INDEMNIFICATION AGREEMENT
EXHIBIT
10.2
THIS
AGREEMENT is entered into, effective as of February __, 2009 by and between
Songzai International Holding Group, Inc., a Nevada corporation (the “Company”),
and _____ (“Indemnitee”).
WHEREAS,
it is essential to the Company to retain and attract as directors and officers
the most capable persons available;
WHEREAS,
Indemnitee is a director of the Company; and
WHEREAS,
in recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued and effective service to
the Company, and in order to induce Indemnitee to provide services to the
Company as a director, the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the fullest
extent (whether partial or complete) permitted by the laws of the Company’s
state of incorporation and as set forth in this Agreement, and, to the extent
insurance is maintained, for the coverage of Indemnitee under the Company’s
directors’ and officers’ liability insurance policies.
NOW,
THEREFORE, in consideration of the above premises and of Indemnitee’s continuing
to serve the Company directly or, at its request, with another enterprise, and
intending to be legally bound hereby, the parties agree as follows:
1.
Certain
Definitions.
(a) “Board” means the
Board of Directors of the Company.
(b) “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 (the
“Act”)), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company 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 (collectively “excluded
persons”), is or becomes the “Beneficial Owner” (as defined in Rule 13d-3 under
the Act), directly or indirectly, of securities of the Company representing 30%
or more of the total voting power represented by the Company’s then outstanding
Voting Securities, or (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 (2/3) of the
directors then still 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 of the Board, 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 that 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 50% 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
(iv) 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.
(c) “Expenses” means any
expense, liability, or loss, including attorneys’ fees and retainers, judgments,
fines, court costs, witness fees, printing and duplicating costs, travel
expenses, and all other disbursements or expenses of the types customarily
incurred in connection with prosecuting, defending, preparing to prosecute and
defend, investigating, being or preparing to be a witness in, or otherwise
participating in, any Proceeding relating to any Indemnifiable Event, amounts
paid or to be paid in settlement, any interest, assessments, or other charges
imposed thereon, and any federal, state, local, or foreign taxes imposes as a
result of the actual or deemed receipt of any payments under this Agreement,
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 in, any Proceeding relating to any Indemnifiable Event. Without
limiting the foregoing, “Expenses” shall also include such amounts incurred in
connection with any appeal resulting from any Proceeding (including
the cost of any bond or other security or costs in connection with any bond) and
any action taken by Indemnitee in enforcing its rights hereunder.
(d) “Indemnifiable Event”
means any event or occurrence that takes place either prior to or after the
effective date of this Agreement, related to any action or activity of the
Company or to the fact that Indemnitee is or was a director or an officer (if
the Indemnitee should be appointed as an officer) of the Company, is or was
serving at the request of the Company as a director, officer, employee, trustee,
agent, or fiduciary of another foreign or domestic corporation, partnership,
joint venture, employee benefit plan, trust, or other enterprise, or was a
director, officer, employee, or agent of a foreign or domestic corporation that
was a predecessor corporation of the Company or of another enterprise at the
request of such predecessor corporation, or related to anything done or not done
by Indemnitee in any such capacity.
(e) “Independent Counsel”
means the person or body appointed in connection with Section 3.
(f) “Potential Change in
Control” shall be deemed to have occurred 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 that, if
consummated, would constitute a Change in Control, (iii) any person (other than
an excluded Person) 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 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.
(g) “Proceeding” means (i)
any threatened, pending, or complete action, suit, arbitration, alternate
dispute resolution mechanism, or proceeding, whether civil, criminal,
administrative, investigative, or other, or (ii) any inquiry, hearing, or
investigation, whether conducted by the Company or any other party, whether of a
civil, criminal or administrative or investigative nature, that Indemnitee in
good faith believes might lead to the institution of any such action, or
proceeding.
(h) “Reviewing Party”
means the person or body appointed in accordance with Section 3 of this
Agreement.
(i) “Voting Securities”
any securities of the Company that vote generally in the election of
directors.
2.
Agreement to
Indemnify.
(a) General Agreement. In
the event Indemnitee was, is, or becomes a party to or witness or otherwise a
participant in, or is threatened to be made a party to or witness or otherwise a
participant in, any Proceeding by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee from and against any
and all Expenses to the fullest extent permitted by law, as the same exists or
may hereafter be amended or interpreted (but 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). The parties hereto intend that this Agreement shall
provide for indemnification in excess of that expressly permitted by statute,
including, without limitation, any indemnification provided by the Company’s
Articles of Incorporation as amended, its bylaws as amended, vote of its
stockholders or disinterested directors, or applicable law.
(b) Initiation of
Proceeding. Notwithstanding anything in this Agreement to the contrary,
Indemnitee shall not be entitled to indemnification pursuant to this Agreement
in connection with any Proceeding initiated by Indemnitee against the Company or
any director or officer of the Company unless (i) the Company has joined in or
the Board has consented to the initiation of such Proceeding, (ii) the
Proceeding is one to enforce indemnification rights under Section 5, or (iii)
the Proceeding is instituted after a Change in Control and Independent Counsel
has approved its initiation.
(c) Expense Advances. If
so requested by Indemnitee, the Company shall advance (within ten business days
of such request) any and all Expenses to Indemnitee (an “Expense Advance”);
provided that such request shall be accompanied by reasonable evidence of the
expenses incurred or anticipated to be incurred by Indemnitee, which Expense
Advance for anticipated expenses shall in no event not exceed $25,000.00, and
that, if and to the extent that the Reviewing Party determines that Indemnitee
would not be permitted to be so indemnified under applicable law, the Company
shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse
the Company) for all such amounts theretofore paid. If Indemnitee has commenced
legal proceedings in a court of competent jurisdiction to secure a determination
that Indemnitee should be indemnified under applicable law, as provided in
Section 4, any determination made by the Reviewing Party that Indemnitee would
not be permitted to be indemnified under applicable law shall not be binding and
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).
(d) Mandatory
Indemnification. Notwithstanding any other provision of this Agreement
(other than Section 2(f) below), and without limiting Indemnitee’s rights
hereunder, to the extent that Indemnitee has been successful on the merits in
defense of any Proceeding relating in whole or in part to an Indemnifiable Event
or in defense of any issue or matter therein, Indemnitee shall be indemnified
against all Expenses incurred in connection therewith.
(e) Partial
Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of Expenses,
but not, however, for the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled.
(f) Prohibited
Indemnification. No indemnification pursuant to this Agreement shall be
paid by the Company on account of any Proceeding in which judgment is rendered
against Indemnitee pursuant to the provisions of Section 16(b) of the Act or
similar provisions of any federal, state or local laws for an accounting of
profits made from the purchase or sale by Indemnitee of securities of the
Company, unless such purchase or sale is made on the written advice of the
Company or the Company’s counsel.
3.
Reviewing
Party. Prior to any Change in Control, the Reviewing Party shall be any
appropriate person or body consisting of a member or members of the Board or any
other person or body appointed by the Board who is not a party to the particular
Proceeding with respect to which Indemnitee is seeking indemnification; after a
Change in Control, the Reviewing Party shall be the Independent Counsel referred
to below. With respect to all matters arising after a Change in Control (other
than a Change in Control approved by a majority of the directors on the Board
who were directors immediately prior to such Change in Control) concerning the
rights of Indemnitee to indemnity payments and Expense Advances under this
Agreement or any other agreement or under applicable law or the Company’s
Articles of Incorporation as amended or bylaws now or hereafter in effect
relating to indemnification for Indemnifiable Events, the Company shall seek
legal advice only from Independent Counsel selected by Indemnitee and approved
by the Company and who has not otherwise performed services for the Company or
the Indemnitee (other than in connection with indemnification matters) within
the last five years. The 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 Indemnitee in
an action to determine Indemnitee’s rights under this Agreement. Such counsel,
among other things, shall render its written opinion to the Company and
Indemnitee as to whether and to what extent the Indemnitee should be permitted
to be indemnified under applicable law. The Company agrees to pay the reasonable
fees of the Independent Counsel and to indemnify fully such counsel against any
and all expenses (including attorney’s fees), claims, liabilities, loss, and
damages arising out of or relating to this Agreement or the engagement of
Independent Counsel pursuant hereto.
4.
Indemnification
Process and Appeal.
(a) Suit To Enforce
Rights. Regardless of any action by the Reviewing Party, if Indemnitee
has not received full indemnification within 60 days after making a request in
accordance with Section 2(c), Indemnitee shall have the right to enforce its
indemnification rights under this Agreement by commencing litigation, in any
appropriate court having subject matter jurisdiction thereof and in which venue
is proper, seeking an initial determination by the court or challenging any
determination by the Reviewing Party or any aspect thereof, provided, however,
that such 60-day period shall be extended for reasonable time, not to exceed
another 60 days, if the reviewing party in good faith requires additional time
for the obtaining or evaluating of documentation and information relating
thereto. The Company hereby consents to service of process and to appear in any
such proceeding. Any determination by the Reviewing Party not challenged by the
Indemnitee shall be binding on the Company and Indemnitee. The remedy provided
for in this Section 4 shall be in addition to any other remedies available to
Indemnitee in law or equity.
(b) Defense to Indemnification,
Burden of Proof, and Presumptions. It shall be a defense to any action
brought by Indemnitee against the Company to enforce this Agreement (other than
an action brought to enforce a claim for Expenses incurred in defending a
Proceeding in advance of its final disposition where the required undertaking
has been tendered to the Company) that it is not permissible under applicable
law for the Company to indemnify Indemnitee for the amount claimed. In
connection with any such action or any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the
burden of proving such a defense or determination shall be on the Company.
Neither the failure of the Reviewing Party or the Company (including its Board,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such action by Indemnitee that indemnification of
the claimant is proper under the circumstances because Indemnitee has met the
standard of conduct set forth in applicable law, nor an actual determination by
the Reviewing Party or Company (including its Board, independent legal counsel,
or its stockholders) that the Indemnitee had not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct. For purposes of this
Agreement, the termination of any claim, action, suit, or proceeding, by
judgment, order, settlement (whether with or without court approval),
conviction, or upon a plea of nolo contendere, or its equivalent shall not
create a presumption that 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.
5.
Indemnification For
Expenses Incurred In Enforcing Rights. The Company shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall
(within ten business days of such request), advance such Expenses to Indemnitee,
that are incurred by Indemnitee in connection with any claim asserted against or
covered action brought by Indemnitee for (i) indemnification of Expenses or
Expense Advances by the Company under this Agreement or any other agreement or
under applicable law or the Company’s Articles of Incorporation as amended, or
bylaws now or hereafter in effect relating to indemnification for Indemnifiable
Events, and or (ii) recovery under directors’ and officers’ liability insurance
policies maintained by the Company, regardless of whether Indemnitee ultimately
is determined to be entitled to such indemnification, Expense Advances, or
insurance recovery, as the case may be.
6.
Notification and
Defense of Proceeding.
(a) Notice. Promptly
after receipt by Indemnitee of notice of the commencement of any Proceeding,
Indemnitee shall, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement thereof,
but the omission so to notify the Company will not relieve the Company from any
liability that it may have to Indemnitee, except as provided in Section
6(c).
(b) Defense. With respect
to any Proceeding as to which Indemnitee notifies the Company of the
commencement thereof, the Company shall be entitled to participate in the
Proceeding at its own expense and except as otherwise provided below, to the
extent the Company so wishes, it may assume the defense thereof with counsel
reasonably satisfactory to Indemnitee. After notice from the Company
to Indemnitee of its election to assume the defense of any Proceeding, the
Company shall not be liable to Indemnitee under this Agreement or otherwise for
any Expenses subsequently incurred by Indemnitee in connection with the defense
of such Proceeding other than reasonable costs of investigation or as otherwise
provided below. Indemnitee shall have the right to employ his or her own legal
counsel in such Proceeding, but all Expenses related thereto incurred after
notice from the Company of its assumption of the defense shall be at
Indemnitee’s expense unless: (i) the employment of legal counsel by Indemnitee
has been authorized by the Company, (ii) Indemnitee has reasonably determined
that there may be a conflict of interest between Indemnitee and the Company in
the defense of the Proceeding, (iii) after a Change in Control, the employment
of counsel by Indemnitee has been approved by the Independent Counsel, (iv)
there are specific defenses available to Indemnitee that are different from
or additional to those available to the Indemnifying Party, provided that such
defenses may result in a conflict of interest between Indemnitee and the Company
or that Company is unable to assert such defenses or claims on behalf of
Indemnitee, or (v) the Company shall not in fact have employed counsel to assume
the defense of such Proceeding, in each of which case all Expenses of the
Proceeding shall be borne by the Company. The Company shall not be entitled to
assume the defense of any Proceeding brought by or on behalf of the Company or
as to which Indemnitee shall have made the determination provided for in (ii)
and/or (iv) above.
(c) Settlement of Claims.
The Company shall not be liable to indemnify Indemnitee under this Agreement or
otherwise for any amounts paid in settlement of any Proceeding effected without
the Company’s written consent, provided that Company has responded to
Indemnitee’s request for consent of settlement within a reasonable time of
Indemnitee’s request for such consent, and provided further that an explicit
rejection from the Company of any such claim will not relieve the Company from
any liability that it may have to Indemnitee under Section 2(c). The
above notwithstanding, if a Change in Control has occurred, the Company shall be
liable for indemnification of Indemnitee for amounts paid in settlement if the
Independent Counsel has approved the settlement. The Company shall not settle
any Proceeding in any manner that would impose any penalty or limitation on
Indemnitee without Indemnitee’s written consent. The Company shall not be liable
to indemnify the Indemnitee under this Agreement with regard to 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; the Company’s liability
hereunder shall not be excused if participation in the Proceeding by the Company
was barred by this Agreement or would otherwise result in a conflict of interest
with Indemnitee’s defense in any Proceeding.
7.
Non-Exclusivity. The
rights of Indemnitee hereunder shall be in addition to any other rights
Indemnitee may have under the Company’s Articles of Incorporation as amended,
bylaws, applicable law, or otherwise. To the extent that a change in applicable
law (whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Company’s Articles of
Incorporation as amended, bylaws, applicable law, or this Agreement, it is the
intent of the parties that Indemnitee enjoy by this Agreement the greater
benefits so afforded by such change.
8.
Liability
Insurance. To the extent the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, 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 Company director
or officer.
9.
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 operate as 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.
10. 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 Indemnitee, who shall
execute all documents 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.
11. 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
Indemnitee has otherwise received payment (under any insurance policy, bylaw, or
otherwise) of the amounts otherwise indemnifiable hereunder.
12. 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 (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), assigns,
spouses, heirs, and personal and legal representatives. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity pertaining to an
Indemnifiable Event even though he or she may have ceased to serve in such
capacity at the time of any Proceeding.
13. Severability. If any
provision (or portion thereof) of this Agreement shall be held by a court of
competent jurisdiction to be invalid, void, or otherwise unenforceable, 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 be construed so as to
give effect to the intent manifested by the provision held invalid, void, or
unenforceable.
14. Governing Law. This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Nevada applicable to contracts made and to be performed in
such state without giving effect to the principles of conflicts of
laws.
15. 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 at:
Songzai
International Holding Group, Inc.
00000
Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx xx
Xxxxxxxx, XX 00000
Attn:
Chief Executive Officer
Notice of
change of address shall be effective only when given 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.
16. 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.
[Remainder of Page Left Blank
Intentionally]
IN
WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Indemnification Agreement as of the day specified above.
COMPANY:
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Songzai
International Holding Group, Inc.
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By:
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Xxxxxxx
Xx
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Chief
Executive Officer
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INDEMNITEE:
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[Indemnitee]
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