Exhibit 10.20
INDEMNIFICATION
AGREEMENT
This Agreement is made as of the
day of
2004, by and between Guitar Center, Inc., a Delaware corporation
(the “ Company ”), and the undersigned
(the “ Indemnitee ”), with reference to the
following facts:
The Indemnitee is willing, under
certain circumstances, to serve as a Director and\or Officer of the
Company. The Indemnitee has indicated that he does not regard
the indemnities available under the Company’s Bylaws as
adequate to protect him against the risks associated with his
service to the Company. In this connection, the Company and
the Indemnitee now agree that they should enter into this
Indemnification Agreement in order to provide greater protection to
Indemnitee against such risks of service to the Company.
Section 145 of the General
Corporation Law of the State of Delaware, under which Law the
Company is organized, empowers corporations to indemnify a person
serving as a director, officer, employee or agent of the Company
and a person who serves at the request of the Company as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust, or other enterprise, and said
Section 145 and the Bylaws of the Company specify that the
indemnification set forth in said Section 145 and in the Bylaws,
respectively, shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any
Bylaw, agreement, vote of stockholders or disinterested directors
or otherwise.
In order to induce the Indemnitee to
serve as a Director and\or Officer of the Company and in
consideration of his continued service, the Company hereby agrees,
as of the date first set forth above, to indemnify the Indemnitee
as follows:
1. Indemnity .
The Company will indemnify the Indemnitee, his executors,
administrators or assigns, for any Expenses (as defined below)
which the Indemnitee is or becomes legally obligated to pay in
connection with any Proceeding. As used in this Agreement the
term “ Proceeding ” shall include any
threatened, pending or completed claim, action, arbitration,
alternate dispute resolution mechanism, investigation,
administrative hearing, suit or proceeding, whether brought by or
in the right of the Company or otherwise and whether of a civil,
criminal, administrative or investigative nature, in which the
Indemnitee may be or may have been involved as a party or
otherwise, by reason of the fact that Indemnitee is or was, or has
agreed to become, a director or officer of the Company, by reason
of any actual or alleged error or misstatement or misleading
statement made or suffered by the Indemnitee, by reason of any
action taken by him or of any inaction on his part while acting as
such director or officer, or by reason of the fact that he was
serving at the request of the Company as a director, trustee,
officer, employee or agent of the Company or another corporation,
partnership, joint venture, trust or other enterprise;
provided , that in each such case Indemnitee acted in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Company, and, in the case of a
criminal proceeding, in addition had no reasonable cause to believe
that his conduct was unlawful. As used in this Agreement, the
term “other enterprise” shall include (without
limitation) employee benefit plans and administrative committees
thereof, and the term “fines” shall include (without
limitation) any excise tax assessed with respect to any
employee
1
benefit plan.
2. Expenses . As
used in this Agreement, the term “ Expenses ”
shall include (without limitation) damages, judgments, fines,
penalties, settlements and costs, retainers, court costs,
transcript costs, fees of witnesses, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage and
delivery fees, service fees, attorneys’ fees and
disbursements and costs of attachment or similar bonds,
investigations, and all other reasonable costs and expenses of the
types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating or being
or preparing to be a witness in a Proceeding and any expenses of
establishing a right to indemnification under this
Agreement.
3. Enforcement .
If a claim or request under this Agreement is not paid by the
Company, or on its behalf, within thirty days after a written claim
or request has been received by the Company, the Indemnitee may at
any time thereafter bring suit against the Company to recover the
unpaid amount of the claim or request and if successful in whole or
in part, the Indemnitee shall be entitled to be paid also the
Expenses of prosecuting such suit. The Company shall have the
right to recoup from the Indemnitee the amount of any item or items
of Expenses theretofore paid by the Company pursuant to this
Agreement, to the extent such Expenses are not reasonable in nature
or amounts; provided, however , that the Company shall have
the burden of proving such Expenses to be unreasonable. The
burden of proving that the Indemnitee is not entitled to
indemnification for any other reason shall be upon the
Company.
4. Subrogation .
In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all papers required
and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such
rights.
5. Exclusions .
The Company shall not be liable under this Agreement to pay any
Expenses in connection with any claim made against the
Indemnitee:
(a)
to the extent that payment is actually made to the Indemnitee under
a valid, enforceable and collectible insurance policy;
(b)
to the extent that the Indemnitee is indemnified and actually paid
otherwise than pursuant to this Agreement;
(c)
in connection with a judicial action by or in the right of the
Company, in respect of any claim, issue or matter as to which the
Indemnitee shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company unless and
only to the extent that any court in which such action was brought
shall determine upon application that, despite the adjudication of
liability but in view
