INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as of March 13, 2006, by and
between MANCHESTER INC., a Nevada corporation (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.
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(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 Nevada 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.
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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 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 Nevada 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 courts of the State of Nevada or 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.
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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 five (5) business 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 indemnification of advances as
granted by this
Section 8 s