Exhibit 10.1


 


INDEMNIFICATION AGREEMENT


 


This
INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as
of                                   
(the “Effective Date”) by and between Image Entertainment, Inc., a
Delaware corporation (the “Company”), and                                   
(the “Indemnitee”).


 


RECITALS


 


1.                                       The
Company believes it is essential to retain and attract qualified officers and
directors.


 


2.                                       The
Indemnitee is an officer or director of the Company.


 


3.                                       Both
the Company and the Indemnitee recognize the increased risk of litigation and
other claims being asserted against officers and directors of public companies.


 


4.                                       The
Company’s certificate of incorporation and bylaws (the “Charter Documents”)
require the Company to indemnify and advance expenses to its officers and
directors to the extent permitted by the DGCL (as defined below).


 


5.                                       The
Indemnitee intends to continue serving as an officer or director of the
Company, in part in reliance on the Charter Documents and this Agreement.


 


6.                                       In
recognition of the Indemnitee’s need for (i) substantial protection against
personal liability based on the Indemnitee’s reliance on the Charter Documents,
(ii) specific contractual assurance that the protection set forth in the
Charter Documents will be available to the Indemnitee, regardless of, among
other things, any amendment to or revocation of the Charter Documents or any
change in the composition of the Company’s board of directors (the “Board”) or
acquisition transaction relating to the Company, and (iii) an inducement to
continue to provide effective services to the Company as an officer or director
thereof, the Company wishes to provide for the indemnification of the
Indemnitee and to advance expenses to the Indemnitee to the fullest extent
permitted by law and as set forth in this Agreement, and, to the extent
insurance is maintained by the Company, to provide for the continued coverage
of the Indemnitee under the Company’s directors’ and officers’ liability
insurance policies.


 


AGREEMENT


 


In
consideration of the premises and of the Indemnitee continuing to serve the
Company, and intending to be legally bound hereby, the parties hereto agree as
follows:


 


1.                                       Definitions.


 


(a)                                  A
“Change in Control” shall be deemed to have occurred if:


 


(i)                                     any
“person,” as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder (the
“Exchange Act”), other than (a) a trustee or other fiduciary


 


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holding securities under an employee benefit plan of the Company; (b) a
corporation owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company; or (c) any current beneficial stockholder or group, as defined by Rule
13d-5 of the Exchange Act, including the heirs, assigns and successors thereof,
of beneficial ownership, within the meaning of Rule 13d-3 of the Exchange Act,
of securities possessing more than 50% of the total combined voting power of
the Company’s outstanding securities; hereafter becomes the “beneficial owner,”
as defined in Rule 13d-3 of the Exchange Act, directly or indirectly, of
securities of the Company representing 30% or more of the total combined voting
power represented by the Company’s then outstanding Voting Securities;


 


(ii)                                  during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board and any new director whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of
at least two-thirds of the directors then in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or


 


(iii)                               the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least 70% of the
total voting power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company, in one
transaction or a series of transactions, of all or substantially all of the
Company’s assets.


 


(b)                                 “DGCL”
means the General Corporation Law of the State of Delaware, as the same exists
or may hereafter be amended or interpreted; provided, however, that in the case
of any such amendment or interpretation, only to the extent that such amendment
or interpretation permits the Company to provide broader indemnification rights
than were permitted prior thereto.


 


(c)                                  “Expense”
means attorneys’ fees and all other costs, expenses and obligations paid or
incurred in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing for any of the foregoing,
any Proceeding relating to any Indemnifiable Event.


 


(d)                                 “Indemnifiable
Event” means any event or occurrence that takes place either prior to or
after the execution of this Agreement, related to the fact that the Indemnitee
is or was a director or officer of the Company, or is or was serving at the
request of the Company as a director, officer, employee, or agent of another
corporation


 


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or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, or by reason of anything done or not done by
the Indemnitee in any such capacity.


 


(e)                                  “Potential
Change in Control” shall be deemed to occur if (i) the Company enters into
an agreement or arrangement, the consummation of which would result in the occurrence
of a Change in Control; (ii) any person (including the Company) publicly
announces an intention to take or to consider taking actions which, if
consummated, would constitute a Change in Control; (iii) any person (other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company acting in such capacity or a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company) who is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company’s then
outstanding Voting Securities, increases his or her beneficial ownership of
such securities by 5% or more over the percentage so owned by such person on
the date hereof; or (iv) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.


 


(f)                                    “Proceeding”
means any threatened, pending or completed action, suit, investigation or
proceeding, and any appeal thereof, whether civil, criminal, administrative or
investigative and/or any inquiry or investigation, whether conducted by the
Company or any other party, that the Indemnitee in good faith believes might
lead to the institution of any such action.


 


(g)                                 “Reviewing
Party” means any appropriate person or body consisting of a member or
members of the Company’s Board or any other person or body appointed by the
Board (including the special independent counsel referred to in Section 6) who
is not a party to the particular Proceeding with respect to which the
Indemnitee is seeking indemnification.


 


(h)                                 “Voting
Securities” means the common stock and any other securities of the Company
which vote generally in the election of directors.


 


2.                                       Indemnification.  In the event the Indemnitee was or is a party
to or is involved (as a party, witness, or otherwise) in any Proceeding by
reason of (or arising in part out of) an Indemnifiable Event, whether the basis
of the Proceeding is the Indemnitee’s alleged action in an official capacity as
a director or officer or in any other capacity while serving as a director or
officer, the Company shall indemnify the Indemnitee to the fullest extent permitted
by the DGCL against any and all Expenses, liability, and loss (including
judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be
paid in settlement, and any interest, assessments, or other charges imposed
thereon, and any federal, state, local, or foreign taxes imposed on any
director or officer as a result of the actual or deemed receipt of any payments
under this Agreement) (collectively, “Liabilities”) reasonably incurred
or suffered by such person in connection with such Proceeding.  The Company shall provide indemnification
pursuant to this Section 2 as soon as practicable, but in no event later than
30 days after it receives written demand from the Indemnitee.  Notwithstanding anything in this Agreement to
the contrary and except as provided


 


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in Section 5 below, the
Indemnitee shall not be entitled to indemnification pursuant to this Agreement
(i) in connection with any Proceeding initiated by the Indemnitee against the
Company or any director or officer of the Company unless the Company has joined
in or consented to the initiation of such Proceeding or (ii) on account of any
suit in which judgment is rendered against the Indemnitee pursuant to Section
16(b) of the Exchange Act for an accounting of profits made from the purchase
or sale by the Indemnitee of securities of the Company.


 


3.                                       Advancement
of Expenses.  The Company shall
advance Expenses to the Indemnitee within 30 business days of such request (an “Expense
Advance”); provided, however, that if required by applicable corporate laws
such Expenses shall be advanced only upon delivery to the Company of an
undertaking by or on behalf of the Indemnitee to repay such amount if it is
ultimately determined that the Indemnitee is not entitled to be indemnified by
the Company; and provided further, that the Company shall make such advances
only to the extent permitted by law. 
Expenses incurred by the Indemnitee while not acting in his/her capacity
as a director or officer, including service with respect to employee benefit
plans, may be advanced upon such terms and conditions as the Board, in its sole
discretion, deems appropriate.


 


4.                                       Review
Procedure for Indemnification. 
Notwithstanding the foregoing, (i) the obligations of the Company under
Sections 2 and 3 above shall be subject to the condition that the Reviewing
Party shall not have determined (in a written opinion, in any case in which the
special independent counsel referred to in Section 6 hereof is involved) that
the Indemnitee would not be permitted to be indemnified under applicable law,
and (ii) the obligation of the Company to make an Expense Advance pursuant to
Section 3 above shall be subject to the condition that, if, when and to the
extent that the Reviewing Party determines that the Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by the Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if the
Indemnitee has commenced legal proceedings in a court of competent jurisdiction
pursuant to Section 5 below to secure a determination that the Indemnitee
should be indemnified under applicable law, any determination made by the Reviewing
Party that the Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding and the Indemnitee shall not be required to
reimburse the Company for any Expense Advance until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or have lapsed). 
The Indemnitee’s obligation to reimburse the Company for Expense
Advances pursuant to this Section 4 shall be unsecured and no interest shall be
charged thereon.  If there has not been a
Change in Control, the Reviewing Party shall be selected by the Board, and if
there has been such a Change in Control, other than a Change in Control which
has been approved by a majority of the Company’s Board who were directors
immediately prior to such Change in Control, the Reviewing Party shall be the
special independent counsel referred to in Section 6 hereof.


 


5.                                       Enforcement
of Indemnification Rights.  If the
Reviewing Party determines that the Indemnitee substantively would not be
permitted to be indemnified in whole or in part under applicable law, or if the
Indemnitee has not otherwise been paid in full pursuant to Sections 2 and 3
above within 30 days after a written demand has been received by the Company,
the Indemnitee shall have the right to commence litigation in any court in the
State of Delaware having subject matter jurisdiction thereof and in which venue
is proper to recover the unpaid


 


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amount of the demand (an “Enforcement
Proceeding”) and, if successful in whole or in part, the Indemnitee shall
be entitled to be paid any and all Expenses in connection with such Enforcement
Proceeding.  The Company hereby consents
to service of process for such Enforcement Proceeding and to appear in any such
Enforcement Proceeding.  Any
determination by the Reviewing Party otherwise shall be conclusive and binding
on the Company and the Indemnitee.


 


6.                                       Change
in Control.  The Company agrees that
if there is a Change in Control of the Company, other than a Change in Control
which has been approved by a majority of the Company’s Board who were directors
immediately prior to such Change in Control, then with respect to all matters
thereafter arising concerning the rights of the Indemnitee to indemnity
payments and Expense Advances under this Agreement or any other agreement or
under applicable law or the Company’s Certificate of Incorporation or Bylaws
now or hereafter in effect relating to indemnification for Indemnifiable
Events, the Company shall seek legal advice only from special independent
counsel selected by the Indemnitee and approved by the Company, which approval
shall not be unreasonably withheld.  Such
special independent counsel shall not have otherwise performed services for the
Company or the Indemnitee, other than in connection with such matters, within
the last five years.  Such independent
counsel shall 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 the Indemnitee in an action to determine the
Indemnitee’s rights under this Agreement. 
Such counsel, among other things, shall render its written opinion to
the Company and the Indemnitee as to whether and to what extent the Indemnitee
would be permitted to be indemnified under applicable law.  The Company agrees to pay the reasonable fees
of the special independent counsel referred to above and to indemnify fully
such counsel against any and all expenses (including attorneys’ fees), claims,
liabilities and damages arising out of or relating to this Agreement or the
engagement of special independent counsel pursuant to this Agreement.


 


7.                                       Establishment
of Trust.  In the event of a
Potential Change in Control, the Company shall, upon written request by the
Indemnitee, create a trust (the “Trust”) for the benefit of the
Indemnitee, and from time to time upon written request of the Indemnitee shall
fund such Trust, to the extent permitted by law, in an amount sufficient to
satisfy any and all Expenses reasonably anticipated at the time of each such
request to be incurred in connection with investigating, preparing for and
defending any Proceeding relating to an Indemnifiable Event, and any and all
judgments, fines, penalties and settlement amounts of any and all Proceedings
relating to an Indemnifiable Event from time to time actually paid or claimed,
reasonably anticipated or proposed to be paid. 
The amount or amounts to be deposited in the Trust pursuant to the
foregoing funding obligation shall be determined by the Reviewing Party, in any
case in which the special independent counsel referred to in Section 6 is
involved.  The terms of the Trust shall
provide that upon a Change in Control (i) the Trust shall not be revoked or the
principal thereof invaded, without the written consent of the Indemnitee, (ii)
the trustee of the Trust (the “Trustee”) shall advance, within ten
business days of a request by the Indemnitee, any and all Expenses to the
Indemnitee, to the extent permitted by law, (and the Indemnitee hereby agrees
to reimburse the Trust under the circumstances under which the Indemnitee would
be required to reimburse the Company under Section 4 of this Agreement), (iii)
the Trust shall continue to be funded by the Company in accordance with the
funding obligation set forth above, (iv) the Trustee shall promptly pay to the
Indemnitee all amounts for which the Indemnitee shall


 


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be entitled to indemnification
pursuant to this Agreement or otherwise, and (v) all unexpended funds in the
Trust shall revert to the Company upon a final determination by the Reviewing
Party or a court of competent jurisdiction, as the case may be, that the
Indemnitee has been fully indemnified under the terms of this Agreement.  The Trustee shall be a bank or trust company
or other individual or entity chosen by the Indemnitee and acceptable to and
approved of by the Company.  Nothing in
this Section 7 shall relieve the Company of any of its obligations under this
Agreement.  All income earned on the
assets held in the Trust shall be reported as income by the Company for
federal, state, local and foreign tax purposes.


 


8.                                       Partial
Indemnity.  If the Indemnitee is
entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of the Expenses and Liabilities, but not,
however, for all of the total amount thereof, the Company shall nevertheless
indemnify the Indemnitee for the portion thereof to which the Indemnitee is
entitled.  Moreover, notwithstanding any
other provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any or all Proceedings
relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, including dismissal without prejudice, the Indemnitee
shall be indemnified against all Expenses incurred in connection
therewith.  In connection with any
determination by the Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that the Indemnitee is not so entitled.


 


9.                                       Non-exclusivity.  The rights of the Indemnitee hereunder shall
be in addition to any other rights the Indemnitee may have under any statute,
provision of the Company’s Certificate of Incorporation or Bylaws, vote of
stockholders or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office.  To the extent that a change in
the DGCL permits greater indemnification by agreement than would be afforded
currently under the Company’s Certificate of Incorporation and Bylaws and this
Agreement, it is the intent of the parties hereto that the Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.


 


10.                                 Liability
Insurance.  To the extent the Company
maintains an insurance policy or policies providing directors’ and officers’
liability insurance, the 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 director or officer of the Company.


 


11.                                 Settlement
of Claims.  The Company shall not be
liable to indemnify the Indemnitee under this Agreement (a) for any amounts
paid in settlement of any action or claim effected without the Company’s
written consent, which consent shall not be unreasonably withheld; or (b) for
any judicial award if the Company was not given a reasonable and timely
opportunity, at its expense, to participate in the defense of such action.


 


12.                                 No
Presumption.  For purposes of this
Agreement, to the fullest extent permitted by law, the termination of any
Proceeding, action, suit or claim, by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that the Indemnitee did not meet
any particular standard of conduct or have any particular belief or that a
court has determined that indemnification is not permitted by applicable law.


 


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13.                                 Period
of Limitations.  No legal action
shall be brought and no cause of action shall be asserted by or on behalf of
the Company or any affiliate of the Company against the Indemnitee, the
Indemnitee’s spouse, heirs, executors or personal or legal representatives
after the expiration of two years from the date of accrual of such cause of
action, or such longer period as may be required by state law under the
circumstances, and any claim or cause of action of the Company or its affiliate
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.


 


14.                                 Amendment
of this Agreement.  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.  Except as specifically provided herein, no
failure to exercise or any delay in exercising any right or remedy hereunder
shall constitute a waiver thereof.


 


15.                                 Subrogation.  In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.


 


16.                                 No
Duplication of Payments.  The Company
shall not be liable under this Agreement to make any payment in connection with
any claim made against Indemnitee to the extent the Indemnitee has otherwise
actually received payment (under any insurance policy, Bylaw, vote, agreement
or otherwise) of the amounts otherwise indemnifiable hereunder.


 


17.                                 Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. 
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 the 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.  This
Agreement shall continue in effect regardless of whether the Indemnitee
continues to serve as a director or officer of the Company or of any other
enterprise at the Company’s request.


 


18.                                 Severability.  The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) is held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted
by law.  Furthermore, to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of this Agreement containing any provision held to be
invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall


 


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be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable.


 


19.                                 Governing
Law.  This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware applicable to contracts made and to be performed in Delaware
without giving effect to the principles of conflicts of laws.


 


20.                                 Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


21.                                 Notices.  All notices, demands, and other
communications required or permitted hereunder shall be made in writing and
shall be deemed to have been duly given if delivered by hand, against receipt,
or mailed, postage prepaid, certified or registered mail, return receipt
requested, and addressed to the Company, Attn: Corporate Secretary, at its
principal executive offices, and to the Indemnitee at the address last on file
with the Company.


 


Notice of
change of address shall be effective only when done in accordance with this
Section.  All notices complying with this
Section shall be deemed to have been received on the date of delivery or on the
third business day after mailing.


 


IN WITNESS
WHEREOF, the parties hereto have duly executed and delivered this Agreement as
of the day first set forth above.


 


	
  COMPANY:

  
	
   

  
	
  IMAGE
  ENTERTAINMENT, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
								



 


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