Exhibit 10.4
INDEMNIFICATION AGREEMENT
INDEMNIFICATION
AGREEMENT, dated as of September 25, 2006 by and between ARCH
MANAGEMENT SERVICES INC., a Nevada corporation on its own behalf
and on behalf of each of its subsidiaries (collectively, the
"Company"), and the director and/or officer whose name appears on
the signature page of this Agreement ("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 and officers
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 they 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
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)
"Disinterested Director" shall mean
a director of the Company who is not or was not a party to the
Proceeding in respect of which indemnification is being sought by
Indemnitee.
(c)
"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.
(d)
"Independent Counsel" shall mean a
law firm or lawyer that neither is presently nor in the past five
years has been retained to represent: (i) the Company or Indemnitee
in any matter material to any such party or (ii) any other party to
the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any firm or person who, under the
applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing any of the Company or
Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement. All Expenses of the
Independent Counsel incurred in connection with acting pursuant to
this Agreement shall be borne by the Company.
(e)
"Losses" shall mean all losses,
claims, liabilities, judgments, fines, penalties and amounts paid
in settlement in connection with any Proceeding.
(f)
"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 agrees to begin or
continue to serve the Company or an Affiliate as a director and/or
officer. Notwithstanding anything contained herein, this Agreement
shall not create a contract of employment 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
. 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 the service of
Indemnitee as a director, advisory director, Board Committee
member, officer, employee or agent of the Company or of an
Affiliate (collectively referred to as an "Officer or Director of
the Company or of an Affiliate"), whether the basis of such
proceeding is alleged action in an official capacity or in any
other capacity while serving as an Officer or Director of the
Company or of an Affiliate, to the fullest extent permitted by the
laws of the State of New York in effect on the date hereof or as
such laws may from time to time hereafter be amended to increase
the scope of such permitted indemnification. Without diminishing
the scope of the indemnification provided by this Section 3, the
rights of indemnification of Indemnitee provided hereunder shall
include but shall not be limited to those rights set forth
hereinafter.
4.
Action or Proceeding Other Than an Action 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, other than an
action by or in the right of the Company, by reason of (a) the fact
that Indemnitee is or was an Officer or Director of the Company or
of an 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 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, with respect to any criminal Proceeding, had no
reasonable cause to believe his conduct was unlawful.
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 the Company or of an 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. Notwithstanding the foregoing provisions of this
Section, no such indemnification shall be made in respect of any
claim, issue or matter as to which New York law expressly prohibits
such indemnification by reason of an adjudication of liability of
Indemnitee to the Company; provided , however , that
in such event such indemnification shall nevertheless be made by
the Company to the extent that the court in which such action or
suit was brought shall determine equitable under the
circumstances.
6.
Indemnification for Losses and Expenses of Party Who is Wholly
or Partly Successful .
Notwithstanding any provision of this Agreement, to the extent that
Indemnitee has been wholly successful on the merits or otherwise
absolved in any Proceeding on any claim, issue or matter,
Indemnitee shall be indemnified against all Losses or Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's
behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company agrees to indemnify
Indemnitee, to the maximum extent permitted by law, against all
Losses and Expenses incurred by Indemnitee in connection with each
successfully resolved claim, issue or matter. In any review or
Proceeding to determine the extent of indemnification, the Company
shall bear the burden of proving any lack of success and which
amounts sought in indemnity are allocable to claims, issues or
matters which were not successfully resolved. For purposes of this
Section and without limitation, the termination of any such claim,
issue or matter by dismissal with or without prejudice shall be
deemed to be a successful resolution as to such claim, issue or
matter.
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 Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's
behalf in connection therewith.
8.
Advancement of Expenses and Costs
. All Expenses 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, and in any event
in advance of the final disposition of such Proceeding within sixty
days after the receipt by the Company of a statement or statements
from Indemnitee requesting from time to time such advance or
advances, whether or not a determination to indemnify has been made
under Section 9. Such statement or statements shall evidence
such Expenses incurred (or reasonably expected to be 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. The right to indemnifica