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EXHIBIT 10.18
INDEMNIFICATION AGREEMENT
This Agreement made and entered into this ____ day of
_______________,
(the "AGREEMENT"), by and between Clayton Holdings, Inc., a
Delaware corporation
(the "COMPANY," which term shall include, where appropriate, any
Entity (as
hereinafter defined) controlled, directly or indirectly, by the
Company) and
_______________ (the "INDEMNITEE"):
WHEREAS, it is essential to the Company that it be able to retain
and
attract as directors and executive officers the most capable
persons available;
WHEREAS, increased corporate litigation has subjected directors
and
executive officers to litigation risks and expenses, and the
limitations on the
availability of directors and officers liability insurance have
made it
increasingly difficult for the Company to attract and retain such
persons;
WHEREAS, the Company's By-laws as amended and in effect from time
to
time (the "BY-LAWS") require it to indemnify its directors and
executive
officers to the fullest extent permitted by law and permit it to
make other
indemnification arrangements and agreements;
WHEREAS, the Company desires to provide Indemnitee with
specific
contractual assurance of Indemnitee's rights to full
indemnification against
litigation risks and expenses (regardless, among other things, of
any amendment
to or revocation of the Company's Certificate of Incorporation as
amended and in
effect from time to time (the "CERTIFICATE OF INCORPORATION") or
By-laws or any
change in the ownership of the Company or the composition of its
Board of
Directors);
WHEREAS, the Company intends that this Agreement provide
Indemnitee
with greater protection than that which is provided by the
Company's By-laws;
and
WHEREAS, Indemnitee is relying upon the rights afforded under
this
Agreement in becoming or continuing as a director or executive
officer of the
Company.
NOW, THEREFORE, in consideration of the promises and the
covenants
contained herein, the Company and Indemnitee do hereby covenant and
agree as
follows:
1.
DEFINITIONS.
(a) "CORPORATE
STATUS" describes the status of a person who
is serving or has served (i) as a director of the Company,
(ii) as an executive officer of the Company, (iii) in any
capacity with respect to any employee benefit plan of the
Company, or (iv) as a director, partner, trustee, officer,
employee, or agent of any other Entity at the request of the
Company. For purposes of subsection (iv) of this Section 1(a),
if Indemnitee is serving or has served as a director, partner,
trustee,
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officer, employee or agent of a Subsidiary, Indemnitee shall
be deemed to be serving at the request of the Company.
(b) "ENTITY"
shall mean any corporation, partnership,
limited liability company, joint venture, trust, foundation,
association, organization or other legal entity.
(c) "ENTERPRISE"
shall mean the Company and any other
corporation, 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,
employee, agent or fiduciary.
(d) "EXPENSES"
shall mean all fees, costs and expenses
incurred by Indemnitee in connection with any Proceeding (as
defined below), including, without limitation, attorneys'
fees, disbursements and retainers (including, without
limitation, any such fees, disbursements and retainers
incurred by Indemnitee pursuant to Sections 13 and 14(c) of
this
Agreement), fees and disbursements of expert witnesses,
private investigators and professional advisors (including,
without limitation, accountants and investment bankers), court
costs, transcript costs, fees of experts, travel expenses,
duplicating, printing and binding costs, telephone and fax
transmission charges, postage, delivery services, secretarial
services, and other disbursements and expenses.
(e)
"INDEMNIFIABLE AMOUNTS" shall have the meaning ascribed
to that term in Section 3 below.
(f)
"LIABILITIES" shall mean judgments, damages,
liabilities, losses, penalties, excise taxes, fines and
amounts paid in settlement.
(g) "PROCEEDING"
shall mean any threatened, pending or
completed claim, action, suit, arbitration, alternate dispute
resolution process, investigation, administrative hearing,
appeal, or any other proceeding, whether civil, criminal,
administrative, arbitrative or investigative, whether formal
or informal, including a proceeding initiated by Indemnitee
pursuant to Section 13 of this Agreement to enforce
Indemnitee's rights hereunder.
(h) "SUBSIDIARY"
shall mean any corporation, partnership,
limited liability company, joint venture, trust or other
Entity of which the Company owns (either directly or through
or together with another Subsidiary of the Company) either (i)
a general partner, managing member or other similar interest
or (ii) (A) 50% or
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more of the voting power of the voting capital equity
interests of such corporation, partnership, limited liability
company, joint venture or other Entity, or (B) 50% or more of
the outstanding voting capital stock or other voting equity
interests of such corporation, partnership, limited liability
company, joint venture or other Entity.
2.
SERVICES OF INDEMNITEE. In consideration of the Company's
covenants and commitments hereunder, Indemnitee agrees to serve or
continue to
serve as a director or executive officer of the Company. However,
this Agreement
shall not impose any obligation on Indemnitee or the Company to
continue
Indemnitee's service to the Company beyond any period otherwise
required by law
or by other agreements or commitments of the parties, if any.
Indemnitee may at
any time and for any reason resign from such position (subject to
any other
contractual obligation or any obligation imposed by operation of
law), upon
which event the Company shall have no obligation under this
Agreement to
continue Indemnitee in such position. Notwithstanding the forgoing,
this
Agreement shall continue in force after Indemnitee has ceased to
serve as a
director or executive officer of the Company.
3.
INDEMNITY IN THIRD-PARTY PROCEEDINGS. The Company shall
indemnify Indemnitee in accordance with the provisions of this
Section 3 if
Indemnitee is, or is threatened to be made, by reason of
Indemnitee's Corporate
Status, a party to or a participant in any Proceeding, other than a
Proceeding
by or in the right of the Company to procure a judgment in its
favor. Pursuant
to this Section 3, Indemnitee shall be indemnified against all
Expenses and
Liabilities actually and reasonably incurred by Indemnitee or on
his behalf in
connection with such Proceeding or any claim, issue or matter
therein
(indemnifiable Expenses and Liabilities collectively referred
herein as
"INDEMNIFIABLE AMOUNTS"), if Indemnitee 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, in the case of a criminal Proceeding, had not reasonable cause
to believe
that his conduct was unlawful. Indemnitee shall not enter into any
settlement in
connection with a Proceeding without the consent of the Company,
which shall not
be unreasonably held or delayed.
4.
INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY.
The Company shall indemnify Indemnitee in accordance with the
provisions of this
Section 4 if Indemnitee is, or is threatened to be made, by reason
of
Indemnitee's Corporate Status, a party to or a participant in any
Proceeding by
or in the right of the Company to procure a judgment in its favor.
Pursuant to
this Section 4, Indemnitee shall be indemnified against all
Expenses actually
and reasonably incurred by him or on his behalf in connection with
such
Proceeding or any claim, issue or matter therein, if Indemnitee
acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best
interests of the Company. No indemnification for Expenses shall be
made under
this Section 4 in respect of any claim, issue or matter as to which
Indemnitee
shall have been finally adjudged by a court to be liable to the
Company, unless
and only to the extent that the Delaware Court of Chancery (the
"DELAWARE
CHANCERY COURT") or any court in which the Proceeding was brought
shall
determine upon application that, despite the adjudication of
liability, but in
view of all the circumstances of the case, Indemnitee is fairly and
reasonably
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entitled to indemnification for such Expenses as the Delaware
Chancery Court or
such other court shall deem proper.
5.
INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR
PARTLY SUCCESSFUL. 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: (a) all Expenses reasonably incurred by
Indemnitee or on
Indemnitee's behalf in connection with each successfully resolved
claim, issue
or matter; and (b) any claim, issue or matter related to any such
successfully
resolved claim, issue or matter. For purposes of this Agreement,
the termination
of any claim, issue or matter in such a Proceeding by dismissal,
with or without
prejudice, by reason of settlement, judgment, order or otherwise,
shall be
deemed to be a successful result as to such claim, issue or
matter.
6.
PROCEDURE FOR PAYMENT OF INDEMNIFIABLE AMOUNTS. Indemnitee
shall submit to the Company a written request specifying the
Indemnifiable
Amounts for which Indemnitee seeks payment under Sections 3, 4 or 5
of this
Agreement and the basis for the claim. The Company shall pay such
Indemnifiable
Amounts to Indemnitee promptly upon receipt of its request. At the
request of
the Company, Indemnitee shall furnish such documentation and
information as are
reasonably available to Indemnitee and necessary to establish that
Indemnitee is
entitled to indemnification hereunder.
7.
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.
8.
EFFECT OF CERTAIN RESOLUTIONS. Neither the settlement or
termination of any Proceeding nor the failure of the Company to
award
indemnification or to determine that indemnification is payable
shall create a
presumption that Indemnitee is not entitled to indemnification
hereunder. In
addition, the termination of any proceeding by judgment, order,
settlement,
conviction, or upon a plea of NOLO CONTENDERE or its equivalent
shall not create
a presumption that Indemnitee did not act in good faith and in a
manner which
Indemnitee reasonably believed to be in or not opposed to the best
interests of
the Company or, with respect to any criminal Proceeding, had
reasonable cause to
believe that Indemnitee's action was unlawful.
9.
EXCLUSIONS. Notwithstanding any provision in this Agreement to
the contrary, the Company shall not be obligated under this
Agreement to make
any indemnity in connection with any claim made against
Indemnitee:
(a)
for which payment has actually been made to or on
behalf of Indemnitee under any insurance policy or
other indemnity provision, except with
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respect to any excess beyond the amount paid under any
insurance policy or other indemnity provisions;
(b)
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 Securities Exchange Act of 1934,
as amended, or similar provisions of state statutory
law or common law; or
(c)
for which payment is prohibited by applicable law.
10. AGREEMENT
TO ADVANCE EXPENSES; UNDERTAKING. The Company shall
advance all Expenses incurred by or on behalf of Indemnitee in
connection with
any Proceeding, including a Proceeding by or in the right of the
Company, in
which Indemnitee is involved by reason of such Indemnitee's
Corporate Status
within thirty (30) calendar days after the receipt by the Company
of a written
statement from Indemnitee requesting such advance or advances from
time to t
