ZANN CORP. INDEMNIFICATION AGREEMENT
This
Indemnification Agreement (“Agreement”)
is
made as of [DATE] by and between Zann Corp., a Nevada corporation (the
“Company”),
and
[NAME] (“Indemnitee”).
WHEREAS,
the
Company and Indemnitee recognize the significant cost of directors’ and
officers’ liability insurance and the general reductions in the coverage of such
insurance;
WHEREAS,
the
Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting officers and directors to expensive litigation
risks at the same time as the coverage of liability insurance has been severely
limited; and
WHEREAS,
the
Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve as officers and directors of the
Company and to indemnify its officers and directors so as to provide them with
the maximum protection permitted by law.
NOW,
THEREFORE,
in
consideration for Indemnitee’s services as an officer or director of the
Company, the Company and Indemnitee hereby agree as follows:
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1.
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Indemnification.
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(a) Third
Party Proceedings.
The
Company shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit, proceeding or any alternative dispute resolution mechanism, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, or by reason of the fact that Indemnitee is 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, against
expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred
by
Indemnitee in connection with such action, suit or 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, with respect to any
criminal action or proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful. The termination of any action, suit or 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
or not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that Indemnitee’s
conduct was unlawful.
(b) Proceedings
By or in the Right of the Company.
The
Company shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or
suit by or in the right of the Company or any subsidiary of the Company to
procure a judgment in its favor by reason of the fact that Indemnitee is or
was
a director, officer, employee or agent of the Company, or any subsidiary of
the
Company, or by reason of the fact that Indemnitee is 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, against
expenses (including attorneys’ fees) and, to the fullest extent permitted by
law, amounts paid in settlement actually and reasonably incurred by Indemnitee
in connection with the defense or settlement of such action or suit 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, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Company unless
and
only to the extent that the District Court of the State of Nevada or the court
in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances
of
the case, Indemnitee is fairly and reasonably entitled to indemnity for such
expenses which the District Court of the State of Nevada or such other court
shall deem proper.
(c) Mandatory
Payment of Expenses.
To the
extent that Indemnitee has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in Subsections (a)
and
(b)
of this
Section 1,
or in
defense of any claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including attorneys’ fees) actually and reasonably incurred by
Indemnitee in connection therewith.
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2.
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Expenses;
Indemnification Procedure.
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(a) Advancement
of Expenses.
The
Company shall advance all expenses actually and reasonably incurred by
Indemnitee in connection with the investigation, defense, settlement or appeal
of any civil or criminal action, suit or proceeding referenced in Section 1(a)
or
1(b)
hereof
(but not amounts actually paid in settlement of any such action, suit or
proceeding). Indemnitee hereby undertakes to repay such amounts advanced only
if, and to the extent that, it shall ultimately be determined that Indemnitee
is
not entitled to be indemnified by the Company as authorized hereby. The advances
to be made hereunder shall be paid by the Company to Indemnitee within
thirty (30) days following delivery of a written request therefor by
Indemnitee to the Company.
(b) Notice/Cooperation
by Indemnitee.
Indemnitee shall, as a condition precedent to his right to be indemnified under
this Agreement, give the Company notice in writing as soon as practicable of
any
claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the President
of the Company at the address shown on the signature page of this Agreement
(or
such other address as the Company shall designate in writing to Indemnitee).
Notice shall be deemed received three business days after the date postmarked
if
sent by domestic certified or registered mail, properly addressed; otherwise
notice shall be deemed received when such notice shall actually be received
by
the Company. In addition, Indemnitee shall give the Company such information
and
cooperation as it may reasonably require and as shall be within Indemnitee’s
power.
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(c) Procedure.
Any
indemnification and advances provided for in Section 1
and this
Section 2
shall be
made no later than thirty (30) days after receipt of the written request of
Indemnitee. If a claim under this Agreement, under any statute, or under any
provision of the Company’s Articles of Incorporation or Bylaws providing for
indemnification, is not paid in full by the Company within thirty (30) days
after a written request for payment thereof has first been received by the
Company, Indemnitee may, but need not, at any time thereafter bring an action
against the Company to recover the unpaid amount of the claim and, subject
to
Section 12
of this
Agreement, Indemnitee shall also be entitled to be paid for the reasonable
expenses (including reasonable attorneys’ fees) of bringing such action. It
shall be a defense to any such action (other than an action brought to enforce
a
claim for expenses incurred in connection with any action, suit or proceeding
in
advance of its final disposition) that Indemnitee has not met the standards
of
conduct which make it permissible under applicable law for the Company to
indemnify Indemnitee for the amount claimed. However, Indemnitee shall be
entitled to receive interim payments of expenses pursuant to Subsection 2(a)
unless
and until such defense may be finally adjudicated by court order or judgment
from which no further right of appeal exists. It is the parties’ intention that
if the Company contests Indemnitee’s right to indemnification, the question of
Indemnitee’s right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel,
or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any committee
or
subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.
(d) Notice
to Insurers.
If, at
the time of the receipt of a notice of a claim pursuant to Section 2(b)
hereof,
the Company has director and officer liability 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.
(e) Selection
of Counsel.
In the
event the Company shall be obligated under Section 2(a)
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
Indemnitee shall have the right to employ Indemnitee’s counsel in any such
proceeding at Indemnitee’s expense; and provided
further
that if
(i) the Company has expressly authorized (and continues to authorize) the
employment of counsel by Indemnitee at the Company’s expense, (ii) the use
of counsel chosen by the Company to represent Indemnitee would present such
counsel with a conflict of interest, or (iii) the Company shall not, in
fact, have employed counsel reasonably satisfactory to Indemnitee within a
reasonable time after notice of the institution of such proceeding, Indemnitee
shall have the right to employ counsel at the expense of the Company in
accordance herewith.
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3.
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Additional
Indemnification Rights; Nonexclusivity.
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(a) Scope.
Notwithstanding any other provision of this Agreement, the Company hereby agrees
to indemnify the Indemnitee to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized by
the
other provisions of this Agreement, the Company’s Articles of Incorporation, the
Company’s Bylaws or by statute. In the event of any change, after the date of
this Agreement, in any applicable law, statute, or rule which expands the right
of a Nevada corporation to indemnify a member of its board of directors or
an
officer, such changes shall be, ipso
facto,
within
the purview of Indemnitee’s rights and Company’s obligations, under this
Agreement. In the event of any change in any applicable law, statute or rule
which narrows the right of a Nevada corporation to indemnify a member of its
board of directors or an 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.
(b) Nonexclusivity.
The
indemnification provided by this Agreement shall not be deemed exclusive of
any
rights to which Indemnitee may be entitled under the Company’s Articles of
Incorporation, its Bylaws, any agreement, any vote of stockholders or
disinterested Directors, the Revised Statutes of the State of Nevada, or
otherwise, both as to action in Indemnitee’s official capacity and as to action
in another capacity while holding such office. The indemnification provided
under this Agreement shall continue as to Indemnitee for any action taken or
not
taken while serving in an indemnified capacity even though he may have ceased
to
serve in such capacity at the time of any action, suit or other covered
proceeding.
4. Partial
Indemnification.
If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of the expenses, judgments, fines or
penalties actually or reasonably incurred by him in the investigation, defense,
appeal or settlement of any civil or criminal action, suit or proceeding, but
not, however, for the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion of such expenses, judgments, fines or
penalties to which Indemnitee is entitled.
5. Mutual
Acknowledgement.
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 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.
6. Officer
and Director Liability Insurance.
The
Company shall, from time to time, make the good faith determination whether
or
not it is practicable for the Company to obtain and maintain a policy or
policies of insurance with reputable insurance companies providing the officers
and directors of the Company with coverage for losses from wrongful acts, or
to
ensure the Company’s performance of its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company’s 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. Notwithstanding the foregoing, the Company shall have no obligation
to
obtain or maintain such insurance if the Company determines in good faith that
such insurance is not reasonably available, if the premium costs for such
insurance are disproportionate to the amount of coverage provided, if the
coverage provided by such insurance is limited by exclusions so as to provide
an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company.
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7. 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 7.
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.
8. Exceptions.
Any
other provision herein to the contrary notwithstanding, the Company shall not
be
obligated pursuant to the terms of this Agreement:
(a) 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; or
(b) 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; or
(c) 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
Indemnitee by an insurance carrier under a policy of officers’ and directors’
liability insurance maintained by the Company.
(d) 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.
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9.
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Construction
of Certain Phrases.
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(a) For
purposes of this Agreement, references to the “Company”
shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power
and
authority to indemnify its directors, officers, and employees or agents, so
that
if Indemnitee is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, Indemnitee shall stand
in
the same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to
such
constituent corporation if its separate existence had continued.
(b) For
purposes of this Agreement, references to “other
enterprises”
shall
include employee benefit plans; references to “fines”
shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to “serving
at the request of the Company”
shall
include any service as a director, officer, employee or agent of the Company
which imposes duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its participants,
or
beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan, Indemnitee shall be deemed to have acted in a
manner “not
opposed to the best interests of the Company”
as
referred to in this Agreement.
10. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original.
11.
Successors
and Assigns.
This
Agreement shall be binding upon the Company and its successors and assigns,
and
shall inure to the benefit of Indemnitee and Indemnitee’s estate, heirs, legal
representatives and assigns.
12. Attorneys’
Fees.
In the
event that any action is instituted by Indemnitee under this Agreement to
enforce or interpret any of the terms hereof, Indemnitee shall be entitled
to be
paid all court costs and expenses, including attorneys’ fees, actually and
reasonably incurred by Indemnitee with respect to such action, unless as a
part
of such action, the court of competent jurisdiction determines that each of
the
material assertions made by Indemnitee as a basis for such action were not
made
in good faith or were frivolous. In the event of an action instituted by or
in
the name of the Company under this Agreement or to enforce or interpret any
of
the terms of this Agreement, Indemnitee shall be entitled to be paid all court
costs and expenses, including attorneys’ fees, actually and reasonably incurred
by Indemnitee in defense of such action (including with respect to Indemnitee’s
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee’s material defenses to such
action were made in bad faith or were frivolous.
13. 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, on the date of such receipt, or
(ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement,
or
as subsequently modified by written notice.
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14. Consent
to Jurisdiction.
The
Company and Indemnitee each hereby irrevocably consent to the jurisdiction
of
the courts of the State of Nevada for all purposes in connection with any action
or proceeding which arises out of or relates to this Agreement and agree that
any action instituted under this Agreement shall be brought only in the state
courts of the State of Nevada.
15. Choice
of Law.
This
Agreement shall be governed by and its provisions construed in accordance with
the laws of the State of Nevada, as applied to contracts between Nevada
residents entered into and to be performed entirely within Nevada without regard
to the conflict of law principles thereof.
16. Period
of Limitations.
No
legal action shall be brought and no cause of action shall be asserted by or
in
the right of the Company against Indemnitee, Indemnitee’s estate, spouse, heirs,
executors or personal or legal representatives after the expiration of two
years
from the date of accrual of such cause of action, and any claim or cause of
action of the Company shall be extinguished and deemed released unless asserted
by the timely filing of a legal action within such two-year period; provided,
however,
that if
any shorter period of limitations is otherwise applicable to any such cause
of
action, such shorter period shall govern.
17. 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 all acts that may be necessary
to
secure such rights and to enable the Company effectively to bring suit to
enforce such rights.
18. Amendment
and Termination.
No
amendment, modification, termination or cancellation of this Agreement shall
be
effective unless it is in writing signed by both the parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute
a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
19. Integration
and Entire Agreement.
This
Agreement sets forth the entire understanding between the parties hereto and
supersedes and merges all previous written and oral negotiations, commitments,
understandings and agreements relating to the subject matter hereof between
the
parties hereto.
(signature
page follows)
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
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Signature
of Authorized Signatory
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Print
Name
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Title
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Address:
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0000
X. Xxxxx Xx., Xxxxxx, XX 00000
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AGREED
TO AND ACCEPTED:
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INDEMNITEE:
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Signature
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Print
Name
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Title
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Address:
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