INDEMNIFICATION AGREEMENT
Exhibit
10.2
THIS
AGREEMENT is made this 29th
day of May, 2008.
BETWEEN:
Altair
Nanotechnologies Inc., a corporation incorporated under the laws of
Canada,
(the
"Corporation")
- and
-
●,
of the City of ●of
the Province of ●,
(the
"Director")
WHEREAS
the Director has requested that the Corporation indemnify him against certain
liabilities and expenses that he may incur in connection with his acting as
director or officer of the Corporation (or as a director or officer or serving
in a similar capacity of any subsidiary of the Corporation or other entity where
the Director is so serving at the Corporation’s request);
AND
WHEREAS the Corporation desires to provide the Director with the maximum
protection permitted by applicable law against any and all liabilities he may
incur in his capacity as a director of the Corporation or in any other capacity
in which he may act at the request of the Corporation;
NOW
THEREFORE in consideration of the mutual covenants contained herein and other
good and valuable consideration (the receipt and sufficiency of which is hereby
mutually acknowledged) and in consideration of the Director continuing to act as
a director of the Corporation, the parties agree as follows:
ARTICLE I
INDEMNIFICATION
1.1 Indemnity. Subject
to Section 1.2, the Corporation undertakes and agrees to indemnify the Director
effective from the date the Director was first elected or appointed as a
director or officer of the Corporation (or as a director or officer or serving
in a similar capacity of any subsidiary of the Corporation or any other entity
where the Director is so serving at the Corporation’s request), to the fullest
extent permitted by law, against any liability or expense (including, without
limitation, costs, charges, legal fees and disbursements, and amounts actually
incurred by the Director to settle claims, actions, suits or proceedings or to
satisfy judgments, fines or penalties in respect of claims, actions, suits or
proceedings or any expense incurred in establishing a right to indemnification
under this Agreement, the Canada Business Corporations Act, as amended from time
to time (the “Act”) or otherwise or in defending against any claims as to which
a right of indemnification is asserted hereunder by the Director) (“Expenses”)
that the Director may suffer or incur in respect of any claim, action, suit or
proceeding (whether civil, criminal, administrative or investigative and whether
brought by or on behalf of the Corporation or otherwise) or any threat thereof
involving the Director or to which the Director is made party and which arises
as a direct or indirect result of the Director being or having been a director
or officer of the Corporation (or serving or having served at the Corporation’s
request as a director or officer or in a similar capacity of any of the
Corporation’s subsidiaries or any other entity) (a “Proceeding”), including any
act or thing done or not done in the Director's capacity as director or officer
of the Corporation (or as a director or officer of, or in a similar capacity
for, such other entity) provided that the Director: (a) acted
honestly and in good faith with a view to the best interests of the Corporation
or, as the case may be, to the best interests of the other entity for which the
Director acted as a director or officer or in a similar capacity at the
Corporation’s request; and (b) in the case of a criminal or administrative
action or proceeding that is enforced by a monetary penalty, the Director had
reasonable grounds for believing his conduct was lawful (“Indemnification
Qualifications”). No determination in any Proceeding against the
Director by judgment, order, settlement (with or without court approval) or
conviction shall, of itself, create a presumption that the Director did not act
honestly and in good faith with a view to the best interests of the Corporation
(or a subsidiary of the Corporation or any other entity for which the Director
served at the Corporation’s request as director or officer or in a similar
capacity) and, with respect to any criminal action or proceeding, that the
Director did not have reasonable grounds for believing that his conduct was
lawful.
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1.2 Payment. From
time to time as each indemnifiable liability or expense is incurred by a
Director, the Director may deliver to the Corporation a claim for
indemnification under this Agreement, accompanied by evidence of the
indemnifiable liability or expense. Within ten days after receipt of
such a claim for indemnification under this Agreement, the Corporation shall pay
or cause to be paid the indemnification claim unless the indemnification claim
is not covered by this Agreement or the payment thereof is not permitted by
applicable law or requires court approval. If the Corporation
believes that the indemnification claim is not covered by this Agreement or the
payment thereof is not permitted by applicable law or requires court approval,
it shall so advise the Director in writing within such ten-day
period. If court approval is required in respect of the payment of an
indemnification claim, the Corporation shall, at the request of the Director,
promptly seek approval of a court of competent jurisdiction to pay the
same. The Director shall be entitled to be represented by counsel of
his choosing at any such proceedings with the fees and expenses of such counsel
for the Director being treated as indemnification hereunder and shall be subject
to Sections 1.1 and 1.2 hereof. Any claim for indemnification, if
paid by the Corporation, shall be subject to repayment in the event that the
indemnification claim is not covered by this Agreement or the payment thereof is
not permitted by applicable law. For greater certainty and
notwithstanding anything herein contained (but subject to obtaining any required
court approval), the Corporation shall advance moneys to the Director for all
costs, charges and expenses incurred by the Director in respect of a Proceeding
in accordance with this Section 1.2, provided that if it is determined by a
court of competent jurisdiction in a judgment that has become non-appealable
that the Director has not satisfied the conditions set forth in Section 1.1 or
is otherwise not entitled to indemnification pursuant to the terms hereof, the
Director shall forthwith repay such amounts to the Corporation upon demand
therefor.
ARTICLE II
CONTRIBUTION
2.1 Contribution.
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(1)
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Whether
or not the indemnification provided in Section 1.1 and 1.2hereof is
available, in respect of any threatened, pending or completed action, suit
or proceeding in which the Corporation is jointly liable with Director (or
would be if joined in such action, suit or proceeding), the Corporation
shall pay, in the first instance, the entire amount of any judgment or
settlement of such action, suit or proceeding without requiring Director
to contribute to such payment and the Corporation hereby waives and
relinquishes any right of contribution it may have against
Director. The Corporation shall not enter into any settlement
of any action, suit or proceeding in which the Corporation is jointly
liable with Director (or would be if joined in such action, suit or
proceeding) unless such settlement provides for a full and final release
of all claims asserted against
Director.
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(2)
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Without
diminishing or impairing the obligations of the Corporation set forth in
the preceding subparagraph, if, for any reason, Director shall elect or be
required to pay all or any portion of any judgment or settlement in any
threatened, pending or completed action, suit or proceeding in which the
Corporation is jointly liable with Director (or would be if joined in such
action, suit or proceeding), the Corporation shall contribute to the
amount of expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred and paid or
payable by Director in proportion to the relative benefits received by the
Corporation and all officers, directors or employees of the Corporation,
other than Director, who are jointly liable with Director (or would be if
joined in such action, suit or proceeding), on the one hand, and Director,
on the other hand, from the transaction from which such action, suit or
proceeding arose; provided, however, that the proportion determined on the
basis of relative benefit may, to the extent necessary to conform to law,
be further adjusted by reference to the relative fault of the Corporation
and all officers, directors or employees of the Corporation other than
Director who are jointly liable with Director (or would be if joined in
such action, suit or proceeding), on the one hand, and Director, on the
other hand, in connection with the events that resulted in such expenses,
judgments, fines or settlement amounts, as well as any other equitable
considerations which the law may require to be considered. The
relative fault of the Corporation and all officers, directors or employees
of the Corporation, other than Director, who are jointly liable with
Director (or would be if joined in such action, suit or proceeding), on
the one hand, and Director, on the other hand, shall be determined by
reference to, among other things, the degree to which their actions were
motivated by intent to gain personal profit or advantage, the degree to
which their liability is primary or secondary and the degree to which
their conduct is active or passive.
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(3)
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The
Corporation hereby agrees to fully indemnify and hold Director harmless
from any claims of contribution which may be brought by officers,
directors or employees of the Corporation, other than Director, who may be
jointly liable with Director.
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(4)
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To
the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to Director
for any reason whatsoever, the Corporation, in lieu of indemnifying
Director, shall contribute to the amount incurred by Director, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to
an indemnifiable event under this Agreement, in such proportion as is
deemed fair and reasonable in light of all of the circumstances of such
Proceeding in order to reflect (i) the relative benefits received by the
Corporation and Director as a result of the event(s) and/or transaction(s)
giving cause to such Proceeding; and/or (ii) the relative fault of the
Corporation (and its directors, officers, employees and agents) and
Director in connection with such event(s) and/or
transaction(s).
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2.2 The
rights of Director to Contribution under this Section shall be subject to the
Indemnification Qualifications described in Section 1.1 of this
Agreement.
ARTICLE III
CLAIMS AND THE DEFENCE THEREOF
3.1 Notification. The
Director shall give notice to the Corporation immediately and in any event no
later than ten days after the Director shall have been served with written
notice of any claim against the Director that may give rise to a claim of
indemnification under this Agreement, provided however that the failure to so
notify the Corporation shall not relieve the Corporation of any liability that
the Corporation has to the Director except to the extent that any delay in or
failure to give notice as required hereby results in the forfeiture by the
Corporation of substantial rights or defences. A copy of any
documents which have been served upon the Director shall accompany such notice
or, where this is not feasible, be delivered to the Corporation as soon as
reasonably practicable thereafter. If, at the time of the receipt of
a notice of a claim pursuant to Section 2.1 hereof, the Corporation has
directors’, officers’, employees’ and/or agents’ liability insurance in effect,
the Corporation shall give prompt notice of such Proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The
Corporation shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Director, all amounts payable as a result
of such Proceeding in accordance with the terms of such policies.
3.2 Right
of Corporation to Defend. Subject to any rights of or duties
to any insurer, reinsurer or other third party having liability for any claim
made or brought against the Director in respect of a Proceeding, the Corporation
shall have the right, at its option, to assume, at its own expense, the control
of the defence thereof, including the employment of legal counsel reasonably
satisfactory to the Director upon the delivery to the Director of written notice
of its election so to do. If the Corporation exercises the foregoing
right, the Director shall cooperate with the Corporation and make available to
it all information under the control of the Director which is relevant to the
claim as it shall reasonably require and as shall be within the Director’s
power, but the Director shall not be required to agree to any request for
co-operation that, acting reasonably, he concludes to be contrary to his
interests. If the Corporation does not exercise the foregoing right,
the Director shall keep the Corporation reasonably apprised of the progress of
the defence of the claim. Legal counsel retained by the Corporation
under this Section 2.2 shall be satisfactory to the Director, acting reasonably,
and shall be instructed not to initiate or participate in (without the prior
written consent of the Director) any discussions that might lead to a settlement
inconsistent with Section 2.7. After delivery of such notice and the
retention of counsel by the Corporation, the Corporation shall not be liable to
the Director under this Agreement for any fees of counsel subsequently incurred
by the Director with respect to the same Proceeding except as provided for in
Section 2.3.
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3.3 Participation
in Defence of Claim. Nothing herein shall preclude the
Director, at his sole discretion and at his expense, from employing legal
counsel of his choosing to participate in the defence of any claim made or
brought against him in addition to legal counsel employed by the Corporation
provided that the Corporation shall reimburse the Director for the fees and
expenses of such additional counsel in each jurisdiction where a Proceeding is
or may reasonably be expected to be brought if: (a) the Corporation and the
Director have agreed in writing to separate retention of counsel by the
Director; (b) the Corporation does not promptly assume pursuant to Section 2.2
the defence of any such claim in such jurisdiction; or (c) the Director is
advised by counsel in any such jurisdiction that there is any actual or
potential conflict in the Corporation’s and the Director’s respective interests
or that additional defences are available to the Director which makes
representation by the same counsel in such jurisdiction inappropriate or
inadvisable. Any such payment for the fees and expenses of counsel
for the Director shall be treated as indemnification of the Director hereunder
and shall be subject to Sections 1.1 and 1.2 hereof.
3.4 Further
Indemnification. The Corporation shall indemnify the Director
in respect of a Proceeding in such other circumstances as the Act permits or
requires.
3.5 Indemnification
for Expenses of a Witness. Notwithstanding any other provision
of this Agreement, to the extent that Director is, by reason of the Directors
status as a present or former director or officer of the Corporation (or as a
director or officer or serving in a similar capacity of any subsidiary of the
Corporation or any other entity where the Director is so serving at the
Corporation’s request) a witness in any Proceeding to which Director is not a
party, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.
3.6 Additional
Indemnification Rights: Non-Exclusivity
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(1)
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Scope.
Notwithstanding any other provision of this Agreement, the Corporation
hereby agrees to indemnify the Director to the fullest extent permitted by
law, notwithstanding that such indemnification is not specifically
authorized by other provisions of this Agreement, the Act, the
Corporation’s articles, the Corporation’s by-laws or by any other statute.
In the event of any change after the date of this Agreement in any
applicable law, statute or rule which expands the right of a corporation
to indemnify a Director, such changes shall, without any formality, be
within the purview of the Director’s rights and the Corporation’s
obligations under this Agreement. In the event of any change in applicable
law, statute or rule which narrows the right of a corporation to indemnify
a Director, to the extent not otherwise required by such law, statute or
rule to be applied to this Agreement, such change shall have no effect on
this Agreement or the parties’ rights and obligations
hereunder.
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(2)
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Non-Exclusivity.
The indemnification provided by this Agreement shall not be deemed
exclusive of any rights to which the Director may be entitled under the
Corporation’s articles, its by-laws, any other agreement by which the
Corporation is bound, any vote of shareholders or disinterested directors,
the Act or otherwise.
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(3)
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Partial
Indemnification. If the Director is entitled under any provision of
this Agreement to indemnification by the Corporation for some or a portion
of the Expenses, judgments, fines, penalties or settlements actually
incurred by the Director in the investigation, defence, appeal or
settlement of any Proceeding, but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify the Director for
that portion for which the Director is entitled to
indemnification.
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3.7 Indemnification
Not Affected By Remuneration. Any indemnification to be made
to the Director under this Agreement shall not be affected by any remuneration
that the Director shall have received, or to which he may become entitled, at
any time for acting in his capacity as a director or officer of the Corporation
or for acting in such a capacity or in a similar capacity for any other entity
at the Corporation’s request.
3.8 Settlement
of Proceedings. The Corporation shall be entitled to settle
any Proceeding against the Director for which indemnity is sought by the
Director hereunder on terms and conditions determined by the Corporation,
provided that:
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(i)
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the
settlement does not involve any obligation or liability of the Director
other than the payment of a monetary
amount;
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(ii)
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the
Director is indemnified in full against payment of such monetary amount
together with all related Expenses, whether or not such Expenses would
otherwise be payable hereunder; and
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(iii)
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the
settlement is expressly stated to be made by the Corporation on behalf of
the Director, without any admission of liability by the
Director.
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3.9 Insurance. The
Corporation shall obtain and maintain a policy or policies of insurance
providing any or all of the Directors of the Corporation with coverage from
insurable losses they may incur in their capacities as directors of the
Corporation, or to insure the Corporation’s performance of its indemnification
obligations under this Agreement during the period in which the Director serves
as a director or officer of the Corporation (or as a director or officer serving
in a similar capacity of any subsidiary of the Corporation or any other entity
where the Director is so serving at the Corporation’s request) and for a period
of six years thereafter. During such period, whether or not the
Director continues to be a director of the Corporation, the Corporation shall
obtain and maintain a policy or policies of insurance on terms and with coverage
limits which provide the Director with insurance coverage which is similar in
all material respects to the directors’ and officers’ insurance coverage
provided by the Corporation to the Director as at the date hereof, the
particulars of which have been provided to the Director, or coverage which
provides enhanced overall directors’ and officers’ insurance coverage to the
Director. In all policies of directors’ and officers’ liability
insurance maintained by the Corporation during the Director’s term as an officer
or director and for a period of six years thereafter, the Director
shall be named as an insured in such a manner as to provide the Director the
same rights and benefits as are accorded to the most favourably insured of the
directors of the Corporation. The Corporation agrees to provide
notice of any material changes in the insurance coverage referred to in this
Section 2.8 during the period in which the Director serves as a director or
officer of the Corporation (or as a director or officer or serving in a similar
capacity of any subsidiary of the Corporation or any other entity where the
Director is so serving at the Corporation’s request) and for a period of six
years thereafter. Notwithstanding the foregoing, the Corporation shall have no
obligation to obtain or maintain such insurance if the Corporation determines in
good faith that such insurance is not reasonably available, that the premium
costs for such insurance are excessive in light of the protection afforded by
such coverage, that the coverage provided by such insurance is limited by
exclusions so as to provide an insufficient benefit or that the Director is
covered by similar insurance maintained by a subsidiary of the
Corporation. Before acting on such a determination, the Corporation
shall discuss the matter with the Director and obtain the consent of the
Director to the decision of the Corporation not to obtain or maintain such
insurance, which consent will not be unreasonably withheld.
3.10 Exceptions. Any
other provision herein to the contrary notwithstanding, pursuant to the terms of
this Agreement the Corporation shall not be obligated:
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(i)
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Claims
Initiated by the Director. to indemnify or advance Expenses to the
Director with respect to proceedings or claims initiated, brought or
actively supported or facilitated by the Director and not by way of
defence, except with respect to proceedings brought to establish or
enforce a right to indemnification under this Agreement, the Act or any
other statute or law; or
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(ii)
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Insured
Claims. to indemnify the Director for expenses or liabilities of
any type whatsoever which have been paid directly to the Director by an
insurance carrier under a policy of directors and officers’ liability
insurance maintained by the Corporation;
or
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(iii)
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Claims
for Unlawful Profits. to indemnify the Director for expenses or the
payment of profits arising from the purchase and sale by the Director of
securities in violation of applicable securities
laws.
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3.11 Mutual
Acknowledgement. Both the Corporation and the Director
acknowledge that in certain instances applicable law or public policy may
prohibit the Corporation from indemnifying the Director under this Agreement or
otherwise. The Director understands and acknowledges that the Corporation has
undertaken or may be required in the future to undertake, with the regulatory
authorities, to submit the question of indemnification to a court in certain
circumstances for a determination of the Corporation’s right under public policy
to indemnify the Director.
3.12 Effectiveness. Nothing
in this Agreement is intended to require or shall be construed as requiring the
Corporation to do or fail to do any act in violation of applicable law. The
Corporation’s inability, pursuant to applicable law or court order, to perform
its obligations under this Agreement shall not constitute a breach of this
Agreement.
3.13 Continuation
of Indemnity. The indemnification and advancement of Expenses
by the Corporation to the Director provided for under this Agreement shall
survive and continue after termination of the Director as a director or officer
of the Corporation (or as a director or officer or serving in a similar capacity
of any subsidiary of the Corporation or any other entity where the Director is
so serving at the Corporation’s request) as to any acts or omissions by the
Director while serving in such capacity.
ARTICLE IV
NOTICES
4.1
Notice. Any
notice or other communication required or permitted under this Agreement shall
be deemed to have been duly given only when received by the party to whom such
notice or communication is sent at the following addresses (or such other
addresses as the party may specify by like notice):
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(1)
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in
the case of the Corporation, to:
000 Xxxxxx
Xxx
Xxxx,
XX 00000
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Attention: President
Facsimile: (000) 000-0000
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(2)
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in
the case of the Director, to:
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●
Facsimile: ●
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ARTICLE V
GENERAL
5.1 Amendment
and Assignment. This Agreement may not be amended except by a
written agreement signed by both of the parties hereto. This
Agreement may not be assigned by the Corporation without the prior written
consent of the Director.
5.2 Binding
Effect. Not Exclusive. This Agreement shall be
binding upon and enure to the benefit of the Corporation and its successors and
permitted assigns (which terms shall be deemed to include any body corporate
formed by the amalgamation of the Corporation with another body corporate) and
shall be binding upon and enure to the benefit of the Director, his legal
representatives, heirs, successors and assigns. The rights provided
to the Director under this Agreement shall be in addition to any indemnification
that may be available to the Director under any other agreement, the articles or
by-laws of the Corporation, by law or at equity.
5.3 Continuance
of Agreement. This Agreement shall continue for the periods
identified herein notwithstanding that the Director has ceased to be a director
or officer of the Corporation or any other entity.
5.4 Severability. The
invalidity or unenforceability of any provision or portion of this Agreement
shall not affect the validity or enforceability of the other provisions or
portions hereof and this Agreement shall be construed as if such invalid or
unenforceable provision or portion were omitted from this
Agreement.
5.5 Governing
Law. Attornment. This Agreement shall be governed
by, and construed in accordance with, the laws of the Province of Ontario and
the federal laws of Canada applicable therein. The parties hereby
irrevocably submit to the non-exclusive jurisdiction of the courts of the
Province of Ontario.
5.6 Counterparts. This
Agreement may be executed in any number of counterparts and each of such
counterparts will for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument.
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IN WITNESS WHEREOF,
the parties hereto have executed this Indemnification Agreement as of the date
first above-written.
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“Corporation”
By: ____________________________
Name:
Title:
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SIGNED
In
the presence of:
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________________________________
Witness (Print
Name)
________________________________
Witness (Sign
Name)
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“Director”
________________________________
(Print
Name)
________________________________
(Sign
Name)
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