Exhibit 10.2

 

[g97761ki01i001.jpg]

 

FORCE PROTECTION, INC.

 

FORM OF INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of
[DATE] between Force Protection, Inc., a Nevada corporation (the “Company”), and
[NAME] (“Indemnitee”).

 

WITNESSETH THAT:

 

WHEREAS, highly competent persons have become more reluctant to serve
corporations as directors and officers or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities.  Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only
at higher premiums and with more exclusions.  At the same time, directors,
officers, and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would have been
brought only against the Company or business enterprise itself.  The By-laws of
the Company require indemnification of the directors, officers, employees,
fiduciaries and agents of the Company.  Indemnitee may also be entitled to
indemnification pursuant to Chapter 78 - Private Corporations, of the Nevada
Revised Statutes (the “NRS”).  The NRS expressly provides that the
indemnification provisions set forth therein are not exclusive, and thereby
contemplate that contracts may be entered into between the Company and members
of the Board with respect to indemnification;

 

WHEREAS, the uncertainties relating to such insurance and to indemnification
have increased the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board has determined that the increased difficulty in attracting
and retaining such persons is detrimental to the best interests of the Company’s
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future;

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify, and to advance expenses on behalf of, 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;

 

WHEREAS, this Agreement is a supplement to and in furtherance of any
indemnification provisions in the Articles of Incorporation and/or the By-laws
of the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder;

 

WHEREAS, Indemnitee does not regard the protection available under the NRS, the
Company’s By-laws and insurance as adequate in the present circumstances, and
may not be willing to serve as an officer or a director without adequate
protection, and the Company desires Indemnitee to serve in such capacity. 
Indemnitee is willing to serve, continue to serve and to take on additional
services for or on behalf of the Company on the condition that he be so
indemnified; and

 

--------------------------------------------------------------------------------

 

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as an
[officer] [director] from and after the date hereof, the parties hereto agree as
follows:

 

1.                                       Indemnity of Indemnitee.  The Company
hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent
permitted by law, as such may be amended from time to time.  In furtherance of
the foregoing indemnification, and without limiting the generality thereof:

 

(a)                                  Proceedings Other Than Proceedings by or in
the Right of the Company.  Indemnitee shall be entitled to the rights of
indemnification provided in this Section l(a) if, by reason of his Corporate
Status (as hereinafter defined), Indemnitee is, or is threatened to be made, a
party to or participant in any Proceeding (as hereinafter defined) other than a
Proceeding by or in the right of the Company.  Pursuant to this Section 1(a),
the Company shall indemnify Indemnitee against all Expenses (as hereinafter
defined), judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by him, or on his behalf, in connection with such
Proceeding or any claim, issue or matter therein, if the Indemnitee acted in
good faith and in a manner the 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 Indemnitee’s conduct was
unlawful.

 

(b)                                 Proceedings by or in the Right of the
Company.  Indemnitee shall be entitled to the rights of indemnification provided
in this Section 1(b) if, by reason of his Corporate Status, the Indemnitee is,
or is threatened to be made, a party to or participant in any Proceeding brought
by or in the right of the Company.  Pursuant to this Section 1(b), the Company
shall indemnify Indemnitee against all Expenses and amounts paid in settlement
actually and reasonably incurred by Indemnitee, or on Indemnitee’s behalf, in
connection with such Proceeding or any claim, issue or matters therein, 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; provided, however, if
applicable law so provides, no indemnification against such Expenses shall be
made in respect of any claim, issue or matter in such Proceeding as to which
Indemnitee shall have been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the Company unless and to
the extent that a court of competent jurisdiction shall determine that such
indemnification may be made.

 

(c)                                  Indemnification under NRS 78.138. 
Indemnitee shall be entitled to the rights of indemnification provided under
Section 1(a) and Section 1(b) if Indemnitee is not liable pursuant to NRS
78.138.

 

(d)                                 Indemnification for Expenses of a Party Who
is Wholly or Partly Successful.  Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a party to and is successful, on the merits or otherwise, in any Proceeding, the
Company shall indemnify Indemnitee to the maximum extent permitted by law, as
such may be amended from time to time, against all Expenses actually and
reasonably incurred by him or on his 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 shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf in connection
with each successfully resolved claim, issue or matter.  For purposes of this
Section and without limitation, the termination of any claim, issue or matter in
such a Proceeding by dismissal, with or without prejudice, shall be deemed to be
a successful result as to such claim, issue or matter.

 

2.                                       Additional Indemnity.  In addition to,
and without regard to any limitations on, the indemnification provided for in
Section 1 of this Agreement, the Company shall and hereby does indemnify and
hold harmless Indemnitee, to the fullest extent permitted by law, as may be
amended from time to time, against all Expenses, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or on his
behalf if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or participant in any Proceeding (including a Proceeding by or
in the right of the Company), including, without limitation, all liability
arising out of the negligence or active or passive wrongdoing of Indemnitee. 
The only limitation that shall exist upon the Company’s obligations

 

2

--------------------------------------------------------------------------------

 

pursuant to this Agreement shall be that the Company shall not be obligated to
make any payment to Indemnitee that is finally determined (under the procedures,
and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be
unlawful.

 

3.                                       Contribution.

 

(a)                                  Whether or not the indemnification provided
in Sections 1 and 2 hereof is available, in respect of any threatened, pending
or completed action, suit or proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such action, suit or proceeding), the
Company shall pay the entire amount of any judgment or settlement of such
action, suit or proceeding without requiring Indemnitee to contribute to such
payment and the Company hereby waives and relinquishes any right of contribution
it may have against Indemnitee.  The Company shall not enter into any settlement
of any action, suit or proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding) unless
such settlement provides for a full and final release of all claims asserted
against Indemnitee.

 

(b)                                 Without diminishing or impairing the
obligations of the Company set forth in the preceding subparagraph, if, for any
reason, Indemnitee shall elect or be required to pay all or any portion of any
judgment or settlement in any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall contribute to
the amount of Expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred and paid or payable by Indemnitee in proportion to the
relative benefits received by the Company and all officers, directors or
employees of the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, from the transaction from which
such action, suit or proceeding arose; provided, however, that the proportion
determined on the basis of relative benefit may, to the extent necessary to
conform to law, be further adjusted by reference to the relative fault of the
Company and all officers, directors or employees of the Company other than
Indemnitee who are jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), on the one hand, and Indemnitee, on the other hand,
in connection with the events that resulted in such expenses, judgments, fines
or settlement amounts, as well as any other equitable considerations which
applicable law may require to be considered.  The relative fault of the Company
and all officers, directors or employees of the Company, other than Indemnitee,
who are jointly liable with Indemnitee (or would be if joined in such action,
suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall
be determined by reference to, among other things, the degree to which their
actions were motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary and the degree to which
their conduct is active or passive.

 

(c)                                  The Company hereby agrees to fully
indemnify and hold Indemnitee harmless from any claims of contribution which may
be brought by officers, directors or employees of the Company, other than
Indemnitee, who may be jointly liable with Indemnitee.

 

(d)                                 To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating to
an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such Proceeding in
order to reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and/or (ii) the relative fault of the Company (and its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).

 

4.                                       Indemnification for Expenses of a
Witness.  Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or
asked) to respond to discovery requests, in any Proceeding to which Indemnitee
is not a party, the

 

3

--------------------------------------------------------------------------------

 

Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.

 

5.                                       Advancement of Expenses. 
Notwithstanding any other provision of this Agreement, the Company shall advance
all Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding by reason of Indemnitee’s Corporate Status within [thirty (30)] days
after the receipt by the Company of a statement or statements from Indemnitee
requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding.  Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee and, if required by law
at the time of such advance, shall include or be preceded or accompanied by a
written undertaking by or on behalf of Indemnitee to repay any Expenses advanced
if it shall ultimately be determined by a court of competent jurisdiction that
Indemnitee is not entitled to be indemnified against such Expenses.  Any
advances and undertakings to repay pursuant to this Section 5 shall be unsecured
and interest free.  In furtherance of the foregoing the Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined by a court of competent jurisdiction that the
Indemnitee is not entitled to be indemnified by the Company as authorized by
this Agreement.

 

6.                                       Procedures and Presumptions for
Determination of Entitlement to Indemnification.  It is the intent of this
Agreement to secure for Indemnitee rights of indemnity that are as favorable as
may be permitted under the NRS and public policy of the State of Nevada. 
Accordingly, the parties agree that the following procedures and presumptions
shall apply in the event of any question as to whether Indemnitee is entitled to
indemnification under this Agreement:

 

(a)                                        To obtain indemnification under this
Agreement, Indemnitee shall submit to the Company a written request, including
therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification.  The Secretary of the
Company shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that Indemnitee has requested indemnification. 
Notwithstanding the foregoing, any failure of Indemnitee to provide such a
request to the Company, or to provide such a request in a timely fashion, shall
not relieve the Company of any liability that it may have to Indemnitee unless,
and to the extent that, the Company is actually and materially prejudiced as a
direct result of such failure.

 

(b)                                 Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 6(a) hereof, a
determination with respect to Indemnitee’s entitlement thereto shall be made in
the specific case by one of the following three methods, which shall be at the
election of the Board:  (i) by a majority vote of a quorum consisting of
Disinterested Directors (as hereinafter defined), (ii) if a majority vote of a
quorum consisting of Disinterested Directors so orders, or if a quorum of
Disinterested Directors cannot be obtained, by Independent Counsel (as
hereinafter defined) in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee, or (iii) by the stockholders of the Company.

 

(c)                                  Notwithstanding anything to the contrary
set forth in this Agreement, if a request for indemnification is made after a
Change in Control, at the election of Indemnitee made in writing to the Company,
any determination required to be made pursuant to Section 6(b) above as to
whether Indemnitee is entitled to indemnification shall be made by Independent
Counsel selected as provided in this Section 6(c). The Independent Counsel shall
be selected by Indemnitee, unless Indemnitee shall request that such selection
be made by the Board. The party making the selection shall give written notice
to the other party advising it of the identity of the Independent Counsel so
selected. The party receiving such notice may, within seven (7) days after such
written notice of selection shall have been given, deliver to the other party a
written objection to such selection. Such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of “Independent Counsel” as defined in Section 13 hereof, and the objection
shall set forth with particularity the factual basis of such assertion.  Absent
a proper and timely objection, the person so selected shall act as Independent
Counsel.  If a written objection is made, the Independent Counsel so selected
may not serve as Independent Counsel unless and until a court has determined
that such objection is without merit.  If,

 

4

--------------------------------------------------------------------------------

 

within twenty (20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall
have been selected (or, if selected, such selection shall have been objected to)
in accordance with this paragraph, then either the Company or Indemnitee may
petition the courts of the State of Nevada or other court of competent
jurisdiction for resolution of any objection which shall have been made by the
Company or Indemnitee to the other’s selection of Independent Counsel and/or for
the appointment as Independent Counsel of a person selected by the court or by
such other person as the court shall designate, and the person with respect to
whom an objection is favorably resolved or the person so appointed shall act as
Independent Counsel under Section 6(c) hereof.  The Company shall pay any and
all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Section 6(b) hereof. 
The Company shall pay any and all reasonable and necessary fees and expenses
incident to the procedures of this Section 6(c), regardless of the manner in
which such Independent Counsel was selected or appointed.

 

(d)                                 If the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 6(b) hereof, the Independent Counsel shall be selected as provided in
this Section 6(d).  The Independent Counsel shall be selected by the Board. 
Indemnitee may, within ten (10) days after such written notice of selection
shall have been given, deliver to the Company a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of “Independent Counsel” as defined in Section 13 of this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion.  Absent a proper and timely objection, the person so selected shall
act as Independent Counsel.  If a written objection is made and substantiated,
the Independent Counsel selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection
is without merit.  If, within twenty (20) days after submission by Indemnitee of
a written request for indemnification pursuant to Section 6(a) hereof, no
Independent Counsel shall have been selected (or, if selected, such selection
shall have been objected to) in accordance with this paragraph, then either the
Company or Indemnitee may petition the appropriate courts of the State of Nevada
or other court of competent jurisdiction for resolution of any objection which
shall have been made by Indemnitee to the Company’s selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the court or by such other person as the court shall designate, and the
person with respect to whom an objection is favorably resolved or the person so
appointed shall act as Independent Counsel under Section 6(b) hereof.  The
Company shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with acting pursuant
to Section 6(b) hereof, and the Company shall pay any and all reasonable fees
and expenses incident to the procedures of this Section 6(d), regardless of the
manner in which such Independent Counsel was selected or appointed.

 

(e)                                  In making a determination with respect to
entitlement to indemnification hereunder, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement.  Anyone seeking to overcome this presumption shall have
the burden of proof and the burden of persuasion by clear and convincing
evidence.  Neither the failure of the Company (including by its directors or
independent legal counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its
directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.

 

(f)                                    Indemnitee shall be deemed to have acted
in good faith if Indemnitee’s action is based on the records or books of account
of the Enterprise (as hereinafter defined), including financial statements, or
on information supplied to Indemnitee by the officers of the Enterprise in the
course of their duties, or on the advice of legal counsel for the Enterprise or
on information or records given or reports made to the Enterprise by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Enterprise.  In addition, the knowledge
and/or actions, or failure to act, of any director, officer, agent or employee
of the Enterprise shall not be imputed to Indemnitee for

 

5

--------------------------------------------------------------------------------

 

purposes of determining the right to indemnification under this Agreement. 
Whether or not the foregoing provisions of this Section 6(f) are satisfied, it
shall in any event be presumed that Indemnitee has at all times acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company.  Anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion by clear and convincing
evidence.

 

(g)                                 Notwithstanding anything to the contrary set
forth in this Agreement, if the person, persons or entity empowered or selected
under Section 6 to determine whether Indemnitee is entitled to indemnification
shall not have been appointed or shall not have made a determination within
sixty (60) days after receipt by the Company of the request therefor, the
requisite determination of entitlement to indemnification shall be deemed to
have been made and Indemnitee shall be entitled to such indemnification, unless
the Company establishes by written opinion of Independent Counsel that (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact
necessary to make Indemnitee’s statement not materially misleading, in
connection with the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law; provided, however, that such 60-day period
may be extended for a reasonable time, not to exceed an additional thirty (30)
days, if the person, persons or entity making such determination with respect to
entitlement to indemnification in good faith requires such additional time to
obtain or evaluate documentation and/or information relating thereto; and
provided, further, that the foregoing provisions of this Section 6(g) shall not
apply if the determination of entitlement to indemnification is to be made by
the stockholders pursuant to Section 6(b) of this Agreement and if (A) within
fifteen (15) days after receipt by the Company of the request for such
determination, the Disinterested Directors resolve as required by
Section 6(b)(iii) of this Agreement to submit such determination to the
stockholders for their consideration at an annual meeting thereof to be held
within seventy-five (75) days after such receipt and such determination is made
thereat, or (B) a special meeting of stockholders is called within fifteen (15)
days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so
called and such determination is made thereat.

 

(h)                                 Indemnitee shall cooperate with the person,
persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination.  Any
Independent Counsel or member of the Board or stockholder of the Company shall
act reasonably and in good faith in making a determination regarding
Indemnitee’s entitlement to indemnification under this Agreement.  Any costs or
expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in
so cooperating with the person, persons or entity making such determination
shall be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.

 

(i)                                     The Company acknowledges that a
settlement or other disposition, including a conviction or a plea of nolo
contendere, short of final judgment may be successful if it permits a party to
avoid expense, delay, distraction, disruption and uncertainty.  In the event
that any action, claim or proceeding to which Indemnitee is a party is resolved
in any manner other than by adverse judgment against Indemnitee (including,
without limitation, settlement of such action, claim or proceeding with or
without payment of money or other consideration) it shall be presumed that
Indemnitee has been successful on the merits or otherwise in such action, suit
or proceeding, and it shall not create a presumption that the Indemnitee did not
act in good faith and in a manner reasonably believed to be in or not opposed to
the best interest of the Company or that, with respect to any criminal
Proceeding, the Indemnitee had reasonable cause to believe that his conduct
unlawful.  Anyone seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion by clear and convincing evidence.

 

(j)                                     The termination of any Proceeding or of
any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not of
itself adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee

 

6

--------------------------------------------------------------------------------

 

did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Company or, with respect to any
criminal Proceeding, that Indemnitee had reasonable cause to believe that his
conduct was unlawful.

 

7.                                       Remedies of Indemnitee.

 

(a)                                  In the event that (i) a determination is
made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 5 of this Agreement, (iii) no determination of
entitlement to indemnification is made pursuant to Section 6(b) or
Section 6(c) of this Agreement within sixty (60) days after receipt by the
Company of the request for indemnification, (iv) payment of indemnification is
not made pursuant to this Agreement within ten (10) days after receipt by the
Company of a written request therefor or (v) payment of indemnification is not
made within [ten (10)] days after a determination has been made that Indemnitee
is entitled to indemnification or such determination is deemed to have been made
pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an
adjudication of Indemnitee’s entitlement to such indemnification or advancement
of expenses either, at the Indemnitee’s sole option, in (1) an appropriate court
of the State of Nevada, or any other court of competent jurisdiction, or (2) an
arbitration to be conducted by a single arbitrator, selected by mutual agreement
of the Company and Indemnitee, pursuant to the rules of the American Arbitration
Association. The Company shall not oppose Indemnitee’s right to seek any such
adjudication.

 

(b)                                 In the event that a determination shall have
been made pursuant to Section 6(b) or Section 6(c) of this Agreement that
Indemnitee is not entitled to indemnification, (i) any judicial proceeding or
arbitration commenced pursuant to this Section 7 shall be conducted in all
respects de novo on the merits, and Indemnitee shall not be prejudiced by reason
of the adverse determination under Section 6(b) or Section 6(c); and (ii) in any
such judicial proceeding or arbitration, the Company shall have the burden of
proving that Indemnitee is not entitled to indemnification under this Agreement.

 

(c)                                  If a determination shall have been made
pursuant to Section 6(b) or Section 6(c), or shall have been deemed to have been
made pursuant to Section 6(g), of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be obligated to pay the amounts constituting
such indemnification within five (5) days after such determination has been made
or has been deemed to have been made and shall be conclusively bound by such
determination in any judicial proceeding commenced pursuant to this Section 7,
unless the Company establishes by written opinion of Independent Counsel that
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s misstatement not materially
misleading in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.

 

(d)                                 In the event that Indemnitee, pursuant to
this Section 7, seeks a judicial adjudication of, or an award in arbitration to
enforce, his rights under, or to recover damages for breach of, this Agreement,
or to recover under any directors’ and officers’ liability insurance policies
maintained by the Company, the Company shall pay to him or on his behalf, in
advance, and shall indemnify him against, any and all expenses (of the types
described in the definition of Expenses in Section 13 of this Agreement)
actually and reasonably incurred by him in such judicial adjudication or
arbitration, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of expenses or insurance recovery.

 

(e)                                  The Company shall be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this
Section 7 that the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement. 
The Company shall indemnify Indemnitee against any and all Expenses and, if
requested by Indemnitee, shall (within ten (10) days after receipt by the
Company of a written request therefore) advance, to the extent not prohibited by
law, such expenses to Indemnitee, which are incurred by Indemnitee in connection
with any action brought by Indemnitee for indemnification or advance of Expenses
from the Company under this Agreement or under any directors’ and officers’
liability insurance policies maintained by the Company,

 

7

--------------------------------------------------------------------------------

 

regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of Expenses or insurance recovery, as the case may
be.

 

8.                                       Non-Exclusivity; Survival of Rights;
Insurance; Subrogation.

 

(a)                                  The rights of indemnification and
advancement of expenses as provided by this Agreement shall not be deemed
exclusive of, and shall be in addition to, any other rights to which Indemnitee
may at any time be entitled under applicable law, the Articles of Incorporation
or By-laws of the Company, any agreement, a vote of stockholders, a resolution
of directors or otherwise, and nothing in this Agreement shall diminish or
otherwise restrict Indemnitee’s rights to indemnification or advancement of
expenses under the foregoing.  No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal.  To the extent that a change in the NRS, whether by statute or judicial
decision, permits greater indemnification than would be afforded currently under
the Company’s Articles of Incorporation, By-laws and this Agreement, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change and Indemnitee shall be deemed to
have such greater benefits hereunder.  No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right and
remedy shall be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.  The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other right or
remedy.  The Company shall not adopt any amendments to its Articles of
Incorporation or By-laws, the effect of which would be to deny, diminish or
encumber Indemnitee’s right to indemnification or advancement of expenses under
this Agreement, any other agreement or otherwise.

 

(b)                                 To the extent that the Company maintains an
insurance policy or policies providing liability insurance for directors,
officers, employees, or agents or fiduciaries of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person serves at the request of the Company, Indemnitee
shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any director, officer,
employee, agent or fiduciary under such policy or policies.  If, at the time of
the receipt of a notice of a claim pursuant to the terms hereof, the Company has
director and officer liability insurance in effect, the Company shall give
prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies.  The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such policies.

 

(c)                                  In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all papers required
and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such
rights (with all of Indemnitee’s reasonable expenses, including, without
limitation, attorneys’ fees and charges, related thereto to be reimbursed by or,
at the option of Indemnitee, advanced by the Company).

 

(d)                                 The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.

 

(e)                                  The Company’s obligation to indemnify or
advance Expenses hereunder to Indemnitee who is or was serving at the request of
the Company as a director, officer, employee or agent of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of expenses from such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise.

 

8

--------------------------------------------------------------------------------

 

9.             Exception to Right of Indemnification. Notwithstanding any
provision in this Agreement, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made against
Indemnitee:

 

(a)           for which payment has actually been made to or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount paid under any insurance policy or other
indemnity provision; or

 

(b)           for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or similar provisions of state statutory law or common law; or

 

(c)           in connection with any Proceeding (or any part of any Proceeding)
initiated by Indemnitee, including any Proceeding (or any part of any
Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of the Company
authorized the Proceeding (or any part of any Proceeding) prior to its
initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.

 

10.           Retroactive Effect; Duration of Agreement; Successors and Binding
Agreement.  All agreements and obligations of the Company contained herein shall
be deemed to have become effective upon the date Indemnitee first became an
officer or director of the Company; shall continue during the period Indemnitee
is an officer or a director of the Company (or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise); and shall continue
thereafter so long as Indemnitee may be subject to any Proceeding (or any
proceeding commenced under Section 7 hereof) by reason of his Corporate Status,
whether or not he is acting or serving in any such capacity at the time any
liability or expense is incurred for which indemnification can be provided under
this Agreement.  This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and their respective successors
(including any direct or indirect successor by purchase, merger, consolidation,
reorganization or otherwise to all or substantially all of the business or
assets of the Company), assigns, spouses, heirs, executors and personal and
legal representatives.  The Company shall require any such successor to all or
substantially all of the business or assets of the Company, by agreement in form
and substance satisfactory to Indemnitee and his counsel, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
the Company would be required to perform if no such succession had taken place. 
Except as otherwise set forth in this Section 10, this Agreement shall not be
assignable or delegable by the Company.

 

11.           Security.  To the extent requested by Indemnitee and approved by
the Board of the Company, the Company may at any time and from time to time
provide security to Indemnitee for the Company’s obligations hereunder through
an irrevocable bank line of credit, funded trust or other collateral.  Any such
security, once provided to Indemnitee, may not be revoked or released without
the prior written consent of the Indemnitee.

 

12.           Enforcement.

 

(a)           The Company expressly confirms and agrees that it has entered into
this Agreement and assumes the obligations imposed on it hereby in order to
induce Indemnitee to serve, or continue to serve, as an officer or a director of
the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as an officer or a director of the Company.

 

(b)           This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.

 

9

--------------------------------------------------------------------------------

 

13.           Definitions.  For purposes of this Agreement:

 

(a)             “Change in Control” means the occurrence of any one of the
following events:

 

(i)            any “person” (as such term is defined in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing [35]% or
more of the combined voting power of the Company’s then outstanding securities
eligible to vote for the election of the Board (the “Company Voting
Securities”); provided, however, that the event described in this paragraph
(i) shall not be deemed to be a Change in Control by virtue of any of the
following acquisitions:  (A) by the Company or any subsidiary; (B) by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any subsidiary; (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities; (D) pursuant to a Non-Control
Transaction (as defined in paragraph (iii) below); or (E) a transaction (other
than one described in paragraph (iii) below) in which Company Voting Securities
are acquired from the Company, if a majority of the Incumbent Board (as defined
in paragraph (ii) below) approves a resolution providing expressly that the
acquisition pursuant to this clause (E) does not constitute a Change in Control
under this paragraph (i);

 

(ii)           individuals who, on [DATE], constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to [DATE], whose election or
nomination for election was approved by a vote of at least two-thirds of the
directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director, without objection to such nomination) shall be
considered a member of the Incumbent Board; provided, however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or
any other actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be deemed to be a member of the
Incumbent Board;

 

(iii)          the consummation of a merger, consolidation, share exchange or
similar form of corporate transaction involving the Company or any of its
subsidiaries that requires the approval of the Company’s stockholders (whether
for such transaction or the issuance of securities in the transaction or
otherwise) (a “Reorganization”), unless immediately following such
Reorganization:  (A) more than [60]% of the total voting power of (x) the
corporation resulting from such Reorganization (the “Surviving Company”), or
(y) if applicable, the ultimate parent corporation that directly or indirectly
has beneficial ownership of 95% of the voting securities eligible to elect
directors of the Surviving Company (the “Parent Company”), is represented by
Company Voting Securities that were outstanding immediately prior to such
Reorganization (or, if applicable, is represented by shares into which such
Company Voting Securities were converted pursuant to such Reorganization), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of such Company Voting Securities among holders
thereof immediately prior to the Reorganization; (B) no person (other than any
employee benefit plan (or related trust) sponsored or maintained by the
Surviving Company or the Parent Company) is or becomes the beneficial owner,
directly or indirectly, of 20% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent Company
(or, if there is no Parent Company, the Surviving Company); and (C) at least a
majority of the members of the board of directors of the Parent Company (or, if
there is no Parent Company, the Surviving Company) following the consummation of
the Reorganization were members of the Incumbent Board at the time of the
Board’s approval of the execution of the initial agreement providing for such
Reorganization (any Reorganization which satisfies all of the criteria specified
in (A), (B) and (C) above shall be deemed to be a “Non-Control Transaction”);

 

(iv)          the stockholders of the Company approve a plan of complete
liquidation or dissolution; or

 

10

--------------------------------------------------------------------------------

 

(v)           the consummation of a sale (or series of sales) of all or
substantially all of the assets of the Company and its subsidiaries to an entity
that is not an affiliate of the Company.

 

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any person acquires beneficial ownership of [35]% or more of the
Company Voting Securities as a result of the acquisition of Company Voting
Securities by the Company which reduces the number of Company Voting Securities
outstanding; provided, that, if after such acquisition by the Company such
person becomes the beneficial owner of additional Company Voting Securities that
increases the percentage of outstanding Company Voting Securities beneficially
owned by such person, a Change in Control shall then occur.

 

(b)           “Corporate Status” describes the status of a person who is or was
a director, officer, employee, agent or fiduciary of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person is or was serving at the request of the Company.

 

(c)           “Disinterested Director” means a director of the Company who is
not and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.

 

(d)           “Enterprise” shall mean the Company and any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
that Indemnitee is or was serving at the express written request of the Company
as a director, officer, employee, agent or fiduciary.

 

(e)           “Expenses” shall include all reasonable attorneys’ fees,
retainers, court costs, transcript costs, 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 of the
types customarily incurred or actually incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, participating, or
being or preparing to be a witness in a Proceeding, or responding to, or
objecting to, a request to provide discovery in a Proceeding.  Expenses also
shall include Expenses incurred in connection with any appeal resulting from any
Proceeding, and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement, including, without limitation, the premium, security for, and
other costs relating to any cost bond, supersede as bond, or other appeal bond
or its equivalent.  Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

(f)            “Independent Counsel” means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five (5) years has been, retained to represent:  (i) the
Company or Indemnitee in any matter material to either such party (other than
with respect to matters concerning Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), 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 person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.  The Company agrees to pay the reasonable fees of the Independent
Counsel referred to above and to fully indemnify such counsel against any and
all Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

 

(g)           “Proceeding” includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought by or in the right of the Company or otherwise and
whether civil, criminal, administrative or investigative, in which Indemnitee
was, is or will be involved as a party or otherwise, by reason of the fact that
Indemnitee is or was an officer or a director of the Company, by reason of any
action taken by him or of any inaction on his part while acting as an officer or
a director of the Company, or by reason of the fact that he is or was serving at
the request of the Company as a director, officer, employee, agent or fiduciary
of another corporation, partnership, joint

 

11

--------------------------------------------------------------------------------

 

venture, trust or other Enterprise; in each case whether or not he is acting or
serving in any such capacity at the time any liability or expense is incurred
for which indemnification can be provided under this Agreement; including one
pending on or before the date of this Agreement, but excluding one initiated by
an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights
under this Agreement.

 

14.           Severability.  The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.  Without limiting the generality of the foregoing, this Agreement is
intended to confer upon Indemnitee indemnification rights to the fullest extent
permitted by applicable laws.  In the event any provision hereof conflicts with
any applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such conflict.

 

15.           Modification and Waiver.  No supplement, modification, termination
or amendment of this Agreement shall be binding unless executed in writing by
both of the parties hereto.  No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

 

16.           Notice By Indemnitee.  Indemnitee agrees promptly to notify the
Company in writing upon being served with or otherwise receiving any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any Proceeding or matter which may be subject to indemnification
covered hereunder.  The failure to so notify the Company shall not relieve the
Company of any obligation which it may have to Indemnitee under this Agreement
unless, and only to the extent that, the Company is actually and materially
prejudiced as a direct result of such delay or failure.

 

17.           Notices.  All notices and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed effectively
given:  (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed electronic mail or facsimile if sent during normal business hours of
the recipient, and if not so confirmed, then on the next business day, (c) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt.  All communications shall be sent:

 

(a)           To Indemnitee at the address set forth below Indemnitee’s
signature hereto.

 

(b)           To the Company at:

 

Force Protection, Inc.

9801 Highway 78, Building No. 1

Ladson, South Carolina, 29456

Attention:  Corporate Secretary

 

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

 

18.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.  Executed counterparts may
be delivered by facsimile and shall be deemed an original, but all of such
counterparts  together shall constitute one and the same instrument.

 

19.           Headings.  The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

 

20.           Successors and Assigns.  The terms of this Agreement shall be
binding upon the Company and its successors and assigns and shall inure to the
benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees,
executors, administrators and other legal representatives.

 

12

--------------------------------------------------------------------------------

 

21.           Governing Law and Consent to Jurisdiction.  This Agreement and the
legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Nevada, without regard to
its conflict of laws rules. The Company and Indemnitee hereby irrevocably and
unconditionally (i) agree that any action or proceeding arising out of or in
connection with this Agreement (other than an arbitration pursuant to Section 7
hereof) shall be brought only in the appropriate court of the State of Nevada
(the “Nevada Court”), and not in any other state or federal court in the United
States of America or any court in any other country, (ii) consent to submit to
the exclusive jurisdiction of the Nevada Court for purposes of such action or
proceeding, (iii) waive any objection to the laying of venue of any such action
or proceeding in the Nevada Court, and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Nevada Court
has been brought in an improper or inconvenient forum.

 

SIGNATURE PAGE TO FOLLOW

 

13

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first above written.

 

 

 

FORCE PROTECTION, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

INDEMNITEE

 

 

 

 

 

Name:

 

 

 

Address:

 

 

 

 

 

14

--------------------------------------------------------------------------------