INDEMNIFICATION AGREEMENT
Exhibit 10.1
This
Indemnification Agreement (this “Agreement”) is effective
as of April 4, 2019, (the “Effective Date”) by and
between Flux Power Holdings, Inc., a Nevada corporation (the
“Company”), and
(“Indemnitee”) and the
parties hereby agree as follows:
1. Services by
Indemnitee. Indemnitee agrees to serve as a director and/or
executive officer of the Company so long as he or she is duly
appointed or elected and qualified in accordance with the
applicable provisions of the Articles of Incorporation and bylaws
of the Company or any subsidiary of the Company and until such time
as he or she resigns or fails to stand for election or is removed
from his or her position. Indemnitee may, at any time and for any
reason, resign or be removed from such position (subject to any
other contractual obligation or other obligation imposed by
operation of law), in which event the Company shall have no
obligation under this Agreement to continue Indemnitee in any such
position.
2.1 The Company hereby agrees to hold
harmless and indemnify Indemnitee against any and all Expenses
incurred by reason of the fact that Indemnitee is or was a
director, officer, agent, or advisor of the Company, or is or was
serving at the request of the Company as a director, officer,
employee, agent or advisor of another corporation, partnership,
joint venture, trust, limited liability company, or other entity or
enterprise, but only if Indemnitee acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interest of the Company and, in the case of a criminal proceeding,
had no reasonable cause to believe that his conduct was unlawful.
The termination of any Proceeding by judgment, order of the 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
reasonably believed to be in or not opposed to the best interest of
the Company, and with respect to any criminal proceeding, shall not
create a presumption that such person believed that his conduct was
unlawful. The indemnification provided herein shall be applicable
whether or not negligence or gross negligence of the Indemnitee is
alleged or proven. Notwithstanding the foregoing, in the case of
any Proceeding brought by or in the right of the Company,
Indemnitee shall not be entitled to indemnification for any claim,
issue or matter as to which Indemnitee has been adjudged by a court
of competent jurisdiction, after exhaustion of all appeals
therefrom, 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 the Proceeding was brought or another court of
competent jurisdiction determines, on application, that in view of
all the circumstances, the person is fairly and reasonably entitled
to indemnity for such expenses as the court deems
proper.
2.2 Notwithstanding anything in this
Agreement to the contrary, the Company shall not be obligated under
this Agreement to continue to indemnify Indemnitee with respect
to:
2.2.1 the reporting or accounting of
profits made from the purchase or sale by Indemnitee of securities
of the Company within the meaning of Section 16 of the Securities
Exchange Act of 1934 as amended, or similar provisions of any state
statutory or common law;
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2.2.2 any attempt to acquire, or obtain
voting rights with respect to, at least fifty percent (50%) of the
then outstanding voting stock of the Company, whether by tender
offer, proxy solicitation or otherwise, if (a) Indemnitee attempted
to acquire or obtain voting rights with respect to such stock or
was or became a member of a group consisting of two (2) or more
persons that had agreed (whether formally or informally and whether
or not in writing) to act together for the purpose of acquiring,
obtaining voting rights with respect, holding, voting or disposing
of such stock, and (b) such attempt to acquire or obtain voting
rights with respect to such stock was not approved by a majority of
the directors of the Company. For purposes of determining whether
any tender offer, proxy solicitation or other transaction
constituted an attempt by Indemnitee, or a group (as described
above) of which Indemnitee was or became a member, to acquire or
obtain voting rights with respect to at least fifty percent (50%)
of the then outstanding voting stock of the Company, there shall be
counted toward the required number of shares of voting stock any
shares which, immediately prior to the commencement of such tender
offer, proxy solicitation or other transaction, (x) were owned by
Indemnitee or any member of any such group, (y) Indemnitee or any
member of any such group had the right to vote, or (z) Indemnitee
or any member of any such group had the right to
acquire;
2.2.3 any solicitation of proxies by
Indemnitee, or by a group of which he was or became a member
consisting of two or more persons that had agreed (whether formally
or informally and whether or not in writing) to act together for
the purpose of soliciting proxies, in opposition to any
solicitation of proxies approved by the Company’s Board of
Directors; or
2.2.4 any act or omission by Indemnitee
that constitutes a breach of or default under any agreement between
Indemnitee and the Company.
2.3 Subject to Section 3, Indemnitee shall
be paid promptly by the Company all amounts necessary to effectuate
the indemnity described in Section 2.
3. Choice of Counsel. Indemnitee
shall be entitled to employ, and be reimbursed for the fees and
disbursements of, counsel separate from that chosen by any other
person or persons whom the Company is obligated to indemnify with
respect to the same or any related or similar
Proceeding.
4. Advancement of
Expenses. All reasonable Expenses incurred by or on behalf
of Indemnitee shall be advanced from time to time by the Company to
him within thirty (30) days after the receipt by the Company of a
written request for an advance of Expenses, whether prior to or
after final disposition of a Proceeding (except to the extent that
there has been a Final Adverse Determination that Indemnitee is not
entitled to be indemnified for such Expenses), including without
limitation any Proceeding brought by or in the right of the
Company; provided,
however, that
Indemnitee shall not be entitled to the advancement of Expenses in
connection with any Proceeding relating to his termination by or
resignation from the Company or arising out of the circumstances
described in Section 2.2 above. The written request for and
advancement of any and all Expenses under this paragraph shall
contain reasonable detail of the Expenses incurred by Indemnitee.
Indemnitee hereby agrees to repay the Company the amounts advanced
if it is ultimately determined that Indemnitee is not entitled to
be indemnified pursuant to the terms of this
Agreement.
5. Additional Limitations. The
foregoing indemnity and advancement of Expenses shall apply only to
the extent that Indemnitee has not been indemnified and reimbursed
pursuant to such insurance as the Company may maintain for
Indemnitee’s benefit, or otherwise; provided, however, that
notwithstanding the availability of such other indemnification and
reimbursement, Indemnitee may claim indemnification and advancement
of Expenses pursuant to this Agreement by assigning to the Company,
at its request, Indemnitee’s claims under such insurance to
the extent Indemnitee has been paid by the Company.
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6. Insurance and
Funding. The Company may purchase and maintain insurance to
protect itself and/or Indemnitee against any Expenses in connection
with any Proceeding to the fullest extent permitted by applicable
laws. The Company may create a trust fund, grant an interest in
assets or use other means (including, without limitation, a letter
of credit) to ensure the payment of such amounts as may be
necessary to effect indemnification or advancement of Expenses as
provided in this Agreement. If, at the time the Company receives
notice from any source of a Proceeding as to which Indemnitee is a
party or a participant (as a witness or otherwise), the Company has
director and officer liability insurance in effect, the Company
shall give prompt notice of such Proceeding to the insurers in
accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such Proceeding in
accordance with the terms of such policies.
7.1 Whenever Indemnitee believes that he is
entitled to indemnification pursuant to this Agreement (other than
pursuant to Section 4 above), Indemnitee shall submit a written
request for indemnification to the Company. Any request for
indemnification shall include sufficient documentation or
information reasonably available to Indemnitee to support his claim
for indemnification. Indemnitee shall submit his claim for
indemnification within a reasonable time not to exceed five (5)
years after any judgment, order, settlement, dismissal, arbitration
award, conviction, acceptance of a plea of nolo contendre or its
equivalent, final termination or other disposition or partial
disposition of any Proceeding, whichever is the later date for
which Indemnitee requests indemnification. The president or the
secretary or other appropriate officer of the Company shall,
promptly upon receipt of Indemnitee’s request for
indemnification, advise the Board of Directors of the Company in
writing that Indemnitee has made such request. Determination of
Indemnitee’s entitlement to indemnification shall be made not
later than sixty (60) days after the Company’s receipt of the
written request for such indemnification. If no determination has
been made in such 60-day period, the Company shall be deemed to
have approved the request.
7.2 The Indemnitee shall be entitled to
select the forum in which Indemnitee’s request for
indemnification will be heard, which selection shall be included in
the written request for indemnification required in Section 7.1
above. The forum shall be any one of the following:
7.2.1 The stockholders of the
Company;
7.2.2 A quorum of the Board of Directors
consisting of Disinterested Directors; or
7.2.3 Independent Legal Counsel, who shall
make the determination in a written opinion.
7.3 Upon making a request for
indemnification, Indemnitee shall be presumed to be entitled to
indemnification under this Agreement and the Company shall have the
burden of proof to overcome that presumption in reaching any
contrary determination. The termination of any Proceeding by
judgment, order, settlement, arbitration award or conviction, or
upon a plea of nolo contendre or its equivalent shall not affect
this presumption or, except as provided in Section 2 or 5 hereof,
establish a presumption with regard to any factual matter relevant
to determining Indemnitee’s rights to indemnification
hereunder.
7.4 The Company agrees to pay the
reasonable fees and expenses of Independent Legal Counsel should
such counsel be retained to make a determination of
Indemnitee’s entitlement to indemnification pursuant to
Section 7 of this Agreement, and to fully indemnify such counsel or
by any of them arising out of or relating to this Agreement or
their engagement pursuant hereto, except with respect to expenses
and losses resulting from the negligence or willful misconduct of
such counsel.
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8. Undertaking By
Indemnitee. Indemnitee hereby undertakes to repay to the
Company any advances of Expenses pursuant to this Agreement to the
extent that it is ultimately determined that Indemnitee is not
entitled to indemnification.
9. Remedies of
Indemnitee.
9.1 In the event that (i) a determination
pursuant to Section 7 hereof is made that Indemnitee is not
entitled to indemnification, (ii) advances of Expenses are not made
pursuant to this Agreement, (iii) payment has not been timely made
following a determination of entitlement to indemnification
pursuant to this Agreement, or (iv) Indemnitee otherwise seeks
enforcement of this Agreement, Indemnitee shall be entitled to a
final adjudication in any court of competent jurisdiction of his
rights. The Company shall not oppose Indemnitee’s right to
indemnification under this Agreement and the Company shall have the
burden of proof to overcome that presumption.
9.2 In the event that a determination that
Indemnitee is not entitled to indemnification, in whole or in part,
has been made pursuant to Section 7 hereof, the decision in the
judicial proceeding provided in Section 9.1 shall be made de novo
and Indemnitee shall not be prejudiced by reason of a determination
that he or she is not entitled to indemnification.
9.3 If a determination that Indemnitee is
entitled to indemnification has been made pursuant to Section 7
hereof or otherwise pursuant to the terms of this Agreement, the
Company shall be bound by such determination in the absence of (i)
misrepresentation of a material fact by Indemnitee or (ii) a
specific finding (which has become final) by a court of competent
jurisdiction that all or any part of such indemnification is
expressly prohibited by Nevada law.
10. Modification,
Waiver, Termination, and Cancellation. No supplement,
modification, termination, cancellation 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
provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver.
11. Notice by
Indemnitee and Defense of Claim. Indemnitee shall promptly
notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other
document relating to any matter, whether civil, criminal,
administrative or investigative, but the omission to notify the
Company will not relieve it from any liability which it may have to
Indemnitee if such omission does not prejudice the Company’s
rights. If such omission does prejudice the Company’s rights,
the Company will be relieved from liability only to the extent of
such prejudice, and such omission shall not relieve the Company
from any liability which it may have to Indemnitee otherwise than
under this Agreement.
12. Settlement of
Claims. The
Company shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding
effected without the Company's written consent. The Company shall
not settle any Proceeding in any manner which would impose any
penalty or limitation on Indemnitee's rights under this Agreement
without Indemnitee's written consent. Neither the Company nor
Indemnitee will unreasonably withhold its or his consent to any
proposed settlement. The Company shall not be liable to indemnify
Indemnitee under this Agreement with regard to any judicial award
if the Company was not given a reasonable and timely opportunity,
at its expense, to participate in the defense of such
action.
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13. Continuation Of
Indemnity. All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is a
director, officer, agent, or advisor of the Company (or is or was
serving at the request of the Company as a director, officer,
employee, agent, or advisor of another corporation, partnership,
joint venture, trust, limited liability company, or other
enterprise) and shall continue thereafter so long as Indemnitee
shall be subject to any possible Proceeding.
14. Partial
Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for
some or a portion of Expenses, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee
for the portion of such Expenses to which Indemnitee is
entitled.
15. Notices.
All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given if
delivered personally or by overnight courier such as Federal
Express, or sent by certified or registered mail with postage
prepaid, addressed as:
If to
Indemnitee,
to:
If to
the Company,
to:
000 Xxxxxxxxxx Xxx.
Xxxxx,
Xxxxxxxxxx 00000
Attn:
President
With a copy
to:
Xxxx X.
Xxxx, Esq.
Xxxxx
Xxxxxxxx
0000
Xxxx Xx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX
00000
or to
such other address as may have been furnished to Indemnitee by the
Company or to the Company by Indemnitee, as the case may be.
Notices given as set forth herein shall be conclusively deemed to
have been received by the party to whom addressed upon receipt, if
delivered personally or by overnight courier, and three business
days after the same is deposited in the United States mail if sent
by certified or registered mail.
16. Non-exclusivity. The
indemnification and advancement of Expenses provided by this
Agreement shall not be deemed exclusive of any other rights to
which Indemnitee may be entitled under the Articles of
Incorporation or Bylaws, the Chapter 78 of the Nevada Revised
Statutes, any policy or policies of directors' and officers'
liability insurance, any agreement, or otherwise, both as to action
in his official capacity and as to action in another capacity while
holding such office. However, Indemnitee shall reimburse the
Company for amounts paid to him under this Agreement in an amount
equal to any payments received pursuant to such other rights to the
extent such payments duplicate any payments received pursuant to
this Agreement.
17. Certain
Definitions.
17.1 “Disinterested Director”
shall mean a director of the Company who is not or was not a party
to the Proceeding in respect of which indemnification is being
sought by Indemnitee.
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17.2 “Expenses” shall include,
without limitation, any judgments, fines, and penalties against
Indemnitee in connection with a Proceeding; amounts paid by
Indemnitee in settlement of a Proceeding; and all attorneys' fees
and disbursements, accountants' fees and disbursements, private
investigation fees and disbursements, retainers, court costs,
transcript costs, fees of experts, fees and expenses of witnesses,
travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other
disbursements or expenses reasonably incurred by or for Indemnitee
in connection with prosecuting, defending, preparing to prosecute
or defend, investigating, or being or preparing to be a witness in
a Proceeding or establishing Indemnitee's right or entitlement to
indemnification for any of the foregoing.
17.3 “Final Adverse
Determination” shall mean that a determination that
Indemnitee is not entitled to indemnification shall have been made
pursuant to Section 7 hereof and either (i) a final adjudication in
a court of competent jurisdiction pursuant to Section 9.1 hereof
shall have denied Indemnitee’s right to indemnification
hereunder, or (ii) Indemnitee shall have failed to file a complaint
in a court of competent jurisdiction pursuant to Section 9.1 for a
period of one hundred twenty (120) days after the determination
made pursuant to Section 7 hereof.
17.4 “Independent Legal
Counsel” shall mean a law firm or a member of a law
firm selected by the Company and approved by Indemnitee (which
approval shall not be unreasonably withheld) and that neither is
presently nor in the past five years has been retained to
represent: (i) the Company or any of its subsidiaries or
affiliates, or Indemnitee or any corporation as to which Indemnitee
was or is a director, officer, employee or agent, or any subsidiary
or affiliate of such a corporation, in any material matter, or (ii)
any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
Independent Legal Counsel shall not include any person who, under
the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing the Company or
Indemnitee in an action to determine Indemnitee’s right to
indemnification under this Agreement.
17.5 “Proceeding” shall include any threatened,
pending, or completed action, suit, or proceeding, whether brought
by or in the right of the Company or otherwise and whether of a
civil, criminal, administrative, or investigative nature, in which
Indemnitee was, is, or will be involved as a party, as a witness,
or otherwise, by reason of the fact that Indemnitee is or was a
director, officer, agent, or advisor of the Company, by reason of
any action taken by him or of any inaction on his part while acting
as a director, officer, agent, or advisor of the Company, or by
reason of the fact that he is or was serving at the request of the
Company as a director, officer, employee, agent, or advisor of
another corporation, partnership, joint venture, trust, limited
liability company, or other entity or enterprise, in each case
whether or not he is acting or serving in any such capacity at the
time any liability or expense is incurred for which indemnification
or reimbursement can be provided under this Agreement; provided,
that any such action which is brought by Indemnitee to enforce his
rights under this Agreement shall not be a Proceeding without prior
approval of a majority of the board of directors of the
Company.
18. Binding
Effect. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto 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 or assets of the Company),
spouses, heirs and personal and legal representatives.
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19. Severability. If any
provision(s) of this Agreement (or any portion thereof) shall be
held to be invalid, illegal or unenforceable for any reason
whatsoever, (i) the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be
affected or impaired thereby; and (ii) to the fullest extent
legally possible, the provisions of this Agreement shall be
construed so as to give effect to the intent of any provision held
invalid, illegal or unenforceable.
20. Applicable
Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Nevada,
without regard to its conflict of laws rules.
21. Attorneys
Fees. In any proceeding brought to enforce any provision of
this Agreement, or to seek damages for a breach of any provision
hereof, or when any provision hereof is validly asserted as a
defense, the prevailing party shall be entitled to receive from the
other party all reasonable attorneys fees and costs in connection
therewith.
22. Entire
Agreement. This Agreement represents the entire agreement
between the parties hereto, and there are no other agreements,
contracts or understandings between the parties hereto with respect
to the subject matter of this Agreement, except as specifically
referred to herein or as provided in Section 16
hereof.
23. Amendments,
Termination and Waiver. No supplement, modification,
amendment or termination 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 provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.
24. Counterparts. This Agreement
may be executed in one or more counterparts (including facsimile),
each of which shall be deemed an original and all of which together
shall constitute one and the same Agreement.
25. Subrogation. In the event of
payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including
the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.
26. No Duplication
of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Proceeding
made against Indemnitee to the extent Indemnitee has otherwise
actually received payment (under insurance policy, Articles of
Incorporation or otherwise) of the amounts otherwise identifiable
hereunder.
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27. Contribution. If the
indemnification provided in Section 2 is unavailable, then, in
respect of any Proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in the Proceeding), the
Company shall contribute to the amount of Expenses, judgments,
fines, penalties and amounts paid in settlement as appropriate to
reflect: (i) the relative benefits received by the Company, on the
one hand, and Indemnitee, on the other hand, from the transaction
from which the 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 which resulted in such Expenses,
judgments, fines, penalties and amounts paid in settlement, 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 Expenses. The Company agrees that it would not be just and
equitable if contribution pursuant to this Section 27 were
determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations
described in this Section 27.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first written
above.
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COMPANY
By:______________________________
Name:
Xxx Xxxx,
CEO
_________________________________
Name:
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