Exhibit 10.1
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this
“Agreement”) is made and entered into as of the day of
by and between Digital Music Group, Inc., a Delaware Corporation
(the “Corporation”), and
(“Director”).
WITNESSETH THAT:
WHEREAS, Director is a member of the
Board of Directors of the Corporation, and in such capacity
performs a valuable service for the Corporation; and
WHEREAS, the Corporation has adopted
and its stockholders have approved a Certificate of Incorporation
(“Certificate of Incorporation”) and bylaws (the
“Bylaws”) which provide for the indemnification of the
Corporation’s directors and officers to the fullest extent
permitted by the General Corporation Law of Delaware (the
“DGCL”); and
WHEREAS, the Corporation recognizes
that the indemnification provided by this Agreement is of great
importance in attracting highly qualified individuals, such as
Director, to serve as members of its Board of Directors;
and
WHEREAS, in order to induce Director
to continue to serve as a member of the Board of Directors of the
Corporation, the Corporation has determined and agreed to enter
into this Agreement with Director for the purpose of fully
implementing the provisions of the DGCL, the Certificate of
Incorporation and the Bylaws.
NOW, THEREFORE, in consideration of
Director’s continued service as a director after the date
hereof, the parties hereto agree as follows:
1. Indemnity of Director . The
Corporation hereby agrees to hold harmless and indemnify Director
to the fullest extent authorized by the provisions of the DGCL, as
it may be amended from time to time.
2. Additional Indemnity . Subject only to
the limitations set forth in Section 3 hereof, the Corporation
hereby further agrees to hold harmless and indemnify
Director:
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(a)
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against any and
all Expenses (as defined below), judgments, fines and amounts paid
in settlement actually and reasonably incurred by Director in
connection with any Proceeding (as defined below) to which Director
is, was or at any time becomes a party, or is threatened to be made
a party, by reason of the Director’s Corporate Status (as
defined below);
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(b)
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against any and
all Expenses actually and reasonably incurred by Director in any
Proceeding to which Director is not a party but in which he is a
witness by reason of his Corporate Status (as defined below);
and
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(c)
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otherwise to
the fullest extent as indemnification may be provided to Director
by the Corporation under the provisions of the DGCL, the
Certificate of Incorporation and the Bylaws.
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For purposes of this
Agreement:
“Corporate Status”
describes the status of a person who is or was a director, officer,
employee or agent of the Corporation or of any other corporation,
partnership or joint venture, trust, employee benefit plan or other
enterprise which such person is or was serving at the request of
the Corporation.
“Expenses” shall include
all reasonable attorneys’ fees, retainers, court costs,
transcript costs, 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
prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding. 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, supersedes bond, or
other appeal bond or its equivalent. Expenses, however, shall not
include amounts paid in settlement by Director or the amount of
judgments or fines against Director.
“Proceeding” shall mean
any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed
proceeding, whether formal or informal and whether brought in the
right of the Corporation or otherwise and whether of a civil,
criminal, administrative or investigative nature; provided
that the term “Proceeding” shall not include any
action, suit or arbitration initiated by Director to enforce
Director’s rights under this Agreement.
3. Limitations on Additional Indemnity .
No indemnification pursuant to Section 2 hereof shall be paid
by the Corporation for any of the following:
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(a)
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to the extent
that Director is or has been reimbursed pursuant to Section 1
hereof or any Directors and Officers Liability Insurance
(“D & O Insurance”) purchased and maintained
by the Corporation;
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(b)
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with respect to
remuneration paid to Director if it shall be determined by a final
judgment or other final adjudication that such remuneration was in
violation of law;
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(c)
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on account of
any suit pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, as amended, and amendments thereto
or similar provisions of any federal, state or local statutory law
in which judgment is rendered against Director for an accounting of
profits made from the purchase or sale by Director of securities of
the Corporation;
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(d)
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if a final
decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful; or
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(e)
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on account of
any action, suit or proceeding (other than a proceeding referred to
in Section 8(b) hereof) commenced by the Director against the
Corporation or against any officer, director or shareholder of the
Corporation unless authorized in the specific case by action of the
Board of Directors.
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4. Contribution . If the indemnification
provided in Sections 1 and 2 is unavailable and may not be paid to
Director for any reason other than those set forth in
Section 3, then in respect of any Proceeding in which
the
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Corporation is jointly liable with Director (or
would be if joined in such Proceeding), the Corporation shall
contribute to the amount of Expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred and paid or
payable by Director in such proportion as is appropriate to reflect
(i) the relative benefits received by the Corporation on the
one hand and Director on the other hand from the transaction from
which such Proceeding arose, and (ii) the relative fault of
the Corporation on the one hand and of Director on the other in
connection with the events which resulted in such Expenses,
judgments, fines or settlement amounts, as well as any other
relevant equitable considerations. The relative fault of the
Corporation on the one hand and of Director on the other shall be
determined by reference to, among other things, the parties’
relative intent, knowledge, access to information and opportunity
to correct or prevent the circumstances resulting in such Expenses,
judgments, fines or settlement amounts. The Corporation
