EXHIBIT 99.1
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered into
as of [________], 2006 between Blue Dolphin Energy Company, a Delaware
corporation (the "Company"), and __________ ("Indemnitee").
WITNESSETH:
WHEREAS, it is essential to the Company to retain and attract as directors
and officers the most capable persons available;
WHEREAS, Indemnitee is a director and/or officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims currently being asserted against directors and
officers of corporations; and
WHEREAS, the Certificate of Incorporation and Bylaws of the Company require
the Company to indemnify and advance expenses to its directors and officers to
the fullest extent permitted under Delaware law, and the Indemnitee has been
serving and continues to serve as a director and/or officer of the Company in
part in reliance on the availability of this indemnification in the Company's
Certificate of Incorporation and Bylaws.
NOW, THEREFORE, in consideration of the above premises and for other good
and valuable consideration, and intending to be legally bound hereby, the
parties agree as follows:
Indemnity of Indemnitee. The Company hereby agrees to hold harmless and
indemnify Indemnitee to the fullest extent permitted by law, as such may be
amended from time to time. In furtherance of the foregoing indemnification, and
without limiting the generality thereof:
(a) Proceedings Other Than Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 1(a) if, by reason of his Corporate Status (as defined in Section 12 of
this Agreement), the Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding (as defined in Section 12 of this Agreement) other
than a Proceeding by or in the right of the Company. Pursuant to this Section
1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter
defined), judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by him, or on his behalf, in connection with such
Proceeding or any claim, issue or matter therein, if the Indemnitee acted in
good faith and 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
Proceeding, had no reasonable cause to believe the Indemnitee's conduct was
unlawful.
(b) Proceedings by or in the Right of the Company. Indemnitee shall be
entitled to the rights of indemnification provided in this Section 1(b) if, by
reason of his Corporate Status, the Indemnitee is, or is threatened to be made,
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a party to or participant in any Proceeding brought by or in the right of the
Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against
all Expenses actually and reasonably incurred by the Indemnitee, or on the
Indemnitee's behalf, in connection with such Proceeding if the Indemnitee acted
in good faith and in a manner the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company; provided, however, if applicable
law so provides, no indemnification against such Expenses shall be made in
respect of any claim, issue or matter in such Proceeding as to which Indemnitee
shall have been adjudged to be liable to the Company unless and to the extent
that the Court of Chancery of the State of Delaware shall determine that such
indemnification may be made.
(c) Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified to the maximum extent permitted by law, as such may be amended from
time to time, against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith. If 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 Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Section and without limitation, 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.
Additional Indemnity.
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(d) In addition to, and without regard to any limitations on, the
indemnification provided for in Section 1 of this Agreement, the Company shall
indemnify Indemnitee to the fullest extent permitted by law if Indemnitee is a
party to or threatened to be made a party to any Proceeding (including a
Proceeding by or in the right of the Company to procure a judgment in its favor)
against all Expenses, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee or on his behalf if, by reason of
his Corporate Status, Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding (including a Proceeding by or in the right of the
Company). No indemnity shall be made under this Section 2 on account of
Indemnitee's conduct which constitutes a breach of Indemnitee's duty of loyalty
to the Company or its stockholders or is an act or omission not in good faith or
which involves intentional misconduct or a knowing violation of the law.
(e) For purposes of Section 2, the meaning of the phrase "TO THE FULLEST
EXTENT PERMITTED BY LAW" shall include, but not be limited to:
The fullest extent permitted by the provision of the DGCL that
authorizes or contemplates additional indemnification by agreement or the
corresponding provision of any amendment to or replacement of the DGCL; and
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the fullest extent authorized or permitted by any amendments to or
replacements of the DGCL, adopted after the date of this Agreement that
increase the extent to which a corporation may indemnify its officers and
directors.
Contribution.
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(f) Whether or not the indemnification provided in Sections 1 and 2 hereof
is available, in respect of any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall pay, in the
first instance, the entire amount of any judgment or settlement of such action,
suit or proceeding without requiring Indemnitee to contribute to such payment
and the Company hereby waives and relinquishes any right of contribution it may
have against Indemnitee. The Company shall not enter into any settlement of any
action, suit or proceeding in which the Company is jointly liable with
Indemnitee (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 Indemnitee.
(g) Without diminishing or impairing the obligations of the Company set
forth in the preceding subparagraph, if, for any reason, Indemnitee 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 Company
is jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), the Company shall contribute to the amount of Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred and paid
or payable by Indemnitee in proportion to the relative benefits received by the
Company and all officers, directors or employees of the Company, other than
Indemnitee, who are jointly liable with Indemnitee (or would be if joined in
such action, suit or proceeding), on the one hand, and Indemnitee, 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 Company and all officers, directors or
employees of the Company other than Indemnitee who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, 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 Company and all officers, directors or employees of
the Company, other than Indemnitee, who are jointly liable with Indemnitee (or
would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, 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.
(h) The Company hereby agrees to fully indemnify and hold Indemnitee
harmless from any claims of contribution which may be brought by officers,
directors or employees of the Company, other than Indemnitee, who may be jointly
liable with Indemnitee.
(i) To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to Indemnitee for
any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall
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contribute to the amount incurred by Indemnitee, 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 Company and Indemnitee as a result of the event(s)
and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative
fault of the Company (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).
Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.
Advancement of Expenses. Notwithstanding any other provision of this
Agreement, the Company shall advance all Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding by reason of Indemnitee's Corporate
Status within thirty (30) days after the receipt by the Company of a statement
or statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by an undertaking by
or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately
be determined that Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this Section 5
shall be unsecured and interest free.
Procedures and Presumptions for Determination of Entitlement to
Indemnification. It is the intent of this Agreement to secure for Indemnitee
rights of indemnity that are as favorable as may be permitted under the DGCL and
public policy of the State of Delaware. Accordingly, the parties agree that the
following procedures and presumptions shall apply in the event of any question
as to whether Indemnitee is entitled to indemnification under this Agreement:
(j) To obtain indemnification under this Agreement, Indemnitee shall submit
to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
(k) If there has been no Change in Control (as defined in Section 12 of
this Agreement), upon written request by Indemnitee for indemnification pursuant
to the first sentence of Section 6(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto shall be made
in the specific case by one of the following three methods, which shall be at
the election of the board: (1) by a majority vote of the Disinterested Directors
(as defined in Section 12 of this Agreement), even though less than a quorum, or
by a committee of Disinterested Directors designated by a majority vote of the
Disinterested Directors, even though less than a quorum, (2) if there are no
Disinterested Directors or if the Disinterested Directors so direct, by
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Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to the Indemnitee, or (3) if so directed by the Board, by the
stockholders of the Company. If there has been a Change in Control at the time
the request for indemnification is submitted, Indemnitee's entitlement to
indemnification shall be determined in a written opinion by Independent Counsel
selected by Indemnitee pursuant to Section 6(c) below.
(l) If there has been a Change in Control and the determination of
entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 6(b) hereof, the Independent Counsel shall be selected by the
Indemnitee. Indemnitee shall give the Company written notice advising of the
identity and address of the Independent Counsel so selected. The Company may,
within 10 days after receipt of such written notice of selection, deliver to the
Indemnitee a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" as defined in
Section 12 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If a written
objection is made and substantiated, the Independent Counsel selected may not
serve as Independent Counsel unless and until such objection is withdrawn or a
court has determined that such objection is without merit. If, within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 6(a) hereof, no Independent Counsel shall have been selected and not
objected to, either the Company or Indemnitee may petition the Court of Chancery
of the State of Delaware or other court of competent jurisdiction for resolution
of any objection which shall have been made by the Indemnitee to the Company's
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the court or by such other person as the court
shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under
Section 6(b) hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 6(b) hereof, and the Company shall
pay all reasonable fees and expenses incident to the procedures of this Section
6(c), regardless of the manner in which such Independent Counsel was selected or
appointed.
(m) In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence.
Neither the failure of the Company (including by its directors or independent
legal counsel) to have made a determination prior to the commencement of any
action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Company (including by its directors or
independent legal counsel) that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
(n) Indemnitee shall be deemed to have acted in good faith if Indemnitee's
action is based on the records or books of account of the Enterprise (as defined
in Section 12 of this Agreement), including financial statements, or on
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information supplied to Indemnitee by the officers of the Enterprise in the
course of their duties, or on the advice of legal counsel for the Enterprise or
on information or records given or reports made to the Enterprise by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Enterprise. In addition, the knowledge
and/or actions, or failure to act, of any director, officer, agent or employee
of the Enterprise shall not be imputed to Indemnitee for purposes of determining
the right to indemnification under this Agreement. Whether or not the foregoing
provisions of this Section 6(e) are satisfied, it shall in any event be presumed
that Indemnitee has at all times acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Company. Anyone seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion by clear and convincing evidence.
(o) If the person, persons or entity empowered or selected under Section 6
to determine whether Indemnitee is entitled to indemnification shall not have
made a determination within sixty (60) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee's statement not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law; provided,
however, that such 60-day period may be extended for a reasonable time, not to
exceed an additional thirty (30) days, if the person, persons or entity making
such determination with respect to entitlement to indemnification in good faith
requires such additional time to obtain or evaluate documentation and/or
information relating thereto; and provided, further, that the foregoing
provisions of this Section 6(f) shall not apply if the determination of
entitlement to indemnification is to be made by the stockholders pursuant to
Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt
by the Company of the request for such determination, the Board or the
Disinterested Directors, if appropriate, resolve to submit such determination to
the stockholders for their consideration at an annual meeting thereof to be held
within seventy-five (75) days after such receipt and such determination is made
thereat, or (B) a special meeting of stockholders is called within fifteen (15)
days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so
called and such determination is made thereat.
(p) Indemnitee shall cooperate with the person, persons or entity making
such determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any Independent Counsel, member of
the Board or stockholder of the Company shall act reasonably and in good faith
in making a determination regarding the Indemnitee's entitlement to
indemnification under this Agreement. Any costs or expenses (including
attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with
the person, persons or entity making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.
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(q) The Company acknowledges that a settlement or other disposition short
of final judgment may be successful if it permits a party to avoid expense,
delay, distraction, disruption and uncertainty. In the event that any action,
claim or proceeding to which Indemnitee is a party is resolved in any manner
other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or proceeding with or without
payment of money or other consideration) it shall be presumed that Indemnitee
has been successful on the merits or otherwise in such action, suit or
proceeding. Anyone seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion by clear and convincing evidence.
(r) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that 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 Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.
Remedies of Indemnitee.
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(s) In the event that (i) a determination is made pursuant to Section 6 of
this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5
of this Agreement, (iii) no determination of entitlement to indemnification is
made pursuant to Section 6(b) of this Agreement within 90 days after receipt by
the Company of the request for indemnification, (iv) payment of indemnification
is not made pursuant to this Agreement within ninety (90) days after receipt by
the Company of a written request therefor or (v) payment of indemnification is
not made within ninety (90) days after a determination has been made that
Indemnitee is entitled to indemnification or such determination is deemed to
have been made pursuant to Section 6 of this Agreement, Indemnitee shall be
entitled to an adjudication in an appropriate court of the State of Delaware, or
in any other court of competent jurisdiction, of Indemnitee's entitlement to
such indemnification. The Company shall not oppose Indemnitee's right to seek
any such adjudication.
(t) In the event that a determination shall have been made pursuant to
Section 6(b) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this Section 7
shall be conducted in all respects as a de novo trial on the merits, and
Indemnitee shall not be prejudiced by reason of the adverse determination under
Section 6(b).
(u) In the event that Indemnitee, pursuant to this Section 7 seeks a
judicial adjudication of his rights under, or to recover damages for breach of,
this Agreement, or to recover under any directors' and officers' liability
insurance policies maintained by the Company, the Company shall pay on his
behalf, in advance, any and all Expenses actually and reasonably incurred by him
in such judicial adjudication, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advancement of expenses or
insurance recovery.
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(v) The Company shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 7 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court that the Company is bound by all the provisions of
this Agreement. The Company shall indemnify Indemnitee against any and all
Expenses and, if requested by Indemnitee, shall (within ten (10) days after
receipt by the Company of a written request therefore) advance, to the extent
not prohibited by law, such expenses to Indemnitee, which are incurred by
Indemnitee in connection with any action brought by Indemnitee for
indemnification or advance of Expenses from the Company under this Agreement or
under any directors' and officers' liability insurance policies maintained by
the Company, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of Expenses or insurance recovery,
as the case maybe.
(w) Notwithstanding anything in this Agreement to the contrary, no
determination as to entitlement to indemnification under this Agreement shall be
required to be made prior to the final disposition of the Proceeding.
Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
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(x) The rights of indemnification as provided by this Agreement shall not
be deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the amended and restated certificate of
incorporation of the Company, the amended and restated Bylaws, any agreement, a
vote of stockholders, a resolution of directors or otherwise. No amendment,
alteration or repeal of this Agreement or of any provision hereof shall limit or
restrict any right of Indemnitee under this Agreement in respect of any action
taken or omitted by such Indemnitee in his Corporate Status prior to such
amendment, alteration or repeal. To the extent that a change in the DGCL,
whether by statute or judicial decision, permits greater indemnification than
would be afforded currently under the Bylaws and this Agreement, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change. No right or remedy herein conferred
is intended to be exclusive of any other right or remedy, and every other right
and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other right or
remedy.
(y) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, employees, or
agents or fiduciaries of the Company or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise that such person
serves at the request of the Company, Indemnitee shall be covered by such policy
or policies in accordance with its or their terms to the maximum extent of the
coverage available for any director, officer, employee, agent or fiduciary under
such policy or policies. If, at the time of the receipt of a notice of a claim
pursuant to the terms 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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(z) In the event of any 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 papers required and take all action necessary
to secure such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(aa) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
(bb) The Company's obligation to indemnify or advance Expenses hereunder to
Indemnitee who is or was serving at the request of the Company as a director,
officer, employee or agent of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from such other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise.
Exception to Right of Indemnification. Notwithstanding any provision in
this Agreement, the Company shall not be obligated under this Agreement to make
any indemnity in connection with any claim made against Indemnitee:
(cc) for which payment has actually been made to or on behalf of Indemnitee
under any insurance policy or other indemnity provision, except with respect to
any excess beyond the amount paid under any insurance policy or other indemnity
provision; or
(dd) for an accounting of profits made from the purchase and sale (or sale
and purchase) by Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar
provisions of state statutory law or common law; or
(ee) except as otherwise provided in Sections 7(d) and (e) hereof, in
connection with any Proceeding (or any part of any Proceeding) initiated by
Indemnitee, including any Proceeding (or any part of any Proceeding) initiated
by Indemnitee against the Company or its directors, officers, employees or other
indemnitees, unless (i) the Board authorized the Proceeding (or any part of any
Proceeding) prior to its initiation or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the
Company under applicable law; or
(ff) on account of Indemnitee's conduct that is established by a final
judgment as knowingly fraudulent or deliberately dishonest or that constituted
willful misconduct; or
(gg) on account of Indemnitee's conduct that is established by a final
judgment as constituting a breach of Indemnitee's duty of loyalty to the Company
or resulting in any personal profit or advantage to which Agent was not legally
entitled; or
(hh) if indemnification is not lawful (and, in this respect, both the
Company and Indemnitee have been advised that the Securities and Exchange
Commission believes that indemnification for liabilities arising under the
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federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication).
Duration of Agreement. This Agreement shall continue until and terminate
upon the later of:
(ii) six (6) years after the date that Indemnitee shall have ceased to
serve as a director or officer of the Company or as a director, officer,
trustee, partner, managing member, fiduciary, employee or agent of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which Indemnitee served at the request of the Company; or
(jj) one (1) year after the final termination of any Proceeding (including
any rights of appeal thereto) then pending in respect of which Indemnitee is
granted rights of indemnification or advancement of Expenses hereunder and of
any proceeding commenced by Indemnitee pursuant to Section 13 of this Agreement
relating thereto (including any rights of appeal of any Section 13 proceeding).
(kk) This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors (including
any direct or indirect successor by purchase, merger, consolidation or otherwise
to all or substantially all of the business or assets of the Company), assigns,
spouses, heirs, executors and personal and legal representatives.
Enforcement.
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(ll) The Company expressly confirms and agrees that it has entered into
this Agreement and assumes the obligations imposed on it hereby for good and
valuable consideration, and the Company acknowledges that Indemnitee is relying
upon the Company's commitments to indemnify him as set forth in this Agreement.
(mm) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral, written and implied, between the parties
hereto with respect to the subject matter hereof.
Definitions. For purposes of this Agreement:
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(nn) "Beneficial Owner" shall have the meaning given to such term in Rule
13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall
exclude any Person otherwise becoming a Beneficial Owner by reason of the
stockholders of the Company approving a merger of the Company with another
entity.
(oo) A "Change in Control" shall be deemed to occur upon the earliest to
occur after the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person (as defined below)
is or becomes the Beneficial Owner (as defined below), directly or
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indirectly, of securities of the Company representing forty percent (40%)
or more of the combined voting power of the Company's then outstanding
securities;
(ii) Change in Board of Directors. During any period of two (2)
consecutive years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a transaction
described in Sections (a)(i), (a)(iii) or (a)(iv)) whose election by the
Board or nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a least a majority of the members of the Board;
(iii) Corporate Transactions. The effective date of a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 51% of the combined
voting power of the voting securities of the surviving entity outstanding
immediately after such merger or consolidation and with the power to elect
at least a majority of the board of directors or other governing body of
such surviving entity;
(iv) Liquidation. The approval by the stockholders of the Company of a
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets; and
(v) Other Events. There occurs any other event of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or a response to any similar item on any similar schedule
or form) promulgated under the Exchange Act (as defined below), whether or
not the Company is then subject to such reporting requirement.
(pp) "Corporate Status" describes the status of a person who is or was a
director, officer, employee, agent or fiduciary of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person is or was serving at the express written request of
the Company.
(qq) "Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
(rr) "Enterprise" shall mean the Company and any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
11
that Indemnitee is or was serving at the express written request of the Company
as a director, officer, employee, agent or fiduciary.
(ss) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, participating, or being or preparing to be a
witness in a Proceeding. Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs relating to any appeal
bond or its equivalent. Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(tt) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(uu) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning Indemnitee under this Agreement, or of other indemnitees
under similar indemnification agreements), or (ii) any other party to the
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 Company or Indemnitee in
an action to determine Indemnitee's rights under this Agreement.
(vv) "Person" shall have the meaning as set forth in Sections 13(d) and
14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the
Company, (ii) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, and (iii) any corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
(ww) "Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought by or in the right of the Company or otherwise and
whether civil, criminal, administrative or investigative, in which Indemnitee
was, is or will be involved as a party or otherwise, by reason of the fact that
Indemnitee is or was an officer or director of the Company, by reason of any
action taken by him or of any inaction on his part while acting as an officer or
director of the Company, or by reason of the fact that he is or was serving at
the request of the Company as a director, officer, employee, agent or fiduciary
of another corporation, partnership, joint venture, trust or other Enterprise;
in each case whether or not he is acting or serving in any such capacity at the
time any liability or expense is incurred for which indemnification can be
provided under this Agreement; including one pending on or before the date of
12
this Agreement, but excluding one initiated by an Indemnitee pursuant to Section
7 of this Agreement to enforce his rights under this Agreement.
Severability. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
Without limiting the generality of the foregoing, this Agreement is intended to
confer upon Indemnitee indemnification rights to the fullest extent permitted by
applicable laws. In the event any provision hereof conflicts with any applicable
law, such provision shall be deemed modified, consistent with the aforementioned
intent, to the extent necessary to resolve such conflict.
Modification and Waiver. No supplement, modification, termination or
amendment of this Agreement shall be binding unless executed in writing by both
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 hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with or otherwise receiving any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification covered hereunder.
The failure to so notify the Company shall not relieve the Company of any
obligation which it may have to Indemnitee under this Agreement or otherwise
unless and only to the extent that such failure or delay materially prejudices
the Company.
Notices. All notices and other communications given or made pursuant to
this Agreement shall be in writing and shall be deemed effectively given: (a)
upon personal delivery to the party to be notified, (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the
recipient, and if not so confirmed, then on the next business day, (c) five (5)
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent:
(xx) To Indemnitee at the address set forth below Indemnitee signature
hereto.
(yy) To the Company at:
Blue Dolphin Energy Company
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Secretary
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same Agreement. This Agreement may also be executed and
13
delivered by facsimile signature and in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.
Governing Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to its
conflict of laws rules. The Company and Indemnitee hereby irrevocably and
unconditionally (i) agree that any action or proceeding arising out of or in
connection with this Agreement shall be brought only in the Chancery Court of
the State of Delaware (the "Delaware Court"), and not in any other state or
federal court in the United States of America or any court in any other country,
(ii) consent to submit to the exclusive jurisdiction of the Delaware Court for
purposes of any action or proceeding arising out of or in connection with this
Agreement, (iii) appoint, to the extent such party is not otherwise subject to
service of process in the State of Delaware, irrevocably [name] [address] as its
agent in the State of Delaware as such party's agent for acceptance of legal
process in connection with any such action or proceeding against such party with
the same legal force and validity as if served upon such party personally within
the State of Delaware, (iv) waive any objection to the laying of venue of any
such action or proceeding in the Delaware Court, and (v) waive, and agree not to
plead or to make, any claim that any such action or proceeding brought in the
Delaware Court has been brought in an improper or inconvenient forum.
SIGNATURE PAGE TO FOLLOW
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
BLUE DOLPHIN ENERGY COMPANY
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
INDEMNITEE
Name:
--------------------------
Address:
-----------------------
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