Item
6. Indemnification of Directors and Officers.
Under
Section 607.0831 of the Florida Business Corporation Act, or the “FBCA”, a director is not personally liable for monetary
damages to the corporation or any other person for any statement, vote, decision, or failure to act regarding corporate management
or policy unless (1) the director breached or failed to perform his or her duties as a director and (2) the director’s breach
of, or failure to perform, those duties constitutes: (a) a violation of the criminal law, unless the director had reasonable cause
to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful; (b) a transaction
from which the director derived an improper personal benefit, either directly or indirectly; (c) a circumstance under which the
liability provisions of Section 607.0834 of the FBCA are applicable (relating to liability for unlawful distributions); (d) in
a proceeding by or in the right of the corporation to procure a judgment in its favor or by or in the right of a shareholder,
conscious disregard for the best interest of the corporation, or willful misconduct; or (e) in a proceeding by or in the right
of someone other than the corporation or a shareholder, recklessness or an act or omission which was committed in bad faith or
with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property. A judgment
or other final adjudication against a director in any criminal proceeding for a violation of the criminal law estops that director
from contesting the fact that his or her breach, or failure to perform, constitutes a violation of the criminal law; but does
not estop the director from establishing that he or she had reasonable cause to believe that his or her conduct was lawful or
had no reasonable cause to believe that his or her conduct was unlawful.
Under
Section 607.0851 of the FBCA, a corporation generally has the power to indemnify any person who was or is a party to any proceeding
because the individual is or was a director or officer of the corporation if (a) the director or officer acted in good faith;
(b) the director or officer acted in a manner he or she reasonably believed to be in, or not opposed to, the best interests of
the corporation; and (c) in the case of any criminal proceeding, the director or officer had no reasonable cause to believe his
or her conduct was unlawful. The termination of a proceeding by judgment, order, settlement, or conviction, or upon a plea of
nolo contendere or its equivalent, does not, of itself, create a presumption that the director or officer did not meet the relevant
standard of conduct described in this section of the FBCA. Unless ordered by a court, a corporation may not indemnify a director
or an officer in connection with a proceeding by or in the right of the corporation except for expenses and amounts paid in settlement
not exceeding, in the judgment of the board of directors, the estimated expense of litigating the proceeding to conclusion, actually
and reasonably incurred in connection with the defense or settlement of such proceeding, where such person 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 corporation.
For
purposes of the indemnification provisions of the FBCA, “director” or “officer” means an individual who
is or was a director or officer, respectively, of a corporation or who, while a director or officer of the corporation, is or
was serving at the corporation’s request as a director or officer, manager, partner, trustee, employee, or agent of another
domestic or foreign corporation, limited liability company, partnership, joint venture, trust, employee benefit plan, or another
enterprise or entity and the terms include, unless the context otherwise requires, the estate, heirs, executors, administrators,
and personal representatives of a director or officer.
Section
607.0852 of the FBCA provides that a corporation must indemnify an individual who is or was a director or officer who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to which the individual was a party because he or she
is or was a director or officer of the corporation against expenses incurred by the individual in connection with the proceeding.
Section
607.0853 of the FBCA provides that a corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse
expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual
is or was a director or an officer if the director or officer delivers to the corporation a signed written undertaking of the
director or officer to repay any funds advanced if (a) the director or officer is not entitled to mandatory indemnification under
Section 607.0852; and (b) it is ultimately determined under Section 607.0854 or Section 607.0855 (as described below) that the
director or officer has not met the relevant standard of conduct described in Section 607.0851 or the director or officer is not
entitled to indemnification under Section 607.0859 (as described below).
Section
607.0854 of the FBCA provides that, unless the corporation’s articles of incorporation provide otherwise, notwithstanding
the failure of a corporation to provide indemnification, and despite any contrary determination of the board of directors or of
the shareholders in the specific case, a director or officer of the corporation who is a party to a proceeding because he or she
is or was a director or officer may apply for indemnification or an advance for expenses, or both, to a court having jurisdiction
over the corporation which is conducting the proceeding, or to a circuit court of competent jurisdiction. The Registrant’s
Articles of Incorporation do not provide any such exclusion. After receipt of an application and after giving any notice it considers
necessary, the court may order indemnification or advancement of expenses upon certain determinations of the court.
Section
607.0855 of the FBCA provides that, unless ordered by a court under Section 607.0854, a corporation may not indemnify a director
or officer under Section 607.0851 unless authorized for a specific proceeding after a determination has been made that indemnification
is permissible because the director or officer has met the relevant standard of conduct set forth in Section 607.0851.
Section
607.0857 of the FBCA provides that a corporation has the power to purchase and maintain insurance on behalf of and for the benefit
of an individual who is entitled to indemnification as set forth therein, and Section 607.0858 of the FBCA provides that
the indemnification provided pursuant to Section 607.0851 and Section 607.0852, and the advancement of expenses provided pursuant
to Section 607.0853 are not exclusive. A corporation may, by a provision in its articles of incorporation, bylaws or any agreement,
or by vote of shareholders or disinterested directors, or otherwise, obligate itself in advance of the act or omission giving
rise to a proceeding to provide any other or further indemnification or advancement of expenses to any of its directors or officers.
Section
607.0859 of the FBCA provides that, unless ordered by a court under provisions of Section 607.0854 of the FBCA, a corporation
may not indemnify a director or officer under Section 607.0851 or Section 607.0858 or advance expenses to a director or officer
under Section 607.0853 or Section 607.0858 if a judgment or other final adjudication establishes that his or her actions, or omissions
to act, were material to the cause of action so adjudicated and constitute: (a) willful or intentional misconduct or a conscious
disregard for the best interests of the corporation in a proceeding by or in the right of the corporation to procure a judgment
in its favor or in a proceeding by or in the right of a shareholder; (b) a transaction in which a director or officer derived
an improper personal benefit; (c) a violation of the criminal law, unless the director or officer had reasonable cause to believe
his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful; or (d) in the case of a director,
a circumstance under which the liability provisions of Section 607.0834 are applicable (relating to unlawful distributions).
Our
articles of incorporation provide that we shall indemnify any present or former officer or director, or person exercising powers
and duties of an officer or a director, to the fullest extent now or hereafter permitted by law.
Our
bylaws provide that the corporation shall indemnify any person who was or is a party to any proceeding (other than an action by,
or in the right of the corporation), by reason of the fact that he or she 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 against liability incurred in connection with such proceeding, including
any appeal thereof, if he or she 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 corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. The termination of any proceeding by judgment, order, settlement, or conviction or upon a plea
of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and
in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation or, with respect
to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.
Our
bylaws also provide that the corporation shall indemnify any person, who was or is a party to any proceeding by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that the person 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, against expenses and amounts paid in settlement
not exceeding, in the judgment of the board of directors, the estimated expense of litigating the proceeding to conclusion, actually
and reasonably incurred in connection with the defense or settlement of such proceeding, including any appeal thereof. Such indemnification
will be authorized if such person 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 corporation, except that no indemnification shall be made under this provision in respect of any claim,
issue, or matter as to which such person has been adjudged to be liable unless, and only to the extent that, the court in which
such proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the
adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity
for such expenses which such court shall deem proper.
To
the extent that a director, officer, employee, or agent of the corporation has been successful on the merits or otherwise in defense
of any proceeding referred to above, or in defense of any claim, issue, or matter therein, the corporation is required to indemnify
that person against expenses actually and reasonably incurred by him or her in connection therewith.
Any
indemnification under such authority, unless pursuant to a determination by a court, shall be made by the Company only as authorized
in the specific case upon a determination that indemnification of the director, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in the applicable provisions of the FBCA and our bylaws. Such
determination shall be made: (i) by the board of directors by a majority vote of a quorum consisting of directors who were not
parties to such proceeding; (ii) if such a quorum is not obtainable or, even if obtainable, by majority vote of a committee duly
designated by the board of directors (in which directors who are parties may participate) consisting solely of two or more directors
not at the time parties to the proceeding; (iii) by independent legal counsel selected in accordance with the bylaws; or (iv)
by the shareholders by a majority vote of a quorum consisting of shareholders who were not parties to such proceeding or, if no
such quorum is obtainable, by a majority vote of shareholders who were not parties to such proceeding.
The
bylaws further provide that expenses incurred by an officer or director in defending a civil or criminal proceeding shall be paid
by the Registrant in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if he is ultimately found not to be entitled to indemnification by the Registrant. Expenses
incurred by other employees and agents shall be paid in advance upon such terms or conditions that the board of directors deems
appropriate. The indemnification and advancement of expenses provided pursuant to the bylaws are not exclusive, and the Registrant
may make any other or further indemnification or advancement of expenses of any of its directors, officers, employees, or agents,
under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. Indemnification and advancement of expenses as provided in the
bylaws shall continue as, unless otherwise provided when authorized or ratified, to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person, unless
otherwise provided when authorized or ratified.
The
bylaws state that if the Registrant fails to provide indemnification, and despite any contrary determination of the board or of
the shareholders in the specific case, a director, officer, employee, or agent of the registrant who is or was a party to a proceeding
may apply for indemnification or advancement of expenses, or both, to the court conducting the proceeding, to the circuit court,
or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice that it considers
necessary, may order indemnification and advancement of expenses, including expenses incurred in seeking court-ordered indemnification
or advancement of expenses, if it determines that: (i) the director, officer, employee, or agent is entitled to mandatory indemnification
under the bylaws, in which case the court shall also order the Registrant to pay the director reasonable expenses incurred in
obtaining court-ordered indemnification or advancement of expenses; (ii) the director, officer, employee, or agent is entitled
to indemnification or advancement of expenses, or both, by virtue of the exercise by the Registrant of its power pursuant to the
bylaws; or (iii) the director, officer, employee, or agent is fairly and reasonably entitled to indemnification or advancement
of expenses, or both, in view of all the relevant circumstances, regardless of whether such person met the standard of conduct
set forth in the relevant bylaw provisions.
Under
the bylaws, the Company has the power to purchase and maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the Company or is or was serving at the request of the Company as a director, officer, employee, or agent
of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against him and
incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power
to indemnify him against such liability under the bylaws. We have purchased and intend to maintain insurance on behalf of any
person who is or was a director or officer against any loss arising from any claim asserted against him or her and incurred by
him or her in any such capacity, subject to certain exclusions.
We
have entered into indemnification agreements with our directors, executive officers and others, in addition to indemnification
provided for in our bylaws, and we intend to enter into indemnification agreements with any new directors and executive officers
in the future.
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 Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
See
also the undertakings set out in response to Item 9 herein.