Document:

Exhibit 10.1

 

EXECUTION COPY

 

AGREEMENT

 

This Agreement (this “Agreement”) is made and entered into as of February 28, 2012, by and among LodgeNet Interactive Corporation (the “Company”) and the entities and natural persons listed on Exhibit A hereto (collectively, “Mast Capital”) (each of the Company and Mast Capital, a “Party” to this Agreement, and collectively, the “Parties”).

 

RECITALS:

 

WHEREAS, the Company and Mast Capital have engaged in various discussions and communications concerning the Company’s business, financial performance and strategic plans;

 

WHEREAS, Mast Capital is deemed to beneficially own shares of Common Stock of the Company (the “Common Stock”) totaling, in the aggregate, 2,425,915 shares, or approximately 9.6% of the Common Stock issued and outstanding on the date hereof;

 

WHEREAS, Mast Capital has submitted a letter demanding a list of stockholders and certain other books and records of the Company (the “Demand Letter”); and

 

WHEREAS the Company and the members of Mast Capital have determined to come to an agreement with respect to the composition of the Board of Directors of the Company (the “Board”), certain matters related to the Company’s 2012 annual meeting of stockholders (the “2012 Annual Meeting”) and certain other matters, as provided in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound hereby, and covenanting to act in good faith, agree as follows:

 

1.                                       Board Matters; Board Appointments; 2012 Annual Meeting.

 

(a)                                  On the later of (i) the date hereof or (ii) the meeting of the Board scheduled for February 28, the Company shall take all necessary actions to appoint Philip Spencer to fill the vacancy on the Board in the class of directors whose term expires at the Company’s 2014 annual meeting of stockholders (the “2014 Annual Meeting”).  Mr. Spencer shall agree to comply with the Company’s standards and guidelines regarding share ownership by outside directors of the Company.

 

(b)                                 The Company agrees to form a committee (the “Selection Committee”) to identify an additional individual (such individual, the “New Appointee”) to serve on the Board.  The Selection Committee shall consist of Scott H. Shlecter, the Chairman of the Governance and Nominating Committee of the Board, Scott C. Petersen, the Chairman and CEO of the Company, and representatives of each of the following stockholders of the Company: Mast Capital, Penn Capital Management Company, Inc., Mark Cuban and John Pecora (collectively, the “Participating Stockholders”).  Each Participating Stockholder and the Company shall be invited, at their option, to submit candidates to serve as the New Appointee.  The Selection Committee shall conduct a standard interview and due diligence process with respect to such recommendations to be coordinated by the Chairman of the Governance and Nominating Committee of the Board.  The New Appointee shall be the individual who receives the support of

 

 

the majority of the Participating Stockholders (based on the number of shares held by each Participating Stockholder and his or its affiliates), provided, however, the Company may reasonably object to such individual.  If the Company has a reasonable objection to the New Appointee, the foregoing process shall be repeated until the Company has no objection to the New Appointee, provided, however, if the Company reasonably objects to three New Appointees selected by the Selection Committee, the Participating Stockholders shall have the right to designate the New Appointee by a majority vote (based on the number of shares held by each Participating Stockholder and his or its affiliates) over any objection by the Company.

 

(c)                                  The Company agrees that one of the incumbent directors, which may be one of the three directors whose terms expire at the 2012 Annual Meeting will either resign prior to, or not stand for re-election at, the 2012 Annual Meeting.  The Company agrees to either (i) appoint the New Appointee to fill the resulting vacancy on the Board prior to the Annual Meeting and, if appropriate, then include the New Appointee in the Company’s slate of three nominees for election at the 2012 Annual Meeting, or (ii) include the New Appointee in the Company’s slate of three nominees for election at the 2012 Annual Meeting.  If the New Appointee is appointed to the class of directors whose terms expire at the 2012 Annual Meeting, the Company agrees to recommend, support and solicit proxies for the election of the New Appointee in the same manner as for the Company’s other two nominees who are up for election at the 2012 Annual Meeting.  If the New Appointee is appointed to the class of directors whose terms expire at the Company’s 2013 annual meeting of stockholders (the “2013 Annual Meeting”) or 2014 Annual Meeting, the Company agrees to recommend, support and solicit proxies for the election of the New Appointee in the same manner as for the Company’s other nominees who are up for election at the 2013 Annual Meeting or 2014 Annual Meeting, as the case may be, provided that the New Appointee is in material compliance with the Company’s policies on director behavior applicable to all directors.  If the New Appointee is not in material compliance with such policies, then a replacement nominee shall be identified pursuant to the process set forth in Section 1(b) above; provided, that no Participating Stockholder shall serve on the Selection Committee unless at such time he or it owns at least a 5% interest in the Common Stock.

 

(d)                                 Each of Philip Spencer and the New Appointee will qualify as “independent” pursuant to NASDAQ listing standards.  The Governance and Nominating Committee of the Board shall have reviewed the qualifications of Mr. Spencer prior to the execution of this Agreement.

 

(e)                                  If Mr. Spencer resigns from the Board during the Standstill Period (as defined in Section 2(a) below), Mast Capital shall have the right to designate a replacement nominee to be appointed to the Board, to serve with a term expiring at the 2014 Annual Meeting; provided (i) that at such time Mast Capital owns at least a 5% interest in the Company’s common stock; and (ii) that such replacement designee must be reasonably acceptable to the Board and must qualify as “independent” pursuant to NASDAQ listing standards.

 

(f)                                    If the New Appointee resigns from the Board during the Standstill Period, the Company shall reconstitute the Selection Committee and a replacement nominee shall be identified pursuant to the process set forth in Section 1(b) above; provided, that no Participating Stockholder shall serve on the Selection Committee unless at such time he or it owns at least a 5% interest in the Common Stock.

 

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(g)                                 Upon execution of this Agreement, Mast Capital hereby withdraws the Demand Letter and each member of Mast Capital agrees not to (i) nominate any person for election at the 2012 Annual Meeting or (ii) submit any proposal for consideration at, or bring any other business before, the 2012 Annual Meeting, directly or indirectly.  Mast Capital shall not publicly or privately encourage or support any other stockholder to nominate any person for election at the 2012 Annual Meeting.

 

(h)                                 During the Standstill Period, Mast Capital agrees to appear in person or by proxy and vote all shares of Common Stock of the Company beneficially owned by it and its affiliates in favor of the election of each of the Company’s nominees for election to the Board at any annual meeting of the Company.

 

(i)                                     The Company agrees that the Board shall take no action to increase the size of the Board to more than nine (9) members during the Standstill Period.

 

(j)                                     The Company agrees to hold the 2012 Annual Meeting no later than June 15, 2012.

 

2.                                       Standstill Provisions

 

(a)                                  Each member of Mast Capital agrees that, from the date of this Agreement until the earlier of (i) the conclusion of the Company’s 2013 Annual Meeting or (ii) June 30, 2013 (the “Standstill Period”), neither it nor any of its Affiliates or Associates (as such terms are defined in Regulation 14A under the Securities Exchange Act of 1934, as amended or the rules or regulations thereunder (the “Exchange Act”)) under its control or direction will, and it will cause each of its Affiliates and Associates under its control not to, directly or indirectly, in any manner:

 

(i)                                     purchase or cause to be purchased or otherwise acquire or agree to acquire beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act) of any Common Stock or other securities issued by Company, if in any such case, immediately after the taking of such action, Mast Capital would, in the aggregate, collectively beneficially own more than 19.99% of the then outstanding shares of Common Stock;

 

(ii)                                  engage in any solicitation of proxies or consents or become a “participant” in a “solicitation” as such terms are defined in Regulation 14A under the Exchange Act of proxies or consents (including, without limitation, any solicitation of consents to call a special meeting of stockholders), in each case, with respect to securities of the Company;

 

(iii)                               seek to advise, encourage, support or influence any person with respect to the voting or disposition of any securities of the Company at annual meeting of stockholders, except in accordance with Section 1;

 

(iv)                              form, join or in any way participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other than a “group” that includes all or some lesser number of the persons identified as part of Mast Capital, but does not include any other members who are not currently identified as part of Mast Capital as of the date hereof);

 

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(v)                                 deposit any Common Stock in any voting trust or subject any Common Stock to any arrangement or agreement with respect to the voting of any Common Stock, other than any such voting trust, arrangement or agreement solely among the members of Mast Capital;

 

(vi)                              seek or encourage any person to submit nominations in furtherance of a “contested solicitation” for the election or removal of directors with respect to the Company;

 

(vii)                           (1) make any proposal for consideration by stockholders at any annual meeting of stockholders of the Company or (2) make any offer or proposal (with or without conditions) with respect to a merger, acquisition, disposition or other business combination involving Mast Capital and the Company; or

 

(viii)                        seek, alone or in concert with others, representation on the Board, except as specifically contemplated in Section 1.

 

(b)                                 Notwithstanding anything contained herein to the contrary, except as expressly provided herein, each member of Mast Capital shall be entitled to:

 

(i)                                     vote their shares on any proposal duly brought before the 2012 Annual Meeting or 2013 Annual Meeting (other than the election of directors), or any special meeting of stockholders of the Company, or otherwise vote as each member of Mast Capital determines in its sole discretion;

 

(ii)                                  propose a slate of nominees for election as directors and/or one or more proposal(s) for consideration or approval by stockholders at the 2014 Annual Meeting;

 

(iii)                               disclose, publicly or otherwise, how it intends to vote or act with respect to any securities of the Company, any stockholder proposal or other matter to be voted on by the stockholders of the Company (other than the election of directors) and the reasons therefor; and

 

(iv)                              announce their opposition to any Board approved proposals related to a merger, acquisition, disposition of all or substantially all of the assets of the Company or other business combination involving the Company.

 

3.                                       Representations and Warranties of the Company.

 

The Company represents and warrants to Mast Capital that (a) the Company has the corporate power and authority to execute this Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles and (c) the execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss

 

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of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound.

 

4.                                       Representations and Warranties of Mast Capital.

 

Mast Capital shall cause its Affiliates to comply with the terms of this Agreement.  Mast Capital represents and warrants to the Company that (a) the authorized signatory of Mast Capital set forth on the signature page hereto has the power and authority to execute this Agreement and to bind it thereto this Agreement, (b) this Agreement has been duly authorized, executed and delivered by Mast Capital, and is a valid and binding obligation of Mast Capital, enforceable against Mast Capital in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) the execution of this Agreement, the consummation of any of the transactions contemplated hereby, and the fulfillment of the terms hereof, in each case in accordance with the terms hereof, will not conflict with, or result in a breach or violation of the organizational documents of Mast Capital as currently in effect and (d) the execution, delivery and performance of this Agreement by each member of Mast Capital does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound.

 

5.                                       Press Release.

 

Promptly following the execution of this Agreement, the Company and Mast Capital shall jointly issue a mutually agreeable press release (the “Mutual Press Release”) announcing the terms of this Agreement, in the form attached hereto as Exhibit B.

 

6.                                       Specific Performance.

 

Each of the members of Mast Capital, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other party hereto would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury would not be adequately compensable in damages.  It is accordingly agreed that the members of Mast Capital or any of them, on the one hand, and the Company, on the other hand (the “Moving Party”), shall each be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms hereof, and the other party hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity.

 

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7.                                       Expenses.

 

The Company shall reimburse Mast Capital for its reasonable, documented out of pocket fees and expenses (including legal expenses) incurred in connection with the matters related to the 2012 Annual Meeting and the negotiation and execution of this Agreement, provided that such reimbursement shall not exceed $35,000 in the aggregate.

 

8.                                       Severability.

 

If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction 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. It is hereby stipulated and declared to be the intention of the Parties that the Parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In addition, the Parties agree to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or enforceable by a court of competent jurisdiction.

 

9.                                       Notices.

 

Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

If to the Company:

 

LodgeNet Interactive Corporation

3900 West Innovation Street

Sioux Falls, South Dakota, 57107

Attention: James Naro

Facsimile:

 

With a copy to:

 

Leonard, Street and Deinard

150 South Fifth Street

Minneapolis, Minnesota 55402

Attention:  Mark Weitz

Telephone: 612-335-1517

Facsimile:  612-335-1657

 

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If to Mast Capital or any member thereof:

 

Mast Capital Management, LLC

200 Clarendon Street, 51st Floor

Boston, MA 02116

Attention: Adam Kleinman, General Counsel

Telephone: (617) 375-3019

Facsimile: (617) 247-7985

 

With a copy to:

 

Olshan Grundman Frome Rosenzweig & Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

Attention: Adam W. Finerman, Esq.

Telephone: (212) 451-2289

Facsimile: (212) 451-2222

 

10.                                 Applicable Law.

 

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without reference to the conflict of laws principles thereof.  Each of the Parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each of the Parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement in any court other than the aforesaid courts. Each of the Parties hereto hereby irrevocably waives, and agrees not to assert in any action or proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by applicable legal requirements, any claim that (A) the suit, action or proceeding in such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

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11.                                 Counterparts.  This Agreement may be executed in one or more counterparts which together shall constitute a single agreement.

 

12.                                 Entire Agreement; Amendment and Waiver; Successors and Assigns.

 

This Agreement contains the entire understanding of the Parties hereto with respect to its subject matter.  There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the Parties other than those expressly set forth herein.  No modifications of this Agreement can be made except in writing signed by an authorized representative of each the Company and Mast Capital. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.  The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Parties hereto and their respective successors, heirs, executors, legal representatives, and permitted assigns. No Party shall assign this Agreement or any rights or obligations hereunder without, with respect to any member of Mast Capital, the prior written consent of the Company, and with respect to the Company, the prior written consent of Mast Capital.

 

13.                                 Breach.

 

In the event of a breach of this Agreement by the Company, Mast Capital’s obligations under Section 2(a) above will terminate.

 

[The remainder of this page intentionally left blank]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.

 

	
 
    	
LODGENET INTERACTIVE CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Scott C. Petersen
    
	
 
    	
 
    	
Name:
    	
Scott   C. Petersen
    
	
 
    	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MAST CAPITAL MANAGEMENT, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Peter Reed
    
	
 
    	
 
    	
Name:
    	
Peter   Reed
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    
								

 

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EXHIBIT A

 

Mast Capital

 

MAST CAPITAL MANAGEMENT, LLC

MAST CREDIT OPPORTUNITIES I MASTER FUND LIMITED

MAST OC I MASTER FUND L.P.

MAST SELECT OPPORTUNITIES MASTER FUND L.P.

MAST PC FUND, L.P.

CHRISTOPHER B. MADISON

DAVID J. STEINBERG

 

 

EXHIBIT B

 

CONTACT:
 Ann Parker
 Director of Corporate Communications
 LodgeNet Interactive Corporation
 605-988-1000
 communications@lodgenet.com

 

LODGENET APPOINTS PHILLIP M. SPENCER TO BOARD OF DIRECTORS

 

SIOUX FALLS, SD, February 28, 2012 — LodgeNet Interactive Corporation (NASDAQ:LNET) the leading provider of interactive media and connectivity services to hospitality and healthcare businesses and the consumers they serve, announced today that Phillip M. Spencer has been appointed to its Board of Directors. Mr. Spencer will fill a board position left open by the retirement of Rodney Leyendecker in 2011.

 

Mr. Spencer is Chief Executive Officer and a member of the board of directors of Windjammer Communications, LLC, which owns and operates cable systems in six states offering High-Speed internet, Cable TV and local phone service to residential and commercial customers. Prior to joining Windjammer in May of 2010, Mr. Spencer was president and CEO of Aplus.Net, a global provider of webhosting and co-location services and also served as President and CEO of Everest Connections, Inc., a Lenexa, Kansas-based cable, telephone, and Internet access provider.  A Marquette University graduate, Mr. Spencer holds a bachelor’s degree in Economics and Finance.

 

“I am very pleased to welcome Phil to the Board of Directors, at LodgeNet” said Scott C. Petersen, Chairman & CEO of LodgeNet.  “As a seasoned executive with a strong cable and media background, Phil is an excellent addition to our board.”

 

About LodgeNet

LodgeNet Interactive Corporation is the leading provider of interactive media and connectivity services to hospitality and healthcare businesses and the consumers they serve. Recently named by Advertising Age as one of the Leading 100 US Media Companies, LodgeNet Interactive serves approximately 1.6 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company’s services include: Interactive Television, Broadband and Advertising Media Solutions along with nationwide technical and professional support services. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, The Hotel Networks and LodgeNet Healthcare. LodgeNet Interactive is listed on NASDAQ and trades under the symbol LNET. For more information, please visit www.lodgenet.com.

 

LodgeNet and the LodgeNet logo are registered trademarks of LodgeNet Interactive Corporation. All other trademarks are the property of their respective owners.

 

Certain statements in this press release constitute “forward-looking statements.” When used in this press release, the words “will,” “expects,” “anticipates,” “estimates,” “believes,” “goal,” and similar expressions, and statements which are made in the future tense or refer to future events or developments are intended to identify such forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

 

LodgeNet is a registered trademark of LodgeNet Interactive Corporation.Exhibit 10.10

 

[Form of indemnity agreement with non-executive directors of Orient-Express Hotels Ltd.]

 

ORIENT-EXPRESS HOTELS LTD.

Canon’s Court

22 Victoria Street

Hamilton HM 12, Bermuda

 

	
 
    	
[date]
    

 

[Name and address]

 

Dear [name]:

 

In consideration of your service as a director of Orient-Express Hotels Ltd., a company incorporated in Bermuda (the “Company”), the Company will, to the extent provided in this letter agreement (this “Agreement”), indemnify you and hold you harmless from and against any and all “Losses” (as defined below) that you may incur by reason of your election or service as a director, officer or employee of the Company or any “Related Entity” (as defined below) or as a duly authorized agent, fiduciary or representative of the Company or any Related Entity.

 

1.                Definitions.

 

(a)  “Costs and Expenses” means all reasonable costs and expenses incurred by you in defending any threatened, pending or completed Proceeding including, without limitation, legal counsel and expert witness fees and disbursements.

 

(b)  “Losses” means all liabilities, Costs and Expenses, amounts of judgments, fines, penalties or excise taxes and amounts paid in settlement of or incurred in defense of or otherwise in connection with any threatened, pending or completed Proceeding, whether civil, criminal, administrative or investigative, and whether brought by or in the right of the Company or otherwise, and appeals in which you may become involved, as a party or otherwise, by reason of acts or omissions in your capacity as and while serving as a director, officer, employee, agent, fiduciary or representative of the Company or any Related Entity.

 

(c)  “Proceeding” means, for the purposes of this Agreement, any threatened, pending or completed claim, action or proceeding, whether civil, criminal, administrative or investigative (including an action brought by or in the right of the Company) in which you may be or may have been involved as a party or otherwise, by reason of the fact that you are or were a director or officer of the Company, by reason of any action taken by you or of any inaction on your part while acting as such director or officer or by reason of the fact that you are or were serving at the request of the Company as a director, officer, employee, agent, fiduciary or representative of a Related Entity whether or not you were serving in such capacity at the time any liability or expense is incurred for which indemnification or reimbursement can be provided under this Agreement.

 

(d)  “Related Entity” means any corporation, partnership, joint venture, trust or other entity or enterprise in which the Company is in any way interested, or in or as to which you are serving at the Company’s request or on its behalf, as a director, officer, employee, agent, fiduciary or representative including, but not limited to, any employee benefit plan or any corporation of which the Company or any Related Entity is, directly or indirectly, a shareholder or creditor.

 

2.  Agreement to Serve.  You agree to serve or to continue to serve as a director of the Company. This Agreement does not create or otherwise establish any separate right on your part to be or to continue to be a director of the Company and does not create an employment contract between you and the Company.

 

3.               Indemnification.

 

(a)  Subject to Section 3(f), the Company shall indemnify you and hold you harmless from and against any and all Losses that you incur in connection with a Proceeding.

 

(b)  Notwithstanding any other provision of this Agreement other than Section 3(f) to the contrary, the Company shall indemnify you against all Costs and Expenses with respect to a Proceeding in which judgment is given in your favor, in which you are acquitted, or in respect of which relief is granted to you by the Supreme Court of Bermuda under Section 281 of the Companies Act of 1981 (as it may be amended from time to time, the “Companies Act”).

 

(c)  Without limiting the scope of the indemnity provided under any other provision of this Agreement, if you have reason to believe that any claim will or might be made against you in respect of any negligence, default, breach of duty or breach of trust, you may apply to the Supreme Court of Bermuda for relief pursuant to Section 281 of the Companies Act and, to the extent that the Supreme Court of Bermuda relieves you, in whole or in part, of liability in accordance with Section 281 of the Companies Act, then you shall be indemnified against any liability incurred by you in defending any proceedings in accordance with Section 98(2)(b) of the Companies Act.

 

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(d)  The Company’s obligation to indemnify you under this Agreement is in addition to any other rights to which you may otherwise be entitled by operation of law, vote of the Company’s shareholders or directors or otherwise and will be available to you whether or not the claim asserted against you is based upon matters that occurred before the date of this Agreement.

 

(e)  If you are entitled under this Agreement or otherwise to indemnification by the Company for some or a portion of the Losses actually and reasonably incurred by you but not, however, for the total amount thereof, the Company shall nevertheless indemnify you for the portion of the Losses in respect of which you are entitled to indemnification.

 

(f)  Anything hereinabove to the contrary notwithstanding, “Losses” shall not include, and you shall not be entitled to indemnification under this Agreement on account of (i) Losses in connection with which you are not entitled to indemnification as a matter of law or public policy; (ii) Losses to the extent you are indemnified by or on behalf of the Company otherwise than pursuant to this Agreement, including any Losses for which payment is made to you under an insurance policy; and (iii) Losses to the extent you are acting in the capacity of auditor to the Company.  Notwithstanding any other terms of this Agreement to the contrary, (x) the Company shall not indemnify you against, or exempt you from, any liability or Losses in respect of your fraud or dishonesty or claims arising under applicable laws concerning insider trading; (y) the Company’s obligation to indemnify you against any Losses if you are or were serving at the request of the Company as a director, officer, employee, agent, fiduciary or representative of the Company or any Related Entity shall be reduced by any amount you actually receive as indemnification from such Related Entity; and (z) except as otherwise provided in Section 3(c), 5 or 6, the Company shall not be obligated under this Agreement to indemnify you or pay any Costs and Expenses in connection with any action, suit or proceeding (or any part of any action, suit or proceeding) initiated by you, including any action, suit or proceeding (or any part of any action, suit or proceeding) initiated by you against the Company or its directors, officers, employees or other indemnitees, unless the Board of Directors of the Company authorized the action, suit or proceeding (or the relevant part of any action, suit or proceeding) prior to its initiation.

 

4.  Costs and Expenses.  Costs and Expenses shall be paid promptly by the Company and in any event within 30 days after receipt by the Company of a statement or statements from you requesting such payment, or, at your request and if authorized by the Company’s Board of Directors in the specific case, shall be advanced on your behalf against delivery of invoices therefor (prior to an ultimate determination as to whether you are entitled to be indemnified by the Company on account thereof) upon the receipt by the Company of an undertaking by you or on your behalf to repay such amount if it shall ultimately be determined that you are not entitled to be indemnified pursuant to this Agreement; provided, however, that if it shall ultimately be determined by final non-appealable decision of the Supreme Court of Bermuda or another court of competent jurisdiction that you are not entitled to be indemnified on account of any Costs or Expenses for which you have theretofore received payment or reimbursement, you shall promptly repay such amount to the Company.

 

5.  Determination of Entitlement to Indemnification.  The determination on behalf of the Company as to whether you are entitled to be indemnified for Losses hereunder may be made either by (a) a majority vote of directors who are not parties to such action, suit or proceeding, even though less than a quorum, (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, (c) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (d) the shareholders of the Company, as the Company’s Board of Directors shall determine.  Notwithstanding such determination, the right to indemnification or advances of Costs and Expenses as provided in this Agreement shall be enforceable by you in the Supreme Court of Bermuda.  Neither the failure of the Company (including its Board of Directors or independent legal counsel) to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because you have met the applicable standard of conduct, nor an actual determination by the Company (including its Board of Directors or independent legal counsel) that you have not met such applicable standard of conduct shall be a defense to the action or create a presumption that you have not met the applicable standard of conduct.  Costs and Expenses, including counsel fees, reasonably incurred by you in connection with successfully establishing your right to indemnification, in whole or in part, in any such action shall also be indemnified by the Company.

 

6.  Attorneys’ Fees and Other Expenses to Enforce Agreement.  In the event that you are subject to or intervene in any Proceeding in which the validity or enforcement of this Agreement is at issue or seek an adjudication to enforce your rights under, or to recover damages for breach of, this Agreement, you, if you prevail in whole or in part in such action, shall be entitled to recover from the Company and shall be indemnified by the Company against, any actual expenses for attorneys’ fees and disbursements reasonably incurred by you, provided that in bringing such action, you acted in good faith.

 

7.  Notice of Proceedings.  You agree to give prompt written notice to the Company of any claim with respect to which you seek indemnification, including the nature of and the facts underlying the claim, and, unless a conflict of interest shall exist between you and the Company with respect to such claim, you will permit the Company to assume the defense of such claim with counsel of its choice. The Company has the right to conduct such defense as it sees fit in its sole discretion, including the right to compromise or settle any claim against you without your consent, except that the Company will not consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to you of a release from all liability with respect to such claim or litigation.  Whether or not such defense is assumed by the Company, the Company will not be subject to any liability for any settlement made without its consent.

 

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In no event will the Company be obligated to pay the fees and expenses of more than one counsel for you and any other directors, officers or employees of the Company who are indemnified pursuant to similar indemnity agreements with respect to any claim, unless a conflict of interest shall exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the Company will be obligated to pay the fees and expenses of an additional counsel for each indemnified party or group of indemnified parties with whom a conflict of interest exists.

 

8.  Directors and Officers Liability Insurance.  To the extent that the Company maintains a policy or policies of insurance providing liability insurance for directors, officers, employees, agents, fiduciaries or representatives of the Company or any Related Entity of the Company in their capacities as such, in respect of acts or omissions occurring while serving in such capacity, you 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 other director, officer, employee, agent, fiduciary or representative of the Company or any Related Entity under such policy or policies. The Company will use reasonable commercial efforts to procure and maintain such insurance in the minimum amount of $[  ] million.

 

9.  Effectiveness.  This Agreement shall be effective as of the date set forth on the first page hereof and shall apply to your acts or omissions that occurred prior to such date if you were a director, officer, employee or other agent of the Company, or were serving at the request of the Company as a director, officer, employee, agent, fiduciary or representative of a Related Entity at the time such act or omission occurred.

 

10.  Survival.  The obligation of the Company to indemnify you with respect to Losses that you may incur by reason of your service as a director, officer, employee, agent, fiduciary or representative of the Company or a Related Entity, as provided under this Agreement, shall survive the termination of your service in such capacities and shall inure to the benefit of your heirs, executors and administrators.

 

11.  Severability.  If any provision of this Agreement or any indemnification made under this Agreement shall for any reason be determined by the Supreme Court of Bermuda or another court of competent jurisdiction to be invalid, unlawful or unenforceable under current or future laws, such provision shall be fully severable and, the remaining provisions of this Agreement shall not otherwise be affected thereby, but shall remain in full force and effect and, to the fullest extent possible, shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

12.  Governing Law; Jurisdiction.  The terms and conditions of this Agreement and the rights of the parties hereunder shall be governed by and construed in all respects in accordance with the laws of the Islands of Bermuda. The parties to this Agreement hereby irrevocably agree that the courts of Bermuda shall have non-exclusive jurisdiction in respect of any dispute, suit, action, arbitration or proceedings (“Agreement Proceedings”) that may arise out of or in connection with this Agreement and waive any objection to Agreement Proceedings in the courts of Bermuda on the grounds of venue or on the basis that the Agreement Proceedings have been brought in an inconvenient forum.

 

13.  Amendment.  No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both the Company and you.

 

14.  Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall constitute an original, and all of which taken together shall constitute one and the same instrument.  Your signature below will evidence your agreement and acceptance with respect to the foregoing.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
ORIENT-EXPRESS   HOTELS LTD.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
AGREED   TO AND ACCEPTED:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
					

 

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