INDEMNIFICATION AGREEMENT
INDEMNIFICATION
AGREEMENT, dated as of February 8, 2007, by and between Manchester Inc., a
Nevada corporation (the "Company"), and Xxxx Xxxxxxx
("Indemnitee").
RECITALS
A. Highly
competent persons are becoming more reluctant to serve as directors or officers
or in other capacities unless they are provided with reasonable protection
through insurance or indemnification against risks of claims and actions against
them arising out of their service to and activities on behalf of the
corporations.
B. The
Board
of Directors of the Company (the "Board" or the "Board of Directors") has
determined that the Company should act to assure its directors, officers and
consultants that there will be increased certainty of such protection in the
future.
C. It
is
reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify such persons to the fullest extent permitted by applicable
law so that such persons will serve or continue to serve the Company free from
undue concern that they will not be so indemnified.
D. Indemnitee
is willing to serve, to continue to serve and to take on additional service
for
or on behalf of the Company on the condition that Indemnitee be so
indemnified.
AGREEMENT
In
consideration of the premises and the covenants contained herein, the Company
and Indemnitee do hereby covenant and agree as follows:
1. Definitions.
For
purposes of this Agreement:
(a) "Affiliate"
shall
mean any subsidiary, other corporation, partnership, joint venture, trust or
other enterprise in respect of which the Indemnitee is or was or will be serving
as a director, officer, advisory director or Board Committee member at the
request of the Company, and including, but not limited to, any employee benefit
plan of the Company or any of the foregoing.
(b) "Expenses"
shall include all attorneys' fees and costs, retainers, court costs,
transcripts, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees
and all other disbursements or expenses incurred in connection with asserting
or
defending claims.
(c) "Losses"
shall mean all losses, claims, liabilities, judgments, fines, penalties and
amounts paid in settlement in connection with any Proceeding.
(d) "Proceeding"
includes any action, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative; provided,
however,
that
the term "Proceeding" shall include any action instituted by an Indemnitee
(other than an action to enforce indemnification rights under this Agreement)
only if such action is authorized by the Board of Directors.
2. Service by Indemnitee.
Indemnitee has pursuant to separately executed employment agreement agreed
to
serve the Company’s subsidiary Manchester Indiana Operations, Inc. as an
officer. Notwithstanding anything contained herein, this Agreement shall not
create a separate contract of employment or amendment thereto between the
Company and Indemnitee, and the termination of Indemnitee's relationship with
the Company or an Affiliate by either party hereto shall not be restricted
by
this Agreement.
3. Indemnification.
Subject
to the terms and conditions of this Agreement, the Company agrees to indemnify
Indemnitee for, and hold Indemnitee harmless from and against, any Losses or
Expenses at any time incurred by or assessed against Indemnitee arising out
of
or in connection with any and all litigation and/or arbitration actions against
Indemnitee by XX Xxxxxxx Franchising Inc. (“Byrider”), including, without
limitation, under the three Second Renewal Franchise Agreements (each, a
“Franchise Agreement,” and collectively, the “Franchise Agreements”) entered
into as of February 23, 2006 between Byrider Franchising, Inc. (“Byrider”) and
F.S. English, Inc. (“FSE”), for each of the following three locations: (i) 0000
Xxxxxxxx Xxxx. Xxxxx, Xxxx Xxxxx, XX 00000; (ii) 0000 Xxxx Xxxxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000; and (iii) 0000 X. XX Xxxxxxx 00, Xxxxx Xxxxx, XX 00000;
and any and all actions in respect of GNAC, Inc. (“GNAC”) (FSE and GNAC are
collectively referred to as “FSE/GNAC”) as acquired by Manchester Indiana
Operations, Inc. (“Operations”) and Manchester Indiana Acceptance, Inc.
(“Indiana Acceptance” and collectively to together with Indiana Operations as
“Manchester Indiana”), subsidiaries of the Company.
4. Action or Proceeding;
Conditions and Waivers.
Subject
to the conditions herein, Indemnitee shall be entitled to the indemnification
rights provided herein if Indemnitee is a person who was or is made a party
or
is threatened to be made a party to any pending, completed or threatened
Proceeding by reason of (a) the fact that Indemnitee was affiliated with
FSE/GNAC as an Officer or Director or any other capacity or (b) anything done
or
not done by Indemnitee in any such capacity. Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses incurred by
Indemnitee or on Indemnitee's behalf in connection with any Proceeding, if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to
be in or not opposed to the best interests of the Company and had no reasonable
cause to believe his conduct was unlawful. An express condition of the
Indemnification provided by the Company herein is that Indemnitee will (i)
promptly and fully cooperate with Manchester Indiana’s and the Company’s counsel
in defending against any claims asserted by Byrider against Indemnitee and/or
FSE/GNAC; and (ii) that you hereby agree to common defense counsel with
Manchester Indiana and the Company, as selected by the Company at its sole
discretion, and you expressly waive any potential conflicts of with respect
to
joint representation.
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5. Actions by or in the Right of the Company.
Indemnitee shall be entitled to the indemnification rights provided
herein if Indemnitee is a person who was or is made a party or is threatened
to
be made a party to any pending, completed or threatened Proceeding brought
by or
in the right of the Company to procure a judgment in its favor by reason of
(a)
the fact that Indemnitee is or was an Officer or Director of FSE/GNAC or any
other Affiliate or (b) anything done or not done by Indemnitee in any such
capacity. Pursuant to this Section, Indemnitee shall be indemnified against
Losses or Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with any Proceeding if Indemnitee acted in
good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company.
6. Indemnification Scope.
Notwithstanding any provision of this Agreement, Company agrees to indemnify
Indemnitee, to the maximum extent permitted by law, against all Losses and
Expenses as provided herein, irrespective of success in regard to any claim,
issue or matter covered hereunder.
7. Payment for Expenses of a Witness. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of the fact that Indemnitee is or was an Officer or Director of the
Company or of an Affiliate, a witness in any Proceeding, the Company agrees
to
pay to Indemnitee all reasonable expenses actually and reasonably incurred
by
Indemnitee or on Indemnitee's behalf in connection therewith.
8. Expenses and Costs.
All
reasonable Expenses directly incurred by or on behalf of Indemnitee (or
reasonably expected by Indemnitee to be incurred by Indemnitee within three
months) in connection with any Proceeding shall be paid promptly by the Company,
except if a determination not to indemnify has been made under Section 9.
Such statement or statements shall evidence such Expenses incurred by Indemnitee
in connection therewith and shall include or be accompanied by a written
undertaking by or on behalf of Indemnitee to repay such amount if it shall
ultimately be determined that Indemnitee is not entitled to be indemnified
therefor pursuant to the terms of this Agreement. It shall be a defense to
any
action seeking an adjudication or award in arbitration pursuant to this
Agreement that the claimant has not met the requirement for cooperation or
standard of conduct set forth herein for such indemnification. Any ancillary
Expenses or Costs of Indemnitee expected to be incurred by Indemnitee as direct
obligations and not directly paid by the Company pursuant to the indemnification
hereunder which is in amount in excess of $1,000 shall require the prior written
consent of the Company.
9. Procedure for Determination of Entitlement to Indemnification. (a) When
seeking indemnification under this Agreement, Indemnitee shall submit a written
request for indemnification to the Company. Such request shall include
documentation or information which is reasonably necessary for the Company
to
make a determination of Indemnitee's entitlement to indemnification hereunder
and which is reasonably available to Indemnitee. Determination of Indemnitee's
entitlement to indemnification shall be made promptly, but in no event later
than five (3) business days after receipt by the Company of Indemnitee's written
request for indemnification. The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.
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(b) The
entitlement of Indemnitee to indemnification under this Agreement in respect
of
any pending, contemplated or threatened Proceeding shall be determined in the
specific case by the Company Board of Directors.
(c) For
purposes of any determination of good faith hereunder, Indemnitee shall be
deemed to have acted in good faith if in taking an action Indemnitee relied
on
the records or books of account of the Company or an Affiliate, including
financial statements, or on information supplied to Indemnitee by the officers
of the Company or an Affiliate in the course of their duties, or on the advice
of legal counsel for the Company or an Affiliate or on information or records
given or reports made to the Company or an Affiliate by an independent certified
public accountant or by an appraiser or other expert selected with reasonable
care by the Company or an Affiliate. The Company shall have the burden of
establishing the absence of good faith. The provisions of this Section 9 shall
not be deemed to be exclusive or to limit in any way the other circumstances
in
which the Indemnitee may be deemed to have met the applicable standard of
conduct set forth in this Agreement.
(d) If
the
determination made pursuant to Section 9(b) is that Indemnitee is not
entitled to indemnification to the full extent of Indemnitee's request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth herein.
(e) If
the
person or persons empowered pursuant to Section 9(b) hereof to make a
determination with respect to entitlement to indemnification shall have failed
to make the requested determination, the requisite determination of entitlement
to indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent (i) misrepresentation by
Indemnitee of a material fact in the request for indemnification; (ii) a final
judicial determination that all or any part of such indemnification is expressly
prohibited by law or (iii) non-performance on the part of Indemnitee of any
other term or condition under Section 4 herein required for such
Indemnification.
(f) The
termination of any Proceeding by judgment, order, settlement or conviction,
or
upon a plea of nolo
contendere
or its
equivalent, shall not, of itself, adversely affect the rights of Indemnitee
to
indemnification hereunder, except as may be specifically provided herein, or
create a presumption that Indemnitee did not act in good faith and in a manner
which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or create a presumption that (with respect to any
criminal action or Proceeding) Indemnitee had reasonable cause to believe that
Indemnitee's conduct was unlawful.
10. Remedies in Cases of Determination Not to Indemnify
Expenses. (a) In
the event that (i) a determination is made that Indemnitee is not entitled
to
indemnification hereunder, (ii) payments are not made pursuant to Section 8
hereof or (iii) payment or other good faith action by the Company has not been
timely made following a determination of entitlement to indemnification pursuant
to Section 9 hereof, Indemnitee shall be entitled to seek an adjudication in
an
appropriate court of competent jurisdiction as to Indemnitee's entitlement
to
such indemnification.
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(b) In
the
event a determination has been made in accordance with the procedures set forth
in Section 9 hereof, in whole or in part, that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration referred to in
paragraph (a) of this Section 10 shall be de novo
and
Indemnitee shall not be prejudiced by reason of any such prior determination
that Indemnitee is not entitled to indemnification, and the Company shall bear
the burdens of proof specified in paragraphs 6 and 9 hereof in such
proceeding.
(c) If
a
determination is made or deemed to have been made pursuant to the terms of
Section 9 or 10 hereof that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or
arbitration in the absence of (i) a misrepresentation of a material fact by
Indemnitee; (ii) a final judicial determination that all or any part of such
indemnification is expressly prohibited by law or (iii) a determination that
Indemnitee did not perform in accordance with requisite terms and conditions
for
such Indemnification under Section 4 hereof.
(d) The
Company and Indemnitee agree that they shall be precluded from asserting that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable. The Company and Indemnitee further agree to stipulate in any such
court that the Company and Indemnitee are bound by all of the provisions of
this
Agreement and are precluded from making any assertion to the
contrary.
(e) To
the
extent deemed appropriate by the court, interest shall be paid by the Company
to
Indemnitee at a reasonable interest rate for amounts which the Company
indemnifies or is obliged to indemnify the Indemnitee for the period commencing
with the date on which Indemnitee requested indemnification (or reimbursement
an
Expense) and ending with the date on which such payment is made to Indemnitee
by
the Company.
11. Expenses Incurred by Indemnitee to Enforce this Agreement. In
the event that Indemnitee is a party to or intervenes in any proceeding in
which
the validity or enforceability of this Agreement is at issue or seeks an
adjudication to enforce Indemnitee's rights under, or to recover damages for
breach of, this Agreement, Indemnitee, if Indemnitee prevails in whole in such
action, shall be indemnified by the Company against, any reasonable Expenses
incurred by Indemnitee. If it is determined that Indemnitee is entitled to
indemnification for part (but not all) of the indemnification so requested,
Expenses incurred in seeking enforcement of such partial indemnification shall
be reasonably prorated among the claims, issues or matters for which the
Indemnitee is entitled to indemnification and for claims, issues or matters
for
which the Indemnitee is not so entitled.
12. Non-Exclusivity. The
rights of indemnification as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under or by reason of applicable law, any certificate of incorporation or
by-laws, any agreement, any vote of stockholders or any resolution of directors
or otherwise. To the extent Indemnitee would be prejudiced thereby, no
amendment, alteration, rescission or replacement of this Agreement or any
provision hereof shall be effective as to Indemnitee with respect to any action
taken or omitted by such Indemnitee in Indemnitee's position with the Company
or
an Affiliate or any other entity which Indemnitee is or was serving at the
request of the Company prior to such amendment, alteration, rescission or
replacement.
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13. Duration of Agreement.
This
Agreement shall apply to any claim asserted and any Losses and Expenses incurred
in connection with any claim asserted on or after the effective date of this
Agreement and shall continue until and terminate upon the later of: (a) 10
years
after Indemnitee has ceased to occupy any of the positions or have any of the
relationships described in Sections 3, 4 or 5 of this Agreement; or
(b) lapse of the applicable statute of limitations pertaining to pending or
threatened Proceedings of the kind described herein with respect to Indemnitee.
This Agreement shall be binding upon the Company and its successors and assigns
and shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisee, executors, administrators or other legal
representatives.
14. Severability.
Should
any part, term or condition hereof be declared illegal or unenforceable or
in
conflict with any other law, the validity of the remaining portions or
provisions of this Agreement shall not be affected thereby, and the illegal
or
unenforceable portions of the Agreement shall be and hereby are redrafted to
conform with applicable law, while leaving the remaining portions of this
Agreement intact.
15. Counterparts.
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
document.
16. Headings.
Section
headings are for convenience only and do not control or affect meaning or
interpretation of any terms or provisions of this Agreement.
17. Modification and Waiver.
No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by each of the parties hereto.
18. No Duplicative Payment.
The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has
otherwise actually received such payment (net of Expenses incurred in collecting
such payment) under this Agreement, any insurance policy, contract, agreement
or
otherwise.
19. Notices.
All
notices, requests, demands and other communications provided for by this
Agreement shall be in writing (including telecopier or similar writing) and
shall be deemed to have been given at the time when mailed in a registered
or
certified postpaid envelope in any general or branch office of the United States
Postal Service, or sent by Federal Express or other similar overnight courier
service, addressed to the address of the parties stated below or to such changed
address as such party may have fixed by notice or, if given by telecopier,
when
such telecopy is transmitted and the appropriate answer back is
received.
(a) If
to
Indemnitee, to the address of record on file with the Company.
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000
Xxxxxxxx Xxxxx, 0xx
Xxxxx
Xxxxxx,
Xxxxx 00000
with
a
copy to:
Wuersch
& Xxxxxx LLP
000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxx, Esq.
Phone:
(000) 000-0000
Fax:
(000) 000-0000
20. GOVERNING LAW.
THE
PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF INCORPORATION
OF
THE COMPANY WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
21. Entire Agreement.
Subject
to the provisions of Section 12 hereof, this Agreement constitutes the
entire understanding between the parties and supersedes all proposals,
commitments, writings, negotiations and understandings, oral and written, and
all other communications between the parties relating to the subject matter
of
this Agreement. This Agreement may not be amended or otherwise modified except
in writing duly executed by all of the parties. A waiver by any party of any
breach or violation of this Agreement shall not be deemed or construed as a
waiver of any subsequent breach or violation thereof.
[Signature
Page to follow]
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IN
WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement
as of the date first above written.
| MANCHESTER INC. | ||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxxx | |
|
Name: Xxxxxxx Xxxxxx |
||
| Title: Corporate Secretary and Director | ||
| INDEMNITEE: | ||
| |
|
|
| /s/ | Xxxx Xxxxxxx | |
|
Name: Xxxx Xxxxxxx |
||
|
Title:
Manchester
Indiana CEO
|
||
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