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Exhibit 10.4
INDEMNIFICATION AGREEMENT
This
Indemnification Agreement (this “
Agreement ”),
dated as of the 4th
day
of February
,
2008 is made by and between SUTOR TECHNOLOGY GROUP LIMITED, a
Nevada corporation (the “
Company ”),
and A.
Carl Mudd ,
an independent director of the Company (the “
Indemnitee ”).
RECITALS
A.
The
Company and the Indemnitee recognize that the present state of
the law is too uncertain to provide the Company’s
officers and directors with adequate and reliable advance
knowledge or guidance with respect to the legal risks and
potential liabilities to which they may become personally
exposed as a result of performing their duties for the
Company;
B.
The
Company and the Indemnitee are aware of the substantial growth
in the number of lawsuits filed against corporate officers and
directors in connection with their activities in such
capacities and by reason of their status as such;
C.
The
Company and the Indemnitee recognize that the cost of
defending against such lawsuits, whether or not meritorious,
is typically beyond the financial resources of most officers
and directors of the Company;
D.
The
Company and the Indemnitee recognize that the legal risks and
potential liabilities, and the threat thereof, associated with
proceedings filed against the officers and directors of the
Company bear no reasonable relationship to the amount of
compensation received by the Company’s officers and
directors;
E.
The
Company, after reasonable investigation prior to the date
hereof, has determined that the liability insurance coverage
available to the Company as of the date hereof is inadequate,
unreasonably expensive or both. The Company believes,
therefore, that the interest of the Company and its current
and future stockholders would be best served by a combination
of (i) such insurance as the Company may obtain pursuant to
the Company’s obligations hereunder and (ii) a contract
with its officers and directors, including the Indemnitee, to
indemnify them to the fullest extent permitted by law (as in
effect on the date hereof, or, to the extent any amendment may
expand such permitted indemnification, as hereafter in effect)
against personal liability for actions taken in the
performance of their duties to the Company;
F.
Section
78.7502 of the Nevada Revised Statutes empowers Nevada
corporations to indemnify their officers and directors and
further states that the indemnification provided by Section
78.7502 shall not be deemed exclusive of any other rights to
which those seeking
indemnification may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while
holding such office; thus, Section 78.7502 does not by itself
limit the extent to which the Company may indemnify persons
serving as its officers and directors;
G.
The
Company’s Articles of Incorporation and Bylaws authorize
the indemnification of the officers and directors of the
Company in excess of that expressly permitted by Section
78.7502;
H.
The
Board of Directors of the Company has concluded that, to
retain and attract talented and experienced individuals to
serve as officers and directors of the Company and to
encourage such individuals to take the business risks
necessary for the success of the Company, it is necessary for
the Company to contractually indemnify its officers and
directors, and to assume for itself liability for expenses and
damages in connection with claims against such officers and
directors in connection with their service to the Company, and
has further concluded that the failure to provide such
contractual indemnification could result in great harm to the
Company and its stockholders;
I.
The
Company desires and has requested the Indemnitee to serve or
continue to serve as a director or officer of the Company,
free from undue concern for the risks and potential
liabilities associated with such services to the Company;
and
J.
The
Indemnitee is willing to serve, or continue to serve, the
Company, provided, and on the expressed condition, that the
Indemnitee is furnished with the indemnification provided for
herein.
AGREEMENT
NOW,
THEREFORE, the Company and Indemnitee agree as
follows:
1.
DEFINITIONS.
(a)
“EXPENSES”
means, for the purposes of this Agreement, all direct and
indirect costs of any type or nature whatsoever (including,
without limitation, any fees and disbursements of
Indemnitee’s counsel, accountants and other experts and
other out-of-pocket costs) actually and reasonably incurred by
the Indemnitee in connection with the investigation,
preparation, defense or appeal of a Proceeding; provided,
however, that Expenses shall not include judgments, fines,
penalties or amounts paid in settlement of a
Proceeding.
(b)
“PROCEEDING”
means, for the purposes of this Agreement, any threatened,
pending or completed action or proceeding, whether civil,
criminal, administrative or investigative (including an action
brought by or in the right of the Company) in which Indemnitee
may be or may have been involved as a party or otherwise, by
reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by
Indemnitee or of any inaction on his or her part while acting
as such director or officer or by reason of the fact that he
or she is or was serving at the request of the Company as a
director, officer, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or
other enterprise, or was a director or officer of the foreign
or domestic corporation which was a predecessor corporation to
the Company or of another enterprise at the request of such
predecessor corporation, whether or not he or she is serving
in such capacity at the time any liability or expense is
incurred for which indemnification or reimbursement can be
provided under this Agreement.
2.
AGREEMENT
TO SERVE.
Indemnitee
agrees to serve or continue to serve as a director or officer
of the Company to the best of his or her abilities at the will
of the Company or under separate contract, if such contract
exists, for so long as Indemnitee is duly elected or appointed
and qualified or until such time as the Indemnitee tenders his
or her resignation in writing. Nothing contained in this
Agreement is intended to create in Indemnitee any right to
continued employment.
3.
INDEMNIFICATION.
(a)
THIRD
PARTY PROCEEDINGS. The Company shall indemnify Indemnitee
against Expenses, judgments, fines, penalties or amounts paid
in settlement (if the settlement is approved in advance by the
Company) actually and reasonably incurred by Indemnitee in
connection with a Proceeding (other than a Proceeding by or in
the right of the Company) if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in the
best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to
believe Indemnitee’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 a presumption that
Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in the best interests of
the Company, or, with respect to any criminal Proceeding, had
no reasonable cause to believe that Indemnitee's conduct was
unlawful.
(b)
PROCEEDINGS
BY OR IN THE RIGHT OF THE COMPANY. To the fullest extent
permitted by law, the Company shall indemnify Indemnitee
against Expenses and amounts paid in settlement, actually and
reasonably incurred by Indemnitee in connection with a
Proceeding by or in the right of the Company to procure a
judgment in its favor if Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in the best
interests of the Company and its stockholders. Notwithstanding
the foregoing, no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have
been adjudged liable to the Company in the performance of
Indemnitee’s duty to the Company and its stockholders
unless and only to the extent that the court in which such
action or Proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the
case, Indemnitee is fairly and reasonably entitled to
indemnity for Expenses and then only to the extent that the
court shall determine.
(c)
SCOPE.
Notwithstanding any other provision of this Agreement but
subject to Section 14(b), the Company shall indemnify the
Indemnitee to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically
authorized by other provisions of this Agreement, the
Company’s Articles of Incorporation, the Company’s
Bylaws or by statute.
4.
LIMITATIONS
ON INDEMNIFICATION.
Any
other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this
Agreement:
(a)
EXCLUDED
ACTS. To indemnify Indemnitee for any acts or omissions or
transactions from which a director may not be relieved of
liability under applicable law;
(b)
EXCLUDED
INDEMNIFICATION PAYMENTS. To indemnify or advance Expenses in
violation of any prohibition or limitation on indemnification
under the statutes, regulations or rules promulgated by any
state or federal regulatory agency having jurisdiction over
the Company;
(c)
CLAIMS
INITIATED BY INDEMNITEE. To indemnify or advance Expenses to
Indemnitee with respect to Proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense,
except with respect to Proceedings brought to establish or
enforce a right to indemnification under this Agreement or any
other statute or l
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