Exhibit 10.1
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT (as
amended, modified or otherwise supplemented from time to time, the
“ Agreement ”), dated March 9, 2007, is entered
into by and between Apex Silver Mines Limited, a company with
limited liability organized under the laws of the Cayman Islands
(the “ Company ”), and
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an individual (the “ Indemnitee ”), to be
effective as of March 9, 2007.
WHEREAS, the Company and Indemnitee
recognize the continued difficulty in obtaining liability insurance
for corporate directors, officers, employees, agents and
fiduciaries, the significant increases in the cost of such
insurance and the general reductions in the coverage of such
insurance;
WHEREAS, the Company desires to
attract and retain the services of highly qualified individuals,
such as Indemnitee, to serve the Company and, to that end, wishes
to provide for the indemnification and advancing of expenses to
Indemnitee to the maximum extent permitted by law; and
WHEREAS, in view of the
considerations set forth above, the Company desires that Indemnitee
shall be indemnified by the Company as set forth herein.
NOW, THEREFORE, the Company and
Indemnitee hereby agree as follows:
1.
Indemnification . Except as otherwise provided in this
Agreement, the Company shall indemnify Indemnitee to the fullest
extent permitted by and in the manner permissible under the law of
the Cayman Islands, if Indemnitee is made, or threatened to be
made, a party to any threatened, pending or completed action, suit,
or proceeding, whether criminal, civil, administrative, or
investigative, or any hearing, inquiry or investigation is
initiated that Indemnitee believes in good faith may lead to any
such action, suit or proceeding (an “ Action ”),
by reason of the fact that Indemnitee (a) is or was a director,
officer, employee or agent of the Company or any predecessor of the
Company or (b) is or was a director, officer, employee or agent of
the Company or any predecessor of the Company and served any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise as a director, officer, partner, trustee,
employee or agent at the request of the Company or any predecessor
of the Company, against any and all expenses (including
attorneys’ fees), judgments, fines, penalties, amounts paid
in settlement (provided that any such settlement is approved in
advance by the board of directors of the Company (the “
Board ”), which approval shall not be unreasonably
withheld or delayed) and taxes imposed on Indemnitee as a result of
the actual or deemed receipt by Indemnitee of any payments pursuant
to this Agreement.
2.
Advancement of Expenses . The right to indemnification
conferred pursuant to Section 1 shall include the right to be paid
by the Company the expenses incurred in defending or participating
in any Action in advance of its final disposition, such advances to
be paid by the Company within twenty (20) days after the receipt by
the Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time; provided,
however , that the payment of such expenses incurred by
Indemnitee in his capacity as a director, officer or agent (and not
in any other capacity in which service was or is rendered by
Indemnitee while a director, officer or agent, including, without
limitation, service to an employee benefit plan) in advance of the
final
disposition of a proceeding shall be
made only upon delivery to the Company of an undertaking by or on
behalf of Indemnitee to repay all amounts so advanced if it shall
ultimately be determined that the Indemnitee is not entitled to be
indemnified under Section 1 or otherwise.
3.
Procedure for Indemnification . To obtain
indemnification under Section 1, 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. Upon the
Company’s receipt of such written request, a determination,
if required by applicable law, with respect to Indemnitee’s
entitlement thereto shall be made as follows: (a) if requested by
Indemnitee or if there are no Disinterested Directors, by
Independent Counsel or (b) by a majority vote of the Disinterested
Directors, even though less than a quorum, or by a majority vote of
a committee of Disinterested Directors designated by a majority
vote of Disinterested Directors, even though less than a
quorum. If it is determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten
(10) days after such determination. If Independent Counsel is
retained with respect to the foregoing, the fees and expenses of
such counsel shall be paid by the Company.
4.
Certain Remedies . If a claim under Section 1 is not
paid in full by the Company within thirty (30) days after a written
claim pursuant to Section 3 has been received by the Company,
Indemnitee may at any time thereafter bring suit against the
Company to recover the unpaid amount of the claim and, if
successful in whole or in part, Indemnitee shall also be entitled
to be paid the expense of prosecuting such suit. It shall be
a defense to any such suit (other than a suit brought to enforce a
claim for expenses incurred in defending any proceeding in advance
of its final disposition where the required undertaking, if any,
has been tendered to the Company) that Indemnitee has not met the
standard of conduct which makes it permissible under Cayman Islands
law for the Company to indemnify Indemnitee for the amount claimed;
provided, however , that the burden of proving such defense
shall be on the Company; and provided further that the
termination of any Action 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 Indemnitee did not meet such standard of
conduct. Neither the failure of the Company (including the
Board, Independent Counsel or shareholders) to have made a
determination prior to the commencement of such suit that
indemnification of Indemnitee is proper in the circumstances
because he has met the applicable standard of conduct under Cayman
Islands law, nor an actual determination by the Company (including
the Board, Independent Counsel or shareholders) that Indemnitee has
not met such applicable standard of conduct, shall be a defense to
the suit or create a presumption that Indemnitee has not met the
applicable standard of conduct.
5.
Binding Effect . If a determination shall have been
made pursuant to Section 3 that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination
in any suit commenced pursuant to Section 4.
6.
Notice by Indemnitee and the Company . Indemnitee
shall, as a condition precedent to Indemnitee’s right to
receive indemnification or the advancement of expenses under this
Agreement, give the Company notice in writing of any Action.
If, at the time of the receipt by the Company of such a notice, the
Company has liability insurance in effect that may cover its
obligation to
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Indemnitee in connection with the
Action, the Company shall give prompt notice to its insurer(s) in
accordance with the procedures set forth in the relevant policy or
policies. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable in connection with the Action
pursuant to this Agreement in accordance with the terms of such
policy or policies.
7.
Selection of Counsel . In the event the Company shall
be obligated to pay the expenses of Indemnitee pursuant to this
Agreement, the Company shall be entitled to assume the defense of
the Action with counsel approved by Indemnitee, which approval
shall not be unreasonably withheld, upon the delivery to Indemnitee
of written notice of its election so to do. After delivery of
such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be
liable to Indemnitee under this Agreement for any fees of
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