Exhibit
10.1
DIGITAL VIDEO SYSTEMS, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the “
Agreement ”) is effective as of April 11, 2007 by
and between Digital Video Systems, Inc., a Delaware corporation
(the “ Company ”) and____________ (the “
Indemnitee ”).
WHEREAS, the Company desires to attract and
retain the services of highly qualified individuals, such as
Indemnitee, to serve the Company and its related
entities;
WHEREAS, in order to induce Indemnitee to
continue to provide services to the Company, the Company wishes to
provide for the indemnification of, and the advancement of expenses
to, Indemnitee to the maximum extent permitted by law;
WHEREAS, the Company and Indemnitee recognize
the continued difficulty in obtaining liability insurance for the
Company’s directors, officers, employees, agents and
fiduciaries, the significant 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 directors, officers, employees, agents and
fiduciaries to expensive litigation risks at the same time as the
availability and coverage of liability insurance has been severely
limited; and
WHEREAS, in view of the considerations set forth
above, the Company desires that Indemnitee shall be indemnified and
advanced expenses by the Company as set forth herein;
NOW, THEREFORE, the Company and the Indemnitee
hereby agree as set forth below.
1. Certain Definitions
(a) “ Change in Control ”
shall mean an event that shall be deemed to have occurred if, on or
after the date of this Agreement, (i) any “ person
” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the
company acting in such capacity or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, who
becomes the “ beneficial owner ” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than 50% of the total
voting power represented by the Company’s then outstanding
Voting Securities, (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of the Company and any new director whose
election by the Board of
Directors or
nomination for election by the Company’s stockholders was
approved by a vote of at least two thirds (2/3) of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the
Company approve a merger or consolidation of the Company with any
other corporation other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding or
immediately prior thereto continuing to represent (either remaining
outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power
represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of
related transactions) all or substantially all of the
Company’s assets.
(b) “ Claim ” shall mean, with
respect to a Covered Event, any threatened, pending or completed
action, suit, proceeding or alternative dispute resolution
mechanism, or any hearing, inquiry or investigation that Indemnitee
in good faith believes might lead to the institution of any such
action, suit, proceeding or alternative dispute resolution
mechanism, whether civil, criminal, administrative, investigative
or other.
(c) References to the “ Company
” shall include, in addition to Digital Video Systems, Inc.,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger to which Digital
Video Systems, Inc. (or any of its wholly owned subsidiaries) is a
party which, if its separate existence had continued, would have
had power and authority to indemnify its directors, officers,
employees, agents or fiduciaries, so that if Indemnitee is or was a
director, officer, employee, agent or fiduciary of such constituent
corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture,
employee benefit plan, 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.
(d) “ Covered Event ” shall
mean any event or occurrence related to the fact that Indemnitee is
or was a director, officer, employee, agent or fiduciary of the
Company, or any subsidiary of the Company, or is or was serving at
the request of the Company as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture,
trust or other enterprise, or by reason of any action or inaction
on the part of Indemnitee while serving in such
capacity.
(e) “ Expenses ” shall mean
any and all expenses (including attorneys’ fees and all other
costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, to be a witness in
or to participate in, any action, suit, proceeding,
alternative
dispute resolution mechanism, hearing, inquiry or investigation),
judgments, fines, penalties 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, of any Claim and any federal, state, local or foreign
taxes imposed on the Indemnitee as a result of the actual or deemed
receipt of any payments under this Agreement.
(f) “ Expense Advance ” shall
mean a payment to Indemnitee, pursuant to Section 3 hereof, of
Expenses in advance of the settlement of or final judgment in any
action, suit, proceeding or alternative dispute resolution
mechanism, hearing, inquiry or investigation which constitutes a
Claim.
(g) “ Independent Legal Counsel
” shall mean an attorney or firm of attorneys, selected in
accordance with the provisions of Section 2(d) hereof, who shall
not have otherwise performed services for the Company or Indemnitee
within the last three years (other than with respect to matters
concerning the rights of Indemnitee under this Agreement, or of
other indemnitees under similar indemnity agreements).
(h) 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, agent or fiduciary of the Company
which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee
benefit plan, its participants or its 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.
(i) “ Reviewing Party ” shall
mean, subject to the provisions of Section 2(d) hereof, any person
or body appointed by the Board of Directors in accordance with
applicable law to review the Company’s obligations hereunder
and under applicable law, which may include a member or members of
the Company’s Board of Directors or Independent Legal
Counsel.
(j) “ Section ” refers to a
section of this Agreement unless otherwise indicated.
(k) “ Voting Securities ”
shall mean any securities of the Company that vote generally in the
election of directors.
2. Indemnification.
(a) Indemnification of Expenses. Subject to the
provisions of Section 2(b) below, the Company shall indemnify
Indemnitee for Expenses to the fullest extent permitted by law if
Indemnitee was or 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, any
Claim (whether
by reason of or arising in part out of a Covered Event), including
all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses.
(b) Review of Indemnification Obligations.
Notwithstanding the foregoing, in the event any Reviewing Party
shall have determined (in a written opinion, in any case in which
Independent Legal Counsel is the Reviewing Party) that Indemnitee
is not entitled to be indemnified hereunder under applicable law,
(i) the Company shall have no further obligation under Section 2(a)
hereof to make any payments to Indemnitee not made prior to such
determination by such Reviewing Party, and (ii) the Company shall
be entitled to be reimbursed by Indemnitee (who hereby agrees to
reimburse the Company) for all Expenses theretofore paid in
indemnifying Indemnitee; provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee is
entitled to be indemnified hereunder under applicable law in
accordance with Section 2(c) hereof, then any determination made by
any Reviewing Party that, under applicable law, Indemnitee is not
entitled to be indemnified hereunder shall not be binding, and,
until a final judicial determination is made with respect to such
legal proceedings (as to which all rights of appeal therefrom have
been exhausted or lapsed), (x) Indemnitee shall not be required to
reimburse the Company for any Expenses theretofore paid in
indemnifying Indemnitee and (y) Indemnitee shall be entitled to
receive interim payments of Expenses pursuant to Section 2(a)
hereof. Indemnitee’s obligation to reimburse the Company for
any Expenses shall be unsecured and no interest shall be charged
thereon.
(c) Indemnitee Rights on Unfavorable Determination;
Binding Effect. If any Reviewing Party determines that Indemnitee
substantively is not entitled to be indemnified hereunder in whole
or in part under applicable law, Indemnitee shall have the right to
commence litigation seeking an initial determination by the court
or challenging any such determination by such Reviewing Party or
any aspect thereof, including the legal or factual bases therefor,
and, subject to the provisions of Section 15 hereof, the Company
hereby consents to service of process and to appear in any such
proceeding. Absent such litigation, any determination by any
Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.
(d) Selection of Reviewing Party; Change in
Control. If there has not been a Change in Control, any Reviewing
Party shall be selected by the Board of Directors. If there has
been such a Change in Control (other than a Change in Control which
has been approved by a majority of the Company’s Board of
Directors who were directors immediately prior to such Change in
Control), any Reviewing Party with respect to all matters
thereafter arising concerning the rights of Indemnitee to
indemnification of Expenses under this Agreement or any other
agreement, or under the Company’s Certificate of
Incorporation or Bylaws as now or hereafter in effect, or under any
other applicable law, if desired by Indemnitee, shall be
Independent Legal Counsel selected by Indemnitee and approved by
the Company (which approval shall not be unreasonably withheld).
Such counsel, among other things, shall render its written opinion
to the Company and Indemnitee as to whether and to what extent
Indemnitee
would be
entitled to be indemnified hereunder under applicable law and the
Company agrees to abide by such opinion. The Company agrees to pay
the reasonable fees of the Independent Legal Counsel referred to
above and to indemnify fully such counsel against any and all
expenses (including attorneys’ fees), claims, liabilities and
damages arising out of or relating to this Agreement or its
engagement pursuant hereto. Notwithstanding any other provision of
this Agreement, the Company shall not be required to pay Expenses
of more than one Independent Legal Counsel in connection with all
matters concerning a single Indemnitee, and such Independent Legal
Counsel shall be the Independent Legal Counsel for any or all other
Indemnitees unless (i) the Company otherwise determines or (ii) any
Indemnitee shall provide a written statement setting forth in
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