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EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
This
Indemnification Agreement (the "AGREEMENT") is entered into as
of
_______ __, 2005, by and among Ritz
Interactive, Inc., a Delaware corporation
(the "COMPANY") and the undersigned party
(the "INDEMNITEE").
RECITALS
A. Indemnitee, as an
officer and/or director of the Company, performs
valuable
services in such capacity for the Company.
B. In order to induce the
Indemnitee to continue to serve as a director
and/or an
officer of the Company, the Company has determined and agreed
to
enter into
this contract with the Indemnitee.
NOW,
THEREFORE, in consideration of the Indemnitee's continued service
as
an officer and/or director after the date
hereof, the parties hereto agree as
follows:
1. Indemnification.
a.
Indemnification of Expenses. The Company shall indemnify and
hold
harmless the Indemnitee (including the Indemnitee's spouse,
heirs,
estate, executor or personal or legal representatives) and each
person who controls the Indemnitee or who may be liable within
the
meaning of Section 15 of the Securities Act of 1933, as amended
(the
"SECURITIES ACT"), or Section 20 of the Securities Exchange Act
of
1934, as amended (the "EXCHANGE ACT"), to the fullest extent
permitted by law, if the 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 threatened,
pending
or completed action, suit, proceeding or alternative dispute
resolution mechanism, or any hearing, inquiry or investigation
that
the Indemnitee believes might lead to the institution of any
such
action, suit, proceeding or alternative dispute resolution
mechanism, whether civil, criminal, administrative, investigative
or
other (hereinafter a "CLAIM") by reason of (or arising in part
out
of) any event or occurrence related to the fact that the
Indemnitee
is or was a director, officer, employee, controlling person,
agent
or fiduciary of the Company, or any direct or indirect subsidiary
of
the Company or any direct or indirect parent of the Company, or
is
or was serving at the request of the Company as a director,
officer,
employee, controlling person, 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 the
Indemnitee
while serving in such capacity including, without limitation,
any
and all losses, claims, damages, expenses and liabilities, joint
or
several (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement
of,
any action, suit, proceeding or any claim asserted) under the
Securities Act, the Exchange Act or other federal or state
statutory
law or regulation, at common law or otherwise, that relate
directly
or indirectly to the registration, purchase, sale or ownership
of
any securities of the Company or to any fiduciary obligation
owed
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with respect thereto (hereinafter an "INDEMNIFICATION EVENT")
against any and all expenses (including attorneys' fees and all
other costs, expenses and obligations incurred in connection
with
investigating, defending, serving as a witness in or
participating
in (including on appeal), or preparing to defend, be a witness in
or
participate in, any such 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 or delayed) of such 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, and all interest, assessments and other charges
paid
or payable thereon or in respect thereto (collectively,
hereinafter
"EXPENSES"). Except as set forth below in SECTION 1(b), such
payment
of Expenses shall be made by the Company as soon as practicable
but
in any event no later than five (5) days after written demand by
the
Indemnitee therefor is presented to the Company.
b.
Reviewing
Party. Notwithstanding the foregoing, (i) the obligations
of the Company under SECTION 1(a) and SECTION 2(a) shall be
subject
to the condition that the Reviewing Party (as described in
SECTION
10(e) hereof) shall not have determined (in a written opinion,
in
any case in which the Independent Legal Counsel referred to in
SECTION 10(d) hereof is involved) that the Indemnitee would not
be
permitted to be indemnified under the terms of this Agreement
or
applicable law and communicates this in writing to the
Indemnitee,
and (ii) the Indemnitee acknowledges and agrees that the
obligation
of the Company to make an advance payment of Expenses to the
Indemnitee pursuant to SECTION 1(a) and SECTION 2(a) (an
"EXPENSE
ADVANCE") shall be subject to the condition that, if, when and
to
the extent that the Reviewing Party determines that the
Indemnitee
would not be permitted to be so indemnified under applicable
law,
the Company shall be entitled to be reimbursed by the
Indemnitee
(who hereby agrees to reimburse the Company) for all such
amounts
theretofore paid; provided, however, that if the Indemnitee has
commenced or thereafter commences legal proceedings in a court
of
competent jurisdiction to secure a determination that the
Indemnitee
should be indemnified under applicable law, any determination
made
by the Reviewing Party that the Indemnitee would not be permitted
to
be indemnified under applicable law shall not be binding and
the
Indemnitee shall not be required to reimburse the Company for
any
Expense Advance until a final judicial determination is made
with
respect thereto (as to which all rights of appeal therefrom
have
been exhausted or lapsed). The Indemnitee's obligation to
reimburse
the Company for any Expense Advance shall be unsecured and no
interest shall be charged thereon.
If there has not been a Change in Control (as defined in
SECTION
10(c) hereof), the Reviewing Party shall be selected by the Board
of
Directors or similar governing body of the Company, and if there
has
been such a Change in Control (other than a Change in Control
that
has been approved by a majority of the Company's Board of
Directors
or similar governing body who were in office immediately
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prior to such Change in Control), the Reviewing Party shall be
the
Independent Legal Counsel referred to in SECTION 10(d) hereof.
If there has been no determination by the Reviewing Party
within
thirty (30) days after a written demand for indemnification has
been
presented to the Company by the Indemnitee or if the Reviewing
Party
determines that the Indemnitee substantively would not be
permitted
to be indemnified in whole or in part under the terms of this
Agreement or applicable law and the Reviewing Party notifies
the
Indemnitee in writing of such determination, then the
Indemnitee
shall have the right to commence litigation seeking an initial
determination by the court 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
service
of process and to appear in any such proceeding.
Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and the Indemnitee.
c.
Contribution. If the indemnification provided for in SECTION
1(a)
above for any reason is held by a court of competent jurisdiction
to
be unavailable to the Indemnitee in respect of any losses,
claims,
damages, expenses or liabilities referred to therein, then the
Company, in lieu of indemnifying the Indemnitee thereunder,
shall
contribute to the amount paid or payable by the Indemnitee as a
result of such losses, claims, damages, expenses or liabilities
(i)
in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Indemnitee, or (ii) if
the
allocation provided by CLAUSE (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect
not
only the relative benefits referred to in CLAUSE (i) above but
also
the relative fault of the Company and the Indemnitee in
connection
with the action or inaction that resulted in such losses,
claims,
damages, expenses or liabilities, as well as any other relevant
equitable considerations. In connection with any registration of
the
Company's securities, the relative benefits received by the
Company
and the Indemnitee shall be deemed to be in the same respective
proportions that the net proceeds from the offering (before
deducting expenses) received by the Company and the Indemnitee,
in
each case as set forth in the table on the cover page of the
applicable prospectus, bear to the aggregate public offering
price
of the securities so offered. The relative fault of the Company
and
the Indemnitee shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material
fact or the omission or alleged omission to state a material
fact
relates to information supplied by the Company or the Indemnitee
and
the parties' relative intent, knowledge, access to information
and
opportunity to correct or prevent such statement or omission.
The Company and the Indemnitee agree that it would not be just
and
equitable if contribution pursuant to this SECTION 1(c) were
determined by pro rata or per capita allocation or by any other
method of allocation that does not take account of the
equitable
considerations referred to in the immediately preceding
paragraph.
In connection with any registration of the Company's securities,
in
no
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event shall the Indemnitee be required to contribute any amount
under this SECTION 1(c) in excess of the lesser of: (i) that
proportion of the total of such losses, claims, damages or
liabilities that are indemnified against, equal to the proportion
of
the total securities sold under such registration statement that
is
being sold by the Indemnitee or (ii) the proceeds received by
the
Indemnitee from its sale of securities under such registration
statement. No person found guilty of fraudulent
misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be
entitled to contribution from any person who was not found guilty
of
such fraudulent misrepresentation.
d.
Survival
Regardless of Investigation. The indemnification and
contribution provided for in this SECTION 1 will remain in full
force and effect regardless of any investigation made by or on
behalf of the Indemnitee or the spouse, estate, heirs or personal
or
legal representative of the Indemnitee.
e.
Change in
Control. The Company agrees that if there is a Change in
Control of the Company (other than a Change in Control that has
been
approved by a majority of the Company's Board of Directors or
similar governing body who were in office immediately prior to
such
Change in Control) then, with respect to all matters thereafter
arising concerning the rights of the Indemnitee to payments of
Expenses under this Agreement or any other agreement or under
the
Company's charter documents as now or hereafter in effect,
Independent Legal Counsel (as defined in SECTION 10(d) hereof)
shall
be selected by the Indemnitee and approved by the Company
(which
approval shall not be unreasonably withheld or delayed). Such
counsel, among other things, shall, within thirty (30) days after
a
written demand for indemnification has been presented to the
Company
by the Indemnitee, render its written opinion to the Company and
the
Indemnitee as to whether and to what extent the Indemnitee would
be
permitted to be indemnified under the terms of this Agreement
or
applicable law. The Company agrees to abide by such opinion and
to
pay the reasonable fees of the Independent Legal Counsel referred
to
above and to fully indemnify 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.
f.
Mandatory
Payment of Expenses. Notwithstanding any other provision
of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in
the
defense of any action, suit, proceeding, inquiry or
investigation
referred to in SECTION 1(a) hereof or in the defense of any
claim,
issue or matter therein, the Indemnitee shall be indemnified
against
all Expenses incurred by the Indemnitee in connection herewith.
2. Expenses;
Indemnification Procedure.
a.
Advancement of Expenses. Subject to SECTION 1(b), the Company
shall
advance all Expenses incurred by the Indemnitee as soon as
practicable but in any event no
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later than five (5) days after written demand by the Indemnitee
therefor to the Company.
b.
Notice/Cooperation by the Indemnitee. The Indemnitee shall give
the
Company notice in writing as soon as practicable of any Claim
made
against the 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 (the "CEO") at
the
Company's address (or such other address as the Company shall
designate in writing to the Indemnitee). The CEO shall,
promptly
upon receipt of such a request for indemnification, advise the
Company's Board of Directors in writing that Indemnitee has
requested indemnification. In addition, Indemnitee shall give
the
Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee's power. The omission
to
so notify the Company will not relieve it from any liability
which
it may have to Indemnitee other than under this Agreement
c.
No
Presumptions; Burden of Proof. For purposes of this Agreement,
the termination of any
Claim 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 the 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 the Indemnitee has met any
particular
standard of conduct or had any particular belief, nor an actual
determin
