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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.
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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 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.
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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 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.
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