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Exhibit 10.3—Indemnity
Agreement 


 
 

INDEMNITY AGREEMENT    
  



    This Indemnity Agreement is made and entered into, effective as of November 24, 1999 by and between T.J.T., INC., a Washington Corporation (the
"Company"), and JOE LIGHT ("Indemnitee"). 


    WHEREAS,
Indemnitee is currently serving as a director of the Company, and the Company wishes Indemnitee to continue in such capacity; 


    WHEREAS,
the Articles of Incorporation of the Company, as amended (the "Articles"), and the Bylaws of the Company (the "Bylaws"), each provide that the Company shall indemnify, in the
manner and to the fullest extent permitted by the Washington Business Corporation Act ("WBCA"), certain persons, including directors of the Company, against specified expenses and losses arising out
of certain threatened, pending or completed actions, suits or proceedings; 


    WHEREAS,
Indemnitee has indicated that he or she may not be willing to continue to serve as a director of the Company in the absence of indemnification in addition to that provided in
the Articles and Bylaws of the Company; 


    WHEREAS,
the Company, in order to induce Indemnitee to continue to serve as a director, has agreed to provide Indemnitee with the benefits contemplated by this Indemnity Agreement
and, as a result of the provision of such benefits, Indemnitee has agreed to continue to serve in such capacity; and 


    WHEREAS,
the Articles and Bylaws of the Company each expressly recognize that the indemnification provisions of the Articles and Bylaws shall not be deemed exclusive of, and shall not
affect, any other rights to which a person seeking indemnification may be entitled under any agreement, and this Indemnity Agreement is being entered into pursuant to the Articles and Bylaws of the
Company as permitted by the WBCA. 


    NOW,
THEREFORE, in consideration of the promises, conditions and representations set forth herein, including Indemnitee's continued service as a director of the Company, the Company
and Indemnitee hereby agree as follows: 


    Section 1.  Definitions.  The following terms, as used herein, shall have
the following meanings: 



    (a) "Covered
Claim" shall mean any claim against Indemnitee based upon or arising out of any past, present or future act, omission, neglect or breach of duty,
including, without limitation, any actual or alleged error, omission, misstatement or misleading statement, that Indemnitee may commit or suffer while serving in his or her capacity as a director of
the Company, provided that such claim: 




	(i)
	is
not solely based upon and does not arise solely out of acts or omissions of Indemnitee finally adjudged to be intentional misconduct or a
knowing violation of law;



	(ii)
	is
not solely based upon and does not arise solely out of conduct of the Indemnitee finally adjudged to be in violation of RCW 23B.08.310; or



	(iii)
	is
not based solely upon and does not arise solely out of any transaction with respect to which it was finally adjudged that Indemnitee
personally received a benefit in money, property or services to which he or she was not legally entitled. 





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    (b) "Determination"
shall mean a determination, based upon the facts known at the time, made by: 




	(i)
	the
Board of Directors of the Company, by the majority vote of a quorum consisting of directors who are not at the time parties to the action, suit
or proceeding in question;



	(ii)
	if
such a quorum is not obtainable, by a majority vote of a committee duly designated by the Board of Directors, in which designation directors
who are parties may participate, consisting solely of two or more directors not at the time parties to the action, suit or proceeding in question;



	(iii)
	by
special legal counsel: (A) selected by the Board of Directors or its committee in the manner prescribed in (i) or (ii) of
this subsection; or (B) if a quorum of the Board of Directors cannot be obtained under (i) of this subsection and a committee cannot be designated under (ii) of this subsection,
selected by a majority vote of the full Board of Directors, in which selection directors who are parties may participate;



	(iv)
	by
the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the action, suit or proceeding in
question may not be voted on the determination; or



	(v)
	by
a court of competent jurisdiction in a final, nonappealable adjudication. 






    (c) "Payment"
shall mean any and all amounts that Indemnitee is or becomes legally obligated to pay in connection with a Covered Claim, including, without limitation,
damages, judgments, amounts paid in settlement, reasonable costs of investigation, reasonable fees of attorneys, costs of investigative, judicial or administrative proceedings or appeals, and costs of
attachment or similar bonds. 




    Section 2.  Indemnification.  The Company shall indemnify and hold
harmless Indemnitee against and from any and all Payments to the extent that: 



    (a) the
Company shall not have advanced expenses to Indemnitee pursuant to the provisions of the Company's Articles of Incorporation or otherwise and no determination
shall have been made pursuant to such Article or the WBCA that the Indemnitee is not entitled to indemnification; 


    (b) Indemnitee
shall not already have received payment on account of such Payments pursuant to one or more valid and collectible insurance policies; and 


    (c) such
indemnification by the Company is not unlawful. 




    Notwithstanding
anything contained in this Agreement to the contrary, except for proceedings to enforce rights to indemnification or advancement of expenses pursuant to
Section 4 hereof, the Company shall have no obligation to indemnify Indemnitee in connection with a proceeding (or part
thereof) initiated by Indemnitee unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Company. Further, the Company shall have no obligation to
indemnify Indemnitee under this Indemnity Agreement for any amounts paid in a settlement of any action, suit or proceeding effected without the Company's prior written consent, which consent shall not
be unreasonably withheld. The Company shall not settle any claim in any manner that would impose any obligation on Indemnitee without Indemnitee's prior written consent. Indemnitee shall not
unreasonably withhold his consent to any proposed settlement. 


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    Section 3.  Indemnification Procedure; Advancements of Costs and
Expenses.  



    (a) Promptly
after receipt by Indemnitee of notice of the commencement or threat of any action, suit or proceeding, Indemnitee shall, if indemnification with respect
thereto may be sought from the Company under this Indemnity Agreement, notify the Company thereof in writing. 



    (b) If,
at the time of receipt of such notice the Company has directors' and officers' liability insurance in effect, the Company shall give prompt notice of the
commencement of such action, suit or proceeding to the insurers in accordance with the procedures set forth in the respective policies in favor of Indemnitee. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all Payments payable as a result of such action, suit or proceeding in accordance with the terms of such policies. 


    (c) All
costs and expenses, including reasonable fees of attorneys, incurred by Indemnitee in defending or investigating such action, suit or proceeding shall be paid
by the Company in advance of the final disposition of such action, suit or proceeding; provided, however, that no such costs or expenses shall be paid
by the Company if, with respect to such action, suit or proceeding, a Determination is made that: 




	(i)
	Indemnitee
did not act in good faith and in a manner Indemnitee reasonably believed (A) in the case of conduct in Indemnitee's official
capacity with the Company, to be in best interests of the Company and (B) in all other cases, not opposed to the best interests of the Company; or



	(ii)
	in
the case of any criminal action or proceeding, Indemnitee had reasonable cause to believe his or her conduct was unlawful. 






    Indemnitee
hereby undertakes and agrees that he or she will repay the Company for any costs or expenses advanced by or on behalf of the Company pursuant to this Section 3(c) if
it shall ultimately be determined by a court of competent jurisdiction in a final, nonappealable adjudication that Indemnitee is not entitled to indemnification under this Indemnity Agreement. 



    (d) If
the Company shall advance the costs and expenses of any such action, suit or proceeding pursuant to Section 3(c) of this Indemnity Agreement, it shall be
entitled to assume the defense of such action, suit or proceeding, if appropriate, with counsel reasonably satisfactory to Indemnitee, upon delivery to Indemnitee of written notice of its election so
to do. After delivery of such notice, the Company shall not be liable to Indemnitee under this Indemnity Agreement for any costs or expenses subsequently incurred by Indemnitee in connection with such
defense other than reasonable cost and expenses of investigation; provided, however, that: 




	(i)
	Indemnitee
shall have the right to employ separate counsel in any such action, suit or proceeding provided that the fees and expenses of such
counsel incurred after delivery of notice by the Company of its assumption of such defense shall be at Indemnitee's own expense; and



	(ii)
	the
fees and expenses of counsel employed by Indemnitee shall be at the expense of the Company if (A) the employment of counsel by
Indemnitee has previously been authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the
conduct of any such defense (provided that the Company shall not be required to pay for more than one counsel to represent two or more Indemnitees where such Indemnitees have reasonably concluded that
there is no conflict of interest among them in the conduct of such defense), or (C) the Company shall not, in fact, have employed counsel to assume the defense of such action, suit or
proceeding. 





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    (e) All
payments on account of the Company's advancement obligations under Section 3(c) of this Indemnity Agreement shall be made within twenty (20) days
of Indemnitee's written request therefor. All other payments on account of the Company's obligations under this Indemnity Agreement shall be made within sixty (60) days of Indemnitee's written
request therefor, unless a Determination is made that the claims giving rise to Indemnitee's request are not payable under this Indemnity Agreement. Each request for payment hereunder shall be
accompanied by evidence reasonably satisfactory to the Company of Indemnitee's incurrence of the costs and expenses for which such payment is sought. 




    Section 4.  Enforcement of Indemnification; Burden of Proof.  If a claim
for indemnification or advancement of costs and expenses under this Indemnity Agreement is not paid in full by or on behalf of the Company within the time period specified in Section 3(e) of
this Indemnity Agreement, Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of such claim. In any such action, the Company shall have the burden of
proving that indemnification is not required under this Indemnity Agreement. 


    Section 5.  Employee Benefit Plans.  The term "other enterprises," as used
in this Indemnity Agreement, shall include employee benefit plans. All references in this Indemnity Agreement to "serving... at the Company's request" shall include any service by Indemnitee as a
director, officer, employee and/or agent of the Company which imposes duties on, or involves services by, Indemnitee with respect to an employee benefit plan, its participants or beneficiaries. If
Indemnitee acts in good faith and in a manner he or she reasonably believes to be in the interests of the participants and beneficiaries of an employee benefit plan, then, for purposes of
Section 3(c)(i) hereof, Indemnitee shall be deemed to have acted in a manner he or she "reasonably believed to be in the best interests of the Company." 


    Section 6.  Rights Not Exclusive.  The rights to indemnification and
advancement of costs and expenses provided hereunder shall not be deemed exclusive of any other rights to which Indemnitee may be entitled under any charter document, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise. 


    Section 7.  Subrogation.  In the event of payment under this Indemnity
Agreement by or on behalf of the Company, 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 that may be
required and shall do all things that may be necessary to secure such rights, including, without limitation, the execution of such documents as may be necessary to enable the Company effectively to
bring suit to enforce such rights. 


    Section 8.  Choice of Law.  This Indemnity Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Washington. 


    Section 9.  Attorneys' Fees.  If any action, suit or proceeding is
commenced in connection with or related to this Indemnity Agreement, the prevailing party shall be entitled to have its costs expenses, including, without limitation, reasonable fees of attorneys and
reasonable expenses of investigation, paid by the losing party. 


    Section 10.  Severability.  In the event that any provision of this
Indemnity Agreement is determined by a court to require the Company to do or to fail to do an action that is in violation of any applicable law,
such provision shall be limited or modified in its application to the minimum extent necessary to avoid a violation of law, and, as so limited or modified, such provision and the balance of this
Indemnity Agreement shall be enforceable in accordance with their terms. 


    Section 11.  Successors and Assigns.  This Indemnity Agreement shall be
binding upon all successors and assigns of the Company, including any transferee of all or substantially all of its assets and any successor by merger or otherwise by operation of law, and shall be
binding upon and inure to the benefit of the heirs, executors and administrators of Indemnitee. 


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    Section 12.  Descriptive Headings.  The descriptive headings in this
Indemnity Agreement are included for the convenience of the parties only and shall not affect the construction of this Indemnity Agreement. 


    Section 13.  Counterparts.  This Indemnity Agreement may be executed in
two counterparts, both of which taken together shall constitute one document. 



    Section 14.  Amendment.  No amendment, modification, termination or
cancellation of this Indemnity Agreement shall be effective unless made in writing and signed by each of the parties hereto. 


    IN
WITNESS WHEREOF, the Company and Indemnitee have executed this Indemnity Agreement as of the day and year first above written. 



	 	 	T.J.T., INC.
	

 	
 	

/s/ TERRENCE J. SHELDON   
 Terrence Sheldon, President & CEO
	

 	
 	

INDEMNITEE
	

 	
 	

/s/ JOE LIGHT   
 Joe Light




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