INDEMNIFICATION AGREEMENT
This
Agreement is made and entered into this 19th day of December 2007 (the
“Agreement”), by and between Sionix Corporation, a Nevada corporation (the
“Company”, which term shall include, where appropriate, any Entity (as
hereinafter defined) controlled directly or indirectly by the Company) and
Xxxxxxx Xxxxxxxx (the “Indemnitee”).
WHEREAS,
the
Indemnitee is an officer of the Company;
WHEREAS,
as an
officer of the Company, the Indemnitee is exposed to significant litigation
risks and expenses;
WHEREAS,
in
light of the foregoing, the Company desires to provide the Indemnitee with
specific contractual assurance of the Indemnitee’s rights to full
indemnification against litigation risks and expenses (regardless, among other
things, of any amendment to or revocation of any of the Company’s Articles of
Incorporation or by-laws or any change in the ownership of the Company or the
composition of its Board of Directors); and
NOW,
THEREFORE,
in
consideration of the promises and the covenants contained herein, the Company
and the Indemnitee do hereby covenant and agree as follows:
1. Definitions.
(a) “Corporate
Status” describes the status of a person who is serving or has served (i) as a
director of the Company, including as a member of any committee thereof, (ii)
as
an officer of the Company, (iii) in any capacity with respect to any employee
benefit plan of the Company, or (iv) as a director, partner, trustee, officer,
employee, or agent of any other Entity at the request of the Company. For
purposes of subsection (iv) of this Section 1(a), an officer or director of
the
Company who is serving or has served as a director, partner, trustee, officer,
employee or agent of a Subsidiary (as defined below) shall be deemed to be
serving at the request of the Company.
(b) “Entity”
shall mean any corporation, partnership, limited liability company, joint
venture, trust, foundation, association, organization or other legal
entity.
(c) “Expenses”
shall mean all direct and indirect fees, costs and expenses of any nature
whatsoever actually and reasonably incurred in connection with the
investigation, preparation of a defense, appeal of or settlement of any
Proceeding (as defined below), including, without limitation, reasonable
attorneys fees, disbursements and retainers (including, without limitation,
any
such fees, disbursements and retainers incurred by the Indemnitee pursuant
to
Sections 8 and 11(c) of this Agreement), fees and disbursements of expert
witnesses, private investigators and professional advisors (including, without
limitation, accountants and investment bankers), court costs, transcript costs,
fees of experts, travel expenses, duplicating, printing and binding costs,
telephone and fax transmission charges, postage, delivery services, secretarial
services and other disbursements and expenses; provided, however, that Expenses
shall not include judgments, fines, penalties or amounts paid in settlement
of a
Proceeding.
(d) “Indemnifiable
Expenses”, “Indemnifiable Liabilities” and “Indemnifiable Amounts” shall have
the meanings ascribed to those terms in Section 3(a) below.
(e) “Liabilities”
shall mean judgments, damages, liabilities, losses, penalties, excise taxes,
fines and amounts paid in settlement.
(f) “Proceeding”
shall mean any threatened, pending or completed claim, action, suit,
arbitration, alternate dispute resolution process, investigation, administrative
hearing, appeal, or any other proceeding, whether civil, criminal,
administrative, arbitrative or investigative, whether formal or informal,
whether or not he is serving in such capacity at the time any Expense or
Liability is incurred for which indemnification or reimbursement can be provided
under this Agreement, including a proceeding initiated by the Indemnitee
pursuant to Section 11 of this Agreement to enforce the Indemnitee’s rights
hereunder or an action brought by or in the right of the Company.
(g) “Subsidiary”
shall mean any corporation, partnership, limited liability company, joint
venture, trust or other Entity of which the Company owns (either directly or
through or together with another Subsidiary of the Company) either (i) a general
partner, managing member or other similar interest or (ii) (A) 50% or more
of
the voting power of the voting capital stock or other voting equity interests
of
any corporation, partnership, limited liability company, joint venture or other
Entity, or (B) 50% or more of the outstanding voting capital stock or other
voting equity interests of any corporation, partnership, limited liability
company, joint venture or other Entity.
2. Services
of the Indemnitee. This Agreement shall not impose any obligation on the
Indemnitee or the Company to continue the Indemnitee’s service to the Company
beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.
3. Agreement
to Indemnify. The Company agrees to indemnify the Indemnitee as
follows:
(a) Subject
to the exceptions contained in Section 4(a) below, if the Indemnitee was or
is a
party or is threatened to be made a party to any Proceeding (other than an
action by or in the right of the Company) by reason of the Indemnitee’s
Corporate Status,
the
Indemnitee shall be indemnified by the Company against all Expenses and
Liabilities incurred or paid by the Indemnitee in connection with such
Proceeding (referred to herein as “Indemnifiable Expenses” and “Indemnifiable
Liabilities”, respectively, and collectively as “Indemnifiable
Amounts”).
(b) To
the
fullest extent permitted by applicable law and subject to the exceptions
contained in Section 4(b) below, if the Indemnitee was or is a party or is
threatened to be made a party to any Proceeding by or in the right of the
Company to procure a judgment in its favor by reason of the Indemnitee’s
Corporate Status, the Indemnitee shall be indemnified by the Company against
all
Indemnifiable Expenses as well as against any amount paid by Indemnitee in
settlement of the Proceeding.
4. Exceptions
to Indemnification. Upon receipt of a written claim addressed to the Board
of
Directors for indemnification pursuant to Section 3, the Company shall determine
by any of the methods set forth in Section
78.751 of the Nevada Revised Statutes
whether
the Indemnitee has met the applicable standards of conduct which makes is
permissible under applicable law to indemnify the Indemnitee. If it is
determined that the Indemnitee is entitled to indemnification, the Indemnitee
shall be entitled to such indemnification under Sections 3(a) and 3(b) above
in
all circumstances other than the following:
(a) If
indemnification is requested under Section 3(a) and it has been determined
that,
in connection with the subject of the Proceeding out of which the claim for
indemnification has arisen, the Indemnitee failed to act (i) in good faith
and
(ii) in a manner the Indemnitee reasonably believed to be in or not opposed
to
the best interests of the Company and, with respect to any criminal action
or
proceeding, the Indemnitee had reasonable cause to believe that the Indemnitee’s
conduct was unlawful, the Indemnitee shall not be entitled to payment of
Indemnifiable Amounts hereunder.
(b) If
indemnification is requested under Section 3(b) and
(i) it
has
been determined that, in connection with the subject of the Proceeding out
of
which the claim for indemnification has arisen, the Indemnitee failed to act
(A)
in good faith and (B) in a manner the Indemnitee reasonably believed to be
in or
not opposed to the best interests of the Company, the Indemnitee shall not
be
entitled to payment of Indemnifiable Expenses hereunder; or
(ii) it
has
determined that the Indemnitee is liable to the Company with respect to any
claim, issue or matter involved in the Proceeding out of which the claim for
indemnification has arisen, no Indemnifiable Expenses shall be paid with respect
to such claim, issue or matter unless a court of competent jurisdiction shall
determine upon application that, despite the adjudication of liability, but
in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such Indemnifiable Expenses which such court shall
deem proper.
5. Procedure
for Payment of Indemnifiable Amounts. The Indemnitee shall submit to the Company
a written request specifying the Indemnifiable Amounts for which the Indemnitee
seeks payment under Section 3 of this Agreement and the basis for the claim.
The
Company shall pay such Indemnifiable Amounts to the Indemnitee within ten (10)
calendar days of receipt of the request. At the request of the Company, the
Indemnitee shall furnish such documentation and information as is reasonably
available to the Indemnitee and necessary to establish that the Indemnitee
is
entitled to indemnification hereunder.
6. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding
any
other provision of this Agreement, and without limiting any such provision,
to
the extent that the Indemnitee is, by reason of the Indemnitee’s Corporate
Status, a party to and is successful, on the merits or otherwise, in any
Proceeding, the Indemnitee shall be indemnified against all Expenses reasonably
incurred by the Indemnitee or on the Indemnitee’s behalf in connection
therewith. If the Indemnitee is not wholly successful in such Proceeding but
is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify the
Indemnitee against all Expenses reasonably incurred by the Indemnitee or on
the
Indemnitee’s behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Agreement, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without prejudice, shall
be
deemed to be a successful result as to such claim, issue or matter.
7. Effect
of
Certain Resolutions. Neither the settlement nor termination of any Proceeding
nor the failure of the Company to award indemnification or to determine that
indemnification is payable shall create an adverse presumption that the
Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not create a presumption
that the Indemnitee did not act in good faith and in a manner which the
Indemnitee reasonably believed to be in, or not opposed to, the best interests
of the Company or, with respect to any criminal action or proceeding, had
reasonable cause to believe that the Indemnitee’s action was
unlawful.
8. Agreement
to Advance Expenses; Conditions. The Company shall pay to the Indemnitee all
Indemnifiable Expenses incurred by the Indemnitee in connection with any
Proceeding, including a Proceeding by or in the right of the Company, in advance
of the final disposition of such Proceeding, as the same are incurred. In making
any such advance, the ability of the Indemnitee to repay shall not be a factor.
To the extent required by Nevada law, the Indemnitee hereby undertakes to repay
the amount of Indemnifiable Expenses paid to the Indemnitee if it is finally
determined by a court of competent jurisdiction that the Indemnitee is not
entitled under this Agreement to indemnification with respect to such Expenses.
This undertaking is an unlimited general obligation of the
Indemnitee.
9. Procedure
for Advance Payment of Expenses. The Indemnitee shall submit to the Company
a
written request specifying the Indemnifiable Expenses for which the Indemnitee
seeks an advance under Section 8 of this Agreement, together with documentation
evidencing that the Indemnitee has incurred such Indemnifiable Expenses. Payment
of Indemnifiable Expenses under Section 8 shall be made no later than ten (10)
calendar days after the Company’s receipt of such request.
10. Selection
of Counsel. In the event the Company shall be obligated under this Agreement
to
pay Indemnifiable Expenses with respect to any Proceeding, the Company shall
be
entitled to assume the defense of such Proceeding with counsel approved by
the
Indemnitee, which approval shall not be unreasonably withheld, upon delivery
of
written notice to the Indemnitee of the Company’s election to do so. After the
Company’s assumption of the defense, the Company shall not be liable to the
Indemnitee under this Agreement for any fees of counsel subsequently incurred
by
the Indemnitee with respect to such Proceeding; provided,
however,
that (i)
the Indemnitee shall have the right to employ his own counsel in any such
Proceeding at the Indemnitee’s expense; and (ii) if the Indemnitee shall have
reasonably concluded that there may be a conflict of interest by reason of
the
representation in such Proceeding of the Indemnitee and the Company and/or
any
other defendants by the same counsel, then the Indemnitee may retain his own
counsel with respect to such Proceeding and the fees and expenses of such
counsel shall be an amount for which the Indemnitee is entitled to
indemnification from the Company under this Agreement, and (iii) if the Company
does not retain counsel after assuming the defense of the Proceeding or if
counsel does not vigorously defend the Proceeding, then the Indemnitee may
retain his own counsel with respect to such Proceeding and the fees and expenses
of such counsel shall be an amount for which the Indemnitee is entitled to
indemnification from the Company under this Agreement. The Indemnitee shall
notify the Company in writing of any matter with respect to which the Indemnitee
intends to seek indemnification hereunder as soon as reasonably practicable
following the receipt by the Indemnitee of written notice thereof. The written
notification to the Company shall be addressed to the Board of Directors and
shall include a description of the nature of the Proceeding and the facts
underlying the Proceeding and be accompanied by copies of any documents filed
with the court in which the Proceeding is pending. In addition, the Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within the Indemnitee’s power.
11. Remedies
of Indemnitee.
(a) Right
to
Petition Court. In the event that the Indemnitee makes a request for payment
of
Indemnifiable Amounts under Sections 3 and 5 above, or a request for an advance
of Indemnifiable Expenses under Sections 8 and 9 above, and the Company fails
to
make such payment or advance in a timely manner pursuant to the terms of this
Agreement, the Indemnitee may petition a court of law to enforce the Company’s
obligations under this Agreement.
(b) Burden
of
Proof. In any judicial proceeding brought under Section 11(a) above, the Company
shall have the burden of proving that the Indemnitee is not entitled to payment
of the Indemnifiable Amounts hereunder.
(c) Expenses.
So long as the Indemnitee prevails in any action he files pursuant to Section
11(a) or if the Company and the Indemnitee settle such action, the Company
agrees to reimburse the Indemnitee in full for any Expenses incurred by the
Indemnitee in connection with investigating, preparing for, litigating,
defending or settling any action brought by the Indemnitee under Section 11(a)
above, or in connection with any claim or counterclaim brought by the Company
in
connection therewith.
(d) Validity
of Agreement. The Company shall be precluded from asserting in any Proceeding,
including, without limitation, an action under Section 11(a) above, that the
provisions of this Agreement are not valid, binding and enforceable or that
there is insufficient consideration for this Agreement and shall stipulate
in
court that the Company is bound by all the provisions of this
Agreement.
(e) Failure
to Act Not a Defense. The failure of the Company (including its Board of
Directors or any committee thereof, independent legal counsel or stockholders)
to make a determination concerning the permissibility of the payment of
Indemnifiable Amounts or the advance of Indemnifiable Expenses under this
Agreement shall not be a defense in any action brought under Section 11(a)
above, and shall not create a presumption that such payment or advance is not
permissible.
12. Representations
and Warranties of the Company. The Company hereby represents and warrants to
the
Indemnitee as follows:
(a) Authority.
The Company has all necessary power and authority to enter into, and be bound
by
the terms of, this Agreement, and the execution, delivery and performance of
the
undertakings contemplated by this Agreement have been duly authorized by the
Company.
(b) Enforceability.
This Agreement, when executed and delivered by the Company in accordance with
the provisions hereof, shall be a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the enforcement of
creditors’ rights generally.
13. Insurance.
In the event the Company obtains directors and officers liability insurance,
the
Company shall use its reasonable best efforts to maintain such coverage in
effect and the Indemnitee shall be named as an insured in such a manner as
to
provide the Indemnitee the same rights and benefits as are accorded to the
most
favorably insured of the Company’s officers and directors. If, at the time of
the receipt of a notice of a claim pursuant to Section 8 hereof, the Company
has
director and officer liability insurance in effect, the Company shall give
prompt notice of the commencement of such Proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of the Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policies.
14. Fees
and
Expenses. During the term of the Indemnitee’s service as an officer or director,
the Company shall promptly reimburse the Indemnitee for all reasonable travel
and other reasonable expenses incurred by the Indemnitee in connection with
the
Indemnitee’s service as an officer or director or member of any board committee
or otherwise in connection with the Company’s business.
15. Contract
Rights Not Exclusive. The rights to payment of Indemnifiable Amounts and
advancement of Indemnifiable Expenses provided by this Agreement shall be in
addition to, but not exclusive of, any other rights which Indemnitee may have
at
any time under applicable law, the Company’s by-laws or articles of
incorporation, or any other agreement, vote of stockholders or directors (or
a
committee of directors), or otherwise, both as to action in Indemnitee’s
official capacity and as to action in any other capacity as a result of
Indemnitee’s serving as a director or officer of the Company.
16. Successors.
This Agreement shall be (a) binding upon all successors and assigns of the
Company (including any transferee of all or a substantial portion of the
business, stock and/or assets of the Company and any direct or indirect
successor by merger or consolidation or otherwise by operation of law) and
(b)
binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of Indemnitee. This Agreement
shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.
17. Subrogation.
In the event of any payment of Indemnifiable Amounts under this Agreement,
the
Company shall be subrogated to the extent of such payment to all of the rights
of contribution or recovery of Indemnitee against other persons, and Indemnitee
shall take, at the request of the Company, all reasonable action necessary
to
secure such rights, including the execution of such documents as are necessary
to enable the Company to bring suit to enforce such rights.
18. Change
in
Law. To the extent that a change in Nevada law (whether by statute or judicial
decision) shall permit broader indemnification or advancement of expenses than
is provided under the terms of the by-laws of the Company and this Agreement,
Indemnitee shall be entitled to such broader indemnification and advancements,
and this Agreement shall be deemed to be amended to such extent.
19. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such
a manner as to be effective and valid under applicable law, but if any provision
of this Agreement, or any clause thereof, shall be determined by a court of
competent jurisdiction to be illegal, invalid or unenforceable, in whole or
in
part, such provision or clause shall be limited or modified in its application
to the minimum extent necessary to make such provision or clause valid, legal
and enforceable, and the remaining provisions and clauses of this Agreement
shall remain fully enforceable and binding on the parties.
20. Indemnitee
as Plaintiff. Except as provided in Section 11(c) of this Agreement and in
the
next sentence, Indemnitee shall not be entitled to payment of Indemnifiable
Amounts or advancement of Indemnifiable Expenses with respect to any Proceeding
brought by Indemnitee against the Company, any Entity which it controls, any
director or officer thereof, or any third party, unless the Company has
consented to the initiation of such Proceeding. This Section shall not apply
to
counterclaims or affirmative defenses asserted by Indemnitee in an action
brought against Indemnitee.
21. Modifications
and Waiver. Except as provided in Section 18 above with respect to changes
in
Nevada law which broaden the right of Indemnitee to be indemnified by the
Company, no supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by each of the parties hereto. No waiver
of
any of the provisions of this Agreement shall be deemed or shall constitute
a
waiver of any other provisions of this Agreement (whether or not similar),
nor
shall such waiver constitute a continuing waiver.
22. Notices.
Any notice or demand which is required or provided to be given under this
Agreement shall be deemed to have been sufficiently given and received for
all
purposes when delivered by hand, telecopy, telex or other method of facsimile,
or five days after being sent by certified or registered mail, postage and
charges prepaid, return receipt requested, or two days after being sent by
overnight delivery providing receipt of delivery, if to the Company, to the
address on record with the Securities and Exchange Commission as reported on
its
website xxx.xxx.xxx
or at
any other address designated by the Company to the Indemnitee in writing; if
to
the Indemnitee, at the address set forth below such Indemnitee’s name on the
signature page hereto, or at any other address designated by the Indemnitee
to
the Company in writing.
23. Governing
Law. This Agreement shall be governed by and construed and enforced under the
laws of the State of Nevada without giving effect to the provisions thereof
relating to conflicts of law.
24. Inability
of the Company to Indemnify. Both the Company and the Indemnitee acknowledge
that in certain instances federal law or applicable public policy may prohibit
the Company from indemnifying its directors and officers under this Agreement
or
otherwise. The Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the appropriate
state or federal regulatory agency to submit for approval any request for
indemnification, and has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question
of
indemnification to a court in certain circumstances for a determination of
the
Company’s right under public policy to indemnify the Indemnitee.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the day and year first above
written.
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COMPANY:
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Sionix
Corporation
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By:
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/s/ Xxxxxx XxXxxx | |
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Name:
Xxxxxx XxXxxx
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Title:
Chief Financial Officer
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INDEMNITEE:
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/s/ Xxxxxxx
Xxxxxxxx
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Name:
Xxxxxxx Xxxxxxxx
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