Exhibit 10.9
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (this "Agreement") is made and executed
as of April 18, 2008, by and between AMERICAN ENVIRONMENTAL ENERGY, INC., a
Nevada corporation (the "Corporation"), and Xxxxxxxx Xxx, an individual residing
at 00 Xxxx Xxxx Xxxxxxxx # 00-00, Xxxxxxxxx, China 128048 (the "Indemnitee").
PREAMBLE
The Corporation is aware that, in order to induce highly competent
persons to serve the Corporation as Directors or in other capacities, the
Corporation must provide such persons with adequate protection through insurance
and indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the Corporation. The
difficulty of obtaining adequate Directors' and officers' liability insurance in
the current market has increased the difficulty of attracting and retaining such
persons. The Board of Directors of the Corporation has determined that (1) it is
essential to the best interests of the Corporation's stockholders that the
Corporation act to assure such persons that there will be increased certainty of
such protection in the future, and that (2) it is reasonable, prudent and
necessary for the Corporation contractually to obligate itself to indemnify such
persons to the fullest extent permitted by applicable law so that they will
continue to serve the Corporation free from undue concern that they will not be
so indemnified. The Indemnitee is willing to serve, continue to serve, and take
on additional service for or on behalf of the Corporation on the condition that
he or she be so indemnified.
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Corporation and the Indemnitee do hereby agree as follows:
1. SERVICE BY THE INDEMNITEE
The Indemnitee will continue to serve as a Director of the Corporation
faithfully and will discharge his duties and responsibilities to the best of his
ability so long as he is duly elected or qualified in accordance with the
provisions of the Articles of Incorporation and Bylaws of the Corporation and
the Nevada Revised Statutes, as may be amended from time to time, or until his
earlier death, resignation or removal. The Indemnitee may at any time and for
any reason resign from such position (subject to any other contractual
obligation or other obligation imposed by operation of law), in which event the
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Corporation shall have no obligation under this Agreement to continue the
Indemnitee in any such position. Nothing in this Agreement shall confer upon the
Indemnitee the right to continue in the employ of the Corporation or as a
Director of the Corporation or affect the right of the Corporation to terminate
the Indemnitee's employment at any time in the sole discretion of the
Corporation, with or without cause, subject to any contract rights of the
Indemnitee created or existing otherwise than under this Agreement.
2. INDEMNIFICATION
The Corporation shall indemnify the Indemnitee to the fullest extent
permitted by the Nevada Revised Statutes or other applicable law, as in effect
from time to time. Without diminishing the scope of the indemnification provided
by this Section, the rights of indemnification of the Indemnitee provided
hereunder shall include, but shall not be limited to, those rights hereinafter
set forth, except that no indemnification shall be paid to the Indemnitee:
(i) on account of any suit in which judgment is rendered against the
Indemnitee for disgorgement of profits made from the purchase or sale
by the Indemnitee of securities of the Corporation pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934, as
amended, or similar provisions of any federal, state or local statutory
law;
(ii) on account of conduct of the Indemnitee which is finally adjudged
by a court of competent jurisdiction to have been knowingly fraudulent
or to constitute willful misconduct;
(iii) in any circumstance where such indemnification is expressly
prohibited by applicable law;
(iv) with respect to liability for which payment is actually made to
the Indemnitee under a valid and collectible insurance policy or under
a valid and enforceable indemnity clause, bylaw or agreement (other
than this Agreement), except in respect of any liability in excess of
payment under such insurance, clause, bylaw or agreement;
(v) if a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful (and, in this
respect, both the Corporation and the Indemnitee have been advised that
it is the position of the Securities and Exchange Commission that
indemnification for liabilities arising under the federal securities
laws is
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against public policy and is, therefore, unenforceable, and that claims
for indemnification should be submitted to the appropriate court for
adjudication); or
(vi) in connection with any proceeding (or part thereof) initiated by
the Indemnitee, or any proceeding by the Indemnitee against the
Corporation or its Directors, officers, employees or other Indemnitees,
unless (i) such indemnification is expressly required to be made by
law, (ii) the proceeding was authorized by the Board of Directors of
the Corporation, (iii) such indemnification is provided by the
Corporation in its sole discretion, pursuant to the powers vested in
the Corporation under applicable law, or (iv) except as provided in
Sections 10 and 13 hereof.
3. ACTIONS OR PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT
OF THE CORPORATION
The Indemnitee shall be entitled to the indemnification rights provided
in this Section if he 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 in nature, other than an action by or
in the right of the Corporation, by reason of the fact that he 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 or
fiduciary of any other entity, including, but not limited to, another
corporation, partnership, joint venture or trust, or by reason of any act or
omission by him in any such capacity. Pursuant to this Section, the Indemnitee
shall be indemnified against all expenses (including attorneys' fees), costs,
judgments, penalties, fines and amounts paid in settlement which were actually
and reasonably incurred by him in connection with such action, suit or
proceeding (including, but not limited to, the investigation, defense or appeal
thereof), if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, if he had no reasonable cause to believe his
conduct was unlawful.
4. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION
The Indemnitee shall be entitled to the indemnification rights provided
in this Section if he is a 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
brought by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
or fiduciary of the Corporation, or is or was serving at the request of the
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Corporation as a director, officer, employee, agent or fiduciary of another
entity, including, but not limited to, another corporation, partnership, joint
venture or trust, or by reason of any act or omission by him in any such
capacity. Pursuant to this Section, the Indemnitee shall be indemnified against
all expenses (including attorneys' fees), costs and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding (including, but not limited to, the investigation, defense or appeal
thereof), if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to be the best interests of the Corporation; provided,
however, that no such indemnification shall be made in respect of any claim,
issue, or matter as to which applicable law expressly prohibits such
indemnification by reason of any adjudication of liability of the Indemnitee to
the Corporation, unless and only to the extent that the Courts of the State of
Nevada or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, the Indemnitee is fairly and reasonably entitled
to indemnity for such expenses and costs which such court shall deem proper.
5. INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF SUCCESSFUL PARTY
Notwithstanding the other provisions of this Agreement, to the extent
that the Indemnitee has served on behalf of the Corporation as a witness or
other participant in any claim, action or proceeding, or has been successful, on
the merits or otherwise, in defense of any action, suit or proceeding referred
to in Sections 3 and 4 hereof, or in defense of any claim, issue or matter
therein, including, but not limited to, the dismissal of any action without
prejudice, he shall be indemnified against all costs, charges and expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
6. PARTIAL INDEMNIFICATION
If the Indemnitee is entitled under any provision of this Agreement to
indemnification by the Corporation for some or a portion of the expenses
(including attorneys' fees), costs, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with the
investigation, defense, appeal or settlement of such suit, action, investigation
or proceeding described in Section 3 or 4 hereof, but is not entitled to
indemnification for the total amount thereof, the Corporation shall nevertheless
indemnify the Indemnitee for the portion of such expenses (including reasonable
attorneys' fees), costs, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him to which the Indemnitee is
entitled. Without limiting the generality of the foregoing, if the action suit,
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and so forth, is brought against the Indemnitee in his capacity as a director,
officer, or employee and a stockholder, the presumption shall be that recovery
is sought by reason of the Indemnitee's status as a director, officer or
employee.
7. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
Upon written request by the Indemnitee for indemnification pursuant to
Section 3 or 4 hereof, the entitlement of the Indemnitee to indemnification
pursuant to the terms of this Agreement shall be determined by the following
person or persons, who shall be empowered to make such determination: (a) the
Board of Directors of the Corporation, by a majority vote of a quorum consisting
of Disinterested Directors (as hereinafter defined); or (b) if such a quorum is
not obtainable or, even if obtainable, if the Board of Directors, by the
majority vote of Disinterested Directors, so directs, by Independent Counsel (as
hereinafter defined) in a written opinion to the Board of Directors, a copy of
which shall be delivered to the Indemnitee. Such Independent Counsel shall be
selected by the Board of Directors and approved by the Indemnitee. Upon failure
of the Board to so select, or upon failure of the Indemnitee to so approve such
Independent Counsel, such Independent Counsel shall be selected by the
appropriate authority of the State of Nevada or such other person as the such
authority shall designate to make such selection. Such determination of
entitlement to indemnification shall be made not later than 45 days after
receipt by the Corporation of a written request for indemnification. Such
request shall include documentation or information which is necessary for such
determination and which is reasonably available to the Indemnitee. Any costs or
expenses (including attorneys' fees) incurred by the Indemnitee in connection
with his request for indemnification hereunder shall be borne by the
Corporation. The Corporation hereby indemnifies and agrees to hold the
Indemnitee harmless therefrom irrespective of the outcome of the determination
of the Indemnitee's entitlement to indemnification. If the person making such
determination shall determine that the Indemnitee is entitled to indemnification
as part (but not all) of the application for indemnification, such person shall
reasonably prorate such partial indemnification among such claims, issues or
matters.
8. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS
The Secretary of the Corporation shall, promptly upon receipt of the
Indemnitee's request for indemnification, advise in writing the Board of
Directors, or such other person or persons as are empowered to make the
determination pursuant to Section 7, that the Indemnitee has made such request
for determination. Upon making such request for indemnification, the Indemnitee
shall be presumed to be entitled to indemnification hereunder and the
Corporation shall have the burden of proof in the making of any determination
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contrary to such presumption. If the person or persons so empowered to make such
determination shall have failed to make the requested indemnification within 45
days after receipt by the Corporation of such request, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and the Indemnitee shall be absolutely entitled to such indemnification,
absent actual and material fraud in the request for indemnification. The
termination of any action, suit, investigation or proceeding described in
Section 3 or 4 hereof by judgment, order, settlement or conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself: (a) create a
presumption that the Indemnitee did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, that the
Indemnitee had reasonable cause to believe that his conduct was unlawful; or (b)
otherwise adversely affect the rights of the Indemnitee to indemnification,
except as may be provided herein.
9. ADVANCEMENT OF EXPENSES AND COSTS
All reasonable expenses and costs actually incurred by the Indemnitee
(including attorneys' fees, retainers and advances of disbursements required of
the Indemnitee) shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding, if so requested by the
Indemnitee, within 20 days after the receipt by the Corporation of a statement
or statements from the Indemnitee requesting such advance or advances. The
Indemnitee may submit such statements from time to time. The Indemnitee's
entitlement to such expenses shall include those incurred in connection with any
proceeding by the Indemnitee seeking an adjudication or award in arbitration
pursuant to this Agreement. Such statement or statements shall reasonably
evidence the expenses and costs incurred by him in connection therewith and
shall include or be accompanied by an undertaking by or on behalf of the
Indemnitee to repay such amount if it is ultimately determined that the
Indemnitee is not entitled to be indemnified against such expenses and costs by
the Corporation pursuant to this Agreement or otherwise.
10. REMEDIES OF THE INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY
OR TO ADVANCE EXPENSES
In the event that a determination is made that the Indemnitee is not
entitled to indemnification hereunder or if payment has not been timely made
following a determination of entitlement to indemnification pursuant to Sections
7 and 8, or if expenses are not advanced pursuant to Section 9, the Indemnitee
shall be entitled to a final adjudication in an appropriate court of the State
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of Nevada or any other court of competent jurisdiction of his entitlement to
such indemnification or advance. Alternatively, the Indemnitee may, at his
option, seek an award in arbitration to be conducted by a single arbitrator
pursuant to the rules of the American Arbitration Association, such award to be
made within 60 days following the filing of the demand for arbitration. The
Corporation shall not oppose the Indemnitee's right to seek any such
adjudication or award in arbitration or any other claim. Such judicial
proceeding or arbitration shall be made de novo and the Indemnitee shall not be
prejudiced by reason of a determination (if so made) that he is not entitled to
indemnification. If a determination is made or deemed to have been made pursuant
to the terms of Section 7 or Section 8 hereof that the Indemnitee is entitled to
indemnification, the Corporation shall be bound by such determination and shall
be precluded from asserting that such determination has not been made or that
the procedure by which such determination was made is not valid, binding and
enforceable. The Corporation further agrees to stipulate in any such court or
before any such arbitrator that the Corporation is bound by all the provisions
of this Agreement and is precluded from making any assertions to the contrary.
If the court or arbitrator shall determine that the Indemnitee is entitled to
any indemnification hereunder, the Corporation shall pay all reasonable expenses
(including attorneys' fees) and costs actually incurred by the Indemnitee in
connection with such adjudication or award in arbitration (including, but not
limited to, any appellate proceedings).
11. NOTIFICATION AND DEFENSE OF CLAIM
Promptly after receipt by the Indemnitee of notice of the commencement
of any action, suit or proceeding, the Indemnitee will, if a claim in respect
thereof is to be made against the Corporation under this Agreement, notify the
Corporation in writing of the commencement thereof, but the omission to so
notify the Corporation will not relieve the Corporation from any liability that
it may have to the Indemnitee otherwise than under this Agreement.
Notwithstanding any other provision of this Agreement, with respect to any such
action, suit or proceeding as to which the Indemnitee gives notice to the
Corporation of the commencement thereof:
(i) The Corporation will be entitled to participate therein at its own
expense; and
(ii) Except as otherwise provided in this Section 11(b), to the extent
that it may wish, the Corporation, jointly with any other indemnifying
party similarly notified, shall be entitled to assume the defense
thereof, with counsel satisfactory to the Indemnitee. After notice from
the Corporation to the Indemnitee of its election to so assume the
defense thereof, the Corporation shall not be liable to the Indemnitee
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under this Agreement for any legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense thereof other
than reasonable costs of investigation or as otherwise provided below.
The Indemnitee shall have the right to employ his own counsel in such
action, suit or proceeding, but the fees and expenses of such counsel
incurred after notice from the Corporation of its assumption of the
defense thereof shall be at the expense of the Indemnitee unless (i)
the employment of counsel by the Indemnitee has been authorized by the
Corporation, (ii) the Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Corporation and the
Indemnitee in the conduct of the defense of such action, or (iii) the
Corporation shall not in fact have employed counsel to assume the
defense of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the Corporation. The Corporation
shall not be entitled to assume the defense of any action, suit or
proceeding brought by or on behalf of the Corporation or as to which
the Indemnitee shall have reached the conclusion provided for in clause
(ii) above.
(iii) The Corporation shall not be liable to indemnify the Indemnitee
under this Agreement for any amounts paid in settlement of any action
or claim effected without its written consent. The Corporation shall
not settle any action or claim in any manner that would impose any
penalty or limitation on the Indemnitee without the Indemnitee's
written consent. Neither the Corporation nor the Indemnitee will
unreasonably withhold their consent to any proposed settlement.
12. OTHER RIGHTS TO INDEMNIFICATION
The indemnification and advancement of expenses (including attorneys'
fees) and costs provided by this Agreement shall not be deemed exclusive of any
other rights to which the Indemnitee may now or in the future be entitled under
any provision of the Bylaws of the Corporation, any provision of the Certificate
of Incorporation of the Corporation, any vote of stockholders or Disinterested
Directors, any provision of law or otherwise.
13. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT
In the event that the Indemnitee is subject to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication or award in arbitration to enforce his rights under, or
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to recover damages for breach of, this Agreement, the Indemnitee, if he prevails
in whole or in part in such action, shall be entitled to recover from the
Corporation and shall be indemnified by the Corporation against any actual
expenses for attorneys' fees and disbursements reasonably incurred by him.
14. DURATION OF AGREEMENT
This Agreement shall continue until and terminate upon the later of:
(a) five years after the Indemnitee has ceased to occupy any of the positions or
have any relationship described in Sections 3 and 4 of this Agreement, and (b)
the final termination of all pending or threatened actions, suits, proceedings
or investigations to which the Indemnitee may be subject by reason of the fact
that he is or was a director, officer, employee, agent or fiduciary of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, agent or fiduciary of any other entity, including,
but not limited to, another corporation, partnership, joint venture or trust, or
by reason of any act or omission by him in any such capacity. The
indemnification provided under this Agreement shall continue as to the
Indemnitee even though he may have ceased to be a director or officer of the
Corporation. This Agreement shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of the Indemnitee and his
spouse, successors, assigns, heirs, devisees, executors, administrators or other
legal representatives.
15. SEVERABILITY
If any provision or provisions of this Agreement shall be held invalid,
illegal or unenforceable for any reason whatsoever, (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including, but
not limited to, all portions of any Sections of this Agreement containing any
such provision held to be invalid, illegal, or unenforceable) shall not in any
way be affected or impaired thereby, and (b) to the fullest extent possible, the
provisions of this Agreement (including, but not limited to, all portions of any
paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifest by
the provision held invalid, illegal or unenforceable.
16. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall for
all purposes be deemed to be an original but all of which together shall
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constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought shall be required to be produced to
evidence the existence of this Agreement.
17. CAPTIONS
The captions and headings used in this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.
18. DEFINITIONS
For purposes of this Agreement:
"Disinterested Director" shall mean a Director of the Corporation who is not or
was not a party to the action, suit, investigation or proceeding in respect of
which indemnification is being sought by the Indemnitee.
"Independent Counsel" shall mean a law firm or a member of a law firm that
neither is presently nor in the past five years has been retained to represent:
(i) the Corporation or the Indemnitee in any matter material to either such
party, or (ii) any other party to the action, suit, investigation or proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Corporation or the
Indemnitee in an action to determine the Indemnitee's right to indemnification
under this Agreement.
19. MODIFICATION AND WAIVER
No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
20. NOTICES
All notices, requests, demands or other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by
hand with receipt acknowledged by the party to whom said notice or other
communication shall have been directed or if (ii) mailed by certified or
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registered mail, return receipt requested, with postage prepaid, on the date
shown on the return receipt:
If to the Indemnitee, to: Xxxxx X. Xxxxxx
If to the Corporation, to: American Environmental Energy, Inc.
Attention: Secretary
or to such other address as may be furnished to the Indemnitee by the
Corporation or to the Corporation by the Indemnitee, as the case may be.
21. GOVERNING LAW
The parties hereto agree that this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Nevada,
applied without giving effect to any conflicts-of-law principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
AMERICAN ENVIRONMENTAL ENERGY, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, CEO and President
INDEMNITEE
By: /s/ Xxxxxxxx Xxx
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Xxxxxxxx Xxx
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