8
DIRECTOR SERVICE AND INDEMNIFICATION AGREEMENT
(Meineke)
This Director Service and Indemnification Agreement (the "Agreement") is made
effective as of February 27, 2004 (the "Effective Date") by and between XXXXX
XXXXXXX, an individual ("Meineke"), and RAPIDTRON, INC., a Nevada corporation
(the "Company"), with reference to the following recitals:
A. Prior to the Effective Date, Meineke served as an officer and director of
the Company.
B. Pursuant to that certain Termination Agreement, dated as of the Effective
Date, Meineke has agreed to continue to serve as a director of the Company,
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the Termination Agreement, the mutual
covenants hereinafter set forth, and other good and valuable consideration,
Meineke and the Company hereby agree as follows:
1. Service. Meineke will continue to serve, at the will of the Company, as
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director of the Company for so long as Meineke is duly elected or until Meineke
tenders his or her resignation effective no less than thirty (30) days from
notice thereof; provided such service does not conflict or unreasonably
interfere with Meineke's duties as President of Raleigh America or the interests
of Raleigh America or Raleigh Cycle Ltd. In furtherance of such service,
Meineke shall attend at least three (3) meetings per year and provide general
advice to the Company upon reasonable request, provided such meeting or advice
does not conflict or unreasonably interfere with Meineke's duties as President
of Raleigh America or the interests of Raleigh America or Raleigh Cycle Ltd.
2. Indemnification.
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(a) Third Party Actions. The Company hereby indemnifies Meineke in the
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event that Meineke is a party, or is threatened to be made a party, to any
proceeding (other than a proceeding by or in the right of the Company to procure
a judgment in the Company's favor) by reason of Meineke's status as a director
or agent of the Company, against expenses, judgments, fines, settlements, and
other amounts actually and reasonably incurred in connection with such
proceeding if Meineke acted in good faith and in a manner that Meineke
reasonably believed to be in the Company's best interests and, in the case of a
criminal proceeding, Meineke had no reasonable cause to believe Meineke's
conduct was unlawful. The termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not, of itself, create any presumption that (a) Meineke did not act in
good faith or in a manner which Meineke reasonably believed to be in the
Company's best interests or (b) Meineke had no reasonable cause to believe that
Meineke's conduct was unlawful.
(b) Actions By the Company. The Company hereby indemnifies Meineke in
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the event that Meineke was or is a party, or is threatened to be made a party,
to any threatened, pending, or completed action by or in the right of the
Company to procure a judgment in the Company's favor by reason of Meineke's
status as a director or agent of the Company, against expenses actually and
reasonably incurred by Meineke in connection with the defense or settlement of
that action, if Meineke acted in good faith and in a manner Meineke believed to
be in the best interests of the Company and the Company's shareholders. No
indemnification shall be made under this Section 2(b) with respect to any claim,
issue, or matter on which Meineke has been adjudged to be liable to the Company
in the performance of Meineke's duty to the Company and/ or the Company's
shareholders, unless and only to the extent that the court in which such
proceeding is or was pending shall determine on application that, in view of all
the circumstances of the case, Meineke is fairly and reasonably entitled to
indemnity for expenses and then only to the extent that the court shall
determine.
(c) Successful Defense By Meineke. To the extent that Meineke has been
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successful on the merits in defense of any proceeding referred to in Sections
2(a) or 2(b), or in defense of any claim, issue, or matter therein, the Company
shall indemnify Meineke against expenses actually and reasonably incurred by
Meineke in connection therewith.
(d) Required Approval. Except for the indemnifications expressly
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authorized by Sections 2(a), 2(b) or 2(c), any indemnification of Meineke by the
Company shall be made only if authorized in the specific case, after a
determination that indemnification of Meineke is proper in the circumstances by
one of the following:
(i) A majority vote of a quorum consisting of directors who are
not parties to such proceeding;
(ii) Independent legal counsel in a written opinion if a quorum of
directors who are not parties to such a proceeding is not available;
(iii) Either (A) the affirmative vote of a majority of shares in
the Company entitled to vote represented at a duly held meeting at which a
quorum is present; or (B) the written consent of holders of a majority of the
outstanding shares entitled to vote; provided however that for purposes of this
Section 2(d)(iii), the shares owned by Meineke shall not be considered
outstanding or entitled to vote thereon); or
(iv) The court in which the proceeding is or was pending, on
application made by the Company, Meineke or any attorney or other person
rendering services in connection with the defense, whether or not such
application is opposed by the Company.
(e) Advances. Expenses incurred in defending any proceeding shall be
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advanced by the Company before the final disposition of such proceeding upon
receipt of an undertaking by or on behalf of Meineke to repay such amounts if it
shall be determined ultimately that Meineke is not entitled to be indemnified as
authorized in this Section 2.
(f) Other Contractual Rights. The indemnification provided by this
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Section 2 shall be deemed cumulative, and not exclusive, of any other rights to
which Meineke may be entitled under any bylaw, agreement, vote of shareholders
or disinterested directors, or otherwise, both as to action in an official
capacity and as to action in another capacity while holding such office.
Nothing in this section shall affect any right to indemnification to which
Meineke may be entitled by contract or otherwise.
(g) Limitations. No indemnification or advance shall be made under
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this Section 2, except as provided in Sections 2(d)(iii) or 2(d)(iv), in any
circumstance if it appears that it would be inconsistent with (i) an agreement
in effect at the time of the accrual of the alleged cause of action asserted in
the proceeding in which expenses were incurred or other amounts were paid, which
prohibits or otherwise limits indemnification; or (ii) any condition expressly
imposed by a court in approving settlement.
(h) Insurance. The Company shall purchase and maintain insurance on
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behalf of Meineke insuring against any liability asserted against or incurred by
Meineke in that capacity or arising out of Meineke's status as such to the
fullest extent permitted by law, whether or not the Company has the power to
indemnify Meineke against that liability under the provisions of this Section 2.
(i) Survival. The rights provided by this Section 2 shall survive the
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expiration or earlier termination of this Agreement pursuant hereto and shall
inure to the benefit of Meineke' heirs, executors, and administrators.
(j) Amendment. Any amendment, repeal, or modification of the Company's
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articles or bylaws shall not adversely affect Meineke's right or protection
existing at the time of such amendment, repeal, or modification.
(k) Settlements. The Company shall not be liable to indemnify Meineke
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under this Section 2 for (i) any amounts paid in settlement of any action or
claim effected without the Company's written consent, which consent shall not be
unreasonably withheld, or (ii) any judicial award, if the Company was not given
a reasonable and timely opportunity to participate, at the Company's expense, in
the defense of such action.
(l) Subrogation. In the event of payment under this Section 2, the
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Company shall be subrogated to the extent of such payment to all Meineke's
rights of recovery; and Meineke shall execute all papers required and shall do
everything necessary or appropriate to secure such rights, including the
execution of any documents necessary or appropriate to the Company effectively
bringing suit to enforce such rights.
(m) No Duplication of Payments. The Company shall not be liable under
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this Section 2 to make any payment in connection with any claim made against
Meineke to the extent Meineke has otherwise actually received payment, whether
under a policy of insurance, agreement, vote, or otherwise, of any amount which
is otherwise subject to indemnification under this Section 2.
(n) Proceedings and Expenses. For the purposes of this Section 2,
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"proceeding" means any threatened, pending, or completed action or proceeding,
whether civil, criminal, administrative, or investigative; and "expenses"
includes, without limitation, attorney fees and any expenses of establishing a
right to indemnification under this Section 2.
(o) Reliance as Safe Harbor. For purposes of any determination of good
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faith, Meineke shall be deemed to have acted in good faith if Meineke's action
is based on the records or books of account of the Company, including financial
statements, or on information supplied to Meineke by the officers of the Company
in the course of their duties, or on the advice of legal counsel for the Company
or on information or records given or reports made to the Company by an
independent certified public accountant or by an appraiser or other expert
selected with the reasonable care by the Company. The provisions of this
Section 2(o) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Meineke may be deemed to have met the
applicable standard of conduct set forth in this Agreement.
3. Expenses. The Company shall reimburse Meineke for the reasonable
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expenses incurred in connection with Meineke's service to the Company, including
reasonable travel, lodging and meal expenses incurred in connection with
attending any meeting of the board of directors.
4. Miscellaneous. This Agreement shall be construed under and in accordance
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with, and governed in all respects by, the laws of the State of California
(without giving effect to principles of conflicts of law). The failure of any
party to insist on strict compliance with any of the terms, covenants, or
conditions of this Agreement by any other party shall not be deemed a waiver of
that term, covenant or condition, nor shall any waiver or relinquishment of any
right or power at any one time or times be deemed a waiver or relinquishment of
that right or power for all or any other times. This Agreement, together with
the Termination Agreement, constitutes the entire agreement of the parties
hereto with respect to Meineke's service as director of the Company from and
after the Effective Date and supersedes any and all prior and contemporaneous
agreements, whether oral or in writing, between the parties hereto with respect
to the subject matter hereof. The parties agree that they will take any action
and execute and deliver any document which the other party reasonably requests
in order to carry out the purposes of this Agreement. 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. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to recover any and all reasonable attorneys' fees, expert witness fees,
costs and necessary disbursements in addition to any other relief to which such
party may be entitled. This Agreement is made and entered into between the
parties solely for the benefit of the parties, and not for the benefit of any
other third party or entity. No third party or entity shall be deemed or
considered a third party beneficiary of any covenant, promise or other provision
of this Agreement or have any right to enforce any such covenant, promise or
other provision against either or both parties.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
effective as of the date first above written.
"Rapidtron"
RAPIDTRON, INC,
a Nevada corporation
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx, Chief Executive Officer and President
"Meineke"
/s/ Xxxxx Xxxxxx
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XXXXX XXXXXXX, an individual
