EXHIBIT 10.7
INDEMNIFICATION
AGREEMENT
THIS AGREEMENT (the
“Agreement”) is made and entered into effective as of
November 15, 2005 between Netopia, Inc., a Delaware
corporation (“the Company”) and J. Francois Crepin
(“Indemnitee”).
WITNESSETH THAT:
WHEREAS, Indemnitee has been elected
as a member of the Board of Directors of the Company, and in such
capacity performs a valuable service for the Company;
and
WHEREAS, the Board of Directors of
the Company have adopted Bylaws (the “Bylaws”)
providing for the indemnification of the officers and directors of
the Company to the maximum extent authorized by Section 145 of
the Delaware General Corporation Law, as amended
(“Law”); and
WHEREAS, the Bylaws and the Law, by
their nonexclusive nature, permit contracts between the Company and
the officers or directors of the Company with respect to
indemnification of such officers or directors; and
WHEREAS, in accordance with the
authorization as provided by the Law, the Company may purchase and
maintain a policy or policies of directors’ and
officers’ liability insurance (“D & O
Insurance”), covering certain liabilities which may be
incurred by its officers or directors in the performance of their
obligations to the Company; and
WHEREAS, as a result of recent
developments affecting the terms, scope and availability of
D & O Insurance there exists general uncertainty as
to the extent of protection afforded Company officers and directors
by such D & O Insurance and said uncertainty also
exists under statutory and bylaw indemnification provisions;
and
WHEREAS, in order to induce
Indemnitee to serve as an officer or director of the Company, the
Company has determined and agreed to enter into this contract with
Indemnitee;
NOW, THEREFORE, in consideration of
Indemnitee’s continued service as an officer or director
after the date hereof, the parties hereto agree as
follows:
1. Indemnity of Indemnitee .
The Company hereby agrees to hold harmless and indemnify Indemnitee
to the full extent authorized or permitted by the provisions of the
Law, as such may be amended from time to time, and
Article VII, Section 6 of the Bylaws, as such may be
amended. In furtherance of the foregoing indemnification, and
without limiting the generality thereof:
(a) Proceedings Other Than
Proceedings by or in the Right of the Company . Indemnitee
shall be entitled to the rights of indemnification provided in this
Section 1(a) if, by reason of his Corporate Status (as
hereinafter defined), he is, or is threatened to be made, a party
to or participant in any Proceeding (as hereinafter defined) other
than a Proceeding by or in the right of the Company. Pursuant to
this Section 1(a), Indemnitee shall be indemnified against all
Expenses (as hereinafter defined), judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him
or on his behalf in connection with such Proceeding or any claim,
issue or matter therein, 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
Proceeding, had no reasonable cause to believe his conduct was
unlawful.
(b) Proceedings by or in the
Right of the Company . Indemnitee shall be entitled to the
rights of indemnification provided in this Section 1(b) if, by
reason of his Corporate Status, he is, or is threatened to be made,
a party to or participant in any Proceeding brought by or in the
right of the Company to procure a judgment in its favor. Pursuant
to this Section 1(b), Indemnitee shall be indemnified against
all Expenses actually and reasonably incurred by him or on his
behalf in connection with 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; provided, however, that, if
applicable law so provides, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged to
be liable to the Company unless and to the extent that the Court of
Chancery of the State of Delaware shall determine that such
indemnification may be made.
(c) Indemnification for Expenses
of a Party Who is Wholly or Partly Successful . Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall
be indemnified to the maximum extent permitted by law against all
Expenses actually and reasonably incurred by him or on his behalf
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 all
Expenses actually and reasonably incurred by him or on his behalf
in connection with each successfully resolved claim, issue or
matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.
2. Additional Indemnity . In
addition to, and without regard to any limitations on, the
indemnification provided for in Section 1, the Company shall
and hereby does indemnify and hold harmless Indemnitee against all
Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf
if, by reason of his Corporate Status he is, or is threatened to be
made, a party
to or participant in any Proceeding (including a
Proceeding by or in the right of the Company), including, without
limitation, all liability arising out of the negligence or active
or passive wrongdoing of Indemnitee. The only limitation that shall
exist upon the Company’s obligations pursuant to this
Agreement shall be that the Company shall not be obligated to make
any payment to Indemnitee that is finally determined (under the
procedures, and subject to the presumptions, set forth in Sections
6 and 7 hereof) to be unlawful under Delaware law.
3. Contribution in the Event of
Joint Liability .
(a) Whether or not the
indemnification provided in Sections 1 and 2 hereof is available,
in respect of any threatened, pending or completed action, suit or
proceeding in which Company is jointly liable with Indemnitee (or
would be if joined in such action, suit or proceeding), Company
shall pay, in the first instance, the entire amount of any judgment
or settlement of such action, suit or proceeding without requiring
Indemnitee to contribute to such payment and Company hereby waives
and relinquishes any right of contribution it may have against
Indemnitee. Company shall not enter into any settlement of any
action, suit or proceeding in which Company is jointly liable with
Indemnitee (or would be if joined in such action, suit or
proceeding) unless such settlement provides for a full and final
release of all claims asserted against Indemnitee.
(b) Without diminishing or impairing
the obligations of the Company set forth in the preceding
subparagraph, if, for any reason, Indemnitee shall elect or be
required to pay all or any portion of any judgment or settlement in
any threatened, pending or completed action, suit or proceeding in
which Company is jointly liable with Indemnitee (or would be if
joined in such action, suit or proceeding), Company shall
contribute to the amount of expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by Indemnitee in proportion
to the relative benefits received by the Company and all officers,
directors or employees of the Company other than Indemnitee who are
jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), on the one hand, and Indemnitee, on
the other hand, from the transaction from which such action, suit
or proceeding arose; provided, however, that the proportion
determined on the basis of relative benefit may, to the extent
necessary to conform to law, be further adjusted by reference to
the relative fault of Company and all officers, directors or
employees of the Company other than Indemnitee who are jointly
liable with Indemnitee (or would be if joined in such action, suit
or proceeding), on the one hand, and Indemnitee, on the other hand,
in connection with the events that resulted in such expenses,
judgments, fines or settlement amounts, as well as any other
equitable considerations which the law may require to be
considered. The relative fault of Company and all officers,
directors or employees of the Company other than Indemnitee who are
jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), on the one hand, and Indemnitee, on
the other hand, shall be determined by reference to, among other
things, the degree to which their actions were motivated by intent
to gain personal profit or advantage, the degree to which their
liability is primary or secondary, and the degree to which their
conduct is active or passive.
(c) Company hereby agrees to fully
indemnify and hold Indemnitee harmless from any claims of
contribution which may be brought by officers, directors or
employees of the Company other than Indemnitee who may be jointly
liable with Indemnitee.
4. Indemnification for Expenses
of a Witness . Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in
connection therewith.
5. Advancement of Expenses .
Notwithstanding any other provision of this Agreement, the Company
shall advance all reasonable Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding by reason of
Indemnitee’s Corporate Status within ten days after the
receipt by the Company of a statement or statements from Indemnitee
requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses
incurred by Indemnitee and shall include or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to
repay any Expenses advanced if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this
Section 5 shall be unsecured and interest free.
Notwithstanding the foregoing, the obligation of the Company to
advance Expenses pursuant to this Section 5 shall be subject
to the condition that, if, when and to the extent that the Company
determines that Indemnitee would not be permitted to be indemnified
under applicable law, the Company shall be entitled to be
reimbursed, within thirty (30) days of such determination, by
Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofor paid; provided, however, that if Indemnitee
has commenced or thereafter commences legal proceedings in a court
of competent jurisdiction to secure a determination that Indemnitee
should be indemnified under applicable law, any determination made
by the Company 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
advance of Expenses until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom
have been exhausted or lapsed).
6. Procedures and Presumptions
for Determination of Entitlement to Indemnification . It is the
intent of this Agreement to secure for Indemnitee rights of
indemnity that are as favorable as may be permitted under the law
and public policy of the State of Delaware. Accordingly, the
parties agree that the following procedures and presumptions shall
apply in the event of any question as to whether Indemnitee is
entitled to indemnification under this Agreement:
(a) To obtain indemnification
(including, but not limited to, the advancement of Expenses and
contribution by the Company) under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of
Directors in writing that Indemnitee has requested
indemnification.
(b) Upon written request by
Indemnitee for indemnification pursuant to the first sentence of
Section 6(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee’s entitlement
thereto shall be made in the specific case by one of the following
three methods, which shall be at the election of Indemnitee:
(1) by a majority vote of the disinterested directors, even
though less than a quorum, or (2) by independent legal counsel
in a written opinion, or (3) by the stockholders.
(c) If the determination of
entitlement to indemnification is to be made by Independent Counsel
pursuant to Section 6(b) hereof, the Independent Counsel shall
be selected as provided in this Section 6(c). The Independent
Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board of Directors).
Indemnitee or the Company, as the case may be, may, within 10 days
after such written notice of selection shall have been given,
deliver to the Company or to Indemnitee, as the case may be, a
written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of
“Independent Counsel” as defined in Section 13 of
this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper
and timely objection, the person so selected shall act as
Independent Counsel. If a written objection is made and
substantiated, the Independent Counsel selected may not serve as
Independent Counsel unless and until such objection is withdrawn or
a court has determined that such objection is without merit. If,
within 20 days after submission by Indemnitee of a written request
for indemnification pursuant to Section 6(a) hereof, no
Independent Counsel shall have
