Exhibit 10.7
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made this ____________________________, by and between Trinzic, Inc., a Delaware corporation (the “Company”), and the undersigned
Officer (“Officer”).
WITNESSETH
WHEREAS, Officer is an executive officer of the Company and in such capacity is performing a valuable service for the Company; and
WHEREAS, the Company has purchased and presently maintains a policy or policies of Directors’ and Officers’ Liability Insurance (“D&O Insurance”)
covering certain liabilities which may be incurred by the directors and officers of the Company in the performance of their services for the Company; and
WHEREAS, developments with respect to the provisions of D&O Insurance and with respect to the application, amendment and enforcement of statutory,
charter and bylaw indemnification provisions generally have raised questions concerning the adequacy and reliability of the protection accorded to directors and officers thereby and may increase the difficulty of attracting and retaining qualified
persons to serve as directors or officers of the Company; and
WHEREAS, the Board of Directors of the Company has determined that difficulties relating to the attraction and retention of such persons would be detrimental
to the best interests of the Company and of its stockholders and that the Company should act to assure such persons that there will be increased certainty of indemnification protection in the future; and
WHEREAS, the Delaware General Corporation Law and the Bylaws of the Company (the “Bylaws”) provide that they are not exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled, and thereby contemplate that contracts may be entered into between the Company and members of its Board of Directors and the Company’s executive officers with respect
to indemnification of such directors and officers; and
WHEREAS, in order to lessen or alleviate the aforementioned concerns and thereby induce Officer to serve and to continue to serve as an executive officer of
the Company, the Company has determined that it is in its best interests to enter into this Agreement with Officer;
NOW, THEREFORE, in consideration of the above premises and of Officer’s continued service as an executive officer of the Company after the date hereof, the
parties hereto agree as follows:
1. Indemnification – General. The Company shall, to the fullest extent, and only to the extent, permitted by
applicable law in effect on the date hereof and to such greater extent as applicable law may thereafter from time to time permit, indemnify and hold Officer harmless from and against any and all losses, liabilities, claims, damages and Expenses
(as hereinafter defined) whatsoever arising out of any event or occurrence related to the fact that Officer is or was an Officer of the Company or is or was serving in another Corporate Status (as hereinafter defined). The rights of Officer
provided under the preceding sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement.
2. Proceedings Other than Proceedings by or in the Right of the Company. Officer shall be entitled to the
indemnification rights provided in this Section 2 if, by reason of Officer’s Corporate Status (as hereinafter defined), Officer is, or is threatened to be made, a party to (or other participant in), or is, or is required to prepare to be, a
witness to, any threatened, pending or completed Proceeding (as hereinafter defined), other than a Proceeding by or in the right of the Company. Pursuant to this Section 2, Officer shall be indemnified against Expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by Officer or on Officer’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Officer acted in good faith and in a manner Officer reasonably
believed to be in, or not opposed to, the best interests of the Company, and, with respect to any criminal Proceeding, had no reasonable cause to believe Officer’s conduct was unlawful.
3. Proceedings by or in the Right of the Company. Officer shall be entitled to the indemnification rights
provided in this Section 3 if, by reason of Officer’s Corporate Status, Officer is, or is threatened to be made, a party to (or other participant in), or is or is required to prepare to be a witness to, any threatened, pending or completed
Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Officer shall be indemnified against Expenses actually and reasonably incurred by Officer or on Officer’s behalf in connection
with such Proceeding if Officer acted in good faith and in a manner Officer reasonably believed to be in, or not opposed to, the best interests of the Company. Notwithstanding the foregoing, no indemnification against such Expenses shall be made
in respect of any claim, issue or matter in such Proceeding as to which Officer shall have been adjudged, in a final adjudication of the Proceeding not subject to further appeal, to be liable to the Company if applicable law prohibits such
indemnification; provided, however, that, if applicable law so permits, indemnification against Expenses shall nevertheless be made by the Company despite any adjudication of liability, if and only to the extent that the Court of Chancery of the
State of Delaware, or the court in which such Proceeding shall have been brought or is pending, shall determine Officer is fairly and reasonably entitled to indemnification for such expenses.
4. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other
provision of this Agreement, to the extent that Officer is, by reason of Officer’s Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, Officer shall be indemnified against all Expenses actually and
reasonably incurred by Officer or on Officer’s behalf in connection therewith. If Officer 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 Officer against all Expenses actually and reasonably incurred by Officer or on Officer’s behalf in connection with each successfully resolved claim, issue or matter. For the purposes of this Section 4
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.
5. Contribution. In the event that the indemnity contained in Sections 2, 3 or 4 of this Agreement is
unavailable or insufficient to hold Officer harmless in a Proceeding described therein, then in accordance with the non-exclusivity provisions of the Delaware General Corporation Law and the Bylaws, and separate from and in addition to, the
indemnity provided elsewhere herein, the Company shall contribute to Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by or on behalf of Officer in connection with such Proceeding or any claim,
issue or matter therein, in such proportion as appropriately reflects the relative benefits received by, and fault of, the Company on the one hand and Officer on the other hand in the acts, transactions or matters to which the Proceeding relates
and other equitable considerations.
6. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, Officer shall submit to the Company a written
request, including such documentation and information as is reasonably available to Officer and is reasonably necessary to determine whether and to what extent Officer is entitled to indemnification. The determination of Officer’s entitlement to
indemnification shall be made not later than 60 days after receipt by the Company of the written request for indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of
Directors in writing that Officer has requested indemnification.
(b) Officer’s entitlement to indemnification or contribution under any of Sections 2, 3, 4 and 5 of
this Agreement shall be determined in the manner provided under this Section 6(b).
(i) If there has been no Change of Control (as hereinafter defined) at the time the request for
indemnification is submitted, Officer’s entitlement to indemnification shall be determined (i) by the Board of Directors by a majority vote of a quorum of the Board consisting of Disinterested Directors (as hereinafter defined); (ii) by
Independent Counsel (as hereinafter defined), in a written opinion if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs; or (iii)
by the stockholders of the Company.
(ii) If there has been a Change of Control at the time the request for indemnification is submitted,
Officer’s entitlement to indemnification shall be determined in a written opinion by Independent Counsel.
(iii) If, with regard to Section 5 of this Agreement, such a determination is not permitted by law or,
in the case of a determination to be made pursuant to Section 6(b)(i), if a quorum of Disinterested Directors so directs, such determination shall be made by the Court of Chancery of the State of Delaware or the court in which the Proceeding
giving rise to the claim for indemnification is brought.
(c) In the event that the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 6(b) of this Agreement, the Independent Counsel shall be selected as provided in this Section 6(c).
(i) If there has been no Change of Control at the time the request for indemnification is submitted,
the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Officer advising Officer of the identity of the Independent Counsel so selected within ten days after receipt of the request for
indemnification. Officer may, within fourteen days after receipt of such written notice of selection shall have been given, deliver to the Company a written objection to such selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. If, within 30 days
after submission by Officer of a written request for indemnification pursuant to Section 6(a) of this Agreement, no Independent Counsel shall have been selected pursuant to the terms of this Section 6(c)(i), or if selected shall have been
objected to, in accordance with this Section 6(c)(i), either the Company or Officer may petition the Court of Chancery of the State of Delaware for a determination as to whether Officer’s objection, if any, has been made without a reasonable
basis and/or for the appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and any person so appointed shall act as Independent Counsel under Section 6(b) of this Agreement.
(ii) If there has been a Change of Control at the time the request for indemnification is submitted,
Officer shall give the Company written notice advising of the identity and address of the Independent Counsel selected by Officer. The Company may, within seven days after receipt of such written notice of selection, deliver to Officer a written
objection to such selection. Officer may, within five days after the receipt of such objection from the Company, submit the name of another Independent Counsel and the Company may, within seven days after receipt of such written notice of
selection, deliver to Officer a written objection to such selection. Such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of
this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Officer may petition the Court of Chancery of the State of Delaware for a determination that the Company’s objection to the first and/or
second selection of Independent Counsel is without a reasonable basis and/or for the appointment as Independent Counsel of a person selected by such court.
(iii) The Company shall pay all reasonable fees and expenses incident to the procedures of this
Section 6(c), regardless of the manner in which any Independent Counsel is selected or appointed.
(d) The procedures and presumptions provided for under Section 8 of the Restated Certificate of
Incorporation of the Company (the “Certificate of Incorporation”) as in effect on the date hereof shall be applicable to any determination of entitlement to indemnification under this Section 6.
(e) In the event that (i) it is determined in accordance with the foregoing provisions of this Section
6 that Officer is not entitled to indemnification or other benefits hereunder, (ii) the Company (or other applicable person) fails to make a determination of entitlement, (iii) the Company fails to make timely payment of indemnifiable amounts or
advancement of Expenses in accordance with this Agreement or (iv) the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding
designed to deny, or to recover from, Officer the benefits provided or intended to be provided to Officer hereunder, Officer shall be entitled to an adjudication in the Court of Chancery of the State of Delaware as to his or her entitlement to
such indemnification or other benefits afforded hereunder.
7. Advancement of Expenses. The Company shall advance all reasonable Expenses incurred by or on behalf of
Officer in connection with any Proceeding within 20 days after the receipt by the Company of a statement or statements from Officer requesting such advance or advances from time to time, whether prior to or after final disposition of such
Proceeding. Officer shall, and hereby undertakes to, repay any Expenses advanced if it shall ultimately be determined that Officer is not entitled to be indemnified against such Expenses.
8. Presumptions and Effect of Certain Proceedings.
(a) Officer shall be presumed to be entitled to indemnification and advancement of Expenses under this
Agreement upon submission of a request therefor in accordance with this Agreement. The Company shall have the burden of proof in overcoming such presumption, and such presumption shall be used as a basis for a determination of entitlement to
indemnification and advancement or reimbursement of Expenses unless the Company overcomes such presumption by clear and convincing evidence. The termination of any proceeding described in any of Sections 2, 3 or 4 of this Agreement, or of any
claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the
right of Officer to indemnification or advancement of Expenses or create a presumption that Officer did not act in good faith and in a manner which Officer reasonably believed to be in or not opposed to the best interests of the Company or, with
respect to any criminal Proceeding, that Officer had reasonable cause to believe that Officer’s conduct was unlawful. Except as otherwise expressly provided in this Agreement, the knowledge and/or actions, or failure to act, of any other
director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, limited liability company, association, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Officer for
purposes of determining any right to indemnification or advancement of Expenses under this Agreement.
(b) If the Company (or other applicable person) selected under Section 6 of this Agreement to determine
whether Officer is entitled to indemnification shall not have made a determination within 60 days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been
made and Officer shall be entitled to such indemnification, absent (i) a misstatement by Officer of a material fact, or an omission of a material fact necessary to make Officer’s statement not materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such indemnification under applicable law.
9. Term of Agreement. All agreements and obligations of the Company contained herein shall commence as of the
time Officer commenced to serve as a director, officer, employee or agent of the Company (or commenced to serve at the request of the Company as a director, officer, employee or agent of another corporation, partnership, limited liability
company, joint venture, trust, employee benefit plan or other enterprise) and shall continue for so long as Officer shall so serve or shall be, or could become, subject to any possible Proceeding in respect of which Officer is granted rights of
indemnification or advancement of Expenses hereunder even if Officer may have ceased to be an officer or hold any other Corporate Status. For the avoidance of doubt, nothing contained herein shall be construed as giving Officer any right to
serve as a director of the Company or in any other Corporate Status.
10. Notification and Defense of Claim. Promptly after receipt by Officer of notice of the commencement of any
Proceeding, Officer will, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission to notify the Company will not relieve it from any liability which it
may have to Officer otherwise than under this Agreement. With respect to any such Proceeding as to which Officer notifies the Company of the commencement thereof:
(a) The Company will be entitled to participate therein at its own expense.
(b) Except as otherwise provided below, to the extent that it may wish, the Company jointly with any
other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Officer. After notice from the Company to Officer of its election so to assume the defense thereof, the Company
will not be liable to Officer under this Agreement for any legal or other Expenses subsequently incurred by Officer in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. Officer shall
have the right to employ its counsel in such Proceeding but the fees and Expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of Officer unless (i) the employment of
counsel by Officer has been authorized by the Company, or (ii) Officer shall have reasonably concluded that there may be a conflict of interest between the Company and Officer in the conduct of the defense of such Proceeding, or (iii) the Company
shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases the fees and Expenses of counsel shall be at the expense of the Company. The Company shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of the Company or as to which Officer shall have made the conclusion provided for in (ii) above.
(c) The Company shall not be liable to indemnify Officer under this Agreement for any amounts paid in
settlement of any Proceeding or claim effected without its written consent. The Company shall not settle any Proceeding or claim in any manner which would include an admission of fault of Officer or impose any penalty or limitation on Officer
without Officer’s written consent. Neither the Company nor Officer will unreasonably withhold, delay or condition its consent to any proposed settlement.
11. Enforcement; Duplicate Payments; Insurance.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the
obligations imposed on it hereby in order to induce Officer to continue as an officer of the Company, and acknowledges that Officer is relying upon this Agreement in continuing in such capacity.
(b) In the event Officer is required to bring any action to enforce rights or to collect moneys due
under this Agreement and is successful in such action, the Company shall reimburse Officer for all of Officer’s reasonable Expenses in bringing and pursuing such action.
(c) The Company shall not be liable under this Agreement to make payments of amounts otherwise
indemnifiable hereunder to the extent that Officer has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise of the amounts otherwise indemnifiable hereunder;
(d) To the extent the Company maintains D&O Insurance, Officer shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of the coverage provided to any other director or officer of the Company. If, at the time the Company receives from Officer any notice of the commencement of a Proceeding,
the Company has such insurance in effect which would reasonably be expected to cover such Proceeding, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in such
policy or policies. The Company shall thereafter take all necessary or reasonably desirable action to cause such insurers to pay, on behalf of Officer, all amounts payable as a result of such Proceeding in accordance with the terms of such
policy or policies.
12. Non-Exclusivity of Rights. The rights of indemnification and to receive advancement of Expenses as provided
by this Agreement shall not be deemed exclusive of any other rights to which Officer may at any time be entitled under applicable law, the Certificate of Incorporation of the Company, the Bylaws, any agreement, a vote of stockholders or a
resolution of directors, or otherwise. None of the foregoing, including any amendment or alteration of the Certificate of Incorporation of the Company or the Bylaws or any other agreement, shall adversely affect the rights provided to Officer
under this Agreement.
13. Definitions. For purposes of this Agreement:
(a) “Change of Control” means a change in control of the Company after the date Officer
acquired Officer’s Corporate Status, which shall be deemed to have occurred in any one of the following circumstances occurring after such date: (i) there shall have occurred an event which would be required to be reported with respect to the
Company in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not
the Company is then subject to such reporting requirement; (ii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) shall have become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding voting securities without prior approval of at least two-thirds of the members of the Board of Directors
in office immediately prior to the initial acquisition of beneficial ownership by such person who attains such percentage interest; (iii) the Company is a party to a merger, consolidation, sale of assets or other reorganization, or an actual or
threatened election contest (as such terms are used in Rule 14a-12(c) promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors
(collectively, an “Actual or Threatened Proxy Contest”), as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iv) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (including, for this purpose, any new director whose election or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period but not including any such new director whose initial assumption of office occurs as a
result of an Actual or Threatened Proxy Contest, including by reason of any agreement intended to avoid or settle an Actual or Threatened Proxy Contest) cease for any reason to constitute at least a majority of the Board of Directors.
(b) “Corporate Status” describes the status of a person who is or was a director, officer,
employee, agent or fiduciary of the Company or of any other corporation, partnership, limited liability company, association, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of
the Company.
(c) “Disinterested Director” means a director of the Company who is not and was not at any time
a party to the Proceeding in respect of which indemnification is sought by Director.
(d) “Expenses” shall include all reasonable attorneys’ fees, 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 disbursements or 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, 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.
(e) “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 five years previous to its selection or appointment has been, retained to represent: (i) the Company or Officer in any matter material to either such party 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 Officer in an action to determine Officer’s rights under this Agreement.
(f) “Proceeding” includes any action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other proceeding whether civil, criminal, administrative or investigative, except one initiated by Officer pursuant to Section 8 of the Certificate of Incorporation to enforce Officer’s
rights under Section 8 of the Certificate of Incorporation or pursuant to Section 6(e) of this Agreement.
14. Severability. Each of the provisions of this Agreement is a separate and distinct agreement and
independent of the others, so that if any provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions hereof.
15. Governing Law; Binding Effect; Amendment and Termination; Specific Performance; Interpretation.
(a) THIS AGREEMENT SHALL BE INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE. If a court of competent jurisdiction shall make a final determination that the provisions of the law of any state other than Delaware govern indemnification by the Company of Officer, then the indemnification provided under this
Agreement shall in all instances be enforceable to the fullest extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.
(b) This Agreement shall be binding upon Officer and upon the Company, its successors and assigns, and
shall inure to the benefit of Officer, Officer’s heirs, spouses, executors, administrators, personal representatives and assigns and to the benefit of the Company, its successors and assigns.
(c) No amendment, modification, termination or cancellation of this Agreement shall be effective
unless executed in writing by both of the parties.
(d) Each party hereto may enforce this Agreement by seeking specific performance hereof, without any
necessity of showing irreparable harm or posting a bond, which requirements are hereby waived, and the parties agree that by seeking specific performance, Officer shall not be precluded from seeking or obtaining any other relief to which he or
she may be entitled.
(e) It is understood that the parties hereto intend this Agreement to be interpreted and enforced so
as to provide indemnification to Officer to the fullest extent now or hereafter permitted by the Delaware General Corporation Law notwithstanding that such indemnification may not be specifically authorized by the Certificate of Incorporation of
the Company or the Bylaws, or by statute as of the date hereof. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Delaware corporation to indemnify a member of its
board of directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Officer shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law,
statute or rule which narrows the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be
applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder.
(f) Both the Company and Officer acknowledge that in certain instances, federal law or applicable
public policy may prohibit the Company from indemnifying its directors, officers, employees, consultants, fiduciaries or agents under this Agreement or otherwise. Officer understands and acknowledges that the Company may be required to submit
the question of indemnification to a court in certain circumstances for a determination of the Company’s right, under public policy, to indemnify Officer.
The parties have executed this Agreement as of the day and year first above written.
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