Colombia Clean Power & Fuels, Inc. INDEMNIFICATION AGREEMENT
Colombia
Clean Power & Fuels, Inc.
This INDEMNIFICATION AGREEMENT, dated
as of December 31, 2010, is by and between Colombia Clean Power & Fuels,
Inc., a Nevada corporation (the “Company”), and Xxxxxx X. Xxxxxx
(“Indemnitee”).
RECITALS:
A.
Indemnitee is a director or officer of the Company and in such capacity is
performing valuable services for the Company.
B.
The Company and Indemnitee recognize
the difficulty in obtaining directors’ and officers’ liability insurance, the
significant cost of such insurance and the periodic reduction in the coverage of
such insurance.
C.
The Company and Indemnitee further recognize
the substantial increase in litigation subjecting directors and officers to
expensive litigation risks at the same time such liability insurance is being
severely limited.
D.
The Company has adopted and its stockholders have
approved bylaws (the “Bylaws”) providing for the indemnification of the
Company’s directors and officers to the full extent permitted by Nevada Law (the
“Statute”).
E.
The Bylaws and the Statute specifically provide that they are not
exclusive, and they thereby contemplate that contracts may be entered into
between the Company and its directors and officers with respect to
indemnification of such directors and officers.
F. To
induce Indemnitee to serve or continue to serve the Company, the Company desires
to confirm the contract indemnification rights provided in the Bylaws and agrees
to provide Indemnitee with the benefits contemplated by this
Agreement.
IN CONSIDERATION of the mutual terms
and conditions set forth herein, the parties hereto agree as
follows:
1. INDEMNITY
OF INDEMNITEE
1.1. SCOPE
The Company agrees to hold harmless and
indemnify Indemnitee to the full extent permitted by law, notwithstanding that
the basis for such indemnification is not specifically enumerated in this
Agreement, the Company’s Restated Certificate of Incorporation, the Bylaws, any
other statute or otherwise. In the event of any change, after the
date of this Agreement, in any applicable law, statute or rule regarding the
right of a Nevada corporation to indemnify a member of its Board of Directors or
an officer, such change, to the extent it would expand Indemnitee’s rights
hereunder, shall be included within Indemnitee’s rights and the Company’s
obligations hereunder, and, to the extent it would narrow Indemnitee’s rights or
the Company’s obligations hereunder, shall be excluded from this Agreement;
provided, however, that any change required by applicable laws, statutes or
rules to be applied to this Agreement shall be so applied regardless of whether
the effect of such change is to narrow Indemnitee’s rights or the Company’s
obligations hereunder.
1.2. 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 Restated Certificate of Incorporation, the Bylaws,
any agreement, any vote of stockholders or disinterested directors, the Statute
or otherwise, whether as to action in Indemnitee’s official capacity or
otherwise.
1.3. INCLUDED
COVERAGE
If Indemnitee was or is made a party,
or is threatened to be made a party, to or is otherwise involved (including,
without limitation, as a witness) in any Proceeding (as defined below), the
Company shall hold harmless and indemnify Indemnitee from and against any and
all losses, claims, damages, liabilities or expenses, including, without
limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties,
witness fees, amounts paid in settlement and other expenses incurred in
connection with such Proceeding (collectively, “Damages”).
1.4. DEFINITION
OF PROCEEDING
For purposes of this Agreement,
“Proceeding” shall mean any completed, actual, pending or threatened action,
suit, claim or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of the Company) and
whether formal or informal, in which Indemnitee is, was or becomes involved by
reason of the fact that Indemnitee is or was a director, officer, employee,
trustee or agent of the Company or that, being or having been such a director,
officer, employee, trustee or agent, Indemnitee is or was serving at the request
of the Company as a director, officer, employee, trustee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise
(collectively, a “Related Company”), including service with respect to an
employee benefit plan, whether the basis of such proceeding is alleged action
(or inaction) by Indemnitee in an official capacity as a director, officer,
employee, trustee or agent or in any other capacity while serving as a director,
officer, employee, trustee or agent; provided, however, that, except with
respect to an action to enforce the provisions of this Agreement, “Proceeding”
shall not include any action, suit, claim or proceeding instituted by or at the
direction of Indemnitee, unless such action, suit, claim or proceeding is or was
authorized by the Company’s Board of Directors.
1.5. DETERMINATION
OF ENTITLEMENT
In the event that a determination of
Indemnitee’s entitlement to indemnification is required pursuant to Section
145(d) of the Statute or a successor statute or pursuant to other applicable
law, the appropriate decision maker shall make such determination; provided,
however, that Indemnitee shall initially be presumed in all cases to be entitled
to indemnification, that Indemnitee may establish a conclusive presumption of
any fact necessary to such a determination by delivering to the Company a
declaration made under penalty of perjury that such fact is true and that,
unless the Company shall deliver to Indemnitee a written notice that Indemnitee
is not entitled to indemnification within 20 days after the Company’s receipt of
Indemnitee’s initial written request for indemnification, such determination
shall conclusively be deemed to have been made in favor of the Company’s
provision of indemnification, and that the Company hereby agrees not to assert
otherwise.
1.6. CONTRIBUTION
If the indemnification provided under
Section 1.1 is unavailable by reason of a court decision, based on grounds other
than any of those set forth in paragraphs (b) through (d) of Section 4.1, then,
in respect of any Proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such Proceeding), the Company shall
contribute to the amount of Damages (including attorneys’ fees) actually and
reasonably incurred and paid or payable by Indemnitee in such proportion as is
appropriate to reflect (i) the relative benefits received by the Company on the
one hand and Indemnitee on the other from the transaction from which such
Proceeding arose and (ii) the relative fault of the Company on the one hand and
of Indemnitee on the other in connection with the events that resulted in such
Damages as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of Indemnitee on the other
shall be determined by reference to, among other things, the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
the circumstances resulting in such Damages. The Company agrees that
it would not be just and equitable if contribution pursuant to this Section 1.6
were determined by pro rata allocation or any other method of allocation that
does not take account of the foregoing equitable considerations.
1.7. SURVIVAL
The indemnification and contribution
provided under this Agreement shall apply to any and all Proceedings,
notwithstanding that Indemnitee has ceased to serve the Company or a Related
Company, and shall continue so long as Indemnitee shall be subject to any
possible Proceeding, whether civil, criminal or investigative, by reason of the
fact that Indemnitee was a director or officer of the Company or serving in any
other capacity referred to in Section 1.4 of this Agreement.
2. EXPENSE
ADVANCES
2.1. GENERALLY
The right to indemnification of Damages
conferred by Section 1 shall include the right to have the Company pay
Indemnitee’s expenses in any Proceeding as such expenses are incurred and in
advance of such Proceeding’s final disposition (such right, an “Expense
Advance”).
2.2. CONDITIONS
TO EXPENSE ADVANCE
The Company’s obligation to provide an
Expense Advance is subject to the following conditions:
2.2.1. UNDERTAKING
If the Proceeding arose in connection
with Indemnitee’s service as a director or officer of the Company (and not in
any other capacity in which Indemnitee rendered service, including service to
any Related Company), then Indemnitee or Indemnitee’s representative shall have
executed and delivered to the Company an undertaking, which need not be secured
and shall be accepted without reference to Indemnitee’s financial ability to
make repayment, by or on behalf of Indemnitee, to repay all Expense Advances if
it shall ultimately be determined by a final, unappealable decision rendered by
a court having jurisdiction over the parties that Indemnitee is not entitled to
be indemnified by the Company.
2.2.2. COOPERATION
Indemnitee shall give the Company such
information and cooperation as it may reasonably request and as shall be within
Indemnitee’s power.
3. PROCEDURES
FOR ENFORCEMENT
3.1. ENFORCEMENT
In the event that any claim for
indemnity, whether an Expense Advance or otherwise, is made hereunder and is not
paid in full within 60 days after written notice of such claim is delivered to
the Company, Indemnitee may, but need not, at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim (an “Enforcement
Action”).
3.2. PRESUMPTIONS
IN ENFORCEMENT ACTION
In any Enforcement Action, the
following presumptions (and limitation on presumptions) shall
apply:
(a) The
Company expressly affirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereunder to induce Indemnitee to continue
as a director or officer of the Company;
(b) Neither
(i) the failure of the Company (including the Company’s Board of Directors,
independent or special legal counsel or the Company’s stockholders) to have made
a determination prior to the commencement of the Enforcement Action that
indemnification of Indemnitee is proper in the circumstances nor (ii) an actual
determination by the Company, its Board of Directors, independent or special
legal counsel or stockholders that Indemnitee is not entitled to indemnification
shall be a defense to the Enforcement Action or create a presumption that
Indemnitee is not entitled to indemnification hereunder; and
(c) If
Indemnitee is or was serving as a director or officer of a corporation of which
a majority of the shares entitled to vote in the election of its directors is
held by the Company or in an Indemnitee or management capacity in a partnership,
joint venture, trust or other enterprise of which the Company or a wholly owned
subsidiary of the Company is a general partner or has a majority ownership, then
such corporation, partnership, joint venture, trust or other enterprise shall
conclusively be deemed a Related Company and Indemnitee shall conclusively be
deemed to be serving such Related Company at the Company’s request.
3.3. ATTORNEYS’
FEES AND EXPENSES FOR ENFORCEMENT ACTION
In the event Indemnitee is required to
bring an Enforcement Action, the Company shall pay all of Indemnitee’s fees and
expenses in bringing and pursuing the Enforcement Action (including attorneys’
fees at any stage, including on appeal); provided, however, that the Company
shall not be required to provide such payment for such attorneys’ fees or
expenses if a court of competent jurisdiction determines that each of the
material assertions made by Indemnitee in such Enforcement Action was not made
in good faith.
4. LIMITATIONS
ON INDEMNITY; MUTUAL ACKNOWLEDGMENT
4.1. LIMITATIONS
ON INDEMNITY
No indemnity pursuant to this Agreement
shall be provided by the Company:
(a) On
account of any suit in which a final, unappealable judgment is rendered against
Indemnitee for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company in violation of the provisions of
Section 16(b) of the Securities Exchange Act of 1934, as amended;
(b)
For Damages that have been paid directly to Indemnitee by an insurance carrier
under a policy of directors’ and officers’ liability insurance maintained by the
Company;
(c) With
respect to remuneration paid to Indemnitee if it shall be determined by a final
judgment or other final adjudication that such remuneration was in violation of
law;
(d) On
account of Indemnitee’s conduct which is finally adjudged to have been
intentional misconduct, a knowing violation of law, a violation of Section 174
of the Statute or a transaction from which Indemnitee derived an improper
personal benefit; or
(e) If
a final decision by a court having jurisdiction in the matter shall determine
that such indemnification is not lawful.
4.2. SEC
UNDERTAKING
Indemnitee understands and acknowledges
that the Company may be required in the future to undertake with the Securities
and Exchange Commission (the “SEC”) to submit in certain circumstances the
question of indemnification to a court for a determination of the Company’s
right under public policy to indemnify Indemnitee.
5. NOTIFICATION
AND DEFENSE OF CLAIM
5.1. NOTIFICATION
Promptly after receipt by Indemnitee of
notice of the commencement of any Proceeding, Indemnitee shall, if a claim in
respect thereof is to be made against the Company under this Agreement, notify
the Company of the commencement thereof; but the omission so to notify the
Company will not, however, relieve the Company from any liability which it may
have to Indemnitee under this Agreement unless and only to the extent that such
omission can be shown to have prejudiced the Company’s ability to defend the
Proceeding.
5.2. DEFENSE
OF CLAIM
With respect to any such Proceeding as
to which Indemnitee notifies the Company of the commencement
thereof:
(a) The
Company may participate therein at its own expense;
(b) The
Company, jointly with any other indemnifying party similarly notified, may
assume the defense thereof, with counsel satisfactory to
Indemnitee. After notice from the Company to Indemnitee of its
election so to assume the defense thereof, the Company shall not be liable to
Indemnitee under this Agreement for any legal or other expenses (other than
reasonable costs of investigation) subsequently incurred by Indemnitee in
connection with the defense thereof unless (i) the employment of counsel by
Indemnitee has been authorized by the Company, (ii) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company (or any other person or persons included in the joint defense) and
Indemnitee in the conduct of the defense of such action, or (iii) the Company
shall not, in fact, have employed counsel to assume the defense of such action,
in each of which cases the fees and expenses of counsel shall be at the
Company’s expense. The Company shall not be entitled to assume the
defense of any Proceeding brought by or on behalf of the Company or as to which
Indemnitee shall have reasonably made the conclusion provided for in (ii)
above;
(c) The
Company shall not be liable to Indemnitee under this Agreement for any amounts
paid in settlement of any Proceeding effected without its written
consent;
(d) The
Company shall not settle any action or claim in any manner that would impose any
penalty or limitation on Indemnitee without Indemnitee’s written consent;
and
(e) Neither
the Company nor Indemnitee shall unreasonably withhold its consent to any
proposed settlement, provided that Indemnitee may withhold consent to any
settlement that does not provide a complete release of Indemnitee.
6. SEVERABILITY
Nothing in this Agreement is intended
to require or shall be construed as requiring the Company to do or to 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 6, and if this
Agreement or any portion hereof shall be invalidated on any ground by any court
of competent jurisdiction, the Company shall nevertheless indemnify or make
contribution to 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.
7. GOVERNING
LAW; BINDING EFFECT; AMENDMENT AND TERMINATION
(a) This
Agreement shall be interpreted and enforced in accordance with the laws of
California.
(b) This
Agreement shall be binding on Indemnitee and on the Company and its successors
and assigns (including any transferee of all or substantially all of its assets
and any successor by merger or otherwise by operation of law), and shall inure
to the benefit of Indemnitee and Indemnitee’s heirs, personal representatives
and assigns and to the benefit of the Company and its successors and
assigns. The Company shall not effect any sale of substantially all
of its assets, merger, consolidation or other reorganization in which it is not
the surviving entity, unless the surviving entity agrees in writing to assume
all such obligations of the Company under this Agreement.
(c) No
amendment, modification, termination or cancellation of this Agreement shall be
effective unless in writing signed by both parties hereto.
8. NOTICES
All notices, claims and other
communications hereunder shall be in writing and made by hand delivery,
registered or certified mail (postage prepaid, return receipt requested),
facsimile or overnight air courier guaranteeing next-day delivery:
(a) If
to the Company,
to: 000
0xx
Xxxxxx
Xxxxx
000-X
Xxx
Xxxxxx, XX 00000
with a copy
to:
Xxxxxx X. Xxxxx
Attorney
at Law
0000
Xxxxxxx Xxxxxx
Xxxxx
000
Xxxxx
Xxxxxx, XX 00000
(b) If
to Indemnitee, to the address specified on the last page of this Agreement or to
such other address as either party may from time to time furnish to the other
party by a notice given in accordance with the provisions of this Section
8. All such notices, claims and communications shall be deemed to
have been duly given if (i) personally delivered, at the time delivered, (ii)
mailed, five days after dispatched, (iii) sent by facsimile transmission, upon
confirmation of receipt, and (iv) sent by any other means, upon
receipt.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement on and as of the day and year first above
written.
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Colombia
Clean Power & Fuels, Inc.
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| By |
/s/
Xxxxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx, CFO
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INDEMNITEE:
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/s/ Xxxxxx X. Xxxxxx | |
| Xxxxxx X. Xxxxxx | ||
| Address: | ||
| 0000 Xxxxxx Xxxxxxxx Xx. | ||
| Xxxxxxxx, XX 00000 | ||
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with
a copy to:
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