Exhibit 10.22
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made effective as of
the ____ day of _________, 2002 by and between VERTEL, a California corporation
(the "Company"), and ______________ ("Indemnitee").
WHEREAS, the Company and Indemnitee recognize the increasing difficulty
in obtaining directors' and officers' liability insurance, the increases in the
cost of such insurance and the general reductions in the coverage of such
insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting officers and directors
to expensive litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited;
WHEREAS, Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other officers and
directors of the Company may not be willing to continue to serve as officers and
directors without additional protection; and
WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve as officers and
directors of the Company and to indemnify its officers and directors so as to
provide them with the maximum protection permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
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(a) Third Party Proceedings. The Company shall indemnify
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Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while an
officer or director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action, suit or proceeding, had no reasonable cause to believe
Indemnitee's conduct was unlawful. The termination of any action, suit or
proceeding by
judgment, order, 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 Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company, and, with respect to any
criminal action, suit or proceeding, had reasonable cause to believe that
Indemnitee's conduct was unlawful.
(b) Proceedings By or in the Right of the Company. The
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Company shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Company or any subsidiary of the Company to
procure a judgment in its favor by reason of the fact that Indemnitee is or was
a director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while an
officer or director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) and, to the fullest extent
permitted by law, amounts paid in settlement (if such settlement is approved in
advance by the Company, such approval not to be unreasonably withheld or
delayed), in each case to the extent actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such action or suit
if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company and its
shareholders, except that no indemnification shall be made in respect of any
claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company in the performance of Indemnitee's duty to the Company and
its shareholders unless and only to the extent that the court in which such
action or suit is or was pending shall determine upon application that, in view
of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for expenses and then only to the extent that the court
shall determine.
(c) Mandatory Payment of Expenses. To the extent that
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Indemnitee has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Subsections (a) and (b) of this
Section 1 or the defense of any claim, issue or matter therein, Indemnitee shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by Indemnitee in connection therewith.
(d) Other Payment of Expenses. Other than for
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indemnification of expenses by the Company pursuant to Section 1(c) or otherwise
ordered by a court of law, Indemnitee shall be indemnified by the Company
against expenses (including attorneys' fees) actually and reasonably incurred by
Indemnitee only if authorized in a specific case upon a determination that
indemnification of Indemnitee is proper in the circumstances because Indemnitee
has met the applicable standard of conduct set forth in Section 1(a) or 1(b), as
applicable, which determination shall be made by one of the following methods
(as chosen by the Company): (i) by a majority vote of the directors who are not
parties to the applicable action, suit or proceeding ("Disinterested
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Directors"), even though less than a quorum may have been present, or by a
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committee of Disinterested Directors appointed thereby, (ii) by Independent
Legal Counsel (as such term is defined below), reasonably acceptable to
Indemnitee and the Company, in a written opinion applying the applicable
standard of conduct set forth in Section 1(a) or 1(b), as applicable, or (iii)
by the shareholders of the Company applying the applicable standard of conduct
set forth in Section 1(a) or 1(b), as
applicable; provided, that, in any case, all requirements of applicable law have
been met. For purposes of this Section 1(d), "Independent Legal Counsel" shall
mean a law firm, or a member of a law firm, that is experienced in matters of
corporate law and neither presently is, nor in the past five years has been,
retained to represent: (A) the Company or Indemnitee in any matter (other than
jointly with respect to the rights of Indemnitee under this Agreement or other
indemnities, under similar indemnity agreements); or (B) any other party to the
action, suit or proceeding giving rise to a claim for indemnification hereunder;
provided, however, Independent Legal Counsel shall not include any firm or
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.
2. Expenses; Indemnification Procedure.
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(a) Advancement of Expenses. The Company shall advance
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all expenses (including attorneys' fees), incurred by Indemnitee in connection
with the investigation, defense, settlement or appeal of any civil or criminal
action, suit or proceeding referenced in Section l(a) or (b) hereof (including
amounts actually paid in settlement of any such action, suit or proceeding).
Indemnitee hereby undertakes to repay such amounts advanced only if, and to the
extent that, it shall ultimately be determined that Indemnitee is not entitled
to be indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid promptly by the Company to Indemnitee following delivery
of a written request therefor by Indemnitee to the Company which request
provides documentation supporting such advances.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall,
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as a condition precedent to the right to be indemnified under this Agreement,
give the Company notice in writing as soon as practicable of any claim made
against Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address shown on the signature page of this
Agreement (or such other address as the Company shall designate in writing to
Indemnitee). Omission of such Notice does not relieve the Company of its
obligation (unless it results in damages to the Company). Notice shall be deemed
received three business days after the date postmarked if sent by domestic
certified or registered mail, properly addressed; otherwise notice shall be
deemed received when such notice shall actually be received by the Company. In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power.
(c) Procedure.
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(i) Any indemnification and advances provided for in
Sections 1 and/or 2, shall be made as soon as practicable, but in no event no
later than forty-five (45) days after receipt of the written request of
Indemnitee. If a claim under this Agreement, under any statute, or under any
provision of the Company's Articles of Incorporation or Bylaws, as amended,
providing for indemnification, is not paid in full by the Company within
forty-five (45) days after
a written request for payment thereof has first been received by the Company,
Indemnitee may, but need not, at any time thereafter bring an action against the
Company to recover the unpaid amount of the claim and, subject to Section 12 of
this Agreement, Indemnitee shall also be entitled to be paid for the expenses
(including attorneys' fees) of bringing such action. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
(including attorneys' fees) 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
Company to indemnify Indemnitee for the amount claimed, but the burden of
proving such defense shall be on the Company and Indemnitee shall be entitled to
receive interim payments of expenses (including attorneys' fees) pursuant to
Subsection 2(a) 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 Company 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 Company (including its
Board of Directors, any committee or subgroup of the Board of Directors,
Independent Legal Counsel, or its shareholders) 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 Company (including its Board of
Directors, any committee or subgroup of the Board of Directors, Independent
Legal Counsel, or its shareholders) 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.
(ii) During the interval between the Company's
receipt of such a request under paragraph (b) of this Section 2, and the later
to occur of (x) payment in full to Indemnitee of the indemnification or advances
required by Sections 1 and 2 or (y) a determination (if required) pursuant to
this Agreement and applicable law that Indemnitee is not entitled to
indemnification hereunder, the Company shall take all necessary steps (whether
or not such steps require expenditures to be made by the Company at that time),
to stay (pending a final determination of Indemnitee's entitlement to
indemnification and, if Indemnitee is so entitled, the payment thereof) the
execution, enforcement or collection of any judgments, penalties, fines or any
other amounts for which Indemnitee may be liable (and as to which Indemnitee has
requested indemnification hereunder) in order to avoid Indemnitee being or
becoming in default with respect to any such amounts (such necessary steps to
include, but not be limited to, the procurement of a surety bond to achieve such
stay or a loan to Indemnitee of amounts for which Indemnitee may be liable and
as to which a stay of execution as aforesaid cannot be obtained), promptly after
receipt of Indemnitee's written request therefor together with a written
undertaking by Indemnitee to repay promptly following receipt of a statement
therefor from the Company, amounts (if any) expended by the Company for such
purpose, if it is ultimately determined (if such determination is required) that
Indemnitee is not entitled to be indemnified against such judgments, penalties,
fines or other amounts.
(d) Notice to Insurers. If, at the time of the receipt of
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a notice of a claim pursuant to Section 2(b) hereof, the Company has director
and officer liability insurance in effect, the Company shall give prompt notice
of the commencement of such action, suit or 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 action, suit or proceeding in accordance with the terms of such
policies.
(e) Selection of Counsel. In the event the Company shall
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be obligated under Section 2(a) hereof to pay the expenses (including attorneys'
fees) of any action, suit or proceeding against Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such action, suit or
proceeding, with counsel approved by Indemnitee, upon the delivery to Indemnitee
of written notice of its election so to do. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with respect to the same
action, suit or proceeding, provided that (i) Indemnitee shall have the right to
employ his counsel in any such action suit or proceeding at Indemnitee's
expense; and (ii) if (A) the employment of counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense, or (C) the Company shall not, in
fact, have employed counsel to assume the defense of such action, suit or
proceeding, then the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company. The Company shall not be entitled to assume the defense
of any claim, action, suit or proceeding brought by or on behalf of the Company
against Indemnitee or as to which the Indemnitee shall have made the conclusion
provided for in (ii) (B) above.
3. Additional Indemnification Rights; Nonexclusivity.
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(a) Scope. Notwithstanding any other provision of this
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Agreement, the Company hereby agrees to indemnify the Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company's
Articles of Incorporation, the Company's Bylaws, as amended or by statute. In
the event of any change in any applicable law, statute or rule which narrows the
right of a California corporation to indemnify a member of its board of
directors or an officer, such changes, to the extent not otherwise required by
such law, statute or rule to be applied to this Agreement shall have no effect
on this Agreement or the parties' rights and obligations hereunder. In the event
of any change, after the date of this Agreement, in any applicable law, statute,
or rule which expands the right of a California corporation to indemnify a
member of its board of directors or an officer, it is the intent of the parties
hereto that Indemnitee shall, without the necessity of amending this Agreement,
be entitled to the full benefit of such expanded indemnification rights.
Indemnitee's rights under this Agreement are contractual rights which may not be
diminished, modified or restricted by any subsequent change in the Company's
Articles of Incorporation, Bylaws or corporate policies, as amended.
(b) Nonexclusivity. The indemnification provided by this
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Agreement shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Company's Articles of Incorporation, its Bylaws, as amended,
any agreement, any vote of shareholders or
disinterested Directors, the Corporation Law of the State of California, or
otherwise, both as to action in Indemnitee's official capacity and as to action
in another capacity while holding such office. The indemnification provided
under this Agreement shall continue as to Indemnitee for any action taken or not
taken while serving in an indemnified capacity even though Indemnitee may have
ceased to serve in such capacity at the time of any action, suit or other
covered proceeding.
4. Partial Indemnification. If Indemnitee is entitled under any
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provision of this Agreement to indemnification by the Company for some or a
portion of the expenses (including attorneys' fees), judgments, fines or
penalties actually or reasonably incurred in the investigation, defense, appeal
or settlement of any civil, criminal, administrative or investigative action,
suit or proceeding, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion of such expenses
(including attorneys' fees), judgments, fines or penalties to which Indemnitee
is entitled.
5. Mutual Acknowledgement. Both the Company and Indemnitee
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acknowledge that in certain instances, Federal law or applicable public policy
may prohibit the Company from indemnifying its directors and officers under this
Agreement or otherwise. For example, the Company and Indemnitee acknowledge that
the Securities and Exchange Commission (the "SEC") has taken the position that
indemnification is not permissible for liabilities arising under certain federal
securities laws, and federal legislation prohibits indemnification for certain
ERISA violations. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company's right under public
policy to indemnify Indemnitee.
6. Officer and Director Liability Insurance. The Company shall,
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from time to time, make the good faith determination whether or not it is
practicable for the Company to obtain and maintain a policy or policies of
insurance with reputable insurance companies providing the officers and
directors of the Company with coverage for losses from wrongful acts, or to
ensure the Company's performance of its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee, as long as he or she is serving as director or officer of the
Company, shall be named as an insured in such a manner as to provide Indemnitee
the same rights and benefits as are accorded to the most favorably insured of
the Company's directors, if Indemnitee is a director; or of the Company's
officers, if Indemnitee is not a director of the Company but is an officer; or
of the Company's key employees, if Indemnitee is not an officer or director but
is a key employee. Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain such insurance if the Company determines in
good faith that such insurance is not reasonably available, if the premium costs
for such insurance are disproportionate to the amount of coverage provided, if
the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit, or if Indemnitee is covered by similar
insurance maintained by a subsidiary or parent of the Company. The Company shall
for a period of [_____] years following Indemnitee's termination as director or
officer, as the case may be, insure the Indemnitee in such
manner as to provide Indemnitee substantially the same rights and benefits as
were accorded to Indemnitee immediately prior to his or her termination as
director or officer of the Company, as the case may be.
7. Severability. Nothing in this Agreement is intended to require
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or shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 7. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
8. Exceptions. Any other provision herein to the contrary
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notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Claims Initiated by Indemnitee. To indemnify or
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advance expenses to Indemnitee with respect to actions, suits, proceedings or
claims initiated or brought voluntarily by Indemnitee and not by way of defense,
except with respect to actions, suits or proceedings brought to establish or
enforce a right to indemnification under this Agreement or any other statute or
law or otherwise as required under Section 317 of the California Corporation
Law, but such indemnification or advancement of expenses may be provided by the
Company in specific cases if the Board of Directors has approved the initiation
or bringing of such suit.
(b) Lack of Good Faith. To indemnify Indemnitee for any
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expenses incurred by the Indemnitee with respect to any action, suit or
proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a
court of competent jurisdiction determines that each of the material assertions
made by the Indemnitee in such action, suit or proceeding was not made in good
faith or was frivolous.
(c) Insured Claims. To indemnify Indemnitee for expenses
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or liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance maintained by the Company.
(d) Claims Under Section 16(b). To indemnify Indemnitee
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for expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.
9. No Employment Rights. Nothing contained in this Agreement is
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intended to create in Indemnitee any right to continued employment.
10. Construction of Certain Phrases.
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(a) For purposes of this Agreement, references to the
"Company" shall include any constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that if Indemnitee is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, Indemnitee shall stand in the same position under the
provisions of this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company
which imposes duties on, or involves services by, such director, officer,
employee or agent 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 interest 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.
11. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall constitute an original.
12. Successors and Assigns. This Agreement shall be binding upon
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the Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. Attorneys' Fees. In the event that any action is instituted by
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Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement or to enforce
or interpret any of the terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. Notice. All notices, requests, demands and other
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communications under this Agreement shall be in writing and shall be deemed duly
given (i) if delivered by hand and receipted for by the party addressee, on the
date of such receipt, or (ii) if mailed by domestic certified or registered mail
with postage prepaid, on the third business day after the date postmarked.
Addresses for notice to either party are as shown on the signature page of this
Agreement, or as subsequently modified by written notice.
15. Consent to Jurisdiction. The Company and Indemnitee each
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hereby irrevocably consent to the jurisdiction of the courts of the State of
California for all purposes in connection with any action, suit or proceeding
which arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be brought only in the state courts of the
State of California.
16. Choice of Law. This Agreement shall be governed by and its
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provisions construed in accordance with the laws of the State of California, as
applied to contracts between California residents entered into and to be
performed entirely within California.
17. Modification. This Agreement constitutes the entire agreement
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between the parties hereto with respect to the subject matter hereof. All prior
negotiations, agreements and understandings between the parties with respect
thereto are superseded hereby. This Agreement may not be modified or amended
except by an instrument in writing signed by or on behalf of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
VERTEL
By:
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Title:
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Address: 00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
AGREED TO AND ACCEPTED:
INDEMNITEE:
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(signature)
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(address)
