Form Of Indemnification Of Directors

INDEMNITY AGREEMENT


THIS AGREEMENT is made and entered into as of ________________, 1997, by and between THE HAVANA REPUBLIC, INC., a Florida corporation (the "Company"), and _______________________ (the "Indemnitee").


PRELIMINARY STATEMENTS


WHEREAS, the Company desires to retain the services of the Indemnitee as a director, officer, employee and/or agent of the Company;


WHEREAS, Section 607.0850 of the Florida Business Corporation Act (the "Act") provides a non-exclusive statutory basis for the indemnification of directors, officers, employees and agents of a Florida corporation and authorizes agreements between the Company and its directors, officers, employees and agents with respect to indemnification of such individuals.


WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify such persons so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified, and the Indemnitee is wiling to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and


WHEREAS, in order to induce the Indemnitee to serve or to continue to serve as a director, officer, employee and/or agent of the Company and/or a subsidiary of the Company, the Company has determined and agreed to enter into this agreement with the Indemnitee, and the Company and the Indemnitee agree as follows:


1. INDEMNIFICATION OF INDEMNITEE. The Company hereby agrees to hold harmless and indemnify the Indemnitee to the fullest extent authorized or permitted by the provisions of the Florida Statute, or by any amendment thereof or other statutory provision authorizing or permitting such indemnification adopted after the date hereof that has the effect of broadening (but not narrowing) the scope of indemnification provided under the Florida Statute as it exists as of the date hereof.


2. ADDITIONAL INDEMNIFICATION. In addition to any other indemnification to which the Indemnitee may be entitled pursuant to the Florida Statute, the Company's Articles of Incorporation (the "Articles") or Bylaws (the "Bylaws"), or otherwise, and subject only to the limitation set forth in Section 3 hereof, the Company hereby further agrees to hold harmless and indemnify the Indemnitee against any and all costs and expenses (including trial, appellate and other attorneys' fees), judgments, fines, penalties and amounts paid in settlement, actually and reasonably incurred by the Indemnitee in connection with any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative (including an action by or in the right of the Company or a corporation, partnership, joint venture, trust, employee benefit plan or other enterprise or by or in the right of any other person) to which the Indemnitee is, was or at any time becomes a


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party, or is threatened to be made a party, by reason of the fact that the Indemnitee is, was or at any time becomes a director, officer, employee or agent of the Company, or is or was serving or at any time serves at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. Notwithstanding any other provision of this Agreement, the Company shall pay and reimburse all expenses incurred by Indemnitee in connection with his appearance as a witness or other participation in a proceeding at a time when he is not a named defendant or respondent in the proceeding.


3. LIMITATIONS ON ADDITIONAL INDEMNIFICATION. No indemnification pursuant to Section 2 hereof shall be paid by the Company if a judgment (after exhaustion of all appeals) or other final adjudication determines that the Indemnitee's actions, or omissions to act, were material to the cause of action so adjudicated and constitute:


a. a violation of criminal law, unless the Indemnitee had reasonable cause to believe his conduct was lawful; or had no reasonable cause to believe his conduct was unlawful;


b. a transaction from which the Indemnitee received an improper personal benefit within the meaning of Section 607.0850(7)(b) of the Florida Statute;


c. in the case of a director, a circumstance under which the liability provisions of Section 607.0834 of the Florida Business Corporation Act are applicable; or


d. willful misconduct or a conscious disregard for the best interests of the Company in a proceeding by or in the right of the Company to procure a judgment in its favor or in a proceeding by or in the right of a shareholder of the Company.


4. DISBURSEMENT/REPAYMENT OF EXPENSES. In addition to the prompt payment of any indemnification to which the Indemnitee may be entitled, upon the demand of the Indemnitee, the Company shall promptly (and in any event within five (5) business days after written demand therefor) advance to or reimburse the Indemnitee for all reasonable expenses (including, without limitation, trial, appellate and other attorneys' fees, court costs, judgments, fines, penalties, amounts paid in settlement and other payments) that the Indemnitee may incur in responding to, investigating, defending, settling or appealing any claim, action, suit or proceeding for which it reasonably appears that the indemnitee may be entitled to indemnification from the Company, either pursuant to this Agreement, the Florida Statute, the Articles, the Bylaws or otherwise. The Indemnitee agrees to reimburse the Company for all such expenses in the event, and only to the extent, that it shall be ultimately determined that the Indemnitee is not entitled to be indemnified by the Company for such expenses under the provisions of Section 3 of this Agreement. Such undertaking to reimburse the Company for amounts advanced if it is ultimately determined that the Indemnitee is not entitled to be indemnified by the Company is an unlimited general, unsecured and interest free obligation of the Indemnitee.


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5. INDEMNIFICATION PROCEDURES.


a. PAYMENT/DETERMINATION OF INDEMNIFICATION. Upon any request from the Indemnitee for indemnification from the Company, whether pursuant to this Agreement, the Florida Statute, the Articles, the Bylaws or otherwise, the Company shall promptly pay the full amount of such requested indemnification. If the Company's Board of Directors (the "Board") reasonably believes that all or any portion of such indemnification pursuant to this Agreement is prohibited by Section 3 hereof, the Company shall in any event promptly pay the amount of such indemnification if any, that may reasonably then be paid and shall promptly make or cause to be made a determination (the "Determination") of whether the payment of the balance is limited by Section 3 hereof. Such Determination shall be made in the following order or preference:


(i) by the Board of Directors by majority vote or consent of a quorum consisting of directors who are not, at the time of the Determination, named parties to such action, suit or proceeding ("Disinterested Directors"); or


(ii) if such a quorum of Disinterested Directors cannot be obtained by majority vote or consent of a committee duly designated by the Board (in which designation all directors, whether or not Disinterested Directors, may participate) consisting solely of two or more Disinterested Directors; or


(iii) if such a committee cannot be established, by the opinion of independent outside legal counsel employed by the Company; or


(iv) if such legal opinion cannot be obtained, by a majority vote or consent of a quorum of shareholders who are not parties to such action, suit or proceedings or, if not such quorum is obtainable, by a majority vote of such shareholders.


b. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. In making a Determination with respect to entitlement to indemnification hereunder, the person or persons or entity making the Determination shall presume that Indemnitee is entitled to indemnification under this Agreement and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any Determination contrary to that presumption. The termination of any claim, action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, be determinative of or create a presumption that the Indemnitee is not entitled to indemnification or reimbursement of expenses hereunder or otherwise.


c. RELIANCE AS SAFE HARBOR. For purposes of any Determination hereunder, the Indemnitee shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; or with respect to any criminal action or proceeding, to have had reasonable cause to believe his conduct was lawful, or no reasonable cause to believe his conduct was unlawful; if his action is based on information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by one or


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more officers or employees of the Company whom the Director reasonably believes to be reliable and competent in such matters presented; legal counsel, public accountants, or other persons as to matters the Director reasonably believes are within the persons' professional or expert competence; or a committee of the Board of Directors of which he is not a member if the Director reasonably believes the committee merits confidence. The term "another enterprise" as used in this Section 5(c) shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which the Indemnitee is or was serving at the request of the Company as a director, officer, partner, trustee, employee or agent. The provisions of this Section 5(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth herein.


d. SUCCESS ON MERITS OR OTHERWISE. Notwithstanding any other provision for this Agreement, to the extent that the Indemnitee has been successful on the merits or otherwise in defense of any action, suit or proceeding described herein, o ...