Exhibit 10.5
INDEMNITY AGREEMENT
This Indemnity Agreement (this "Agreement") is made as of
March 6, 2006 by and between Financial Federal Corporation, a
Nevada corporation (the "Company"), and the undersigned officer
or director of the Company ("Indemnitee").
RECITALS
WHEREAS, highly competent persons have become more reluctant
to serve corporations as directors, officers or in other
capacities unless they are provided with adequate protection
through insurance or adequate indemnification against inordinate
risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation.
WHEREAS, the Board of Directors of the Company (the "Board")
has determined that, in order to attract and retain qualified
individuals, the Company will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect
persons serving the Company and its subsidiaries from certain
liabilities. Although the furnishing of such insurance has been
a customary and widespread practice among United States-based
corporations and other business enterprises, the Company believes
that, given current market conditions and trends, such insurance
may be available to it in the future only at higher premiums and
with more exclusions. At the same time, directors, officers and
other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming
litigation relating to, among other things, matters that
traditionally would have been brought only against the Company or
business enterprise itself. The Articles of Incorporation and
Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to
indemnification pursuant to applicable provisions of the Nevada
Revised Statutes (the "NRS"). The Bylaws and the NRS expressly
provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be
entered into between the Company and members of the board of
directors, officers and other persons with respect to
indemnification.
WHEREAS, the uncertainties relating to such insurance and to
indemnification have increased the difficulty of attracting and
retaining such persons.
WHEREAS, the Board has determined that the increased
difficulty in attracting and retaining such persons is
detrimental to the best interests of the Company's stockholders
and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future.
WHEREAS, it is reasonable, prudent and necessary for the
Company contractually to obligate itself to indemnify, and to
advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue
to serve the Company free from undue concern that they will not
be so indemnified.
WHEREAS, this Agreement is a supplement to and in
furtherance of the Articles of Incorporation and Bylaws of the
Company and any resolutions adopted pursuant thereto, and shall
not be deemed a substitute therefor, nor to diminish or abrogate
any rights of Indemnitee thereunder.
WHEREAS, Indemnitee does not regard the protection available
under the Company's Articles of Incorporation and Bylaws and
insurance as adequate in the present circumstances, and may not
be willing to serve or continue to serve as an officer or
director without adequate protection, and the Company desires
Indemnitee to serve in such capacity. Indemnitee is willing to
serve, continue to serve and to take on additional service for or
on behalf of the Company on the condition that he be so
indemnified.
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Company and Indemnitee do hereby
covenant and agree as follows:
1. Services to the Company. Indemnitee will serve or continue
to serve as an officer, director or key employee of the Company
for so long as Indemnitee is duly elected or appointed or until
Indemnitee tenders his resignation or until Indemnitee's services
to the Company are otherwise terminated.
2. Definitions. As used in this Agreement:
(a) References to "agent" shall mean any person who is or was a
director, officer, or employee of the Company or a subsidiary of
the Company or other person authorized by the Company to act for
the Company, to include such person serving in such capacity as a
director, officer, employee, fiduciary or other official of
another corporation, partnership, limited liability company,
joint venture, trust or other enterprise at the request of, for
the convenience of, or to represent the interests of the Company
or a subsidiary of the Company.
(b) The terms "Beneficial Owner" and "Beneficial Ownership"
shall have the meanings set forth in Rule 13d-3 promulgated under
the Exchange Act (as defined below) as in effect on the date
hereof.
(c) A "Change in Control" shall be deemed to occur upon the
earliest to occur after the date of this Agreement of any of the
following events:
(i) Acquisition of Stock by Third Party. Any Person (as
defined below) is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing a majority
of the combined voting power of the Company's then outstanding
securities entitled to vote generally in the election of
directors, unless (1) the change in the relative Beneficial
Ownership of the Company's securities by any Person results
solely from a reduction in the aggregate number of outstanding
shares of securities entitled to vote generally in the election
of directors or (2) such acquisition was approved in advance by
the Continuing Directors (as defined below) and such acquisition
would not constitute a Change in Control under part (iii) of this
definition;
(ii) Change in Board of Directors. Individuals who, as of the
date hereof, constitute the Board, and any new director whose
election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors on the date
hereof or whose election for nomination for election was
previously so approved (collectively, the "Continuing
Directors"), cease for any reason to constitute at least a
majority of the members of the Board;
(iii) Corporate Transactions. The effective date of a
reorganization, merger or consolidation of the Company (a
"Business Combination"), in each case, unless, following such
Business Combination: (1) all or substantially all of the
individuals and entities who were the Beneficial Owners of
securities entitled to vote generally in the election of
directors immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty-one
percent (51%) of the combined voting power of the then
outstanding securities of the Company entitled to vote generally
in the election of directors resulting from such Business
Combination (including, without limitation, a corporation which
as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more Subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination, of the securities entitled to vote
generally in the election of directors; (2) no Person (excluding
any corporation resulting from such Business Combination) is the
Beneficial Owner, directly or indirectly, of fifteen percent
(15%) or more of the combined voting power of the then
outstanding securities entitled to vote generally in the election
of directors of such corporation except to the extent that such
ownership existed prior to the Business Combination and (3) at
least a majority of the Board of Directors of the corporation
resulting from such Business Combination were Continuing
Directors at the time of the execution of the initial agreement,
or of the action of the Board of Directors, providing for such
Business Combination;
(iv) Liquidation. The approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement
or series of agreements for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than factoring the Company's current receivables or escrows
due (or, if such approval is not required, the decision by the
Board to proceed with such a liquidation, sale, or disposition in
one transaction or a series of related transactions); or
(v) Other Events. There occurs any other event of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item
on any similar schedule or form) promulgated under the Exchange
Act (as defined below), whether or not the Company is then
subject to such reporting requirement.
(d) "Corporate Status" describes the status of a person who is
or was a director, officer, trustee, general partner, managing
member, fiduciary, employee or agent of the Company or of any
other Enterprise (as defined below) which such person is or was
serving at the request of the Company.
(e) "Disinterested Director" shall mean a director of the
Company who is not and was not a party to the Proceeding (as
defined below) in respect of which indemnification is sought by
Indemnitee.
(f) "Enterprise" shall mean the Company and any other
corporation, constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger to which
the Company (or any of its wholly owned subsidiaries) is a party,
limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise of which Indemnitee is
or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary,
employee or agent.
(g) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(h) "Expenses" shall include attorneys' fees and costs,
retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees,
and all other disbursements or expenses in connection with
prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding (as defined below).
Expenses also shall include Expenses incurred in connection with
any appeal resulting from any Proceeding (as defined below),
including without limitation the premium, security for, and other
costs relating to any cost bond, supersedeas bond, or other
appeal bond or its equivalent. Expenses, however, shall not
include amounts paid in settlement by Indemnitee or the amount of
judgments or fines against Indemnitee.
(i) References to "fines" shall include any excise tax assessed
on Indemnitee with respect to any employee benefit plan;
references to "serving at the request of the Company" shall
include any service as a director, officer, employee, agent or
fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary
with respect to an employee benefit plan, its participants or
beneficiaries; and if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in the best interests
of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not
opposed to the best interests of the Company" as referred to in
this Agreement.
(j) "Independent Counsel" shall mean a law firm or a member of a
law firm that is experienced in matters of corporation law and
neither presently is, nor in the past five years has been,
retained to represent (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters
concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements) or (ii) any
other party to the Proceeding (as defined below) giving rise to a
claim for indemnification hereunder. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include any
person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to
determine Indemnitee's rights under this Agreement.
(k) "New York Courts" shall mean courts of the State of New
York, the courts of the United States for the Southern District
of New York and appellate courts from any thereof.
(l) The term "Person" shall have the meaning as set forth in
Sections 13(d) and 14(d) of the Exchange Act as in effect on the
date hereof; provided, however, that "Person" shall exclude: (i)
the Company; (ii) any Subsidiaries (as defined below) of the
Company; (iii) any employment benefit plan of the Company or of a
Subsidiary (as defined below) of the Company or of any
corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their
ownership of stock of the Company and (iv) any trustee or other
fiduciary holding securities under an employee benefit plan of
the Company or of a Subsidiary (as defined below) of the Company
or of a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company.
(m) The term "Proceeding" shall include any threatened, pending
or completed action, suit, arbitration, alternate dispute
resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding,
whether brought in the right of the Company or otherwise and
whether of a civil (including intentional or unintentional tort
claims), criminal, administrative or investigative nature, in
which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a
director or officer of the Company, by reason of any action (or
failure to act) taken by him or of any action (or failure to act)
on his part while acting as a director or officer of the Company,
or by reason of the fact that he is or was serving at the request
of the Company as a director, officer, trustee, general partner,
managing member, fiduciary, employee or agent of any other
Enterprise, in each case whether or not serving in such capacity
at the time any liability or expense is incurred for which
indemnification, reimbursement, or advancement of expenses can be
provided under this Agreement.
(n) The term "Subsidiary," with respect to any Person, shall
mean any corporation or other entity of which a majority of the
voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by that Person.
3. Indemnity in Third-Party Proceedings. The Company shall
indemnify and hold harmless Indemnitee in accordance with the
provisions of this Section 3 if Indemnitee was, is, or is
threatened to be made, a party to or a participant (as a witness
or otherwise) in any Proceeding, other than a Proceeding by or in
the right of the Company to procure a judgment in its favor.
Pursuant to this Section 3, Indemnitee shall be indemnified
against all Expenses, judgments, liabilities, fines, penalties
and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with
or in respect of such Expenses, judgments, fines, penalties and
amounts paid in settlement) actually and reasonably incurred by
Indemnitee or on his behalf in connection with such Proceeding or
any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, in the case of
a criminal Proceeding, had no reasonable cause to believe that
his conduct was unlawful.
4. Indemnity in Proceedings by or in the Right of the Company.
The Company shall indemnify and hold harmless Indemnitee in
accordance with the provisions of this Section 4 if Indemnitee
was, is, or is threatened to be made, a party to or a participant
(as a witness or otherwise) in any Proceeding by or in the right
of the Company to procure a judgment in its favor. Pursuant to
this Section 4, Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf
in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Company. No indemnification for Expenses shall be made
under this Section 4 in respect of any claim, issue or matter as
to which Indemnitee shall have been finally adjudged by a court
to be liable to the Company, unless and only to the extent that
any court in which the Proceeding was brought or the New York
Courts shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to
indemnification.
5. Indemnification for Expenses of a Party Who is Wholly or
Partly Successful. Notwithstanding any other provisions of this
Agreement, to the extent that Indemnitee is a party to (or a
participant in) and is successful, on the merits or otherwise, in
any Proceeding or in defense of any claim, issue or matter
therein, in whole or in part, the Company shall indemnify and
hold harmless Indemnitee against all Expenses actually and
reasonably incurred by him in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the
Company shall indemnify and hold harmless Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf
in connection with each successfully resolved claim, issue or
matter. If the Indemnitee is not wholly successful in such
Proceeding, the Company also shall indemnify and hold harmless
Indemnitee against all Expenses reasonably incurred in connection
with a claim, issue or matter related to any claim, issue, or
matter on which the Indemnitee was successful. For purposes of
this Section 5 and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or
without prejudice, shall be deemed to be a successful result as
to such claim, issue or matter.
6. Indemnification For Expenses of a Witness. Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in
any Proceeding to which Indemnitee is not a party, he shall be
indemnified and held harmless against all Expenses actually and
reasonably incurred by him or on his behalf in connection
therewith.
7. Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4 or 5, the
Company shall indemnify and hold harmless Indemnitee if
Indemnitee is a party to or threatened to be made a party to any
Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses,
judgments, fines, penalties and amounts paid in settlement
(including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses,
judgments, fines, penalties and amounts paid in settlement)
actually and reasonably incurred by Indemnitee in connection with
the Proceeding. No indemnity shall be made under this Section
7(a) on account of Indemnitee's conduct which constitutes a
breach of Indemnitee's duty of loyalty to the Company or its
stockholders or is an act or omission not in good faith or which
involves intentional misconduct or a knowing violation of the
law.
(b) Notwithstanding any limitation in Sections 3, 4, 5 or 7(a),
the Company shall indemnify and hold harmless Indemnitee if
Indemnitee is a party to or threatened to be made a party to any
Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses,
judgments, fines, penalties and amounts paid in settlement
(including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses,
judgments, fines, penalties and amounts paid in settlement)
actually and reasonably incurred by Indemnitee in connection with
the Proceeding.
8. Contribution in the Event of Joint Liability.
(a) To the fullest extent permissible under applicable law, if
the indemnification and hold harmless rights provided for in this
Agreement are unavailable to Indemnitee in whole or in part for
any reason whatsoever, the Company, in lieu of indemnifying and
holding harmless Indemnitee, shall pay, in the first instance,
the entire amount incurred by Indemnitee, whether for judgments,
liabilities, fines, penalties, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any Proceeding
without requiring Indemnitee to contribute to such payment, and
the Company hereby waives and relinquishes any right of
contribution it may have at any time against Indemnitee.
(b) The Company shall not enter into any settlement of any
Proceeding in which the Company is jointly liable with Indemnitee
(or would be if joined in such Proceeding) unless such settlement
provides for a full and final release of all claims asserted
against Indemnitee.
(c) The Company hereby agrees to fully indemnify and hold
harmless Indemnitee from any claims for contribution which may be
brought by officers, directors or employees of the Company other
than an Indemnitee who may be jointly liable with Indemnitee.
9. Exclusions. Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made
against Indemnitee:
(a) for which payment has actually been received by or on behalf
of Indemnitee under any insurance policy or other indemnity
provision, except with respect to any excess beyond the amount
actually received under any insurance policy, contract,
agreement, other indemnity provision or otherwise;
(b) for an accounting of profits made from the purchase and sale
(or sale and purchase) by Indemnitee of securities of the Company
within the meaning of Section 16(b) of the Exchange Act or
similar provisions of state statutory law or common law; or
(c) except as otherwise provided in Sections 14(e)-(f) hereof,
prior to a Change in Control, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding)
initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board
authorized the Proceeding (or any part of any Proceeding) prior
to its initiation; or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers
vested in the Company under applicable law.
10. Advances of Expenses; Defense of Claim.
(a) Notwithstanding any provision of this Agreement to the
contrary, and to the fullest extent permitted by applicable law,
the Company shall advance the Expenses incurred by Indemnitee (or
reasonably expected by Indemnitee to be incurred by Indemnitee
within three (3) months) in connection with any Proceeding within
ten (10) days after the receipt by the Company of a statement or
statements requesting such advances from time to time, whether
prior to or after final disposition of any Proceeding. Advances
shall be unsecured and interest free. Advances shall be made
without regard to Indemnitee's ability to repay the Expenses and
without regard to Indemnitee's ultimate entitlement to
indemnification under the other provisions of this Agreement.
Advances shall include any and all reasonable Expenses incurred
pursuing a Proceeding to enforce this right of advancement,
including Expenses incurred preparing and forwarding statements
to the Company to support the advances claimed. The Indemnitee
shall qualify for advances, to the fullest extent permitted by
applicable law, solely upon the execution and delivery to the
Company of an undertaking providing that the Indemnitee
undertakes to repay the advance to the extent that it is
ultimately determined that Indemnitee is not entitled to be
indemnified by the Company under the provisions of this
Agreement, the Articles of Incorporation or Bylaws of the
Company, applicable law or otherwise.
(b) The Company will be entitled to participate in the
Proceeding at its own expense.
(c) The Company shall not settle any action, claim or Proceeding
(in whole or in part) which would impose any Expense, judgment,
fine, penalty or limitation on the Indemnitee without the
Indemnitee's prior written consent.
11. Procedure for Notification and Application for
Indemnification.
(a) Indemnitee agrees to notify promptly the Company in writing
upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to
any Proceeding or matter which may be subject to indemnification
or advancement of Expenses covered hereunder. The failure of
Indemnitee to so notify the Company shall not relieve the Company
of any obligation which it may have to the Indemnitee under this
Agreement, or otherwise.
(b) Indemnitee may deliver to the Company a written application
to indemnify and hold harmless Indemnitee in accordance with this
Agreement. Such application(s) may be delivered from time to
time and at such time(s) as Indemnitee deems appropriate in his
or her sole discretion. Following such a written application for
indemnification by Indemnitee, the Indemnitee's entitlement to
indemnification shall be determined according to Section 12(a) of
this Agreement.
12. Procedure Upon Application for Indemnification.
(a) A determination, if required by applicable law, with respect
to Indemnitee's entitlement to indemnification shall be made in
the specific case by one of the following methods, which shall be
at the election of Indemnitee: (i) by a majority vote of a
quorum of the Board consisting of Disinterested Directors; or
(ii) by Independent Counsel in a written opinion to the Board, a
copy of which shall be delivered to Indemnitee. The Company
promptly will advise Indemnitee in writing with respect to any
determination that Indemnitee is or is not entitled to
indemnification, including a description of any reason or basis
for which indemnification has been denied. If it is so
determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten (10) days after
such determination. Indemnitee shall reasonably cooperate with
the person, persons or entity making such determination with
respect to Indemnitee's entitlement to indemnification, including
providing to such person, persons or entity upon reasonable
advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to
such determination. Any costs or Expenses (including attorneys'
fees and disbursements) incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination
shall be borne by the Company (irrespective of the determination
as to Indemnitee's entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(b) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 12(a) hereof, the Independent Counsel shall be selected
as provided in this Section 12(b). The Independent Counsel shall
be selected by Indemnitee (unless Indemnitee shall request that
such selection be made by the Board), and Indemnitee shall give
written notice to the Company advising it of the identity of the
Independent Counsel so selected and certifying that the
Independent Counsel so selected meets the requirements of
"Independent Counsel" as defined in Section 2 of this Agreement.
If the Independent Counsel is selected by the Board, the Company
shall give written notice to Indemnitee advising him of the
identity of the Independent Counsel so selected and certifying
that the Independent Counsel so selected meets the requirements
of "Independent Counsel" as defined in Section 2 of this
Agreement. In either event, Indemnitee or the Company, as the
case may be, may, within ten (10) days after such written notice
of selection shall have been received, deliver to the Company or
to Indemnitee, as the case may be, a written objection to such
selection; provided, however, that such objection may be asserted
only on the ground that the Independent Counsel so selected does
not meet the requirements of "Independent Counsel" as defined in
Section 2 of this Agreement, and the objection shall set forth
with particularity the factual basis of such assertion. Absent a
proper and timely objection, the person so selected shall act as
Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve
as Independent Counsel unless and until such objection is
withdrawn or a court of competent jurisdiction has determined
that such objection is without merit. If, within twenty (20)
days after submission by Indemnitee of a written request for
indemnification pursuant to Section 11(a) hereof, no Independent
Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the New York Courts for
resolution of any objection which shall have been made by the
Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a
person selected by the New York Courts, and the person with
respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 12(a)
hereof. Upon the due commencement of any judicial proceeding or
arbitration pursuant to Section 14(a) of this Agreement,
Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).
(c) The Company agrees to pay the reasonable fees and expenses
of Independent Counsel and to fully indemnify and hold harmless
such Independent Counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
13. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to
indemnification hereunder, the person, persons or entity making
such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted
a request for indemnification in accordance with Section 11(b) of
this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that
presumption. Neither the failure of the Company (including by
its directors or Independent Counsel) to have made a
determination prior to the commencement of any action pursuant to
this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including
by its directors or Independent Counsel) that Indemnitee has not
met such applicable standard of conduct, shall be a defense to
the action or create a presumption that Indemnitee has not met
the applicable standard of conduct.
(b) If the person, persons or entity empowered or selected under
Section 12 of this Agreement to determine whether Indemnitee is
entitled to indemnification shall not have made a determination
within thirty (30) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of
a material fact necessary to make Indemnitee's statement not
materially misleading, in connection with the request for
indemnification, or (ii) a final judicial determination that any
or all such indemnification is expressly prohibited under
applicable law; provided, however, that such 30-day period may be
extended for a reasonable time, not to exceed an additional
fifteen (15) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in
good faith requires such additional time for the obtaining or
evaluating of documentation and/or information relating thereto.
(c) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or
upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of
itself adversely affect the right of Indemnitee to
indemnification or 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 interests of the Company or,
with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(d) For purposes of any determination of good faith, Indemnitee
shall be deemed to have acted in good faith if Indemnitee's
action is based on the records or books of account of the
Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the
course of their duties, or on the advice of legal counsel for the
Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or
by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 13(d) shall not be deemed to be
exclusive or to limit in any way the other circumstances in which
the Indemnitee may be deemed or found to have met the applicable
standard of conduct set forth in this Agreement.
(e) The knowledge and/or actions, or failure to act, of any
other director, officer, trustee, partner, managing member,
fiduciary, agent or employee of the Enterprise shall not be
imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.
14. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to
Section 12 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement; (ii) advancement of
Expenses, to the fullest extent permitted by applicable law, is
not timely made pursuant to Section 10 of this Agreement; (iii)
no determination of entitlement to indemnification shall have
been made pursuant to Section 12(a) of this Agreement within
thirty (30) days after receipt by the Company of the request for
indemnification; (iv) payment of indemnification is not made
pursuant to Section 5, 6, 7 or the last sentence of Section 12(a)
of this Agreement within ten (10) days after receipt by the
Company of a written request therefor; (v) a contribution payment
is not made in a timely manner pursuant to Section 8 of this
Agreement or (vi) payment of indemnification pursuant to Section
3 or 4 of this Agreement is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to
indemnification, Indemnitee shall be entitled to an adjudication
by the New York Courts to such indemnification, contribution or
advancement of Expenses. Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. Except as set forth
herein, the provisions of Nevada law (without regard to its
conflict of laws rules) shall apply to any such arbitration. The
Company shall not oppose Indemnitee's right to seek any such
adjudication or award in arbitration.
(b) In the event that a determination shall have been made
pursuant to Section 12(a) of this Agreement that Indemnitee is
not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 14 shall be
conducted in all respects as a de novo trial, or arbitration, on
the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any judicial proceeding or
arbitration commenced pursuant to this Section 14, Indemnitee
shall be presumed to be entitled to indemnification under this
Agreement and the Company shall have the burden of proving
Indemnitee is not entitled to indemnification or advancement of
Expenses, as the case may be, and the Company may not refer to or
introduce into evidence any determination pursuant to Section
12(a) of this Agreement adverse to Indemnitee for any purpose.
If Indemnitee commences a judicial proceeding or arbitration
pursuant to this Section 14, Indemnitee shall not be required to
reimburse the Company for any advances pursuant to Section 10
until a final determination is made with respect to Indemnitee's
entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination shall have been made pursuant to
Section 12(a) of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination
in any judicial proceeding or arbitration commenced pursuant to
this Section 14, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in
connection with the request for indemnification or (ii) a
prohibition of such indemnification under applicable law.
(d) The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this
Section 14 that the procedures and presumptions of this Agreement
are not valid, binding and enforceable and shall stipulate in any
such court or before any such arbitrator that the Company is
bound by all the provisions of this Agreement.
(e) The Company shall indemnify and hold harmless Indemnitee to
the fullest extent permitted by law against all Expenses and, if
requested by Indemnitee, shall (within ten (10) days after the
Company's receipt of such written request) advance to Indemnitee,
to the fullest extent permitted by applicable law, such Expenses
which are incurred by Indemnitee in connection with any judicial
proceeding or arbitration brought by Indemnitee (i) to enforce
his rights under, or to recover damages for breach of, this
Agreement or any other indemnification, advancement or
contribution agreement or provision of the Company's Articles of
Incorporation or Bylaws now or hereafter in effect; or (ii) for
recovery or advances under any insurance policy maintained by any
person for the benefit of Indemnitee, regardless of whether
Indemnitee ultimately is determined to be entitled to such
indemnification, advance, contribution or insurance recovery, as
the case may be.
(f) Interest shall be paid by the Company to Indemnitee at the
legal rate under Nevada law for amounts which the Company
indemnifies or is obliged to indemnify for the period commencing
with the date on which Indemnitee requests indemnification,
contribution, reimbursement or advancement of any Expenses and
ending with the date on which such payment is made to Indemnitee
by the Company.
15. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the Company's Articles of
Incorporation or Bylaws, any agreement, a vote of stockholders or
a resolution of directors, or otherwise. No amendment,
alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such
Indemnitee in his Corporate Status prior to such amendment,
alteration or repeal. To the extent that a change in applicable
law, whether by statute or judicial decision, permits greater
indemnification or advancement of Expenses than would be afforded
currently under the Company's Articles of Incorporation or Bylaws
or this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change. No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
right or remedy.
(b) The NRS and the Company's Articles of Incorporation and
Bylaws permit the Company to purchase and maintain insurance or
furnish similar protection or make other arrangements including,
but not limited to, providing a trust fund, letter of credit, or
surety bond ("Indemnification Arrangements") on behalf of
Indemnitee against any liability asserted against him or incurred
by or on behalf of him or in such capacity as a director,
officer, employee or agent of the Company, or arising out of his
status as such, whether or not the Company would have the power
to indemnify him against such liability under the provisions of
this Agreement or under the NRS, as it may then be in effect.
The purchase, establishment, and maintenance of any such
Indemnification Arrangement shall not in any way limit or affect
the rights and obligations of the Company or of the Indemnitee
under this Agreement except as expressly provided herein, and the
execution and delivery of this Agreement by the Company and the
Indemnitee shall not in any way limit or affect the rights and
obligations of the Company or the other party or parties thereto
under any such Indemnification Arrangement.
(c) To the extent that the Company maintains an insurance policy
or policies providing liability insurance for directors,
officers, trustees, partners, managing members, fiduciaries,
employees, or agents of the Company or of any other Enterprise
which such person serves at the request of the Company,
Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the
coverage available for any such director, officer, trustee,
partner, managing member, fiduciary, employee or agent under such
policy or policies. If, at the time the Company receives notice
from any source of a Proceeding as to which Indemnitee is a party
or a participant (as a witness or otherwise), the Company has
director and officer liability insurance in effect, the Company
shall give prompt notice 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.
(d) In the event of any payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all
papers required and take all action necessary to secure such
rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee who is or was serving at the request of
the Company as a director, officer, trustee, partner, managing
member, fiduciary, employee or agent of any other Enterprise
shall be reduced by any amount Indemnitee has actually received
as indemnification or advancement of expenses from such
Enterprise.
16. Duration of Agreement. All agreements and obligations of
the Company contained herein shall continue during the period
Indemnitee serves as a director or officer of the Company or as a
director, officer, trustee, partner, managing member, fiduciary,
employee or agent of any other corporation, partnership, joint
venture, trust, employee benefit plan or other Enterprise which
Indemnitee serves at the request of the Company and shall
continue thereafter so long as Indemnitee shall be subject to any
possible Proceeding (including any rights of appeal thereto and
any Proceeding commenced by Indemnitee pursuant to Section 14 of
this Agreement) by reason of his Corporate Status, whether or not
he is acting in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided
under this Agreement.
17. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable
for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this Agreement
(including, without limitation, each portion of any Section,
paragraph or sentence of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is
not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable
to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the
intent of the parties hereto and (c) to the fullest extent
possible, the provisions of this Agreement (including, without
limitation, each portion of any Section, paragraph or sentence of
this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the
intent manifested thereby.
18. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed
on it hereby in order to induce Indemnitee to serve as a
director, officer or key employee of the Company, and the Company
acknowledges that Indemnitee is relying upon this Agreement in
serving as a director, officer or key employee of the Company.
(b) Without limiting any of the rights of Indemnitee under the
Articles of Incorporation or Bylaws of the Company as they may be
amended from time to time, this Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties
hereto with respect to the subject matter hereof.
(c) The indemnification and advancement of expenses provided by
or granted pursuant to this Agreement shall be binding upon and
be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all
or substantially all of the business or assets of the Company),
shall continue as to an Indemnitee who has ceased to be a
director, officer, employee or agent of the Company or of any
other Enterprise at the Company's request, and shall inure to the
benefit of Indemnitee and his or her spouse, assigns, heirs,
devisees, executors and administrators and other legal
representatives.
(d) The Company and Indemnitee agree herein that a monetary
remedy for breach of this Agreement, at some later date, may be
inadequate, impracticable and difficult of proof, and further
agree that such breach may cause Indemnitee irreparable harm.
Accordingly, the parties hereto agree that Indemnitee may enforce
this Agreement by seeking injunctive relief and/or specific
performance hereof, without any necessity of showing actual
damage or irreparable harm and that by seeking injunctive relief
and/or specific performance Indemnitee shall not be precluded
from seeking or obtaining any other relief to which he may be
entitled. The Company and Indemnitee further agree that
Indemnitee shall be entitled to such specific performance and
injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions, without the
necessity of posting bonds or other undertaking in connection
therewith. The Company acknowledges that in the absence of a
waiver, a bond or undertaking may be required of Indemnitee by
the New York Courts, and the Company hereby waives any such
requirement of such a bond or undertaking.
19. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in
writing by 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 of this Agreement nor shall any
waiver constitute a continuing waiver.
20. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given (i) if delivered by hand and
receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third
(3rd) business day after the date on which it is so mailed:
(a) If to Indemnitee, at the address indicated on the signature
page of this Agreement, or such other address as Indemnitee shall
provide in writing to the Company.
(b) If to the Company, to:
Financial Federal Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
or to any other address as may have been furnished to Indemnitee
in writing by the Company.
21. Applicable Law and Consent to Jurisdiction. This Agreement
and the legal relations among the parties shall be governed by,
and construed and enforced in accordance with, the laws of the
State of Nevada, without regard to its conflict of laws rules
that would result in the application of any law other than the
law of the State of Nevada. Except with respect to any
arbitration commenced by Indemnitee pursuant to Section 14(a) of
this Agreement, the Company and Indemnitee hereby irrevocably and
unconditionally (a) agree that any action or proceeding arising
out of or in connection with this Agreement shall be brought only
in the New York Courts and not in any other state or federal
court in the United States of America or any court in any other
country; (b) consent to submit to the exclusive jurisdiction of
the New York Courts for purposes of any action or proceeding
arising out of or in connection with this Agreement; (c) appoint
irrevocably, to the extent such party is not a resident of the
State of Nevada, Capitol Corporate Services, Inc., 000 Xxxxx
Xxxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxx 00000 as its agent in the
State of Nevada as such party's agent for acceptance of legal
process in connection with any such action or proceeding against
such party with the same legal force and validity as if served
upon such party personally within the State of Nevada; (d) waive
any objection to the laying of venue of any such action or
proceeding in the New York Courts and (e) waive, and agree not to
plead or to make, any claim that any such action or proceeding
brought in the New York Courts has been brought in an improper or
inconvenient forum, or is subject (in whole or in part) to a jury
trial.
22. Identical Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be
deemed to be an original but all of which together shall
constitute one and the same Agreement. Only one such counterpart
signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Agreement.
23. Miscellaneous. Use of the masculine pronoun shall be deemed
to include usage of the feminine pronoun where appropriate. The
headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed as of the day and year first above written.
FINANCIAL FEDERAL CORPORATION INDEMNITEE
----------------------------- -------------------------------
By:
Name: Name:
Title: Address:
By:
Name:
Title:
