EXHIBIT 10.3


 


INDEMNITY AGREEMENT


 


This Indemnity Agreement ("Agreement")
is made as of -------------------, 2012, by and between Skkynet Cloud Systems, Inc., a Nevada corporation ("Company"),
and [name of director or officer] ("Indemnitee"), a director and/or officer or key executive, employee or consultant
of the Company and/or one or more affiliates of the Company, or a person serving at the request of the Company as a director, officer,
employee or agent of another enterprise.


 


RECITALS:


 


A. The Indemnitee is currently serving or has
agreed to serve as a director and/or officer of the Company and/or one or more of its affiliates or to provide services as a key
executive, employee or consultant and in such capacity has rendered and/or will render valuable services to the Company.


 


B. The Company has investigated the availability
and sufficiency of liability insurance and applicable statutory indemnification provisions to provide its directors and officers,
on the one hand, and its key executives, employees and consultants, on the other hand, with adequate protection against various
legal risks and potential liabilities to which such individuals are subject due to their positions with the Company and its affiliates
and has concluded that such insurance may be unavailable or too costly, and even if purchased it, and the statutory provisions,
may provide inadequate and unacceptable protection to certain individuals requested to serve as its directors and/or officers or
as its key executives, employees and/or consultants.


 


C. It is essential to the Company that it attract
and retain as officers, directors, key executives, employees and consultants the most capable persons available and in order to
induce and encourage highly experienced and capable persons such as the Indemnitee to serve or continue to serve as a director
and/or officer of the Company, or as a key executive, employee or consultant to the Company and/or its affiliates, the Company’s
Board of Directors has determined, after due consideration and investigation of the terms and provisions of the Agreement and the
various other options available to the Company and the Indemnitee in lieu hereof, that this Agreement is not only reasonable and
prudent but necessary to promote and ensure the best interests of the Company and its stockholders.


 


NOW, THEREFORE, in consideration of the services
or continued services of the Indemnitee and in order to induce the Indemnitee to serve or continue to serve as director, officer,
key executive, employee and/or consultant, the Company and the Indemnitee do hereby agree as follows:


 


1.Definitions. As used in this Agreement:


 


(a) The term "Proceeding" shall include
any threatened, pending or completed inquiry, hearing, investigation, action, suit, arbitration or other alternative dispute resolution
mechanism or proceeding, formal or informal, whether brought in the name of the Company or otherwise and whether of a civil, criminal
or administrative or investigative nature, by reason of the fact that the Indemnitee is or was a director and/or officer of the
Company, a key executive or employee of the Company or a consultant to the Company or is or was serving at the request of the Company
as a director, officer, employee, consultant or agent of another enterprise, whether or not he/she is serving in such capacity
at the time any liability or expense is incurred for which indemnification or reimbursement is to be provided under this Agreement.



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(b) The term "Expenses" includes,
without limitation: attorneys' fees, costs, disbursements and retainers; accounting and witness fees; fees of experts; travel and
deposition costs; transcript costs, filing fees, telephone charges, postage, copying costs, delivery service fees and other expenses
and obligations of any nature whatsoever paid or incurred in connection with any investigations, judicial or administrative proceedings
and appeals, amounts paid in settlement by or on behalf of Indemnitee, and any expenses of establishing a right to indemnification,
pursuant to this Agreement or otherwise, including reasonable compensation for time spent by the Indemnitee in connection with
the investigation, defense or appeal of a Proceeding or action for indemnification for which he/she is not otherwise compensated
by the Company or any third party. The term "Expenses" does not include the amount of judgments, fines, penalties or
ERISA excise taxes actually levied against the Indemnitee.


 


2.Agreement to Serve. If applicable, the Indemnitee
agrees to serve or to continue to serve as a director and/or officer of the Company for so long as he/she is duly elected or appointed
or until such time as he/she tenders his/her resignation in writing or is removed as a director and/or officer. However, nothing
contained in this Agreement shall be construed as giving Indemnitee any right to be retained in the employ of the Company, any
subsidiary or any other person.


 


3.Indemnification in Third Party Actions. The Company
shall indemnify the Indemnitee if the Indemnitee is a party to or threatened to be made a party to or is otherwise involved in
any Proceeding (other that a Proceeding by or in the name of the Company to procure a judgment in its favor), by reason of the
fact that the Indemnitee is or was a director and/or officer of the Company, or is or was serving at the request of the Company
as a director, officer, key executive, employee, consultant or agent of another enterprise, against all Expenses, judgments, fines,
penalties and ERISA excise taxes actually and reasonably incurred by the Indemnitee in connection with the defense or settlement
of such a Proceeding, to the fullest extent permitted by applicable corporate law and the Company's Articles of Incorporation;
provided that any settlement of a Proceeding be approved in writing by the Company.


 


4.Indemnification in Proceedings by or In the Name of
the Company. The Company shall indemnify the Indemnitee if the Indemnitee is a party to or threatened to be made a party to
or is otherwise involved in any Proceeding by or in the name of the Company to procure a judgment in its favor by reason of the
fact that the Indemnitee was or is a director and/or officer of the Company, a key executive or employee of the Company, or a consultant
to the Company, or is or was serving at the request of the Company as a director, officer, key executive, employee or agent of
another enterprise, against all Expenses, judgments, fines, penalties and ERISA excise taxes actually and reasonably incurred by
the Indemnitee in connection with the defense or settlement of such a Proceeding, to the fullest extent permitted by applicable
corporate law and the Company's Articles of Incorporation.


 


5.Conclusive Presumption Regarding Standards of Conduct.
The Indemnitee shall be conclusively presumed to have met the relevant standards of conduct, if any, as defined by applicable corporate
law, for indemnification pursuant to this Agreement, unless a determination is made that the Indemnitee has not met such standards
(i) in a written opinion by independent counsel, selection of whom has been approved by the Indemnitee in writing, or (ii) by a
court of competent jurisdiction.



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6.Indemnification of Expenses of Successful Party.
Notwithstanding any other provision of the Agreement except subsections 10(a) and 10(b) below, to the extent that the Indemnitee
has been successful in defense of any Proceeding or in defense of any claim, issue or matter therein, on the merits or otherwise,
including the dismissal of a Proceeding without prejudice or the settlement of a Proceeding without an admission of liability,
the Indemnitee shall be indemnified against all Expenses incurred in connection therewith to the fullest extent permitted by applicable
corporate law.


 


7.Advances of Expenses. The Expenses incurred by
the Indemnitee in any Proceeding shall be paid promptly by the Company in advance of the final disposition of the Proceeding at
the written request of the Indemnitee to the fullest extent permitted by applicable corporate law; provided that the Indemnitee
shall undertake in writing to repay any advances if it is ultimately determined that the Indemnitee is not entitled to indemnification.


 


8.Partial Indemnification. If the Indemnitee is entitled
under any provision of this Agreement to indemnification by the Company for a portion of the Expenses, judgments, fines, penalties
or ERISA excise taxes actually and reasonably incurred by him/her in the investigation, defense, appeal or settlement of any Proceeding
but not, however, for the total amount of his/her Expenses, judgments, fines, penalties or ERISA excise taxes, the Company shall
nevertheless indemnify the Indemnitee for the portion of Expenses, judgments, fines, penalties or ERISA excise taxes to which the
Indemnitee is entitled.


 


9.Indemnification Procedure; Determination of Right to
Indemnification.


 


(a) Promptly after receipt by the Indemnitee
of notice of the commencement of any Proceeding, the Indemnitee shall, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement thereof in writing. The omission to so notify the Company,
however, shall not relieve it from any liability which it may have to the Indemnitee otherwise than under this Agreement.


 


(b) If a claim for indemnification or advances
under this Agreement is not paid by the Company within thirty (30) days of receipt of written notice, the rights provided by this
Agreement shall be enforceable by the Indemnitee in any court of competent jurisdiction. The burden of proving by clear and convincing
evidence that indemnification or advances are not appropriate shall be on the Company. The failure of the Company's independent
legal counsel to have made a determination prior to the commencement of such action that indemnification or advances are proper
in the circumstances because the Indemnitee has met the applicable standard of conduct, if any, nor an actual determination by
the independent legal counsel that the Indemnitee has not met the applicable standard of conduct, shall be a defense to the action
or create a presumption for the purpose of an action that the Indemnitee has not met the applicable standard of conduct.


 


(c) The Indemnitee's Expenses incurred in connection
with any Proceeding concerning his/her right to indemnification or advances in whole or part pursuant to this Agreement shall also
be indemnified by the Company regardless of the outcome of such Proceeding.



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(d) With respect to any Proceeding for which
indemnification is requested, the Company will be entitled to participate therein at its own expense and, except as otherwise provided
below, to the extent that it may wish, the Company may assume the defense thereof, with counsel satisfactory to the Indemnitee.
After notice from the Company to the Indemnitee of its election to assume the defense of a Proceeding, the Company will not be
liable to the Indemnitee for any Expenses subsequently incurred by the Indemnitee in connection with the defense thereof, other
than as provided below. The Company shall not settle any Proceeding in any manner which would impose any penalty or limitation
on the Indemnitee without the Indemnitee's written consent. The Indemnitee shall have the right to employ his/her counsel in any
Proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense of
the Proceeding shall be at the expense of the Indemnitee, unless (i) the employment of counsel by the Indemnitee has been authorized
by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company
and the Indemnitee in the conduct of the defense of a Proceeding, in each of which cases the fees and expenses of the Indemnitee's
counsel shall be advanced by the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by
or on behalf of the Company or as to which the Indemnitee has concluded that there may be a conflict of interest between the Company
and the Indemnitee.


 


10.Limitations on Indemnification. No payments pursuant
to this Agreement shall be made by the Company:


 


(a) To indemnify the Indemnitee against liability
to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office;


 


(b) To indemnify or advance funds to the Indemnitee
expenses with respect to Proceeding initiated or brought voluntarily by the 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 law or otherwise
as required under applicable corporate law, but such indemnification or advancement of expenses may be provided by the Company
in specific cases if the Board of Directors finds it to be appropriate;


 


(c) To indemnify the Indemnitee for any Expenses,
judgment, fines, penalties or ERISA excise taxes sustained in any Proceeding for which payment is actually made to the Indemnitee
under a valid and collectible insurance policy, except in respect of any excess beyond the amount of payment under such insurance;


 


(d) To indemnify the Indemnitee for any Expenses,
judgment, fines, and/or penalties sustained in any Proceeding for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, the
rules and regulations promulgated thereunder and amendments thereto or similar provisions of any federal, state or local statutory
law; and


 


(e) If a court of competent jurisdiction finally
determines, with all rights of appeal having been exhausted or otherwise terminated, that any indemnification hereunder is unlawful.


 


11.Maintenance of Liability Insurance.


 


(a) The Company hereby covenants and agrees
that, as long as the Indemnitee continues to serve as a director and/or officer of the Company and thereafter as long as the Indemnitee
may be subject to any possible Proceeding, the Company, subject to subsection (c), shall promptly obtain and maintain in full force
and effect directors' and officers' liability insurance ("D&O Insurance") in reasonable amounts from established
and reputable insurers.



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(b) In all D&O insurance policies, the Indemnitee
shall be named as an insured in such a manner as to provide the Indemnitee the same rights and benefits as are accorded to the
most favorably insured of the Company's directors and/or officers.


 


(c) Notwithstanding the foregoing, the Company
shall have no obligation to obtain or maintain D&O Insurance if the Company determines, in its sole discretion, that such insurance
is not reasonably available, the premium costs for such insurance is so limited by exclusions that it provides an insufficient
benefit, or the Indemnitee is covered by similar insurance maintained by a subsidiary of the Company.


 


12.Indemnification Hereunder Not Exclusive. The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may be entitled under the
Articles of Incorporation, Bylaws, any agreement, vote of shareholders or disinterested directors, provision of applicable corporate
law, or otherwise, both as to action in his/her official capacity and as to action in another capacity on behalf of the Company
while holding such office.


 


13.Successors and Assigns. This Agreement shall be
binding upon, and shall inure to the benefit of the Indemnitee and his/her heirs, executors, administrators and assigns, whether
or not Indemnitee has ceased to be a director or officer, and the Company and its successors and assigns.


 


14.Severability. Each and every paragraph, sentence,
term and provision hereof is separate and distinct so that if any paragraph, sentence, term or provision hereof shall be held to
be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or enforceability
of any other paragraph, sentence, term or provision hereof. To the extent required, any paragraph, sentence, term or provision
of this Agreement shall be modified by a court of competent jurisdiction to preserve its validity and to provide the Indemnitee
with the broadest possible indemnification permitted under applicable corporate law.


 


15.Savings Clause. If this Agreement or any paragraph,
sentence, term or provision hereof is invalidated on any ground by any court of competent jurisdiction, the Company shall nevertheless
indemnify the Indemnitee as to any Expenses, judgments, fines, penalties for ERISA excise taxes incurred with respect to any Proceeding
to the full extent permitted by any applicable paragraph, sentence, term or provision of this Agreement that has not been invalidated
or by any other applicable provision of applicable corporate law.


 


16.Interpretation; Governing Law. This Agreement
shall be construed as a whole and in accordance with its fair meaning. Headings are for convenience only and shall not be used
in construing meaning. This Agreement shall be governed and interpreted in accordance with the laws of the State of Nevada.


 


17.Amendments. No amendment, waiver, modification,
termination or cancellation of this Agreement shall be effective unless in writing signed by the party against whom enforcement
is sought. The indemnification rights afforded to the Indemnitee hereby are contract rights and may not be diminished, eliminated
or otherwise affected by amendments to the Articles of Incorporation, Bylaws, or by other agreements, including D&O Insurance
policies.



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18.Counterparts. This Agreement may
be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each party and delivered to the other.


 


19.Notices. Any notice required to
be given under this Agreement shall be directed:


 


	TO:	 	Skkynet Cloud Systems, Inc.
 162 Guelph Street, Suite 253
 Georgetown, Ontario
                                                                                                                                                                                                  L7G 5X7 Canada
 Attn: Andrew s. Thomas, CEO
 
 With a copy to:



Richard C. Fox, Esq. 
Fox Law Offices, P.A. 
561 NE Zebrina Senda 
Jensen Beach, Florida 34957


 








 


 


	And to:		 [Name/address of Indemnitee]



 


or to such other address as either shall designate in writing.


 


IN WITNESS WHEREOF, the parties have executed
this Indemnity Agreement as of the date first written above.


 


	 	INDEMNITEE:
	 	 
	 	 
	 	_______________________
	 	[insert name of Indemnitee]
	 	 
	 	Skkynet Cloud Systems, Inc.
	 	 
	 	 
	 	 
	 	By:                           
	 	Andrew S. Thomas, CEO