EXHIBIT 10.9
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement,
dated as of
, 2005 (this “
Agreement ”), is made by and between Datastream
Systems, Inc., a Delaware corporation (the “
Company ”), and
(“ Indemnitee ”).
RECITALS:
A. It is critically important to the
Company and its stockholders that the Company be able to attract
and retain the most capable persons reasonably available to serve
as directors, officers and employees of the Company.
B. In recognition of the need for
corporations to be able to induce capable and responsible persons
to accept positions in corporate management, Delaware law
authorizes (and in some instances requires) corporations to
indemnify their directors, officers and employees, and further
authorizes corporations to purchase and maintain insurance for the
benefit of their directors, officers and employees.
C. The Delaware courts have
recognized that indemnification by a corporation serves the dual
policies of (1) allowing corporate officials to resist unjustified
lawsuits, secure in the knowledge that, if vindicated, the
corporation will bear the expense of litigation, and (2)
encouraging capable women and men to serve as corporate directors,
officers and employees, secure in the knowledge that the
corporation will absorb the costs of defending their honesty and
integrity.
D. The number of lawsuits
challenging the judgment and actions of directors, officers and
employees of Delaware corporations, the costs of defending those
lawsuits and the threat to directors’, officers’ and
employees’ personal assets have all materially increased over
the past several years, chilling the willingness of capable women
and men to undertake the responsibilities imposed on corporate
directors, officers and employees.
E. Recent federal legislation and
rules adopted by the Securities and Exchange Commission and the
national securities exchanges have exposed such directors, officers
and employees to new and substantially broadened civil
liabilities.
F. Under Delaware law, a director,
officer and/or employee’s right to be reimbursed for the
costs of defense of criminal actions, whether such claims are
asserted under state or federal law, does not depend upon the
merits of the claims asserted against the director, officer and/or
employee and is separate and distinct from any right to
indemnification the director, officer and/or employee may be able
to establish.
G. Indemnitee is, or will be, a
director, officer and/or employee of the Company and his
willingness to serve in such capacity is predicated, in substantial
part, upon the Company’s willingness to indemnify him in
accordance with the principles reflected above, to the fullest
extent permitted by the laws of the State of Delaware, and upon the
other undertakings set forth in this Agreement.
H. Therefore, in recognition of the
need to provide Indemnitee with substantial protection against
personal liability, in order to procure Indemnitee’s
continued service as a
director, officer and/or employee of the Company
and to enhance Indemnitee’s ability to serve the Company in
an effective manner, and in order to provide such protection
pursuant to express contract rights (intended to be enforceable
irrespective of, among other things, any amendment to the
Company’s certificate of incorporation or bylaws
(collectively, the “ Constituent Documents
”), any change in the composition of the Company’s
Board of Directors (the “ Board ”) or any
change-in-control or business combination transaction relating to
the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancement of Expenses to
Indemnitee as set forth in this Agreement and for the continued
coverage of Indemnitee under the Company’s directors’
and officers’ liability insurance policies.
I. In light of the considerations
referred to in the preceding recitals, it is the Company’s
intention and desire that the provisions of this Agreement be
construed liberally, subject to their express terms, to maximize
the protections to be provided to Indemnitee hereunder.
AGREEMENT:
NOW, THEREFORE, the parties hereby
agree as follows:
1. Certain
Definitions. In addition
to terms defined elsewhere herein, the following terms have the
following meanings when used in this Agreement with initial capital
letters:
(a) “ Change in
Control ” shall have occurred at such time, if any,
as Incumbent Directors cease for any reason to constitute a
majority of Directors. For purpose of this Section 1(a),
“Incumbent Directors” means the
individuals who, as of the date hereof, are Directors of the
Company and any individual becoming a Director subsequent to the
date hereof whose election, nomination for election by the
Company’s stockholders, or appointment, was approved by a
vote of at least two-thirds of the then Incumbent Directors (either
by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director,
without objection to such nomination); provided, however ,
that an individual shall not be an Incumbent Director if such
individual’s election or appointment to the Board occurs as a
result of an actual or threatened election contest (as described in
Rule 14a-12(c) of the Securities Exchange Act of 1934, as amended)
with respect to the election or removal of Directors or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board.
(b) “ Claim
” means (i) any threatened, asserted, pending or completed
claim, demand, action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, investigative or other, and whether
made pursuant to federal, state or other law; and (ii) any inquiry
or investigation, whether made, instituted or conducted, by the
Company or any other Person, including without limitation any
federal, state or other governmental entity, that Indemnitee
determines might lead to the institution of any such claim, demand,
action, suit or proceeding. For the avoidance of doubt, the Company
intends indemnity to be provided hereunder in respect of acts or
failure to act prior to, on or after the date hereof.
(c) “ Controlled
Affiliate ” means any corporation, limited liability
company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, that is directly or
indirectly controlled by the Company. For purposes of this
definition, “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of
the
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management or policies of an entity or
enterprise, whether through the ownership of voting securities,
through other voting rights, by contract or otherwise;
provided that direct or indirect Beneficial Ownership of
capital stock or other interests in an entity or enterprise
entitling the holder to cast 15% or more of the total number of
votes generally entitled to be cast in the election of directors
(or persons performing comparable functions) of such entity or
enterprise shall be deemed to constitute control for purposes of
this definition.
(d) “ Disinterested
Director ” means a director of the Company who is not
and was not a party to the Claim in respect of which
indemnification is sought by Indemnitee.
(e) “ Expenses
” means attorneys’ and experts’ fees and expenses
and all other costs and expenses paid or payable in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to investigate, defend, be a
witness in or participate in (including on appeal), any
Claim.
(f) “ Indemnifiable
Claim ” means any Claim based upon, arising out of or
resulting from (i) any actual, alleged or suspected act or failure
to act by Indemnitee in his or her capacity as a director, officer,
employee or agent of the Company or as a director, officer,
employee, member, manager, trustee or agent of any other
corporation, limited liability company, partnership, joint venture,
trust or other entity or enterprise, whether or not for profit, as
to which Indemnitee is or was serving at the request of the
Company, (ii) any actual, alleged or suspected act or failure to
act by Indemnitee in respect of any business, transaction,
communication, filing, disclosure or other activity of the Company
or any other entity or enterprise referred to in clause (i) of this
sentence, or (iii) Indemnitee’s status as a current or former
director, officer, employee or agent of the Company or as a current
or former director, officer, employee, member, manager, trustee or
agent of the Company or any other entity or enterprise referred to
in clause (i) of this sentence or any actual, alleged or suspected
act or failure to act by Indemnitee in connection with any
obligation or restriction imposed upon Indemnitee by reason of such
status. In addition to any service at the actual request of the
Company, for purposes of this Agreement, Indemnitee shall be deemed
to be serving or to have served at the request of the Company as a
director, officer, employee, member, manager, agent, trustee or
other fiduciary of another entity or enterprise if Indemnitee is or
was serving as a director, officer, employee, member, manager,
agent, trustee or other fiduciary of such entity or enterprise and
(A) such entity or enterprise is or at the time of such service was
a Controlled Affiliate, (B) such entity or enterprise is or at the
time of such service was an employee benefit plan (or related
trust) sponsored or maintained by the Company or a Controlled
Affiliate, or (C) the Company or a Controlled Affiliate (by action
of the Board, any committee thereof or the Company’s Chief
Executive Officer (“ CEO ”) (other than
as the CEO him or herself)) caused or authorized Indemnitee to be
nominated, elected, appointed, designated, employed, engaged or
selected to serve in such capacity.
(g) “ Indemnifiable
Losses ” means any and all Losses relating to,
arising out of or resulting from any Indemnifiable Claim; provided,
however, that Indemnifiable Losses shall not include Losses
incurred by Indemnitee in respect of any Indemnifiable Claim (or
any matter or issue therein) as to which Indemnitee shall have been
adjudged liable to the Company, unless and only to the extent that
the Delaware Court of Chancery or the court in which such
Indemnifiable Claim 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
entitled to indemnification for such Expenses as the court shall
deem proper.
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(h) “ Independent
Counsel ” means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to
represent: (i) the Company (or any Subsidiary) or Indemnitee in any
matter material to either such party (other than with respect to
matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements) or (ii) any
other named (or, as to a threatened matter, reasonably likely to be
named) party to the Indemnifiable Claim giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
(i) “ Losses
” means any and all Expenses, damages, losses, liabilities,
judgments, fines, penalties (whether civil, criminal or other) and
amounts paid or payable in settlement, including without limitation
all interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing.
(j) “
Person” means any individual, entity, or group, within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended.
(k) “ Standard of
Conduct ” means the standard for conduct by Indemnitee
that is a condition precedent to indemnification of Indemnitee
hereunder against Indemnifiable Losses relating to, arising out of
or resulting from an Indemnifiable Claim. The Standard of Conduct
is (i) good faith and reasonable belief by Indemnitee that his
action was in or not opposed to the best interests of the Company
and, with respect to any criminal action or proceeding, that
Indemnitee had no reasonable cause to believe that his conduct was
unlawful, or (ii) any other applicable standard of conduct that may
hereafter be substituted under Section 145(a) or (b) of the
Delaware General Corporation Law or any successor to such
provision(s).
2. Indemnification
Obligation. Subject only
to Section 7 and to the proviso in this Section, the Company shall
indemnify, defend and hold harmless Indemnitee, to the fullest
extent permitted or required by the laws of the State of Delaware
in effect on the date hereof or as such laws may from time to time
hereafter be amended to increase the scope of such permitted
indemnification, against any and all Indemnifiable Claims and
Indemnifiable Losses; provided , however , that,
except as provided in Sections 4 and 20, Indemnitee shall not be
entitled to indemnification pursuant to this Agreement in
connection with any Claim initiated by Indemnitee against the
Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such Claim.
The Company acknowledges that the foregoing obligation is
substantially broader than that now provided by applicable law and
the Company’s Constituent Documents and intends that it be
interpreted consistently with this Section and the recitals to this
Agreement.
3. Advancement of
Expenses. Indemnitee
shall have the right to advancement by the Company prior to the
final disposition of any Indemnifiable Claim of any and all
Expenses relating to, arising out of or resulting from any
Indemnifiable Claim paid or incurred by Indemnitee or which
Indemnitee determines in good faith are reasonably likely to be
paid or
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incurred by Indemnitee and as to which
Indemnitee’s counsel provides supporting documentation.
Without limiting the generality or effect of any other provision
hereof, Indemnitee’s right to such advancement is not subject
to the satisfaction of any Standard of Conduct. Without limiting
the generality or effect of the foregoing, within five business
days after any request by Indemnitee that is accompanied by
supporting documentation for specific Expenses to be reimbursed or
advanced, the Company shall, in accordance with such request (but
without duplication), (a) pay such Expenses on behalf of
Indemnitee, (b) advance to Indemnitee funds in an amount sufficient
to pay such Expenses, or (c) reimburse Indemnitee for such
Expenses; provided that Indemnitee shall repay, without
interest any amounts actually advanced to Indemnitee that, at the
final disposition of the Indemnifiable Claim to which the advance
related, were in excess of amounts paid or payable by Indemnitee in
respect of Expenses relating to, arising out of or resulting from
such Indemnifiable Claim. In connection with any such payment,
advancement or reimbursement, at the request of the Company,
Indemnitee shall execute and deliver to the Company an undertaking,
which need not be secured and shall be accepted without reference
to Indemnitee’s ability to repay the Expenses, by or on
behalf of the Indemnitee, to repay any amounts paid, advanced or
reimbursed by the Company in respect of Expenses relating to,
arising out of or resulting from any Indemnifiable Claim in respect
of which it shall have been determined, following the final
disposition of such Indemnifiable Claim and in accordance with
Section 7, that Indemnitee is not entitled to indemnification
hereunder.
4. Indemnification for Additional
Expenses. Without
limiting the generality or effect of the foregoing, the Company
shall indemnify and hold harmless Indemnitee against and, if
requested by Indemnitee, shall reimburse Indemnitee for, or advance
to Indemnitee, within five business days of such request
accompanied by supporting documentation for specific Expenses to be
reimbursed or advanced, any and all Expenses paid or incurred by
Indemnitee or which Indemnitee determines in good faith are
reasonably likely to be paid or incurred by Indemnitee in
connection with any Claim made, instituted or conducted by
Indemnitee for (a) indemnification or reimbursement or advance
payment of Expenses by the Company under any provision of this
Agreement, or under any other agreement or provision of the
Constituent Documents now or hereafter in effect relating to
Indemnifiable Claims, and/or (b) recovery under any
directors’ and officers’ liability insurance policies
maintained by the Company, regardless in each case of whether
Indemnitee ultimately is determined to be entitled to such
indemnification, reimbursement, advance or insurance recovery, as
the case may be; provided , however , that Indemnitee
shall return, without interest, any such advance of Expenses (or
portion thereof) which remains unspent at the final disposition of
the Claim to which the advance related.
5. Partial Indemnity.
If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for
some or a portion of any Indemnifiable Loss but not for all of the
total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is
entitled.
6. Procedure for
Notification . To obtain
indemnification under this Agreement in respect of an Indemnifiable
Claim or Indemnifiable Loss, Indemnitee shall submit to the Company
a written request therefor, including a brief description (based
upon information then available to Indemnitee) of such
Inde
