Chen-Drake Law has passed
on the validity of the Shares offered pursuant to this Registration Statement.
Item 6. Indemnification of Officers and Directors
The indemnification of our
officers and directors is governed by Section 145 of the DGCL, our Certificate of Incorporation and bylaws. Subsection (a) of
DGCL Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) 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 (including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such action, suit or proceeding if (1) such person acted in good
faith, (2) in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and (3) with
respect to any criminal action or proceeding, such person had no reasonable cause to believe the person’s conduct was unlawful.
Subsection (b) of DGCL
Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit 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
(including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such
action or suit if such person acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best
interests of the corporation, and except that no indemnification may be made in respect of any claim, issue or matter as to which such
person has been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought determines upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or
such other court deems proper.
DGCL Section 145 further
provides that to the extent that a present or former director or officer is successful, on the merits or otherwise, in the defense of
any action, suit or proceeding referred to in subsections (a) and (b) of Section 145, or in defense of any claim, issue or matter
therein, such person will be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person
in connection with such action, suit or proceeding. In all cases in which indemnification is permitted under subsections (a) and
(b) of Section 145 (unless ordered by a court), it will be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because
the applicable standard of conduct has been met by the party to be indemnified. Such determination must be made, with respect to a person
who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such
action, suit or proceeding, even though less than a quorum, (2) by a committee of such directors designated by majority vote of such
directors, even though less than a quorum, (3) if there are no such directors, or if such directors so direct, by independent legal
counsel in a written opinion or (4) by the stockholders. The statute authorizes the corporation to pay expenses incurred by an officer
or director in advance of the final disposition of a proceeding upon receipt of an undertaking by or on behalf of the person to whom the
advance will be made, to repay the advances if it is ultimately determined that he or she was not entitled to indemnification. DGCL Section 145
also provides that indemnification and advancement of expenses permitted under such Section are not to be exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise. DGCL Section 145 also authorizes the corporation to purchase and maintain liability insurance
on behalf of its directors, officers, employees and agents regardless of whether the corporation would have the statutory power to indemnify
such persons against the liabilities insured.
Section 174 of the DGCL provides,
among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase
or redemption, may be held jointly and severally liable for such actions. A director who was either absent when the unlawful actions were
approved or dissented at the time may avoid liability by causing his or her dissent to such actions to be entered in the books containing
the minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives
notice of the unlawful acts.
Our Certificate of Incorporation
provides that our directors will not be liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director
except for liability (a) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (b) for acts or
omission not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the Delaware
General Corporation Law, or (d) for any transaction from which the director derived any improper personal benefit. DGCL Section 102(b)(7)
provides that the personal liability of a director to a corporation or its stockholders for breach of fiduciary duty as a director may
be eliminated except for liability (1) for any breach of the director’s duty of loyalty to the registrant or its stockholders,
(2) for which the director would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence, in the performance
of his or her duties, or by reason of his or her reckless disregard of his obligations and duties to the Corporation, (3) under Section 174
of the DGCL, relating to unlawful payment of dividends or unlawful stock purchases or redemption of stock or (4) for any transaction
from which the director derives an improper personal benefit.
Our bylaws provide for the
indemnification of any person to the full extent permitted, and in the manner provided, by the current DGCL or as the DGCL may hereafter
be amended.
This limitation of liability
does not apply to liabilities arising under the federal securities laws and does not affect the availability of equitable remedies such
as injunctive relief or rescission.
These provisions may discourage
stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect
of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might
otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay
the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We believe
that these provisions are necessary to attract and retain talented and experienced officers and directors.
