Section 3.REIMBURSEMENT OF EXPENSES FOLLOWING ADJUDICATION OF NEGLIGENCE.The Company shall reimburse the Indemnitee for any expenses (including attorneys’ fees) and amountspaid in settlement actually and reasonably incurred or paid by him in connection with theinvestigation, defense, settlement or appeal of any action or suit described in Section 2 hereofthat results in an adjudication that the Indemnitee was liable for negligence, gross negligence orrecklessness (but not willful misconduct) in the performance of his duty to the Company; provided,however, that the Indemnitee acted in good faith and in a manner he believed to be in the bestinterests of the Company.          Section 4.AUTHORIZATION OF INDEMNIFICATION. Any indemnification underSections 1 and 2 hereof (unless ordered by a court) and any reimbursement made under Section 3hereof shall be made by the Company only as authorized in the specific case upon a determination(the “Determination”) that indemnification or reimbursement of the Indemnitee is proper in thecircumstances because the Indemnitee has met the applicable standard of conduct set forth inSection 1, 2 or 3 hereof, as the case may be. Subject to Sections 5.6, 5.7, 5.8 and 8 of thisAgreement, the Determination shall be made in the following order of preference:               (a) first, by the Company’s Board of Directors (the “Board”) by majority vote or consent ofdirectors (“Disinterested Directors”) who are not, at the time of the Determination, named partiesto such action, suit or proceeding, even though such Disinterested Directors may be less than aquorum; or               (b) next, if the majority vote or consent of the Disinterested Directors cannot be obtained,by majority vote or consent of a committee duly designated by such Disinterested Directorsconsisting solely of two or more Disinterested Directors, even though such Disinterested Directorsmay be less than a quorum; or               (c) next, if such a committee cannot be designated, by any independent legal counsel (who maybe any outside counsel regularly employed by the Company); or               (d) next, if such legal counsel determination cannot be obtained, by vote or consent of theholders of a majority of the Company’s Common Stock that are represented in person or by proxy at ameeting called for such purpose.          4.1 No Presumptions. The termination of any action, suit or proceeding by judgment,order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, ofitself, create a presumption that the Indemnitee did not act in good faith and in a manner that hereasonably believed to be in or not opposed to the best interests of the Company, and with respectto any criminal action or proceeding, had reasonable cause to believe that his conduct wasunlawful.          4.2 Benefit Plan Conduct. The Indemnitee’s conduct with respect to an employeebenefit plan for a purpose he reasonably believed to be in the interests of the participants in andbeneficiaries of the plan shall be deemed to be conduct that the Indemnitee reasonably believed tobe not opposed to the best interests of the Company.          4.3 Reliance as Safe Harbor. For purposes of any Determination hereunder, theIndemnitee shall be deemed to have acted in good faith and in a manner he reasonably believed to bein or not opposed to the best interests of the Company, or, with respect to any criminal action orproceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action isbased on (i) the records or books of account of the Company or another enterprise, includingfinancial statements, (ii)
2

 
information supplied to him by the officers of the Company or another enterprise in the courseof their duties, (iii) the advice of legal counsel for the Company or another enterprise, or (iv)information or records given or reports made to the Company or another enterprise by an independentcertified public accountant or by an appraiser or other expert selected with reasonable care by theCompany or another enterprise. The term “another enterprise” as used in this Section 4.3 shallmean any other corporation or any partnership, joint venture, trust, employee benefit plan or otherenterprise of which the Indemnitee is or was serving at the request of the Company as an officer,director, partner, trustee, employee or agent. The provisions of this Section 4.3 shall not bedeemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee maybe deemed to have met the applicable standard of conduct set forth in Sections 1, 2 or 3 hereof, asthe case may be.          4.4 Success on Merits or Otherwise. Notwithstanding any other provision of thisAgreement, to the extent that the Indemnitee has been successful on the merits or otherwise indefense of any action, suit or proceeding described in Section 1 or 2 hereof, or in defense of anyclaim, issue or matter therein, he shall be indemnified against expenses (including attorneys’fees) actually and reasonably incurred by him in connection with the investigation, defense,settlement or appeal thereof. For purposes of this Section 4.4, the term “successful on the meritsor otherwise” shall include, but not be limited to, (i) any termination, withdrawal or dismissal(with or without prejudice) of any claim, action, suit or proceeding against the Indemnitee withoutany express finding of liability or guilt against him, (ii) the expiration of 120 days after themaking of any claim or threat of an action, suit or proceeding without the institution of the sameand without any promise or payment made to induce a settlement, or (iii) the settlement of anyaction, suit or proceeding under Section 1, 2 or 3 hereof pursuant to which the Indemnitee paysless than $25,000.          4.5 Partial Indemnification or Reimbursement. If the Indemnitee is entitled under anyprovision of this Agreement to indemnification and/or reimbursement by the Company for some or aportion of the claims, damages, expenses (including attorneys’ fees), judgments, fines or amountspaid in settlement by the Indemnitee in connection with the investigation, defense, settlement orappeal of any action specified in Section 1, 2 or 3 hereof, but not, however, for the total amountthereof, the Company shall nevertheless indemnify and/or reimburse the Indemnitee for the portionthereof to which the Indemnitee is entitled. The party or parties making the Determination shalldetermine the portion (if less than all) of such claims, damages, expenses (including attorneys’fees), judgments, fines or amounts paid in settlement for which the Indemnitee is entitled toindemnification and/or reimbursement under this Agreement.          4.6 Limitations on Indemnification. No indemnification pursuant to Section 1 or 2hereof shall be paid by the Company if a judgment (after exhaustion of all appeals) or other finaladjudication determines that the Indemnitee’s actions, or omissions to act, were material to thecause of action so adjudicated and constitute:               (a) a violation of criminal law, unless the Indemnitee had reasonable cause to believe hisconduct was lawful or had no reasonable cause to believe his conduct was unlawful;               (b) a transaction from which the Indemnitee derived an improper personal benefit within themeaning of the Delaware General Corporation Law;               (c) in the event that the Indemnitee is a director of the Company, a circumstance under whichthe liability provisions of Section 174 of the Delaware General Corporation Law are applicable; or               (d) willful misconduct or conscious disregard for the best interests of the Company in aproceeding by or in the right of the Company to procure a judgment in its favor or in a proceedingby or in the right of a stockholder of the Company.
3

 
          4.7 Costs. All costs of making the Determination required by Section 4 hereof shallbe borne solely by the Company, including, but not limited to, the costs of legal counsel, proxysolicitations and judicial determinations. The Company shall also be solely responsible for paying(i) all reasonable expenses incurred by the Indemnitee to enforce this Agreement, including, butnot limited to, the costs incurred by the Indemnitee to obtain court-ordered indemnificationpursuant to Section 8 hereof, regardless of the outcome of any such application or proceeding, and(ii) all costs of defending any suits or proceedings challenging payments to the Indemnitee underthis Agreement.          Section 5. PROCEDURES FOR DETERMINATION OF WHETHER STANDARDS HAVE BEEN SATISFIED.          5.1 Timing of the Determination. The Company shall use its best efforts to make theDetermination contemplated by Section 4 hereof promptly. In addition, the Company agrees:               (a) if the Determination is to be made by the Board or a committee thereof, such Determinationshall be made not later than 30 days after a written request for a Determination (a “Request”) isdelivered to the Company by the Indemnitee;               (b) if the Determination is to be made by independent legal counsel, such Determination shallbe made not later than 45 days after a Request is delivered to the Company by the Indemnitee; and               (c) if the Determination is to be made by the stockholders of the Company, such Determinationshall be made not later than 120 days after a Request is delivered to the Company by theIndemnitee.The failure to make a Determination within the above-specified time period shall constitute aDetermination approving full indemnification or reimbursement of the Indemnitee. Notwithstandinganything herein to the contrary, a Determination may be made in advance of (i) the Indemnitee’spayment (or incurring) of expenses with respect to which indemnification or reimbursement issought, and/or (ii) final disposition of the action, suit or proceeding with respect to whichindemnification or reimbursement is sought.          5.2 Reasonableness of Expenses. The evaluation and finding as to the reasonablenessof expenses incurred by the Indemnitee for purposes of this Agreement shall be made (in thefollowing order of preference) within 30 days after the Indemnitee’s delivery to the Company of aRequest that includes a reasonable accounting of expenses incurred:               (a) first, by the Board by majority vote or consent of the Disinterested Directors, eventhough such Disinterested Directors may be less than a quorum; or               (b) next, if such a quorum cannot be obtained, by majority vote or consent of a committee dulydesignated by the Disinterested Directors, consisting solely of two or more DisinterestedDirectors, even though such Disinterested Directors may be less than a quorum; or               (c) next, if such a committee cannot be designated, by any independent legal counsel (who maybe any outside counsel regularly employed by the Company);provided, however, that if a determination as to reasonableness of expenses is not made under anyof the foregoing subsections (a), (b) and (c), such determination shall be made, not later than 120days after the Indemnitee’s delivery of such Request, by vote or consent of the holders of amajority of the Company’s Common Stock that are represented in person or by proxy at a meetingcalled for such purpose.
4

 
All expenses shall be considered reasonable for purposes of this Agreement if the findingcontemplated by this Section 5.3 is not made within the prescribed time. The finding required bythis Section 5.3 may be made in advance of the payment (or incurring) of the expenses for which indemnification orreimbursement is sought.          5.3 Payment of Indemnified Amount. Immediately following a Determination that theIndemnitee has met the applicable standard of conduct set forth in Section 1, 2 or 3 hereof, as thecase may be, and the finding of reasonableness of expenses contemplated by Section 5.3 hereof, orthe passage of time prescribed for making such determination(s), the Company shall pay to theIndemnitee in cash the amount to which the Indemnitee is entitled to be indemnified and/orreimbursed, as the case may be, without further authorization or action by the Board; provided,however, that the expenses for which indemnification or reimbursement is sought have actually beenincurred by the Indemnitee.          5.4 Stockholder Vote on Determination. Notwithstanding the provisions of Section 145of the Delaware General Corporation Law, the Indemnitee and any other stockholder who is a party tothe proceeding for which indemnification or reimbursement is sought shall be entitled to vote onany Determination to be made by the Company’s stockholders, including a Determination made pursuantto Section 5.7 hereof. In addition, in connection with each meeting at which a stockholderDetermination will be made, the Company shall solicit proxies that expressly include a proposal toindemnify or reimburse the Indemnitee. Any Company proxy statement relating to a proposal toindemnify or reimburse the Indemnitee shall not include a recommendation against indemnification orreimbursement.          5.5 Selection of Independent Legal Counsel. If the Determination required underSection 4 is to be made by independent legal counsel, such counsel shall be selected by theIndemnitee with the approval of the Board, which approval shall not be unreasonably withheld. Thefees and expenses incurred by counsel in making any Determination (including Determinationspursuant to Section 5.8 hereof) shall be borne solely by the Company regardless of the results ofany Determination and, if requested by counsel, the Company shall give such counsel an appropriatewritten agreement with respect to the payment of their fees and expenses and such other matters asmay be reasonably requested by counsel.          5.6 Right of Indemnitee to Appeal an Adverse Determination by Board. If aDetermination is made by the Board or a committee thereof that the Indemnitee did not meet theapplicable standard of conduct set forth in Section 1, 2 or 3 hereof, upon the written request ofthe Indemnitee and the Indemnitee’s delivery of $500 to the Company, the Company shall cause a newDetermination to be made by the Company’s stockholders at the next regular or special meeting ofstockholders. Subject to Section 8 hereof, such Determination by the Company’s stockholders shallbe binding and conclusive for all purposes of this Agreement.          5.7 Right of Indemnitee To Select Forum For Determination. If, at any time subsequentto the date of this Agreement, “Continuing Directors” do not constitute a majority of the membersof the Board, or there is otherwise a change in control of the Company (as contemplated by Item403(c) of Regulation S-K), then upon the request of the Indemnitee, the Company shall cause theDetermination required by Section 4 hereof to be made by independent legal counsel selected by theIndemnitee and approved by the Board (which approval shall not be unreasonably withheld), whichcounsel shall be deemed to satisfy the requirements of clause (3) of Section 4 hereof. If none ofthe legal counsel selected by the Indemnitee are willing and/or able to make the Determination,then the Company shall cause the Determination to be made by a majority vote or consent of a Boardcommittee consisting solely of Continuing Directors. For purposes of this Agreement, a “ContinuingDirector” means either a member of the Board at the date of this Agreement or a person nominated toserve as a member of the Board by a majority of the then Continuing Directors.          5.8 Access by Indemnitee to Determination. The Company shall afford to the Indemniteeand his representatives ample opportunity to present evidence of the facts upon which theIndemnitee relies for indemnification or reimbursement, together with other information relating toany requested Determination. The Company shall also afford the Indemnitee the reasonableopportunity toinclude such evidence and information in any Company proxy statement relating to a stockholderDetermination.
5

 
          5.9 Judicial Determinations in Derivative Suits. In each action or suit described inSection 2 hereof, the Company shall cause its counsel to use its best efforts to obtain from theCourt in which such action or suit was brought (i) an express adjudication whether the Indemniteeis liable for negligence or misconduct in the performance of his duty to the Company, and, if theIndemnitee is so liable, (ii) a determination whether and to what extent, despite the adjudicationof liability but in view of all the circumstances of the case (including this Agreement), theIndemnitee is fairly and reasonably entitled to indemnification.          Section 6.SCOPE OF INDEMNITY. The actions, suits and proceedings describedin Sections 1 and 2 hereof shall include, for purposes of this Agreement, any actions that involve,directly or indirectly, activities of the Indemnitee both in his official capacities as a Companydirector or officer and actions taken in another capacity while serving as director or officer,including, but not limited to, actions or proceedings involving (i) compensation paid to theIndemnitee by the Company, (ii) activities by the Indemnitee on behalf of the Company, includingactions in which the Indemnitee is plaintiff, (iii) actions alleging a misappropriation of a“corporate opportunity,” (iv) responses to a takeover attempt or threatened takeover attempt of theCompany, (v) transactions by the Indemnitee in Company securities, and (vi) the Indemnitee’spreparation for and appearance (or potential appearance) as a witness in any proceeding relating,directly or indirectly, to the Company. In addition, the Company agrees that, for purposes of thisAgreement, all services performed by the Indemnitee on behalf of, in connection with or related toany subsidiary of the Company, any employee benefit plan established for the benefit of employeesof the Company or any subsidiary, any corporation or partnership or other entity in which theCompany or any subsidiary has a 5% ownership interest, or any other affiliate of the Company, shallbe deemed to be at the request of the Company.          Section 7. ADVANCE FOR EXPENSES.          7.1 Mandatory Advance. Expenses (including attorneys’ fees, court costs, judgments,fines, amounts paid in settlement and other payments) incurred by the Indemnitee in investigating,defending, settling or appealing any action, suit or proceeding described in Section 1 or 2 hereofshall be paid by the Company in advance of the final disposition of such action, suit orproceeding. The Company shall promptly pay the amount of such expenses to the Indemnitee, but inno event later than 10 days following the Indemnitee’s delivery to the Company of a written requestfor an advance pursuant to this Section 7, together with a reasonable accounting of such expenses.          7.2 Undertaking to Repay. The Indemnitee hereby undertakes and agrees to repay to theCompany any advances made pursuant to this Section 7 if and to the extent that it shall ultimatelybe found that the Indemnitee is not entitled to be indemnified by the Company for such amounts.          7.3 Miscellaneous. The Company shall make the advances contemplated by this Section 7regardless of the Indemnitee’s financial ability to make repayment, and regardless whetherindemnification of the Indemnitee by the Company will ultimately be required. Any advances andundertakings to repay pursuant to this Section 7 shall be unsecured and interestfree.          Section 8.COURT-ORDERED INDEMNIFICATION. Regardless whether the Indemniteehas met the standard of conduct set forth in Section 1, 2 or 3 hereof, as the case may be, andnotwithstanding the presence or absence of any Determination whether such standards have beensatisfied, the Indemnitee may apply for indemnification (and/or reimbursement pursuant to Section 3or 12 hereof) to the court conducting any proceeding to which the Indemnitee is a party or to anyother court of competent jurisdiction. On receipt of an application, the court, after giving anynotice the court considers necessary, may order indemnification (and/or reimbursement) if itdetermines the Indemnitee is fairly andreasonably entitled to indemnification (and/or reimbursement) in view of all the relevantcircumstances (including this Agreement).
6

 
          Section 9.NONDISCLOSURE OF PAYMENTS. Except as expressly required by law,neither party shall disclose any payments under this Agreement unless prior approval of the otherparty is obtained. Any payments to the Indemnitee that must be disclosed shall, unless otherwiserequired by law, be described only in Company proxy or information statements relating to specialand/or annual meetings of the Company’s stockholders, and the Company shall afford the Indemniteethe reasonable opportunity to review all such disclosures and, if requested, to explain in suchstatement any mitigating circumstances regarding the events reported.          Section 10.COVENANT NOT TO SUE, LIMITATION OF ACTIONS AND RELEASE OF CLAIMS.No legal action shall be brought and no cause of action shall be asserted by or on behalf of theCompany (or any of its subsidiaries) against the Indemnitee, his spouse, heirs, executors, personalrepresentatives or administrators after the expiration of two (2) years following the date theIndemnitee ceases (for any reason) to serve as either an executive officer or director of theCompany, and any and all such claims and causes of action of the Company (or any of itssubsidiaries) shall be extinguished and deemed released unless asserted by filing of a legal actionwithin such twoyear period.          Section 11.INDEMNIFICATION OF INDEMNITEE’S ESTATE. Notwithstanding any otherprovision of this Agreement, and regardless whether indemnification of the Indemnitee would bepermitted and/or required under this Agreement, if the Indemnitee is deceased, the Company shallindemnify and hold harmless the Indemnitee’s estate, spouse, heirs, administrators, personalrepresentatives and executors (collectively the “Indemnitee’s Estate”) against, and the Companyshall assume, any and all claims, damages, expenses (including attorneys’ fees), penalties,judgments, fines and amounts paid in settlement actually incurred by the Indemnitee or theIndemnitee’s Estate in connection with the investigation, defense, settlement or appeal of anyaction described in Section 1 or 2 hereof. Indemnification of the Indemnitee’s Estate pursuant tothis Section 11 shall be mandatory and not require a Determination or any other finding that theIndemnitee’s conduct satisfied a particular standard of conduct.          Section 12.REIMBURSEMENT OF ALL LEGAL EXPENSES. Notwithstanding any otherprovision of this Agreement, and regardless of the presence or absence of any Determination, theCompany promptly (but not later than 30 days following the Indemnitee’s submission of a reasonableaccounting) shall reimburse the Indemnitee for all attorneys’ fees and related court costs andother expenses incurred by the Indemnitee (but not for judgments, penalties, fines or amounts paidin settlement) in connection with the investigation, defense, settlement or appeal of any actiondescribed in Section 1 or 2 hereof (including, but not limited to, the matters specified in Section6 hereof).          Section 13. MISCELLANEOUS.          13.1 Notice Provision. Any notice, payment, demand or communication required orpermitted to be delivered or given by the provisions of this Agreement shall be deemed to have beeneffectively delivered or given and received on the date personally delivered to the respectiveparty to whom it is directed, or when deposited by registered or certified mail, with postage andcharges prepaid and addressed to the parties at the respective addresses set forth below oppositetheir signatures to this Agreement, or to such other address as to which notice is given.          13.2 Entire Agreement. Except for the Company’s Articles of Incorporation, thisAgreement constitutes the entire understanding of the parties and supersedes all priorunderstandings, whether written or oral, between the parties with respect to the subject matter ofthis Agreement.
7

 
          13.3 Severability of Provisions. If any provision of this Agreement is held to beillegal, invalid or unenforceable under present or future laws effective during the term of thisAgreement, suchprovision shall be fully severable; this Agreement shall be construed and enforced as if suchillegal, invalid or unenforceable provision had never comprised a part of this Agreement; and theremaining provisions of this Agreement shall remain in full force and effect and shall not beaffected by the illegal, invalid or unenforceable provision or by its severance from thisAgreement. Furthermore, in lieu of each such illegal, invalid or unenforceable provision thereshall be added automatically as a part of this Agreement a provision as similar in terms to suchillegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.          13.4 Applicable Law. This Agreement shall be governed by and construed under the lawsof the State of Delaware.          13.5 Execution in Counterparts. This Agreement and any amendment may be executedsimultaneously or in two or more counterparts, each of which together shall constitute one and thesame instrument.          13.6 Cooperation and Intent. The Company shall cooperate in good faith with theIndemnitee and use its best efforts to ensure that the Indemnitee is indemnified and/or reimbursedfor liabilities described herein to the fullest extent permitted by law.          13.7 Amendment. No amendment, modification or alteration of the terms of thisAgreement shall be binding unless in writing, dated subsequent to the date of this Agreement, andexecuted by the parties.          13.8 Binding Effect. The obligations of the Company to the Indemnitee hereunder shallsurvive and continue as to the Indemnitee even if the Indemnitee ceases to be a director, officer,employee and/or agent of the Company. Each and all of the covenants, terms and provisions of thisAgreement shall be binding upon and inure to the benefit of the successors to the Company and, uponthe death of the Indemnitee, to the benefit of the Indemnitee’s estate, heirs, executors,administrators and personal representatives of the Indemnitee.          13.9 Gender and Number. Wherever the context shall so require, all words herein inthe male gender shall be deemed to include the female or neuter gender, all singular words shallinclude the plural and all plural words shall include the singular.          13.10 Nonexclusivity. The rights of indemnification and reimbursement provided inthis Agreement shall be in addition to any rights to which the Indemnitee may otherwise be entitledby statute, bylaw, agreement, vote of stockholders or otherwise.          13.11 Effective Date. The provisions of this Agreement shall cover claims, actions,suits and proceedings whether now pending or hereafter commenced and shall be retroactive to coveracts or omissions or alleged acts or omissions which heretofore have taken place.     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first abovewritten.     ADDRESS: THE COMPANY:                                By:            ADDRESS: THE INDEMNITEE:                            
8