EXHIBIT 10.38
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the
“ Agreement ”) is made as of February 23,
2004, by and between GlobalSecure Holdings Ltd., a Delaware
corporation (the “ Company ”), and C. Thomas
McMillen (the “ Indemnitee ”).
RECITALS
The Company and Indemnitee recognize
the increasing difficulty in obtaining liability insurance for
directors, officers and key employees, the significant increases in
the cost of such insurance and the general reductions in the
coverage of such insurance. The Company and Indemnitee further
recognize the substantial increase in corporate litigation in
general, subjecting directors, officers and key employees to
expensive litigation risks at the same time as the availability and
coverage of liability insurance has been severely limited.
Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and agents
of the Company may not be willing to continue to serve as agents of
the Company without additional protection. The Company desires to
attract and retain the services of highly qualified individuals,
such as Indemnitee, and to indemnify its directors, officers and
key employees so as to provide them with the maximum protection
permitted by law.
AGREEMENT
In consideration of the mutual
promises made in this Agreement, and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Company
and Indemnitee hereby agree as follows:
1.
Indemnification .
(a)
Third Party Proceedings . The Company shall
indemnify Indemnitee if Indemnitee is or was a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that Indemnitee is or
was a director, officer, employee or agent of the Company, or any
subsidiary of the Company, by reason of any action or inaction on
the part of Indemnitee while an officer, director, employee or
agent or by reason of the fact that Indemnitee is or was serving at
the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement (if such
settlement is approved in advance by the Company, which approval
shall not be unreasonably withheld) actually and reasonably
incurred by Indemnitee in connection with such action, suit or
proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with [missing text] conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, 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 action or proceeding, that Indemnitee had reasonable cause
to believe that Indemnitee’s conduct was unlawful.
- -
(b)
Proceedings By or in the Right of the Company
. The Company shall indemnify Indemnitee if Indemnitee was
or is a party or is threatened to be made a party to any
threatened, pending or completed action or proceeding by or in the
right of the Company or any subsidiary of the Company to procure a
judgment in its favor by reason of the fact that Indemnitee is or
was a director, officer, employee or agent of the Company, or any
subsidiary of the Company, by reason of any action or inaction on
the part of Indemnitee while an officer, director, employee oragent
or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys’ fees) and,
to the fullest extent permitted by law, amounts paid in settlement
(if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld), in each case to the
extent actually and reasonably incurred by Indemnitee in connection
with the defense or settlement of such action or suit if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company and
its stockholders, except that no indemnification shall be made in
respect of any claim, issue or matter as to which Indemnitee shall
have been finally adjudicated by court order or judgment to be
liable to the Company in the performance of Indemnitee’s duty
to the Company and its stockholders unless and only to the extent
that the court in which such action or proceeding is or was pending
shall determine upon application that, in view of all the
circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem
proper.
(c)
Mandatory Payment of Expenses . To the extent
that Indemnitee has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section
1(a) or Section 1(b) or the defense of any claim, issue or matter
therein, Indemnitee shall be indemnified against expenses
(including attorneys’ fees) actually and reasonably incurred
by Indemnitee in connection therewith.
2. No Employment
Rights . Nothing contained in this Agreement is
intended to create in Indemnitee any right to continued
employment.
3. Expenses;
Indemnification Procedure .
(a)
Advancement of Expenses . The Company shall
advance all expenses incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of any civil or
criminal action, suit or proceeding referred to in Section 1(a) or
Section 1(b) hereof (including amounts actually paid in settlement
of any such action, suit or proceeding). Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the
extent that, it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company as authorized
hereby.
(b)
Notice/Cooperation by Indemnitee . Indemnitee
shall, as a condition precedent to his or her right to be
indemnified under this Agreement, give the Company notice in
writing as soon as practicable of any claim made against Indemnitee
for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company and shall be given in accordance
with the provisions of
- 2 -
Section 12(d) below. In addition, Indemnitee shall give the
Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee’s power.
(c)
Procedure . Any indemnification and advances
provided for in Section 1 and this Section 3 shall be
made no later than twenty (20) days after receipt of the
written request of Indemnitee. If a claim under this Agreement,
under any statute, or under any provision of the Company’s
Certificate of Incorporation or Bylaws providing for
indemnification, is not paid in full by the Company within twenty
(20) days after a written request for payment thereof has
first been received by the Company, Indemnitee may, but need not,
at any time thereafter bring an action against the Company to
recover the unpaid amount of the claim and, subject to
Section 11 of this Agreement, Indemnitee shall also be
entitled to be paid for the expenses (including attorneys’
fees) of bringing such action. It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in connection with any action, suit or proceeding
in advance of its final disposition) that Indemnitee has not met
the standards of conduct which make it permissible under applicable
law for the Company to indemnify Indemnitee for the amount claimed,
but the burden of proving such defense shall be on the Company and
Indemnitee shall be entitled to receive interim payments of
expenses pursuant to Section 3(a) unless and until such defense may
be finally adjudicated by court order or judgment from which no
further right of appeal exists. It is the parties’ intention
that if the Company contests Indemnitee’s right to
indemnification, the question of Indemnitee’s right to
indemnification shall be for the court to decide, and neither the
failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal
counsel, or its stockholders) to have made a determination that
indemnification of Indemnitee is proper in the circumstances
because Indemnitee has met the applicable standard of conduct
required by applicable law, nor an actual determination by the
Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or
its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has
or has not met the applicable standard of conduct.
(d)
Notice to Insurers . If, at the time of the
receipt of a notice of a claim pursuant to Section 3(b) hereof, the
Company has director and officer liability insurance in effect, the
Company shall give prompt notice of the commencement of such
proceeding to the insurers in accordance with the procedures set
forth in the respective policies. The Company shall thereafter take
all necessary or desirable action to cause such insurers to pay, on
behalf of the Indemnitee, all amounts payable as a result of such
proceeding in accordance with the terms of such policies.
(e)
Selection of Counsel . In the event the
Company shall be obligated under Section 3(a) hereof to pay the
expenses of any proceeding against Indemnitee, the Company if
|
