INDEMNIFICATION AGREEMENT
This
Agreement is made and entered into as of December 12, 2007 by and between
Xxxxxxx X. Xxxxx (“Indemnitee”)
and
Concentric Energy Corp., a Nevada corporation (the “Company”).
BACKGROUND
The
Company has requested the Indemnitee serve as a Member of the Board of Directors
of the Company.
Both
the
Company and Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of companies in today’s
environment.
In
recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s service to the Company in an
effective manner, and in part to provide Indemnitee with specific contractual
assurance that the indemnification protection provided by the By-Laws of the
Company will be available to Indemnitee (regardless of, among other things,
any
amendment to or revocation of such By-Laws or any change in the composition
of
the Company’s Board of Directors or any Change in Control of the Company), and
in order to induce Indemnitee to serve a Member of the Board of the Company,
the
Company wishes to provide in this Agreement for the indemnification of and
the
advancing of expenses to Indemnitee to the fullest extent permitted by law
and
as set forth in this Agreement, and for the continued coverage of Indemnitee
under the Company’s directors’ and officers’ liability insurance policies (the
“D&O Insurance”).
AGREEMENT
The
parties agree as follows:
1. Services
by Indemnitee.
Indemnitee agrees to serve or continue to serve as a director of the Company
for
so long as Indemnitee is duly elected or appointed and until such time as
Indemnitee tenders his or her resignation in writing or is removed as a
director, or on such terms as may be otherwise provided in any separate
agreement between the Company and Indemnitee (an “Executive
Agreement”).
2. Basic
Indemnification Agreement.
In the
event Indemnitee was, is or becomes a party to or witness or other participant
in, or is threatened to be made a party to or witness or other participant
in, a
Claim by reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee to the fullest extent permitted by law as
soon as practicable after written demand is presented to the Company, against
any and all Expenses, liabilities and losses (including without limitation,
judgments, fines, ERISA excise taxes and penalties, and amounts paid and to
be
paid in settlement, interest, assessments, and other charges imposed thereon,
and any federal, state, local, or foreign taxes (increased by any taxes imposed
by such payments) imposed on the Indemnitee as a result of the actual or deemed
receipt of any payments under this Agreement) actually and reasonably incurred
by Indemnitee or on Indemnitee’s behalf in connection with any such Claim, or
any issue or matter therein. If so requested by Indemnitee, the Company shall
advance (within two (2) business days of that request) any and all Expenses
to
Indemnitee (an “Expense Advance”). Expense Advances shall be unsecured and
interest free and shall be made without regard to Indemnitee’s ability to repay
the Expenses and without regard to Indemnitee’s ultimate entitlement to
indemnification under the other provisions of this Agreement. Notwithstanding
anything in this Agreement or in the Company’s By-Laws to the contrary and
except as provided in Section 3 or in an Executive Agreement, before a Change
in
Control, Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Claim initiated by Indemnitee against the
Company or any director or officer of the Company unless the Company has joined
in or consented to the initiation of that Claim. The Indemnitee shall qualify
for advances upon the execution and delivery to the Company of this Agreement
which shall constitute an undertaking providing that the Indemnitee undertakes
to the fullest extent permitted by law to repay the advance if and to
the
extent that it is ultimately determined by a final, non-appealable decision
rendered by a court of competent jurisdiction,
that
Indemnitee is not entitled to be indemnified by the Company.
3. Indemnification
Requests.
The
Company shall indemnify Indemnitee against any and all Expenses and, if
requested by Indemnitee, shall (within two (2) business days of that request)
advance those Expenses to Indemnitee that are incurred by Indemnitee in
connection with any Claim asserted against Indemnitee or that are incurred
in
connection with any action brought by Indemnitee for (i) indemnification or
advance payment of expenses by the Company under this Agreement or any other
agreement or under the Certificate of Incorporation or By-Laws of the Company
now or hereafter in effect relating to Claims for Indemnifiable Events and/or
(ii) recovery under any directors’ and officers’ liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to that indemnification, advance expense payment,
or
insurance recovery, as the case may be. If a request for indemnification or
advancement of Expenses or recovery under any directors’ and officers’ liability
insurance policies hereunder is not paid in full by the Company within twenty
(20) days after such a request has been received by the Company, the Indemnitee
may at any time thereafter bring suit against the Company to recover the unpaid
amount of the request. It shall be a defense to any such action (other than
any
action brought to enforce a Claim in respect of or for the advancement of
Expenses incurred in defending any proceeding in advance of its final
disposition) that the Indemnitee has not met the standards of conduct that
make
it permissible under the Nevada Private Corporations Law (the “NPCL”) for the
Company to indemnify the Indemnitee for the amount claimed, but only to the
extent ultimately determined by a final, non-appealable decision rendered by
a
court of competent jurisdiction. The burden of proving such defense shall be
on
the Company. Neither the failure of the Company (including the Company’s Board
of Directors, Independent Legal Counsel or the stockholders) to have made a
determination prior to the commencement of such action that indemnification
of
the Indemnitee is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the NPCL, nor an actual
determination by the Company (including the Company’s Board of Directors,
Independent Legal Counsel or its stockholders) that the Indemnitee has not
met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the Indemnitee person has not met the applicable standard
of
conduct. The Company shall be precluded from asserting in any Claim commenced
pursuant to this Section 3 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any
such
court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement. If Indemnitee, pursuant to this Section 3, seeks
a
judicial adjudication to enforce Indemnitee’s rights under, or to recover
damages for breach of, this Agreement, Indemnitee shall be entitled to recover
from the Company, and shall be indemnified by the Company against, any and
all
expenses (of the types described in the definition of Expenses in Section 14
of
this Agreement) actually and reasonably incurred by Indemnitee in such
Claim.
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4. Partial
Indemnity.
If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of the Expenses, liabilities and losses
(including without limitation, judgments, fines, ERISA excise taxes and
penalties, and amounts paid and to be paid in settlement, interest, assessments,
and other charges imposed thereon, and any federal, state, local, or foreign
taxes (increased by any taxes imposed by such payments)), but not for the total
amount, the Company shall nevertheless indemnify Indemnitee for the portion
to
which Indemnitee is entitled. Moreover, notwithstanding any other provision
of
this Agreement, to the extent that Indemnitee has been successful on the merits
or otherwise in defense of any or all Claims relating in whole or in part to
an
Indemnifiable Event or in defense of any related issue or matter, including
a
dismissal or withdrawal with or without prejudice, Indemnitee shall be
indemnified against all Expenses, liabilities and losses (including without
limitation, judgments, fines, ERISA excise taxes and penalties, and amounts
paid
and to be paid in settlement, interest, assessments, and other charges imposed
thereon, and any federal, state, local, or foreign taxes (increased by any
taxes
imposed by such payments) incurred in connection with Claims related to that
Indemnifiable Event.
5. No
Presumption.
The
termination of any claim, action, suit, or proceeding, by judgment, order,
settlement (whether with or without court approval) or conviction, or upon
a
plea of nolo contendere or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
6. Non-exclusivity.
Indemnitee’s
rights under this Agreement shall be in addition to any other rights Indemnitee
may have under the Company’s Certificate of Incorporation or By-Laws, or any
other agreement, vote of stockholders or a resolution of directors, or the
Nevada Private Corporations Law or otherwise. To the extent that a change in
the
Nevada Private Corporations Law (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Company’s Certificate of Incorporation and By-Laws and this Agreement,
the parties intend that Indemnitee shall enjoy, by virtue of this Agreement,
the
greatest benefits so afforded by that change.
7. No
Construction as Employment Agreement.
Nothing
contained in this Agreement shall be construed as giving Indemnitee any right
to
be retained in the employ of the Company or any of its
subsidiaries.
8. Liability
Insurance.
(a) The
Company hereby covenants and agrees that, so long as the Indemnitee shall
continue to serve as a director of the Company or any of its subsidiaries,
and
thereafter so long as the Indemnitee shall be subject to any possible proceeding
by reason of such service, the Company shall use its best efforts to obtain
and
maintain in full force and effect D&O Insurance from established and
reputable insurers, providing for at least $20 million in coverage, with no
deductible or co-payment in respect of “A Side” coverage (or the equivalent) for
at least $10 million. Indemnitee shall be covered by such policy or policies
in
accordance with the terms thereof to the maximum extent of the coverage
available for any independent director under such policy or
policies.
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(b) Without
limiting the generality of the foregoing, the Company will use its best efforts
to obtain the right to purchase separate “tail” or continuing insurance in
respect of all D&O Insurance it obtains in the future, and will require its
successor to purchase such “tail” insurance at the Company’s expense, in at
least the coverage amounts set forth in clause (a) above and for a period of
at
least six (6) years, to cover claims that may be made after a Change in Control.
Such tail insurance will also be provided for the benefit of the Indemnitee,
if
not covered by the D&O Insurance then in force, to cover claims that may be
made after the Indemnitee ceases, for any reason, to serve as a director,
whether by reason of resignation, retirement, death or failure to be
renominated.
9. Period
of Limitations.
No legal
action shall be brought and no cause of action shall be asserted by or in the
right of the Company or any affiliate of the Company against Indemnitee,
Indemnitee’s spouse, heirs, executors, administrators, or personal or legal
representatives after the expiration of one year from the date of accrual of
that cause of action, and any claim or cause of action of the Company or its
affiliates shall be extinguished and deemed released unless asserted by the
timely filing of a legal action within that one-year period. However, if any
shorter period of limitations is otherwise applicable to any cause of action,
that shorter period shall govern.
10. Amendments.
No
supplement, modification, or amendment of this Agreement shall be binding unless
executed in writing by both of the parties to this Agreement. No waiver of
any
of the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provisions of this Agreement (whether or not similar) nor shall
that waiver constitute a continuing waiver.
11. No
Subrogation.
In the
event of payment under this Agreement, the Company shall not be subrogated
in
any respect to all of Indemnitee’s rights of recovery, unless the Indemnitee
consents in writing to that subrogation.
12. No
Duplication of Payments.
The
Company shall not be liable under this Agreement to make any payment in
connection with any Claim made against Indemnitee to the extent Indemnitee
has
otherwise actually received payment (under any insurance policy, the Certificate
of Incorporation or the By-Laws of the Company or otherwise) of the amounts
otherwise indemnifiable under this Agreement.
13. Indemnification
Procedures.
(a) Promptly
after Indemnitee receives notice of the commencement of, or the threat of
commencement of, any action, suit, proceeding or other matter that may be
subject to indemnification or advancement of Expenses covered hereunder,
Indemnitee shall notify the Company in writing of that commencement or threat.
However, the omission or delay in notifying the Company will not relieve the
Company from any liability that it may have to Indemnitee.
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(b) The
Company shall give prompt notice of the commencement of that action, suit, or
proceeding to the insurers on the D&O Insurance, if any, in accordance with
the procedures set forth in the respective policies in favor of Indemnitee.
Without limiting any of the Company’s indemnification obligations hereunder or
its obligations under clause (d) below, the Company shall thereafter take all
reasonably necessary or desirable action to cause those insurers to pay, on
behalf of Indemnitee, all amounts that are payable under such policies as a
result of that action, suit, or proceeding in accordance with the terms of
those
policies.
(c) All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) if delivered by hand
to
the party to whom said notice or other communication is directed and that party
provides a receipt of delivery, at the time of delivery, (ii) if mailed by
certified mail (return receipt requested) with postage prepaid, on the third
business day after the date on which it is so mailed, in the case of the
Company, to the Company’s principal business address, and in the case of the
Indemnitee, to the Indemnitee’s last known business or residence address, or to
such other address as may have been furnished by like notice to Indemnitee
by
the Company or to the Company by Indemnitee, as the case may be or (iii) if
communicated via electronic mail, to the electronic email address of the
Company's general counsel (or chief financial officer if the Company has no
general counsel) and, in the case of Indemnitee, to the email address provided
by Indemnitee to the Company for business communications.
(d) If
Indemnitee requires the Company to defend him, or if Indemnitee proceeds under
the D&O Insurance but determines that those insurers are unable or unwilling
to adequately defend, contest, and protect Indemnitee against any action, suit,
or proceeding, the Company shall promptly undertake to defend that action,
suit,
or proceeding, at the Company’s sole cost and expense, using counsel of
Indemnitee’s choice. If appropriate, the Company shall have the right to
participate in the defense of the action.
14. Certain
Definitions.
(a) A
“Change
in Control”“means
a
change in control of the Company of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item or any similar schedule or form) promulgated under
the Securities Exchange Act of 1934, as amended (the “Act”), whether or not the
Company is then subject to such reporting requirement; provided,
however,
that,
without limitation, such a Change in Control shall be deemed to have occurred
if
(i) any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Act) not presently in possession of such beneficial ownership
is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing [twenty (20%)]
or more of the combined voting power of the Company’s then outstanding
securities without the prior approval of at least two-thirds of the members
of
the Board in office immediately prior to such person attaining such percentage
interest; (ii) the Company is a party to a merger, consolidation, sale of
assets or other reorganization, or a proxy contest, as a consequence of which
members of the Board in office immediately prior to such transaction or event
constitute less than a majority of the Board thereafter; or (iii) during
any period of two (2) consecutive years, individuals who at the beginning of
such period constituted the Board (including for this purpose any new director
whose election 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 were directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board.
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(b) “Claim”
means
any
threatened, pending or completed action, suit, proceeding, arbitration or other
alternate dispute resolution mechanism, or any inquiry, hearing or
investigation, whether conducted by the Company, any governmental agency or
any
other party.
(c) “Expenses”
means
attorneys’ fees and all other costs, travel expenses, fees and expenses of
experts, transcript costs, filing fees, witness fees and expenses, telephone
charges, postage, delivery service fees, expenses and obligations of any nature
whatsoever paid or incurred in connection with investigating, prosecuting,
defending, being a witness in, or participating in (including on appeal), or
preparing to prosecute or defend, be a witness in or participate in any
Claim.
(d) “Indemnifiable
Event”
means
any event or occurrence related to the fact that Indemnitee is, was or has
agreed to become a director, or is or was an officer, employee, agent or
fiduciary of the Company, any of its wholly-owned subsidiaries, or any other
domestic or foreign corporation, partnership, joint venture, limited liability
corporation, employee benefit plan, trust or other enterprise that Indemnitee
is
or was serving or agreed to serve at the request of the Company, or related
to
anything done or not done by Indemnitee in any of those capacities.
(e) “Independent
Legal Counsel”
means an
attorney, selected by Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld), who has not otherwise performed services
for the Company or Indemnitee within the last five years (other than in
connection with seeking indemnification under this Agreement). Independent
Legal
Counsel shall not be 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, nor shall Independent Legal Counsel be
any person who has been sanctioned or censored for ethical violations of
applicable standards of professional conduct.
(f) “Potential
Change in Control”
shall be
deemed to have occurred if the Board adopts a resolution to the effect that,
for
purposes of this Agreement, a Potential Change in Control has
occurred.
(g) “Voting
Securities”
means
any securities of the Company that vote generally in the election of
directors.
15. Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties and their respective successors and assigns (including any direct
or indirect successor by purchase, merger, consolidation, or otherwise to all
or
substantially all of the business and/or assets of the Company), spouses, heirs,
and personal and legal representatives. The Company shall require and cause
any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be
required to perform if no succession had taken place. This Agreement shall
continue in effect regardless of whether Indemnitee continues to serve as a
director of the Company.
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16. Contribution.
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 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 Claim 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 Claim; 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).
17. Severability.
The
provisions of this Agreement shall be severable. If any of the provisions of
this Agreement (including any provision within a single section, paragraph
or
sentence) are held by a court of competent jurisdiction to be invalid, void,
or
otherwise unenforceable, the remaining provisions shall remain enforceable
to
the fullest extent permitted by law. Furthermore, to the fullest extent
possible, the provisions of this Agreement (including, without limitation,
each
portion of this Agreement containing any provision held to be invalid, void,
or
otherwise unenforceable, that is not itself invalid, void, or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal, or unenforceable.
18. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Nevada applicable to contracts made and to be performed
in
such state without giving effect to the principles of conflicts of laws. 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.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties have executed this Indemnification Agreement on
the
day and year first indicated above.
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/s/
Xxxxxxx X. Xxxxx
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Xxxxxxx
X. Xxxxx
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By:
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx
Chairman
of the Board
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SIGNATURE
PAGE TO INDEMNIFICATION AGREEMENT
