EXHIBIT 10.29
INDEMNIFICATION AGREEMENT
          This INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered
into effective as of the _____ day of _________, 20__ by and between HCC
Insurance Holdings, Inc., a Delaware corporation (“Company”), and
_________________________ (“Indemnitee”).
          WHEREAS, competent and experienced persons are becoming more reluctant
to serve as directors and officers of corporations unless they are provided with
adequate protection against claims and actions against them for their activities
on behalf or at the request of such corporations, generally through insurance
and indemnification; and
          WHEREAS, uncertainties in the interpretations of the statutes and
regulations, laws and public policies relating to indemnification of corporate
directors and officers are such as to make adequate, reliable assessment of the
risks to which directors and officers of corporations may be exposed difficult,
particularly in light of the proliferation of lawsuits against directors and
officers; and
          WHEREAS, the Board of Directors of the Company, based upon its
business experience, has concluded that the continuation of present trends in
litigation against corporate directors and officers will inevitably make it more
difficult for the Company to attract and retain directors and officers of the
highest degree of competence committed to the active and effective direction and
supervision of the business and affairs of the Company and its subsidiaries and
affiliates and the operation of its and their facilities, and the Board deems
such consequences to be so detrimental to the best interests of the Company’s
stockholders that it has concluded that the Company should act to provide its
directors and officers with enhanced protection against inordinate risks
attendant on their positions in order to assure that the most capable persons
otherwise available will be attracted to such positions and, in such connection,
such directors have further concluded that it is not only reasonable and
prudent, but necessary, for the Company to contractually obligate itself to
indemnify to the fullest extent permitted by applicable law its directors and
certain of its officers and to assume, to the maximum extent permitted by
applicable law, financial responsibility for expenses and liabilities which
might be incurred by such individuals in connection with claims lodged against
them for their decisions, actions and omissions in such capacities; and
          WHEREAS, Section 145 of the General Corporation Law of the State of
Delaware, under which law the Company is organized, empowers a corporation
organized in Delaware to indemnify persons who serve as directors, officers,
employees or agents of the corporation or persons who serve at the request of
the corporation as directors, officers, employees or agents of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, and further specifies that the indemnification provided by such
section “shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any By-Law, agreement, vote of
stockholders or disinterested directors or otherwise,” and further empowers a
corporation to “purchase and maintain insurance” on behalf of such persons
“against any liability asserted against him or incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under the
provisions of” such laws; and
          WHEREAS, the Certificate of Incorporation of the Company provides for
indemnification in accordance with and to the fullest extent permitted by the
General Corporation Law of the State of Delaware or any other applicable laws as
presently or hereinafter in effect; and
          WHEREAS, the Company has (a) reviewed the type of insurance available
to insure the directors and officers of the Company and of its affiliates
against costs, expenses (including attorneys’ fees and disbursements),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with any action, suit or proceeding to
which they are, or are threatened to be made, a party by reason of their status
and/or decisions or actions in such positions, (b) studied the nature and extent
of the coverage provided by such insurance and the cost thereof to the Company,
(c) purchased such insurance to the extent reasonably available, and
(d) concluded, notwithstanding the purchase of such insurance to the extent
reasonably available, that it would be in the best interests of the Company and
its stockholders for the Company to enter into agreements to indemnify certain
of such persons in the form of this Agreement; and
          WHEREAS, the Company desires to have Indemnitee serve or continue to
serve as a director and/or officer of the Company, and/or as a director,
officer, employee, partner, trustee, agent or fiduciary of such other
corporations, partnerships, joint ventures, employee benefit plans, trusts or
other enterprises (herein collectively called “Company Affiliates”) of which he
has been or is serving, or will serve, at the request of or for the convenience
of or to represent the interests of the Company, free from undue concern for
unpredictable,

 

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inappropriate or unreasonable claims for damages by reason of his being an
officer of the Company or a director, officer, employee, partner, trustee, agent
or fiduciary of a Company Affiliate or by reason of his decisions or actions on
their behalf; and
          WHEREAS, Indemnitee is willing to serve, or to continue to serve, or
to take on additional service for, the Company and/or the Company Affiliates in
such aforesaid capacities on the condition that he be indemnified as provided
for herein;
          NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
          1.       Services to the Company. Indemnitee will serve and/or
continue to serve as a director and/or officer of the Company and/or as a
director, officer, employee, partner, trustee, agent or fiduciary of a Company
Affiliate in good faith so long as he is duly elected and qualified in
accordance with the provisions of the Company’s By-Laws or other applicable
constitutive documents thereof; provided that Indemnitee may at any time and for
any reason resign from such position.
          2.       Indemnification.
                    (a)         Except as otherwise expressly provided in this
Agreement or prohibited by applicable law, the Company, within sixty (60) days
(or such longer period, if any, as may be permitted by Section 4(a) hereof)
after receipt of a written statement from Indemnitee requesting indemnification
and reasonably evidencing the costs, expenses, judgments, penalties, fines and
amounts in settlement incurred by him, shall, in accordance with the applicable
provisions of this Agreement, fully indemnify Indemnitee if Indemnitee is or was
made a Party or is threatened to be made a party to any Proceeding (as
hereinafter defined) by reason of the fact that he is or was a director,
officer, employee, agent or fiduciary of the Company or is or was serving at the
request of or for the convenience of or to represent the interests of the
Company as a director, officer, employee, partner, trustee, agent or fiduciary
of a Company Affiliate, or by reason of anything done or not done by him in any
such capacity (all of the foregoing reasons being herein collectively called
“Qualifying Reasons”), against costs, expenses (including attorneys’ fees and
disbursements), judgments, penalties, fines and amounts in settlement incurred
by him in connection with such Proceeding (including, but not limited to, the
investigation, defense, settlement or appeal thereof). In the event that both
the foregoing sentence and Section 2(b) hereof would be applicable to the
indemnification being sought, the provisions of Section 2(b) shall govern. For
purposes of this Agreement, (i) a “Proceeding” shall mean any threatened,
pending or completed investigation, action, suit, arbitration, alternate dispute
resolution mechanism or any other proceeding (including any appeals therefrom),
whether civil, criminal, administrative or investigative in nature and whether
in a court or arbitration, or before or involving a governmental, administrative
or private entity (including, but not limited to, an investigation initiated by
the Company, a Company Affiliate, or the Board of Directors or fiduciaries of
any thereof); (ii) references to “fines” shall include, without limitation, any
excise taxes assessed on Indemnitee with respect to any employee benefit or
welfare plan; and (iii) references to “serving at the request of the Company”
shall include, without limitation, any service, while serving as a director,
officer, employee, partner, trustee, agent or fiduciary of the Company or any
Company Affiliate which imposes duties on, or involves services by, Indemnitee
with respect to any employee benefit or welfare plan of the Company or any
Company Affiliate, its participants or beneficiaries.
                    (b)         Notwithstanding any other provisions of this
Agreement (except as set forth in Section 2(c) hereof), and without a
requirement for any determination as described in Section 4(a) hereof, to the
extent Indemnitee (i) has prepared to serve or has served as a witness in any
Proceeding in any way relating to the Company, any Company Affiliate, any
affiliate (as defined in Rule 405 under the Securities Act of 1933, as amended)
of the Company (“Securities Act Affiliate”), any associate (as defined in such
Rule 405) of the Company or of any Securities Act Affiliate or Company
Affiliate, or anything done or not done by Indemnitee as a director, officer,
employee, partner, trustee, agent or fiduciary of the Company or any Company
Affiliate, or (ii) has been successful on the merits or otherwise (including,
without limitation, the dismissal of an action without prejudice) in defense of
any Proceeding arising out of a Qualifying Reason, or in the defense of any
claim, issue or matter involved therein, whether in the final adjudication,
arbitration or alternate dispute resolution mechanism or on appeal, the Company
shall fully indemnify him against all costs and expenses (including attorneys’
fees and disbursements) incurred by him in connection therewith (including, but
not limited to, the preparation or service as a witness or the investigation,
defense or appeal in connection with any such Proceeding) within thirty
(30) days after receipt by the Company from Indemnitee of a statement requesting
such indemnification, reasonably evidencing the expenses and costs so incurred
by him and averring that they do not relate to matters of the type described in
clauses (i) or (ii) of Section 2(c) hereof.
                    (c)         Notwithstanding anything to the contrary in the
foregoing provisions of this Section 2 (and except as provided in the proviso
clause of this sentence), Indemnitee shall not be entitled, as a matter of
right, to indemnification pursuant to this Section 2: (i) except as provided in
Section 4(e) or 8 hereof, against costs and expenses incurred in connection with
any Proceeding commenced by Indemnitee against the Company, any Company
Affiliate, any Securities Act Affiliate or any person who is or was a director
or officer, in his or her respective capacity as such, of the Company, any
Company Affiliate or any Securities Act Affiliate; or (ii) against costs and

 

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expenses incurred by Indemnitee in connection with preparing to serve or
serving, prior to a Change in Control (as defined in Section 4(d)(i) hereof), as
a witness in cooperation with any party or entity, who or which has threatened
or commenced any Proceeding against the Company, any Company Affiliate or
Securities Act Affiliate, or any director, officer, employee, partner, trustee,
agent or fiduciary of any thereof in his or her respective capacity as such; or
(iii) to the extent that Indemnitee has theretofore received payment pursuant to
any directors’ and officers’ liability insurance policy maintained by the
Company; provided, however, that indemnification may be provided by the Company
in any specific case as contemplated by Section 6 hereof notwithstanding the
applicability of the foregoing clause (i) or (ii).
                    (d)         Notwithstanding any other provision of this
Agreement, indemnification shall also be made by the Company to the extent that
the Court of Chancery of the State of Delaware or the court in which a
Proceeding was brought shall determine that Indemnitee is fairly and reasonably
entitled to indemnification for such costs and expenses as such court shall deem
proper.
                    (e)         The rights of the Indemnitee under this
Agreement shall not be limited, diminished or reduced by the right of the
Indemnitee to seek or receive payments with respect to the matters covered by
this Agreement from any person other than the Company or under the insurance
policies maintained by the Company. In addition, the Indemnitee shall be under
no obligation to seek or accept any settlement offer and the failure to accept a
settlement offer shall not be a basis for refusing indemnification or any
diminution thereof.
        3.         Partial Indemnification. If Indemnitee is only partially
successful in the defense of any Proceeding arising out of a Qualifying Reason,
or in the defense of any claim, issue or matter involved therein, whether in the
initial adjudication, arbitration or alternate dispute resolution mechanism or
on appeal, the Company shall nevertheless indemnify Indemnitee, as a matter of
right pursuant to Section 2(b) hereof, to the extent Indemnitee has been
partially successful.
        4.         Determination of Entitlement to Indemnification Pursuant to
Section 2(a).
                    (a)         Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 2(a) hereof, any
determination required by Delaware law regarding Indemnitee’s entitlement to
indemnification shall be made not later than sixty (60) days after the Company
shall have received such written request. Such sixty (60) -day period can be
extended for an additional reasonable time if:
                                 (i) the Company, pursuant to a request by
Indemnitee, has provided timely, continuous and effective Interval Protection
(as defined in Section 7 hereof); and
                                 (ii) the Company in good faith requires such
additional time for the obtaining or evaluating of documentation reasonably
available to Indemnitee and required for the determination of entitlement to
indemnification.
Any such determination of eligibility shall be made:
                                 (i) if a Change in Control (as hereinafter
defined) shall have occurred, by Independent Counsel (as hereinafter defined) in
a written opinion delivered by such Independent Counsel to the Board of
Directors, a copy of which (including each prior draft thereof) shall be
simultaneously delivered to Indemnitee (unless Indemnitee shall have made a
request, which request is timely under the circumstances, that such
determination be made by the Board of Directors or stockholders, in which case
the determination shall be made, as requested by Indemnitee, pursuant to clause
(ii)(A) or (ii)(C) of this Section 4(a)); and
                                 (ii) in all other cases:
                              (A) by the Board of Directors of the Company by a
majority vote of a quorum consisting of Disinterested Directors (as hereinafter
defined), or
                              (B) if such a quorum is not obtainable or, even if
obtainable, if the Board of Directors by the majority vote of Disinterested
Directors so directs, by Independent Counsel in a written opinion delivered by
such Independent Counsel to the Board of Directors, a copy of which shall be
simultaneously delivered to Indemnitee, or
                              (C) by the stockholders of the Company.

 

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The General Counsel of the Company, if any, shall, promptly upon receipt of
Indemnitee’s request for indemnification, advise the Board of Directors in
writing that Indemnitee has made such request for indemnification. Indemnitee
shall cooperate with the party making the determination of Indemnitee’s
entitlement to indemnification, including providing to such party, upon
reasonable advance request, any documentation or information reasonably
available to Indemnitee and necessary to such determination, but not including
documents or information that is within the scope of Indemnitee’s
attorney-client privilege. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the party making
such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to indemnification pursuant to
Section 2(a) hereof), and the Company hereby indemnifies and agrees to hold
Indemnitee harmless from such costs or expenses.
                    (b)         In making a determination of entitlement
pursuant to Section 4(a) or 4(e) hereof, the person or entity making such
determination shall presume that Indemnitee is entitled to indemnification
pursuant to Section 2(a) hereof and that the Company shall have the burden of
proof in the making of any determination contrary to such presumption. If no
determination pursuant to Section 4(a) hereof is made within sixty (60) days (or
such longer period, if any, as may be permitted by Section 4(a) hereof) of the
Company’s receipt of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be absolutely entitled to such indemnification, absent (i) a misstatement
of a material fact necessary to make the statements in such request not
materially misleading with respect to the information necessary for the
determination of entitlement to indemnification, or (ii) a prohibition of such
indemnification under applicable law.
                    (c)         The termination of any Proceeding by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, in and of itself, affect the rights of Indemnitee to
indemnification or the presumptions to which Indemnitee is otherwise entitled
pursuant to the provisions of this Agreement.
                    (d)          For purposes of this Agreement:
                                 (i)         “Change in Control” shall mean a
change in control of the Company 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 (the “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 (irrespective of the applicability of the initial clause of this
definition) if (A) any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act, but excluding any employee benefit plan or employee
stock plan of the Company or any subsidiary of the Company, or any entity
organized, appointed, established or holding securities of the Company with
voting power for or pursuant to the terms of any such plan) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing thirty-five percent
(35%) or more of the combined voting power of the Company’s then outstanding
securities without the prior approval of at least two-thirds (2/3) of the
members of the Board of Directors of the Company in office immediately prior to
such persons attaining such interest; (B) the Company is a party to a merger,
consolidation, sale of assets or other reorganization, or a proxy contest, as a
consequence of which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority of the Board
of Directors thereafter; or (C) during any period of two (2) consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors (including for this purpose any new director whose election or
nomination for election by the Company’s stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors.
                                 (ii)         “Disinterested Director” with
respect to any request by Indemnitee for indemnification hereunder shall mean a
director of the Company who neither is nor was a party to the Proceeding in
respect of which indemnification is being sought by Indemnitee.
                                 (iii)         “Independent Counsel” shall mean
a law firm or a member of a law firm (A) that neither is nor in the past five
(5) years has been retained to represent in any material matter the Company, any
Company Affiliate or any Securities Act Affiliate, or Indemnitee or any other
party to the Proceeding giving rise to a claim for indemnification hereunder,
and (B) which, under applicable standards of professional conduct then
prevailing, would not have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s right to
indemnification under this Agreement, and (C) that is reasonably acceptable to
the Company and Indemnitee. For purposes hereof, counsel shall not be deemed to
represent any government or governmental entity which may have commenced any
Proceeding or be asserting any claim against Indemnitee solely by reason of
having represented any department, commission, authority, subdivision or public
benefit corporation of or created by such government or governmental entity
which is a party to such Proceeding or before which it is being prosecuted or
which is making any such claim. In the event that the parties are unable to
agree on the selection of Independent Counsel, such counsel shall be selected by
lot from among the (x) Delaware law firms

 

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generally reputed to be experienced in corporate law and having more than
twenty-five (25) attorneys and which meet the requirements of
Section 4(d)(iii)(A) and (B) hereof or (y) Dallas, Houston, or New York City law
firms generally reputed to be experienced in corporate law and having more than
one hundred twenty-five (125) attorneys and which meet the requirements of
Section 4(d)(iii)(A) and (B) hereof and having, in each case, a rating of “av”
or better in the then current Martindale-Hubbell Law Directory. Such selection
shall be made in the presence of Indemnitee (or his representative), and the
parties shall contact, in the order of their selection by lot, such law firms,
requesting each such firm to accept an engagement to make the determination
required hereunder until one of such firms accepts such engagement. The fees and
expenses of counsel in connection with making any determination contemplated
hereunder (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) shall be paid by the Company and, if requested by such counsel,
the Company shall promptly give such counsel an appropriate written agreement
with respect to the payment of its fees and expenses and such other matters as
may be reasonably requested by such counsel.
                    (e)         In the event that pursuant to Section 4(a)
hereof a determination is made that Indemnitee shall not be entitled to
indemnification hereunder in respect of all or any part of a claim made by
Indemnitee therefor, Indemnitee shall nevertheless be entitled, at his option,
to a final adjudication or may seek an award in arbitration regarding his
entitlement to indemnification hereunder in respect of such claim. In the event
Indemnitee seeks adjudication, Indemnitee shall initially commence, within one
hundred eighty (180) days from Indemnitee’s receipt of notice that he is not
entitled to indemnification, an appropriate action in an appropriate court of
the State of Delaware or any other court of competent jurisdiction. In the event
Indemnitee seeks an award in arbitration, such arbitration shall be initiated by
Indemnitee within one hundred eighty (180) days from Indemnitee’s receipt of
notice that he is not entitled to indemnification and shall be conducted by a
single arbitrator who is a member of a firm which would qualify as an
Independent Counsel hereunder pursuant to the commercial arbitration rules of
the American Arbitration Association. The arbitrator shall notify the parties of
his or her decision within sixty (60) days following the initiation of such
arbitration. The Company hereby agrees to be bound by the determination of such
arbitrator and shall bear all fees, costs and expenses imposed by the American
Arbitration Association on account of such proceeding, irrespective of the
determination thereof. The Company further unconditionally and irrevocably
agrees that its execution of this Agreement shall also constitute a stipulation
by which it shall be irrevocably bound in any court or arbitration in which such
proceeding shall have been commenced, continued or appealed that (i) it shall
not oppose Indemnitee’s right to seek or obtain any such adjudication or award
in arbitration or any other claim by reason of any prior determination made
pursuant to this Agreement with respect to Indemnitee’s right to indemnification
under this Agreement on such claim or any other claim, or, except in good faith,
raise any objections not specifically relating to the merits of Indemnitee’s
claim; (ii) for all purposes of this Agreement any such adjudication or
arbitration shall be conducted de novo and without prejudice by reason of any
such prior determination to the effect that Indemnitee is not entitled to
indemnification; and (iii) it shall be bound by all provisions of this Agreement
(including, but not limited to, Sections 4(b) and 4(c) hereof). Whether or not
the court or arbitrator shall determine that Indemnitee is entitled to
indemnification hereunder as to any costs, expenses (including attorneys’ fees
and disbursements), judgments, penalties, fines or amounts in settlement in
respect of any claim, issue or matter involved in the Proceeding in respect of
which indemnification is sought hereunder, the Company shall within ninety
(90) days after written request therefor (and submission of reasonable evidence
of the nature and amount thereof), and unless there is a specific judicial
finding that Indemnitee’s suit was frivolous, pay all costs and expenses
(including attorneys’ fees and disbursements) incurred by Indemnitee in
connection with such adjudication or arbitration (including, but not limited to,
any appellate proceedings).
                    (f)         If the person or entity (including the Board of
Directors, Independent Counsel, stockholders, court or arbitrator) making the
determination as to the entitlement of Indemnitee to indemnification hereunder
shall determine that Indemnitee is not entitled to indemnification in respect of
all claims, issues or matters involved in a Proceeding in respect of which
indemnification is sought hereunder but is entitled to indemnification for some
of such claims, issues or matters, such person or entity shall equitably
allocate such costs, expenses (including attorneys’ fees and disbursements),
judgments, penalties, fines and amounts in settlement incurred in connection
with such Proceeding among the claims, issues or matters involved therein and
determine those for which Indemnitee shall be indemnified hereunder.
        5.         Advancement of Costs and Expenses.
                    (a)         All costs and expenses (including attorneys’
fees, retainers and advances of disbursements required of Indemnitee) incurred
by Indemnitee in preparing to serve or serving as a witness in a Proceeding of
the type described in clause (i) of Section 2(b) hereof, or in investigating,
defending or appealing any Proceeding relating to a Qualifying Reason (and not
excluded by clause (i) or (ii) of Section 2(c), or arising in connection with an
adjudication or award in arbitration pursuant to Section 4(e) hereof, or
relating to a Proceeding described in or arising pursuant to Section 8 hereof,
shall be paid by the Company (in advance of the final disposition of such
Proceeding) at the request of Indemnitee within twenty (20) days after the
receipt from time to time by the Company from Indemnitee of a statement or
statements requesting such advance or advances, reasonably evidencing the
expenses and costs incurred by him in connection therewith and averring that
they do not relate to matters described in the aforesaid clause (i) or (ii) of
Section 2(c), together with a written undertaking by Indemnitee to repay such
amount if it is ultimately determined (in a final adjudication or conclusion

 

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of an arbitration pursuant to Section 4(e) hereof, if Indemnitee elects to seek
such an adjudication or arbitration, and otherwise in a determination, if
required hereunder, pursuant to Section 4(a) hereof) that Indemnitee is not
entitled to be indemnified against such costs and expenses by the Company as
provided by this Agreement (or, if Indemnitee has sought advances pursuant to
Section 4(e) or 8 hereof, if there is a specific judicial finding that
Indemnitee’s suit was frivolous).
                    (b)         If and to the extent it is finally determined
hereunder that Indemnitee is not entitled to indemnification under this
Agreement, or is entitled only to partial indemnification hereunder, Indemnitee
shall reimburse the Company for all costs and expenses advanced or prepaid
pursuant to Indemnitee’s prior request or requests hereunder, or the proper
proportion thereof, as the case may be, within ninety (90) days after receipt of
an itemized written statement therefor from the Company, provided that
Indemnitee shall have no obligation to reimburse the Company for any of
Indemnitee’s costs and expenses relating to (i) cooperating with the Company in
making its determination, as provided in Section 4(a) hereof, (ii) an
adjudication or arbitration of his entitlement to indemnification hereunder, as
provided in Section 4(e) hereof, or (iii) a Proceeding described in or arising
under Section 8 hereof (unless, in the case of the foregoing clause (ii) or
(iii), there is a specific judicial finding that Indemnitee’s suit was
frivolous).
                    (c)         Indemnitee shall have the right to employ
counsel during the pendency of any Proceeding which is the subject of this
Agreement, but the fees and expenses of such counsel shall be at Indemnitee’s
expense unless (i) all Indemnitees who are made a party or threatened to be made
a party to any Proceeding within the scope of this Agreement agree to use the
same legal counsel; (ii) the employment of counsel by Indemnitee has been
authorized by the Company; (iii) the Company acknowledges that there is a
conflict of interest between the Company and Indemnitee in the conduct of the
defense of such Proceeding, in which case, counsel selected by Indemnitee must
be reasonably satisfactory to Company; and provided further however that in the
event other persons who are potential targets of any Proceeding are being
separately represented because of the same or substantially same conflict of
interest, Indemnitee shall, upon the Company’s demand, use the same counsel as
engaged on behalf of the other persons (unless a conflict also exists between
Indemnitee and such other persons); (iv) following ten (10) -days’ written
notice, the Company shall in fact not have employed counsel to assume the
defense of such Proceeding; or (v) counsel selected by the Company moves to
withdraw from representing Indemnitee, and the Company does not, within ten days
of receiving notice of such motion employ substitute counsel.
        6.         Other Rights to Indemnification. The indemnification and
advancement of costs and expenses (including attorneys’ fees and disbursements)
provided by this Agreement shall not be deemed exclusive of any other rights to
which Indemnitee may now or in the future be entitled under any provision of
applicable law, the Certificate of Incorporation or any By-Law of the Company or
any other agreement or any vote of directors or stockholders or otherwise,
whether as to action in his official capacity or in another capacity while
occupying any of the positions or having any of the relationships referred to in
Section 2 of this Agreement.
        7.         Interval Protection Against Premature Enforcement. During the
interval between the Company’s receipt of Indemnitee’s request for
indemnification and the latest to occur of (a) payment in full to Indemnitee of
the indemnification to which he is entitled hereunder, or (b) a determination
(if required) pursuant to Section 4(a) hereof or a final adjudication or
conclusion of an arbitration pursuant to Section 4(e) hereof (if Indemnitee
elects to seek such an adjudication or arbitration) that Indemnitee is not
entitled to indemnification hereunder, the Company shall provide “Interval
Protection” which, for purposes of this Agreement, shall mean the taking of the
necessary steps (whether or not such steps require expenditures to be made by
the Company at that time) to stay, pending a final determination of Indemnitee’s
entitlement to indemnification (and, if Indemnitee is so entitled, the payment
thereof), the execution, enforcement or collection of any judgments, penalties,
fines or any other amounts for which Indemnitee may be liable (and as to which
Indemnitee has requested indemnification hereunder) in order to avoid Indemnitee
being or becoming in default with respect to any such amounts (such necessary
steps to include, but not be limited to, the procurement of a surety bond to
achieve such stay or the loan to Indemnitee of amounts necessary to satisfy the
judgments, penalties, fines or other amounts for which Indemnitee may be liable
and as to which a stay of execution as aforesaid cannot be obtained, the Board
of Directors by its approval of the form of the Indemnification Agreement (as
hereinafter defined) having made the judgment that, in general, such loan or
similar assistance may reasonably be expected to benefit the Company), within
three (3) days after receipt of Indemnitee’s written request therefor, together
with a written undertaking by Indemnitee to repay, no later than ninety
(90) days following receipt of a statement therefor from the Company, amounts
(if any) expended by the Company for such purpose, if it is ultimately
determined (in a final adjudication or conclusion of an arbitration pursuant to
Section 4(e) hereof, if Indemnitee elects to seek such an adjudication or
arbitration, and otherwise in a determination (if required) pursuant to
Section 4(a) hereof) that Indemnitee is not entitled to be indemnified against
such judgments, penalties, fines or other amounts, provided that in no event
shall the Company pay the amount of any such judgment, penalty, fine or other
amount except pursuant to Sections 2, 4 (if applicable) or 6 hereof.

 

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        8.         Enforcement.
                    (a)         The Company unconditionally and irrevocably
agrees that its execution of this Agreement shall also constitute a stipulation
by which it shall be irrevocably bound in any court or arbitration in which a
proceeding by Indemnitee for enforcement of his rights shall have been
commenced, continued or appealed that its obligations set forth in this
Agreement are unique and special, and that failure of the Company to comply with
the provisions of this Agreement will cause irreparable and irremediable injury
to Indemnitee, for which a remedy at law will be inadequate. As a result, in
addition to any other right or remedy he may have at law or in equity with
respect to a violation of this Agreement, Indemnitee shall be entitled to
injunctive or mandatory relief directing specific performance by the Company of
its obligations under this Agreement. The Company further irrevocably stipulates
and agrees that (i) it shall not, except in good faith, raise any objections not
specifically relating to the merits of Indemnitee’s claim, (ii) if a
determination was made or deemed to have been made pursuant to the provisions of
Section 4 hereof that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination and shall be precluded from asserting that
such determination has not been made or that the procedure by which such
determination was made is not valid, binding and enforceable, (iii) the Company
shall be bound, in any such proceeding, by all provisions of this Agreement
(including, but not limited to, Sections 4(b) and 4(c) hereof), and (iv) the
Company shall not assert any rights of set-off against Indemnitee except for
money borrowed by Indemnitee from the Company.
                    (b)         In the event that Indemnitee is subject to or
intervenes in any legal action in which the validity or enforceability of this
Agreement is at issue or institutes any legal action, for specific performance
or otherwise, to enforce his rights under, or to recover damages for breach of,
this Agreement, Indemnitee shall, within thirty (30) days after written request
to the Company therefor (and submission of reasonable evidence of the amount
thereof), and unless there is a specific judicial finding that Indemnitees suit
was frivolous, be indemnified by the Company against all costs and expenses
(including attorneys’ fees and disbursements) incurred by him in connection
therewith.
        9.         Duration of Agreement.
                    (a)         This Agreement shall continue until and
terminate upon the later of (i) the tenth (10th) anniversary after Indemnitee
has ceased to occupy any of the positions or have any of the relationships
described in Section 2(a) of this Agreement or (ii) (A) the final termination or
resolution of all proceedings with respect to Indemnitee commenced during such
ten (10) -year period and (B) either (x) receipt by Indemnitee of the
indemnification to which he is entitled hereunder with respect thereto, or (y) a
final adjudication or binding arbitration that Indemnitee is not entitled to any
further indemnification with respect thereto, as the case may be.
                    (b)         This Agreement shall be binding upon the Company
and its successors and assigns and shall inure to the benefit of Indemnitee and
his heirs, devisees, executors, administrators or other legal representatives.
        10.       Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable under any particular
circumstances or for any reason whatsoever (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, without
limitation, all other portions of any section, paragraph or clause of this
Agreement that contains any provision that has been found to be invalid, illegal
or unenforceable, that are not themselves invalid, illegal or unenforceable), or
the validity, legality or enforceability under any other circumstances shall not
in any way be affected or impaired thereby and (b) to the fullest extent
possible consistent with applicable law, the provisions of this Agreement
(including, without limitation, all other portions of any section, paragraph or
clause of this Agreement that contains any such provision that has been found to
be invalid, illegal or unenforceable, that are not themselves invalid, illegal
or unenforceable) shall be deemed revised, and shall be construed so as to give
effect to the intent manifested by this Agreement (including the provision held
invalid, illegal or unenforceable).
        11.       Identical Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be deemed to be an
original, but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
        12.       Headings. The headings 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.
        13.       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 provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

 

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        14.       Notification and Defense of Claim. Indemnitee agrees to
promptly notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any matter which may be subject to indemnification covered
hereunder, whether civil, criminal or investigative; provided, however, that the
failure of Indemnitee to give such notice to the Company shall not adversely
affect Indemnitee’s rights under this Agreement except to the extent the Company
shall have been materially prejudiced as a direct result of such failure.
Nothing in this Agreement shall constitute a waiver of the Company’s right to
seek participation at its own expense in any Proceeding which may give rise to
indemnification hereunder.
        15.       Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, (ii) mailed by certified
or registered mail with postage prepaid, on the fourth business day after the
date on which it is so mailed, or (iii) sent by facsimile transmission with the
effective transmission confirmed by receipt, in all cases:
                    (a)         if to Indemnitee, at the address indicated on
the signature page hereof; and
                    (b)         if to the Company:

     
                                  HCC Insurance Holdings, Inc.
   
                                  13403 Northwest Freeway
 
                                  Houston, TX. 77040
 
                                  Facsimile No.: (713) 744-9468
   
                                  Attention: General Counsel
 

or to such other address as may have been furnished to either party by the other
party.
        16.       Governing Law. The parties hereto agree that this Agreement
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware, without regard to the conflicts of laws principles
thereof.
[signature page follows]
          IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written

                      HCC INSURANCE HOLDINGS, INC.    
 
               
 
  By:                               Name:        
 
       
 
        Title:        
 
       
 
   
 
               
 
               
 
                              [NAME]    
 
                    Address: