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Exhibit
10.1
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION
AGREEMENT (the “Agreement”), is made and entered into
as of the day of
, 200 , between ForeFront Holdings, Inc., a
Florida corporation (the “Company”), and
(the “Indemnitee”).
Recitals
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A. |
The Company desires to retain the services of the Indemnitee as
, [and a Director] of the Company. |
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B. |
As a condition to the Indemnitee’s agreement to serve the
Company as such, the Indemnitee requires that he be indemnified
from liability to the fullest extent permitted by law. |
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C. |
The Company is willing to indemnify the Indemnitee to the
fullest extent permitted by law in order to retain the services of
the Indemnitee. |
Agreement
NOW, THEREFORE , for
and in consideration of the mutual premises and covenants contained
herein, the Company and the Indemnitee agree as follows:
Section 1. MANDATORY
INDEMNIFICATION IN PROCEEDINGS OTHER THAN THOSE BY OR IN THE RIGHT
OF THE COMPANY . Subject to Section 4 hereof, the Company
shall indemnify and hold harmless the Indemnitee from and against
any and all claims, damages, expenses (including attorneys’
fees), judgments, penalties, fines (including excise taxes assessed
with respect to an employee benefit plan), amounts paid in
settlement and all other liabilities actually and reasonably
incurred or paid by him in connection with the investigation,
defense, prosecution, settlement or appeal of any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise (other than an
action by or in the right of the Company) and to which the
Indemnitee was or is a party or is threatened to be made a party by
reason of the fact that the Indemnitee is or was an officer,
director, shareholder, employee or agent of the Company, or is or
was serving at the request of the Company as an officer, director,
partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of anything done or not done by the
Indemnitee in any such capacity or capacities, either prior to or
after the execution of this Agreement, provided that the 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, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. In addition, the Company
shall indemnify and hold harmless the Indemnitee from and against
any and all federal, state, local or foreign taxes imposed on any
director or officer as a result of the actual or deemed receipt of
any payments under this Agreement.
Section 2. MANDATORY
INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT OF THE
COMPANY . Subject to Section 4 hereof, the Company shall
indemnify and hold harmless the Indemnitee from and against any and
all expenses (including attorneys’ fees) and amounts paid in
settlement actually and reasonably incurred or paid by him in
connection with the investigation, defense, prosecution, settlement
or appeal of any threatened, pending or completed action, suit or
proceeding by or in the right of the Company to procure a judgment
in its favor, whether civil, criminal, administrative,
investigative or otherwise, and to which the Indemnitee was or is a
party or is threatened to be made a party by reason of the fact
that the Indemnitee is or was an officer, director, shareholder,
employee or agent of the Company, or is or was serving at the
request of the Company as an officer, director, partner, trustee,
employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, or by
reason of anything done or not done by the Indemnitee in any such
capacity or capacities, either prior to or after the
execution of this Agreement, provided
that (i) the 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 (ii) no indemnification shall be made
under this Section 2 in respect of any claim, issue or matter
as to which the Indemnitee shall have been adjudged to be liable to
the Company for misconduct in the performance of his duty to the
Company unless and only to the extent that the court in which such
action, suit or proceeding was brought (or any other court of
competent jurisdiction) shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem
proper. In addition, the Company shall indemnify and hold harmless
the Indemnitee from and against any and all federal, state, local
or foreign taxes imposed on any director or officer as a result of
the actual or deemed receipt of any payments under this
Agreement.
Section 3.
REIMBURSEMENT OF EXPENSES FOLLOWING ADJUDICATION OF NEGLIGENCE
. The Company shall reimburse the Indemnitee for any expenses
(including attorneys’ fees) and amounts paid in settlement
actually and reasonably incurred or paid by him in connection with
the investigation, defense, settlement or appeal of any action or
suit described in Section 2 hereof that results in an
adjudication that the Indemnitee was liable for negligence, gross
negligence or recklessness (but not willful misconduct) in the
performance of his duty to the Company; provided, however, that the
Indemnitee acted in good faith and in a manner he believed to be in
the best interests of the Company.
Section 4.
AUTHORIZATION OF INDEMNIFICATION . Any indemnification under
Sections 1 and 2 hereof (unless ordered by a court) and any
reimbursement made under Section 3 hereof shall be made by the
Company only as authorized in the specific case upon a
determination (the “Determination”) that
indemnification or reimbursement of the Indemnitee is proper in the
circumstances because the Indemnitee has met the applicable
standard of conduct set forth in Section 1, 2 or 3 hereof, as
the case may be. Subject to Sections 5.6, 5.7, 5.8 and 8 of this
Agreement, the Determination shall be made in the following order
of preference:
(a) first, by the
Company’s Board of Directors (the “Board”) by
majority vote or consent of a quorum consisting of directors
(“Disinterested Directors”) who are not, at the time of
the Determination, named parties to such action, suit or
proceeding; or
(b) next, if such a quorum of
Disinterested Directors cannot be obtained, by majority vote or
consent of a committee duly designated by the Board (in which
designation all directors, whether or not Disinterested Directors,
may participate) consisting solely of two or more Disinterested
Directors; or
(c) next, if such a committee
cannot be designated, by any independent legal counsel (who may be
any outside counsel regularly employed by the Company);
or
(d) next, if such legal
counsel determination cannot be obtained, by vote or consent of the
holders of a majority of the Company’s Common Stock that are
represented in person or by proxy at a meeting called for such
purpose.
4.1 No Presumptions .
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 the
Indemnitee did not act in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests
of the Company, and with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
4.2 Benefit Plan
Conduct . The Indemnitee’s conduct with respect to an
employee benefit plan for a purpose he reasonably believed to be in
the interests of the participants in and beneficiaries of the plan
shall be deemed to be conduct that the Indemnitee reasonably
believed to be not opposed to the best interests of the
Company.
4.3 Reliance as Safe
Harbor . For purposes of any Determination hereunder, the
Indemnitee shall be deemed to have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Company, or, with respect to any criminal action
or proceeding, to have had no reasonable cause to believe his
conduct was unlawful, if his action is based on (i) the
records or books of account of the Company or another enterprise,
including financial statements, (ii) information supplied to
him by the officers of the Company or another enterprise in the
course of their duties, (iii) the advice of legal counsel for
the Company or another enterprise, or (iv) information or
records given or reports made to the Company or another enterprise
by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Company or
another enterprise. The term “another enterprise” as
used in this Section 4.3 shall mean any other corporation or
any partnership, joint venture, trust, employee benefit plan or
other enterprise of which the Indemnitee is or was serving at the
request of the Company as an officer, director, partner, trustee,
employee or agent. The provisions of this Section 4.3 shall
not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in Sections 1, 2 or 3
hereof, as the case may be.
4.4 Success on Merits or
Otherwise . Notwithstanding any other provision of this
Agreement, to the extent that the Indemnitee has been successful on
the merits or otherwise in defense of any action, suit or
proceeding described in Section 1 or 2 hereof, or in defense
of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys’ fees) actually and
reasonably incurred by him in connection with the investigation,
defense, settlement or appeal thereof. For purposes of this
Section 4.4, the term “successful on the merits or
otherwise” shall include, but not be limited to, (i) any
termination, withdrawal or dismissal (with or without prejudice) of
any claim, action, suit or proceeding against the Indemnitee
without any express finding of liability or guilt against him,
(ii) the expiration of 120 days after the making of any claim
or threat of an action, suit or proceeding without the institution
of the same and without any promise or payment made to induce a
settlement, or (iii) the settlement of any action, suit or
proceeding under Section 1, 2 or 3 hereof pursuant to which
the Indemnitee pays less than $25,000.
4.5 Partial
Indemnification or Reimbursement . If the Indemnitee is
entitled under any provision of this Agreement to indemnification
and/or reimbursement by the Company for some or a portion of the
claims, damages, expenses (including attorneys’ fees),
judgments, fines or amounts paid in settlement by the Indemnitee in
connection with the investigation, defense, settlement or appeal of
any action specified in Section 1, 2 or 3 hereof, but not,
however, for the total amount thereof, the Company shall
nevertheless indemnify and/or reimburse the Indemnitee for the
portion thereof to which the Indemnitee is entitled. The party or
parties making the Determination shall determine the portion (if
less than all) of such claims, damages, expenses (including
attorneys’ fees), judgments, fines or amounts paid in
settlement for which the Indemnitee is entitled to indemnification
and/or reimbursement under this Agreement.
4.6 Limitations on
Indemnification . No indemnification pursuant to Section 1
or 2 hereof shall be paid by the Company if a judgment (after
exhaustion of all appeals) or other final adjudication determines
that the Indemnitee’s actions, or omissions to act, were
material to the cause of action so adjudicated and
constitute:
(a) a violation of criminal
law, unless the Indemnitee had reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his
conduct was unlawful;
(b) a transaction from which
the Indemnitee derived an improper personal benefit within the
meaning of Section 607.0850(7) of the Florida Business
Corporation Act (the “FBCA”);
(c) in the event that the
Indemnitee is a director of the Company, a circumstance under which
the liability provisions of Section 607.0834 of the FBCA are
applicable; or
(d) willful misconduct or
conscious disregard for the best interests of the Company in a
proceeding by or in the right of the Company to procure a judgment
in its favor or in a proceeding by or in the right of a shareholder
of the Company.
Section 5. PROCEDURES
FOR DETERMINATION OF WHETHER STANDARDS HAVE BEEN
SATISFIED.
5.1 Costs . All costs
of making the Determination required by Section 4 hereof shall
be borne solely by the Company, including, but not limited to, the
costs of legal counsel, proxy solicitations and judicial
determinations. The Company shall also be solely responsible for
paying (i) all reasonable expenses incurred by the Indemnitee
to enforce this Agreement, including, but not limited to, the costs
incurred by the Indemnitee to obtain court-ordered indemnification
pursuant to Section 8 hereof, regardless of the outcome of any
such application or proceeding, and (ii) all costs of
defending any suits or proceedings challenging payments to the
Indemnitee under this Agreement.
5.2 Timing of the
Determination . The Company shall use its best efforts to make
the Determination contemplated by Section 4 hereof promptly.
In addition, the Company agrees:
(a) if the Determination is
to be made by the Board or a committee thereof, such Determination
shall be made not later than 30 days after a written request for a
Determination (a “Request”) is delivered to the Company
by the Indemnitee;
(b) if the Determination is
to be made by independent legal counsel, such Determination shall
be made not later than 45 days after a Request is delivered to the
Company by the Indemnitee; and
(c) if the Determination is
to be made by the shareholders of the Company, such Determination
shall be made not later than 90 days after a Request is delivered
to the Company by the Indemnitee.
The failure to make a Determination
within the above-specified time period shall constitute a
Determination approving full indemnification or reimbursement of
the Indemnitee. Notwithstanding anything herein to the contrary, a
Determination may be made in advance of
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