Further, Nevada law permits a Nevada corporation to purchase and maintain insurance or to
make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise for any liability asserted against him or her and liability and expenses incurred by him or her in his or her capacity as a director, officer, employee or agent, or arising out of
his or her status as such, whether or not the corporation has the authority to indemnify him or her against such liability and expenses.
Under our current articles of incorporation and bylaws, we are obligated to indemnify any director, officer, employee or agent of the company
to the fullest extent permitted by Nevada law as described above. We have entered, and intend to continue to enter, into separate indemnification agreements with our directors, in addition to the indemnification provided for in our articles of
incorporation and bylaws. These agreements, among other things, require us to indemnify our directors who have met the standards of conduct that make it permissible under Chapter 78 of the NRS for us to indemnify the claimant for certain expenses,
including attorneys fees, judgments, fines and settlement amounts incurred by a director in any action or proceeding arising out of their services as one of our directors, or any of our subsidiaries or any other company or enterprise to which
the person provides services at our request. We believe that these articles of incorporation and bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors.
In addition, indemnification is required to continue as to a person who has ceased to be a director or officer and inures to the benefit of
his or her heirs, executors and administrators. However, subject to the exceptions detailed below, we may indemnify a person seeking indemnification in connection with a proceeding (or part thereof) initiated by the person seeking indemnification
only if the proceeding (or part thereof) was authorized by our Board of Directors. We may indemnify any employee or agent of us to an extent greater than required by law only if and to the extent that our directors, in their discretion, may
determine.
If we do not pay a claim for indemnification (following the final disposition of the proceeding with respect to which
indemnification is sought, including any settlement of such action, suit or proceeding) or advancement of expenses under our bylaws in full within 30 days after a written claim has been received by us, the claimant may bring suit against us to
recover the unpaid amount of the claim and, if successful in whole or in part, the claimant also will be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by applicable law. In any such action, we would have
the burden of proving that the claimant is not entitled to the requested indemnification or advancement of expenses.
Insofar as
indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC this
indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Anti-Takeover Effects of Provisions of
Nevada State Law
We may be, or in the future we may become, subject to Nevadas control share laws. A corporation is subject to
Nevadas control share law if it has more than 200 stockholders, at least 100 of whom are stockholders of record and residents of Nevada, and if the corporation does business in Nevada, including through an affiliated corporation. This control
share law may have the effect of discouraging corporate takeovers. We currently have fewer than 100 stockholders of record who are residents of Nevada.
The control share law focuses on the acquisition of a controlling interest, which means the ownership of outstanding voting shares
that would be sufficient, but for the operation of the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors:
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one-fifth
or more but less than
one-third;
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