INDEMNIFICATION AGREEMENT
This is an Indemnification Agreement dated as of December
15, 1992 between HARRIS & HARRIS GROUP, INC., a New York
corporation (the "Company"), and (the "Indemnitee").
1. Recitals. The Indemnitee is an officer/director
of the Company. Article 8 of the Company's Certificate of
Incorporation, as currently amended, obligates the Company to
indemnify its directors and officers to the fullest extent
permitted by the New York Business Corporation Law, as amended
(the "NYBCL"), subject to the limitations imposed by the
Investment Company Act of 1940 and the Rules and Regulations
adopted thereunder. In accordance with the NYBCL and in
consideration of the Indemnitee's continuing services to the
Company, the Company and the Indemnitee desire to enter into this
Agreement.
2. Indemnitee's Services. The Indemnitee shall diligently
administer the Company's affairs in the position or positions
described in paragraph 1. Subject to any obligation imposed by
contract or by operation of law, (a) the Indemnitee may at any
time and for any reason resign from such position or positions,
and (b) the Company may at any time and for any reason (or no
reason) terminate the Indemnitee's employment in such position or
positions.
3. Indemnification. The Company shall indemnify the
Indemnitee and hold the Indemnitee harmless against any loss or
liability related to or arising from the Indemnitee's service as
a director, officer, employee, or agent of the Company, or of any
subsidiary or affiliate of the Company (a "Subsidiary") or in any
capacity whether as a director, officer, employee, agent or in
any other capacity, for any other corporation, investee,
partnership, joint venture, trust, employee benefit plan or other
enterprise on behalf of the Company or its subsidiaries
("Entity"), upon the following terms and conditions:
(a) The Company shall, to the fullest extent permitted
by the NYBCL as now in effect--and to such greater or, with
respect to acts or omissions occurring thereafter, to such lesser
extent as the NYBCL (or of any successor codification of the New
York corporation laws) may hereafter from time to time permit --
hold the Indemnitee harmless from and indemnify the Indemnitee
against (1) all judgments rendered, fines levied, and other
assessments (including amounts paid in settlement of any claims,
if approved by the Company), plus (2) all reasonable costs and
expenses (including, without limitation, attorneys fees,
retainers, court costs, transcript costs, experts' fees, witness
fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, and delivery service fees),
incurred in connection with the defense of any threatened,
pending, or completed action or proceeding, whether civil,
criminal, administrative, or investigative (an "Action"), related
to or arising from (1) any actual or alleged act or omission of
the Indemnitee at any time as a director, officer, employee, or
agent of the Company or of any Subsidiary or Entity, or (2) the
Indemnitee's past, present, or future status as a director,
officer, employee, or agent of the Company or of any Subsidiary
or Entity.
1
(b) Subject to a determination by a majority of the
disinterested directors or a committee thereof who are not a
party to such Action or by independent legal counsel in a written
opinion that the Indemnitee is likely to have satisfied the
standard for indemnification under the NYBCL and the Investment
Company Act of 1940, upon presentation from time to time of such
invoices, statements for services rendered, or other similar
documentation as the Company may reasonably request, the Company
shall advance to or reimburse the Indemnitee for all reasonable
costs and expenses incurred of the types specified in paragraph
3(a) in the defense of any threatened, pending, or completed
Action, as and when such costs are incurred.
(c) The Company shall indemnify the Indemnitee under
paragraph 3(a) only as authorized in a specific case upon a
determination that indemnification of the Indemnitee is proper in
the circumstances because the Indemnitee has met the applicable
standard of conduct set forth in the NYBCL or in any other
applicable provision of New York law. Such determination shall
be made, as the Indemnitee chooses, either (1) by a majority vote
of a quorum of the Company's disinterested directors who are not
parties to such Action, or (2) by independent legal counsel in a
written opinion. The Company shall pay the fees and expenses of
any independent legal counsel chosen by the Company to make the
determination contemplated by this paragraph 3(c).
(d) The indemnification provided by this Agreement
shall apply only to (1) actual or alleged acts or omissions that
occur during the Indemnitee's service as a director, officer,
employee, or agent of the Company or of any Subsidiary or Entity,
and (2) actual or threatened Actions in which the Indemnitee is
joined or named as a party, but which relate to or arise from
alleged acts or omissions that occurred before the Indemnitee's
service as a director, officer, employee, or agent of the Company
or of any Subsidiary or Entity, or which relate to acts or
omissions alleged against any former directors, officers,
employees, or agents of the Company or of any Subsidiary or
Entity.
(e) Nothing in this Agreement shall be deemed or
construed to create any liability of the Company (1) to former
directors, officers, employees, or agents or their predecessors
other than Indemnitee, or to any other person not a party to this
Agreement, or (2) exceeding the liability that the Company may
lawfully incur in accordance with applicable New York law.
2
4. Conduct of Litigation.
(a) If any Action is made, brought, or threatened
against the Indemnitee for which the Indemnitee may be
indemnified under this Agreement, the Indemnitee shall, to the
extent not inconsistent with any private insurance coverage
obtained by the Company:
(l) Permit the Company to conduct the
Indemnitee's defense of the Action at the Company's expense and
with the use of counsel selected by the Company; or
(2) Retain counsel acceptable to the Indemnitee
and the Company to defend or counsel the Indemnitee with respect
to the Action, and permit the Company to monitor and direct the
Indemnitee's defense.
(b) The Company shall at all times have the option to
undertake the Indemnitee's defense of any Action for which the
Indemnitee may be indemnified under this Agreement. If the
Company elects to conduct the Indemnitee's defense, the
Indemnitee shall cooperate fully with the Company in the defense
of the Action. If the Company elects to conduct the Indemnitee's
defense after the Indemnitee proceeds under paragraph 4(a)(2),
the Company shall advance or reimburse the Indemnitee for the
reasonable costs, including attorneys' fees, incurred by the
Indemnitee in enabling the Company to undertake the Indemnitee's
defense.
5. Reimbursement of Expenses. As required by the NYBCL,
if the Company makes any payment to the Indemnitee under this
Agreement, and if it is ultimately determined that the Indemnitee
was not entitled to be indemnified by the Company under the NYBCL
or the Investment Company Act of 1940, the Indemnitee shall
promptly repay the Company for all amounts paid to the Indemnitee
under this Agreement which exceed the indemnification to which
the Indemnitee is lawfully entitled.
6. Enforcement of Agreement. If the Indemnitee makes a
claim for indemnification under this Agreement and the Company
refuses to indemnify the Indemnitee, and if the Indemnitee then
prevails in an action or proceeding brought to enforce this
Agreement, the Company shall pay all reasonable costs and
expenses (including attorneys' fees) incurred by the Indemnitee
in connection with the action or proceeding in addition to any
other indemnification required under this Agreement.
3
7. Notice of Claims. If the Indemnitee receives a
complaint, claim, or other notice of any loss, claim, damage, or
liability giving rise to a claim for indemnification under this
Agreement, the Indemnitee shall promptly notify the Company of
the complaint, claim, or other notice. Any failure to notify the
Company, however, shall not relieve the Company from any
liability under this Agreement unless the Company (a) is
materially prejudiced by the failure (such as, for example, where
the failure results in the exclusion or denial of the Company's
otherwise available insurance coverage), and (b) had no actual
knowledge of the complaint, claim, or other notice. In no event
shall the Company be obligated to indemnify the Indemnitee for
any settlement of any Action effected without the Company's prior
consent.
8. Termination.
(a) This Agreement shall terminate (1) upon
termination of the Indemnitee's service as a director, officer,
employee, or agent of the Company or of any Subsidiary or Entity,
or (2) upon the Company's written notice to the Indemnitee that,
in the reasonable opinion of the Company, the Indemnitee has not
complied with paragraph 4 of this Agreement. The Company shall
not issue any such notice merely because it disagrees with a
business judgment or judgments of the Indemnitee.
(b) The termination of this Agreement shall not:
(l) Terminate the Company's liability to the
Indemnitee for (A) Actions against the Indemnitee related to or
arising from acts or omissions occurring or alleged to have
occurred before termination of this Agreement, or (B) Actions
that name or join the Indemnitee as a party, but relate to or
arise from acts or omissions alleged to have occurred before the
Indemnitee's service as a director, officer, employee, or agent,
or acts or omissions alleged against former directors, officers,
employees, or agents.
(2) Render the terms and conditions of this
Agreement inapplicable to any Actions subject to paragraph 8(b)
(1).
9. Subrogation. If the Company makes any payment to the
Indemnitee under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the Indemnitee's rights
of recovery and the Indemnitee shall execute any documents and
take any actions necessary to secure such rights (including
execution of any documents necessary to enable the Company to
bring suit to enforce such rights).
10. Insurance Reimbursements. The Company shall not be
required to make any payment of amounts otherwise indemnifiable
under this Agreement if and to the extent that the Indemnitee has
otherwise actually received such payment under any insurance
policy, contract, agreement, or otherwise.
4
11. Notices. Any notice or other communication required or
permitted under this Agreement shall be deemed given when hand-delivered
or sent by registered United States mail, postage prepaid and
return-receipt requested, to the intended recipient at the address
set forth below or at such other address as the recipient shall
hereafter furnish the sender in writing:
If to the Indemnitee: (name and address)
If to the Company: Harris & Harris Group, Inc.
One Rockefeller Plaza
Rockefeller Center
New York, New York 10020
Attention: The Chairman of the Board
12. Governing Law. The laws of New York and to the extent
inconsistent therewith, the Investment Company Act of 1940, shall
govern the validity, interpretation, and construction of this
Agreement. Nothing in this Agreement shall require any unlawful
action or inaction by any party.
13. Modification. No modification of this Agreement shall
be binding unless executed in writing by the Indemnitee and the
Company.
14. Headings. All "paragraph" references in this Agreement
refer to numbered paragraphs of this Agreement. Paragraph
headings are not part of this Agreement, but are solely for
convenience of reference and shall not affect the meaning or
interpretation of this Agreement or any provision in it.
15. Sole Benefit. Nothing expressed or referred to in this
Agreement is intended or shall be construed to give any person
other than the Company, its successors and assigns, and the
Indemnitee and the Indemnitee's personal representatives, heirs,
or devisees, any legal or equitable right, remedy, or claim under
or with respect to this Agreement or any provisions contained
herein. The assumption of obligations and statements of
responsibilities and all conditions and provisions of this
Agreement are for the sole benefit of the Company, its successors
and assigns, and the Indemnitee and the Indemnitee's personal
representatives, heirs, or devisees.
16. Effect of Prior Agreements. This Agreement contains
the entire understanding between the Company and the Indemnitee
with respect to the subject matter hereof and supersedes any
prior indemnification agreement between the Company or any
predecessor of the Company and the Indemnitee.
5
IN WITNESS WHEREOF, the Indemnitee and the Company have
executed several originals of this Agreement as of December 15,
1992 but actually on the dates set forth below.
THE "INDEMNITEE" HARRIS & HARRIS GROUP, INC.
____________________________ By:____________________________
Name:______________________ Title:__________________________
Date:_______________________ Date:___________________________
6