Indemnification Agreement - NewHeading Inc. and Vern J. Brownell
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT dated as of March 1 between NewHeading, Inc., a
Delaware corporation (the "Company"), and the undersigned indemnitee (the
"Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as directors
and officers the most capable persons available;
WHEREAS, Indemnitee is a director or officer of the Company;
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's service to the
Company in an effective manner, the Company wishes to provide in this Agreement
for the indemnification of and the advancing of expenses to Indemnitee to the
fullest extent (whether partial or complete) permitted by law and as set forth
in this Agreement, and, to the extent insurance is maintained, for the continued
coverage of Indemnitee under the Company's directors' and officers' liability
insurance policies;
NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, another enterprise
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Certain Definitions
Claim: any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether instituted by the Company
or any other party, that Indemnitee in good faith believes might lead to the
institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other.
Expenses: include attorneys' fees and all other reasonable costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in any Claim relating to
any Indemnifiable Event.
Indemnifiable Event: any event or occurrence related to the fact
that Indemnitee is or was a director, officer, employee, agent or fiduciary of
the Company, or is or was serving at the request of the Company as a director,
officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or
by reason of anything done or not done by Indemnitee in any such capacity;
provided that "Indemnifiable Event" shall exclude any intentional act or
intentional omission by Indemnitee which is (i) a violation of law by
Indemnitee, (ii) a material violation of the Company's written policies
(including without limitation those prohibiting harassment or discrimination
based on race, sex, sexual preference, religion, national origin, age, marital
status, or medical condition, handicap or disability), (iii)
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outside of the course or scope of Indemnitee's employment with the Company, or
(iv) contrary to public policy.
Reviewing Party: any appropriate person or body consisting of a
member or members of the Company's Board of Directors or any other person or
body appointed by the Board who is not a party to the particular Claim for which
Indemnitee is seeking indemnification.
2. Basic Indemnification Arrangement.
(a) In the event Indemnitee was, is or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reason of (or arising in part out
of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the
fullest extent permitted by law as soon as practicable but in any event no later
than thirty days after written demand is presented to the Company, against any
and 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 or
amounts paid in settlement) of such Claim. If so requested by Indemnitee, the
Company shall advance (within two business days of such request) any and all
Expenses to Indemnitee (an "Expense Advance").
(b) Notwithstanding the foregoing, (i) the obligations of the
Company under Section 2(a) shall be subject to the condition that the Reviewing
Party shall not have determined that Indemnitee would not be permitted to be
indemnified under applicable law, and (ii) the obligation of the Company to make
an Expense Advance pursuant to Section 2(a) shall be subject to the condition
that, if, when and to the extent that the Reviewing Party determines that
Indemnitee would not be permitted to be so indemnified under applicable law, the
Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid; provided, however,
that if Indemnitee has commenced or thereafter commences arbitration proceedings
to secure a determination that Indemnitee should be indemnified under applicable
law, any determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final determination is made by the arbitrator with respect
thereto. If there has been no determination by the Reviewing Party or if the
Reviewing Party determines that Indemnitee substantively would not be permitted
to be indemnified in whole or in part under applicable law, Indemnitee shall
have the right to commence arbitration seeking a determination or challenging
any such determination by the Reviewing Party or any aspect thereof, including
the legal or factual bases therefor, and the Company hereby consents to appear
in such proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.
3. Indemnification for Additional Expenses. The Company shall
indemnify Indemnitee against any and all reasonable expenses (including
attorneys' fees) and, if
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requested by Indemnitee, shall (within two business days of such request)
advance such expenses to Indemnitee, which are incurred by Indemnitee in
connection with arbitration brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement or Company By-law now of hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.
4. Partial Indemnity, Etc. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties and amounts paid in
settlement of a Claim but not, however, for all of the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled. Moreover, notwithstanding any other provision of
this Agreement, to the extent that Indemnitee has been successful on the merits
or otherwise in defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
5. Burden of Proof. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.
6. No Presumptions. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption 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. In addition, neither the failure of the Reviewing
Party to have made a determination as to whether Indemnitee has met any
particular standard of conduct or had any particular belief, nor an actual
determination by the Reviewing Party that Indemnitee has not met such standard
of conduct or did not have such belief, prior to the commencement of arbitration
proceedings by Indemnitee to secure a determination that Indemnitee should be
indemnified under applicable law shall be a defense to Indemnitee's claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief.
7. Nonexclusivity Etc. The rights of the Indemnitee hereunder
shall be in addition to any other rights Indemnitee may have under the Company's
By-laws or the Delaware General Corporation Law or otherwise. Nothing in this
Agreement shall limit the right of the Company, in its sole discretion, to
indemnify Indemnitee with respect to events which are not Indemnifiable Events,
but the Company shall have no obligation under this Agreement to do so.
8. Liability Insurance. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be
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covered by such policy or policies, in accordance with its or their terms, to
the maximum extent of the coverage available for any Company director or
officer.
9. No Implied Employment Rights. Indemnitee understands and
agrees that this Agreement does not confer upon Indemnitee any rights to
continued employment by the Company that Indemnitee would not otherwise have,
nor does this Agreement obligate the Company to employ Indemnitee for any
specific period of time.
10. Arbitration. The Company and Indemnitee mutually consent to
the resolution by arbitration, to the fullest extent provided by applicable law,
of all claims or controversies arising under this Agreement in accordance with
the Model Employment Arbitration Procedures of the American Arbitration
Association. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.
11. Amendments, Etc. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
12. 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 papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
13. No Duplication of Payments. The Company shall not be liable
under this Agreement to make any payment in connection with any Claim made
against Indemnitee to the extent indemnitee has otherwise actually received
payment (under any insurance policy, By-law or otherwise) of the amounts
otherwise indemnifiable hereunder.
14. Binding Effect, Etc. This Agreement shall be binding upon and
inure to the benefit of 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 and/or assets of the Company, spouses, heirs, executors and personal
and legal representatives. This Agreement shall continue in effect regardless of
whether Indemnitee continues to serve as an officer or director of the Company
or of any other enterprise at the Company's request for actions taken during
such service.
15. Termination. Either party may terminate this Agreement with 60
days notice with respect to Indemnifiable Events occurring after the effective
date of termination; provided that such termination shall not affect the
Company's obligations hereunder with respect to Indemnifiable Events occurring
prior to the effective date of termination.
16. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts
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made and to be performed in such state without giving effect to the principles
of conflicts of laws.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
NewHeading, Inc.
By: /s/ Vern J. Brownell
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Name: Vern J. Brownell
Title: Chairman
/s/ Vern J. Brownell
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Indemnitee