Indemnity Agreement - Coinmach Services Corp.
INDEMNITY AGREEMENT
This Indemnity Agreement, dated as of ___________, 2004 (the "Agreement")
is made by and between Coinmach Service Corp., a Delaware corporation (the
"Company") and _____________, (the "Indemnitee").
RECITALS
A. The Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors or officers of corporations unless
they are protected by adequate indemnification, due to increased exposure to
litigation costs and risk resulting from their service to such corporations, and
due to the fact that the exposure may bear no reasonable relationship to the
compensation of such directors and officers;
B. The statutes and judicial decisions regarding the duties of directors
and officers are often difficult to apply, ambiguous, or conflicting, and
therefore fail to provide such directors and officers with adequate, reliable
knowledge of legal risks to which they are exposed or information regarding the
proper course of action to take;
C. Plaintiffs often seek damages in such large amounts and the costs of
litigation may be so great (whether or not the case is meritorious), that the
defense and/or settlement of such litigation may be beyond the personal
resources of directors and officers;
D. The Board of Directors of the Company (the "Board") has concluded that,
to retain and attract talented and experienced individuals to serve as officers
and directors of the Company and to encourage such individuals to make the
business decisions necessary or appropriate for the success of the Company and
its Subsidiaries (as defined in Section 1 below), it is necessary for the
Company to contractually indemnify its directors and certain of its officers,
and certain of the directors and officers of its Subsidiaries, and to assume for
itself maximum permissible liability for Expenses, losses, liabilities and
damages in connection with claims against such officers and directors relating
to their service in such capacities, and has further concluded that the failure
to provide such contractual indemnification could result in significant harm to
the Company and its Subsidiaries and the Company's stockholders;
E. The provisions of the Amended and Restated Certificate of Incorporation
of the Company (the "Certificate of Incorporation") specifically state that the
rights to indemnification and payment of expenses described therein are not
exclusive, and thereby contemplate that contracts with respect to
indemnification and payment of Expenses by the Company and similar obligations
of the Company may be entered into by and between the Company and persons
entitled to such rights described in the Certificate of Incorporation; and
F. The Company desires the Indemnitee to serve or continue to serve as a
director or officer of the Company and/or one or more of its Subsidiaries
without undue concern for claims for damages arising out of or related to such
services to the Company and/or one or more of its Subsidiaries.
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NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Definitions. For the purposes of this Agreement, the following terms
shall have the meanings set forth below:
(a) Agent. "Agent" means any person who (i) is or was a director,
officer, employee, or other agent of the Company or a Subsidiary of the
Company, (ii) is or was serving at the request of, for the convenience of,
or to represent the "interest of the Company" or a Subsidiary of the
Company as a director, officer, trustee, partner, employee, fiduciary or
agent of another foreign or domestic corporation, partnership, limited
liability company, joint venture, trust, foundation, association,
organization or other legal entity or enterprise or (iii) is or was
serving in any capacity with respect to any employee, fiduciary benefits
plans of the Company or any Subsidiary. For purposes of subsection (ii) of
this Section 1(a), if Indemnitee is serving or has served as a director,
officer, trustee, partner, employee, fiduciary or agent of a Subsidiary,
Indemnitee shall be deemed to be serving at the request of the Company.
(b) Controlled. "Controlled" means subject to the power to exercise
a controlling influence over the management or policies of a corporation,
partnership, joint venture, trust or other entity.
(c) Expenses. "Expenses" includes all direct and indirect costs,
fees and expenses of any type or nature whatsoever (including, without
limitation, attorneys' fees and related disbursements and retainers, other
out-of-pocket costs such as fees and disbursements of expert witnesses,
private investigators and professional advisors, court costs, transcript
costs, fees of experts, duplicating, printing and binding costs, telephone
and fax transmission charges, postage, delivery services, secretarial
services and other disbursements and Expenses and reasonable compensation
for time spent by the Indemnitee for which he is not otherwise compensated
by the Company or any third party) actually and reasonably incurred by the
Indemnitee in connection with either the investigation, defense,
settlement or appeal of, or otherwise related to a Proceeding or
establishing or enforcing a right to indemnification under this Agreement,
[Section 8.75] or otherwise.
(d) Proceeding. "Proceeding" means any threatened, pending, or
completed claim, action, suit, arbitration, alternate dispute resolution
process, investigation, administrative hearing, appeal or any other
proceeding, whether civil, criminal, administrative, investigative or any
other type whatsoever, whether formal or informal, including a proceeding
initiated by Indemnitee pursuant to Section 6 of this Agreement to enforce
Indemnitee's rights hereunder.
(e) Subsidiary. "Subsidiary" means (i) any corporation of which 50%
or more of the outstanding voting securities are owned directly or
indirectly by the Company, or which is otherwise controlled by the
Company, (ii) any partnership, joint venture, limited liability company,
trust or other entity of which 50% or more of the equity interest is owned
directly or indirectly by the Company, or which is otherwise controlled by
the
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Company or (iii) the Company owns a general partner or managing member or
similar interest.
2. Agreement To Serve. The Indemnitee agrees to serve and/or continue to
serve as an Agent of the Company, at its will (or under separate agreement, if
such agreement exists), in the capacity Indemnitee currently serves as an Agent
of the Company; provided, however, that nothing contained in this Agreement is
intended to or shall (i) restrict the ability of the Indemnitee to resign at any
time and for any reason from any current or future position or positions, (ii)
create any right to continued employment of the Indemnitee in any current or
future position or positions, or (iii) restrict the ability of the Company to
terminate the employment or agency of Indemnitee at any time and for any reason
(subject to compliance with the terms of any employment or other applicable
agreement to which the Company (or any of its Subsidiaries) and the Indemnitee
are parties).
3. Indemnification as Agent.
(a) Third Party Actions. If the Indemnitee was or is a party or is
threatened to be made a party to any Proceeding (other than an action by or in
the right of the Company) by reason of the fact that he is or was an Agent of
the Company, or by reason of anything done or not done by him in any such
capacity or otherwise at the request of the Company or any of its officers,
directors, or stockholders, the Company shall indemnify and hold harmless the
Indemnitee against any and all Expenses, losses and liabilities of any type
whatsoever (including, but not limited to, judgments, damages, liabilities,
losses, fines, excise taxes, penalties and amounts paid in settlement) actually
and reasonably incurred by him in connection with the investigation, defense,
settlement or appeal of, or otherwise related to such Proceeding, 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, and, with respect to any criminal action or
Proceeding, if he had no reasonable cause to believe his conduct was unlawful.
The termination of any Proceeding, or any claim, issue or matter in such a
Proceeding by reason of settlement, judgment, order or otherwise, shall be
deemed to be a successful result as to such Proceeding, claim, issue or matter,
so long as there has been no finding (either adjudicated or pursuant to Section
6(c) below) that Indemnitee (i) did not act in good faith, or (ii) did not act
in a manner reasonably believed to be in, or not opposed to, the best interests
of the Company, or (iii) with respect to any criminal Proceeding, had reasonable
cause to believe his conduct was unlawful.
(b) Derivative Actions. If the Indemnitee was or is a party or is
threatened to be made a party to any Proceeding by or in the right of the
Company to procure a judgment in its favor by reason of the fact that he is or
was an Agent of the Company, or by reason of anything done or not done by him in
any such capacity, the Company shall indemnify and hold harmless the Indemnitee
against any amounts paid in settlement of any such Proceeding and any and all
Expenses, losses and liabilities of any type whatsoever (including, but not
limited to, judgments, damages, liabilities, losses, fines, excise taxes,
penalties and amounts paid in settlement) actually and reasonably incurred by
him in connection with the investigation, defense, settlement, or appeal of, or
otherwise related to such Proceeding, 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; except that no indemnification under this subsection shall be made with
respect to any claim, issue or matter as to which such person has been finally
adjudged to have been liable to the Company, unless and
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only to the extent that the Court of Chancery of the State of Delaware or the
court in which such Proceeding 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 as the court shall deem proper.
(c) Scope of Indemnification. If the General Corporation Law of the State
of Delaware (the "Delaware Law") or any other applicable law is amended after
the date hereof to permit the Company to indemnify Indemnitee for Expenses or
liabilities, or to indemnify Indemnitee with respect to any action or
Proceeding, not contemplated by this Agreement, then this Agreement (without any
further action be either party hereto) shall automatically be deemed to be
amended to require that the Company indemnify Indemnitee to the fullest extent
permitted by the Delaware Law.
4. Advancement of Expenses. Subject to Sections 7(a) and (b) below, the
Company shall advance all Expenses actually and reasonably incurred by the
Indemnitee in connection with the investigation, defense, settlement or appeal
of, or otherwise related to any Proceeding to which the Indemnitee is a party or
is threatened to be made a party by reason of the fact that the Indemnitee is or
was an Agent of the Company. Indemnitee hereby agrees to repay such amounts
advanced if it shall ultimately be determined pursuant to Section 6 below that
the Indemnitee is not entitled to be indemnified by the Company.
5. Indemnification Procedures.
(a) Notice by Indemnitee. Promptly after receipt by the Indemnitee of
notice of the commencement of or the threat of commencement of any Proceeding,
the Indemnitee shall, if the Indemnitee believes that indemnification with
respect thereto may be sought from the Company under this Agreement, provide
written notice to the Company of the commencement or threat of commencement
thereof; provided that the failure to give such notice shall not impair
Indemnitee's rights under this Agreement.
(b) Notice to Insurer. If, at the time of the receipt of a notice of the
commencement of a Proceeding pursuant to Section 5(a) above, the Company has in
effect an insurance policy or policies providing directors' and officers'
liability insurance, the Company shall give prompt notice of the commencement 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.
(c) Assumption of Defense. In the event the Company shall be obligated to
pay the Expenses of the Indemnitee with respect to any Proceeding, the Company
shall be entitled to assume the defense of such Proceeding, with counsel of its
choosing, upon the delivery to the Indemnitee of written notice of its election
to do so, which written notice shall be delivered within ten (10) calendar days
after receipt of written notice of the Proceeding pursuant to Section 5(a)
above. After delivery of such notice, the Company will not be liable to the
Indemnitee under this Agreement for any fees and Expenses of counsel which are
subsequently incurred by the Indemnitee with respect to the same Proceeding;
provided, however, that the Indemnitee shall have the right to employ his
counsel in any such Proceeding at the Indemnitee's
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expense; and provided further, that if (i) the employment of counsel by the
Indemnitee has been previously authorized by the Company, or (ii) the Indemnitee
shall have reasonably concluded that there may be a conflict of interest between
the Company and the Indemnitee in the conduct of any such defense or that
Indemnitee may have separate defenses or counterclaims to assert with respect to
any issue which may not be consistent with the position of other defendants in
such Proceeding, or (iii) the Company shall not, in fact, have employed counsel
to assume the defense of such Proceeding in a timely manner, then, in any such
case, the fees and Expenses of Indemnitee's counsel shall be at the expense of
the Company. In addition, if the Company fails to comply with any of its
obligations under this Agreement or in the event that the Company or any other
person takes any action to declare this Agreement void or unenforceable, or
institutes any action, suit or Proceeding to deny or to recover from Indemnitee
the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall
have the right to retain counsel of Indemnitee's choice, at the expense of the
Company, to represent Indemnitee in connection with any such matter. The Company
shall not, without the prior written consent of Indemnitee, consent to the entry
of any judgment against Indemnitee or enter into any settlement or compromise
which (i) includes an admission of fault of Indemnitee or (ii) does not include,
as an unconditional term thereof, the full release of Indemnitee from all
liability in respect of such Proceeding, which release shall be in form and
substance reasonably satisfactory to Indemnitee. This Section 5(c) shall not
apply to a Proceeding brought by Indemnitee under Section 6 below or pursuant to
Section 7(a) or (b) below.
(d) 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 the Indemnitee. Indemnitee shall execute all documents required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company to effectively bring
suit to enforce such rights.
(e) Cooperation by Indemnitee. Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
Indemnitee's power.
6. Determination of Right to Indemnification.
(a) Successful Proceeding. To the extent the Indemnitee has been
successful, on the merits or otherwise, in the defense of any Proceeding
referred to in Section 3 above, the Company shall indemnify the Indemnitee
against any and 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
Indemnitee against any and all Expenses actually and reasonably incurred by or
for him in connection with each successfully resolved claim, issue or matter.
(b) Other Proceeding. In the event that Section 6(a) above is
inapplicable, or applicable only in part, the Company shall nevertheless
indemnify the Indemnitee unless it is determined in a form described below that
the Indemnitee has not met the applicable standard of conduct set forth in
Section 3 above, if any, which entitles Indemnitee to such indemnification.
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(c) Forum in Event of Dispute. The Indemnitee shall be entitled to select
the forum in which the validity of the Company's claim under Section 6(b) hereof
that the Indemnitee is not entitled to indemnification will be heard, from among
the following (subject to provisions of applicable law):
(i) by a majority vote of the directors of the Board who are not
parties to such Proceeding, even though less than a quorum; or
(ii) by a committee of such directors designated by majority vote of
such directors, even though less than a quorum; or
(iii) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion; or
(iv) by the stockholders.
(d) Submission of Company's Claim. As soon as practicable, and in no event
later than thirty (30) days after written notice of the Indemnitee's choice of
forum pursuant to Section 6(c) above, the Company shall, at its own expense,
submit to the selected forum in such manner as the Indemnitee or the
Indemnitee's counsel may reasonably request, its claim that the Indemnitee is
not entitled to indemnification. The Company shall act in the utmost good faith
to assure the Indemnitee a complete opportunity to defend against such claim.
(e) Appeal to Court. Notwithstanding a determination by any forum listed
in Section 6(c) above that Indemnitee is not entitled to indemnification with
respect to a specific Proceeding, the Indemnitee shall have the right to apply
to the court in which that Proceeding is or was pending or any other court of
competent jurisdiction, for the purpose of enforcing the Indemnitee's right to
indemnification pursuant to this Agreement.
(f) Indemnity for Expenses in Enforcement of Agreement. Notwithstanding
any other provision in this Agreement to the contrary, the Company shall
indemnify the Indemnitee against all Expenses incurred by the Indemnitee in
connection with any hearing or Proceeding under this Section 6 involving the
Indemnitee and against all Expenses incurred by the Indemnitee in connection
with any other Proceeding between the Company and the Indemnitee involving the
interpretation or enforcement of the rights of the Indemnitee under this
Agreement unless a court of competent jurisdiction finds that the claims and/or
defenses of the Indemnitee in any such Proceeding was frivolous or made in bad
faith.
(g) Effect of Certain Resolutions. Neither the settlement or termination
of any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create a presumption that
Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any Proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not 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
or, with respect to any criminal Proceeding, had reasonable cause to believe
that Indemnitee's action was unlawful.
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(h) Failure To Act Not a Defense. The failure of the Company (including
its Board of Directors or any committee thereof, independent legal counsel, or
stockholders) to make a determination concerning the permissibility of
indemnification hereunder or the advancement of Expenses under this Agreement
shall not be a defense in any action brought under Section 6 above, and shall
not create a presumption that such indemnification or advancement is not
permissible.
7. Exceptions.
(a) Excluded Action or Omissions. Any other provision herein to the
contrary notwithstanding, the Company shall not be obligated to indemnify or
advance Expenses to Indemnitee with respect to Proceedings or claims arising out
of acts, omissions or transactions for which Indemnitee is prohibited from
receiving indemnification under applicable law.
(b) Claims Initiated by Indemnitee. Any other provision herein to the
contrary notwithstanding, the Company shall not be obligated pursuant to the
terms of this Agreement to indemnify or advance Expenses to the Indemnitee with
respect to Proceedings or claims initiated or brought voluntarily by the
Indemnitee and not by way of defense or counterclaims asserted by Indemnitee in
any Proceeding brought against Indemnitee, except with respect to Proceedings
brought to establish or enforce a right to indemnification under this Agreement
or any other statute or law or otherwise as required under the General
Corporation Law of the State of Delaware, but such indemnification or
advancement of Expenses may be provided by the Company in specific cases if the
Board finds it to be appropriate.
(c) Lack of Good Faith. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement to indemnify the Indemnitee for any Expenses incurred by the
Indemnitee with respect to any Proceeding instituted by the 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
Proceeding was frivolous or made in bad faith.
(d) Unauthorized Settlements. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement to indemnify the Indemnitee for any amount paid in settlement of
a Proceeding effected without the prior written consent of the Company. The
Company agrees not to unreasonably withhold its consent to any settlement.
(e) No Duplicative Payment. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
8. Non-exclusivity. THE PROVISIONS FOR INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES SET FORTH IN THIS AGREEMENT SHALL NOT BE DEEMED EXCLUSIVE OF ANY OTHER
RIGHTS WHICH THE INDEMNITEE MAY HAVE UNDER ANY PROVISION OF LAW, THE CERTIFICATE
OF INCORPORATION OR AMENDED AND RESTATED BYLAWS, THE VOTE OF THE COMPANY'S
STOCKHOLDERS OR DISINTERESTED DIRECTORS, OTHER AGREEMENTS, OR OTHERWISE, BOTH AS
TO ACTION IN HIS OFFICIAL
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CAPACITY AND AS TO ACTION IN ANOTHER CAPACITY WHILE OCCUPYING A POSITION AS AN
AGENT OF THE COMPANY.
9. Interpretation of Agreement; Scope. It is understood that the parties
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent now or hereafter
permitted by applicable law. The benefits of this Agreement shall inure to the
Indemnitee both with respect to acts done or not done by him both before and
after this date.
10. Burden of Proof. In making a determination with respect to entitlement
to indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
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.
11. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever, (i)
the validity, legality and enforceability of the remaining provisions of the
Agreement (including, without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 9 hereof.
12. Modification and Waiver. Except as contemplated by Section 3(c), no
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by all 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.
13. Survival, Successors and Assigns. The Indemnitee's rights under this
Agreement shall continue after the Indemnitee has ceased acting as an Agent of
the Company. The terms of this Agreement shall be binding on and inure to the
benefit of the Company and its successors and assigns and shall be binding on
and inure to the benefit of Indemnitee and Indemnitee's heirs, executors and
administrators.
14. Gender. The masculine, feminine or neuter pronouns used herein shall
be interpreted without regard to gender, and the use of the singular or plural
shall be deemed to include the other whenever the context so requires.
15. Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and received by the party addressee or (ii) if mailed by
certified or registered mail with postage prepaid, on the third business day
after the mailing date. All notice to either party will be sent to the
applicable address below, or as subsequently modified by written notice.
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If to the Company:
Coinmach Service Corp.
303 Sunnyside Blvd., Suite 70
Plainview, NY 11803
Attention: Robert M. Doyle
If to Indemnitee, at such Indemnitee's primary address listed in the
records of the Company.
16. Governing Law. This Agreement, and all rights, remedies, liabilities,
powers and duties of the parties to this Agreement, shall be governed
exclusively by and construed according to the laws of the State of Delaware
without regard to principles of conflicts of laws.
17. Consent to Jurisdiction. The Company and the Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action 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 Delaware.
18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
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The parties hereto have entered into this Indemnity Agreement effective as
of the date first above written.
COINMACH SERVICE CORP.
By:
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Title:
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INDEMNITEE:
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