INDEMNIFICATION AGREEMENT
EXHIBIT
10.5
This
Indemnification Agreement (the “Agreement”) is made as of ____________, 2007, by
and between Refinery Science Corp., a Texas corporation (the “Company”), and
____________ (the “Indemnitee”).
RECITALS
The
Company and Indemnitee recognize the increasing difficulty in obtaining
liability insurance for directors, officers and key employees, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance. The Company and Indemnitee further recognize the
substantial increase in corporate litigation in general, subjecting directors,
officers and key employees to expensive litigation risks at the same time as
the
availability and coverage of liability insurance has been severely limited.
Indemnitee does not regard the current protection available as adequate under
the present circumstances, and Indemnitee and agents of the Company may not
be
willing to continue to serve as agents of the Company without additional
protection. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, and to indemnify its directors,
officers and key employees so as to provide them with the maximum protection
permitted by law.
AGREEMENT
In
consideration of the mutual promises made in this Agreement, and for other
good
and valuable consideration, receipt of which is hereby acknowledged, the Company
and Indemnitee hereby agree as follows:
1.
Indemnification.
(a)
Third
Party Proceedings.
The
Company shall indemnify Indemnitee if Indemnitee is or was a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) by reason of the fact
that Indemnitee is or was a director, officer, employee or agent of the Company,
or any subsidiary of the Company, by reason of any action or inaction on the
part of Indemnitee while an officer or director or by reason of the fact that
Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement (if such settlement is approved
in advance by the Company, which approval shall not be unreasonably withheld)
actually and reasonably incurred by Indemnitee in connection with such action,
suit or proceeding if Indemnitee acted in good faith and in a manner 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, had no
reasonable cause to believe Indemnitee’s conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction,
or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create
a
presumption that Indemnitee did not act in good faith and in a manner which
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, that
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful.
(b)
Proceedings
by or in the right of the Company.
The
Company shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or
proceeding by or in the right of the Company or any subsidiary of the Company
to
procure a judgment in its favor by reason of the fact that Indemnitee is or
was
a director, officer, employee or agent of the Company, or any subsidiary of
the
Company, by reason of any action or inaction on the part of Indemnitee while
an
officer or director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees) and, to the fullest extent
permitted by law, amounts paid in settlement (if such settlement is approved
in
advance by the Company, which approval shall not be unreasonably withheld),
in
each case to the extent actually and reasonably incurred by Indemnitee in
connection with the defense or settlement of such action or suit if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in
or
not opposed to the best interests of the Company and its stockholders, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which Indemnitee shall have been finally adjudicated by court order or
judgment to be liable to the Company in the performance of Indemnitee’s duty to
the Company and its stockholders unless and only to the extent that the court
in
which such action or proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, Indemnitee
is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
(c)
Mandatory
Payment of Expenses.
To the
extent that Indemnitee has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in Section 1(a) or Section 1(b)
or
the defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against expenses (including attorneys’ fees) actually and reasonably
incurred by Indemnitee in connection therewith.
2.
No
Employment Rights.
Nothing
contained in this Agreement is intended to create in Indemnitee any right to
continued employment.
3.
Expenses;
Indemnification Procedure.
(a)
Advancement
of Expenses.
The
Company shall advance all expenses incurred by Indemnitee in connection with
the
investigation, defense, settlement or appeal of any civil or criminal action,
suit or proceeding referred to in Section l(a) or Section 1(b) hereof (including
amounts actually paid in settlement of any such action, suit or proceeding).
Indemnitee hereby undertakes to repay such amounts advanced only if, and to
the
extent that, it shall ultimately be determined that Indemnitee is not entitled
to be indemnified by the Company as authorized hereby.
(b)
Notice/Cooperation
by Indemnitee.
Indemnitee shall, as a condition precedent to his or her right to be indemnified
under this Agreement, give the Company notice in writing as soon as practicable
of any claim made against Indemnitee for which indemnification will or could
be
sought under this Agreement. Notice to the Company shall be directed to the
President of the Company and shall be given in accordance with the provisions
of
Section 12(d) below. In addition, Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
Indemnitee’s power.
(c)
Procedure.
Any
indemnification and advances provided for in Section 1 and this Section 3 shall
be made no later than twenty (20) days after receipt of the written request
of
Indemnitee. If a claim under this Agreement, under any statute, or under any
provision of the Company’s Articles of Incorporation or Bylaws providing for
indemnification, is not paid in full by the Company within twenty (20) days
after a written request for payment thereof has first been received by the
Company, Indemnitee may, but need not, at any time thereafter bring an action
against the Company to recover the unpaid amount of the claim and, subject
to
Section 11 of this Agreement, Indemnitee shall also be entitled to be paid
for
the expenses (including attorneys’ fees) of bringing such action. It shall be a
defense to any such action (other than an action brought to enforce a claim
for
expenses incurred in connection with any action, suit or proceeding in advance
of its final disposition) that Indemnitee has not met the standards of conduct
which make it permissible under applicable law for the Company to indemnify
Indemnitee for the amount claimed, but the burden of proving such defense shall
be on the Company and Indemnitee shall be entitled to receive interim payments
of expenses pursuant to Section 3(a) unless and until such defense may be
finally adjudicated by court order or judgment from which no further right
of
appeal exists. It is the parties’ intention that if the Company contests
Indemnitee’s right to indemnification, the question of Indemnitee’s right to
indemnification shall be for the court to decide, and neither the failure of
the
Company (including its Board of Directors, any committee or subgroup of the
Board of Directors, independent legal counsel, or its stockholders) to have
made
a determination that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct
required by applicable law, nor an actual determination by the Company
(including its Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel, or its stockholders) that Indemnitee
has
not met such applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of conduct.
(d)
Notice
to Insurers.
If, at
the time of the receipt of a notice of a claim pursuant to Section 3(b) 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.
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(e)
Selection
of Counsel.
In the
event the Company shall be obligated under Section 3(a) hereof to pay the
expenses of any proceeding against Indemnitee, the Company, if appropriate,
shall be entitled to assume the defense of such proceeding, with counsel
approved by Indemnitee, upon the delivery to Indemnitee of written notice of
its
election so to do. After delivery of such notice, approval of such counsel
by
Indemnitee and the retention of such counsel by the Company, the Company will
not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same proceeding,
provided that (i) Indemnitee shall have the right to employ counsel in any
such
proceeding at Indemnitee’s expense; and (ii) if (A) the employment of counsel by
Indemnitee has been previously authorized by the Company, (B) Indemnitee shall
have reasonably concluded that there may be a conflict of interest between
the
Company and Indemnitee in the conduct of any such defense or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the
expense of the Company.
4.
Additional
Indemnification Rights; Nonexclusivity.
(a)
Scope.
Notwithstanding any other provision of this Agreement, the Company hereby agrees
to indemnify the Indemnitee to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized by
the
other provisions of this Agreement, the Company’s Articles of Incorporation, the
Company’s Bylaws or by 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 Washington corporation to indemnify a member of its board of directors
or
an officer, such changes shall be deemed to be within the purview of
Indemnitee’s rights and the Company’s obligations under this Agreement. In the
event of any change in any applicable law, statute or rule which narrows the
right of a Washington corporation to indemnify a member of its board of
directors or an officer, such changes, to the extent not otherwise required
by
such law, statute or rule to be applied to this Agreement shall have no effect
on this Agreement or the parties’ rights and obligations hereunder.
(b)
Nonexclusivity.
The
indemnification provided by this Agreement shall not be deemed exclusive of
any
rights to which Indemnitee may be entitled under the Company’s Articles of
Incorporation, its Bylaws, any agreement, any vote of stockholders or
disinterested members of the Company’s Board of Directors, the Texas Business
Corporation Act (and any successor statute applicable to the Company), or
otherwise, both as to action in Indemnitee’s official capacity and as to action
in another capacity while holding such office. The indemnification provided
under this Agreement shall continue as to Indemnitee for any action taken or
not
taken while serving in an indemnified capacity even though he or she may have
ceased to serve in any such capacity at the time of any action, suit or other
covered proceeding.
5.
Partial
Indemnification.
If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of the expenses, judgments, fines or
penalties actually or reasonably incurred in the investigation, defense, appeal
or settlement of any civil or criminal action, suit or proceeding, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such expenses, judgments, fines or penalties
to
which Indemnitee is entitled.
6.
Mutual
Acknowledgment.
Both
the Company and Indemnitee acknowledge that in certain instances, Federal law
or
public policy may override applicable state law and prohibit the Company from
indemnifying its directors and officers under this Agreement or otherwise.
For
example, the Company and Indemnitee acknowledge that the Securities and Exchange
Commission (the “SEC”) has taken the position that indemnification is not
permissible for liabilities arising under certain federal securities laws,
and
federal legislation prohibits indemnification for certain ERISA violations.
Indemnitee understands and acknowledges that the Company has undertaken or
may
be required in the future to undertake with the SEC 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 Indemnitee.
7.
Officer
and Director Liability Insurance.
The
Company shall, from time to time, make the good faith determination whether
or
not it is practicable for the Company to obtain and maintain a policy or
policies of insurance with reputable insurance companies providing the officers
and directors of the Company with coverage for losses from wrongful acts, or
to
ensure the Company’s performance of its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company’s directors, if Indemnitee is a director; or of the
Company’s officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company’s key employees, if Indemnitee is not an officer or
director but is a key employee. Notwithstanding the foregoing, the Company
shall
have no obligation to obtain or maintain such insurance if the Company
determines in good faith that such insurance is not reasonably available, if
the
premium costs for such insurance are disproportionate to the amount of coverage
provided, if the coverage provided by such insurance is limited by exclusions
so
as to provide an insufficient benefit, or if Indemnitee is covered by similar
insurance maintained by a parent or subsidiary of the Company.
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8.
Severability.
Nothing
in this Agreement is intended to require or shall be construed as requiring
the
Company to do or fail to do any act in violation of applicable law. The
Company’s inability, pursuant to court order, to perform its obligations under
this Agreement shall not constitute a breach of this Agreement. The provisions
of this Agreement shall be severable as provided in this Section 8. If this
Agreement or any portion hereof shall be invalidated on any ground by any court
of competent jurisdiction, then the Company shall nevertheless indemnify
Indemnitee to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated, and the balance of this
Agreement not so invalidated shall be enforceable in accordance with
its
terms.
9.
Exceptions.
Any
other provision herein to the contrary notwithstanding, the Company shall not
be
obligated pursuant to the terms of this Agreement:
(a)
Claims
Initiated By Indemnitee.
To
indemnify or advance expenses to Indemnitee with respect to proceedings or
claims initiated or brought voluntarily by Indemnitee and not by way of defense,
except with respect to proceedings brought to establish or enforce a right
to
indemnification under this Agreement or any other statute or law or otherwise
as
required under the Texas Business Corporation Act (and any successor statute
applicable to the Company), but such indemnification or advancement of expenses
may be provided by the Company in specific cases if the Board of Directors
finds
it to be appropriate;
(b)
Lack
of Good Faith.
To
indemnify Indemnitee for any expenses incurred by Indemnitee with respect to
any
proceeding instituted by Indemnitee to enforce or interpret this Agreement,
if a
court of competent jurisdiction determines that each of the material assertions
made by Indemnitee in such proceeding was not made in good faith or was
frivolous;
(c)
Insured
Claims.
To
indemnify Indemnitee for expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) to the extent such expenses or
liabilities have been paid directly to Indemnitee by an insurance carrier under
a policy of officers’ and directors’ liability insurance maintained by the
Company; or
(d)
Claims
Under Section 16(b).
To
indemnify Indemnitee for expenses or the payment of profits arising from the
purchase and sale by Indemnitee of securities in violation of Section 16(b)
of
the Securities Exchange Act of 1934, as amended, or any similar successor
statute.
10.
Construction
of Certain Phrases.
(a)
For
purposes of this Agreement, references to the “Company” shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority
to
indemnify its directors, officers, and employees or agents, so that if
Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting
or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
(b)
For
purposes of this Agreement, references to “Other Enterprises” shall include
employee benefit plans; references to “Fines” shall include any excise taxes
assessed on Indemnitee with respect to an employee benefit plan; and references
to “Serving at the Request of the Company” shall include any service as a
director, officer, employee or agent of the Company which imposes duties on,
or
involves services by, such director, officer, employee or agent with respect
to
an employee benefit plan, its participants, or beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in
the
interest of the participants and beneficiaries of an employee benefit plan,
Indemnitee shall be deemed to have acted in a manner “Not Opposed to the Bests
Interests of the Company” as referred to in this Agreement.
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11.
Attorneys’
Fees.
In the
event that any action is instituted by Indemnitee under this Agreement to
enforce or interpret any of the terms hereof, Indemnitee shall be entitled
to be
paid all court costs and expenses, including reasonable attorneys’ fees,
incurred by Indemnitee with respect to such action, unless as a part of such
action, the court of competent jurisdiction determines that each of the material
assertions made by Indemnitee as a basis for such action were not made in good
faith or were frivolous. In the event of an action instituted by or in the
name
of the Company under this Agreement or to enforce or interpret any of the terms
of this Agreement, Indemnitee shall be entitled to be paid all court costs
and
expenses, including attorneys’ fees, incurred by Indemnitee in defense of such
action (including with respect to Indemnitee’s counterclaims and cross-claims
made in such action), unless as a part of such action the court determines
that
each of Indemnitee’s material defenses to such action were made in bad faith or
were
frivolous.
12.
Miscellaneous.
(a)
Governing
Law.
This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the State of Washington, without giving effect
to
principles of conflict of law.
(b)
Entire
Agreement; Enforcement of Rights.
This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter herein and merges all prior discussions between
them. No modification of or amendment to this Agreement, nor any waiver of
any
rights under this Agreement, shall be effective unless in writing signed by
the
parties to this Agreement. The failure by either party to enforce any rights
under this Agreement shall not be construed as a waiver of any rights of such
party.
(c)
Construction.
This
Agreement is the result of negotiations between and has been reviewed by each
of
the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and
no
ambiguity shall be construed in favor of or against any one of the parties
hereto.
(d)
Notices.
Any
notice, demand or request required or permitted to be given under this Agreement
shall be in writing and shall be deemed sufficient when delivered personally
or
sent by telegram or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed
to
the party to be notified at such party’s address as set forth below or as
subsequently modified by written notice.
(e)
Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall constitute one instrument.
(f)
Successors
and Assigns.
This
Agreement shall be binding upon the Company and its successors and assigns,
and
inure to the benefit of Indemnitee and Indemnitee’s heirs, legal representatives
and assigns.
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of page intentionally left blank]
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(g)
Subrogation.
In the
event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who
shall
execute all documents required and shall do all acts that may be necessary
to
secure such rights and to enable the Company to effectively
bring
suit to enforce such rights.
The
parties hereto have executed this Agreement as of the day and year set forth
on
the first page of this Agreement.
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Address:
000 X. Xxxxxxxxxx Xxx., #000 Xxxxxx Xxxx
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AGREED
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