mstf10_5.htm


    Exhibit
      10.5

     

    INDEMNIFICATION
      AGREEMENT

    


    This
      Indemnification Agreement
      ("Agreement") is
      entered into as of June 29, 2007 by and between Monarch Staffing, Inc., a Nevada
      corporation (the
"Company") and Rodney
      McDermott
      ("Indemnitee").

    


    RECITALS

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

    


    A.  The
      Company and
      Indemnitee recognize the continued difficulty in obtaining liability insurance
      for its directors, officers, employees, agents and fiduciaries, the significant
      increases in the cost of such insurance and the general reductions in the
      coverage of such insurance.

    


    B.  The
      Company and
      Indemnitee further recognize the substantial increase in corporate litigation
      in
      general, subjecting directors, officers, employees, agents and fiduciaries
      to
      expensive litigation risks at the same time as the availability and coverage
      of
      liability insurance has been severely limited.

    


    C.  Indemnitee
      does not
      regard the current protection available as adequate under the present
      circumstances, and Indemnitee and other directors, officers, employees, agents
      and fiduciaries of the Company may not be willing to continue to serve in such
      capacities without additional protection.

    


    D.  The
      Company desires to attract and retain the services of highly qualified
      individuals, such as Indemnitee, to serve the Company and, in part, in order
      to
      induce Indemnitee to continue to provide services to the Company, wishes to
      provide for the indemnification and advancing of expenses to Indemnitee to
      the
      maximum extent permitted by law.

    


    E.  In
      view of the considerations set forth above, the Company desires that Indemnitee
      be indemnified by the Company as set forth herein.

    


    NOW,
      THEREFORE, the Company and Indemnitee hereby agree as
      follows:

    


    1.  Indemnification.

    


    (a)  Indemnification
      of Expenses.  The Company shall indemnify to the fullest extent
      permitted by law if Indemnitee was or is or becomes a party to or witness or
      other participant in, or is threatened to be made a party to or witness or
      other
      participant in, any threatened, pending or completed action, suit, proceeding
      or
      alternative dispute resolution mechanism, or any hearing, inquiry or
      investigation that Indemnitee in good faith believes might lead to the
      institution of any such action, suit, proceeding or alternative dispute
      resolution mechanism, whether civil, criminal, administrative, investigative
      or
      other (hereinafter a
"Claim") by reason of
      (or arising in part out of) any event or occurrence related to the fact that
      Indemnitee is or was a director, officer, employee, agent or fiduciary of the
      Company, or any subsidiary of the Company, or is or was serving at the request
      of the Company as a director, officer, employee, agent or fiduciary of another
      corporation, partnership, joint venture, trust or other enterprise, or by reason
      of any action or inaction on the part of Indemnitee while serving in such
      capacity (hereinafter an "Indemnifiable
      Event") against any and all expenses (including
      attorneys' fees and all other costs, expenses and obligations incurred in
      connection with investigating, defending, being a witness in or participating
      in
      (including on appeal), or preparing to defend, be a witness in or participate
      in, any such action, suit, proceeding, alternative dispute resolution mechanism,
      hearing, inquiry or investigation), judgments, fines, penalties and amounts
      paid
      in settlement (if such settlement is approved in advance by the Company, which
      approval shall not be unreasonably withheld) of such Claim and any federal,
      state, local or foreign taxes imposed on Indemnitee as a result of the actual
      or
      deemed receipt of any payments under this Agreement (collectively, hereinafter
      "Expenses"), including
      all interest, assessments and other charges paid or payable in connection with
      or in respect of such Expenses.  Such payment of Expenses shall be
      made by the Company as soon as practicable but in any event no later than twenty
      (20) days after written demand by Indemnitee therefor is presented to the
      Company.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  Reviewing
      Party.  Notwithstanding the foregoing, (i) the obligations of the
      Company under Section 1(a) shall be subject to the condition that the Reviewing
      Party (as described in Section 10(e) hereof) shall not have determined (in
      a
      written opinion, in any case in which the Independent Legal Counsel referred
      to
      in Section 1(c) hereof is involved) that Indemnitee would not be permitted
      to be
      indemnified under applicable law, and (ii) the obligation of the Company to
      make
      an advance payment of Expenses to Indemnitee pursuant to Section 2(a) (an
"Expense Advance")
      shall be subject to the condition that, if, when and to the extent that the
      Reviewing Party determines that Indemnitee would not be permitted to be so
      indemnified under applicable law, the Company shall be entitled to be reimbursed
      by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts
      theretofore paid; provided, however, that if Indemnitee has commenced or
      thereafter commenced legal proceedings in a court of competent jurisdiction
      to
      secure a determination that Indemnitee should be indemnified under applicable
      law, any determination made by the Reviewing Party that Indemnitee would not
      be
      permitted to be indemnified under applicable law shall not be binding and
      Indemnitee shall not be required to reimburse the Company for any Expense
      Advance until a final judicial determination is made with respect thereto (as
      to
      which all rights of appeal therefrom have been exhausted or lapsed). The
      Indemnitee's obligation to reimburse the Company for any Expense Advance shall
      be unsecured and no interest shall be charged thereon.  If there has
      not been a Change in Control (as defined in Section 10(c) hereof), the Reviewing
      Party shall be selected by the Board of Directors, and if there has been such
      a
      Change in Control (other than a Change in Control which has been approved by
      a
      majority of the Company's Board of Directors who were directors immediately
      prior to such Change in Control), the Reviewing Party shall be the Independent
      Legal Counsel referred to in Section 1(c) hereof. If there has been no
      determination by the Reviewing Party or if the Reviewing Party determines that
      Indemnitee substantively would not be permitted to be indemnified in whole
      or in
      part under applicable law, Indemnitee shall have the right to commence
      litigation seeking an initial determination by the court or challenging any
      such
      determination by the Reviewing Party or any aspect thereof, including the legal
      or factual bases therefor, and the Company hereby consents to service of process
      and to appear in any such proceeding. Any determination by the Reviewing Party
      otherwise shall be conclusive and binding on the Company and
      Indemnitee.

    


    (c)  Change
      in Control.  The Company agrees that if there is a Change in Control
      of the Company (other than a Change in Control which has been approved by a
      majority of the Company's Board of Directors who were directors immediately
      prior to such Change in Control) then, with respect to all matters thereafter
      arising concerning the rights of Indemnitees to payments of Expenses and Expense
      Advances under this Agreement or any other agreement or under the Company's
      Articles of Incorporation, as amended, or Bylaws as now or hereafter in effect,
      Independent Legal Counsel (as defined in Section 10(d) hereof) shall be selected
      by Indemnitee and approved by the Company (which approval shall not be
      unreasonably withheld). Such counsel, among other things, shall render its
      written opinion to the Company and Indemnitee as to whether and to what extent
      Indemnitee would be permitted to be indemnified under applicable law and the
      Company agrees to abide by such opinion. The Company agrees to pay the
      reasonable fees of the Independent Legal Counsel referred to above and to fully
      indemnify such counsel against any and all expenses (including attorneys' fees),
      claims, liabilities and damages arising out of or relating to this Agreement
      or
      its engagement pursuant hereto.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)  Mandatory
      Payment of Expenses.  Notwithstanding any other provision of this
      Agreement other than Section 9 hereof, to the extent that Indemnitee has been
      successful on the merits or otherwise, including, without limitation, the
      dismissal of an action without prejudice, in defense of any action, suit,
      proceeding, inquiry or investigation referred to in Section (1)(a) hereof or
      in
      the defense of any claim, issue or matter therein, Indemnitee shall be
      indemnified against all Expenses incurred by Indemnitee in connection
      therewith.

    


    2.  Expenses;
      Indemnification Procedure.

    


    (a)  Advancement
      of Expenses.  The Company shall advance all Expenses incurred by
      Indemnitee. The advances to be made hereunder shall be paid by the Company
      to
      Indemnitee as soon as practicable but in any event no later than twenty (20)
      days after written demand by Indemnitee therefor to the Company.

    


    (b)  Notice/Cooperation
      by Indemnitee.  Indemnitee shall, as a condition precedent to
      Indemnitee's right to be indemnified under this Agreement, give the Company
      notice in writing as soon as practicable of any Claim made against Indemnitee
      for which indemnification will or could be sought under this Agreement. Notice
      to the Company shall be directed to the Board of Directors of the Company at
      the
      address set forth in Section 14(d)(i) hereof (or such other address as the
      Company shall designate in writing to Indemnitee as provided in Section 14
      hereof). In addition, Indemnitee shall give the Company such information and
      cooperation as it may reasonably require and as shall be within Indemnitee's
      power.

    


    (c)  No
      Presumptions; Burden of Proof.  For purposes of this Agreement, the
      termination of any Claim by judgment, order, settlement (whether with or without
      court approval) or conviction, or upon a plea of nolo contendere, or its
      equivalent, shall not create a presumption that Indemnitee did not meet any
      particular standard of conduct or have any particular belief or that a court
      has
      determined that indemnification is not permitted by applicable law. In addition,
      neither the failure of the Reviewing Party to have made a determination as
      to
      whether Indemnitee has met any particular standard of conduct or had any
      particular belief, nor an actual determination by the Reviewing Party that
      Indemnitee has not met such standard of conduct or did not have such belief,
      prior to the commencement of legal proceedings by Indemnitee to secure a
      judicial determination that Indemnitee should be indemnified under applicable
      law, shall be a defense to Indemnitee's claim or create a presumption that
      Indemnitee has not met any particular standard of conduct or did not have any
      particular belief.  In connection with any determination by the
      Reviewing Party or otherwise as to whether Indemnitee is entitled to be
      indemnified hereunder, the burden of proof shall be on the Company to establish
      that Indemnitee is not so entitled.

    


    (d)  Notice
      to Insurers.  If, at the time of the receipt by the Company of a
      notice of a Claim pursuant to Section 2(b) hereof, the Company has liability
      insurance in effect which may cover such Claim, the Company shall give prompt
      notice of the commencement of such Claim 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 action, suit, proceeding,
      inquiry or investigation in accordance with the terms of such
      policies.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)  Selection
      of Counsel.  In the event the Company shall be obligated hereunder to
      pay the Expenses of any Claim, the Company shall be entitled to assume the
      defense of such Claim with counsel approved by Indemnitee, which approval shall
      not be unreasonably withheld, upon the delivery to Indemnitee of written notice
      of its election so to do. After delivery of such notice, approval of such
      counsel by Indemnitee and the retention of such counsel by the Company, the
      Company will not be liable to Indemnitee under this Agreement for any fees
      of
      separate counsel subsequently incurred by Indemnitee with respect to the same
      Claim; provided that, (i) Indemnitee shall have the right to employ Indemnitee's
      counsel in any such Claim at Indemnitee's expense and (ii) if (A) the employment
      of counsel by Indemnitee has been previously authorized by the Company, (B)
      Indemnitee shall have reasonably concluded that there is a conflict of interest
      between the Company and Indemnitee in the conduct of any such defense, or (C)
      the Company shall not continue to retain such counsel to defend such Claim,
      then
      the fees and expenses of Indemnitee's counsel shall be at the expense of the
      Company. The Company shall have the right to conduct such defense as it sees
      fit
      in its sole discretion, including the right to settle any claim against
      Indemnitee without the consent of the Indemnitee.

    


    3.  Additional
      Indemnification Rights; Nonexclusivity.

    


    (a)  Scope.  The
      Company hereby agrees to indemnify Indemnitee to the fullest extent permitted
      by
      law, notwithstanding that such indemnification is not specifically authorized
      by
      the other provisions of this Agreement, the Company's Articles of Incorporation,
      as amended, the Company's Bylaws or by statute. In the event of any change
      after
      the date of this Agreement in any applicable law, statute or rule which expands
      the right of a Nevada corporation to indemnify a member of its Board of
      Directors or an officer, employee, agent or fiduciary, it is the intent of
      the
      parties hereto that Indemnitee shall enjoy by this Agreement the greater
      benefits afforded by such change. In the event of any change in any applicable
      law, statute or rule which narrows the right of a Nevada corporation to
      indemnify a member of its Board of Directors or an officer, employee, agent
      or
      fiduciary, such change, to the extent not otherwise required by such law,
      statute or rule to be applied to this Agreement, shall have no effect on this
      Agreement or the parties' rights and obligations hereunder except as set forth
      in Section 8(a) hereof.

    


    (b)  Nonexclusivity.  The
      indemnification provided by this Agreement shall be in addition to any rights
      to
      which Indemnitee may be entitled under the Company's Articles of Incorporation,
      as amended, its Bylaws, any agreement, any vote of stockholders or directors,
      the Nevada Revised Statutes, or otherwise. The indemnification provided under
      this Agreement shall continue as to Indemnitee for any action Indemnitee took
      or
      did not take while serving in an indemnified capacity even though Indemnitee
      may
      have ceased to serve in such capacity.

    


    4.  No
      Duplication of Payments.  The Company shall not be liable under this
      Agreement to make any payment in connection with any Claim made against
      Indemnitee to the extent Indemnitee has otherwise actually received payment
      (under any insurance policy, Article of Incorporation, as amended, Bylaw or
      otherwise) of the amounts otherwise indemnifiable hereunder.

    


    5.  Partial
      Indemnification.  If Indemnitee is entitled under any provision of
      this Agreement to indemnification by the Company for some or a portion of
      Expenses incurred in connection with any Claim, but not, however, for the total
      amount thereof, the Company shall nevertheless indemnify Indemnitee for the
      portion of such Expenses to which Indemnitee is entitled.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.  Mutual
      Acknowledgment.  Both the Company and Indemnitee acknowledge that in
      certain instances, Federal law or applicable public policy may prohibit the
      Company from indemnifying its directors, officers, employees, agents or
      fiduciaries under this Agreement or otherwise. Indemnitee understands and
      acknowledges that the Company has undertaken or may be required in the future
      to
      undertake with the Securities and Exchange Commission to submit the question
      of
      indemnification to a court in certain circumstances for a determination of
      the
      Company's right under public policy to indemnify Indemnitee.

    


    7.  Liability
      Insurance.  The Company shall, from time to time, make the good faith
      determination whether or not it is practicable for the Company to obtain and
      maintain a policy or policies of insurance with reputable insurance companies
      providing the officers and directors of the Company with coverage for losses
      from wrongful acts, or to ensure the Company's performance of its
      indemnification obligations under this Agreement. Among other considerations,
      the Company will weigh the costs of obtaining such insurance coverage against
      the protection afforded by such coverage. In all policies of directors' and
      officers' liability insurance, Indemnitee shall be named as an insured in such
      a
      manner as to provide Indemnitee the same rights and benefits as are accorded
      to
      the most favorably insured of the Company's directors, if Indemnitee is a
      director; of the Company's officers, if Indemnitee is not a director of the
      Company but is an officer; of the Company's key employees, if Indemnitee is
      not
      an officer or director but is a key employee; or of any combination of the
      foregoing in which Indemnitee serves, if Indemnity serves in more capacities
      than just a director, an officer or a key employee. Notwithstanding the
      foregoing, the Company shall have no obligation to obtain or maintain such
      insurance if the Company determines in good faith that such insurance is not
      reasonably available, if the premium costs for such insurance are
      disproportionate to the amount of coverage provided, if the coverage provided
      by
      such insurance is limited by exclusions so as to provide an insufficient
      benefit, or if Indemnitee is covered by similar insurance maintained by a
      subsidiary or parent of the Company.

    


    8.  Exceptions.  Any
      other provision herein to the contrary notwithstanding, the Company shall not
      be
      obligated pursuant to the terms of this Agreement:

    


    (a)  Excluded
      Action or Omissions.  To indemnify Indemnitee for Expenses resulting
      from acts, omissions or transactions for which Indemnitee is prohibited from
      receiving indemnification under this Agreement or applicable law;

    


    (b)  Claims
      Initiated by Indemnitee.  To indemnify or advance expenses to
      Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee
      and not by way of defense, except (i) with respect to actions or proceedings
      brought to establish or enforce a right to indemnification under this Agreement
      or any other agreement or insurance policy or under the Company's Articles
      of
      Incorporation, as amended, or Bylaws now or hereafter in effect relating to
      Claims for Indemnifiable Events, (ii) in specific cases if the Board of
      Directors has approved the initiation or bringing of such Claim, or (iii) as
      otherwise required under the Nevada Revised Statutes, regardless of whether
      Indemnitee ultimately is determined to be entitled to such indemnification,
      advance expense payment or insurance recovery, as the case may be;

    


    (c)  Lack
      of Good Faith.  To indemnify Indemnitee for any expenses incurred by
      Indemnitee with respect to any proceeding instituted by Indemnitee to enforce
      or
      interpret this Agreement, if a court of competent jurisdiction determines that
      each of the material assertions made by Indemnitee in such proceeding was not
      made in good faith or was frivolous; or

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)  Claims
      Under Section 16(b).  To indemnify Indemnitee for expenses and the
      payment of profits arising from the purchase and sale by Indemnitee of
      securities in violation of Section 16(b) of the Securities Exchange Act of
      1934,
      as amended, or any similar successor statute.

    


    9.  Period
      of Limitations.  No legal action shall be brought and no cause of
      action shall be asserted by or in the right of the Company against Indemnitee,
      Indemnitee's estate, spouse, heirs, executors or personal or legal
      representatives after the expiration of one (1) year from the date of accrual
      of
      such cause of action, and any claim or cause of action of the Company shall
      be
      extinguished and deemed released unless asserted by the timely filing of a
      legal
      action within such one-year period; provided, however, that if any shorter
      period of limitations is otherwise applicable to any such cause of action,
      such
      shorter period shall govern.

    


    10.  Construction
      of Certain Phrases.

    


    (a)  For
      purposes of this Agreement, references to the
"Company" shall
      include, in addition to the resulting corporation, any constituent corporation
      (including any constituent of a constituent) absorbed in a consolidation or
      merger which, if its separate existence had continued, would have had power
      and
      authority to indemnify its directors, officers, employees, agents or
      fiduciaries, so that if Indemnitee is or was a director, officer, employee,
      agent or fiduciary of such constituent corporation, or is or was serving at
      the
      request of such constituent corporation as a director, officer, employee, agent
      or fiduciary of another corporation, partnership, joint venture, employee
      benefit plan, trust or other enterprise, Indemnitee shall stand in the same
      position under the provisions of this Agreement with respect to the resulting
      or
      surviving corporation as Indemnitee would have with respect to such constituent
      corporation if its separate existence had continued.

    


    (b)  For
      purposes of this Agreement, references to "other
      enterprises" shall include employee benefit plans;
      references to "fines"
      shall include any excise taxes assessed on Indemnitee with respect to an
      employee benefit plan; and references to "serving at
      the request of the Company" shall include any
      service as a director, officer, employee, agent or fiduciary of the Company
      which imposes duties on, or involves services by, such director, officer,
      employee, agent or fiduciary with respect to an employee benefit plan, its
      participants or its beneficiaries; and if Indemnitee acted in good faith and
      in
      a manner Indemnitee reasonably believed to be in the interest of the
      participants and beneficiaries of an employee benefit plan, Indemnitee shall
      be
      deemed to have acted in a manner "not opposed to the
      best interests of the Company" as referred to in
      this Agreement.

    


    (c)  For
      purposes of this Agreement a "Change in
      Control" shall be deemed to have occurred if, on
      or after the date of this Agreement, (i) any
"person" (as such term
      is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
      as
      amended), other than a trustee or other fiduciary holding securities under
      an
      employee benefit plan of the Company acting in such capacity or a corporation
      owned directly or indirectly by the stockholders of the Company in substantially
      the same proportions as their ownership of stock of the Company, becomes the
      "beneficial owner" (as
      defined in Rule 13d-3 under said Act), directly or indirectly, of securities
      of
      the Company representing more than 50% of the total voting power represented
      by
      the Company's then outstanding Voting Securities (as defined in Section 10(f)
      hereof), (ii) during any period of two (2) consecutive years, individuals who
      at
      the beginning of such period constitute the Board of Directors of the Company
      and any new director whose election by the Board of Directors or nomination
      for
      election by the Company's stockholders was approved by a vote of at least two
      thirds (2/3) of the directors then still in office who either were directors
      at
      the beginning of the period or whose election or nomination for election was
      previously so approved, cease for any reason to constitute a majority thereof,
      or (iii) the stockholders of the Company approve a merger or consolidation
      of
      the Company with any other corporation other than a merger or consolidation
      which would result in the Voting Securities of the Company outstanding
      immediately prior thereto continuing to represent (either by remaining
      outstanding or by being converted into Voting Securities of the surviving
      entity) at least 80% of the total voting power represented by the Voting
      Securities of the Company or such surviving entity outstanding immediately
      after
      such merger or consolidation, or the stockholders of the Company approve a
      plan
      of complete liquidation of the Company or an agreement for the sale or
      disposition by the Company of (in one transaction or a series of related
      transactions) all or substantially all of the Company's assets.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)  For
      purposes of this Agreement, "Independent Legal
      Counsel" shall mean an attorney or firm of
      attorneys, selected in accordance with the provisions of Section 1(c) hereof,
      who shall not have otherwise performed services for the Company or Indemnitee
      within the last three (3) years (other than with respect to matters concerning
      the rights of Indemnitee under this Agreement, or of other indemnitees under
      similar indemnity agreements).

    


    (e)  For
      purposes of this Agreement, a "Reviewing
      Party" shall mean any appropriate person or body
      consisting of a member or members of the Company's Board of Directors or any
      other person or body appointed by the Board of Directors who is not a party
      to
      the particular Claim for which Indemnitee are seeking indemnification, or
      Independent Legal Counsel.

    


    (f)  For
      purposes of this Agreement, "Voting
      Securities" shall mean any securities of the
      Company that vote generally in the election of directors.

    


    11.  Counterparts.  This
      Agreement may be executed in one or more counterparts, each of which shall
      constitute an original.

    


    12.  Binding
      Effect; Successors and Assigns.  This Agreement shall be binding upon
      and inure to the benefit of and be enforceable by the parties hereto and their
      respective successors, assigns, including any direct or indirect successor
      by
      purchase, merger, consolidation or otherwise to all or substantially all of
      the
      business and/or assets of the Company, spouses, heirs, and personal and legal
      representatives.  The Company shall require and cause any successor
      (whether direct or indirect by purchase, merger, consolidation or otherwise)
      to
      all, substantially all, or a substantial part, of the business and/or assets
      of
      the Company, by written agreement in form and substance satisfactory to
      Indemnitee, expressly to assume and agree to perform this Agreement in the
      same
      manner and to the same extent that the Company would be required to perform
      if
      no such succession had taken place.  This Agreement shall continue in
      effect with respect to Claims relating to Indemnifiable Events regardless of
      whether Indemnitee continues to serve as a director, officer, employee, agent
      or
      fiduciary of the Company or of any other enterprise at the Company's
      request.

    


    13.  Attorneys'
      Fees.  In the event that any action is instituted by Indemnitee under
      this Agreement or under any liability insurance policies maintained by the
      Company to enforce or interpret any of the terms hereof or thereof, Indemnitee
      shall be entitled to be paid all Expenses incurred by Indemnitee with respect
      to
      such action, regardless of whether Indemnitee is ultimately successful in such
      action, and shall be entitled to the advancement of Expenses with respect to
      such action, unless, as a part of such action, a court of competent jurisdiction
      over such action determines that each of the material assertions made by
      Indemnitee as a basis for such action was not made in good faith or was
      frivolous.  In the event of an action instituted by or in the name of
      the Company under this Agreement to enforce or interpret any of the terms of
      this Agreement, Indemnitee shall be entitled to be paid all Expenses incurred
      by
      Indemnitee in defense of such action (including costs and expenses incurred
      with
      respect to Indemnitee's counterclaims and cross-claims made in such action),
      and
      shall be entitled to the advancement of Expenses with respect to such action,
      unless, as a part of such action, a court having jurisdiction over such action
      determines that each of Indemnitee's material defenses to such action was made
      in bad faith or was frivolous.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    14.  Notice.  All
      notices and other communications required or permitted hereunder shall be in
      writing, shall be effective when given, and shall in any event be deemed to
      be
      given (a) five (5) days after deposit with the U.S. Postal Service or other
      applicable postal service, if delivered by first class mail, postage prepaid,
      (b) upon delivery, if delivered by hand, (c) one (1) business day after the
      business day of deposit with Federal Express or similar overnight courier,
      freight prepaid, or (d) one (1) day after the business day of delivery by
      facsimile transmission, if delivered by facsimile transmission, with copy by
      first class mail, postage prepaid, to the parties and the following
      addresses:

    


    (i)
      if to
      the Company,
      to:                                                     Attention:
      Board of Directors

    Monarch
      Staffing, Inc.

                    30950
      Rancho Viejo Rd
      #120

    Address

              San
      Juan Capistrano, CA 
92675

    


    Address

    


    (ii)
      if to Indemnitee,
      to:                                                      Rodney
      McDermott

    


    


    


    Address

    


    


    Address

    


    or
      at
      such other address as such party may designate by ten (10) days' advance written
      notice to the other party hereto.

    


    15.  Consent
      to Jurisdiction.  The Company and Indemnitee each hereby irrevocably
      consent to the jurisdiction of the courts of the State of Nevada for all
      purposes in connection with any action or proceeding which arises out of or
      relates to this Agreement and agree that any action instituted under this
      Agreement shall be commenced, prosecuted and continued only in the courts of
      the
      State of Nevada, which shall be the exclusive and only proper forum for
      adjudicating such a claim.

    


    16.  Severability.  The
      provisions of this Agreement shall be severable in the event that any of the
      provisions hereof (including any provision within a single section, paragraph
      or
      sentence) are held by a court of competent jurisdiction to be invalid, void
      or
      otherwise unenforceable, and the remaining provisions shall remain enforceable
      to the fullest extent permitted by law. Furthermore, to the fullest extent
      possible, the provisions of this Agreement (including, without limitations,
      each
      portion of this Agreement containing any provision held to be invalid, void
      or
      otherwise unenforceable that is not itself invalid, void or unenforceable)
      shall
      be construed so as to give effect to the intent manifested by the provision
      held
      invalid, illegal or unenforceable.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    17.  Choice
      of Law.  This Agreement shall be governed by and its provisions
      construed and enforced in accordance with the laws of the State of Nevada,
      as
      applied to contracts between Nevada residents, entered into and to be performed
      entirely within the State of Nevada, without regard to the conflict of laws
      principles thereof.

    


    18.  Subrogation.  In
      the event of 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 documents required and shall do all acts that may be necessary
      to secure such rights and to enable the Company effectively to bring suit to
      enforce such rights.

    


    19.  Amendment
      and Termination.  No amendment, modification, termination or
      cancellation of this Agreement shall be effective unless it is in writing signed
      by both 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.

    


    20.  Integration
      and Entire Agreement.  This Agreement sets forth the entire
      understanding between the parties hereto and supersedes and merges all previous
      written and oral negotiations, commitments, understandings and agreements
      relating to the subject matter hereof between the parties hereto.

    


    21.  No
      Construction as Employment Agreement.  Nothing contained in this
      Agreement shall be construed as giving Indemnitee any right to be retained
      in
      the employ of the Company or any of its subsidiaries.

    


    22.  Faxed
      Signatures.  For purposes of this Agreement a faxed signature shall
      constitute an original signature.

    


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

    


    MONARCH
      STAFFING, INC.

    


    


    By:
      ____________________

    Name:   Keith
      C. Moore

    Title:     Director

    


    


    AGREED
      TO AND ACCEPTED BY:

    


    


    _______________________________

    Rodney
      McDermott