OFFICER AND DIRECTOR INDEMNITY AGREEMENT
This Agreement is made as of the ___ day of September, 1997, by and
between Premium Cigars International, an Arizona corporation (the
"Corporation"), and ___________________ ("Indemnitee").
RECITALS
A. The Corporation believes it is important to the Corporation to
retain and attract the most capable persons available to serve as executive
officers and directors.
B. Indemnitee, in the capacity as an executive officer and/or a
director of the Corporation, will be performing a valuable service to the
Corporation.
C. In recognition of Indemnitee's need for substantial protection
against personal liability and in order to retain Indemnitee's services as an
executive officer and/or a director of the Corporation, the Corporation desires
to provide Indemnitee with specific contractual assurances that such protection
will be available to Indemnitee as set forth in this Agreement, to the fullest
extent (whether partial or complete) permitted by law, and, to the extent
officers' and directors' liability insurance is maintained by the Corporation,
to provide for the coverage of Indemnitee under the Corporations officers' and
directors' liability insurance policies.
AGREEMENT
NOW, THEREFORE, in consideration of Indemnitee agreeing to serve as an
executive officer and/or a director of the Corporation and other good and
valuable consideration, the parties hereto hereby agree as follows:
1. Indemnity. The Corporation will indemnify Indemnitee, to the fullest
extent allowed by law, against all damages, judgments, fines, assessments,
charges, penalties, expenses (including attorneys' fees), and amounts paid in
settlement (all hereinafter referred to as "Damages") suffered or incurred by or
on behalf of Indemnitee in connection with or arising out of any threatened,
pending or completed actions, suit or proceeding, whether civil, criminal,
administrative or investigative ("Proceeding") with respect to any event, act,
omission, occurrence or circumstance related to the fact that Indemnitee is or
was an executive officer and/or a director of the Corporation or an agent of
another corporation, partnership, joint venture, trust or other enterprise at
the request of the Corporation ("Indemnifiable Event"), including, without
limitations, acts or omissions of Indemnitee that constitute negligence. The
Corporation shall pay all amounts required to be paid to or on behalf of
Indemnitee pursuant to this Agreement as soon as possible, but in any event no
later than fifteen (15) days after written demand therefor is presented to the
Corporation.
2. Advance Payment of Expenses. Notwithstanding anything to the
contrary, promptly upon written request by Indemnitee, expenses (including
attorneys' fees) incurred by
Indemnitee in connection with defending a civil or criminal action, suit or
proceeding shall be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding, upon receipt of an undertaking by or on
behalf of Indemnitee to repay such amount unless it ultimately shall be
determined that he is entitled to be indemnified by the Corporation as required
in the Corporation's Articles of Incorporation or authorized by law and may be
paid by the Corporation in advance on behalf of any other authorized
representative when authorized by the Board of Directors upon receipt of a
similar undertaking.
3. Presumptions. The termination (in whole or in part) of any action,
suit or proceeding, whether by judgment, order, settlement, conviction, or upon
a plea of nolo contendere, or its equivalent, shall not, of itself, create a
presumption that Indemnitee 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
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
4. Partial Indemnification. If Indemnitee is entitled to
indemnification, whether pursuant to this Agreement or otherwise, for a portion,
but not all, of the Damages, the Corporation shall, nevertheless, indemnify
Indemnitee for the portion of the Damages to which Indemnitee is entitled. In
addition, the extent that Indemnitee has been successful in defense of any or
all Proceedings relating in whole or in part to an Indemnifiable Event, or in
defense of any issue or matter (including, without limitation, any dismissal
without prejudice), Indemnitee shall be entitled to indemnification against all
expenses incurred in connection with those defenses.
5. Indemnification Hereunder Not Exclusive; Change in Law. Nothing in
this Agreement shall be deemed to diminish or otherwise restrict Indemnitee's
right to indemnification under any provision of the Certificate of Incorporation
or Bylaws of the Corporation or under Arizona law. If and to the extent that any
change in the law of Arizona (whether by statute or judicial action) permits
greater indemnification than would be afforded under the Corporation's
then-current Certificate of Incorporation or Bylaws or by this Agreement, it is
the intent of the parties that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change immediately upon the occurrence of
such change, without further action on the part of the parties hereto.
6. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, ARIZONA LAW, REGARDLESS OF ANY CONFLICT-OF-LAW
PRINCIPALS TO THE CONTRARY.
7. Attorneys' Fees. In the event of any claim, controversy or dispute
arising out of or relating to this Agreement, or the breach thereof, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred in connection with any such proceeding.
8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and
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assigns; provided, however, that Indemnitee may not assign Indemnitee's rights
hereunder and that any assignment by the Corporation shall not relieve the
Corporation of its obligations hereunder. Any transfer by operation of law,
pursuant to a merger or otherwise, shall constitute an assignment.
9. Continuation of Indemnification. The indemnification under this
Agreement applied to Indemnitee with respect to Indemnifiable events occurring
during Indemnitee's service as an executive officer and/or a director of the
Corporation and shall continue beyond any termination of that service as an
executive officer and/or a director to the Corporation.
10. Amendment, Modification or Waiver. No amendment, modification or
waiver of any condition, provision or term of this Agreement shall be valid or
of any effect unless made in writing, signed by the party or parties to be bound
and specifying with particularity the nature and extent of such amendment,
modification or waiver. Failure on the part of any party to complain of any act
or failure to act of another party or to declare another party in default,
irrespective of how long such failure continues, shall not constitute a waiver
by such party of its rights hereunder. Any waiver by any party of any default of
another party shall not affect or impair any right arising from any other or
subsequent default. Nothing herein shall limit the remedies and rights of the
parties hereto under and pursuant to this Agreement.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first above written.
INDEMNITEE CORPORATION
Premium Cigars International,
an Arizona corporation
By:
- ----------------------------- --------------------------------
Steven A. Lambrecht
President and Chief Executive
Officer
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