INDEMNIFICATION AGREEMENT
Exhibit 10.4
This Indemnification Agreement (this “Agreement”), dated as of February ____, 2011, is made by
and between Abtech Holdings, Inc. (formerly known as Xxxxxx Resources, Inc.), a Nevada corporation
(the “Company”), and the undersigned, who is either a director or an officer of the Company (the
“Indemnitee”), with this Agreement to be deemed effective as of the date that the Indemnitee first
became a director or an officer of the Company.
RECITALS
A. The Company is aware that competent and experienced persons are reluctant to serve as
directors or officers of corporations unless they are protected by comprehensive liability
insurance and indemnification, due to the exposure to litigation costs and risks resulting from
their service to such corporations, and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such directors and officers;
B. The Board of Directors of the Company (the “Board”) has concluded that, to retain and
attract talented and experienced individuals to serve as officers or directors of the Company, it
is necessary for the Company contractually to indemnify certain of such persons and to assume for
itself maximum liability for expenses and damages in connection with claims against such persons in
connection with their service to the Company;
C. Section 7502 of Chapter 78 of the Nevada General Corporation Law, under which the Company
is organized (“Section 7502”), empowers the Company to indemnify by agreement its present and
former officers and directors and persons who serve, at the request of the Company, as directors or
officers of other corporations, partnerships, joint ventures, trusts, or other enterprises and
expressly provides that the indemnification provided by Section 7502 is not exclusive; and
D. The Company desires and has requested the Indemnitee to serve or continue to serve as a
director or an officer of the Company free from undue concern for claims for damages arising out of
or related to such services to the Company.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions
1.1 Agent. For the purposes of this Agreement, “agent” of the Company means any person who is
or was a director or an officer of the Company or a subsidiary of the Company; or is or was serving
at the request of the Company or a subsidiary of the Company as a director or an officer of another
foreign or domestic corporation, partnership, joint venture, trust, or other enterprise or an
affiliate of the Company. The term “enterprise” includes any employee benefit plan of the Company,
its subsidiaries, affiliates, and predecessor corporations.
1.2 Company. For purposes of this Agreement, the “Company” includes, in addition to the
resulting corporation, any constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger that, if its separate existence had continued,
would have had power and authority to indemnify its directors or officers so that any person
who is or was a director or an officer of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director or an officer of another corporation,
partnership, joint venture, trust, or other enterprise, shall stand in the same position under this
Agreement with respect to the resulting or surviving corporation as such person would have with
respect to such constituent corporation if its separate existence had continued.
1.3 Expenses. For the purposes of this Agreement, “expenses” includes all direct and indirect
costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and
related disbursements and other out-of-pocket costs) actually and reasonably incurred by the
Indemnitee in connection with the investigation, defense, or appeal of a proceeding or establishing
or enforcing a right to indemnification or advancement of expenses under this Agreement, Section
7502 or otherwise; provided, however, that expenses shall not include any
judgments, fines, ERISA excise taxes or penalties, or amounts paid in settlement of a proceeding.
1.4 Fines. For purposes of this Agreement, references to “fines” includes any excise taxes
assessed on a person with respect to any employee benefit plan.
1.5 Liabilities. For purposes of this Agreement, “liabilities” means judgments, fines, ERISA
execute taxes or penalties, and amounts paid in settlement in connection with a proceeding.
1.6 Other Enterprises. For purposes of this Agreement, “other enterprises” includes employee
benefit plans.
1.7 Proceeding. For the purposes of this Agreement, “proceeding” means any threatened,
pending, or completed action, suit, or other proceeding, whether civil, criminal, administrative,
or investigative.
1.8 Subsidiary. For purposes of this Agreement, “subsidiary” means any corporation of which
more than 50% of the outstanding voting securities is owned directly or indirectly by the Company,
by the Company and one or more of its subsidiaries, or by one or more of the Company’s
subsidiaries.
1.9 Serving at the Request of the Company. For purposes of this Agreement, “serving at the
request of the Company” includes any service as a director or an officer of the Company that
imposes duties on, or involves services by, such director or officer with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a
manner such person reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this Agreement.
2. Agreement to Serve . The Indemnitee agrees to serve and/or continue to serve as an agent of the Company, at the
will of the Company (or under separate agreement, if such agreement exists), in the capacity the
Indemnitee currently serves as an agent of the Company, faithfully and to the best of his ability,
so long as he is duly appointed or elected and qualified in accordance with the applicable
provisions of the charter documents of the Company or any
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subsidiary of the Company; provided, however, that the Indemnitee may at any
time and for any reason resign from such position (subject to any contractual obligation that the
Indemnitee may have assumed apart from this Agreement), and the Company and any subsidiary shall
have no obligation under this Agreement to continue the Indemnitee in any such position.
3. Directors’ and Officers’ Insurance. The Company shall, to the extent that the Board determines it to be economically
reasonable, maintain a policy of directors’ and officers’ liability insurance (“D&O Insurance”), on
such terms and conditions as may be approved by the Board.
4. Mandatory Indemnification. Subject to Section 9 below, the Company shall indemnify the Indemnitee:
4.1 Third-Party Actions. If the Indemnitee is a person who was or is a party or is threatened
to be made a party to any proceeding (except an action by or in the right of the Company) by reason
of the fact that the Indemnitee is or was an agent of the Company, or by reason of anything done or
not done by the Indemnitee in any such capacity, against any and all expenses and liabilities of
any type whatsoever incurred by the Indemnitee in connection with such proceeding if (a) 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 action or
proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful, or (b) the
Indemnitee, if a director or an officer of the Company, did not act or fail to act in a manner that
constituted a breach of the Indemnitee’s fiduciary duties as a director or an officer or such
Indemnitee’s breach of those duties did not involve intentional misconduct, fraud, or a knowing
violation of law; and
4.2 Derivative Actions. If the Indemnitee is a person who 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 fact that the Indemnitee is or was an agent of the Company, or by reason of
anything done or not done by the Indemnitee in any such capacity, against any and all expenses and
liabilities incurred by the Indemnitee in connection with such proceeding if (a) 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, or (b) the Indemnitee, if a director or an officer of the
Company, did not act or fail to act in a manner that constituted a breach of the Indemnitee’s
fiduciary duties as a director or an officer or such Indemnitee breach of those duties involved
intentional misconduct, fraud, or a knowing violation of law; except that no
indemnification under this subsection shall be made in respect of any claim, issue, or matter as to
which the Indemnitee shall have been adjudged by a court of competent jurisdiction, after the
exhaustion of all appeals thereform, to be liable to the Company or for amounts paid in settlement
to the Company, unless and only to the extent that the court in which such proceeding was brought
or another court of competent jurisdiction determines upon application that, in view of all the
circumstances of the case, the Indemnitee is fairly and reasonable entitled to indemnity for such
expenses as the court deems proper; and
4.3 Exception for Amounts Covered by Insurance. Notwithstanding the foregoing, the Company
shall not be obligated to indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise
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taxes or penalties, and amounts paid in settlement) to the extent such have been paid to the
Indemnitee by D&O Insurance.
5. Partial Indemnification and Contribution.
5.1 Partial Indemnification. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of any expenses or liabilities of
any type whatsoever incurred by the Indemnitee in connection with a proceeding but is not entitled,
however, to indemnification for all of the total amount thereof, then the Company shall
nevertheless indemnify the Indemnitee for such total amount except as to the portion thereof to
which the Indemnitee is not entitled to indemnification.
5.2 Contribution. If the Indemnitee is not entitled to the indemnification provided in
Section 4 for any reason other than the statutory limitations set forth in the Nevada General
Corporation Law, then in respect of proceeding in which the Company is jointly liable with the
Indemnitee (or would be if joined in such proceeding), the Company shall contribute to the amount
of expenses and liabilities paid or payable by the Indemnitee in such proportion as is appropriate
to reflect (a) the relative benefits received by the Company on the one hand and the Indemnitee on
the other hand from the transaction from which such proceeding arose and (b) the relative fault of
the Company on the one hand and of the Indemnitee on the other hand in connection with the events
that resulted in such expenses, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of the Indemnitee on the other hand 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 expenses,
judgments, fines, or settlement amounts. The Company agrees that it would not be just and
equitable if contribution pursuant to this Section 5 were determined by pro rata allocation or any
other method of allocation which does not take account of the foregoing equitable considerations.
6. Mandatory Advancement of Expenses.
6.1 Advancement. Subject to Section 9 below, the Company shall pay as incurred and in advance
of the final disposition of a civil or criminal proceeding all expenses incurred by the Indemnitee
in connection with defending any such proceeding to which the Indemnitee is a party or is
threatened to be made a party by reason of the fact that the Indemnitee is or was an agent of the
Company or by reason of anything done or not done by the Indemnitee in any such capacity. The
Indemnitee hereby undertakes to promptly repay such amounts advanced only if, and to the extent
that, it shall ultimately by determined that the Indemnitee is not entitled to be indemnified by
the Company under the provisions of this Agreement, the Articles of Incorporation or Bylaws of the
Company, the Nevada General Corporation Law, or otherwise. The advances to be made hereunder shall
be paid by the Company to the Indemnitee within thirty (30) days following delivery of a written
request therefor by the Indemnitee to the Company.
6.2 Exception. Notwithstanding the foregoing provisions of this Section 6, the Company shall
not be obligated to advance any expenses to the Indemnitee arising from a lawsuit filed directly by
the Company against the Indemnitee if an absolute majority of the
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members of the Board reasonably determines in good faith, within thirty (30) days of the
Indemnitee’s request to be advanced expenses, that the facts known to them at the time such
determination is made demonstrate clearly and convincingly that the Indemnitee acted in bad faith.
If such a determination is made, the Indemnitee may have such decision reviewed in the manner set
forth in Section 8.5 hereof, with all references therein to “indemnification” being deemed to refer
to “advancement of expenses,” and the burden of proof shall be on the Company to demonstrate
clearly and convincingly that, based on the facts known at the time, the Indemnitee acted in bad
faith. The Company may not avail itself of this Section 6.2 as to a given lawsuit if, at any time
after the occurrence of the activities or omissions that are the primary focus of the lawsuit, the
Company has undergone a change in control. For this purpose, a “change in control” shall mean a
given person of group of affiliated persons or groups increasing their beneficial ownership
interest in the Company by at least twenty (20) percentage points without advance Board approval.
7. Notice and Other Indemnification Procedures.
7.1 Notification. Promptly after receipt by the Indemnitee of notice of the commencement of
or the threat of commencement of any proceeding, the Indemnitee shall, if the Indemnitee believes
that indemnification with respect thereto may be sought from the Company under this Agreement,
notify the Company of the commencement or threat of commencement thereof.
7.2 Insurance. If, at the time of the receipt of a notice of the commencement of a proceeding
pursuant to Section 7.1 hereof, the Company has D&O 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 D&O Insurance policies.
7.3 Defense. In the event the Company shall be obligated to advance the expenses for any
proceeding against the Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by the Indemnitee (which approval shall not be
unreasonably withheld), upon the delivery to the Indemnitee of written notice of its election to do
so. After delivery of such notice, approval of such counsel by the Indemnitee and the retention of
such counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement
for any fees of counsel subsequently incurred by the Indemnitee with respect to the same
proceeding, provided that (a) the Indemnitee shall have the right to employ the
Indemnitee’s own counsel in any such proceeding at the Indemnitee’s expense; (b) the Indemnitee
shall have the right to employ the Indemnitee’s own counsel in connection with any such proceeding,
at the expense of the Company, if such counsel serves in a review, observer, advice, and counseling
capacity and does not otherwise materially control or participate in the defense of such
proceeding; and (c) if (i) the employment of counsel by the Indemnitee has been previously
authorized by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be
conflict of interest between the Company and the Indemnitee in the conduct of any such defense, or
(iii) the Company shall not, in fact, have
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employed counsel to assume the defense of such proceeding, then the fees and expenses of the
Indemnitee’s counsel shall be at the expense of the Company.
8. Determination of Right to Indemnification.
8.1 Success on Merits. To the extent the Indemnitee has been successful on the merits or
otherwise in defense of any proceeding referred to in Section 4.1 or 4.2 of this Agreement or in
the defense of any claim, issue, or matter described therein, the Company shall indemnify the
Indemnitee against expenses actually and reasonably incurred by the Indemnitee in connection with
the investigation, defense, or appeal of such proceeding, or such claim, issue, or matter, as the
case may be.
8.2 Proof by Company. In the event that Section 8.1 is inapplicable, or does not apply to the
entire proceeding, the Company shall nonetheless indemnify the Indemnitee unless the Company shall
prove by clear and convincing evidence to a forum listed in Section 8.4 below that the Indemnitee
has not met the applicable standard of conduct required to entitle the Indemnitee to such
indemnification.
8.3 Termination of Proceeding. The termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere its equivalent, does not, of itself,
create a presumption that a person (a) did not act in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the Company, (b) with respect
to any criminal action or proceeding, that the person had reasonable cause to believe that the
person’s conduct was unlawful, or (c) the person’s act or failure to act constituted a breach of
the person’s fiduciary duties as a director or an officer or the person’s breach of those duties
involved intentional misconduct, fraud, or a knowing violation of law.
8.4 Applicable Forums. The Indemnitee shall be entitled to select the forum in which the
validity of the Company’s claim under Section 8.2 hereof that the Indemnitee is not entitled to
indemnification will be heard from among the following, except that the Indemnitee can
select a forum consisting of the stockholders of the Company only with the approval of the Company
and, if the Indemnitee is a director or an officer at the time of such determination, the
determination shall be made in accordance with (a), (b), (c) or (d) below at the election of the
Company:
(a) A majority vote of the directors who are not parties to the proceeding for which
indemnification is being sought even though less than a quorum;
(b) By a committee of directors who are not parties to the proceeding for which
indemnification is being sought designated by a majority vote of such directors, even though less
than a quorum;
(c) If there are no directors who are not parties to the proceeding for which indemnification
is sought, or if such directors so direct, by independent legal counsel in a written opinion;
(d) The stockholders of the Company;
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(e) A panel of three arbitrators, one of whom is selected by the Company, another of whom is
selected by the Indemnitee and the last of whom is selected by the first two arbitrators so
selected; or
(f) A court having jurisdiction of subject matter and the parties.
8.5 Submission. As soon as practicable, and in no event later than thirty (30) days after the
forum has been selected pursuant to Section 8.4 above, the Company shall, at its own expense,
submit to the selected forum its claim that the Indemnitee is not entitled to indemnification, and
the Company shall act in the utmost good faith to assure the Indemnitee a complete opportunity to
defend against such claim.
8.6 Appeals. If the forum selected in accordance with Section 8.4 hereof is not a court, then
after the final decision of such forum is rendered, the Company or the Indemnitee shall have the
right to apply to a court of Nevada, the court in which the proceeding giving rise to the
Indemnitee’s claim for indemnification is or was pending, or any other court of competent
jurisdiction, for the purpose of appealing the decision of such forum, provided that such
right is executed within sixty (60) days after the final decision of such forum is rendered. If
the forum selected in accordance with Section 8.4 hereof is a court, then the rights of the Company
or the Indemnitee to appeal any decision of such court shall be governed by the applicable laws and
rules governing appeals of the decision of such court.
8.7 Expenses for Interpretation. Notwithstanding any other provision in this Agreement to the
contrary, the Company shall indemnify the Indemnitee against all expenses incurred by the
Indemnitee in connection with any hearing or proceeding under this Section 8 involving the
Indemnitee and against all expenses incurred by the Indemnitee in connection with any other
proceeding between the Company and the Indemnitee involving the interpretation or enforcement of
the rights of the Indemnitee under this Agreement unless a court of competent jurisdiction finds
that each of the material claims and/or defenses of the Indemnitee in any such proceeding was
frivolous or not made in good faith.
9. Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall not be
obligated pursuant to the terms of this Agreement in the following circumstances:
9.1 Claims Initiated by Indemnitee. To indemnify or advance expenses to the Indemnitee with
respect to proceedings or claims initiated or brought voluntarily by the Indemnitee and not by way
of defense, except with respect to proceedings specifically authorized by the Board or
brought to establish or enforce a right to indemnification and/or advancement of expenses arising
under this Agreement, the charter documents of the Company or any subsidiary, or any statute or law
or otherwise, but such indemnification or advancement of expenses may be provided by the Company in
specific cases if the Board finds it to be appropriate; or
9.2 Unauthorized Settlements. To indemnify the Indemnitee hereunder for any amounts paid in
settlement of a proceeding unless the Company consents in advance in writing to such settlement,
which consent shall not be unreasonably withheld; or
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9.3 Securities Law Actions. To indemnify the Indemnitee on account of any suit in which
judgment is rendered against the Indemnitee for an accounting of profits made from the purchase or
sale by the Indemnitee of securities of the company pursuant to the provisions of Section 16(b) of
the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal,
state, or local statutory law; or
9.4 Unlawful Indemnification. To indemnify the Indemnitee if a final decision by a court
having jurisdiction in the mater shall determine that such indemnification is not lawful. In this
respect, the Company and the Indemnitee have been advised that the Securities and Exchange
Commission takes the position that indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore, unenforceable and that claims for
indemnification should be submitted to appropriate courts for adjudication.
10. Non-Exclusivity. The provisions for indemnification and advancement of expenses set forth in this Agreement
shall not be deemed exclusive of any other rights that the Indemnitee may have under any provision
of law, the Company’s Certificate of Incorporation or Bylaws, the vote of the Company’s
stockholders or disinterested directors, other agreements, or otherwise, both as to action in the
Indemnitee’s official capacity and to action in another capacity while occupying the Indemnitee’s
position as an agent of the Company, and the Indemnitee’s rights hereunder shall continue after the
Indemnitee has ceased acting as an agent of the Company and shall inure to the benefit of the
heirs, executors, and administrators of the Indemnitee.
11. General Provisions.
11.1 Interpretation of Agreement. It is understood that the parties hereto intend this
Agreement to be interpreted and enforced so as to provide indemnification and advancement of
expenses to the Indemnitee to the fullest extent now or hereafter permitted by law, except as
expressly limited herein.
11.2 Severability. If any provision or provisions of this Agreement shall be held to be
invalid, illegal, or unenforceable for any reason whatsoever, then: (a) the validity, legality, and
enforceability of the remaining provisions of this Agreement (including, without limitation, all
portions of any paragraphs of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable that are not themselves invalid, illegal, or unenforceable) shall not in
any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraphs of this Agreement
containing any such provision held to be invalid, illegal, or unenforceable, that are not
themselves invalid, illegal, or unenforceable) shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal, or unenforceable and to give effect to
Section 11.1 hereof.
11.3 Modification and Waiver. No supplement, modification, or amendment of this Agreement
shall be binding unless executed in writing by the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.
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11.4 Subrogation. In the even of full payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who
shall execute all documents required and shall do all acts that may be necessary or desirable to
secure such rights and to enable the Company effectively to bring suit to enforce such rights.
11.5 Counterparts. This Agreement may be executed in one or more counterparts, which shall
together constitute one agreement.
11.6 Successors and Assigns. The terms of this Agreement shall bind, and shall inure to the
benefit of, the successors and assigns of the parties hereto. The indemnification and advancement
of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director or an officer and
shall inure to the benefit of the heirs, executors, and administrators of such a person.
11.7 Notice. All notices, requests, demands, and other communications under this Agreement
shall be in writing and shall be deemed duly given if (a) delivered by hand and receipted for by
the party addressee, or (b) mailed by certified or registered mail, with postage prepaid, on the
third business day after the mailing date. Addresses for notice to either party are as shown on
the signature page of this Agreement or as subsequently modified by written notice.
11.8 Governing Law. This Agreement shall be governed exclusively by and construed according
to the laws of the state of Nevada, as applied to contracts between Nevada residents entered into
and to be performed entirely within Nevada .
11.9 Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocably consent
to the jurisdiction of the courts of the state of Nevada for all purposes in connection with any
action or proceeding which arises out of or relates to this Agreement.
11.10 Attorneys’ Fees. In the event Indemnitee is required to bring any action to enforce
rights under this Agreement (including, without limitation, the expenses of any proceeding
described in Section 4), the Indemnitee shall be entitled to all reasonable fees and expenses in
bringing and pursuing such action, unless a court of competent jurisdiction finds each of the
material claims of the Indemnitee in any such action was frivolous and not made in good faith.
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IN WITNESS WHEREOF, the parties hereto have entered into this Indemnification Agreement
effective as of the date first written above.
| ABTECH HOLDINGS, INC. | INDEMNITEE: | |||
By: |
||||
Title:
|
President and CEO | |||
| (Print Name) |
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