Document:

dynt_ex102.htm

EXHIBIT 10.2
  
 
  
 AGREEMENT REGARDING CONFIDENTIAL INFORMATION, 
 OWNERSHIP OF INVENTIONS, NON-COMPETITION, CUSTOMER 
 NON-SOLICITATION, AND EMPLOYEE NON-SOLICITATION COVENANTS, 
 AND ACKNOWLEDGMENT OF AT-WILL EMPLOYMENT
  
 This Agreement Regarding Confidential Information, Ownership of Inventions, Non-Competition, Customer Non-Solicitation, and Employee Non-Solicitation Covenants and Acknowledgment of At-Will Employment (“Agreement”) is made and entered into by Brian D. Baker (“Employee”) in favor of DYNATRONICS CORPORATION, a Utah corporation with its principal place of business at 1200 Trapp Road, Eagan, MN 55121 (the “Company”). The Company and Employee are sometimes referred to collectively as the “Parties,” and individually as a “Party.”
  
 RECITALS
  
 A. Company designs, manufactures, markets, and distributes advanced-technology medical devices, therapeutic and medical treatment tables, rehabilitation equipment, custom athletic training treatment tables and equipment, institutional cabinetry, orthopedic soft goods, as well as other specialty patient, rehabilitation and therapy products and supplies. 
  
 B.   Company markets and sells its products to physical therapists, chiropractors, athletic trainers, sports medicine practitioners, orthopedists, hospitals, clinics, and other medical professionals and institutions, and is a manufacturer and distributor of medical products and equipment throughout the United States and globally.
  
 C.   Employee is the Chief Operating Officer of the Company, having entered into an employment offer letter accepted and approved by the Board of Directors of the Company effective as of January 17, 2022 (the “Employment Letter”).
  
 D. In consideration of the Company’s employment and continued employment of Employee, the payment of salary and other compensation and benefits by the Company to Employee, which Employee acknowledges to be good and valuable consideration for his obligations hereunder, the Parties agree and covenant as follows:
  
 1. Definitions.
  
 a. “Confidential Information,” as used herein, means any present or future information belonging to the Company that pertains to its business, whether developed by Employee, other Company employees, or any of the Company’s customers, contractors or agents, that is confidential or proprietary in nature, and that is not generally known in the public domain. Confidential Information includes, without limitation, information regarding the Company’s finances, financial condition, operations, business plans, business opportunities, purchasing activities, suppliers or potential suppliers, costs of materials, pricing, margins, sales, markets, marketing strategies, plans and ideas, customers, customer lists and information derived therefrom, customer agreements, customer information and documents (including contract information, terms, and services), potential customers, employees, employee compensation, technology, specifications, features, technical data, research, methodologies, services, software in various stages of development (source code, object code, documentation, diagrams, and/or flow charts), developments, Inventions, processes, formulas, designs, drawings, Trade Secrets, Confidential Materials, Inventions, Employment Inventions, Intellectual Property, or any other confidential business information belonging to the Company that is disclosed to or obtained by Employee, directly or indirectly, whether in writing, orally, by observation or electronically (through email, computer disk, DVD, CD-ROM, or other electronic means). 
  
 	 
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 The Employee understands that the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise identified as confidential or proprietary, or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used. 
  
 The Employee understands and agrees that Confidential Information developed by him in the course of his employment by the Company shall be subject to the terms and conditions of this Agreement as if the Company furnished the same Confidential Information to the Employee in the first instance. Confidential Information shall not include information that is generally available to and known by the public, provided that such disclosure to the public is through no direct or indirect fault of the Employee or persons acting on the Employee’s behalf.
  
 b. “Confidential Materials,” as used herein, means any tangible medium containing Confidential Information, including but not limited to paper, electronic or magnetic media, prototypes, products, and other materials.
  
 c. “Employment Inventions,” as used herein, means any Invention or part thereof conceived, developed, reduced to practice, completed or created which is: (i) conceived, developed, reduced to practice, completed, or created by Employee (whether solely by Employee or jointly with others) within the scope of Employee’s employment with the Company; on the Company’s time; or with the aid, assistance, or use of any property, equipment, facilities, supplies, resources, personnel, or Intellectual Property of the Company; (ii) the result of any work, services, or duties performed or suggested by Employee for or on behalf of the Company; (iii) related to the industry or trade of the Company; or (iv) related to the current or demonstrably anticipated business, research, or development of the Company.
  
 d. “Intellectual Property,” as used herein, means any and all patents, copyrights, trademarks, service marks, Trade Secrets, know how, technology, ideas, or computer software belonging to the Company or relating to any Employment Invention.
  
 e. “Inventions,” as used herein, means any and all inventions, products, formulations, discoveries, concepts, ideas, developments, improvements, technology, know-how, products, devices, structures, equipment, processes, methods, techniques, formulas, Trade Secrets, texts, research, programs, software, computer programs, source codes, data, designs, works of authorship, and or other materials, whether or not published, patented, copyrighted, registered or suitable therefor, and all Intellectual Property Rights therein, to the extent they relate to the past, present, future, or anticipated business, research, development or trade of the Company.
  
 f. “Trade Secrets,” as used herein, means information, including a formula, pattern, compilation, program, device, method, technique, or process, that (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 
  
 	 
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 2. Covenants of Confidentiality, Non-Disclosure and Authorized Use of Confidential Information. 
  
 a. In connection with Employee’s employment with the Company, Employee will receive or have access to Confidential Information, including Trade Secrets, Confidential Materials, Inventions, Employment Inventions, and/or Intellectual Property, as those terms are defined in this Agreement. Employee acknowledges and agrees that all Confidential Information shall remain the sole property of the Company. Employee further acknowledges and agrees that all Confidential Information belonging to the Company is valuable, special and unique to its business, that the Company’s business depends upon such Confidential Information, and that the Company wishes to protect such Confidential Information by keeping it confidential for the use and benefit of the Company. 
  
 b. Employee agrees that the Company’s Confidential Information will be kept confidential and will not, without the prior written consent of the Company, be disclosed by Employee (whether directly or through some other person or entity), in whole or in part, and will not be used by Employee, directly or indirectly, for any purpose other than as expressly allowed by the Company. In addition, Employee shall not use any Confidential Information for Employee’s direct or indirect benefit or for the direct or indirect benefit of any person or entity other than the Company. Employee shall not aid, encourage, or allow any other person or entity to use or disclose the Confidential Information of the Company without authorization. 
  
 c. Employee further agrees to use reasonable and diligent efforts to protect the confidentiality of the Company’s Confidential Information. Employee specifically agrees: (i) to use the Company’s Confidential Information solely to fulfill the duties of Employee’s employment with the Company, and not otherwise to use such information for Employee’s benefit or the benefit of others; (ii) not to use, view, or access Confidential Information where it can be seen or viewed by unauthorized persons, and not to leave such information or materials where they can be seen or accessed by unauthorized persons; (iii) to notify the Company if Employee becomes aware of any loss, misuse, wrongful disclosure, or other unauthorized access of any Confidential Information by any person; and (iv) to take all other reasonable steps necessary, or reasonably requested by the Company, to safeguard the Confidential Information from unauthorized disclosure or use.
  
 d. Employee’s duties of non-disclosure and confidentiality under this Agreement govern Employee both during Employee’s employment with the Company and following the termination of the employment relationship. All obligations of confidentiality shall continue for as long as is permitted by law. Employee authorizes the Company to notify others, including but not limited to the Company’s customers or suppliers or Employee’s future employers, of the terms of this Agreement and Employee’s covenants and obligations hereunder.
  
 e. Nothing in this Agreement prohibits or restricts Employee (or Employee’s attorney) from filing a charge or complaint with the Securities and Exchange Commission (“SEC”) or any other federal or state regulatory authority (each a “Government Agency” and collectively, “Government Agencies”). Employee further understands that this Agreement does not limit Employee’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency or in connection with reporting a possible securities law violation without notice to the Company. This Agreement does not limit Employee’s right to receive an award for information provided to any Government Agency or the SEC.
  
 	 
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 f. Notice of Immunity Under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016.
  
 (i)   Employee will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a Trade Secret that is made: (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law; or (B) in a complaint or other document that is filed under seal in a lawsuit or other proceeding.
  
 (ii) If Employee files a lawsuit against the Company for alleged retaliation by the Company for Employee reporting a suspected violation of law, Employee may disclose the Company’s Trade Secrets to Employee’s attorney and use the Trade Secret information in the court proceeding if Employee (A) files any document containing the Trade Secret under seal; and (B) does not disclose the Trade Secret, except pursuant to court order.
  
 3. Covenant to Maintain Confidentiality of Third Party Trade Secrets.
  
 a. Employee shall not disclose to the Company any Trade Secrets or confidential information of any of Employee’s previous employers or of any other person or entity to whom Employee owes a duty of confidentiality. 
  
 b. Employee may be exposed to Trade Secrets or confidential information of third parties with whom the Company has a business relationship, such as its customers or suppliers, during the course of Employee’s employment with the Company. Employee agrees to treat third party Trade Secrets and confidential information in the same manner as Employee has agreed to treat the Company’s Confidential Information under this Agreement.
  
 4. Covenant of Ownership and Disclosure of Developments.
  
 a. Disclosure. Employee agrees to promptly and fully disclose to the Company the existence, use, and/or manner of operation of any and all Employment Inventions as defined in Section 1 of this Agreement. 
  
 b. Work Product. The Employee acknowledges and agrees that all writings, works of authorship, technology, Inventions, discoveries, ideas and other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived, or reduced to practice by the Employee individually or jointly with others during the period of his employment by the Company and relating in any way to the business or contemplated business, research, or development of the Company (regardless of when or where the Work Product is prepared or whose equipment or other resources is used in preparing the same) and all printed, physical, and electronic copies, all improvements, rights, and claims related to the foregoing, and other tangible embodiments thereof (collectively, “Work Product”), as well as any and all rights in and to copyrights, Trade Secrets, trademarks (and related goodwill), mask works, patents, and other Intellectual Property Rights therein arising in any jurisdiction throughout the world and all related rights of priority under international conventions with respect thereto, including all pending and future applications and registrations therefor, and continuations, divisions, continuations-in-part, reissues, extensions, and renewals thereof (collectively, “Intellectual Property Rights”), shall be the sole and exclusive property of the Company.
  
 	 
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 c. For purposes of this Agreement, Work Product includes, but is not limited to, Company information, including plans, publications, research, strategies, techniques, agreements, documents, contracts, terms of agreements, negotiations, know-how, computer programs, computer applications, software design, web design, work in process, databases, manuals, results, developments, reports, graphics, drawings, sketches, market studies, formulae, notes, communications, algorithms, product plans, product designs, styles, models, audiovisual programs, Inventions, unpublished patent applications, original works of authorship, discoveries, experimental processes, experimental results, specifications, customer information, customer lists, manufacturing information, marketing information, advertising information, and sales information.
  
 d. Work Made for Hire; Assignment. The Employee acknowledges that, by reason of being employed by the Company at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is “work made for hire” as defined in the Copyright Act of 1976 (17 U.S.C. § 101), and such copyrights are therefore owned by the Company. To the extent that the foregoing does not apply, the Employee hereby irrevocably assigns to the Company, for no additional consideration, the Employee’s entire right, title, and interest in and to all Work Product and Intellectual Property Rights therein, including the right to sue, counterclaim, and recover for all past, present, and future infringement, misappropriation, or dilution thereof, and all rights corresponding thereto throughout the world. Nothing contained in this Agreement shall be construed to reduce or limit the Company’s rights, title, or interest in any Work Product or Intellectual Property Rights so as to be less in any respect than that the Company would have had in the absence of this Agreement. Employee agrees to take all actions reasonably requested by the Company, both during and after the term of Employee’s employment with the Company, to assign to the Company, and to establish, perfect, exercise or protect the Company’s rights in any Employment Inventions or title thereto, including, without limitation, assisting in obtaining or registering copyrights, patents, trademarks or similar Intellectual Property Rights and executing assignments to the Company. 
  
 e. Further Assurances; Power of Attorney. During and after his employment, the Employee agrees to reasonably cooperate with the Company to (i) apply for, obtain, perfect, and transfer to the Company the Work Product and Intellectual Property Rights in the Work Product in any jurisdiction in the world; and (ii) maintain, protect, and enforce the same, including, without limitation, executing and delivering to the Company any and all applications, oaths, declarations, affidavits, waivers, assignments, and other documents and instruments as shall be requested by the Company. The Employee hereby irrevocably grants the Company power of attorney to execute and deliver any such documents on the Employee’s behalf in his name and to do all other lawfully permitted acts to transfer the Work Product to the Company and further the transfer, issuance, prosecution, and maintenance of all Intellectual Property Rights therein, to the full extent permitted by law, if the Employee does not promptly cooperate with the Company’s request (without limiting the rights the Company shall have in such circumstances by operation of law). The power of attorney is coupled with an interest and shall not be impacted by the Employee’s subsequent incapacity. 
  
 	 
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 f. Moral Rights. To the extent any copyrights are assigned under this Agreement, the Employee hereby irrevocably waives, to the extent permitted by applicable law, any and all claims the Employee may now or hereafter have in any jurisdiction to all rights of paternity, integrity, disclosure, and withdrawal and any other rights that may be known as “moral rights” with respect to all Work Product and all Intellectual Property Rights therein.
  
 g. No License. The Employee understands that this Agreement does not, and shall not be construed to, grant the Employee any license or right of any nature with respect to any Work Product or Intellectual Property Rights or any Confidential Information, materials, software, or other tools made available to him by the Company.
  
 5. Return of Information; Exit Obligations. Upon (a) voluntary or involuntary termination of the Employee’s employment or (b) the Company’s request at any time during Employee’s employment, the Employee shall (i) provide or return to the Company any and all Company property, including keys, key cards, access cards, identification cards, security devices, employer credit cards, network access devices, computers, cell phones, smartphones, PDAs, pagers, fax machines, equipment, speakers, webcams, manuals, reports, files, books, compilations, Work Product, email messages, recordings, tapes, disks, thumb drives, or other removable information storage devices, hard drives, negatives, and data and all Company documents and materials belonging to the Company and stored in any fashion, including but not limited to those that constitute or contain any Confidential Information or Work Product, that are in the possession or control of the Employee, whether they were provided to the Employee by the Company or any of its business associates or created by the Employee in connection with his employment by the Company; and (ii) delete or destroy all copies of any such documents and materials not returned to the Company that remain in the Employee’s possession or control, including those stored on any non-Company devices, networks, storage locations, and media in the Employee’s possession or control.
  
 6. Publicity. Employee hereby consents to any and all uses and displays, by the Company and its agents, of the Employee’s name, voice, likeness, image, appearance, and biographical information in, on or in connection with any pictures, photographs, audio, and video recordings, digital images, websites, television programs, and advertising, other advertising, sales, and marketing brochures, books, magazines, other publications, CDs, DVDs, tapes, and all other printed and electronic forms and media throughout the world, at any time during or after the period of his employment by the Company, for all legitimate business purposes of the Company (“Permitted Uses”). Employee hereby forever releases the Company and its directors, officers, employees, and agents from any and all claims, actions, damages, losses, costs, expenses, and liability of any kind, arising under any legal or equitable theory whatsoever at any time during or after the period of his employment by the Company, in connection with any Permitted Use.
  
 7. Requests for Clarification. In the event Employee is uncertain as to the meaning of any provision of this Agreement or its application to any particular information, document, item or activity, Employee will inquire in writing to the Company’s human resources manager, specifying any areas of uncertainty. The Company will respond in writing within a reasonable time and will endeavor to clarify any areas of uncertainty, including such things as whether it considers particular information or documents to be Confidential Information, and will endeavor to explain any provisions of this Agreement.
  
 	 
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 8. Notice of Compelled Disclosure. In the event that Employee becomes legally compelled (by subpoena, discovery request, civil investigative demand, or other judicial or compulsory process) to disclose any of the Company’s Confidential Information, Employee will provide the Company with prompt written notice so that it may seek a protective order or other appropriate remedy to protect and preserve the confidentiality of such Confidential Information and/or waive compliance with the provisions of this Agreement. In the event that such a protective order or other remedy is not obtained, or compliance with the provisions of this Agreement is waived, Employee shall disclose or furnish only that portion of the Confidential Information that Employee is legally required or authorized to produce and will exercise Employee’s best efforts to obtain reliable assurance that the Confidential Information will be kept confidential to the greatest extent possible. 
  
 9. Non-Compete Covenant. In order to preserve the confidentiality of the Company’s Confidential Information, and to protect the goodwill and other legitimate business interests of the Company, Employee agrees that, during Employee’s employment with the Company and during the twelve-month period following the termination of Employee’s employment with the Company for any reason or no reason by Employee or the Company (“Non-Competition Period”), Employee shall not directly or indirectly engage in competition with the Company, and/or provide other products or services that are competitive with the products and/or services provided by the Company (collectively, a “Competing Business”), within the “Restricted Territory” defined below, without the express written consent of the Company. Employee further agrees that, during the Non-Competition Period, Employee will not directly or indirectly assist, perform services for, contract with, be employed by, establish or operate, or have an equity interest in any person or entity, whether as an employee, officer, director, owner, member, manager, agent, consultant, independent contractor, or otherwise, that engages in a Competing Business within the Restricted Territory, without the express written consent of the Company. Employee agrees that the Non-Competition Period set forth herein shall be extended for a period equal to the duration of any breach of this covenant by Employee. For purposes of this Agreement, the term “Restricted Territory” means (a) each and every country, province, state, city or other political subdivision of the United States and Canada; (b) each and every country, province, state, city or other political subdivision of the European Union; and (c) each and every country, province, state, city, or other political subdivision of the world in which the Company or any of its subsidiaries or affiliates is currently engaged in, currently plans to engage in, or engages in business in during the Non-Competition Period.
  
 10. Non-Solicitation of Customers. Employee understands and acknowledges that: (a) the Company’s relationships with its customers are of great competitive value; (b) the Company has invested and continues to invest substantial resources in developing and preserving its customer relationships and goodwill; and (c) the loss of any such customer relationship or goodwill will cause significant and irreparable harm to the Company. Employee promises, covenants and agrees that during Employee’s employment with the Company and for a period of one (1) year following the termination of Employee’s employment with the Company for any reason or no reason by Employee or the Company (the “Customer Non-Solicitation Restricted Period”), Employee shall not personally or on behalf of any other person or entity, or through any other person or entity, directly or indirectly, contact, call on, solicit business from, sell to, or do business with any customer of the Company who did business with the Company during the term of Employee’s employment with the Company, in connection with providing products or services of, or entering into, any Competing Business. Employee agrees that the Customer Non-Solicitation Restricted Period set forth herein shall be extended for a period equal to the duration of any breach of this covenant by Employee.
  
 	 
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 11. Non-Solicitation of Employees. Employee promises, covenants and agrees that during Employee’s employment with the Company and for a period of one (1) year following the termination of Employee’s employment with the Company for any reason or no reason by Employee or the Company (the “Employee Non-Solicitation Restricted Period”), Employee shall not personally or on behalf of any other person or entity, or through any other person or entity, directly or indirectly (a) recruit, solicit or encourage any person who is employed by the Company or was employed by the Company within six (6) months of the termination of Employee’s employment with the Company (“Restricted Employee”) to become an employee or independent contractor of, or perform other work for, Employee, any other employer of Employee or any affiliated company, or any other person or entity; (b) employ or hire, offer to employ or hire, or facilitate or assist in the employing or hiring of, any Restricted Employee, to work for Employee, any other employer of Employee or any affiliated company, or any other person or entity; (c) ask, invite, induce or encourage any Restricted Employee to terminate his or her employment relationship with the Company or seek employment with another person or entity; or (d) otherwise interfere with or disrupt the employment or business relationship between the Company and any of its employees. Employee agrees that the Employee Non-Solicitation Restricted Period set forth herein shall be extended for a period equal to the duration of any breach of this covenant by Employee.
  
 12. Remedies for Breach of the Covenants. Employee recognizes that the Company’s business interest in maintaining the confidentiality of its Confidential Information, its rights in its Employee Inventions, its relationships and goodwill with its customers, and the stability of its work force, is so great that the Company shall not have an adequate remedy at law for any breach or threatened breach of the covenants contained in this Agreement by Employee and shall suffer irreparable harm from any such breach or threatened breach. Employee agrees that, in the event of a breach or threatened breach by Employee of any of the covenants contained in this Agreement, a court of competent jurisdiction may issue a restraining order or an injunction against Employee, restraining or enjoining Employee from engaging in conduct or actions that violate the said covenants. In addition, the Company shall be entitled to any and all other remedies available to it at law or in equity, and no action by the Company in pursuing a given remedy shall constitute an election to forego other remedies.
  
 13. Non-Disparagement. Employee agrees and covenants that he will not at any time make, publish, or communicate to any person or entity or in any public forum any derogatory, defamatory or disparaging remarks, comments, or statements concerning the Company’s products or services, its existing and prospective customers, suppliers, investors, or other associated third parties, or any of the Company’s current or former employees or officers.
  
 14. Reasonableness of Covenants. Employee understands that the restrictions contained in the covenants set forth herein have been imposed only to the extent necessary to protect the Company from the loss of goodwill, from unfair competition, and to preserve the Company’s Confidential Information, including its Trade Secrets. Each Party expressly acknowledges and agrees that the respective covenants and agreements contained herein are reasonable as to both scope and time, as applicable. 
  
 	 
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 15. Judicial Modification. Should any of the foregoing restrictive covenants be determined by a court of competent jurisdiction to be overbroad, unreasonable or unenforceable as drafted, the court shall be authorized to modify or “blue pencil” the overbroad or unenforceable provision and limit the restrictions in such provision so that the provision is not overbroad or unreasonable.
  
 16. At-Will Employment. Employee’s employment with the Company is at-will, and may be terminated by Employee or by the Company at any time, with or without cause and with or without advance notice. Nothing in this Agreement shall be construed to in any way terminate, supersede, undermine, or otherwise modify the at-will status of the employment relationship between the Company and the Employee, pursuant to which either the Company or the Employee may terminate the employment relationship at any time, with or without cause, with or without notice.
  
 17. General Provisions.
  
 a. Attorneys’ Fees and Costs. In the event that either Party commences an action to enforce the terms of this Agreement, or to seek damages or injunctive relief for the alleged breach thereof, the prevailing Party shall be entitled to collect from the non-prevailing Party the prevailing Party’s reasonable attorneys’ fees and costs incurred therein.
  
 b. Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior oral and written negotiations, communications, discussions and agreements pertaining to its subject matter. The Parties expressly acknowledge and agree, however, that no provision in this Agreement is intended to, or shall be construed to, modify, supersede, void, or otherwise alter the obligations of the Parties under the Employment Agreement or any of the agreements and addenda referenced therein and forming a part thereof.
  
 c. Amendments. No amendment or modification of any provision of this Agreement will be effective unless it is agreed to in a written document that expressly amends this Agreement and is signed by all Parties.
  
 d. Waiver. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the waiving Party. The failure of either Party to require the performance of any term or obligation of this Agreement, or the waiver by either Party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
  
 	 
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 e. Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable as written, such provision shall be enforced to the fullest extent permitted by applicable law. Any such modification of the unenforceable provision shall become a part hereof and treated as though originally set forth in this Agreement. The Parties further agree that any such court is expressly authorized to modify any such unenforceable provision of this Agreement in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, by adding additional language to this Agreement, or by making such other modifications as it deems warranted to carry out the intent and agreement of the Parties as embodied herein to the maximum extent permitted by law. The Parties expressly agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had not been set forth herein. 
   
 f. Governing Law, Jurisdiction and Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to any conflicts of law provisions. Any action or proceeding by either Party to enforce this Agreement or to recover damages or obtain injunctive relief or any other remedy shall be brought only in any state or federal court located in the State of New York, County of New York (Manhattan). The Parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive (a) any objection to the laying of venue with respect to any such action, proceeding, or litigation arising out of or in connection with this Agreement in any of the aforesaid courts, and (b) any right to stay or dismiss any such action, proceeding or litigation brought in any of the aforesaid courts on the ground of inconvenient forum.
  
 g. Successors and Assigns.
  
 (i)   Assignment by the Company. The Company may assign this Agreement to any subsidiary or corporate affiliate, or to any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and its permitted successors and assigns.
  
 (ii) No Assignment by the Employee. Employee may not assign this Agreement or any part hereof. Any purported assignment by Employee shall be null and void from the initial date of the purported assignment. 
  
 h. Waiver of Jury Trial. To the fullest extent permitted by applicable law, each Party hereby waives its right to a trial by jury with respect to any claim or cause of action based upon or arising out of or related to this Agreement, in any action, proceeding or other litigation of any type brought by any Party against the other Party, whether with respect to contract claims, tort claims, statutory claims, or otherwise. Each Party agrees that any such claim or cause of action shall be tried by the court without a jury. Without limiting the foregoing, the Parties further agree that their respective right to a trial by jury is waived by operation of this paragraph as to any action, counterclaim or other proceeding which seeks, in whole or in part, to challenge the validity or enforceability of this Agreement, or any provision hereof. This waiver shall apply to any subsequent amendments, renewals, supplements, or modifications to this Agreement.
  
 	 
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 i. Headings. The section and paragraph headings used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement. 
  
 j. Counterparts. This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more than one Party, but all such counterparts taken together will constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
  
 [Signatures on following page.]
  
 	 
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 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth below. 
  
 	EMPLOYEE: 	 	THE COMPANY:	 
	  
	  
	  
	  
	  

	 BRIAN D. BAKER 
	  
	 DYNATRONICS CORPORATION
	  

	  
	  
	  
	  
	  

	/s/ Brian D. Baker 	 	By:	/s/ John A. Krier	 
	 Brian D. Baker 
	 	 		 
	  
	  
	  
	  

		 	Its: President and Chief Executive Officer	 
	 DATED: January 17, 2022   
	  
	  
	  
	  

	  
	  
	 John A. Krier 
	  

	  
	  
	  
	  

	  
	  
	 DATED: January 17, 2022
	  

  
 Signature Page to Confidentiality and Non-compete Agreement
 DYNATRONICS CORPORATION
  
 	 
	12dynt_ex103.htm

EXHIBIT 10.3 
 INDEMNIFICATION AGREEMENT
  
 This Indemnification Agreement (“Agreement”), dated as of January 17, 2022, is entered into by and between DYNATRONICS CORPORATION, a Utah corporation (the “Company”) and Brian D. Baker (the “Indemnitee”). Company and Indemnitee are sometimes referred to as a “Party” or collectively as the “Parties” in this Agreement.
  
 RECITALS:
  
 WHEREAS, Indemnitee is the Chief Operating Officer of the Company;
  
 WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against executive officers of public companies; 
  
 WHEREAS, the Board is aware that because of the increased exposure to litigation and the costs associated with such litigation, talented and experienced Persons are increasingly reluctant to serve or continue serving as officers corporations unless they are protected by comprehensive liability insurance and indemnification; 
  
 WHEREAS, the Board has concluded that, in order to retain and attract talented and experienced individuals to serve as officers of the Company and its subsidiaries and to encourage such individuals to take the business risks necessary for the success of the Company and its subsidiaries, the Company should contractually indemnify its officers, and the officers of its subsidiaries, in connection with claims against such officers relating to their services to the Company and its subsidiaries and has further concluded that the failure to provide such contractual indemnification could be detrimental to the Company, its subsidiaries and shareholders and
  
 WHEREAS, Indemnitee’s willingness to serve as an officer of the Company is predicated, in substantial part, upon the Company’s willingness to indemnify Indemnitee in accordance with the principles reflected above, to the fullest extent permitted by the laws of the State of Utah, and upon the other undertakings set forth in this Agreement.
  
 AGREEMENT:
  
 NOW, THEREFORE, in consideration of the mutual promises made in this Agreement and for other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound hereby, agree as follows:
  
 1. Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
  
 (a) “Agent” with respect to the Company means any person who is or was a director, officer, employee or other agent of the Company or a subsidiary; or is or was serving at the request of, for the convenience of, or to represent the interests of, the Company or a subsidiary as a director, officer, employee or Agent of another corporation, partnership, joint venture, trust or other enterprise (including without limitation any employee benefit plan whether or not subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)); or was a director, officer, employee or Agent of a predecessor corporation (or other predecessor entity or enterprise) of the Company or a subsidiary, or was a director, officer, employee or Agent of another corporation, partnership, joint venture, trust or other enterprise (including without limitation any employee benefit plan whether or not subject to the ERISA) at the request of, for the convenience of, or to represent the interests of such predecessor.
  
 	 
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 (b) “Beneficial Owner” has the meaning given to the term “beneficial owner” in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
  
 (c) “Change in Control” means the occurrence after the date of this Agreement of any of the following events: (i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 30% or more of the Company’s then outstanding Voting Securities; (ii) the consummation of a reorganization, merger or consolidation, unless immediately following such reorganization, merger or consolidation, all of the Beneficial Owners of the Voting Securities of the Company immediately prior to such transaction beneficially own, directly or indirectly, more than 60% of the combined voting power of the outstanding Voting Securities of the entity resulting from such transaction; (iii) during any period of two (2) consecutive years, not including any period prior to the execution of this Agreement, individuals who at the beginning of such period constituted the Board (including for this purpose any new directors whose election by the Board or nomination for election by the Company’s shareholders 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 at least a majority of the Board; or (iv) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets. Notwithstanding anything in this Agreement, however, it is agreed that a change in ownership of Prettybrook Partners, LLC or of Provco Partners I, LP, shall not be deemed a Change in Control for purposes of this Agreement.
  
 (d) “Company” shall include, in addition to Dynatronics Corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which Dynatronics Corporation (or any of its wholly- owned subsidiaries) is a party 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, manager, employee, Agent or fiduciary of another corporation, partnership, limited liability company, 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.
  
 (e) “Expense Advance” means any payment of Expenses advanced to Indemnitee by the Company pursuant to Section 2 or Section 3 hereof.
  
 (f)   “Expenses” means any and all expenses, including attorneys’ and experts’ fees, court costs, transcript costs, travel expenses, duplicating, printing and binding costs, telephone charges, and all other costs and expenses incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Proceeding. Expenses also shall include (i) expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 4 only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee. 
  
 	 
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 (g) “Indemnifiable Event” means any event or occurrence, whether occurring before, on or after the date of this Agreement, related to the fact that Indemnitee is or was a director, officer, employee or Agent 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, member, manager, trustee or Agent of any other corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise or by reason of an action or inaction by Indemnitee in any such capacity (whether or not serving in such capacity at the time any Loss is incurred for which indemnification can be provided under this Agreement).
  
 (h) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently performs, nor in the past three (3) years has performed, services for either: (i) the Company or Indemnitee (other than in connection with matters concerning Indemnitee under this Agreement or of other indemnitees under similar agreements) or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
  
 (i)   “Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), ERISA excise taxes, amounts paid or payable in settlement, including any interest, assessments, and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Proceeding.
  
 (j)   Other References. 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.
  
 (k) “Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity and includes the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act. 
  
 (l)   “Proceeding” means any threatened, pending, or completed claim, suit, action, proceeding or alternative dispute resolution mechanism, or any hearing or investigation, whether civil, criminal, administrative, investigative or otherwise, including without limitation any situation which Indemnitee believes in good faith might lead to the institution of any such proceeding.
  
 (m) “Reviewing Party” shall mean, subject to the provisions of Section 2(e), any person or body appointed by the Board in accordance with applicable law to review the Company’s obligations hereunder and under applicable law, which may include a member or members of the Board, Independent Counsel or any other person or body not a party to the particular Proceeding for which Indemnitee is seeking indemnification, as set forth in Section 2(g). 
  
 (n) “Utah Court” shall have the meaning ascribed to it in Section 8(e) below. 
  
 (o) “Voting Securities” means any securities of the Company that vote generally in the election of directors. 
  
 	 
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 2. Indemnification. 
  
 (a) Third Party Proceedings. The Company shall defend, indemnify and hold harmless Indemnitee to the fullest extent permitted by the Utah Revised Business Corporation Act (the “Act”) if Indemnitee is or was a party or is threatened to be made a party to any Proceeding (other than an action by or in the right of the Company) by reason of the fact that Indemnitee is or was or is claimed to be an Agent of the Company or any subsidiary of the Company, by reason of any action or inaction on the part of Indemnitee while an Agent of the Company, against all Expenses and liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld)) actually and reasonably incurred by Indemnitee in connection with such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.
  
 (b) Proceedings By or in the Right of the Company. The Company shall defend, indemnify and hold harmless Indemnitee to the fullest extent permitted by the Act if Indemnitee was or is a party or is threatened to be made a party to any Proceeding by or in the right of the Company or any subsidiary of the Company to procure a judgment in its favor by reason of the fact that Indemnitee is or was or is claimed to be an Agent of the Company, all Expenses and liabilities of any type whatsoever (including, but not limited to, legal fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld)), in each case to the extent actually and reasonably incurred by Indemnitee in connection with the defense or settlement of such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and its stockholders, except that no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudicated by court order or judgment to be liable to the Company in the performance of Indemnitee’s duty to the Company and its stockholders unless and only to the extent that the court in which such action or Proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses, which such court shall deem proper.
  
 (c) Actions Where Indemnitee Is Deceased. If Indemnitee was or is a party, or is threatened to be made a party, to any Proceeding by reason of the fact that Indemnitee is or was an Agent of the Company, or by reason of anything done or not done by Indemnitee in any such capacity, and prior to, during the pendency of, or after completion of, such Proceeding, Indemnitee shall die, then the Company shall defend, indemnify and hold harmless the estate, heirs and legatees of Indemnitee against any and all Expenses and liabilities reasonably incurred by or for such persons or entities in connection with the investigation, defense, settlement or appeal of such Proceeding on the same basis as provided for Indemnitee in Section 2(a) and Section 2(b) above.
  
 (d) Extent of Insurance. The Expenses and liabilities covered hereby shall be net of any payments made by D&O Insurance (as defined in Section 14) carriers or others.
  
 	 
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 (e) Review of Indemnification Obligations. Notwithstanding the foregoing, in the event any Reviewing Party shall have determined (in a written opinion, in any case in which Independent Counsel is the Reviewing Party) that Indemnitee is not entitled to be indemnified hereunder under applicable law: (i) the Company shall have no further obligation under Section 2(a) or Section 2(b) to make any payments to Indemnitee not made prior to such determination by such Reviewing Party; and (ii) the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all Expenses theretofore paid to Indemnitee to which Indemnitee is not entitled hereunder under applicable law; provided, however, that if Indemnitee has commenced or thereafter commences legal Proceedings in a court of competent jurisdiction to secure a determination that Indemnitee is entitled to be indemnified hereunder under applicable law, any determination made by any Reviewing Party that Indemnitee is not entitled to be indemnified hereunder under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expenses theretofore paid in indemnifying Indemnitee until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). Indemnitee’s obligation to reimburse the Company for any Expenses shall be unsecured and no interest shall be charged thereon.
  
 (f)   Indemnitee Rights on Unfavorable Determination; Binding Effect. If any Reviewing Party determines that Indemnitee substantively is not entitled to be indemnified hereunder 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 such 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. Absent such litigation, any determination by any Reviewing Party shall be conclusive and binding on the Company and Indemnitee.
  
 (g) Selection of Reviewing Party; Change in Control. A determination, if required by applicable law, with respect to Indemnitee’s entitlement to indemnification shall be made in accordance with the provisions of this Section 2(g). If there has not been a Change in Control, a Reviewing Party shall be selected by the Board, 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 Board who were directors immediately prior to such Change in Control), any Reviewing Party with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnification of Expenses under this Agreement or any other agreement or under the Company’s Articles of Incorporation or Bylaws (collectively, the “Constituent Documents”) as now or hereafter in effect, or under any other applicable law, if desired by Indemnitee, shall be Independent Counsel 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 entitled to be indemnified hereunder under applicable law and the Company agrees to abide by such opinion. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to indemnify fully 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. Notwithstanding any other provision of this Agreement, the Company shall not be required to pay Expenses of more than one Independent Counsel in connection with all matters concerning a single Indemnitee, and such Independent Counsel shall be the Independent Counsel for any or all other Indemnitees unless: (i) the employment of separate counsel by one (1) or more Indemnitees has been previously authorized by the Board in writing; or (ii) an Indemnitee shall have provided to the Company a written statement that such Indemnitee has reasonably concluded that there may be a conflict of interest between such Indemnitee and the other Indemnitees with respect to the matters arising under this Agreement.
  
 	 
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 3. Advancement of Expenses. The Company shall advance, prior to the final disposition of any Proceeding by final adjudication to which there are no further rights of appeal, any and all Expenses actually and reasonably paid or incurred by Indemnitee in connection with any Proceeding arising out of an Indemnifiable Event. Indemnitee’s right to such advancement is not subject to the satisfaction of any standard of conduct. Without limiting the generality or effect of the foregoing, within thirty (30) days after any request by Indemnitee, the Company shall, in accordance with such request, (a) pay such Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses. In connection with any request for Expense Advances, Indemnitee shall not be required to provide any documentation or information to the extent that the provision thereof would undermine or otherwise jeopardize attorney-client privilege. Execution and delivery to the Company of this Agreement by Indemnitee constitutes an undertaking by the Indemnitee to repay any amounts paid, advanced or reimbursed by the Company pursuant to this Section 3 in respect of Expenses relating to, arising out of or resulting from any Proceeding in respect of which it shall be determined, pursuant to Section 8, following the final disposition of such Proceeding, that Indemnitee is not entitled to indemnification hereunder. No other form of undertaking shall be required other than the execution of this Agreement. Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon.
  
 4. Indemnification for Expenses in Enforcing Rights. To the full extent allowable under applicable law, the Company shall also indemnify against, and, if requested by Indemnitee, shall advance to Indemnitee subject to and in accordance with Section 2, any Expenses actually and reasonably paid or incurred by Indemnitee in connection with any action or Proceeding by Indemnitee for (a) indemnification or reimbursement or advance payment of Expenses by the Company under any provision of this Agreement, or under any other agreement or provision of the Constituent Documents now or hereafter in effect relating to Proceedings relating to Indemnifiable Events, and/or (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company. However, in the event that Indemnitee is ultimately determined not to be entitled to such indemnification or insurance recovery, as the case may be, then all amounts advanced under this Section 4 shall be repaid. Indemnitee shall be required to reimburse the Company in the event that a final judicial determination is made that such action brought by Indemnitee was frivolous or not made in good faith. 
  
 5. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of any Losses in respect of a Proceeding related to an Indemnifiable Event but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
  
 6. Notification and Defense.
  
 (a) Notification. Indemnitee shall notify the Company in writing as soon as practicable of any Proceeding which could relate to an Indemnifiable Event or for which Indemnitee could seek Expense Advances, including a brief description (based upon information then available to Indemnitee) of the nature of, and the facts underlying, such Proceeding. The failure by Indemnitee to timely notify the Company hereunder shall not relieve the Company from any liability hereunder unless such failure materially prejudices the Company. 
  
 (b) Notice to Insurers. If, at the time of the receipt of a notice of a claim pursuant to Section 6(a) hereof, the Company has D&O Insurance (as defined in Section 14 below) in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
  
 	 
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 (c) Defense of Proceedings. The Company shall be entitled to participate in the defense of any Proceeding relating to an Indemnifiable Event at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such Proceeding, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently directly incurred by Indemnitee in connection with Indemnitee’s defense of such Proceeding other than reasonable costs of investigation or as otherwise provided below. 
  
 (d) Selection of Counsel. Indemnitee shall be entitled to retain one (1) or more counsel from time to time selected by Indemnitee in Indemnitee’s reasonable discretion to act as its counsel in and for the investigation, defense, settlement or appeal of each Proceeding. The Company shall not waive any privilege or right available to Indemnitee in any such Proceeding. All Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s own expense; provided, however, that if (i) Indemnitee’s employment of its own legal counsel has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such Proceeding, (iii) after a Change in Control, Indemnitee’s employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such Proceeding, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one (1) law firm plus, if applicable, local counsel in respect of any such Proceeding) and all Expenses related to such separate counsel shall be borne by the Company.
  
 7. Procedure upon Application for Indemnification. In order to obtain indemnification pursuant to this Agreement, Indemnitee shall submit to the Company a written request therefor, including in such request such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of the Proceeding. Indemnification shall be made insofar as the Company determines Indemnitee is entitled to indemnification in accordance with Section 8 below. 
  
 8. Determination of Right to Indemnification.
  
 (a) Mandatory Indemnification; Indemnification as a Witness. 
  
 (i)   To the extent that Indemnitee shall have been successful on the merits or otherwise in defense of any Proceeding relating to an Indemnifiable Event or any portion thereof or in defense of any issue or matter therein, including without limitation dismissal without prejudice, Indemnitee shall be indemnified against all Losses relating to such Proceeding in accordance with Section 2 to the full extent allowable by law. 
  
 (ii) To the extent that Indemnitee’s involvement in a Proceeding relating to an Indemnifiable Event is to prepare to serve and serve as a witness, and not as a party, the Indemnitee shall be indemnified against all Losses incurred in connection therewith to the full extent allowable by law.
  
 	 
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 (b) Standard of Conduct. To the extent that the provisions of Section 8(a) are inapplicable to a Proceeding related to an Indemnifiable Event that shall have been finally disposed of, any determination of whether Indemnitee has satisfied the applicable standard of conduct set forth in Section 16-10a-902 of the Act that is a legally required condition to indemnification of Indemnitee hereunder against Losses relating to such Proceeding and any determination that Expense Advances must be repaid to the Company (a “Standard of Conduct Determination”) shall be made as follows: (i) by a majority vote of the Disinterested Directors (as defined by the Act), even if less than a quorum of the Board; (ii) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum; or (iii) if there are no such Disinterested Directors, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee. 
  
 (c) Making the Standard of Conduct Determination. The Company shall use its reasonable best efforts to cause any Standard of Conduct Determination required under Section 8(b) to be made as promptly as practicable. If the person or persons designated to make the Standard of Conduct Determination under Section 8(b) shall not have made a determination within thirty (30) days after the later of (A) receipt by the Company of a written request from Indemnitee for indemnification pursuant to Section 6(d) (the date of such receipt being the “Notification Date”) and (B) the selection of an Independent Counsel, if such determination is to be made by Independent Counsel, then Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such 30-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person or persons making such determination in good faith requires such additional time to obtain or evaluate information relating thereto. Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of any Proceeding.
  
 (d) Payment of Indemnification. If, in regard to any Losses: (i) Indemnitee shall be entitled to indemnification pursuant to Section 8(a); (ii) no Standard of Conduct Determination is legally required as a condition to indemnification of Indemnitee hereunder; or (iii) Indemnitee has been determined or deemed pursuant to Section or Section 8(c) to have satisfied the Standard of Conduct Determination, then the Company shall pay to Indemnitee, within five (5) days after the later of (A) the Notification Date or (B) the earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) is satisfied, above, an amount equal to such Losses.
  
 (e) Selection of Independent Counsel for Standard of Conduct Determination. If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to Section 8(b), the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected. 
  
 (f)   Presumptions and Defenses. 
  
 (i)   Indemnitee’s Entitlement to Indemnification. In making any Standard of Conduct Determination, the person or persons making such determination shall presume that Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification, and the Company shall have the burden of proof to overcome that presumption and establish that Indemnitee is not so entitled. Any Standard of Conduct Determination that is adverse to Indemnitee may be challenged by the Indemnitee in the Utah Court. No determination by the Company (including by its directors or any Independent Counsel) that Indemnitee has not satisfied any applicable standard of conduct may be used as a defense to any legal Proceedings brought by Indemnitee to secure indemnification or reimbursement or advance payment of Expenses by the Company hereunder or create a presumption that Indemnitee has not met any applicable standard of conduct.
  
 	 
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 (ii) Reliance as a Safe Harbor. For purposes of this Agreement, and without creating any presumption as to a lack of good faith if the following circumstances do not exist, Indemnitee shall be deemed to have acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company if Indemnitee’s actions or omissions to act are taken in good faith reliance upon the records of the Company, including its financial statements, or upon information, opinions, reports or statements furnished to Indemnitee by the officers or employees of the Company or any of its subsidiaries in the course of their duties, or by committees of the Board or by any other Person (including legal counsel, accountants and financial advisors) as to matters Indemnitee reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company. In addition, the knowledge and/or actions, or failures to act, of any director, officer, Agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnity hereunder.
  
 (iii) No Other Presumptions. In making any determination concerning Indemnitee’s right to indemnification, there shall be a presumption that Indemnitee has satisfied the applicable standard of conduct, and the Company may overcome such presumption only by its adducing clear and convincing evidence to the contrary. For purposes of this Agreement, the termination of any Proceeding 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 this Agreement or applicable law. In addition, neither the failure of any 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 any 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 this Agreement 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. Any determination concerning Indemnitee’s right to indemnification that is adverse to Indemnitee may be challenged by Indemnitee in the courts of the State of Utah. No determination by the Company (including without limitation by its directors or any Independent Counsel) that Indemnitee has not satisfied any applicable standard of conduct shall be a defense to any claim by Indemnitee for indemnification or reimbursement or advance payment of Expenses by the Company hereunder or create a presumption that Indemnitee has not met any applicable standard of conduct.
  
 (iv) Defense to Indemnification and Burden of Proof. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a Proceeding for Losses incurred in defending against a Proceeding related to an Indemnifiable Event in advance of its final disposition) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. In connection with any such action or any related Standard of Conduct Determination, the burden of proving such a defense or that the Indemnitee did not satisfy the applicable standard of conduct shall be on the Company.
  
 	 
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 (g) The Parties acknowledge and agree that the Standard of Conduct Determination described in Section 8(b) is being conducted solely for purposes of compliance with applicable Utah state law. The standards to be utilized in making the Standard of Conduct Determination shall be those set forth in Section 16-10a-902 of the Act. Such Standard of Conduct Determination, when made, is expressly for use by the Company and shall not be used or relied upon in any way by any other person or entity nor shall any Standard of Conduct Determination made under or in connection with this Agreement be admissible in any judicial or administrative Proceeding for any purpose whatsoever other than the enforcement of this Agreement by the Parties to this Agreement.
  
 9. Exclusions from Indemnification. Notwithstanding anything in this Agreement to the contrary, the Company shall not be obligated to:
  
 (a) indemnify or advance funds to Indemnitee for Expenses or Losses with respect to Proceedings initiated by Indemnitee, including any Proceedings against the Company or its directors, officers, employees or other indemnitees and not by way of defense, except: (i) Proceedings referenced in this Section 9(a) (unless 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 (ii) where the Company has joined in or the Board has consented to the initiation of such Proceedings.
  
 (b) indemnify Indemnitee if a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law. 
  
 (c) indemnify Indemnitee for the disgorgement of profits or the advancement or reimbursements of any Expenses incurred in connection with the purchase or sale by Indemnitee of securities of the Company in violation of Section 16(b) of the Exchange Act, or any similar successor statute.
  
 (d) To indemnify Indemnitee for Expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) to the extent such Expenses or liabilities have been paid directly to Indemnitee by an insurance carrier under a policy of officers’ and directors liability insurance maintained by the Company; or
  
 (e) indemnify or advance funds to Indemnitee for Indemnitee’s reimbursement to the Company of any bonus or other incentive-based or equity-based compensation previously received by Indemnitee or payment of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements under Section 304 of the Sarbanes-Oxley Act of 2002 in connection with an accounting restatement of the Company or the payment to the Company of profits arising from the purchase or sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act).
  
 10. Settlement. The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending Proceeding related to an Indemnifiable Event effected without the Company’s prior written consent, which shall not be unreasonably withheld. The Company shall not settle any Proceeding related to an Indemnifiable Event in any manner that would impose any Losses on the Indemnitee without the Indemnitee’s prior written consent.
  
 	 
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 11. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that in certain instances, Federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the “SEC”) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC 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.
  
 12. Duration. All agreements and obligations of the Company contained herein shall continue during the period that Indemnitee is a director or officer of the Company (or is serving at the request of the Company as a director, officer, employee, member, trustee or Agent of another enterprise) and shall continue thereafter (i) so long as Indemnitee may be subject to any possible Proceeding relating to an Indemnifiable Event (including any rights of appeal thereto) and (ii) throughout the pendency of any Proceeding (including any rights of appeal thereto) commenced by Indemnitee to enforce or interpret his or her rights under this Agreement, even if, in either case, he or she may have ceased to serve in such capacity at the time of any such Proceeding.
  
 13. Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any other rights Indemnitee may have under the Constituent Documents, the Act, any other contract or otherwise (collectively, “Other Indemnity Provisions”); provided, however, that (a) to the extent that Indemnitee otherwise would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee will be deemed to have such greater right hereunder and (b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to indemnification than that provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right hereunder. 
  
 14. Liability Insurance. For the duration of Indemnitee’s service as a director or officer of the Company, and thereafter for so long as Indemnitee shall be subject to any pending Proceeding relating to an Indemnifiable Event, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to continue to maintain in effect policies of directors’ and officers’ liability insurance (“D&O Insurance”) providing coverage that is at least substantially comparable in scope and amount to that provided by the Company’s current policies of D&O Insurance. In all policies of D&O Insurance maintained by the Company, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of the Company’s directors, if Indemnitee is a director, or of the Company’s officers, if Indemnitee is an officer (and not a director) by such policy. Upon request, the Company will provide to Indemnitee copies of all D&O Insurance applications, binders, policies, declarations, endorsements and other related materials.
  
 15. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment to Indemnitee in respect of any Losses to the extent Indemnitee has otherwise received payment under any insurance policy, the Constituent Documents, Other Indemnity Provisions or otherwise of the amounts otherwise indemnifiable by the Company hereunder.
  
 16. Subrogation. In the event of payment to Indemnitee under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee. Indemnitee shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
  
 	 
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 17. Amendments. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the Parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the Party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.
  
 18. Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the Parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), assigns, 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 substances 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.
  
 19. Severability. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. The provisions of this Agreement shall be severable as provided in this Section 19. If this Agreement or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated, and the balance of this Agreement not so invalidated shall be enforceable in accordance with its terms. 
  
 20. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, by postage prepaid, certified or registered mail:
  
 if to Indemnitee, to the address set forth on the signature page hereto. 
  
 if to the Company, addressed to the Chairperson of the Board of Directors, with a copy to the Corporate Secretary at: 
  
 DYNATRONICS CORPORATION
  
 1200 Trapp Road
 Eagan, MN 55121
  
 Notice of change of address shall be effective only when given in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of hand delivery or on the third (3rd) business day after mailing.
  
 21. Governing Law and Forum. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to contracts made and to be performed in such state without giving effect to its principles of conflicts of laws. The Company and Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or Proceeding arising out of or in connection with this Agreement shall be brought only in the New York Court and not in any other state or federal court in the United States, (b) consent to submit to the exclusive jurisdiction of the New York Court for purposes of any action or Proceeding arising out of or in connection with this Agreement, and (c) waive, and agree not to plead or make, any claim that the New York Court lacks venue or that any such action or Proceeding brought in the New York Court has been brought in an improper or inconvenient forum.
  
 22. Headings. The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation thereof.
  
 23. Counterparts. This Agreement may be executed in one (1) or more counterparts, each of which shall for all purposes be deemed to be an original, but all of which together shall constitute one and the same Agreement.
  
 [SIGNATURE PAGE FOLLOWS]
  
 	 
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 EXECUTION COPY
  
 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
  
 	  
  
	 DYNATRONICS CORPORATION
	  

	  
	  
	  
	  

	  
	 By: 
	  /s/ John. A. Krier
	  

	  
	 Name:
	 John. A. Krier Title: President and Chief Executive Officer
	  

	  
	  
	  
	  

	  
	 INDEMNITEE
	  

	  
	  
	  
	  

	  
  
	 Brian D. Baker
  
 Address for Notice:
  
  
	  

  
 Signature Page – Indemnification Agreement
 Dynatronics Corporation

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