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Exhibit 10.16
INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made as of September
28, 2006 by and between Interpool, Inc., a Delaware corporation
(the "Company"), and Clifton H. W. Maloney ("Indemnitee").
RECITALS
WHEREAS, highly competent persons have become more reluctant to
serve as directors or in other capacities unless they are provided
with adequate protection through insurance and adequate
indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on
behalf of the corporation.
WHEREAS, Article VI of the Amended and Restated By-laws of the
Company and Article XII of the Amended and Restated Certificate of
Incorporation of the Company provide for indemnification of the
officers and directors of the Company. Officers and directors may
also be entitled to indemnification pursuant to applicable
provisions of the Delaware General Corporation Law ("DGCL"). The
indemnification provisions set forth therein are not exclusive, and
contracts may be entered into between the Company and members of
the board of directors, officers and other persons with respect to
indemnification.
WHEREAS, pursuant to resolutions of the Company’s Board of
Directors adopted on August 31, 2006 Indemnitee was appointed as a
member of a Special Committee of the Board of Directors of the
Company (the "Special Committee") for the purpose of considering,
negotiating the terms of and making recommendations to the
Company’s Board of Directors with respect to potential
proposals to be made to acquire the Company (the
"Transaction");
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify, and to advance
expenses on behalf of, Indemnitee to the fullest extent permitted
by applicable law, as a supplement to and in furtherance of Article
VI of the Amended and Restated By-laws of the Company and the
Amended and Restated Certificate of Incorporation of the Company,
so that Indemnitee will serve or continue to serve as a member of
the Special Committee free from undue concern that Indemnitee will
not be so indemnified.
WHEREAS, in order to induce Indemnitee to serve as a member of the
Special Committee and to accept the additional duties,
responsibilities and burdens of such service, the Company wishes to
provide Indemnitee with the compensation and indemnification
arrangements set forth herein; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to
take on additional service for or on behalf of the Company on the
condition that Indemnitee be so indemnified hereunder.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and
agree as follows:
1. Service on the
Special Committee. Indemnitee hereby agrees to
serve as a member of the Special Committee so long as such
appointment by the Board shall remain in effect. Indemnitee may,
however, resign from such position at any time and for any reason
or for no reason. The Company’s obligation to indemnify
Indemnitee as set forth in this Agreement shall continue in full
force and effect notwithstanding any such termination of
appointment or resignation.
2. Definitions.
As used in this Agreement:
(a) With the exception of
Section 21 of this Agreement, references to "agent" shall mean any
person who is or was a director, officer, or employee of the
Company or a Subsidiary of the Company or other person authorized
by the Company to act for the Company, to include such person
serving in such capacity as a director, officer, employee,
fiduciary or other official of another corporation, partnership,
limited liability company, joint venture, trust or other business
operation at the request of, for the convenience of, or to
represent the interests of the Company or a Subsidiary of the
Company.
(b) "Delaware Court"
shall mean the Court of Chancery of the State of Delaware.
(c) "Disinterested
Director" shall mean a director of the Company who is not and was
not a party to the Proceeding (as defined below) in respect of
which indemnification is sought by Indemnitee.
(d) "Expenses" shall
include attorneys’ fees and costs, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other reasonable
disbursements or expenses in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, or otherwise participating in, a
Proceeding. Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding, including
without limitation the premium, security for, and other costs
relating to any cost bond, supersedeas bond, or other appeal bond
or its equivalent. Expenses, however, shall not include amounts
paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.
(e) "Independent Counsel"
shall mean 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
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 party to the Proceeding 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.
(f) The term "Proceeding"
shall include any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company
or otherwise and whether of a civil (including intentional or
unintentional tort claims), criminal, administrative or
investigative nature, in which Indemnitee was, is or will be
involved as a party or otherwise by reason of the fact that
Indemnitee is or was a member of the Special Committee or is or was
a director or agent of the Company or by reason of any action (or
failure to act) taken by Indemnitee or of any action (or failure to
act) on Indemnitee’s part while acting as a member of the
Special Committee or as a director or agent of the Company, in each
case whether or not serving in such capacity at the time any
liability or Expense is incurred for which indemnification,
reimbursement, or advancement of Expenses can be provided under
this Agreement.
(g) The term
"Subsidiary," with respect to any person, shall mean any
corporation or other entity of which a majority of the voting power
or the voting equity securities or equity interest is owned,
directly or indirectly, by that person.
3. Indemnity in
Third-Party Proceedings. The Company shall
indemnify and hold harmless Indemnitee in accordance with the
provisions of this Section 3 if Indemnitee was, is, or is
threatened to be made, a party to or a participant (as a witness or
otherwise) in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant
to this Section 3, Indemnitee shall be indemnified against all
Expenses, judgments, liabilities, fines, penalties and amounts paid
in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such
Expenses, judgments, fines, penalties and amounts paid in
settlement) actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with such Proceeding or any
claim, issue or matter therein, 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, in the case of a
criminal Proceeding, had no reasonable cause to believe that
Indemnitee’s conduct was unlawful.
4. Indemnity in
Proceedings by or in the Right of the Company. The
Company shall indemnify and hold harmless Indemnitee in accordance
with the provisions of this Section 4 if Indemnitee was, is, or is
threatened to be made, a party to or a participant (as a witness or
otherwise) in any Proceeding by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4,
Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection with such Proceeding or any claim, issue or matter
therein, 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. No indemnification for Expenses shall be
made under this Section 4 in respect of any claim, issue or matter
as to which Indemnitee shall have been finally adjudged by a court
to be liable to the Company, unless and only to the extent that any
court in which the Proceeding was brought or the Delaware Court
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.
5. Indemnification for
Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement,
to the extent that Indemnitee is a party to (or a participant in)
and is successful, on the merits or otherwise, in any Proceeding or
in defense of any claim, issue or matter therein, in whole or in
part, the Company shall indemnify and hold harmless Indemnitee
against all Expenses actually and reasonably incurred by Indemnitee
in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify and hold harmless
Indemnitee against all Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection with each
successfully resolved claim, issue or matter. If the Indemnitee is
not wholly successful in such Proceeding, the Company also shall
indemnify and hold harmless Indemnitee against all Expenses
reasonably incurred in connection with a claim, issue or matter
related to any claim, issue, or matter on which the Indemnitee was
successful. For purposes of this Section and without limitation,
the termination of any claim, issue or matter in such a Proceeding
by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.
6. Indemnification For
Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by
reason of the fact that Indemnitee is or was a member of the
Special Committee, a witness in any Proceeding to which Indemnitee
is not a party, Indemnitee shall be indemnified and held harmless
against all Expenses actually and reasonably incurred by Indemnitee
or on Indemnitee’s behalf in connection therewith.
7. Additional
Indemnification.
(a) Notwithstanding any
limitation in Sections 3, 4, or 5, the Company shall indemnify
Indemnitee to the fullest extent permitted by applicable law if
Indemnitee is a party to or threatened to be made a party to any
Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses,
judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with the
Proceeding.
(b) For purposes of
Section 7(a), the meaning of the phrase "to the fullest extent
permitted by applicable law" shall include, but not be limited
to:
i. to the fullest extent
permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the
corresponding provision of any amendment to or replacement of the
DGCL, and
ii. to the fullest extent
authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the
extent to which a corporation may indemnify its officers and
directors.
8. Contribution in the
Event of Joint Liability.
(a) To the fullest extent
permissible under applicable law, if the indemnification and hold
harmless rights provided for in this Agreement are unavailable to
Indemnitee in whole or in part for any reason whatsoever, the
Company, in lieu of indemnifying and holding harmless Indemnitee,
shall pay, in the first instance, the entire amount incurred by
Indemnitee, whether for judgments, liabilities, fines, penalties,
amounts paid or to be paid in settlement or for Expenses, in
connection with any Proceeding without requiring Indemnitee to
contribute to such payment, and the Company hereby waives and
relinquishes any right of contribution it may have at any time
against Indemnitee.
(b) The Company shall not
enter into any settlement of any Proceeding in which the Company is
jointly liable with Indemnitee (or would be if joined in such
Proceeding) unless such settlement provides for a full and final
release of all claims asserted against Indemnitee.
(c) The Company hereby
agrees to fully indemnify and hold harmless Indemnitee from any
claims for contribution which may be brought by officers, directors
or employees of the Company who may be jointly liable with
Indemnitee.
9. Exclusions.
Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against Indemnitee:
(a) for which payment has
actually been received by or on behalf of Indemnitee under any
insurance policy or other indemnity provision, except with respect
to any excess beyond the amount actually received under any
insurance policy, contract, agreement, other indemnity provision or
otherwise;
(b) except as otherwise
provided in Section 14(e) hereof, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including
any Proceeding (or any part of any Proceeding) initiated by
Indemnitee against the Company or its directors, officers,
employees or other indemnitees, unless the Board authorized the
Proceeding (or any part of any Proceeding) prior to its
initiation;
(c) if such
indemnification is not lawful;
(d) if Indemnitee’s
conduct giving rise to the claim with respect to which
indemnification is requested was knowingly fraudulent, a knowing
violation of law, deliberately dishonest or in bad faith or
constituted willful misconduct;
(e) in respect of any
claim based upon or attributable to Indemnitee gaining in fact any
personal profit or advantage to which Indemnitee was not legally
entitled.
10. Advances of Expenses; Defense
of Claim.
(a) Notwithstanding any
provision of this Agreement to the contrary, and to the fullest
extent not prohibited by applicable law, the Company shall advance
the Expenses reasonably incurred by Indemnitee (or reasonably
expected by Indemnitee to be incurred by Indemnitee within three
months) in connection with any Proceeding within ten (10) days
after the receipt by the Company of a statement or statements
requesting such advances from time to time, whether prior to or
after final disposition of any Proceeding. Advances shall be
unsecured and interest free. Advances shall be made without regard
to Indemnitee’s ability to repay the Expenses and without
regard to Indemnitee’s ultimate entitlement to
indemnification under the other provisions of this Agreement.
Advances shall include any and all reasonable Expenses incurred
pursuing a Proceeding to enforce this right of advancement,
including Expenses incurred preparing and forwarding statements to
the Company to support the advances claimed. The Indemnitee shall
qualify for advances, to the fullest extent permitted by applicable
law, solely upon the execution and delivery to the Company of an
undertaking providing that the Indemnitee undertakes to repay the
advance to the extent that it is ultimately determined that
Indemnitee is not entitled to be indemnified by the Company under
the provisions of this Agreement, the Amended and Restated
Certificate of Incorporation of the Company, the Amended and
Restated By-laws of the Company, applicable law or otherwise. This
Section 10(a) shall not apply to any claim made by Indemnitee for
which indemnity is excluded pursuant to Section 9.
(b) The Company will be
entitled to participate in the Proceeding at its own expense.
(c) The Company shall not
settle any action, claim or Proceeding (in whole or in part) that
would impose any Expense, judgment, fine, penalty or limitation on
the Indemnitee without the Indemnitee’s prior written
consent.
11. Procedure for Notification and
Application for Indemnification.
(a) Indemnitee shall
notify the Company in writing promptly upon being served with any
summons, citation, subpoena, complaint, indictment, information or
other document relating to any Proceeding or matter that may be
subject to indemnification or advancement of Expenses covered
hereunder. The failure of Indemnitee to so notify the Company shall
not relieve the Company of any obligation that it may have to the
Indemnitee under this Agreement, or otherwise.
(b) Indemnitee may
deliver to the Company a written application to indemnify and hold
harmless Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such
time(s) as Indemnitee deems appropriate in
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