INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this
“Agreement”),
dated as of the 20th day of January, 2010 is made by and between XXXXX
TECHNOLOGY GROUP LIMITED., a Nevada corporation (the “Company”), and Xxxxxx
Xxxxxxx, a director of the Company (the “Indemnitee”).
RECITALS
A. The
Company and the Indemnitee recognize that the present state of the law is too
uncertain to provide the Company’s officers and directors with adequate and
reliable advance knowledge or guidance with respect to the legal risks and
potential liabilities to which they may become personally exposed as a result of
performing their duties for the Company;
B. The
Company and the Indemnitee are aware of the substantial growth in the number of
lawsuits filed against corporate officers and directors in connection with their
activities in such capacities and by reason of their status as
such;
C. The
Company and the Indemnitee recognize that the cost of defending against such
lawsuits, whether or not meritorious, is typically beyond the financial
resources of most officers and directors of the Company;
D. The
Company and the Indemnitee recognize that the legal risks and potential
liabilities, and the threat thereof, associated with proceedings filed against
the officers and directors of the Company bear no reasonable relationship to the
amount of compensation received by the Company’s officers and
directors;
E. The
Company, after reasonable investigation prior to the date hereof, has determined
that the liability insurance coverage available to the Company as of the date
hereof is inadequate, unreasonably expensive or both. The Company
believes, therefore, that the interest of the Company and its current and future
stockholders would be best served by a combination of (i) such insurance as the
Company may obtain pursuant to the Company’s obligations hereunder and (ii) a
contract with its officers and directors, including the Indemnitee, to indemnify
them to the fullest extent permitted by law (as in effect on the date hereof,
or, to the extent any amendment may expand such permitted indemnification, as
hereafter in effect) against personal liability for actions taken in the
performance of their duties to the Company;
F. Section
78.7502 of the Nevada Revised Statutes empowers Nevada corporations to indemnify
their officers and directors and further states that the indemnification
provided by Section 78.7502 shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under the articles of
incorporation or any bylaw, agreement, 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; thus, Section 78.7502 does
not by itself limit the extent to which the Company may indemnify persons
serving as its officers and directors;
G. The
Company’s Articles of Incorporation and Bylaws authorize the indemnification of
the officers and directors of the Company in excess of that expressly permitted
by Section 78.7502;
H. The Board
of Directors of the Company has concluded that, to retain and attract talented
and experienced individuals to serve as officers and directors of the Company
and to encourage such individuals to take the business risks necessary for the
success of the Company, it is necessary for the Company to contractually
indemnify its officers and directors, and to assume for itself liability for
expenses and damages in connection with claims against such officers and
directors in connection with their service to the Company, and has further
concluded that the failure to provide such contractual indemnification could
result in great harm to the Company and its stockholders;
I. The
Company desires and has requested the Indemnitee to serve or continue to serve
as a director or officer of the Company, free from undue concern for the risks
and potential liabilities associated with such services to the Company;
and
J. The
Indemnitee is willing to serve, or continue to serve, the Company, provided, and
on the expressed condition, that the Indemnitee is furnished with the
indemnification provided for herein.
AGREEMENT
NOW, THEREFORE, the Company and
Indemnitee agree as follows:
1.
DEFINITIONS.
(a) “EXPENSES”
means, for the purposes of this Agreement, all direct and indirect costs of any
type or nature whatsoever (including, without limitation, any fees and
disbursements of Indemnitee’s counsel, accountants and other experts and other
out-of-pocket costs) actually and reasonably incurred by the Indemnitee in
connection with the investigation, preparation, defense or appeal of a
Proceeding; provided, however, that Expenses shall not include judgments, fines,
penalties or amounts paid in settlement of a Proceeding.
(b) “PROCEEDING”
means, for the purposes of this Agreement, any threatened, pending or
completed action
or proceeding, whether civil, criminal,
administrative or investigative (including an action brought by or in the right
of the Company) in which Indemnitee may be or may have been involved as a party
or otherwise, by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by Indemnitee or of any
inaction on his or her part while acting as such director or officer or by
reason of the fact that he or she is or was serving at the request of the
Company as a director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise, or was
a director or officer of the foreign or domestic corporation which was a
predecessor corporation to the Company or of another enterprise at the request
of such predecessor corporation, whether or not he or she is serving in such
capacity at the time any liability or expense is incurred for which
indemnification or reimbursement can be provided under this
Agreement.
2.
AGREEMENT TO SERVE.
Indemnitee agrees to serve or continue
to serve as a director or officer of the Company to the best of his or her
abilities at the will of the Company or under separate contract, if such
contract exists, for so long as Indemnitee is duly elected or appointed and
qualified or until such time as the Indemnitee tenders his or her resignation in
writing. Nothing contained in this Agreement is intended to create in
Indemnitee any right to continued employment.
3.
INDEMNIFICATION.
(a) THIRD
PARTY PROCEEDINGS. The Company shall indemnify Indemnitee against
Expenses, judgments, fines, penalties or amounts paid in settlement (if the
settlement is approved in advance by the Company) actually and reasonably
incurred by Indemnitee in connection with a Proceeding (other than a Proceeding
by or in the right of the Company) if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful. The
termination of any Proceeding by judgment, order, settlement, conviction, or
upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in the best interests of the Company,
or, with respect to any criminal Proceeding, had no reasonable cause to believe
that Indemnitee's conduct was unlawful.
(b) PROCEEDINGS
BY OR IN THE RIGHT OF THE COMPANY. To the fullest extent permitted by
law, the Company shall indemnify Indemnitee against Expenses and amounts paid in
settlement, actually and reasonably incurred by Indemnitee in connection with a
Proceeding by or in the right of the Company to procure a judgment in its favor
if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in the best interests of the Company and its
stockholders. Notwithstanding the foregoing, no indemnification shall
be made in respect of any claim, issue or matter as to which Indemnitee shall
have been adjudged liable to the Company in the performance of Indemnitee’s
duty to the Company and its stockholders unless and only to the extent that the
court in which such action or Proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnity for Expenses and then only to the
extent that the court shall determine.
(c) SCOPE. Notwithstanding
any other provision of this Agreement but subject to Section 14(b), the Company
shall indemnify the Indemnitee to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized by
other provisions of this Agreement, the Company’s Articles of Incorporation, the
Company’s Bylaws or by statute.
4.
LIMITATIONS ON INDEMNIFICATION.
Any other provision herein to the
contrary notwithstanding, the Company shall not be obligated pursuant to the
terms of this Agreement:
(a) EXCLUDED
ACTS. To indemnify Indemnitee for any acts or omissions or
transactions from which a director may not be relieved of liability under
applicable law;
(b) EXCLUDED
INDEMNIFICATION PAYMENTS. To indemnify or advance Expenses in
violation of any prohibition or limitation on indemnification under the
statutes, regulations or rules promulgated by any state or federal regulatory
agency having jurisdiction over the Company.
(c) CLAIMS
INITIATED BY INDEMNITEE. To indemnify or advance Expenses to
Indemnitee with respect to Proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
Proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 78.7502 of the Nevada Revised Statutes, but such indemnification or
advancement of Expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such
suit;
(d) LACK
OF GOOD FAITH. To indemnify Indemnitee for any Expenses incurred by
the Indemnitee with respect to any Proceeding instituted by Indemnitee to
enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such Proceeding was not made in good faith or was
frivolous;
(e) INSURED
CLAIMS. To indemnify Indemnitee for Expenses or liabilities of any
type whatsoever (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement) which have been paid
directly to or on behalf of Indemnitee by an insurance carrier under a policy of
directors’ and officers’ liability insurance maintained by the Company or any
other policy of insurance maintained by the Company or Indemnitee;
or
(f) CLAIMS
UNDER SECTION 16(b). To indemnify Indemnitee for Expenses and the
payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.
5.
DETERMINATION OF RIGHT TO INDEMNIFICATION.
Upon receipt of a written claim
addressed to the Board of Directors for indemnification pursuant to Section 3,
the Company shall determine by any of the methods set forth in Section 78.751 of
the Nevada Revised Statutes whether Indemnitee has met the applicable standards
of conduct which makes it permissible under applicable law to indemnify
Indemnitee. If a claim under Section 3 is not paid in full by
the Company within ninety (90) days after such written claim has been
received by the Company, the Indemnitee may at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim and, unless such
action is dismissed by the court as frivolous or brought in bad faith, the
Indemnitee shall be entitled to be paid also the expense of prosecuting such
claim. The court in which such action is brought shall determine
whether Indemnitee or the Company shall have the burden of proof concerning
whether Indemnitee has or has not met the applicable standard of
conduct.
6.
ADVANCEMENT AND REPAYMENT OF
EXPENSES.
Subject to Section 4 hereof, the
Expenses incurred by Indemnitee in defending and investigating any Proceeding
shall be paid by the Company in advance of the final disposition of such
Proceeding within 30 days after receiving from Indemnitee the copies of invoices
presented to Indemnitee for such Expenses, if Indemnitee shall provide an
undertaking to the Company to repay such amount to the extent it is ultimately
determined that Indemnitee is not entitled to indemnification. In
determining whether or not to make an advance hereunder, the ability of
Indemnitee to repay shall not be a factor. Notwithstanding the
foregoing, in a proceeding brought by the Company directly, in its own right (as
distinguished from an action bought derivatively or by any receiver or trustee),
the Company shall not be required to make the advances called for hereby if the
Board of Directors determines, in its sole discretion, that it does not appear
that Indemnitee has met the standards of conduct which make it permissible under
applicable law to indemnify Indemnitee and the advancement of Expenses would not
be in the best interests of the Company and its stockholders.
7.
PARTIAL INDEMNIFICATION.
If the Indemnitee is entitled under any
provision of this Agreement to indemnification or advancement by the Company of
some or a portion of any Expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, penalties, and amounts paid in
settlement) incurred by him in the investigation, defense, settlement or appeal
of a Proceeding, but is not entitled to indemnification or advancement of the
total amount thereof, the Company shall nevertheless indemnify or pay
advancements to the Indemnitee for the portion of such Expenses or liabilities
to which the Indemnitee is entitled.
8.
NOTICE TO COMPANY BY INDEMNITEE.
Indemnitee shall notify the Company in
writing of any matter with respect to which Indemnitee intends to seek
indemnification hereunder as soon as reasonably practicable following the
receipt by Indemnitee of written notice thereof; provided, however, that any
delay in so notifying the Company shall not constitute a waiver by Indemnitee of
her rights hereunder. The written notification to the Company shall
be addressed to the Board of Directors and shall include a description of the
nature of the Proceeding and the facts underlying the Proceeding and be
accompanied by copies of any documents filed with the court in which the
Proceeding is pending. In addition, Indemnitee shall give the Company
such information and cooperation as it may reasonably require and as shall be
within Indemnitee’s power.
9.
MAINTENANCE OF LIABILITY INSURANCE.
(a) Subject
to Section 4 hereof, the Company hereby agrees that so long as Indemnitee shall
continue to serve as a director or officer of the Company and thereafter so long
as Indemnitee shall be subject to any possible Proceeding, the Company, subject
to Section 9(b), shall use reasonable commercial efforts to obtain and maintain
in full force and effect directors’ and officers’ liability insurance (“D&O Insurance”)
which provides Indemnitee the same rights and benefits as are accorded to the
most favorably insured of the Company’ directors, if Indemnitee is a director;
or of the Company’s officers, if Indemnitee is not a director of the Company but
is an officer.
(b) Notwithstanding
the foregoing, the Company shall have no obligation to obtain or maintain
D&O Insurance if the Company determines in good faith that such insurance is
not reasonably available, the premium costs for such insurance are
disproportionate to the amount of coverage provided, the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or the Indemnitee is covered by similar insurance maintained by a
subsidiary or parent of the Company.
(c) If,
at the time of the receipt of a notice of a claim pursuant to Section 8 hereof,
the Company has D&O Insurance in effect, the Company shall give prompt
notice of the commencement of such Proceeding to the insurers in accordance with
the procedures set forth in the respective policies. The Company
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of the Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policies.
10.
DEFENSE OF CLAIM.
In the event that the Company shall be
obligated under Section 6 hereof to pay the Expenses of any Proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the defense
of such Proceeding, with counsel approved by Indemnitee, which approval shall
not be unreasonably withheld, upon the delivery to Indemnitee of written notice
of its election to do so. After delivery of such notice, approval of
such counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same Proceeding,
provided that (i) Indemnitee shall have the right to employ counsel in any such
Proceeding at Indemnitee’s expense; and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the Company, or (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and the Indemnitee in the conduct of such defense
or (C) the Company shall not, in fact, have employed counsel to assume the
defense of such Proceeding, then the fees and expenses of Indemnitee’s counsel
shall be at the expense of the Company.
11.
ATTORNEYS' FEES.
In the event that Indemnitee or the
Company institutes an action to enforce or interpret any terms of this
Agreement, the Company shall reimburse Indemnitee for all of the Indemnitee’s
reasonable fees and expenses in bringing and pursuing such action or defense,
unless as part of such action or defense, a court of competent jurisdiction
determines that the material assertions made by Indemnitee as a basis for such
action or defense were not made in good faith or were
frivolous.
12.
CONTINUATION OF OBLIGATIONS.
All agreements and obligations of the
Company contained herein shall continue during the period the Indemnitee is a
director or officer of the Company, or is or was serving at the request of the
Company as a director, officer, fiduciary, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, and shall
continue thereafter so long as the Indemnitee shall be subject to any possible
proceeding by reason of the fact that Indemnitee served in any capacity referred
to herein.
13.
SUCCESSORS AND ASSIGNS.
This Agreement establishes contract
rights that shall be binding upon, and shall inure to the benefit of, the
successors, assigns, heirs and legal representatives of the parties
hereto.
14.
NON-EXCLUSIVITY.
(a) The
provisions for indemnification and advancement of expenses set forth in this
Agreement shall not be deemed to be exclusive of any other rights that the
Indemnitee may have under any provision of law, the Company’s Articles of
Incorporation or Bylaws, the vote of the Company’s stockholders or
disinterested directors, other agreements or otherwise, both as to action
in the Indemnitee’s official capacity and action in another capacity while
occupying the Indemnitee’s position as a director or officer of the
Company.
(b) In
the event of any changes, after the date of this Agreement, in any applicable
law, statute, or rule which expand the right of a Nevada corporation to
indemnify its officers and directors, the Indemnitee's rights and the Company’s
obligations under this Agreement shall be expanded to the full extent permitted
by such changes. In the event of any changes in any applicable law,
statute or rule, which narrow the right of a Nevada corporation to indemnify a
director or officer, such changes, to the extent not otherwise required by such
law, statute or rule to be applied to this Agreement, shall have no effect on
this Agreement or the parties’ rights and obligations hereunder.
15.
EFFECTIVENESS OF AGREEMENT.
To the extent that the indemnification
permitted under the terms of certain provisions of this Agreement exceeds the
scope of the indemnification provided for in the Nevada Revised Statutes, such
provisions shall not be effective unless and until the Company’s Articles of
Incorporation authorize such additional rights of indemnification. In all
other respects, the balance of this Agreement shall be effective as of the date
set forth on the first page and may apply to acts of omissions of Indemnitee
which occurred prior to such date if Indemnitee was an officer, director,
employee or other agent of the Company, or was serving at the request of
the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, at the time such act or
omission occurred.
16.
SEVERABILITY.
Nothing in this Agreement is intended
to require or shall be construed as requiring the Company to do or fail to do
any act in violation of applicable law. The Company’s
inability, pursuant to court order, to perform its obligations under
this Agreement shall not constitute a breach of this Agreement. The
provisions of this Agreement shall be severable as provided in this Section
16. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
17.
GOVERNING LAW.
This Agreement shall be interpreted and
enforced in accordance with the laws of the State of Nevada, without reference
to its conflict of law principals. To the extent permitted by
applicable law, the parties hereby waive any provisions of law which render any
provision of this Agreement unenforceable in any respect.
18.
NOTICE.
All notices, requests, demands and
other communications under this Agreement shall be in writing and shall be
deemed duly given (i) if delivered by hand and receipted for by the party
addressee or (ii) if mailed by certified or registered mail with postage
prepaid, on the third business day after the mailing date. Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.
19.
MUTUAL ACKNOWLEDGMENT.
Both the Company and Indemnitee
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Company from indemnifying its directors and officers under this
Agreement or otherwise. Indemnitee understands and acknowledges that
the Company has undertaken or may be required in the future to undertake with
the appropriate state or federal regulatory agency to submit for approval any
request for indemnification, and has undertaken or may be required in the
future to undertake with the Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company’s right under public policy to indemnify
Indemnitee.
20.
COUNTERPARTS.
This Agreement may be executed in one
or more counterparts, each of which shall constitute an
original.
21.
AMENDMENT AND TERMINATION.
No amendment, modification, termination
or cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
