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EXHIBIT 10.10
INDEMNITY AGREEMENT
This Indemnity Agreement (this Agreement) dated as of [________] 1997, is
by and between Club Xxxxxx Resorts, Inc., a Nevada corporation (the Company),
and the person whose name is set forth on the signature page hereof under the
heading "INDEMNITEE" (Indemnitee).
R E C I T A L S
A. Indemnitee will serve as an officer and/or director of the Company,
and the Company wishes Indemnitee to serve in such capacity;
B. the Company's Bylaws (the Bylaws), and its Articles of Incorporation
(the Articles), provide for the indemnification of the directors, officers,
employees and agents of the Company and also provide that the Company can
further indemnify such parties pursuant to an agreement or otherwise;
C. the Nevada General Corporation Law, as amended (the NGCL),
specifically provides that indemnification and advancement of expenses provided
in such statute shall not be exclusive of any other rights under any agreement,
and thereby contemplates that agreements may be entered into between the Company
and its directors, officers, employees and agents with respect to the
indemnification of such persons; and
D. to induce Indemnitee to serve as an officer and/or director of the
Company in the future, the Company has deemed it to be in its best interest to
enter into this Agreement with Indemnitee.
W I T N E S S E T H
NOW, THEREFORE, in consideration of Indemnitee's agreement to serve as an
officer or a member of the Company's Board of Directors (the Board) beginning
[_______], the mutual promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto stipulate and agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following capitalized
terms shall have the meanings ascribed to them in this Section.
Action - any threatened, pending or completed action,
suit or proceeding, whether civil, criminal,
administrative, or investigative.
Affiliate - any corporation, partnership (general or
limited), limited liability company, joint
venture, trust, or any other organization or
enterprise, foreign or domestic (i) in which
the Company owns, either directly or
indirectly, more than 50% of the outstanding
voting capital stock or other ownership
interest or (ii) over which the Company,
either directly or indirectly, exercises, or
has the ability to exercise, control or
dominion.
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Agent - a duly appointed and authorized officer,
director, employee, agent, representative,
or fiduciary.
Board - the Board of Directors of the Company as
constituted from time to time.
Change in Control - shall have occurred if the Company's
stockholders approve (x) a merger or
consolidation of the Company with any other
entity (other than a merger or consolidation
which would result in the Company's voting
securities outstanding immediately prior
thereto continuing to represent (either by
remaining outstanding or by being converted
into voting securities of the surviving
entity) at least 51% of the combined voting
power of the voting securities of the
Company or such surviving entity outstanding
immediately after such merger or
consolidation), (y) a plan of complete
liquidation of the Company or (z) an
agreement or agreements for the sale or
disposition, in a single transaction or a
series of related transactions, by the
Company of all or substantially all of its
property and assets. Notwithstanding the
foregoing, events otherwise constituting a
Change in Control in accordance with the
foregoing shall not constitute a Change in
Control if such events are solicited by the
Company and are approved, recommended or
supported by the Board in actions taken
prior to, and with respect to, such events.
Damages - losses, penalties, fines, judgments, amounts
paid in settlement, or other damages and
expenses (including reasonable legal and
investigative expenses).
Enterprise - a corporation, general partnership limited
partnership, limited liability company,
joint venture, trust or any other
organization or enterprise.
Nevada Court - a court in the State of Nevada.
2. AGREEMENT TO SERVE. Indemnitee will serve as an officer or a director
of the Company and/or its Affiliates at the will of the Company or under
separate contract, if such exists, and/or will serve as an officer or a director
of such other Affiliate Enterprise as the Company may request, and shall act in
each such capacity so long as he is duly authorized by the Company in accordance
with the Bylaws or Articles or until such time as Indemnitee tenders his
resignation in writing at the office of the Company.
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3. INDEMNIFICATION
(a) GENERAL INDEMNIFICATION.
(i) Subject to the exclusions set forth in Section 9, the
Company shall indemnify Indemnitee:
(1) If Indemnitee is a person who was or is a party or is
threatened to be made a party to any Action (other than an action
by or in the right of the Company or any of its Affiliates),
because he is or was acting as an Agent of the Company or any of
its Affiliates, or is or was serving at the request of the
Company as an Agent of another Enterprise, or because of anything
done or not done by him in any such capacity, against Damages
incurred by him in connection with the investigation, defense or
appeal of such Action if:
(a) in the case of a civil, administrative or
investigative (other than criminal) action, suit or
proceeding, he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best
interests of the Company; or
(b) in the case of a criminal action, suit or
proceeding, he reasonably believed his conduct was lawful;
(2) If Indemnitee is a person who was or is a party or is
threatened to be made a party to any Action by or in the right of
the Company or any of its Affiliates to procure a judgment in its
favor because he is or was acting as an Agent of the Company or
any of its Affiliates, or is or was serving at the request of the
Company as an Agent of another Enterprise, or because of anything
done or not done by him in any such capacity, against all Damages
incurred by him in connection with the investigation, defense,
settlement or appeal of such Action if he acted in good faith and
in a manner he reasonably believed to be in, or not opposed to,
the best interests of the Company; provided, however, that no
indemnification under this subsection shall be made in respect of
any claim, issue, or matter as to which such person shall have
been adjudged to be liable to the Company or any of its
Affiliates unless and then only to the extent that a Nevada Court
or the court in which such Action was brought shall determine
upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses
which the Nevada Court or such other court shall deem proper; and
(ii) To the extent Indemnitee has been successful on the merits
or otherwise in defense of any Action referred to in Section 3(a)(i),
or in the defense of any claim, issue or matter described therein,
against all Damages incurred by him in connection with the
investigation, defense or appeal of such Action.
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(b) ADDITIONAL INDEMNITY. The parties hereto intend that Indemnitee
shall be indemnified pursuant to this Agreement to the fullest extent
authorized and permitted by the provisions of the Articles, Bylaws, NGCL,
or any other applicable law. If the Articles, Bylaws, NGCL, or any other
applicable law is amended or modified after the date hereof, the parties
hereby agree that Indemnitee shall be entitled any additional
indemnification rights resulting from such amendment or modification, but
only to the extent that such amendment or modification permits the Company
to provide broader indemnification rights than the Articles, Bylaws, NGCL,
or applicable law permitted the Company to provide prior to such amendment
or modification.
(c) INDEMNIFICATION OF ESTATE. If Indemnitee is deceased and is
entitled to indemnification under any provision of this Agreement, the
Company shall indemnify Indemnitee's estate and his spouse, heirs,
administrators, and executors against, and the Company shall, and does
hereby agree to, assume any and all Damages incurred by or for Indemnitee
or his estate in connection with the investigation, defense, settlement or
appeal or any such Action. Further, when requested in writing by the spouse
of Indemnitee and/or the heirs, executors or administrators of Indemnitee's
estate, the Company shall provide appropriate evidence of the Company's
agreement set out herein to indemnify Indemnitee against and to assume such
Damages.
(d) PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Damages incurred by or for him in the investigation,
defense, appeal or settlement of such Action but not, however, for all of
the total amount thereof, the Company shall nevertheless indemnify
Indemnitee against the portion thereof to which Indemnitee is entitled.
4. NOLO CONTENDERE. The termination of any Action which is covered by
this Agreement by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent shall not, of itself, create a presumption for
the purposes of this Agreement that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by applicable law.
5. PAYMENT OF CLAIMS; DETERMINATION OF INDEMNIFICATION RIGHTS
(a) DETERMINATION OF RIGHT TO INDEMNIFICATION. Anything contained
elsewhere herein to the contrary notwithstanding, the determination as to
whether or not Indemnitee has met the standard of conduct required to
qualify and entitle him, partially or fully, to indemnification under the
provisions hereof shall be made by the Board by a majority vote of a quorum
consisting of directors who were not parties to the subject Action;
provided, however, that if such quorum is not obtainable, the Board, by a
majority vote of disinterested directors, shall appoint independent legal
counsel (who may be the outside counsel regularly employed by the Company),
which will issue a written opinion stating whether Indemnitee has met the
appropriate standard of conduct set forth herein; provided further, if all
directors are deemed to be interested, such independent legal counsel shall
be appointed by a majority vote of the entire Board. The fees and expenses
of counsel in connection with making said determination shall be paid by
the Company and, if requested by such counsel, the Company shall give such
counsel
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an appropriate written agreement with respect to the payment of its
fees and expenses and such other matters as may be reasonably requested by
counsel.
(b) CLAIMS FOR INDEMNIFICATION. Indemnitee shall make any and all
claims for indemnification or requests for advances covered by this
Agreement in writing. Such written claim or request shall contain
sufficient information to reasonably inform the Company about the nature
and extent of the indemnification or advance sought by Indemnitee.
(c) JUDICIAL REVIEW OF INDEMNIFICATION. Notwithstanding Section 5(a),
Indemnitee may, either before or within two years after a determination
regarding indemnification has been made pursuant to the terms of this
Agreement, petition a Nevada Court or any other court of competent
jurisdiction to determine whether Indemnitee is entitled to indemnification
pursuant to the provisions hereof, and such court shall thereupon have the
exclusive authority to make such determination unless and until such court
dismisses or otherwise terminates such Action without having made such
determination. Such court shall, as petitioned, make an independent
determination of whether Indemnitee was entitled to indemnification
pursuant to his Agreement, and, if so, the extent of such indemnification.
If the court shall determine that Indemnitee is entitled to indemnification
hereunder as to any claim, issue, or matter involved in the Action with
respect to which there has been no prior determination pursuant hereto or
with respect to which there has been a prior determination pursuant hereto
that Indemnitee was not entitled, or was only partially entitled, to
indemnification hereunder, the Company shall pay all Damages incurred by
Indemnitee in connection with such judicial determination , as well as the
amount of indemnification specified by such court (to the extent that such
indemnification has not already been paid).
(d) BURDEN OF PROOF. If under applicable law the entitlement of
Indemnitee to be indemnified under this Agreement depends on whether a
standard of conduct has been met, the burden of proof of establishing that
Indemnitee did not act in accordance with such standard of conduct shall
rest with the Company. Indemnitee shall be presumed to have acted in
accordance with such standard and be entitled to indemnification or
advancement of expenses hereunder, as the case may be, unless, based upon a
preponderance of the evidence, it shall be determined by the party
reviewing Indemnitee's conduct that the Indemnitee did not meet such
standard.
6. CHANGE IN CONTROL. If there has not been a Change in Control after
the date hereof, the determination of the (i) rights of Indemnitee to
indemnification and payment of losses and expenses under this Agreement or under
the provisions of the Articles, Bylaws, and the NGCL, (ii) standard of conduct
and (iii) evaluation of the reasonableness of amounts claimed by Indemnitee
shall be made in accordance with Section 5(a) or in such other manner as may be
required by the NGCL or other applicable law. If there has been a Change in
Control after the date hereof, such determination and evaluation shall be made
by a special, independent counsel (which may be the outside counsel regularly
employed by the Company) who is selected by Indemnitee and approved by the
Company, which approval shall not be unreasonably withheld.
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7. LIMITATION OF ACTIONS; RELEASE OF CLAIMS. No Action shall be brought
and no cause of Action shall be asserted by or on behalf of the Company, or any
of its Affiliates, against Indemnitee, his spouse, heirs, executors, or
administrators after the expiration of two years from the date Indemnitee ceases
(for any reason) to serve in any one or more of the capacities covered by this
Agreement, and any claim or cause of Action of the Company, or any of its
Affiliates, shall be extinguished and deemed released unless asserted by filing
of a legal Action within such two year period.
8. SUBROGATION. In the event of 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 documents, instruments and papers
and take all actions reasonably requested by the Company to implement such
subrogation rights.
9. LIMITATION OF INDEMNIFICATION RIGHTS. The Company shall not be liable
under this Agreement to make any payment in connection with any claim made
against Indemnitee:
(a) for which payment is actually made to Indemnitee under a valid and
collectible insurance policy, except in respect of any excess beyond the
amount of payment under such insurance;
(b) for which Indemnitee has already been indemnified by the Company
or any of its Affiliates or any other Enterprise of which Indemnitee serves
as Agent by request of the Company, otherwise than pursuant to this
Agreement;
(c) for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company 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 common law;
(d) brought about or contributed to by the knowingly fraudulent,
deliberate, dishonest or willful misconduct of Indemnitee; or
(e) for which indemnification under this Agreement is determined by a
final adjudication of a court of competent jurisdiction to be unlawful and
violative of public policy.
10. PARTICIPATION BY THE COMPANY. With respect to any such Action as to
which Indemnitee notifies the Company of the commencement thereof:
(a) Company will be entitled to participate therein at its own
expense;
(b) Except as otherwise provided below, to the extent that it may
wish, the Company (jointly with any other indemnifying party similarly
notified) will be entitled to assume the defense thereof, with counsel
satisfactory to Indemnitee. After receipt of notice from the Company to
Indemnitee of the Company's election so to assume the defense thereof, the
Company will not be liable to Indemnitee under this Agreement for
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any legal or other expenses subsequently incurred by Indemnitee in
connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have the
right to employ his own counsel in such Action but the fees and expenses of
such counsel incurred after notice from the Company of its assumption of
the defense thereof shall be at the expense of Indemnitee unless: (i) the
employment of counsel by Indemnitee has been authorized by the Company,
(ii) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of
the defense of such Action, or (iii) the Company shall not in fact have
employed counsel to assume the defense of such Action, in each of which
cases the fees and expenses of counsel employed by Indemnitee shall be
subject to indemnification pursuant to this Agreement. The Company shall
not be entitled to assume the defense of any Action brought in the name of
or on behalf of the Company or as to which Indemnitee shall have made the
conclusion provided for in (ii) above; and
(c) The Company shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Action effected without
its written consent, which consent shall not be unreasonably withheld. The
Company shall not settle any Action in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee's written consent,
which consent shall not be unreasonably withheld.
11. ADVANCES
(a) ADVANCES. Upon any threatened or pending Action in which
Indemnitee is a party or is involved and which may give rise to a right of
indemnification under this Agreement, following written request to the
Company by Indemnitee, the Company shall promptly pay to Indemnitee amounts
to cover expenses reasonably incurred (or to be reasonably incurred) by
Indemnitee in such proceeding in advance of its final disposition upon the
receipt by the Company of (i) a written undertaking executed by or on
behalf of Indemnitee to repay the advance if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Company
as provided in this Agreement and (ii) satisfactory evidence as to the
amount of such expenses.
(b) REPAYMENT OF ADVANCES OR OTHER EXPENSES. Indemnitee agrees that
Indemnitee shall reimburse the Company for all expenses paid by the Company
in defending any Action against Indemnitee upon and only to the extent that
it shall be determined pursuant to this Agreement or by final judgment or
other final adjudication under the provisions of the NGCL or any applicable
law that Indemnitee is not entitled to be indemnified by the Company for
such expenses.
12. OTHER RIGHTS AND REMEDIES. Any indemnification or advance payment of
expenses made pursuant to any provision in this Agreement shall be in addition
to any other rights to which Indemnitee may be entitled in any capacity under
any provision of law, the Bylaws and Articles, any governing instrument of any
Affiliate, this or any other agreement, or pursuant to any vote of the governing
body of any Affiliate or of disinterested members of the Board.
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13. INSURANCE
(a) NO OBLIGATION TO MAINTAIN INSURANCE. The Company shall not under
any circumstances be obligated to maintain an insurance policy or insurance
policies providing officers' and directors' insurance (Insurance).
(b) INSURANCE COVERAGE. If the Company maintains Insurance,
Indemnitee shall be covered by such Insurance in accordance with its terms
to the maximum extent of coverage applicable to any director or officer
then serving the Company.
14. DURATION. All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is an Agent of the Company or
any of its Affiliates or serves as an Agent at the request of the Company for
any other Enterprise and shall continue thereafter so long as Indemnitee shall
be subject to any possible Action because Indemnitee was an Agent of the Company
or any of its Affiliates or serving in any other capacity referred to herein.
15. NOTICE. Promptly after receipt by Indemnitee of notice of the
commencement of any Action, Indemnitee shall, if he anticipates or contemplates
making a claim for expenses or an advance pursuant to this Agreement, notify the
Company of the commencement of such Action; provided, however, that any delay in
so notifying the Company shall not constitute a waiver or release by Indemnitee
of rights hereunder and that any omission by Indemnitee to so notify the Company
shall not relieve the Company from any liability which it may have to Indemnitee
hereunder or otherwise than under this Agreement.
16. INTENT OF PARTIES. The Company expressly confirms and agrees that it
has entered into this Agreement and assumed the obligations imposed on the
Company hereby to induce Indemnitee to serve as an officer and/or director of
the Company and acknowledges that Indemnitee is relying upon this Agreement in
agreeing to serve in such capacity.
17. EFFECTIVENESS OF AGREEMENT. This Agreement is effective for, and shall
apply to, (i) any claim which is asserted or threatened before, on or after the
date of this Agreement but for which no Action has been brought prior to the
date hereof and (ii) any Action which is threatened before, on or after the date
of this Agreement but which is not pending prior to the date hereof. This
Agreement shall not apply to any Action which was brought before the date of
this Agreement. So long as the foregoing is satisfied, this Agreement shall be
effective for, and be applicable to, acts or omissions occurring to, on or after
the date hereof.
18. MISCELLANEOUS
(a) SEVERABILITY. If any provision of this Agreement shall be held to
be unenforceable under any applicable law, then such unenforceability shall
not invalidate the entire Agreement. Such provision shall be deemed to be
modified to the extent necessary to render it enforceable, and if no such
modification shall render it enforceable, then this Agreement shall be
construed as if not containing the provisions held to be unenforceable, and
the rights and obligations of the parties shall be construed and enforced
accordingly.
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(b) ENTIRE AGREEMENT. This Agreement, those documents expressly
referred to herein and any other documents of even date herewith embody the
complete agreement and understanding between the parties hereto and
supersede and pre-empt any prior understandings, agreements or
representations between the parties, written, oral or otherwise, which may
have related to the subject matter hereof in any way.
(c) 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 and all of which together shall constitute one and the same
instrument.
(d) HEADINGS. The headings used in this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
(e) USE OF CERTAIN TERMS. As used in this Agreement, the words
"herein," "hereof," and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular paragraph,
subparagraph, section, subsection, or other subdivision. Whenever the
context may require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns, pronouns and verbs shall include the plural and vice versa.
(f) MODIFICATION; WAIVER; TERMINATION. No supplement, modification,
or amendment, or termination of this Agreement shall be effective 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.
(g) NOTICES. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given
if delivered by hand (return receipt requested) or sent by overnight
delivery service, cable, telegram, or facsimile transmission to the parties
at the following addresses or at such other addresses as shall be specified
by the parties by like notice:
(i) if to Indemnitee, to the address on the signature page
hereof; and
(ii) if to the Company, to:
Club Xxxxxx Resorts, Inc.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: President
Notice so given shall, in the case of notice so given by mail,
be deemed to be given and received on the fourth calendar day after
posting, in the case of notice so given by overnight delivery service, on
the date of actual delivery and, in the case of notice so given by cable,
telegram, facsimile transmission or, as the case may be, personal delivery.
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(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF NEVADA, EXCLUDING CONFLICT OF LAWS PRINCIPLES.
(i) SURVIVAL; CONTINUATION. The rights of Indemnitee under this
Agreement shall inure to the benefit of Indemnitee, his heirs, executors,
administrators, personal representatives and assigns, and this Agreement
shall be binding upon the Company, its successors and assigns. If the
Company, in a single transaction or series of related transactions, sells,
leases, exchanges, or otherwise disposes of all or substantially all of its
property and assets, the Company shall, as a condition precedent to any
such transaction, cause effective provision to be made so that the Persons
acquiring such property and assets shall become bound by and replace the
Company under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.
CLUB XXXXXX RESORTS, INC.
By:
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Xxxxxxx X. Xxxx, Chairman
INDEMNITEE
By:
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