Exhibit 10.44
INDEMNIFICATION AGREEMENT
This Agreement, made and entered into as of the 14th day of
January, 1994 ("Agreement"), by and between Capital Associates, Inc., a
Delaware corporation (the "Company"), and Gary M. Jacobs ("Director"):
WHEREAS, highly competent persons are becoming more reluctant to
serve publicly-held corporations as directors or in other capacities unless
they are provided with adequate protection through insurance or 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, the current impracticability of obtaining adequate
insurance on an affordable basis and the uncertainties relating to
indemnification have increased the difficulty of attracting and retaining
such persons;
WHEREAS, the Board of Directors of the Company has determined that
the inability to attract and retain such persons is detrimental to the best
interests of the Company's stockholders and that the Company should act to
assure such persons that there will be increased certainty of such protection
in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest
extent permitted by applicable law so that they will serve or continue to
serve the Company free from undue concern that they will not be so
indemnified;
WHEREAS, the Company's Board of Directors has determined that it is
in the best interests of the Company to increase the number of members on the
Board by electing Director to the Board;
WHEREAS, Director is willing to serve, continue to serve and to
take on additional service for or on behalf of the Company on the condition
that he indemnified as set forth herein;
WHEREAS, Director previously served as a Director of the Company
(referred to herein as Director's "Prior Directorship");
WHEREAS, Director resigned his Prior Directorship effective as of
September 20, 1990;
WHEREAS, the Company and Director entered into an Indemnification
Agreement, dated as of July 31, 1990 (referred to herein as Director's "Prior
Indemnification Agreement");
WHEREAS, the Company's Board of Directors has determined that it is
in the best interests of the Company to adopt certain indemnification
arrangements in addition to the indemnification provisions in the Company's
Articles of Incorporation and By-Laws;
WHEREAS, the Company's Board of Directors intends that the
indemnification rights and benefits afforded to Director hereunder are in
addition to, and not in lieu of or in replacement of or in substitution for,
the indemnification rights and benefits afforded to Director under his Prior
Indemnification Agreement;
WHEREAS, the Directors of the Company intend that this Agreement is
not intended to supersede the Prior Indemnification Agreement and, to the
maximum extent possible, this Agreement and the Prior Indemnification
Agreement (the "Agreements") are intended to be read consistently with each
other;
WHEREAS, the Directors intend that, if the provisions of this
Agreement give Director greater or broader rights than the Prior
Indemnification Agreement or the Prior Indemnification Agreement gives
Director greater or broader rights than this Agreement, then the Agreements
shall not be deemed to be inconsistent or in conflict with each other, and
Director shall have the full benefits of the greater or broader provisions;
and
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Director do hereby covenant and agree as
set forth below.
Section 1. Services by Director. Director agrees to serve as a
director of the Company. Director may at any time and for any reason resign
from such position, and the Company shall have no obligation under this
Agreement to continue Director in such position (in each case subject to any
other contractual obligation or any obligation imposed by operation of law).
Section 2. Indemnification - General. The Company shall
indemnify, and advance Expenses (as hereinafter defined) to, Director (a) as
provided in this Agreement, and (b) to the fullest extent permitted by
applicable law in effect on the date hereof and as amended from time to time.
The rights of Director provided under the preceding sentence shall include,
but shall not be limited to, the rights set forth in the other Sections of
this Agreement.
Section 3. Proceedings Other Than Proceedings by or in the Right
of the Company. Director shall be entitled to the rights of indemnification
provided in this Section 3 if, by reason of his Corporate Status (as
hereinafter defined), he is, or is threatened to be made, a party 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 3, Director shall be indemnified against all Expenses, judgments,
penalties, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such Proceeding or any
claim, issue or matter therein, if he 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 Proceeding, had no reasonable cause
to believe his conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company. Subject
to the condition set forth below in this Section 4, Director shall be
entitled to the rights of indemnification provided in this Section 4 if, by
reason of his Corporate Status, he is, or is threatened to be made, a party
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,
Director shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection with such Proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company; provided, however, that, if
applicable law so provides, no indemnification against such Expenses shall be
made in respect of any claim, issue or matter in such Proceeding as to which
Director shall have been adjudged to be liable to the Company unless and 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 that such indemnification may be made.
Section 5. Indemnification for Expenses of a Party Who is Wholly
or Partly Successful. Notwithstanding any other provision of this Agreement,
to the extent that Director, is, by reason of his Corporate Status, a party
to and is successful, on the merits or otherwise, in any Proceeding, he shall
be indemnified against all Expenses actually and reasonably incurred by him
or on his behalf in connection therewith. If Director 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 Director against all Expenses
actually and reasonably incurred by him or on his behalf in connection with
each successfully resolved claim, issue or matter. 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 wholly successful result as to such claim, issue or matter.
Section 6. Indemnification for Expenses of a Witness.
Notwithstanding any other provision of this Agreement, to the extent that
Director is, by reason of his Corporate Status, a witness in any Proceeding
to which Director is not a party, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in
connection therewith.
Section 7. Advancement of Expenses. The Company shall advance all
reasonable Expenses incurred by or on behalf of Director in connection with
any Proceeding within ten days after the receipt by the Company of a
statement or statements from Director requesting such advance or advances
from time to time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence the
Expenses incurred by Director and shall include or be preceded or accompanied
by an undertaking by or on behalf of Director to repay any Expenses advanced
if it shall ultimately be determined that Director is not entitled to be
indemnified against such Expenses.
Section 8. Procedure for Determination of Entitlement to
Indemnification.
(a) To obtain indemnification under this Agreement, Director
shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Director and
is reasonably necessary to determine whether and to what extent Director is
entitled to indemnification. The Secretary of the Company shall, promptly
upon receipt of such a request for indemnification, advise the Board of
Directors in writing that Director has requested indemnification.
(b) Upon written request by Director for indemnification
pursuant to the first sentence of Section 8(a) hereof, a determination, if
required by applicable law, with respect to Director's entitlement thereto
shall be made in the specific case: (i) if a Change in Control (as
hereinafter defined) shall have occurred, by Independent Counsel (as
hereinafter defined) in a written opinion to the Board of Directors, a copy
of which shall be delivered to Director; or (ii) if a Change of Control shall
not have occurred, (A) by the Board of Directors by a majority vote of a
quorum consisting of Disinterested Directors (as hereinafter defined), or (B)
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, by Independent Counsel in a written opinion to the
Board of Directors, a copy of which shall be delivered to Director, or (C) if
so directed by the Board of Directors, by the stockholders of the Company;
and, if it is so determined that Director is entitled to indemnification,
payment to Director (or on behalf of Director) shall be made within ten (10)
days after such determination. Director shall cooperate with the person,
persons or entity making such determination with respect to Director's
entitlement to indemnification, including providing to such person, persons
or entity upon reasonable advance request any documentation or information
which is not privileged or otherwise protected from disclosure and which is
reasonably available to Director and reasonably necessary to such
determination. Any costs or expenses (including attorneys' fees and
disbursements) incurred by Director in so cooperating with the person,
persons or entity making such determination shall be borne by the Company
(irrespective of the determination as to Director's entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold
Director harmless therefrom.
(c) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 8(b)
hereof, the Independent Counsel shall be selected as provided in this Section
8(c). If a Change of Control shall not have occurred, the Independent
Counsel shall be selected by the Board of Directors, and the Company shall
give written notice to Director advising him of the identity of the
Independent Counsel so selected. If a Change of Control shall have occurred,
the Independent Counsel shall be selected by Director (unless Director shall
request that such selection be made by the Board of Directors, in which event
the preceding sentence shall apply), and Director shall give written notice
to the Company advising it of the identity of the Independent Counsel so
selected. In either event, Director or the Company, as the case may be, may,
within 10 days after such written notice of selection shall have been given,
deliver to the Company or to Director, as the case may be, a written
objection to such selection; provided, however, that 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 17 of
this Agreement, and the objection shall set forth with particularity the
factual basis of such assertion. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court
has determined that such objection is without merit. If, within 20 days
after submission by Director of a written request for indemnification
pursuant to Section 8(a) hereof, no Independent Counsel shall have been
selected and not objected to, either the Company or Director may petition the
Court of Chancery of the State of Delaware or other court of competent
jurisdiction for resolution of any objection which shall have been made by
the Company or Director to the other's selection of Independent Counsel
and/or for the appointment as Independent Counsel of a person selected by the
Court or by such other person as the Court shall designate, and the person
with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 8(b) hereof. The
Company shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with acting
pursuant to Section 8(b) hereof, and the Company shall pay all reasonable
fees and expenses incident to the procedures of this Section 8(c), regardless
of the manner in which such Independent Counsel was selected or appointed.
Upon the due commencement of any judicial proceeding or arbitration pursuant
to Section 10(a)(iii) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity
(subject to the applicable standards of professional conduct then
prevailing).
Section 9. Presumptions and Effect of Certain Proceedings.
(a) If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that
Director is entitled to indemnification under this Agreement if Director has
submitted a request for indemnification in accordance with Section 8(a) of
this Agreement, and the Company shall have the burden of proof to overcome
that presumption in connection with the making by any person, persons or
entity of any determination contrary to that presumption.
(b) The termination of any Proceeding 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
Director to indemnification or create a presumption that Director did not act
in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal
Proceeding, that Director had reasonable cause to believe that his conduct
was unlawful.
Section 10. Remedies of Director.
(a) In the event that (i) a determination is made pursuant to
Section 8 of this Agreement that Director is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made
pursuant to Section 7 of this Agreement, (iii) no determination of
entitlement to indemnification shall have been made pursuant to Section 8(b)
of this Agreement within 90 days after receipt by the Company of the request
for indemnification, (iv) payment of indemnification is not made pursuant to
Section 5 or 6 of this Agreement within ten (10) days after receipt by the
Company of a written request therefor, or (v) payment of indemnification is
not made within ten (10) days after a determination has been made that
Director is entitled to indemnification, Director shall be entitled to an
adjudication in an appropriate court of the State of Delaware, or in any
other court of competent jurisdiction, of his entitlement to such
indemnification or advancement of Expenses. Alternatively, Director, at his
option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Director shall commence such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on
which Director first has the right to commence such proceeding pursuant to
this Section 10(a); provided, however, that the foregoing clause shall not
apply in respect of a proceeding brought by Director to enforce his rights
under Section 5 of this Agreement.
(b) In the event that a determination shall have been made
pursuant to Section 8(b) of this Agreement that Director is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 10 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Director shall not be prejudiced by reason of
that adverse determination. If a Change of Control shall have occurred, in
any judicial proceeding or arbitration commenced pursuant to this Section 10
the Company shall have the burden of proving that Director is not entitled to
indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to
Section 8(b) of this Agreement that Director is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding
or arbitration commenced pursuant to this Section 10, absent (i) a
misstatement by Director of a material fact, or an omission of a material
fact necessary to make Director's statement not materially misleading, in
connection with the request for indemnification, or (ii) a prohibition of
such indemnification under applicable law.
(d) In the event that Director, pursuant to this Section 10,
seeks a judicial adjudication of or an award in arbitration to enforce his
rights under, or to recover damages for breach of, this Agreement, Director
shall be entitled to recover from the Company, and shall be indemnified by
the Company against, any and all expenses (of the types described in the
definition of Expenses in Section 17 of this Agreement) actually and
reasonably incurred by him in such judicial adjudication or arbitration, but
only if he prevails therein. If it shall be determined in said judicial
adjudication or arbitration that Director is entitled to receive part but not
all of the indemnification or advancement of expenses sought, the expenses
incurred by Director in connection with such judicial adjudication or
arbitration shall be appropriately prorated.
Section 11. Non-Exclusivity; Survival of Rights; Insurance;
Subrogation.
(a) 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 Director may at any time be entitled under
applicable law, the Certificate of Incorporation, the By-Laws, any agreement,
a vote of stockholders, a resolution of directors, Director's Prior
Indemnification Agreement, or otherwise. No amendment, alteration or repeal
of this Agreement or of any provision hereof shall limit or restrict any
right of Director under this Agreement in respect of any action taken or
omitted by such Director in his Corporate Status prior to such amendment,
alteration or repeal.
(b) To the extent that the Company maintains an insurance
policy or policies providing liability insurance for directors of the Company
or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which such person serves at the request of
the Company, Director shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
maintained for any such director under such policy or policies.
(c) In the event of any payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Director, who shall execute all papers required and
take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce
such rights.
(d) The Company shall not be liable under this Agreement to
make any payment of amounts otherwise indemnifiable hereunder if and to the
extent that Director has otherwise actually received such payment under any
insurance policy, contract, agreement or otherwise.
Section 12. Duration of Agreement. This Agreement shall continue
until and terminate upon the later of: (a) 10 years after the date that
Director shall have ceased to serve as a director, officer, employee, or
agent of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which Director served at the
request of the Company; or (b) the final termination of any Proceeding then
pending in respect of which Director is granted rights of indemnification or
advancement of expenses hereunder and of any proceeding commenced by Director
pursuant to Section 10 of this Agreement relating thereto. This Agreement
shall be binding upon the Company and its successors and assigns and shall
inure to the benefit of Director and his heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the
remaining provisions of this Agreement (including without limitation, each
portion of any Section of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that is not itself invalid, illegal
or unenforceable) shall not in any way be affected or impaired thereby; and
(b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable,
that is not itself invalid, illegal or unenforceable) shall be construed so
as to give effect to the intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement
of Expenses. Notwithstanding any other provision of this Agreement, Director
shall not be entitled to indemnification or advancement of Expenses under
this Agreement with respect to any Proceeding brought by Director, or any
claim therein prior to a Change in Control, unless the bringing of such
Proceeding or making of such claim shall have been approved by the Board of
Directors.
Section 15. Identical Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall for all purposes be
deemed to be an original but all of which together shall constitute one and
the same Agreement. Only one such counterpart signed by the party against
whom enforceability is sought needs to be produced to evidence the existence
of this Agreement.
Section 16. Headings. The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
Section 17. Definitions. For purposes of this Agreement:
(a) "Change in Control" means a change in control of the
Company occurring after the Effective Date of a nature that would be required
to be reported 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 (the "Act"), whether or not the
Company is then subject to such reporting requirement; provided, however,
that, without limitation, such a Change in Control shall be deemed to have
occurred if after the Effective Date (i) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 15% or more of the combined voting
power of the Company's then outstanding securities without the prior approval
of at least two-thirds of the members of the Board of Directors in office
immediately prior to such person attaining such percentage interest; (ii)
there occurs a proxy contest, or the Company is a party to a merger,
consolidation, sale of assets, plan of liquidation or other reorganization
not approved by at least two-thirds of the members of the Board of Directors
then in office, 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 (iii) during any period
of two consecutive years, other than as a result of an event described in
clause (a)(ii) of this Section 17, 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)
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 of the Company or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise which such
person is or was serving as a director at the request of the Company.
(c) "Disinterested Director" means a director of the Company
who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Director.
(d) "Effective Date" means January __, 1994.
(e) "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 a Proceeding.
(f) "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 Director 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 Director in an action to
determine Director's rights under this Agreement.
(g) "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 (i) initiated by a Director pursuant to Section 10
of this Agreement to enforce his rights under this Agreement, or (ii) pending
on or before the Effective Date.
Section 18. Modification and Waiver. No supplement, modification
or amendment of this Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
Section 19. Notice by Director. Director agrees promptly to
notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to
any Proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder.
Section 20. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom
said notice or other communication shall have been directed, or (ii) mailed
by certified or registered mail with postage prepaid, on the third business
day after the date on which it is so mailed:
(a) If to Director, to:
(b) If to the Company to:
Capital Associates, Inc.
7175 W. Jefferson Avenue
Suite 3000
Lakewood, Colorado 80235
with a copy to:
John L. Ruppert, Esq.
Ballard Spahr Andrews & Ingersoll
1225 17th Street, Suite 2300
Denver, Colorado 80202
or to such other address as may have been furnished to Director by the
Company or to the Company by Director, as the case may be.
Section 21. Governing Law. The parties agree that this Agreement
shall be governed by, and construed and enforced in accordance with, the laws
of the State of Delaware.
Section 22. Miscellaneous. Use of the masculine pronoun shall be
deemed to include usage of the feminine pronoun where appropriate.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
COMPANY
CAPITAL ASSOCIATES, INC.
By: /s/Dennis Lacey
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Dennis Lacey
Title: CEO
DIRECTOR
/s/ Gary M. Jacobs
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