Exhibit 10.1
INDEMNIFICATION AGREEMENT
(Delaware corporation)
This Indemnification Agreement (this
“ Agreement ”), made and entered into as of the
day of
2005, by and between First Advantage Corporation, a Delaware
corporation (the “ Company ”), and
(“ Indemnitee ”).
W I T N E S S E T H:
WHEREAS, highly competent persons
have become more reluctant to serve publicly-held corporations as
directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification
against risks of claims and actions against them arising out of
their service to and activities on behalf of the
corporation.
WHEREAS, the Board of Directors of
the Company (the “ Board ”) has determined that,
in order to attract and retain qualified individuals, the Company
will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its
subsidiaries from certain liabilities. Although the furnishing of
such insurance has been a customary and widespread practice among
United States-based corporations and other business enterprises,
the Company believes that, given current market conditions and
trends, such insurance may be available to it in the future only at
higher premiums and with more exclusions. At the same time,
directors, officers, and other persons in service to corporations
or business enterprises are being increasingly subjected to
expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only
against the Company or business enterprise itself.
WHEREAS, the By-Laws of the Company
provide that the Company shall indemnify and advance expenses to
all directors and officers of the Company in the manner set forth
therein and to the fullest extent permitted by applicable law, and
the Company’s Certificate of Incorporation provides for
limitation of liability for directors. In addition, Indemnitee may
be entitled to indemnification pursuant to the General Corporation
Law of the State of Delaware (“ DGCL ”) . The
By-Laws and the DGCL expressly provide that the indemnification
provisions set forth therein are not exclusive, and thereby
contemplate that contracts may be entered into between the Company
and members of the board of directors, officers and other persons
with respect to indemnification.
WHEREAS, the uncertainties relating
to such insurance and to indemnification have increased the
difficulty of attracting and retaining such persons.
WHEREAS, the Board has determined
that the increased difficulty in attracting and retaining such
persons is detrimental to the best interests of the Company’s
stockholders and that the Company should act to assure such persons
that there will be increased certainty of such protection in the
future.
WHEREAS, it is reasonable, prudent
and necessary for the Company contractually to obligate itself to
indemnify, and to advance expenses on behalf of, such persons to
the fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern that
they will not be so indemnified.
WHEREAS, this Agreement is a
supplement to and in furtherance of the charter and by-laws of the
Company and any resolutions adopted pursuant thereto and shall not
be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder.
WHEREAS, Indemnitee does not regard
the protection available under the Company’s charter and
by-laws and insurance as adequate in the present circumstances, and
may not be willing to serve as an officer or director of the
Company without adequate protection, and the Company desires
Indemnitee to serve in such capacity. Indemnitee is willing to
serve, continue to serve and to take on additional service for or
on behalf of the Company on the condition that he or she be so
indemnified.
NOW, THEREFORE, in consideration of
the premises and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows:
ARTICLE 1
C ERTAIN D EFINITIONS
(a) As used in this
Agreement:
“ Change of Control
” shall be deemed to have occurred in any one of the
following circumstances occurring after the date hereof: (i) there
shall have occurred an event required to be reported with respect
to the Company in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item or any similar
schedule or form) under the Exchange Act, regardless of whether the
Company is then subject to such reporting requirement; (ii) any
“person” or “group” (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act) shall have become
the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Company representing 15% or more of the combined voting power of
the Company’s then outstanding voting securities; (iii) there
occurs a merger or consolidation of the Company with any other
entity, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior
to
such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 51% of
the combined voting power of the voting securities of the surviving
entity outstanding immediately after such merger or consolidation
and with the power to elect at least a majority of the board of
directors or other governing body of such surviving entity; (iv)
all or substantially all the assets of the Company are sold or
disposed of in a transaction or series of related transactions; (v)
the approval by the stockholders of the Company of a complete
liquidation of the Company; or (vi) the individuals who on the date
hereof constitute the Board (including, for this purpose, any new
director whose election or nomination for election by the
Company’s stockholders was approved by a vote of at least a
majority of the directors then still in office who were directors
on the date hereof or whose election or nomination was so approved)
cease for any reason to constitute at least a majority of the
members of the Board.
“ Corporate Status
” describes the status of a person who is or was a director,
officer, trustee, general partner, managing member, fiduciary,
board of directors’ committee member, employee or agent of
the Company or of any other Enterprise (as defined below) which
such person is or was serving at the request of the
Company.
“ Disinterested
Director ” means a director of the Company who is not and
was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
“ Enterprise ”
means the Company and any other corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan
or other enterprise of which Indemnitee is or was serving at the
request of the Company as a director, officer, trustee, general
partner, managing member, fiduciary, board of directors’
committee member, employee or agent.
“ Exchange Act ”
means the Securities Exchange Act of 1934, as amended.
“ Expenses ”
shall include all reasonable direct and indirect costs (including,
without limitation, attorneys’ fees, retainers, court costs,
transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with (i)
prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding, (ii) establishing or enforcing a
right to indemnification under this Agreement, applicable law or
otherwise, or (iii) the review and preparation of this Agreement on
behalf of Indemnitee. Expenses also shall include Expenses incurred
in connection with any appeal resulting from any Proceeding,
including without limitation the premium, security for, and other
costs relating to any cost bond, supersedeas bond, or other appeal
bond or its equivalent. Expenses, however,
shall not include amounts paid in settlement by
Indemnitee or the amount of judgments or fines against
Indemnitee.
“ FACO ” means
The First American Corporation, a California
corporation.
“ Independent Counsel
” means a law firm, or a member of a law firm, that is
experienced in matters of corporate law and neither currently is,
nor in the five years previous to its selection or appointment has
been, retained to represent (i) the Company or Indemnitee in any
matter material to either such party (other than with respect to
matters concerning the rights of Indemnitee under this Agreement or
of other indemnitees under similar indemnification agreements) or
(ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
“ Independent Directors
” any member of the Company’s board of directors who is
not (i) an officer or employee of the Company, (ii) an officer,
director or employee of FACO or any affiliate (excluding the
Company) thereof, (iii) a person who controls or is under common
control with FACO or any affiliate thereof or (iv) a person who
otherwise would fail to qualify as an “independent
director” under the applicable rules of the Nasdaq National
Market as then in effect; provided , however , that a
person designated by Pequot in accordance with the Stockholders
Agreement dated as of December 13, 2002, among FACO, Pequot and the
Company shall not be deemed to be disqualified as an Independent
Director by application of section (iv) of this
definition.
“ Liabilities ”
means any losses or liabilities, including, without limitation, any
judgments, fines, ERISA excise taxes and penalties, penalties and
amounts paid in settlement, arising out of or in connection with
any Proceeding (including all interest, assessments and other
charges paid or payable in connection with or in respect of any
such judgments, fines, ERISA excise taxes and penalties, penalties
or amounts paid in settlement).
“ Pequot ” means
Pequot Private Equity Fund II, L.P., a Delaware limited
partnership.
“ person ” shall
have the meaning as set forth in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that the term “person”
shall exclude (i) the Company, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company,
and (iii) any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company.
“ Proceeding ”
includes any threatened, pending or completed action, derivative
action, suit, claim, counterclaim, cross claim, arbitration,
alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual threatened or completed
proceeding, whether civil (including intentional and unintentional
tort claims), criminal, administrative or investigative, including
any appeal therefrom, and whether instituted by or on behalf of the
Company or any other party, or any inquiry or investigation that
Indemnitee in good faith believes might lead to the institution of
any such action, suit or other proceedings hereinabove listed in
which Indemnitee was, is or will be involved as a party or
otherwise by reason of any Corporate Status of Indemnitee, or by
reason of any action taken (or failure to act) by him or her or of
any action (or failure to act) on his or her part while serving in
any Corporate Status, in each case whether or not serving in such
capacity at the time any liability or expense is incurred for which
indemnification, reimbursement, or advancement of Expenses can be
provided under this Agreement.
(a) For the purposes of this
Agreement:
References to “Company”
shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or
agents, so that if Indemnitee is or was a director, officer,
employee, or agent of such constituent corporation or is or was
serving at the request of such constituent corporation as a
director, officer, employee, or agent of another corporation,
partnership, joint venture, trust or other enterprise, then
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.
Reference to “other
enterprise” shall include employee benefit plans; references
to “fines” shall include any excise tax assessed with
respect to any employee benefit plan; references to “serving
at the request of the Company” shall include any service as a
director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith
and in a manner he or she reasonably believed to be in the best
interests of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner “not
opposed to the best interests of the Company” as referred to
in this Agreement.
ARTICLE 2
S ERVICES B Y
I NDEMNITEE
Section 2.01 . Services By
Indemnitee. Indemnitee hereby agrees to continue to serve as a
director of the Company for so long as Indemnitee is duly elected
or until Indemnitee tenders his or her resignation or is
removed.
ARTICLE 3
I NDEMNIFICATION
Section 3.01 . General. (a)
The Company hereby agrees to and shall indemnify Indemnitee and
hold him or her harmless from and against any and all Expenses and
Liabilities, in either case, actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf, to the fullest extent
permitted by applicable law.
For purposes of this Section 3.01,
the meaning of the phrase “to the fullest extent permitted by
applicable law” shall include, but not be limited
to:
(i) to the fullest extent permitted
by any provision of the DGCL, or the corresponding provision of any
amendment to or replacement of the DGCL, and
(ii) to the fullest extent
authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the
extent to which a corporation may indemnify its officers and
directors.
(b) Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by
reason of his or her Corporate Status, a witness in any Proceeding
to which Indemnitee is not a party, he or she shall be indemnified
against all Expenses actually and reasonably incurred by him or her
or on his or her behalf in connection therewith.
(c) Notwithstanding any other
provisions of this Agreement, to the extent that Indemnitee is a
party to (or a participant in) and is successful, on the merits or
otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by
him or her 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 her
or on his or her behalf in connection with each successfully
resolved claim, issue or matter. If the Indemnitee is not wholly
successful in such Proceeding, the Company also shall indemnify
Indemnitee against all Expenses reasonably incurred in
connection
with a claim, issue or matter related to any
claim, issue, or matter on which the Indemnitee was successful. 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.
Section 3.02 . Exclusions.
Notwithstanding any provision of this Agreement, the Company shall
not be obligated under this Agreement to make any indemnity
(including any advancement of Expenses) in connection with any
claim made against Indemnitee:
(a) for an accounting of profits
made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act or similar provisions of state
statutory law or common law; or
(b) except as otherwise provided in
Sections 6.01(d) or (f) hereof, prior to a Change in Control, in
connection with any Proceeding (or any part of any Proceeding)
initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its
affiliates or their respective directors, officers, employees or
other indemnitees, unless (i) the Proceeding (or any part of any
Proceeding) is authorized prior to its initiation by a majority of
the Independent Directors or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers
vested in the Company under applicable law.
ARTICLE 4
A DVANCEMENT O F
E XPENSES ;
D EFENSE OF C
LAIMS
Section 4.01 . Advances.
Notwithstanding any provision of this Agreement to the contrary,
the Company shall advance any Expenses incurred by Indemnitee in
connection with any Proceeding within ten (10) days after the
receipt by the Company of a statement or statements requesting such
advances from time to time, whether prior to or after final
disposition of any Proceeding. Any overdue amount of such Expenses
to be paid by the Company hereunder shall bear interest, compounded
monthly, at a rate of 8% per annum. Advances shall be made without
regard to Indemnitee’s ability to repay such amounts and
without regard to Indemnitee’s ultimate entitlement to
indemnification under the other provisions of this Agreement.
Advances shall include any and all reasonable Expenses incurred
pursuing an action to enforce this right of advancement, including
Expenses incurred preparing and forwarding statements to the
Company to support the advances claimed. This Section 4.01 shall
not apply to any claim made by Indemnitee for which indemnity is
excluded pursuant to Section 3.02.
Section 4.02 .
Repa
