities of the Corporation within the
meaning of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or similar provisions of any state statutory law; or
(vi) brought about or contributed to by the dishonesty of
the Indemnitee seeking payment hereunder; however, notwithstanding
the foregoing, the Indemnitee shall be protected under this
Agreement as to any claims upon which suit may be brought against
him by reason of any alleged dishonesty on his part, unless a
judgment or other final adjudication thereof adverse to Indemnitee
shall establish that he committed acts of active and deliberate
dishonesty with actual dishonest purpose and intent, which acts
were material to the cause of action so adjudicated.
2. Interim Expenses. The Corporation agrees to pay Indemnifiable
Expenses incurred by Indemnitee in connection with any Indemnifiable
Litigation in advance of the final disposition thereof, provided that the
Corporation has received an undertaking from or on behalf of Indemnitee,
substantially in the form attached hereto as Annex I, to repay the amount so
advanced to the extent that it is ultimately determined that Indemnitee is not
entitled to be indemnified by the Corporation under this Agreement or
otherwise.
3. Procedure for Making Demand. Payments of Indemnifiable Expenses
and advances provided for in Sections 1 and 2 hereof shall be made no later
than forty-five (45) days after receipt of the written request of Indemnitee,
and Indemnitee shall be deemed to have met the applicable standard of conduct
required for indemnification unless a determination is made within said 45-day
period by (i) the Corporation's Board of Directors by a majority vote of a
quorum consisting of disinterested directors who are not parties to the
Indemnification Litigation giving rise to the demand, (ii) if such a quorum of
disinterested directors is not obtainable, or even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) by the Corporation's stockholders, that Indemnitee has not
met the relevant standard of conduct for indemnification set forth in
Section 1 hereof. Indemnitee may contest the determination that Indemnitee
has not met the relevant standard of indemnification by petitioning a court to
make an independent determination with respect to the right of
indemnification, in accordance with the terms of Section 4 hereof.
4. Failure to Indemnify.
(a) If a claim under this Agreement, or any statute, or under
any provision of the Corporation's Certificate of Incorporation or By-laws
providing for indemnification, is not paid in full by the
Corporation within forty-five (45) days after a written request for
payment thereof has been received by the Corporation, Indemnitee may,
but need not, at any time thereafter bring an action against the
Corporation to recover the unpaid amount of the claim and, if successful
in whole or in part, Indemnitee shall also be entitled to be paid for
the expense (including attorneys' fees) of bringing such action.
(b) It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection
with any action, suit or proceeding in advance of its final disposition)
that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Corporation to indemnify
Indemnitee for the amount claimed, but the burden of proving such
defense shall be on the Corporation and Indemnitee shall be entitled to
receive interim payments of interim expenses pursuant to Section
2 hereof unless and until such defense may be finally adjudicated by
court order or judgment from which no further right of appeal exists.
It is the parties' intention that if the Corporation contests
Indemnitee's right to indemnification, the question of Indemnitee's
right to indemnification shall be for the court to decide, and neither
the failure of the Corporation (including its Board of Directors, any
committee of the Board of Directors, independent legal counsel, or its
stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Corporation (including its Board of Directors, any
committee of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has or has not met
the applicable standard of conduct.
5. Successors. This Agreement establishes contract rights which
shall be binding upon, and shall inure to the benefit of, the successors,
assigns, heirs and legal representatives of the parties hereto.
6. Contract Rights Not Exclusive. The contract rights conferred by
this Agreement shall be in addition to, but not exclusive of, any other right
which Indemnitee may have or may hereafter acquire under any statute,
provision of the Corporation, Certificate of Incorporation or By-laws,
agreement, vote of stockholders or disinterested directors, or otherwise.
7. Indemnitee's Obligations. The Indemnitee shall promptly advise
the Corporation in writing of the institution of any investigation, claim,
action, suit or proceeding which is or may be subject to this Agreement and
keep the Corporation generally informed of, and consult with the Corporation
with respect to, the status of any such investigation, claim, action, suit or
proceeding. Notices to the Corporation shall be directed to Southern
Electronics Corporation, ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: Secretary (or such other address as the Corporation shall designate in
writing to Indemnitee). Notice shall be deemed received when personally
delivered or three days after the date postmarked if sent by certified or
registered mail, properly addressed. In addition, Indemnitee shall give the
Corporation such information and cooperation as it may reasonably require and
as shall be within Indemnitee's power.
8. Severability. Should any provision of this Agreement, or any
clause thereof, be held to be invalid, illegal or unenforceable, in whole or
in part, the remaining provisions and clauses of this Agreement shall remain
fully enforceable and binding on the parties.
9. 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.
10. Choice of Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the state of
Delaware.
11. Change in Position. Notwithstanding any change in the position(s)
shown below as held by the Indemnitee with the Corporation, this Agreement
shall continue in full force and effect, and a new agreement between the
parties hereto need not be executed and delivered as long as Indemnitee
continues to serve as an officer and/or member of the Board of Directors of
the Corporation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
SOUTHERN ELECTRONICS CORPORATION
By:______________________________
Name:_________________________
Title:________________________
INDEMNITEE
By:______________________________
Director
ANNEX I
UNDERTAKING AGREEMENT
This AGREEMENT is made and entered into as of _______________, 199__, by
and between SOUTHERN ELECTRONICS CORPORATION, a Delaware corporation (the
"Corporation"), and _______________, a member of the Board of Directors of the
Corporation ("Indemnitee").
WHEREAS, Indemnitee has become involved in investigations, claims,
actions, suits or proceedings which have arisen as a result of Indemnitee's
service to the Corporation; and
WHEREAS, Indemnitee desires that the Corporation pay any and all
expenses (including, but not limited to, attorneys' fees and court costs)
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
defending or investigating any such suits or claims and that such payment be
made in advance of the final disposition of such investigations, claims,
actions, suits or proceedings to the extent that Indemnitee has not been
previously reimbursed by insurance; and
WHEREAS, the Corporation is willing to make such payments but, in
accordance with Section 145 of the General Corporation Law of the State of
Delaware, the Corporation may make such payments only if it receives an
undertaking to repay from Indemnitee; and
WHEREAS, Indemnitee is willing to give such an undertaking.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto agree as follows:
1. In regard to any payments made by the Corporation to Indemnitee
pursuant to the terms of the Indemnification Agreement dated as of February
12, 1992 between the Corporation and Indemnitee, Indemnitee hereby undertakes
and agrees to repay to the Corporation any and all amounts so paid promptly
and in any event within thirty (30) days after the disposition, including any
appeals, of any litigation or threatened litigation on account of which
payments were made; provided, however, that Indemnitee shall not be required
to repay the amount as to which he is determined to be entitled to be
indemnified by the Corporation under Article Eighth of the Certificate of
Incorporation and Article XI of the By-laws of the Corporation and Section 145
of the General Corporation Law of the State of Delaware or other applicable
law.
2. This Agreement shall not affect in any manner the rights which
Indemnitee may have against the Corporation, any insurer or any other person
to seek indemnification for or reimbursement of any expenses referred to
herein or any judgment which may be rendered in any litigation or proceeding.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.
SOUTHERN ELECTRONICS CORPORATION
By:______________________________
Name:_________________________
Title:________________________
INDEMNITEE
By:______________________________
Director
