Yale Transaction Finders, Inc 8-K, filed Mar 23, 2022
Yale Transaction Finders, Inc. (YTFD)
About this 8-K
Yale Transaction Finders, Inc filed this 8-K on March 23, 2022, reporting on events of March 22, 2022.
Items reported
- Item 1.01: Entered into a material agreement
- Item 5.01: Change in control
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported):
(Exact Name of Registrant as Specified in its Charter)
(State or Other Jurisdiction of Incorporation) |
(Commission File No.) |
(I.R.S. Employer Identification No.) |
| ||
| (Address of Principal Executive Offices) | (Zip Code) |
(
Registrant’s telephone number, including area code:
41 Ulua Place, Haiku, HI 96708
(Former name or former address, if changed since last report)
Securities registered under Section 12(g) of the Exchange Act:
| Title of each Class | Ticker Symbol | Name of each exchange on which registered | ||
| Pink Sheets |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01. | Entry into a Material Definitive Agreement. |
On March 22, 2022, Yacht Finders, Inc. (the “Company”) entered into and consummated a Securities Purchase Agreement (the “Purchase Agreement”) with Fountainhead Capital Management Limited, a Jersey company (the “Seller”), Ironbound Partners Fund, LLC, a Delaware limited liability company, Moyo Partners, LLC, a New York limited liability company, Dakota Group, Ltd., a New York limited liability company, and Rise Capital Corp., a New York corporation (each a “Purchaser” and together, the “Purchasers”).
Pursuant to the Purchase Agreement, the Seller sold to Purchasers an aggregate of 5,120,000 shares of common stock of the Company held by the Seller (the “Shares”), representing approximately 98.5% of the outstanding capital stock of the Company, for an aggregate purchase price of $352,641. The Purchasers owned no other shares of capital stock of the Company prior to the consummation of the Purchase Agreement.
Additionally, pursuant to the Purchase Agreement:
| ● | The Seller contributed a promissory note issued by the Company in favor of Seller in the amount of $832,305 (the “Note”) plus accrued interest, which as of March 17, 2002 was $348,158, to the Company’s capital for no additional consideration; | |
| ● | Thomas W. Colligan, the sole director of the Company, authorized an increase in the number of directors on the Board from one to two and appointed Jonathan J. Ledecky as a director to fill the vacancy on the Board created by this increase; | |
| ● | Mr. Colligan resigned as Chief Executive Officer, Chief Financial Officer, President and Treasurer, effectively immediately, and resigned from the Company’s board, effective on the day following the tenth day after the mailing of the Information Statement (defined below); and | |
| ● | The Board appointed Mr. Ledecky as Chief Executive Officer and Chief Financial Officer of the Company and Arnold P. Kling as President, Treasurer and Secretary of the Company. |
The biographies of each of Mr. Ledecky and Mr. Kling are set forth below under Item 5.02.
The Company has agreed to prepare and file with the Securities and Exchange Commission, and thereafter mail, an information statement (“Information Statement”) pursuant to Rule 14f-1 promulgated under the Securities Exchange Act of 1934, as amended, for the purpose of notifying the Company’s stockholders of the above-referenced transactions and change in the majority of the Board as soon as practicable. Following ten days after mailing of the Information Statement to all holders of record of the Company’s common stock and the effectiveness of Mr. Colligan’s resignation as a director, Mr. Ledecky will be the sole director of the Company.
The transactions discussed above will not change the Company’s “shell company” status. As a result, the Company will continue to seek to acquire a business or company or other opportunity for it and its shareholders’ benefit.
Concurrently and in connection with the transactions described above, the Company and each of Mr. Ledecky and Mr. Kling entered into an indemnification agreement (the “Indemnification Agreements”) pursuant to which the Company agreed to indemnify each of them against any damages, liabilities, losses, taxes, fines, penalties, costs and expenses that may be sustained by either of them in connection with any action either takes while a director, officer or as an agent on behalf of the Company.
The foregoing descriptions of the Purchase Agreement and Indemnification Agreements are qualified in their entirety by reference to the full texts of the Purchase Agreement and Indemnification Agreements. The Purchase Agreement and form of Indemnification Agreement are attached as Exhibits 10.1 and 10.2 hereto, respectively, and incorporated herein by reference.
| Item 5.01. | Changes in Control of Registrant. |
The information set forth in Item 1.01 is incorporated herein by reference.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
The information set forth in Item 1.01 is incorporated herein by reference.
Jonathan J. Ledecky, 64 years old,has been a co-owner of the National Hockey League’s New York Islanders franchise since October 2014. He also serves as an Alternate Governor on the Board of Governors of the NHL and as President of NY Hockey Holdings LLC. Mr. Ledecky has also served as chairman of Ironbound Partners Fund, LLC, a private investment management fund, since March 1999. He served as President and Chief Financial Officer and as a director of Newtown Lane Marketing, Incorporated from October 2015 until it consummated its merger with Cyxtera Cybersecurity, Inc. (d/b/a AppGate), a cybersecurity company, in October 2021. He has continued to serve as a director of the company (now Appgate Inc.) since such date. He served as the President and Chief Operating Officer and as a director of Northern Star Acquisition Corp. from September 2020 until it consummated an initial business combination with Barkbox, Inc., an omnichannel brand serving dogs across the four key categories of play, food, health and home, in June 2021 (NYSE: BARK). He has continued to serve as a director of the company (now Bark, Inc.) since such date. Since November 2020, he has served as the President, Chief Operating Officer and a director of each of Northern Star Investment Corp. II (NYSE: NSTB), Northern Star Investment Corp. III (NYSE: NSTC) and Northern Star Investment Corp. IV (NSTD). Since October 2020, he has also served as Chairman of the Board of Pivotal Investment Corporation III (NYSE: PICC). Each of the foregoing companies is a blank check company that is currently searching for an initial business combination. From July 2019 to December 2020, he was also the Chief Executive Officer and Chairman of the Board of Directors of Pivotal Investment Corporation II (NYSE: PIC), a blank check company that consummated an initial business combination with XL Fleet, a provider of fleet electrification solutions for commercial vehicles in North America. From August 2018 to December 2019, he served as Chairman and Chief Executive Officer of Pivotal Acquisition Corp. (NYSE: PVT), a blank check company that consummated an initial business combination with KLDiscovery Inc., a leading global provider of eDiscovery, information governance and data recovery solutions to corporations, law firms, insurance companies and individuals, in December 2019. Mr. Ledecky continued to serve as a member of the board of KLDiscovery from its merger until June 2021. Mr. Ledecky previously founded U.S. Office Products in October 1994 and served as its Chief Executive Officer until November 1997 and as its Chairman until its sale in June 1998. U.S. Office Products was one of the fastest start-up entrants in the history of the Fortune 500 with sales in excess of $3 billion within its first three years of operation. From 1999 to 2001, Mr. Ledecky was vice chairman of Lincoln Holdings, owners of the Washington sports franchises in the NBA, NHL and WNBA. He has served as a trustee of George Washington University and the U.S. Olympic and Paralympic Foundation, director of the U.S. Chamber of Commerce, and as a commissioner on the National Commission on Entrepreneurship. In 2004, Mr. Ledecky was elected the Chief Marshal of the 2004 Harvard University Commencement, an honor bestowed by his alumni peers for a 25th reunion graduate deemed to have made exceptional contributions to Harvard and the greater society while achieving outstanding professional success. Mr. Ledecky received a B.A. (cum laude) from Harvard University in 1979 and an M.B.A. from the Harvard Business School in 1983. We believe Mr. Ledecky’s qualifications to serve on the Board include his extensive executive leadership and business and entrepreneurial experience, including experience with public shell companies looking to make acquisitions.
Arnold P. Kling, 63 years old, has, since 2003, been managing partner for several private equity investment funds focused on early-stage companies whose technologies have the potential to disrupt their targeted markets. Mr. Kling has also been serving as Vice-Chairman of UAV Turbines, Inc., a privately held Florida based micro-turbine engine manufacturer, since 2011, founding shareholder and a member of the board of directors of Materialytics Technology Corp., a privately held Texas based material provenance/traceability technology, since 2009, as well as a member of the board of directors of H.C. Wainwright & Co, LLC, a leading New York life science investment bank, since 2021. From 2010 to 2019, Mr. Kling was the President and a member of the board of directors of Protalex, Inc. (OTCBB: PRTX), a biotechnology company. From 1999 to 2003 he was Managing Director of Adelphia Holdings, LLC, an investment firm founded in conjunction with a European family office, and from 1995 to 1999, he was Managing Director and general counsel of GH Venture Partners, LLC, a private merchant bank. Prior to that, from 1993 to 1995, he was a senior executive and general counsel of Buckeye Communications, Inc. a Nasdaq listed licensing and multimedia company, and from 1990 through 1993 he was as an associate and partner in the corporate and financial services department of Tannenbaum, Helpern, Syracuse & Hirschtritt LLP, a mid-size New York law firm. Mr. Kling received a Bachelor of Science degree from New York University in International Business and a Juris Doctor degree from the Benjamin Cardozo School of Law.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit Number | Description | |
| 10.1 | Securities Purchase Agreement made by and among Fountainhead Capital Management Limited, Ironbound Partners Fund, LLC, Moyo Partners, LLC, Dakota Group, Ltd., Rise Capital Corp. and Yacht Finders, Inc. | |
| 10.2 | Indemnification Agreement | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 23, 2022
| YACHT FINDERS, INC. | ||
| By: | /s/ Jonathan J. Ledecky | |
| Name: | Jonathan J. Ledecky | |
| Title: | Chief Executive Officer | |
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of March 22, 2022, by and among, Fountainhead Capital Management Limited, a Jersey company (the “Seller”), Ironbound Partners Fund, LLC, a Delaware limited liability company, Moyo Partners, LLC, a New York limited liability company, Dakota Group, Ltd., a New York corporation, and Rise Capital Corp., a New York corporation (each a “Purchaser” and together, the “Purchasers”), and Yacht Finders, Inc., a Delaware corporation (“YFI”).
WHEREAS, there are presently 5,199,000 issued and outstanding shares of YFI common stock, par value $0.0001 per share (“Common Stock”), of which 5,120,000 shares are owned by Seller (the “Seller Shares”); and
WHEREAS, Purchasers and Seller have agreed to the purchase by each Purchaser of a portion of the Seller Shares; and
WHEREAS, Seller desires to sell the Seller Shares to Purchasers who desire to acquire the Seller Shares pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Purchase and Sale. Seller hereby agrees to sell, transfer, convey and deliver unto Purchasers and Purchasers hereby agree to acquire and purchase from the Seller, the Seller Shares in such share amounts set forth on Exhibit A hereto
2. Purchase Price; Withholding.
(a) The aggregate purchase price for the Seller Shares is $352,641 (the “Aggregate Purchase Price”), in cash. The allocation of the Aggregate Purchase Price among Purchasers is set forth on Exhibit A hereto. The portion of the Aggregate Purchase Price paid by a Purchaser is referred to as the “Individual Purchase Price.”
(b) Any person making a payment pursuant to this Agreement shall be entitled to deduct and withhold such amounts as are required to be deducted and withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended, or under any applicable provision of state, local or non-U.S. Law related to Taxes and to obtain any necessary Tax forms, including Form W-9 or the appropriate series of Form W-8, as applicable, or any similar information, from Seller or other recipient of any payment hereunder. To the extent amounts are so withheld and timely paid over to the appropriate Tax authority, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the person in respect of which such deduction and withholding was made.
3. The Closing. The consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place simultaneously with the execution of this Agreement on the date of this Agreement (the “Closing Date”), remotely by exchange of documents and signatures (or their electronic counterparts) and electronic payment of the Aggregate Purchase Price.
(a) On or prior to the Closing Date, Seller and/or YFI will cause Thomas W. Colligan (“Colligan”), the sole director of YFI, to (i) increase the number of directors of YFI from one to two and (ii) (x) appoint Jonathan Ledecky to fill the vacancy on the YFI board of directors created by this newly created position and (y) appoint Jonathan J. Ledecky as Chief Executive Officer and Chief Financial Officer and appoint Arnold P. Kling as President, Treasurer and Secretary of YFI, with such appointments being effective on the Closing Date.
(b) At the Closing, each respective Purchaser will deliver to Seller:
(i) the Purchaser’s Individual Purchase Price, by wire transfer in accordance with the wire transfer instructions set forth in Exhibit B hereto; and
(ii) a certificate of the Managing Member or such other authorized Person (as defined below) of such Purchaser, certifying that attached thereto are true and complete copies of all resolutions of such Purchaser authorizing the execution, delivery, and performance of this Agreement and the other agreements, instruments, and documents required to be delivered in connection with this Agreement or at the Closing to which such Purchaser is a party (collectively, the “Purchaser Transaction Documents”) and the consummation of the transactions contemplated hereby and thereby, and that such resolutions are in full force and effect.
(c) At the Closing, Seller will deliver, or cause to be delivered to the respective Purchaser:
(i) certificates evidencing the Seller Shares acquired by such Purchaser, registered in the name of such Purchaser or duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank;
(ii) evidence reasonably satisfactory to the Purchasers evidencing the contribution to the capital of YFI for no additional consideration of that certain amended loan and promissory note issued by YFI in favor of the Seller (the “Seller Note”);
(iii) evidence reasonably satisfactory to the Purchasers that there are no further accounts payable owed by YFI as of the Closing;
(iv) a legal opinion from counsel to Seller and YFI, in form and substance satisfactory to Purchasers and its counsel, containing the opinions set forth on Exhibit C hereto;
(v) the resignation of Colligan (a) from all offices of YFI held by Colligan, effective the Closing Date and (b) as a director of YFI, effective 10 days following the mailing to YFI’s stockholders of an Information Statement required by 17 CFR § 240.14f-1 (the “Information Statement” and such 10-day period the “Waiting Period”); and
(vi) a certificate of the Secretary (or other officer) of Seller certifying: (a) that attached thereto are true and complete copies of all resolutions of the board of managers, directors and/or members of Seller authorizing the execution, delivery, and performance of this Agreement and the other agreements, instruments, and documents required to be delivered in connection with this Agreement or at the Closing (collectively, the “Seller Transaction Documents”) to which Seller is a party and the consummation of the transactions contemplated hereby and thereby, and that such resolutions are in full force and effect; and (b) the names, titles, and signatures of the officers of Seller authorized to sign the Transaction Documents.
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(d) At the Closing, YFI will deliver to the respective Purchaser:
(i) a stockholder list generated by its transfer agent as of a date no more than five days prior to the Closing Date (the “Stockholder List”);
(ii) a certificate of the Secretary (or other officer) of YFI certifying: (a) that attached thereto are true and complete copies of all resolutions of the board of directors and the stockholders of Seller authorizing (x) the execution, delivery, and performance of this Agreement and the other agreements, instruments, and documents required to be delivered in connection with this Agreement or at the Closing (collectively, the “YFI Transaction Documents”) to which YFI is a party and the consummation of the transactions contemplated hereby and thereby, and (y) the actions provided for in Section 3(a), and that such resolutions are in full force and effect; and (b) the names, titles, and signatures of the officers of YFI authorized to sign the YFI Transaction Documents; and
(iii) a good standing certificate from the Secretary of State of the State of Delaware, dated within two business days prior to the Closing Date
(e) At the Closing, Seller will pay the YFI Costs and Expenses provided for in Section 10(c).
4. Representations and Warranties of Seller. Seller makes the following representations, warranties and covenants to each Purchaser, each of which is true and correct as of the date hereof and shall survive the Closing:
(a) Seller has full power and authority to enter into the Seller Transaction Documents and to carry out the transactions contemplated thereby. The Seller Transaction Documents constitute valid and binding obligations of Seller enforceable against Seller in accordance with their respective its terms, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforceability of creditor’s rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability.
(b) Neither the execution and delivery of the Seller Transaction Documents, nor the consummation of the transactions contemplated thereby or compliance with the terms and conditions thereof by Seller will violate or result in a breach of any term or provision of any agreement to which Seller is bound or is a party, or be in conflict with or constitute a default under, or cause the acceleration of the maturity of any obligation of Seller under any existing agreement or violate any order, writ, injunction, decree, statute, rule or regulation applicable to Seller or any of its properties or assets, the effect of which would be to impair the performance by Seller of its obligations thereunder or the receipt by the Purchasers of their respective portion of the Seller Shares.
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(c) The Seller Shares and the Seller Note are owned beneficially and of record by Seller. The Seller Shares are validly issued and outstanding, fully paid for and non-assessable. The Seller Note (including all amendments thereto) was duly authorized and validly issued with no personal liability attaching to the ownership thereof. Seller is the only Person with a direct or indirect interest in either the Seller Shares or the Seller Note. Neither the Seller Shares nor the Seller Note or any interest therein have been sold, assigned, transferred or hypothecated by Seller, nor has Seller entered into any agreement or arrangement to sell, assign, transfer or hypothecate all or any portion of the Seller Shares or the Seller Note. Seller owns the Seller Shares and the Seller Note free and clear of all liens, charges, encumbrances or claims of others (subject to restrictions imposed by Federal securities laws), and upon delivery of the Seller Shares, Purchasers will acquire good, valid and marketable title to their respective portion of the Seller Shares free and clear of all liens, charges, encumbrances and claims of others (subject to restrictions imposed by Federal securities laws). “Person” means any individual, corporation, partnership, joint venture, limited liability company, governmental authority, unincorporated organization, trust, association, or other entity.
(d) Seller does not beneficially own any options or warrants or other rights to purchase shares of Common Stock.
(e) Seller is aware of YFI’s business affairs and financial condition and has reached an informed and knowledgeable decision to sell the Seller Shares.
(f) There are no shareholder agreements, voting trusts or other agreements or understandings to which Seller is a party or by which it is bound relating to the voting of any shares of the capital stock of YFI.
(g) Except as may be required to comply with the terms of this Agreement, no permit, consent, approval or authorization of, or declaration, filing or registration with any governmental or regulatory authority is required in connection with the execution and delivery by Seller of the Seller Transaction Documents and the consummation of the transactions contemplated thereby.
(h) No representation or warranty by Seller in the Seller Transaction Documents or any certificate or other document furnished or to be furnished to Purchasers by Seller pursuant thereto contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
5. Representations and Warranties of Purchasers. Each Purchaser makes the following representations, warranties and covenants to Seller, each of which is true and correct as of the date hereof and shall survive the Closing:
(a) The Purchaser has full power and authority to enter into the Purchaser Transaction Documents and to carry out the transactions contemplated thereby. The Purchaser Transaction Documents constitute valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance with their respective terms, except as (i) the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting the enforceability of creditor’s rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability.
(b) Neither the execution and delivery of the Purchaser Transaction Documents, nor the consummation of the transactions contemplated thereby or compliance with the terms and conditions thereof by the Purchaser will violate or result in a breach of any term or provision of any agreement to which the Purchaser is bound or is a party, or be in conflict with or constitute a default under, or cause the acceleration of the maturity of any obligation of the Purchaser under any existing agreement or violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Purchaser or any of its properties or assets, the effect of which would be to impair the performance by the Purchaser of its obligations hereunder.
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(c) The Purchaser is acquiring its respective portion of the Seller Shares without a view to the resale thereof, unless same is either registered under the Securities Act of 1933, as amended (the “Securities Act”) or is sold exempt from registration thereunder. The Purchaser represents that it is purchasing its respective portion of the Seller Shares for its own account, with the intention of holding its respective portion of the Seller Shares, with no present intention of dividing or allowing others to participate in this investment or of reselling or otherwise participating, directly or indirectly, in a distribution of its respective portion of the Seller Shares, and shall not make any sale, transfer, or pledge thereof without registration under the Securities Act and any applicable securities laws of any state unless an exemption from registration is available under those laws.
(d) The Seller Shares delivered to Purchasers shall bear a restrictive legend indicating that they have not been registered under the Securities Act and are “restricted securities” as that term is defined in Rule 144 under the Securities Act. The Purchaser represents that it has adequate means of providing for its current needs and has no need for liquidity in this investment in its respective portion of the Seller Shares. The Purchaser represents that it is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Purchaser has no reason to anticipate any material change in its financial condition for the foreseeable future. The Purchaser is financially able to bear the economic risk of this investment, including the ability to hold its respective portion of the Seller Shares or to afford a complete loss of its investment in its respective portion of the Seller Shares. The Purchaser has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in its respective portion of the Seller Shares. The Purchaser has had a full and fair opportunity to make inquiries about the terms and conditions of this Agreement, to discuss the same and all related matters with its own independent counsel and its own accountants and tax advisers. The Purchaser has been given the opportunity to ask questions of, and receive answers from Seller concerning the terms and conditions of this Agreement and to obtain such additional written information about YFI to the extent Seller possess such information or can acquire it without unreasonable effort or expense. Notwithstanding the foregoing, The Purchaser has had the opportunity to conduct its own independent investigation.
(e) Except as may be required to comply with the terms of this Agreement, no permit, consent, approval or authorization of, or declaration, filing or registration with any governmental or regulatory authority is required in connection with the execution and delivery by the Purchaser of this Agreement and the consummation of the transactions contemplated hereby.
(f) No representation or warranty by the Purchaser in the Purchaser Transaction Documents or any certificate or other document furnished or to be furnished to Seller by the Purchaser pursuant thereto contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
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6. Representations and Warranties of YFI. YFI makes the following representations, warranties and covenants to each Purchaser, each of which is true and correct as of the date hereof and shall survive the Closing:
(a) YFI is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted. YFI has heretofore delivered to Purchasers true and complete copies of its Articles of Incorporation, as amended, and By-laws, each as currently in effect.
(b) YFI has full power and authority to enter into the YFI Transaction Documents and to carry out the transactions contemplated thereby. The YFI Transaction Documents constitute valid and binding obligations of YFI enforceable against YFI in accordance with their respective terms, except as (i) the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting the enforceability of creditor’s rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability.
(c) Neither the execution and delivery of the YFI Transaction Documents, nor the consummation of the transactions contemplated thereby or compliance with the terms and conditions thereof by YFI will violate or result in a breach of any term or provision of any agreement to which YFI is bound or is a party, or YFI’s Certificate of Incorporation or By-Laws, or be in conflict with or constitute a default under, or cause the acceleration of the maturity of any obligation of YFI under any existing agreement or violate any order, writ, injunction, decree, statute, rule or regulation applicable to YFI or any of its properties or assets, the effect of which would be to impair the performance by YFI of its obligations hereunder or the receipt by Purchasers of their respective portion of the Seller Shares.
(d) The Seller Shares and the Seller Note are owned beneficially and of record by Seller. The Seller Shares are validly issued and outstanding, fully paid for and non-assessable. The Seller Note (including all amendments thereto) was duly authorized and validly issued with no personal liability attaching to the ownership thereof.
(e) The number of shares and type of all authorized, issued and outstanding capital stock of YFI is set forth on Schedule 6(f) attached hereto. All of the issued and outstanding shares of capital stock of YFI have been duly authorized and validly issued and are fully paid and nonassessable. All of the issued and outstanding shares of capital stock of YFI have been offered, issued and sold by YFI in compliance with all applicable federal and state securities laws. No securities of YFI are entitled to preemptive or similar rights, and no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated hereby. There are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of capital stock of YFI, or contracts, commitments, understandings or arrangements by which YFI is or may become bound to issue additional shares of its capital stock, or securities or rights convertible or exchangeable into shares of capital stock of YFI.
(f) There are no outstanding obligations, contingent or otherwise, of YFI to redeem, purchase or otherwise acquire any capital stock or other securities of YFI.
(g) YFI does not have, or have the right to acquire, an ownership interest in any other Person.
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(h) There are no stockholder agreements, voting trusts or other agreements or understandings to which YFI is a party or by which it is bound relating to the voting of any shares of the capital stock of YFI.
(i) YFI has no liabilities of any kind, direct, contingent or otherwise other than the Seller Note, which has a principal balance, together with accrued interest (as of December 31, 2021), in the amount of $1,121,624.
(j) The Stockholder List accurately reflects all of the issued and outstanding shares of Common Stock.
(k) During the period from its inception through the Closing Date, YFI has filed or furnished (i) all reports, schedules, forms, statements, prospectuses and other documents required to be filed with, or furnished to, the Securities and Exchange Commission (the “SEC”) by YFI (all such documents, as amended or supplemented, are referred to collectively as, the “YFI SEC Documents”) and (ii) all certifications and statements required by (x) Rule 13a-14 or 15d-14 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (y) 18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley act of 2002) with respect to any applicable YFI SEC Document (collectively, the “SOX Certifications”). YFI has made available to Purchaser all SOX Certifications and comment letters received by YFI from the staff of the SEC and all responses to such comment letters by or on behalf of YFI. YFI has identified and made available to Purchaser a copy of all YFI SEC Documents filed within the 10 days preceding the date of this Agreement. YFI has complied in all respects with its SEC filing obligations under the Exchange Act and the Securities Act. Each of the audited financial statements and related schedules and notes thereto and unaudited interim financial statements of YFI (collectively, the “YFI Financial Statements”) contained in the YFI SEC Documents (or incorporated therein by reference) were prepared in accordance with United States generally accepted accounting principles applied on a consistent basis (“GAAP”) (except in the case of interim unaudited financial statements) except as noted therein, and fairly present in all respects the consolidated financial position of YFI as of the dates thereof and the consolidated results of their operations, cash flows and changes in stockholders’ equity for the periods then ended, subject (in the case of interim unaudited financial statements) to normal year-end audit adjustments (the effect of which will not, individually or in the aggregate, be adverse) and, such financial statements complied as to form as of their respective dates in all respects with applicable rules and regulations of the SEC. The financial statements referred to herein reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes to such financial statements. No financial statements of any Person not already included in such financial statements are required by GAAP to be included in the YFI Financial Statements. As of their respective dates, each YFI SEC Document was prepared in accordance with and complied with the requirements of the Exchange Act or the Securities Act, as applicable, and the rules and regulations thereunder, and the YFI SEC Documents (including all financial statements included therein and all exhibits and schedules thereto and all documents incorporated by reference therein) did not, as of the date of effectiveness in the case of a registration statement, the date of mailing in the case of a proxy or information statement and the date of filing in the case of other YFI SEC Documents, contain any untrue statement of a fact or omit to state a fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Neither YFI nor, to YFI’s knowledge, any of its officers has received notice from the SEC or any other Governmental Entity questioning or challenging the accuracy, completeness, content, form or manner of filing or furnishing of the SOX Certifications. The term “Governmental Entity” means any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any arbitrator, court, or tribunal of competent jurisdiction.
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(l) YFI has properly and timely filed all returns declarations, reports, information returns, and other statements related to Taxes (“Tax Returns”), and has paid all Taxes, assessments, interest and penalties due and payable. All such Tax Returns were complete and correct in all respects as filed, and no claims have been assessed with respect to such returns. The provisions made for Taxes on the balance sheets of YFI included in the YFI Financial Statements and the YFI Interim Financial Statements are sufficient in all respects for the payment of all Taxes whether disputed or not that are due or are hereafter found to have been due with respect to the conduct of the business of YFI up to and through the date of such YFI Financial Statements. There are no present, pending, or threatened audit, investigations, assessments or disputes as to Taxes of any nature payable by YFI, nor any Tax liens whether existing or inchoate on any of the assets of YFI, except for current year Taxes not presently due and payable. The Tax Returns of YFI have never been audited. No Internal Revenue Service or foreign, state, county or local Tax audit is currently in progress. YFI has not waived the expiration of the statute of limitations with respect to any Taxes. There are no outstanding requests by YFI for any extension of time within which to file any Tax Return or to pay Taxes shown to be due on any Tax Return. “Taxes” means all federal, state, local, foreign, and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties, or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest, additions, or penalties with respect thereto.
(m) YFI does not employ any employees and does not maintain any employee benefit or stock option plans.
(n) There are no claims, actions, causes of action, demands, lawsuits, arbitrations, inquiries, audits, notices of violation, proceedings, litigation, citations, summons, subpoenas, or investigations of any nature, whether at law or in equity (collectively, “Actions”) pending or, to YFI’s knowledge, threatened against or by YFI. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.
(o) YFI has complied, and is now complying, with all laws applicable to it or its business, properties, or assets. any statute, law, ordinance, regulation, rule, code, treaty, or other requirement of any governmental authority. There are no outstanding orders, writs, judgments, injunctions, decrees, determinations, penalties, or awards entered by or with any governmental authority applicable to YFI.
(p) Since December 31, 2021, there has not been any change, event, condition, or development that is, or could reasonably be expected to be, individually or in the aggregate, materially adverse to YFI.
(q) Except as may be required to comply with the terms of this Agreement, no permit, consent, approval or authorization of, or declaration, filing or registration with any governmental or regulatory authority is required in connection with the execution and delivery by YFI of this Agreement and the consummation of the transactions contemplated hereby.
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(r) No representation or warranty by YFI in the YFI Transaction Documents or any certificate or other document furnished or to be furnished to Purchaser by YFI pursuant thereto contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
7. Information Statement; Form 8-K Filings.
(a) As soon as practicable after the Closing Date, YFI shall (i) timely file a Current Report on Form 8-K (“Form 8-K”) with the SEC, which Form 8-K will be prepared by counsel to the Purchasers, disclosing the purchase of the Seller Shares and any other information required in connection therewith and (ii) file and distribute the Information Statement for purposes of notifying YFI’s stockholders of the change of YFI’s board of directors that will result from the transactions contemplated hereby. Purchasers and the Seller shall provide all information reasonably requested by YFI that is within their control and is necessary for inclusion in such Form 8-K and Information Statement.
(b) The Seller agrees that the information supplied by it for the Information Statement shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, not misleading. If any event, circumstance or change relating to the Seller occurs that should be set forth in or described in an amendment to the Information Statement, the Seller shall promptly inform Purchasers and YFI and YFI shall promptly file and distribute such amendment to the Information Statement.
(c) Each Purchaser agrees that the information supplied by it for the Information Statement shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, not misleading. If any event, circumstance or change relating to such Purchaser occurs that should be set forth in or described in an amendment to the Information Statement, the Purchaser shall promptly inform the Seller and YFI and YFI shall promptly file and distribute such amendment to the Information Statement.
(d) The Information Statement and all other documents that YFI is responsible for filing with the SEC in connection with the transactions contemplated hereby will comply as to form and substance in all material respects with the applicable requirements of the Act and the rules and regulations thereunder and the Exchange Act and the rules and regulations thereunder.
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8. Interim Operations of YFI. During the period from the date of this Agreement to the end of the Waiting Period, YFI shall and the Seller and Purchasers shall cause YFI to conduct its business only in the ordinary course of business consistent with past practice, except to the extent otherwise necessary to comply with the provisions hereof and with applicable laws and regulations. Additionally, during the period from the date of this Agreement to the end of the Waiting Period, except as required hereby in connection with this Agreement, neither YFI nor the Seller shall permit YFI to do any of the following without the prior consent of all of the Purchasers: (i) amend or otherwise change its Certificate of Incorporation or Bylaws, (ii) issue, sell or authorize for issuance or sale (including, but not limited to, by way of stock split or dividend), shares of any class of its securities or enter into any agreements or commitments of any character obligating it to issue such securities, other than in connection with the exercise of warrants or stock options outstanding prior to the date of this Agreement; (iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property) with respect to the Common Stock of YFI, (iv) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, (v) enter into any material contract or agreement or material transaction or make any material capital expenditure other than those relating to the transactions contemplated by this Agreement, (vi) create, incur, assume, maintain or permit to exist any indebtedness except as otherwise incurred in the ordinary course of business, consistent with past practice, (vii) pay, discharge or satisfy claims or liabilities (absolute, accrued, contingent or otherwise) other than in the ordinary course of business consistent with past practice, (viii) cancel any material debts or waive any material claims or rights, (ix) make any loans, advances or capital contributions to, or investments in financial instruments of any Person, (x) assume, guarantee, endorse or otherwise become responsible for the liabilities or other commitments of any other Person, (xi) grant any increase in the compensation payable or to become payable by YFI to any of its employees, officers or directors or any increase in any bonus, insurance, pension or other employee benefit plan, payment or arrangement made to, for or with any such employees, officers or directors, (xii) enter into any employment contract or grant any severance or termination pay or make any such payment with or to any officer, director or employee of YFI, (xiii) alter in any material way the manner of keeping the books, accounts or records of YFI or the accounting practices therein reflected other than alterations or changes required by GAAP or applicable law, (xiv) enter into any indemnification, contribution or similar contract pursuant to which YFI may be required to indemnify any other Person or make contributions to any other Person, (xv) amend or terminate any existing contracts in any manner that would result in any material liability to YFI for or on account of such amendment or termination or (xvi) or change any existing or adopt any new tax accounting principle, method of accounting or tax election except as provided herein or agreed to in writing by each of the Purchasers.
9. Indemnification by Seller.
(a) Seller shall defend, indemnify and hold harmless each of the Purchasers and YFI and their respective representatives, successors and assigns (each an “Indemnified Party” and collectively, the “Indemnified Parties”) from and against any and all expenses (including legal expenses), losses, claims, damages and liabilities, joint or several, and all actions, claims, proceedings or investigations in respect thereof which are asserted or threatened against an Indemnified Party or which an Indemnified Party may become subject, in each case, prior to the expiration of the eighteen (18) month period after the Closing Date, to the extent that such expenses, losses, claims, damages, liabilities or actions arise out of or are based upon any (i) inaccuracy in or breach of any of the representations or warranties of Seller or YFI contained in the Seller Transaction Documents or YFI Transaction Documents; or (ii) any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Seller or YFI pursuant to the Seller Transaction Documents or YFI Transaction Documents.
(b) Whenever any claim shall arise for indemnification hereunder, the Indemnified Party shall promptly provide written notice of such claim to Seller and the other Indemnified Parties. In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action by a Person who is not a party to this Agreement, Seller, at its sole cost and expense and upon written notice to the Indemnified Parties, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense. If Seller does not assume the defense of any such Action, the Indemnified Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate, including settling such Action, after giving notice of it to Seller, on such terms as the Indemnified Party may deem appropriate and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve Seller of its indemnification obligations herein provided with respect to any damages resulting therefrom. Seller shall not settle any Action without the Indemnified Party’s prior written consent (which consent shall not be unreasonably withheld or delayed).
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(c) Under any circumstances, the amount of any indemnification under this Agreement shall not exceed, in the aggregate, the Aggregate Purchase Price.
10. Miscellaneous Provisions.
(a) Notices. All notices, requests and other communications to any party hereunder shall be in writing and either delivered personally, emailed or sent by overnight delivery service or certified or registered mail, postage prepaid,
| If to Seller: | Fountainhead Capital Management Limited | |
| 13 Castle Street | ||
| St Helier | ||
| Jersey JE2 3BT | ||
| Channel Islands | ||
| Email: peterz@aol.com | ||
| With a copy to: | Robert Diener, Esq | |
| 141 Ulua Place | ||
| Haiku, HI 96978 | ||
| Email: rob@rdienerlaw.com | ||
| If to any Purchaser: | Ironbound Partners Fund LLC | |
| 1080 Fifth Avenue | ||
| New York, New York 10180 | ||
| Attn: Jonathan J. Ledecky | ||
| Email: jledecky@hockeyny.com | ||
| Moyo Partners, LLC | ||
| 444 East 86th Street #PHF | ||
| New York, New York 10028 | ||
| Attn: Arnold P. Kling | ||
| Email: arniekling@gmail.com | ||
| Dakota Group, Ltd. | ||
| 38 East 1st Street #3C | ||
| New York, New York 10003 | ||
| Attn: Stanley F. Buchthal | ||
| Email: dakotagroupltd@gmail.com | ||
| Rise Capital Corp. | ||
| 80 Fir Drive | ||
| Roslyn, New York 11576 | ||
| Attn: David Barrocas | ||
| Email: dbarrocas@gmail.com |
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| With a copy to: | Graubard Miller | |
| 405 Lexington Avenue | ||
| New York, NY 10174 | ||
| Attn: Jeffrey M. Gallant, Esq. | ||
| Email: jgallant@graubard.com | ||
| If to YFI: | Yacht Finders, Inc. | |
| c/o Ironbound Partners Fund LLC | ||
| 1080 Fifth Avenue | ||
| New York, New York 10180 | ||
| Attn: Jonathan J. Ledecky | ||
| Email: jledecky@hockeyny.com | ||
| With a copy to: | Graubard Miller | |
| 405 Lexington Avenue | ||
| New York, NY 10174 | ||
| Attn: Jeffrey Gallant, Esq. | ||
| Email: jgallant@graubard.com |
or such other address or email address as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date delivered personally or by overnight delivery service or emailed or, if mailed, five (5) business days after the date of mailing if received prior to 5 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.
(b) Amendments; No Waivers.
(i) Any provision of this Agreement with respect to transactions contemplated hereby may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by all parties hereto; or in the case of a waiver, by the party against whom the waiver is to be effective.
(ii) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
(c) Fees and Expenses. All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense, provided that Seller shall be responsible for all costs and expenses incurred by YFI to effectuate the consummation of the transactions contemplated hereby, including the cost and expense of printing and mailing the Information Statement. All such costs and expenses incurred by YFI not paid by YFI prior to the Closing (the “YFI Costs and Expenses”) will be paid by Seller at Closing from the Aggregate Purchase Price received from the Purchasers.
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(d) Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that a Purchaser shall have the right to assign this Agreement to an affiliate of the Purchaser and no other party hereto may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto, but any such transfer or assignment will not relieve the appropriate party of its obligations hereunder.
(e) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of law thereof.
(f) Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the City of New York, Borough of Manhattan, and each of the parties hereto consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 10(a) shall be deemed effective service of process on such party. Each party hereto (including its affiliates, agents, officers, directors and employees) irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
(g) Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto has received counterparts hereof signed by all of the other parties. No provision of this Agreement is intended to confer upon any person other than the parties hereto any rights or remedies under this Agreement.
(h) Entire Agreement. This Agreement and the attached Exhibits and Schedule constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.
(i) Captions. The captions are included for convenience of reference only and shall be ignored in the construction or interpretation of this Agreement.
(j) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any parties. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.
(k) Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement is not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms of this Agreement in addition to any other remedy to which they are entitled at law or in equity.
(l) Brokers and Finders. Neither Seller nor YFI, nor any of their respective directors, officers or agents on their behalf, has incurred any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or financial advisory services or other similar payment in connection with this Agreement.
(m) Further Assurances. Each of the parties hereto agree, from time to time, at the reasonable request of the other, to deliver to the other such further instruments or take such other actions as the other may reasonably require to effect the purposes and intent of this Agreement and to effect the terms and provisions contained therein.
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IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement as of the date first above written.
| PURCHASERS: | IRONBOUND PARTNERS FUND LLC | ||
| By: | /s/ Jonathan J. Ledecky | ||
| Name: | Jonathan J. Ledecky | ||
| Title: | Managing Member | ||
| MOYO PARTNERS, LLC | |||
| By: | /s/ Arnold P. Kling | ||
| Name: | Arnold P. Kling | ||
| Title: | Managing Member | ||
| DAKOTA GROUP, LTD | |||
| By: | /s/ Stanley F. Buchthal | ||
| Name: | Stanley F. Buchthal | ||
| Title: | President | ||
| RISE CAPITAL CORP. | |||
| By: | /s/ David Barrocas | ||
| Name: | David Barrocas | ||
| Title: | Managing Member | ||
| SELLER: | FOUNTAINHEAD CAPITAL MANAGEMENT LIMITED | ||
| By: | /s/ Angela Morris and /s/ Claire Farrow | ||
| Name: | Angela Morris and Claire Farrow | ||
| Title: | Directors | ||
| YFI: | YACHT FINDERS, INC. | ||
| By: | /s/ Thomas W. Colligan | ||
| Name: | Thomas W. Colligan | ||
| Title: | Chief Executive Officer | ||
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Exhibit 10.2
INDEMNIFICATION AGREEMENT
This Agreement, made and entered into effective as of March 22, 2022 (“Agreement”), by and between Yacht Finders, Inc., a Delaware corporation (“Company”), and the undersigned indemnitee (“Indemnitee”).
WHEREAS, the adoption of the Sarbanes-Oxley Act of 2002 and other laws, rules and regulations being promulgated have increased the potential for liability of officers and directors; and
WHEREAS, the Board of Directors of the Company (“Board”) has determined that the ability to attract and retain such persons is in the best interests of the Company’s stockholders; and
WHEREAS, it is reasonable, prudent and necessary for the Company to obligate itself contractually to indemnify such persons to the fullest extent permitted by applicable law so that such persons will serve or continue to serve the Company free from undue concern that they will not be adequately indemnified; and
WHEREAS, this Agreement is a supplement to and in furtherance of the Company’s Certificate of Incorporation and Bylaws of the Company, each as amended, and any resolutions adopted pursuant thereto and shall neither be deemed to be a substitute therefor nor to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee is willing to serve on behalf of the Company on the condition that he be indemnified according to the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
1. Definitions. For purposes of this Agreement:
1.1 “Change in Control” means a change in control of the Company occurring after the date hereof 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, as amended (“Exchange 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 date hereof (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a person who is an officer or director of the Company on the date hereof (and any of such person’s affiliates), is or becomes “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the then outstanding securities of the Company without the prior approval of at least two-thirds of the members of the Board in office immediately prior to such person attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which (A) members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter or (B) the voting securities of the Company outstanding immediately prior to such transaction do not continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such transaction with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (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 or whose election or nomination for election was previously so approved) cease for any reason to constitute at least a majority of the Board.
1.2 “Corporate Status” means 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, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company. In addition, service at the actual request of the Company, for purposes of this Agreement, Indemnitee shall be deemed to be serving or to have served at the request of the Company as a director, officer, employee, agent or fiduciary of any other enterprise if Indemnitee is or was serving as a director, officer, employee, agent or fiduciary of such enterprise and (A) such enterprise is or at the time of such service was an affiliate of the Company, (B) such enterprise is or at the time of such service was an employee benefit plan (or related trust) sponsored or maintained by the Company or an affiliate of the Company or (C) the Company or an affiliate of the Company directly or indirectly caused Indemnitee to be nominated, elected, appointed, designated, employed, engaged or selected to serve in such capacity
1.3 “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 Indemnitee.
1.4 “Expenses” means all reasonable attorneys’ fees, retainers, court costs (including trial and appeals), transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local, or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, appealing, preparing to appeal, investigating, or being or preparing to be a witness in a Proceeding.
1.5 “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 Indemnitee in any other 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” does 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 Indemnitee in an action to determine Indemnitee’s rights under this Agreement. Except as provided in the first sentence of Section 9.3 hereof, Independent Counsel shall be selected by (a) the Disinterested Directors or (b) a committee of the Board consisting of two or more Disinterested Directors or if (a) and (b) above are not possible, then by a majority of the full Board.
1.6 “Proceeding” means any action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, , whether conducted by or on behalf of the Company or any other party, whether civil, criminal, administrative or investigative, except one initiated by an Indemnitee pursuant to Section 11 of this Agreement to enforce his rights under this Agreement.
2. Services by Indemnitee.
Indemnitee agrees to serve as a director, officer or employee of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law).
3. Indemnification - General.
Except with respect to actions finally adjudicated to be a result of actual fraud or intentional misconduct of the Indemnitee, the Company shall indemnify, and advance Expenses to, Indemnitee as provided in this Agreement to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as any amendment to or interpretation of applicable law may thereafter from time to time permit. The rights of Indemnitee provided under the preceding sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement.
4. Proceedings Other Than Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification provided in this Agreement if, by reason of his Corporate Status, he is, was or is threatened to be made, a party to any threatened, pending or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Agreement, Indemnitee shall be indemnified against Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any 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.
5. Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification provided in this Agreement if, by reason of his Corporate Status, he was 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 Agreement, Indemnitee shall be indemnified against amounts paid in settlement and Expenses actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of any 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. Notwithstanding the foregoing, no indemnification under this paragraph shall be made in respect of (1) a threatened or pending Proceeding which is settled or otherwise disposed of, or (2) any claim, issue or matter as to which such person shall have been adjudged to be liable to the Company, unless and only to the extent that the court in which such Proceeding shall have been brought, was brought or is pending, shall determine, upon application, that Indemnitee is fairly and reasonably entitled to indemnity for such portion of the settlement amount and Expenses as the court deems proper.
6. Indemnification for Expenses of Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that Indemnitee 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 (and, when eligible hereunder, amounts paid in settlement) actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee 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 Indemnitee against all Expenses (and, when eligible hereunder, amount paid in settlement) actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Agreement, the term “successful, on the merits or otherwise,” includes, but is not limited to, (i) any termination, withdrawal, or dismissal (with or without prejudice) of any Proceeding against the Indemnitee without any express finding of liability or guilt against him, and (ii) the expiration of 90 days after the making of any claim or threat of a Proceeding without the institution of the same and without any promise or payment made to induce a settlement.
7. Indemnification for Expenses as a Witness.
Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
8. Advancement of Expenses and Other Amounts.
The Company shall advance all Expenses, judgments, penalties, fines and, when eligible hereunder, amounts paid in settlement, incurred by or on behalf of Indemnitee in connection with any Proceeding within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee 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, judgments, penalties, fines and amounts paid in settlement, incurred by Indemnitee and shall include or be preceded or accompanied by an agreement by or on behalf of Indemnitee to repay any Expenses, judgments, penalties, fines and amounts paid in settlement advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses, judgments, penalties, fines and, when eligible hereunder, amounts paid in settlement. In connection with any request for advancement of Expenses, judgments, penalties, fines and amounts paid in settlement, Indemnitee shall not be required to provide any documentation or information to the extent that the provision thereof would undermine or otherwise jeopardize attorney-client privilege. The Company’s obligation in respect of the advancement of Expenses, judgments, penalties, fines and amounts paid in settlement in connection with a criminal Proceeding in which Indemnitee is a defendant shall terminate at such time as Indemnitee pleads guilty or is convicted after trial and such conviction becomes final and no longer subject to appeal. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay such amounts and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.
9. Procedure for Determination of Entitlement to Indemnification.
9.1 To obtain indemnification under this Agreement in connection with any Proceeding, and for the duration thereof, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of any such request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.
9.2 Upon written request by Indemnitee for indemnification pursuant to Section 9.1 hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in such case: (i) if a Change in Control shall have occurred, by Independent Counsel (unless Indemnitee shall request that such determination be made by the Board or the stockholders, in which case in the manner provided for in clauses (ii) or (iii) of this Section 9.2) in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; (ii) if a Change of Control shall not have occurred, at the election of the Company, (A) by the Board by a majority vote of a quorum consisting of Disinterested Directors, or (B) if a quorum of the Board consisting of Disinterested Directors is not obtainable, by a majority of a committee of the Board consisting of two or more Disinterested Directors, or (C) by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (D) by the stockholders of the Company, by a majority vote of a quorum consisting of stockholders who are not parties to the proceeding, or if no such quorum is obtainable, by a majority vote of stockholders who are not parties to such proceeding; or (iii) as provided in Section 10.2 of this Agreement. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’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 Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
9.3 If a Change of Control shall have occurred, Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board), and Indemnitee (or the Board, as the case may be) shall give written notice to the other party advising it of the identity of Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within seven days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection. Such objection may be asserted only on the ground that Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 1 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. If such written objection is made, Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 9.1 hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction, for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel 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 the person with respect to whom an objection is so resolved or the person so appointed shall act as Independent Counsel under Section 9.2 hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with its actions pursuant to this Agreement, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 9.3, regardless of the manner in which such Independent Counsel was selected or appointed. Upon the due commencement date of any judicial proceeding pursuant to Section 11.1(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).
10. Presumptions and Effects of Certain Proceedings.
10.1 In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9.1 of this Agreement, and the Company shall have the burden of proof to overcome that presumption by clear and convincing evidence in connection with the making by any person, persons or entity of any determination contrary to that presumption.
10.2 If the person, persons or entity empowered or selected under Section 9 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (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 Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith require(s) such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, however, that the foregoing provisions of this Section 10.2 shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 9.2 of this Agreement and if (A) within 15 days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within 75 days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within 15 days after such receipt for the purpose of making such determination, such meeting is held for such purpose within 60 days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 9.2 of this Agreement. In connection with each meeting at which a stockholder determination will be made, the Company shall solicit proxies that expressly include a proposal to indemnify or reimburse the Indemnitee. The Company shall afford the Indemnitee ample opportunity to present evidence of the facts upon which the Indemnitee relies for indemnification in any Company proxy statement relating to such stockholder determination. 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.
10.3 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 Indemnitee to indemnification or 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 Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
10.4 Reliance as Safe Harbor.
For purposes of this Agreement, 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 Proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on (i) the records or books of account of the Company, or another enterprise, including financial statements, (ii) information supplied to him by the officers of the Company or another enterprise in the course of their duties, (iii) the advice of legal counsel for the Company or another enterprise, or of an independent certified public accountant or an appraiser or other expert selected with reasonable care by the Company or another enterprise. The term “another enterprise” as used in this Section 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 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. Whether or not the foregoing provisions of this Section 10.4 are satisfied, it shall in any event be presumed that Indemnitee has at all times 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 Proceeding, to have had no reasonable cause to believe Indemnitee’s conduct was unlawful. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
11. Remedies of Indemnitee.
11.1 In the event that (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) the determination of indemnification is to be made by Independent Counsel pursuant to Section 9.2 of this Agreement and such determination shall not have been made and delivered in a written opinion within sixty (60) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within thirty (30) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within thirty (30) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 9 or 10 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of New York, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advancement of Expenses, judgments, penalties, fines or, when eligible hereunder, amounts paid in settlement. The Company shall not oppose Indemnitee’s right to seek any such adjudication.
11.2 In the event that a determination shall have been made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section shall be conducted in all respects as a de novo trial on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.
11.3 If a determination shall have been made or deemed to have been made pursuant to Section 9 or 10 of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) prohibition of such indemnification under applicable law.
11.4 The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement.
11.5 In the event that Indemnitee, pursuant to this Section, seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement or any other agreement, including any other indemnification, contribution or advancement agreement, or any provision of the certificate of incorporation or by-laws of the Company now or hereafter in effect, or for recovery under directors’ and officers’ liability insurance policies maintained by the Company, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all expenses (of the kinds described in the definition of Expenses) actually and reasonably incurred by him in such judicial adjudication, but only if he prevails therein. If it shall be determined in such judicial adjudication that Indemnitee is entitled to receive less than all of the indemnification or advancement of expenses sought, the expenses incurred by Indemnitee in connection with such judicial adjudication shall be appropriately prorated. In addition, the Company shall, if so requested by Indemnitee, advance the foregoing expenses to Indemnitee, subject to and in accordance with Section 8.
12. Procedure Regarding Indemnification.
With respect to any Proceedings, the Indemnitee, prior to taking any action with respect to such Proceeding, shall consult with the Company as to the procedure to be followed in defending, settling, or compromising the Proceeding and may not consent to any settlement or compromise of the Proceeding without the written consent of the Company (which consent may not be unreasonably withheld or delayed). The Company shall be entitled to participate in defending, settling or compromising any Proceeding and to assume the defense of such Proceeding with counsel of its choice and shall assume such defense if requested by the Indemnitee. Notwithstanding the election by, or obligation of, the Company to assume the defense of a Proceeding, the Indemnitee shall have the right to participate in the defense of such Proceeding and to employ counsel of Indemnitee’s choice, but the fees and expenses of such counsel shall be at the expense of the Indemnitee unless (i) the employment of such counsel has been authorized in writing by the Company, or (ii) the Indemnitee has reasonably concluded that there may be defenses available to him which are different from or additional to those available to the Company (in which latter case the Company shall not have the right to direct the defense of such Proceeding on behalf of the Indemnitee), in either of which events the fees and expenses of not more than one additional firm of attorneys selected by the Indemnitee shall be borne by the Company. If the Company assumes the defense of a Proceeding, then counsel for the Company and Indemnitee shall keep Indemnitee reasonably informed of the status of the Proceeding and promptly send to Indemnitee copies of all documents filed or produced in the Proceeding, and the Company shall not compromise or settle any such Proceeding without the written consent of the Indemnitee (which consent may not be unreasonably withheld or delayed) if the relief provided shall be other than monetary damages and shall promptly notify the Indemnitee of any settlement and the amount thereof.
13. Non-Exclusivity; Survival of Rights; Insurance; Subrogation; Contribution.
13.1 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 Indemnitee may at any time be entitled under applicable law, the certificate of incorporation or by-laws of the Company, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or any provision hereof shall be effective as to any Indemnitee with respect to any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.
13.2 To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, agents or fiduciaries 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, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee, agent or fiduciary under such policy or policies.
13.3 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 Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are reasonably necessary to enable the Company to bring suit to enforce such rights.
13.4 The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
13.5 If a determination is made that Indemnitee is not entitled to indemnification, after Indemnitee submits a written request therefor, under this Agreement, then in respect of any threatened, pending or completed Proceeding in which the Company is jointly liability with the Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement 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 Proceeding arose, and (ii) the relative fault of the Company on the one hand and of the Indemnitee on the other hand in connection with the events that resulted in such Expenses, judgments, fines or amounts paid in settlement, 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 hand 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 amounts paid in settlement. The Company agrees that it would not be just and equitable if contribution pursuant to this Section were determined by pro rata allocation or any other method of allocation that does not take into account the foregoing equitable considerations. 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 the Proceeding 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 Disinterested Directors; or (iii) Independent Counsel, if a quorum is not obtainable for purpose of (ii) above, or, even if obtainable, a quorum of Disinterested Directors so directs.
14. Duration of Agreement.
This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a director and/or officer of the Company, or (b) the final termination of all pending Proceedings in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses, judgments, penalties, fines or amounts paid in settlement hereunder and or any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his spouse, heirs, executors, personal representatives and administrators. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
15. 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 by the provision held invalid, illegal or unenforceable.
16. Entire Agreement.
This Agreement constitutes the entire agreement between the Company and the Indemnitee with respect to the subject matter hereof and supersedes all prior agreements, understanding, negotiations and discussion, 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 reasons whatsoever, and is not reformed pursuant to Section 15 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 any Prior Agreements, as well as those provided under applicable law, the certificate of incorporation or by-laws of the Company, a vote of stockholders or resolution of directors.
17. Exception to Right of Indemnification or Advancement of Expenses.
17.1 Except as provided in Section 11.5, Indemnitee shall not be entitled to indemnification or advancement of Expenses, judgments, penalties, fines and amounts paid in settlement under this Agreement with respect to any Proceeding, or any claim therein, brought or made by him against the Company.
17.2 Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to any Proceeding, or any claim therein, arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Exchange Act or Company similar successor statute.
18. Covenant Not to Sue; Limitation of Actions; 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, executors, personal representatives or administrators after the expiration of two (2) years from the date of accrual of such cause of action 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 two (2) year period; provided, however, that if any shorter period of limitation is otherwise applicable to any such cause of action, such shorter period shall govern.
19. 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.
20. 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.
21. 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.
22. Notice by Indemnitee.
Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating any Proceeding or matter which may be subject to indemnification or advancement of Expenses, judgments, penalties, fines or amounts paid in settlement covered hereunder. The failure to notify the Company on a timely basis shall not constitute a waiver of Indemnitee’s rights under this Agreement, except to the extent that such failure or delay (i) causes the amounts paid or to be paid by the Company to be greater than they otherwise would have been, (ii) adversely affects the Company’s ability to obtain for itself or Indemnitee coverage or proceeds under any insurance policy available to the Company or Indemnitee, or (iii) otherwise results in prejudice to the Company.
23. 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 such 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:
If to Indemnitee, to the address specified on the signature page hereto.
If to the Company, to:
Yacht Finders, Inc.
c/o Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: Jeffrey M. Gallant, Esq.
or to such other address or such other person as Indemnitee or the Company shall designate in writing in accordance with this Section, except that notices regarding changes in notices shall be effective only upon receipt.
24. 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 New York applicable to contracts made and performed in that state without giving effect to the principles of conflicts of laws. The Company and Indemnitee each hereby irrevocably consents to the jurisdiction of the courts of the State of New York and the federal courts within the State for all purposes in connection with any action or proceeding that arises out of or relates to this Agreement and agrees that any action instituted under this Agreement shall be brought only in the United States District Court for the Southern District of New York and any New York State court within that District.
25. Mutual Acknowledgment.
Both the Company and Indemnitee acknowledge that, in certain instances, Federal law or applicable public policy may prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future in certain circumstances to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court for a determination of the Company’s right under public policy to indemnify Indemnitee.
26. Miscellaneous.
Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.
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YACHT FINDERS, INC. | |
| By: | ||
| Name: | ||
| Title: | ||
| INDEMNITEE | ||
| Name: | ||
[Signature Page to Indemnification Agreement]