Exhibit 10.49
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (“Agreement”) is made on
November 17, 2006, between Material Technologies, Inc., a Delaware
corporation (the “Corporation”), and ______________
(the “Director”).
Recitals
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. Article 6 of the
Corporation’s Articles of Incorporation provides that, to the
fullest extent permitted by law, no director or officer shall be
personally liable to the Corporation or its shareholders.
Section 3 of the Corporation’s Bylaws provides that, to the
fullest extent permitted by law, the Corporation shall have the
power to indemnify the officers and directors of this Corporation
against any liability as may be determined to be in the best
interests of the Corporation.
C. The Corporation has
not obtained directors and officers liability insurance
(“D&O Insurance”), but may acquire such at a time
in the future.
D. 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 the
indemnification available from the Corporation is 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.
E. 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 in to 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 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.
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2.
Indemnification .
(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 notice of any claim for indemnification under
this Agreement. Payment requests will include a schedule
setting 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
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the extent practicable, Corporation will pay Indemnified Amounts
directly without requiring Director to make any prior payment.
4.
Determination of Right to Indemnification .
(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:
