Exhibit 6.5
INDEMNIFICATION AGREEMENT
This Agreement is made as of the ____ day of __________, 1999, by and
between XXXXXXXXXXXX.XXX, INC., a Nevada corporation, (the "Corporation") and
________________ (the "Indemnitee") with reference to the following facts:
RECITALS
A. The Indemnitee is currently serving as a Director and/or Officer of the
Corporation and the Corporation wishes the Indemnitee to continue in such
capacity. The Indemnitee is willing, under certain circumstances, to continue in
such capacity.
B. In order to induce and encourage experienced and capable persons such as
the Indemnitee to continue to serve as a Director and/or Officer of the
Corporation, the Board of Directors has determined, after due consideration and
investigation of the terms and provisions of this Agreement and the various
other options available to the Corporation and the Indemnitee in lieu hereof,
that this Agreement is not only reasonable and prudent but necessary to promote
and ensure the best interests of the Corporation and its shareholders.
AGREEMENT
NOW, THEREFORE, in consideration of the continued services of the
Indemnitee and in order to induce the Indemnitee to continue to serve as a
Director and/or Officer of the Corporation, the Corporation and the Indemnitee
agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Corporation" includes any domestic or foreign predecessor entity
of the Corporation in a merger or other transaction in which the predecessor's
existence ceased upon consummation of the transaction.
(b) "Director" means an individual who is or was a director or officer
of the Corporation or an individual who, while a director or officer of the
Corporation, is or was serving at the Corporation's request as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise. A director is considered to be serving an employee benefit plan at
the Corporation's request if the director's duties to the Corporation also
impose duties on, or otherwise involve services by, the director to the plan or
to participants in or beneficiaries of the plan. "Director" includes, unless the
context requires otherwise, the estate or personal representative of a director.
(c) "Expenses" include counsel fees.
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(d) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine, including an excise tax assessed with respect to an employee
benefit plan, or reasonable expenses incurred with respect to a proceeding.
(e) "Official capacity" means the office of director in the
Corporation: "Official capacity" does not include service for any other foreign
or domestic corporation or any partnership, joint venture, trust, employee
benefit plan, or other enterprise.
(f) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(g) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative or investigative
and whether formal or informal.
2. Indemnification by the Corporation.
(a) The Corporation shall indemnify the Indemnitee in the defense of
any proceeding, whether or not brought by or in the right of the Corporation, to
which the Indemnitee was a party because of being a director of the Corporation
against all reasonable expenses incurred by the Indemnitee in connection with
the proceeding.
(b) Except as provided in subsection (e) of this Section 2, the
Corporation shall indemnify the Indemnitee made a party to a proceeding, because
the Indemnitee is or was a director of the Corporation, against liability
incurred in the proceeding if:
(i) The Indemnitee acted in good faith; and
(ii) The Indemnitee reasonably believed:
(A) In the case of conduct in the Indemnitee's official
capacity with the Corporation, that the Indemnitee's conduct was in the
Corporation's best interests; and
(B) In all other cases, that the Indemnitee's conduct was at
least not opposed to the Corporation's best interests; and
(iii)In the case of any criminal proceeding, the Indemnitee had
no reasonable cause to believe the Indemnitee's conduct was unlawful.
(c) The Indemnitee's conduct with respect to an employee benefit plan
for a purpose the Indemnitee reasonably believed to be in the interests of the
participants in and
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beneficiaries of the plan is conduct that satisfies the requirement of
subsection (b)(ii) of this Section 2.
(d) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the Indemnitee did not meet the standard of conduct
described in this Section.
(e) The Corporation shall not indemnify the Indemnitee under Section 2
of this Agreement:
(i) In connection with a proceeding by or in the right of the
Corporation in which the Indemnitee was adjudged liable to the Corporation; or
(ii) In connection with any other proceeding charging improper
personal benefit to the Indemnitee whether or not involving action in the
Indemnitee's official capacity, in which the Indemnitee was adjudged liable on
the basis that personal benefit was improperly received by the Indemnitee.
(f) Indemnification under this Agreement in connection with a
proceeding by or in the right of the Corporation is limited to reasonable
expenses incurred in connection with the proceeding.
(g) A request for indemnification under this Section 2 shall be in
substantially the form of Exhibit A attached hereto.
3. Advance for Expenses.
(a) The Corporation shall pay for or reimburse the reasonable expenses
incurred by the Indemnitee who is a party to a proceeding in advance of final
disposition of the proceeding and in advance of any determination and
authorization of indemnification pursuant to Section 4 of this Agreement if:
(i) The Indemnitee furnishes the Corporation a written
affirmation of the Indemnitee's good faith belief that the Indemnitee has met
the standard of conduct described in Section 2 of this Agreement; and
(ii) The Indemnitee furnishes the Corporation a written
undertaking, executed personally or on the Indemnitee's behalf, to repay the
advance if it is ultimately determined that the Indemnitee did not meet the
standard of conduct.
(b) The undertaking required by subsection (a)(i) of this Section 3
must be an unlimited general obligation of the Indemnitee but need not be
secured and may be accepted without reference to financial ability to make
repayment.
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(c) A request for an advance of expenses, including the affirmation
and undertaking under this Section 3 shall be in substantially the form of
Exhibit B attached hereto.
4. Determination and Authorization of Indemnification.
(a) The Corporation shall not indemnify the Indemnitee under this
Agreement unless authorized in the specific case after a determination has been
made that indemnification of the Indemnitee is permissible in the circumstances
because the Indemnitee has met the standard of conduct set forth in Section 2(b)
of this Agreement.
(b) The determination shall be made:
(i) By the Board of Directors by majority vote of a quorum
consisting of directors not at the time parties to the proceeding; or
(ii) If a quorum cannot be obtained under (i) of this subsection,
by majority vote of a committee duly designated by the Board of Directors, in
which designation directors who are parties may participate, consisting solely
of two or more directors not at the time parties to the proceeding; or
(iii) By special legal counsel:
(A) Selected by the Board of Directors or its committee in
the manner prescribed in (i) or (ii) of this subsection; or
(B) If a quorum of the Board of Directors cannot be obtained
under (i) of this subsection and a committee cannot be designated under (ii) of
this subsection, selected by majority vote of the full Board of Directors, in
which selection directors who are parties may participate; or
(iv) By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding may not be
voted on the determination.
(c) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the determination
that indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subsection (b)
(iii) of this Section to select counsel.
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5. Right of the Indemnitee to Bring Suit: If a claim under this Agreement
is not paid in full by the Corporation within 60 days after a written claim has
been received by the Corporation, except in the case of a claim for expenses
incurred in defending a proceeding in advance of its final disposition, in which
case the applicable period shall be 20 days, the Indemnitee may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, to the extent successful in whole or in part, the Indemnitee
shall be entitled to be paid also the expense of prosecuting such claim. Neither
the failure of the Corporation (including its Board of Directors, its
shareholders or special legal counsel) to have made a determination prior to the
commencement of such action that indemnification of or reimbursement or
advancement of expenses to the claimant is proper in the circumstances, nor an
actual determination by the Corporation (including its Board of Directors, its
shareholders or special legal counsel) that the Indemnitee is not entitled to
indemnification or to the reimbursement or advancement of expenses, shall be a
defense to the action or create a presumption that the Indemnitee is not so
entitled.
6. Nonexclusivity of Rights: The right to indemnification under this
Agreement shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Articles of Incorporation,
Bylaws, other agreement, vote of shareholders or disinterested directors,
insurance policy, principles of common law or equity, or otherwise.
7. Continuation of Rights: Rights of indemnification under this Agreement
shall continue as to an Indemnitee who has ceased to be a Director or Officer
and shall inure to the benefit of his heirs, executors and administrators.
8. Savings Clause: If any provision of this Agreement or any portion
thereof shall be invalidated on any ground by any court of competent
jurisdiction, the Corporation shall nevertheless indemnify each director as to
reasonable expenses and liabilities with respect to any proceeding, whether or
not brought by or in the right of the Corporation, to the full extent permitted
by any applicable portion of this Agreement that shall not have been
invalidated, or by any other applicable law.
9. Gender: Whenever the context requires, the gender of all words used
herein shall include the masculine, feminine and neuter.
10. Governing Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
XXXXXXXXXXXX.XXX, INC. INDEMNITEE
By ------------------------------ -------------------------------------
------------------------------ [Type in Name of Indemnitee]
Its -----------------------------
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EXHIBIT A
STATEMENT OF REQUEST FOR INDEMNIFICATION
STATE/PROVINCE OF ---------------)
) ss.
COUNTY/CITY OF ------------------)
I, ---------------------- , being first duly sworn, do depose and say as
follows:
1. This Statement is submitted pursuant to the Indemnification Agreement
(the "Agreement") dated __________________, 19__, between XXXXXXXXXXXX.XXX,
INC., a Nevada corporation, (the "Corporation") and the undersigned.
2. I am requesting indemnification against expenses (including attorneys'
and others' fees and expenses), judgments, fines and amounts paid in settlement,
all of which (collectively, "Liabilities") have been or will be actually and
reasonably incurred by me in connection with the defense of a proceeding to
which I was or am a party.
3. With respect to all matters related to any such action or proceeding, I
am entitled to be indemnified as herein contemplated pursuant to the aforesaid
Indemnification Agreement.
4. Without limiting any other rights which I have or may have, I am
requesting indemnification against Liabilities which have arisen or may arise
out of --------------------------------------------------------------.
Dated:-------------, 19--.
------------------------------------------
[Type in Name of Indemnitee]
Subscribed and sworn to before me this ---- day of ---------------, 19--.
------------------------------------------
(Seal) Notary Public in and for the State of
------------, residing at ----------------
Commission expires:-----------------------
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EXHIBIT B
STATEMENT OF UNDERTAKING
STATE/PROVINCE OF ---------------)
) ss.
COUNTY/CITY OF ------------------)
I, ---------------------- , being first duly sworn, do depose and say as
follows:
1. This Statement of Undertaking is submitted pursuant to the
Indemnification Agreement dated ---------------, 19-, between XXXXXXXXXXXX.XXX,
INC., a Nevada corporation, (the "Corporation") and the undersigned.
2. I am requesting advancement of certain expenses (including attorneys'
and others' fees and expenses) which I have incurred or will incur in defending
a civil or criminal action or proceeding.
3. It is my good faith belief that I have met the standard of conduct
necessary for indemnification by the Corporation under the terms of the
aforesaid Indemnification Agreement.
4. I hereby undertake to repay this advancement of expenses if it shall be
ultimately determined that I am not entitled to be indemnified by the
Corporation under the aforesaid Indemnification Agreement or otherwise.
5. The expenses for which advancement is requested are, in general, all
expenses related to ------------------------------------.
Dated:-------------, 1999.
------------------------------------------
[Type in Name of Indemnitee]
Subscribed and sworn to before me this ---- day of ---------------, 19--.
------------------------------------------
(Seal) Notary Public in and for the State of
------------, residing at ----------------
Commission expires:-----------------------
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