1
Exhibit 10.6
INDEMNITY AGREEMENT
THIS AGREEMENT is made and entered into as of ________________, 1997,
by and between JET AVIATION TRADING, INC., a Florida corporation (the
"Company"), and _______________________ (the "Indemnitee").
PRELIMINARY STATEMENTS
WHEREAS, the Company desires to retain the services of the Indemnitee
as a director, officer, employee and/or agent of the Company;
WHEREAS, Section 607.0850 of the Florida Business Corporation Act (the
"Act") provides a non-exclusive statutory basis for the indemnification of
directors, officers, employees and agents of a Florida corporation and
authorizes agreements between the Company and its directors, officers,
employees and agents with respect to indemnification of such individuals.
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons so that they will
serve or continue to serve the Company free from undue concern that they will
not be so indemnified, and the Indemnitee is wiling to serve, continue to serve
and to take on additional service for or on behalf of the Company on the
condition that he be so indemnified; and
WHEREAS, in order to induce the Indemnitee to serve or to continue to
serve as a director, officer, employee and/or agent of the Company and/or a
subsidiary of the Company, the Company has determined and agreed to enter into
this agreement with the Indemnitee, and the Company and the Indemnitee agree as
follows:
1. Indemnification of Indemnitee. The Company hereby agrees to hold
harmless and indemnify the Indemnitee to the fullest extent authorized or
permitted by the provisions of the Florida Statute, or by any amendment thereof
or other statutory provision authorizing or permitting such indemnification
adopted after the date hereof that has the effect of broadening (but not
narrowing) the scope of indemnification provided under the Florida Statute as
it exists as of the date hereof.
2. Additional Indemnification. In addition to any other
indemnification to which the Indemnitee may be entitled pursuant to the Florida
Statute, the Company's Articles of Incorporation (the "Articles") or Bylaws
(the "Bylaws"), or otherwise, and subject only to the limitation set forth in
Section 3 hereof, the Company hereby further agrees to hold harmless and
indemnify the Indemnitee against any and all costs and expenses (including
trial, appellate and other attorneys' fees), judgments, fines, penalties and
amounts paid in settlement, actually and reasonably incurred by the Indemnitee
in connection with any threatened, pending or completed claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
an action by or in the right of the
1
2
Company or a corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise or by or in the right of any other person) to which
the Indemnitee is, was or at any time becomes a party, or is threatened to be
made a party, by reason of the fact that the Indemnitee is, was or at any time
becomes a director, officer, employee or agent of the Company, or is or was
serving or at any time serves at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise. Notwithstanding any other
provision of this Agreement, the Company shall pay and reimburse all expenses
incurred by Indemnitee in connection with his appearance as a witness or other
participation in a proceeding at a time when he is not a named defendant or
respondent in the proceeding.
3. Limitations on Additional Indemnification. No indemnification
pursuant to Section 2 hereof shall be paid by the Company if a judgment (after
exhaustion of all appeals) or other final adjudication determines that the
Indemnitee's actions, or omissions to act, were material to the cause of action
so adjudicated and constitute:
a. a violation of criminal law, unless the Indemnitee had
reasonable cause to believe his conduct was lawful; or had no reasonable cause
to believe his conduct was unlawful;
b. a transaction from which the Indemnitee received an
improper personal benefit within the meaning of Section 607.0850(7)(b) of the
Florida Statute;
c. in the case of a director, a circumstance under which the
liability provisions of Section 607.0834 of the Florida Business Corporation
Act are applicable; or
d. willful misconduct or a conscious disregard for the best
interests of the Company in a proceeding by or in the right of the Company to
procure a judgment in its favor or in a proceeding by or in the right of a
shareholder of the Company.
4. Disbursement/Repayment of Expenses. In addition to the prompt
payment of any indemnification to which the Indemnitee may be entitled, upon
the demand of the Indemnitee, the Company shall promptly (and in any event
within five (5) business days after written demand therefor) advance to or
reimburse the Indemnitee for all reasonable expenses (including, without
limitation, trial, appellate and other attorneys' fees, court costs, judgments,
fines, penalties, amounts paid in settlement and other payments) that the
Indemnitee may incur in responding to, investigating, defending, settling or
appealing any claim, action, suit or proceeding for which it reasonably appears
that the indemnitee may be entitled to indemnification from the Company, either
pursuant to this Agreement, the Florida Statute, the Articles, the Bylaws or
otherwise. The Indemnitee agrees to reimburse the Company for all such expenses
in the event, and only to the extent, that it shall be ultimately determined
that the Indemnitee is not entitled to be indemnified by the Company for such
expenses under the provisions of Section 3 of this Agreement. Such undertaking
to reimburse the Company for amounts advanced if it is ultimately determined
that the Indemnitee is not entitled to be indemnified by the Company is an
unlimited general, unsecured and interest free obligation of the Indemnitee.
2
3
5. Indemnification Procedures.
a. Payment/Determination of Indemnification. Upon any request
from the Indemnitee for indemnification from the Company, whether pursuant to
this Agreement, the Florida Statute, the Articles, the Bylaws or otherwise, the
Company shall promptly pay the full amount of such requested indemnification.
If the Company's Board of Directors (the "Board") reasonably believes that all
or any portion of such indemnification pursuant to this Agreement is prohibited
by Section 3 hereof, the Company shall in any event promptly pay the amount of
such indemnification if any, that may reasonably then be paid and shall
promptly make or cause to be made a determination (the "Determination") of
whether the payment of the balance is limited by Section 3 hereof. Such
Determination shall be made in the following order or preference:
(i) by the Board of Directors by majority vote or consent of
a quorum consisting of directors who are not, at the time of the Determination,
named parties to such action, suit or proceeding ("Disinterested Directors");
or
(ii) if such a quorum of Disinterested Directors cannot be
obtained by majority vote or consent of a committee duly designated by the
Board (in which designation all directors, whether or not Disinterested
Directors, may participate) consisting solely of two or more Disinterested
Directors; or
(iii) if such a committee cannot be established, by the
opinion of independent outside legal counsel employed by the Company; or
(iv) if such legal opinion cannot be obtained, by a majority
vote or consent of a quorum of shareholders who are not parties to such action,
suit or proceedings or, if not such quorum is obtainable, by a majority vote of
such shareholders.
b. Presumptions and Effect of Certain Proceedings. In making
a Determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making the Determination shall presume that
Indemnitee is entitled to indemnification under 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. The termination of any claim, action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, be determinative of or create a
presumption that the Indemnitee is not entitled to indemnification or
reimbursement of expenses hereunder or otherwise.
c. Reliance as Safe Harbor. For purposes of any Determination
hereunder, the Indemnitee shall be deemed to have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; or with respect to any criminal action or proceeding, to have had
reasonable cause to believe his conduct was lawful, or no reasonable cause to
believe his conduct was unlawful; if his action is based on information,
opinions, reports, or
3
4
statements, including financial statements and other financial data, prepared
or presented by one or more officers or employees of the Company whom the
Director reasonably believes to be reliable and competent in such matters
presented; legal counsel, public accountants, or other persons as to matters
the Director reasonably believes are within the persons' professional or expert
competence; or a committee of the Board of Directors of which he is not a
member if the Director reasonably believes the committee merits confidence. The
term "another enterprise" as used in this Section 5(c) shall mean any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise of which the Indemnitee is or was serving at the request of
the Company as a director, officer, partner, trustee, employee or agent. The
provisions of this Section 5(c) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed to
have met the applicable standard of conduct set forth herein.
d. Success on Merits or Otherwise. Notwithstanding any other
provision for this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any action, suit or
proceeding described herein, or in defense of any claim, issue or matter
therein, he shall be indemnified against all costs and expenses (including
trial, appellate and other attorneys' fees) actually and reasonably incurred by
him in connection with the investigation, defense, settlement or appeal
thereof. For purposes of this Section 5(d), the term "successful on the merits
or otherwise" shall include, but not be limited to, (i) any termination,
withdrawal, or dismissal (with or without prejudice) of any claim, action, suit
or proceeding against the Indemnitee without any express finding of liability
or guilt against him, (ii) the expiration of 90 days after the making of any
claim or threat of an action, suit or proceeding without the institution of the
same and without any promise of payment made to induce a settlement, or (iii)
the settlement of any action, suit or proceeding pursuant to which the
Indemnitee pays less than $15,000 in settlement.
e. Partial Indemnification or Reimbursement. If the
Indemnitee is entitled under any provision of this Agreement to indemnification
and/or reimbursement by the Company for some or a portion of the costs and
expenses (including trial, appellate and other attorneys' fees) judgments,
fines, penalties or amounts paid in settlement by the Indemnitee in connection
with the investigation, defense, settlement or appeal of any action specified
herein, but not, however, for the total amount thereof, the Company shall
nevertheless indemnify and/or reimburse the Indemnitee for the portion thereof
to which the Indemnitee is entitled. The party or parties making the
Determination shall determine the portion (if less than all) of such claims,
damages, expenses (including trial, appellate and other attorneys' fees),
judgments, fines or amounts paid in settlement for which the Indemnitee is
entitled to indemnification and/or reimbursement under this Agreement.
f. Costs. All costs of making any Determination required by
this Section 5 shall be borne solely by the Company, including, but not limited
to, the costs of legal counsel, proxy solicitations and judicial
determinations. The Company shall also be solely responsible for paying (i) all
reasonable expenses incurred by the Indemnitee to enforce this Agreement
including trial, appellate and other attorneys' fees and costs; and (ii) all
costs of defending any suits or proceedings challenging payments to the
Indemnitee under this Agreement including trial, appellate and other attorneys'
fees and costs.
4
5
g. Timing of the Determination. The Company shall use its best
efforts to make the Determination contemplated by this Section 5 promptly, but
in all events within the following time periods:
i. if the Determination is to be made by the Board or a
committee thereof, such Determination shall be made not later than 30 days
after a written request for a Deermination (a "Request") is delivered to the
Company by the Indemnitee;
ii. if the Determination is to be made by the Company's
outside independent legal counsel, such Determination shall be made not later
than 30 days after a Request is delivered to the Company by the Indemnitee; and
iii. if the Determination is to be made by the Company's
shareholders, such Determination shall be made not later than 90 days after a
Request is delivered to the Company by the Indemnitee.
The failure to make a Determination within the above-specified time period
shall constitute a Determination that full indemnification is not limited or
prohibited by Section 3 hereof.
h. Shareholder Vote on Determination. In connection with each
meeting at which a Shareholder Determination will be made, the Company shall
solicit proxies that expressly include a proposal to indemnify or reimburse the
Indemnitee. Subject to the fiduciary duties of its members under applicable
law, the Board will not recommend against Indemnification or reimbursement in
any proxy statement relating to the proposal to indemnify or reimburse the
Indemnitee.
i. Right of Indemnitee to Appeal on Adverse Determination by
Board or Committee. If a Determination is made by the Board or a committee
thereof that all or any portion of a request for indemnification pursuant to
this Agreement is prohibited by Section 3 hereof, then upon the written request
of the Indemnitee, the Company shall cause a new Determination to be made by
the Company's shareholders at the next regular or special meeting of
shareholders. Such Determination by the Company's shareholders shall be binding
and conclusive for all purposes of this Agreement, but shall not preclude the
Indemnitee from seeking court-ordered indemnification or reimbursement pursuant
to any provision of the Florida Statutes or otherwise.
j. Right of Indemnitee to Select Forum for Indemnification. If at
any time subsequent to the date of this Agreement, "Continuing Directors" (as
defined below) do not constitute a majority of the members of the Board, or
there is otherwise a change in control of the Company (as contemplated by Item
403(c) of Securities and Exchange Commission Regulation S-K), then upon the
request of the Indemnitee, the Company shall cause the Determination required
by this Section 5 to be made by special legal counsel designated by the
Indemnitee and approved by the Board (which approval shall not be unreasonably
withheld), which counsel shall be deemed to satisfy the requirements of Section
5(a)(iii) hereof. If none of the legal counsel selected by the Indemnitee
5
6
are willing and/or able to make the Determination, then the Company shall cause
the Determination to be made a majority vote or consent of a Board committee
consisting solely of Continuing Directors. For purposes of this Agreement, a
"Continuing Director" means either a member of the Board at the date of this
Agreement or a person nominated to serve as a member of the Board by a majority
of the then Continuing Directors.
k. Access by the Indemnitee to Determination. The Company
shall afford to the Indemnitee and his representative ample opportunity to
present evidence of the facts upon which the Indemnitee relies for
indemnification or reimbursement, together with other information relating to
any requested Determination. The Company shall also afford the Indemnitee the
reasonable opportunity to include such evidence and information in any Company
proxy statement relating to a shareholder Determination.
6. Contribution.
a. If the indemnification provided in Sections 1 and 2 hereof is
unavailable and may not be paid to the Indemnitee for any reason other than
those set forth in Section 3 hereof, then in respect of any threatened, pending
or completed action, suit or proceeding in which the Company is jointly liable
with the Indemnitee (or would be joined in such action, suit or proceeding),
the Company shall contribute to the amount of expenses, judgments, fines and
settlements paid or payable by the Indemnitee in such proportion as is
appropriate to reflect (i) the relative benefits received by the Company on the
one hand and the Indemnitee on the other hand from the transaction from which
such action, suit or proceeding arose, and (ii) the relative fault of the
Company on the one hand and of the Indemnitee on the other in connection with
the events that resulted in such expenses, judgments, fines or settlement
amounts, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the Indemnitee on the other shall
be determined by reference to, among other things, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
the circumstances resulting in such expenses, judgments, fines or settlement
amounts. The Company agrees that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by pro rata allocation
or any other method of allocation that does not take in to account the
foregoing equitable considerations.
b. The determination as to the amount of the contribution, if any,
shall be made by:
i. a court of competent jurisdiction upon the application of
both the Indemnitee and the Company (if an action or suit had been brought in,
and final determination had been rendered by such court);
ii. the Board by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding; or
6
7
iii. outside independent legal counsel of the Company, if a
quorum is not obtainable for purpose of (ii) above, or, even if obtainable, a
quorum of Disinterested Directors so directs.
7. Notification and Defense of Claim. Promptly after receipt of notice
of the commencement of any action, suit or proceeding, the Indemnitee 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
so notify the Company will not relieve the Company from any liability that it
may have to the Indemnitee otherwise than under this Agreement. With respect to
any such action, suit or proceeding as to which the Indemnitee so notifies the
Company:
a. The Company will be entitled to participate therein at its own
expense.
b. Except as otherwise provided below, the Company may assume the
defense thereof, with counsel satisfactory to the Indemnitee. After notice from
the Company to the Indemnitee of its election to assume the defense, the
Company will not be liable to the Indemnitee under this Agreement for any legal
or other expenses subsequently incurred by the Indemnitee in connection with
the defense thereof, other than reasonable costs of investigation or as
otherwise provided below. The Indemnitee shall have the right to employ his
counsel in such action, suit or 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 the Indemnitee unless: (i) the employment of
counsel by the Indemnitee has been authorized by the Company; (ii) the
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and the Indemnitee in the conduct of the defense
of such action; or (iii) the Company shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of the Indemnitee's counsel shall be at the expense of the Company. The Company
shall not be entitled to assume the defense of any action, suit or proceeding
brought by or on behalf of the Company or as to which the Indemnitee shall have
come to the conclusion provided for in (ii) above; and
c. The Company shall not be liable to indemnify the Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any action
or claim in any manner that would impose any penalty or limitation on the
Indemnitee without the Indemnitee's written consent. Neither the Company nor
the Indemnitee will unreasonably withhold its or his consent to any proposed
settlement.
8. Liability Insurance. So long as the Indemnitee shall continue to
serve as a director or officer of the Company (or shall continue at the request
of the Company to serve as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise), the Company will use
its best efforts to purchase and maintain in effect for the benefit of the
Indemnitee one or more valid, binding and enforceable policy or policies of D&O
Insurance providing coverage within limits determined by the Board in its sole
discretion. Notwithstanding the foregoing, the Company shall
7
8
not be required to purchase or maintain such insurance policy, if, in the sole
discretion of the Board (i) such insurance is not reasonably available; (ii)
the premium cost for such insurance is disproportionate to the amount of
coverage; or (iii) the coverage provided by such insurance is so limited by
exclusions that there is insufficient benefit from such insurance.
9. Disclosure of Payments. Except as expressly required by law,
neither party shall disclose any payments under this Agreement unless prior
approval of the other party is obtained. Any payments to the Indemnitee that
must be disclosed shall, unless otherwise required by law, be described only in
Company proxy or information statements relating to special and/or annual
meetings of the Company's shareholders, and the Company shall afford the
Indemnitee the reasonable opportunity to review all such disclosures and, if
requested, to explain in such statement any mitigating circumstances regarding
the events reported.
10. Covenant Not to Sue; Limitation of Actions and Release of Claims.
No legal action shall be brought and no cause of action shall be asserted by or
on behalf of the Company (or any of its subsidiaries) against the Indemnitee,
his spouse, heirs, personal representatives, successors or assigns after the
expiration of 2 years from the date the Indemnitee ceases (for any reason) to
serve as either a director, officer, or agent of the Company, and any claim or
cause of action of the Company (or any of its subsidiaries) shall be
extinguished and deemed released unless asserted by the filing of a legal
action within such 2-year period.
11. Continuation of Obligations. All agreements and obligations of the
Company contained herein shall continue during the period the Indemnitee is a
director, officer, employee or agent of the Company (or is serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise), and shall
continue thereafter for so long as the Indemnitee shall be subject to any
possible claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal or investigative, by reason of the fact that the
Indemnitee has ceased to serve in any such capacity due to his resignation,
removal by vote of directors or shareholders, termination, death, disability or
otherwise.
12. Enforcement.
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 the Indemnitee to serve or to continue to serve as a director,
officer, employee and/or agent of the Company and/or a subsidiary of the
Company, and acknowledges that the Indemnitee is relying upon this Agreement in
agreeing to serve or to continue to serve in such capacity.
b. In the event the Indemnitee is required to bring any action to
enforce his rights and to collect monies due under this Agreement and is
successful in such action, the Company shall reimburse the Indemnitee for all
of the Indemnitee's reasonable fees and expenses in bringing and pursuing such
action, including reasonable attorney's fees (including trial, appellate and
other attorney's fees), court costs and other related expenses.
8
9
13. Miscellaneous.
a. Cooperation and Intent. The Company shall cooperate in good
faith with the Indemnitee and use its best efforts to ensure that the
Indemnitee is indemnified and/or reimbursed for expenses as described herein to
the fullest extent permitted under the provisions of this Agreement.
b. Nonexclusivity; Subrogation; Entire Agreement. The rights of
indemnification and reimbursement provided in this Agreement shall be in
addition to any rights by which the Indemnitee may otherwise be entitled by the
Florida Statutes, the Articles, the Bylaws, a vote of the Company's
shareholders, or otherwise. 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 the Indemnitee, who shall execute all papers required and
take all action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights. The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
the Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise. This Agreement constitutes the entire
agreement between the Company and the Indemnitee with respect to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, both written and oral, between the parties hereto with respect
to such subject matter (the "Prior Agreements"); provided, however, that if
this Agreement shall ever be held void or unenforceable for any reason
whatsoever, and is not reformed pursuant to Section 13(d) hereof, then (i) this
Agreement shall not be deemed to have superseded any Prior Agreements; (ii) all
of such Prior Agreements shall be deemed to be in full force and effect
notwithstanding the execution of this Agreement; and (iii) the Indemnitee shall
be entitled to maximum indemnification benefits provided under the Florida
Statute, the Articles, the Bylaws, a vote of Company's shareholders, or any
Prior Agreements.
c. Effective Date. The provisions of this Agreement shall cover
claims, actions, suits, and proceedings whether now pending or hereafter
commenced and shall be retroactive to cover acts or omissions or alleged acts
or omissions that heretofore have taken place.
d. Severability; Reformation. 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 in
whole or in part for any reason, such invalidity or unenforceability shall not
affect the validity or enforceability of the other provisions hereof. In the
event that all or any portion of this Agreement is ever held void or
unenforceable by a court of competent jurisdiction, then the parties hereto
hereby expressly authorize such court to modify any provision(s) held void or
unenforceable to the extent, and only to the extent, necessary to render it
valid and enforceable.
e. 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 is directed, or (ii) mailed by certified or registered
mail, postage prepaid, on the third business day after the date on which it is
so mailed:
9
10
If to the Indemnitee: To the address set forth on the signature page hereof.
If to the Company: Jet Aviation Trading, Inc.
15675 N.W. 15 Avenue
Miami, FL 33169
or to such other address as may have been furnished by either party to the
other.
f. Amendments or Modification. This Agreement may not be amended or
modified in any way except by a written instrument executed by all of the
parties.
g. Governing Law. This Agreement shall be governed by, interpreted
and enforced in accordance with the laws of the State of Florida, without
giving effect to the principles of conflicts of law thereof.
h. Successor and Assigns. This Agreement shall be binding, upon the
Indemnitee and the Company, its successors and assigns, and shall inure to the
benefit of the Indemnitee, his heirs, personal representatives, successors and
assigns and to the benefit of the Company, its successors and assigns.
i. 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.
j. Headings. The headings of the sections 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
JET AVIATION TRADING, INC.
BY:
-----------------------------------
Joseph Nelson, President
THE INDEMNITEE:
--------------------------------------
Address:
------------------------------
--------------------------------------
10