INDEMNIFICATION AGREEMENT
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This Indemnification Agreement ("Agreement") is made on ________, 2002,
between Star E Media Corp. a Nevada corporation (the "Corporation"), and
_______________ (the "Director").
R E C I T A L S
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A. The Director is a member of the Corporation's Board of Directors and
the Corporation desires Director to continue in such capacity. Director is
willing to continue to serve on the Corporation's Board of Directors if Director
receives the protections provided by this Agreement.
B. The Corporation has not obtained directors and officers liability
insurance ("D&O Insurance"), but may acquire such at a time in the future.
C. The Corporation believes that (1) litigation against corporate
directors, regardless of whether meritorious, is expensive and time-consuming
for the director to defend; (2) there is a substantial risk of a large judgment
or settlement in litigation in which a corporate director was neither culpable
nor profited personally to the detriment of the corporation; (3) it is
increasingly difficult to attract and keep qualified directors because of such
potential liabilities; (4) it is important for a director to have assurance that
indemnification will be available if the director acts in accordance with
reasonable business standards; and (5) because available D&O Insurance and the
indemnification available from the Corporation are not adequate to fully protect
the Corporation's directors against the problems discussed above, it is in the
best interests of the Corporation and its shareholders for the Corporation to
contractually obligate itself to indemnify its directors and to set forth the
details of the indemnification process.
D. Based upon the conclusions stated in Recital D above, to induce
Director to continue to serve on the Corporation's Board of Directors and in
consideration of Director's continued service as a director, the Corporation
wishes to enter into this Agreement with Director.
Therefore, Corporation and Director agree as follows:
1. AGREEMENT TO SERVE. Director will serve as a member of the Board of
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Directors of the Corporation so long as Director is duly elected and qualified
to so serve or until Director resigns or is removed from the Corporation's Board
of Directors.
2. INDEMNIFICATION.
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(a) Corporation will indemnify Director to the fullest extent permitted
under applicable law if Director was or is a party or threatened to be made a
party to any threatened, pending or completed action, suit or proceeding of any
kind, whether civil, criminal, administrative or investigative and whether
formal or informal (including actions by or in the right of Corporation and any
preliminary inquiry or claim by any person or authority), by reason of the fact
that Director is or was a director, officer, partner, trustee, employee or agent
of Corporation or is or was serving at Corporation's request as a director,
officer, employee or agent of another corporation (including a Subsidiary),
limited liability company, partnership, joint venture, trust, employee benefit
plan or other enterprise, whether or not for profit, or by reason of anything
done or not done by Director in any such capacity (collectively, "Covered
Matters"). Such indemnification will cover all Expenses (as defined in paragraph
5(a) below), liabilities, judgments (including punitive and exemplary damages),
penalties, fines (including excise taxes relating to employee benefit plans and
civil penalties) and amounts paid in settlement that are incurred or imposed
upon Director in connection with a Covered Matter (collectively, "Indemnified
Amounts").
(b) Director will be indemnified for all Indemnified Amounts and
Corporation will defend Director against claims (including threatened claims and
investigations) in any way related to Director's service as a director including
claims brought by or on behalf of Corporation or any Subsidiary, except if it is
finally determined by the court of last resort (or by a lower court if not
timely appealed) that (1) the payment is prohibited by applicable law or
(2) Director engaged in intentional misconduct for the primary purpose of
significant personal financial benefit through actions adverse to Corporation's
and its shareholders' best interests. As used in this Agreement, (1)
"intentional misconduct" will not include violations of disclosure or reporting
requirements of federal securities laws or a breach of fiduciary duties
(including duties of loyalty or care) if Director relied on advice of counsel to
Corporation, or otherwise reasonably believed that there was no violation of
such requirements or breach of fiduciary duty; and (2) "significant personal
financial benefit" will not include compensation or employee benefits for past
or prospective services to Corporation or Corporation's successor or in
connection with an agreement not to compete or similar agreement, or any benefit
received by directors or officers or shareholders of Corporation generally.
(c) If Director is entitled under this Agreement to indemnification for
less than all of the amounts incurred by Director in connection with a Covered
Matter, Corporation will indemnify Director for the indemnifiable amount.
3. CLAIMS FOR INDEMNIFICATION. Director will give Corporation written
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notice of any claim for indemnification under this Agreement. Payment requests
will include a schedule settling forth in reasonable detail the amount requested
and will be accompanied (or, if necessary, followed) by copies of the relevant
invoice or other documentation. Upon Corporation's request, Director will
provide Corporation with a copy of the document or pleading, if any, notifying
Director of the Covered Matter. To the extent practicable, Corporation will pay
Indemnified Amounts directly without requiring Director to make any prior
payment.
4. DETERMINATION OF RIGHT TO INDEMNIFICATION.
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(a) Director will be presumed to be entitled to indemnification under
this Agreement and will receive such indemnification, subject to paragraph 4(b)
below, irrespective of whether the Covered Matter involves allegations of
intentional misconduct, alleged violations of Section 16(b) of the Securities
Exchange Act of 1934, alleged violations of Section 10(b) of Securities Exchange
Act of 1934 (including Rule 10b-5 thereunder), breach of Director's fiduciary
duties (including duties of loyalty or care) or any other claim.
(b) If, in the opinion of counsel to Corporation, applicable law
permits indemnification in a Covered Matter only as authorized in the specific
case upon a determination that indemnification is proper in the circumstances
because Director has met a standard of conduct established by applicable law,
and upon an evaluation of Indemnification Amounts to be paid in connection with
such Covered Matter, the following will apply:
(1) Corporation will give Director notice that a determination
and evaluation will be made under this paragraph 4(b); such notice will be given
immediately after receipt of counsel's opinion that such a determination and
evaluations necessary and will include a copy of such opinion.
(2) Such determination and evaluation will be made in good
faith, as follows:
(A) by a majority vote of a quorum of Corporation's Board
of Directors who are not parties or threatened to be made parties to the
Covered Matter in question ("Disinterested Directors") or, if such a quorum
is not obtainable, by a majority vote of a committee of Disinterested
Directors who are selected by the Board; or
(B) by an attorney or firm of attorneys, having no
previous relationship with Corporation or Director, which is selected by
Corporation and Director; or
(C) by all independent directors of Corporation who are
not parties or threatened to be made parties to the Covered Matter.
(3) Director will be entitled to a hearing before the entire
Board of Directors of Corporation and any other person or persons making the
determination and evaluation under clause (2) above. Director will be entitled
to be represented by counsel at such hearing.
(4) The cost of a determination and evaluation under this para-
graph 4(b) (including attorneys' fees and other expenses incurred by Director in
preparing for and attending the hearing contemplated by clause (3) above and
otherwise in connection with the determination and evaluation under this
paragraph 4(b)) will be borne by Corporation.
(5) The determination will be made as promptly as possible
after final adjudication of the Covered Matter.
(6) Director will be presumed to have met the required standard
of conduct under this Section 4(b) unless it is clearly demonstrated to the
determining body that Director had not met the required standard of conduct.
5. ADVANCE OF EXPENSES.
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(a) Before final adjudication of a Covered Matter, upon Director's
request pursuant to paragraph 3 above, Corporation will promptly either advance
Expenses directly or reimburse Director for all Expenses. As used in this
Agreement, "Expenses" means all costs and expenses (including attorneys' fees,
expert fees, other professional fees and court costs) incurred by Director in
connection with a Covered Matter other than judgments, penalties, fines and
settlement amounts.
(b) If, in the opinion of counsel to Corporation, applicable law
permits advancement of Expenses only as authorized in the specific case up on a
determination that Director has net a standard of conduct established by
applicable law, the determination will be made at Corporation's cost, in good
faith and as promptly as possible after Director's request, in accordance with
clauses (1) through (4) and (6) of paragraph 4(b) above. Because of the
difficulties inherent in making any such determination before final disposition
of the Covered Matter, to the extent permitted by law such advance will be made
if (1) the facts then known to those persons making the determination, without
conducting a formal independent investigation, would not preclude advancement of
Expenses under applicable law and (2) Director submits to Corporation a written
affirmation of Director's belief that Director has met the standard of conduct
necessary for advancement of Expenses under the circumstances.
(c) Director will repay any Expenses that are advanced under this
paragraph 5 if it is ultimately determined, in a final, non-appealable judgment
rendered by the court of last resort (or by a lower court if not timely
appealed), that Director is not entitled to be indemnified against such
Expenses. This undertaking by Director is an unlimited general undertaking but
no security for such undertaking will be required.
6. DEFENSE OF CLAIM.
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(a) Except as provided in paragraph 6(c) below, Corporation, jointly
with any other indemnifying party, will be entitled to assume the defense of any
Covered Matter as to which Director requests indemnification.
(b) Counsel selected by Corporation to defend any Covered Matter will be
subject to Director's advance written approval, which will not be unreasonably
withheld.
(c) Director may employ Director's own counsel in a Covered Matter and
be fully reimbursed therefore if (1) Corporation approves, in writing, the
employment of such counsel or (2) either (A) Director has reasonably concluded
that there may be a conflict of interest between Corporation and Director
or between Director and other parties represented by counsel employed by
Corporation to represent Director in such action or (B) Corporation has not
employed counsel reasonably satisfactory to Director to assume the defense of
such Covered Matter promptly after Director's request.
(d) Neither Corporation nor Director will settle any Covered Matter
without the other's written consent, which will not be reasonably withheld.
(e) If Director is required to testify (in court proceedings,
depositions, informal interviews or otherwise), consult with counsel, furnish
documents or take any other reasonable action in connection with a Covered
Matter, Corporation will pay Director a fee for Director's efforts at a rate
equal to the amount payable to Director for attending Board and Board committee
meetings, plus reimbursement for all reasonable expenses incurred by Director in
connection therewith.
7. DISPUTES; ENFORCEMENT.
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(a) If there is a dispute relating to the validity or enforceability of
this Agreement or a denial of indemnification, advance of Expenses or payment of
any other amounts due under this Agreement or Corporation's Articles of
Incorporation or Bylaws, Corporation will provide such indemnification, advance
of Expenses or other payment until a final, non-appealable judgment that
Director is not entitled to such indemnification, advance of Expenses or other
payment has been rendered by the court of last resort (or by a lower court if
not timely appealed). Director will repay such amounts if such final,
non-appealable judgment so requires.
(b) Corporation will reimburse all of Director's reasonable expenses
(including attorney's fees ) in pursuing an action to enforce Director's rights
under this Agreement unless a final, non-appealable judgment against Director
has been rendered in such action by the court of last resort (or by a lower
court if not timely appealed). At Director's request, such expenses will be
advanced by Corporation to Director as incurred before final resolution of such
action by the court of last resort; such expenses will be repaid by Director if
a final, non-appealable judgment in Corporations favor is rendered in such
action by the court of last resort (or by a lower court if not timely appealed).
8. D&O INSURANCE.
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(a) Corporation represents that it does not currently have a policy
of D&O Insurance in effect.
(b) Except as provided in paragraph 8(c) below, Corporation will
purchase and maintain D&O Insurance with a policy limit of at least $1,000,000
without deductible or co-insurance in excess of the amounts set forth on the
schedule which is attached to this Agreement, insuring Director against any
liability arising out of Director's status as a director of Corporation,
regardless of whether Corporation has the power to indemnify Director against
such liability under applicable law.
(c) Corporation will not be required to purchase and maintain D&O
Insurance if the Board of Directors of Corporation determines, after diligent
inquiry, that (1) such insurance is not available; (2) the premiums for
available insurance are disproportionate to the amount of coverage and to the
premiums paid by other corporations similarly situated; or (3) the Corporation
is not financially able to pay the premiums. The Board of Directors of
Corporation will, at least annually, in good faith review its decision not to
maintain D&O Insurance and will purchase such insurance at any time that the
conditions of this paragraph 8(c) cease to apply.
(d) The parties will cooperate to obtain advances of Expenses, indem-
nification payments and consents from D&O Insurance carriers in any Covered
Matter to the full extent of applicable D&O Insurance. The existence of D&O
Insurance coverage will not diminish or limit Corporation's obligation to make
indemnification payments to Director. Amounts paid directly to Director with
respect to a Covered Matter by Corporation's D&O Insurance carriers will be
credited to the amounts payable by Corporation to Director under this Agreement.
9. LIMITATIONS OF ACTIONS; RELEASE OF CLAIMS; LIMITATION OF LIABILITY.
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(a) No action will be brought by or on behalf of Corporation against
Director or Director's heirs or personal representatives relating to Director's
service as a director, after the expiration of one year from the date Director
ceases (for any reason) to serve as a Director of Corporation, and any claim or
cause of action of Corporation will be extinguished and deemed released unless
asserted by the filing of a legal action before the expiration of such period.
(b) The Directors of Corporation who are employees of Corporation
(the "Inside Directors"), have investigated Director's activities during
Director's prior service and the Inside Directors have determined and ack-
nowledged that Corporation has no basis for any claim against Director for
negligence or misconduct in the performance of Director's duties on the basis of
any information presently available. Accordingly, Corporation releases Director
and Director's heirs, personal representatives and assigns from all causes of
action and claims which may be based upon negligence or misconduct by Director
in the performance of Director's duties to Corporation by reason of facts
existing on the date of this Agreement and known or available to the Inside
Directors.
10. RIGHTS NOT EXCLUSIVE. The Indemnification provided to Director
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under this Agreement will be in addition to any indemnification provided to
Director by law, agreement, Board resolution, provision of the Articles of
Incorporation or Bylaws of Corporation or otherwise.
11. SUBROGATION. Upon payment of any Indemnified Amount under this
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Agreement, Corporation will be subrogated to the extent of such payment to all
of Director's rights of recovery therefore and Director will take all reasonable
actions requested by Corporation (at no cost or penalty to Director) to secure
Corporation's rights under this paragraph 11 including executing documents.
12. CONTINUATION OF INDEMNITY. All of Corporation's obligations under
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this Agreement will continue as long as Director is subject to any actual or
possible Covered Matter, notwithstanding Director's termination of service as a
director.
13. AMENDMENTS. Neither Corporation's Articles of Incorporation nor
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its Bylaws will be changed to increase liability of directors or to limit
Director's indemnification. Any repeal or modification of Corporation's Articles
of Incorporation or Bylaws or any repeal or modification of the relevant
provisions of any applicable law will not in any way diminish any of Director's
rights or Corporation's obligations under this Agreement. This Agreement cannot
be amended except with the written consent of Corporation or Director.
14. GOVERNING LAW. This Agreement will be governed by Nevada law.
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15. SUCCESSORS.
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(a) This Agreement will be binding upon and inure to the benefit of the
parties and their respective heirs, legal representatives and assigns.
(b) Corporation will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of the Corporation to assume all of Corporation's
obligations under this Agreement. Such assumption will not release Corporation
from its obligations under this Agreement.
16. SEVERABILITY. The provisions of this Agreement will be deemed
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severable, and if any part of any provision is held illegal, void or invalid
under applicable law, such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If any
provision of this Agreement is held illegal, void or invalid in its entirety,
the remaining provisions of this Agreement will not in any way be affected or
impaired but will remain binding in accordance with their terms.
17. NOTICES. All notices given under this Agreement will be in writing
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and delivered either personally, by registered or certified mail (return receipt
requested, postage prepaid), by recognized overnight courier or by telecopy (if
promptly followed by a copy delivered personally, by registered or certified
mail or overnight courier), as follows:
If to Director: _________________________________
_________________________________
_________________________________
If to Corporation: Star E Media Corp.
00000 Xxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Attention: Secretary
or to such other address as either party furnishes to the other in writing.
18. COUNTERPARTS. This Agreement may be signed in counterpart.
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19. SUBSIDIARIES. As used in this Agreement, the term "Subsidiary"
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means any corporation in which Corporation owns a majority interest.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
written above.
Star E Media Corp.,
a Nevada corporation
______________________________ ______________________________
By: ________________________
Its: ________________________
