INDEMNITY AGREEMENT
THIS AGREEMENT is made and entered into as of September 29, 2000, by and
between ENERGY PRODUCERS INC., a Nevada Corporation (the "Corporation"), and
Xxxxx X. Xxxxx (Indemnitee), a Director or Officer of the Corporation.
RECITALS
WHEREAS, it is essential to the corporation to retain and attract as
Directors and Officers the most capable persons available; and
WHEREAS, the substantial increase in corporate litigation subjects
Directors and Officers of the Corporation to expensive litigation risks at the
same time that the availability of Directors' and Officers' liability insurance
has been severely limited: and
WHEREAS, it is now and has always been the express policy of the
Corporation to indemnify persons serving as its Directors and Officers so as to
provide them with the maximum possible protection permitted by law; and
WHEREAS, Indemnitee does not regard the protection available under the
Corporation's Restated Certificate of Incorporation, By-laws and insurance as
adequate in the present circumstances, and may not be willing to serve as a
Director or Officer of the Corporation with-out adequate protection, and the
Corporation desires Indemnitee to serve in such capacity.
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, the Corporation and Indemnitee hereby agree as follows:
1. Agreement to Serve. Indemnitee agrees to serve or continue to serve as
a Director or Officer of the Corporation for so long as he is duly
elected or appointed or until such time as he/she tenders his/her
resignation in writing.
2. Definitions. For purposes of this Agreement:
(a) The term "Proceeding" shall include any threatened, pending or
completed action, suit or proceeding, whether brought by or in
the right of the Corporation or otherwise and whether of a civil,
criminal, administrative or investigative nature, in which
Indemnitee may be or may have been involved as a party or
otherwise, by reason of the fact that Indemnitee is or was a
Director or Officer of the Corporation, by reason of any action
taken by him/her or any inaction on his/her part while acting in
his/her capacity as such a Director or Officer, or by reason of
the fact that he/she is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise; in each case whether or not he/she is acting or
serving in any such capacity at the time any liability or expense
is incurred for which indemnification or reimbursement can be
provided under this Agreement.
INDEMNIFICATION
(b) The term "Expenses" shall include, without limitation, expenses
of investigations, judicial or administrative proceedings or
appeals, amounts paid in settlement by or on behalf of
Indemnitee, attorney's fees and disbursements and any expenses of
establishing a right to indemnification under Section 7 of this
agreement, but shall not include the amount of judgments, fines
or penalties against Indemnitee.
(c) References to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax
assessed with respect to any employee benefit plan; references to
"serving at the request of the Corporation" shall include any
service as a Director, Officer, employee or agent of the
Corporation which imposes duties on, or involves services by,
such Director, Officer, employee, or agent with respect to any
employee benefit plan, its participants or beneficiaries; and a
person who acted in food faith and in a manner he reasonable
believed to be in the best interests 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
Corporation" as referred to in this Agreement.
(d) A "Change in Control of the Corporation" shall be deemed to have
occurred if (i) any "person" [as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended], who is not currently a stockholder of the Corporation,
other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Corporation or a corporation
owned directly or indirectly by the stockholders of the
Corporation in substantially the same proportions as their
ownership of stock of the Corporation, is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under said act),
directly or indirectly, of securities of the Corporation
representing 20% or more of the total voting power of the then
outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors (the Voting
Stock), or (ii) during any period of two consecutive years,
individuals, who at the beginning of such period constitute the
Board of Directors of the Corporation, and any new director,
whose election by the Board of Directors or nomination for
election by the Corporation's stockholders was approved by a vote
of at least two thirds (2/3rds) 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 majority thereof,
or (iii) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation,
other than a merger or consolidation which would result in the
Voting Stock outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 80% of
the total voting power represented by the Voting Stock or the
voting securities of such surviving entity outstanding
immediately after such merger or consolidation, or the
stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all the
Corporation's assets.
INDEMNIFICATION
3. Indemnity in Third Party Proceedings. The Corporation shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if
Indemnitee is a party to or threatened to be made a party to or
otherwise involved in any proceeding (other that a Proceeding by or in
the right of the Corporation to procure a judgment in its favor) by
reason of the fact that Indemnitee is or was a Director or Officer of
the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against all Expenses, judgments, fines and penalties, actually and
reasonably incurred by Indemnitee in connection with the defense or
settlement of such Proceeding, but only if Indemnitee acted in food
faith and in a manner which he/she reasonably believed to be in or not
opposed to the best interests of the Corporation and, in the case of a
criminal proceeding, in addition, had no reasonable cause to believe
that his/her conduct was unlawful. The termination of any such
Proceeding be judgment, order of court, settlement, conviction or upon
a plea of nolo contendere, or its equivalent, shall not, of itself,
create a presumption that Indemnitee did not act in good faith and in
a manner which he/she reasonably believed to be in or not opposed to
the best interests of the Corporation, or with respect to any criminal
proceeding, that such person had reasonable cause to believe that
his/her conduct was unlawful.
4. Indemnity in Proceedings by or in the Right of the Corporation. The
Corporation shall indemnify Indemnitee in accordance with the
provisions of this Section 4 if Indemnitee is a party to or threatened
to be made a party to any Proceeding by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact
that Indemnitee is or was a Director or Officer of the Corporation, or
is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against all Expenses actually and
reasonable incurred by Indemnitee in connection with the defense or
settlement of such Proceeding, but only if he/she acted in good faith
and in a manner which he/she reasonably believed to be in or not
opposed to the best interests of the Corporation, except that in
indemnification for Expenses shall be made under this Section 4 in
respect of any claim, issue or matter as to which Indemnitee shall
have been adjudged to be liable to the Corporation, unless and only to
the extent that any court in which such Proceeding was brought shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnity for such Expenses as such court
shall deem proper.
5. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee has
been successful on the merits or otherwise in defense of any
Proceeding or in defense of any claim, issue or matter therein,
including dismissal without prejudice, Indemnitee shall be indemnified
by the Corporation against all Expenses incurred in connection
therewith.
6. Advances and Expenses. Expenses incurred by Indemnitee in connection
with any Proceeding shall be paid by the Corporation in advance of the
final disposition thereof upon the written request of Indemnitee, if
Indemnitee shall undertake to repay such amount if and to the extent
it is ultimately determined that Indemnitee is not entitled to
indemnification. INDEMNIFICATION
7. Right of Indemnitee to Indemnification Upon Application: Procedure
Upon
Application.
(a) Any indemnification under Sections 3 and 4 shall be made no later
than 45 days after receipt by the Corporation of a written
request therefor from Indemnitee, unless a determination in made
within said 45 day period by (1) the Board of Directors of the
Corporation by a majority vote of a quorum consisting of
Directors who were not parties to the Proceeding in respect of
which such written request is made, or (2) independent legal
counsel in a written opinion (which counsel shall be appointed if
such a quorum in not obtainable), that the Indemnitee has not met
the applicable standard for indemnification set forth in Section
3 or 4 hereof, whichever shall be applicable; provided, however,
that, notwithstanding the foregoing, following the occurrence of
a Change in Control of the Corporation, the determination as to
whether or not Indemnitee has met the applicable standard of
indemnification set forth in Section 3 or 4 hereof, whichever
shall be applicable, shall in all events be made by independent
counsel selected as provided in paragraph (b) of this section.
(b) The selection of independent counsel referred to in the proviso
of paragraph (a) of this section shall be made by Indemnitee and
approved by the Corporation (which approval shall not be
unreasonably withheld). If the Corporation and the Indemnitee are
unable reasonably to agree on the selection of such independent
counsel, such counsel shall be selected by lot from among the
Phoenix, Arizona metropolitan area law firms having more that 50
attorneys, having a rating of "av" or better in the then current
Martindale Xxxxxxx Law Directory and not having performed
services for the Corporation or Indemnitee during the preceding
five years. Such selection by lot shall be conducted by outside
counsel named by the Corporation and be made in the presence of
Indemnitee (and his/her legal counsel or either of them, as
Indemnitee may elect). The outside counsel named by the
Corporation and Indemnitee (and his/her legal counsel or either
of them, as Indemnitee may elect) shall contact, in the order of
their selection by lot, such law firms, requesting each such firm
to accept the engagement to make the determination required
hereunder until one of such firms accepts such engagement. Such
independent counsel, among other things, shall render its written
opinion to the Corporation and Indemnitee as to whether and to
what extent Indemnitee would be permitted to be indemnified under
Section 3 or 4 of this Agreement, whichever shall be applicable.
The Corporation agrees to pay the reasonable fees of such
independent counsel and to indemnify such counsel fully against
any and all expenses (including attorney's fees), claims,
liabilities and damages arising our of or relating to this
Agreement or its engagement pursuant hereto. If, pursuant to the
proviso of paragraph (a) of this Section, the determination as to
whether or not Indemnitee has met the applicable standard of
conduct for indemnification set forth in Section 3 or 4 hereof,
whichever shall be applicable, is to be made by independent
counsel selected in accordance with this paragraph, Indemnitee
and the Corporation will use their best efforts to accomplish the
selection of such independent counsel promptly enough to permit
such independent counsel to make such determination within the
45- day period referred to in such paragraph (a).
(c) The right to indemnification and advances as provided by this
Agreement shall be enforceable by Indemnitee in an action in any
court of competent jurisdiction. In such an action, the burden of
proving that indemnification is not required hereunder shall be
on the Corporation. Neither the failure of the Corporation
(including its Board of Directors and independent legal counsel)
to have made a determination prior to the commencement of such an
indemnification action that indemnification is proper and in the
circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Corporation
(including its Board of directors and independent counsel) that
Indemnitee has not
met such applicable standard of conduct, shall be a defense to
such action or create a presumption that Indemnitee has not met
the applicable standard of conduct. Indemnitee's Expenses
reasonably incurred in connection with successfully establishing
his/her right to indemnification, in whole or in part, in
connection with any Proceeding shall also be indemnified by the
Corporation.
8. Indemnification Hereunder Not Exclusive.
(a) The indemnification provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may be
entitled under the Restated Certificate Of Incorporation or the
By-laws of the Corporation, any agreement, any vote of
stockholders or disinterested Directors, the General Corporation
Law of the State of Nevada, or otherwise, both as to action in
his/her official capacity and as to action in another capacity
while holding such office.
(b) The indemnification under this agreement shall continue as to
Indemnitee even though he/she may have ceased to be a Director,
or Officer of the Corporation and shall inure to the benefit of
the heirs and personal representatives of Indemnitee.
9. Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Corporation for some or a
portion of the Expenses, judgment, fines or penalties actually and
reasonably incurred by him/her in the investigation, defense, appeal
or settlement of any Proceeding but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify Indemnitee for
the portion of such Expenses, judgments, fines or penalties as to
which Indemnitee is so entitled to indemnification.
10. Saving Clause. If this Agreement or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, the
Corporation shall nevertheless indemnify Indemnitee as to Expenses,
judgments, fines and penalties with respect to any Proceeding to the
full extent permitted by any applicable portion of the Agreement that
shall not have been invalidated or by any applicable law.
11. Stockholder Approval: Termination. This Agreement shall terminate at
the conclusion of the next annual meeting of the stockholders of the
Corporation in the event that it shall not have been ratified and
approved by such stockholders at such annual meeting, by the
affirmative vote of the holders of at least a majority of the voting
power of the Corporation's voting stock present in person or
represented by proxy at such annual meeting; provided, that, in the
event of such termination all rights and liabilities of the parties
which shall have arisen under this Agreement prior to such termination
(whether by reason of the circumstances giving rise to such rights and
liabilities having occurred prior thereto or otherwise) shall survive
such termination. Subject to the foregoing provisions of this Section,
this Agreement shall continue in full force and effect until
terminated by an instrument in writing signed by both of the parties
hereto.
INDEMNIFICATION
12. Notice. Indemnitee shall, as a condition precedent to his/her right to
be indemnified under this Agreement, give to the Corporation notice in
writing as soon as practicable of any claim
made against him/her for which indemnity will or could be sought
hereunder. Notice to the Corporation shall be directed to Energy
Producers Inc., at its principal offices in Scottsdale Arizona,
Attention: President (or other such address as the Corporation shall
designate in writing to Indemnitee). Notice shall be deemed received
three days after the date postmarked if sent by prepaid mail, properly
addressed. In addition, Indemnitee shall give the Corporation such
information and cooperation as it may reasonably require and shall we
within Indemnitee's power.
13. Security. To the fullest extent permitted by applicable law, the
Corporation may from time to time, but shall not be required to,
provide such insurance, collateral, letters of credit or other
security devices as its Board of Directors may deem appropriate to
support or secure the Corporation's obligations under this Agreement.
14. Amendment. This Agreement may not be amended, except by an instrument
in writing signed by both of the parties hereto.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each and all of which shall constitute one agreement.
16. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
17. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Corporation and its successors and assigns and
Indemnitee and his/her heirs and personal representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ENERGY PRODUCERS, INC.
By /s/ Xxx Xxxxxx
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Chairman & CEO
INDEMNITEE:
/s/ Xxxxx X. Xxxxx
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Director
