Item 6.
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Indemnification of Directors and Officers
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Article Eighth (c) of the registrants Articles of Incorporation, Article VI of the registrants Bylaws and Title 7, Article 109 of the Colorado Corporation Code (the Colorado
Code) provide for the indemnification of the registrants directors and officers in a variety of circumstances, which may include liabilities under the Securities Act of 1933, as amended (the Securities Act).
Article Eighth (c) of the registrants Articles of Incorporation and Article VI of the registrants Bylaws require the
registrant to indemnify, to the extent permitted by Colorado statute, its officers and directors against expenses (including attorneys fees), judgments, fines and amounts paid in settlement, actually and necessarily incurred by such officers
and directors in connection with the defense of any action, suit or proceeding in which such officer or director is made a party by reason of being or having been a director, officer, employee or agent of the registrant or is or was serving at the
request of the registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust
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or other enterprise, if the person acted in good faith and, in the case of conduct in the persons official capacity, in a manner he or she reasonably believed to be in the best interests of
the registrant or, in all other cases, in a manner that was at least not opposed to the corporations best interests, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Article VI of the registrants Bylaws also requires the registrant to indemnify its officers and directors against
expenses actually and reasonably incurred by an officer, director, employee or agent of the registrant who is successful on the merits in defense of any action, suit or proceeding. Article VI of the registrants Bylaws provide that in no case
will indemnification be made to any director who is adjudged liable on the basis that the director derived an improper personal benefit.
The Colorado Code requires the indemnification of an individual made a party to a proceeding because the individual is or was a director, officer, employee, or agent of a corporation (unless limited by
the corporations articles of incorporation) if the individual is wholly successful in the proceeding, on the merits or otherwise. In addition, the Colorado Code allows a corporation to indemnify such an individual if: (a) the conduct of
the individual was in good faith; (b) the individual reasonably believed: in the case of conduct in an official capacity with the registrant that the individuals conduct was in the best interests of the registrant; or in the case of
conduct in other capacities that the individuals conduct was at least not opposed to the registrants best interests; and (c) in the case of a criminal proceeding, the individual did not have reasonable cause to believe that the
individuals conduct was unlawful.
However, the Colorado Code does not permit indemnification:
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in the case of any proceeding by or in the right of the registrant (a derivative action), if the individual was adjudged liable to the corporation; or
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in connection with a proceeding that charged the individual with and adjudged the individual liable for improperly receiving a personal benefit.
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The Colorado Code also authorizes a court to order indemnification, whether or not the above standards of
conduct have been met, if the court determines that the officer or director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances.
The indemnification described in the Colorado Code is not exclusive of any other rights to which officers or directors may be entitled under a corporations articles of incorporation or bylaws, or
under any agreement, action of its board of directors, vote of shareholders or otherwise.
The registrant maintains a
directors and officers insurance policy which insures the officers and directors of the registrant from any claim arising out of an alleged wrongful act by such persons in their respective capacities as officers and directors of the
registrant.
Effective January 8, 2013, the registrant entered into indemnification agreements (each an
Indemnification Agreement) with each of its directors and officers. Under the Indemnification Agreements, the registrant has agreed, to the fullest extent permitted by the laws of the State of Colorado, and in accordance with the terms,
conditions and limitations set forth in the Indemnification Agreements, to indemnify each of its directors and officers against all judgments, penalties, fines and amounts paid in settlement, and all expenses actually and reasonably incurred, in
connection with legal proceedings to which an officer or director is, or is threatened to be, made a party, including, without limitation, a lawsuit, arbitration, administrative hearing or investigation, whether by or in the right of the registrant
or otherwise. The right to indemnification also extends to actions taken by the director or officer in other capacities in which he is serving at the request of the registrant.
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Indemnification is not available: (a) if the act or omission by the director or officer
was committed in bad faith; (b) if the director or officer did not reasonably believe, in a case of conduct in his official capacity with the registrant, that the action was in the best interests of the registrant, or, in all other cases, that
the action was at least not opposed to the registrants best interests; (c) if, in a criminal proceeding, the director or officer acted in a manner that he had reasonable cause to believe was unlawful; or (d) if the director or
officer actually received an improper personal benefit. Indemnification also generally is not available if the proceeding is by or on behalf of the registrant and the director is found to be liable to the registrant or if the proceeding is brought
by the director against the registrant. The Indemnification Agreements put in place specific processes and procedures for indemnification claims and advancement of expenses.
(a) The
undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933 (Securities Act);
(ii) To reflect in the
prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
Provided, however
, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain
unsold at the termination of the offering.
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(b) The undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrants annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plans annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial
bona fide
offering thereof.
(h) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 6 above, or otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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