INDEMNIFICATION AGREEMENT
This
Indemnification Agreement (this “Agreement”),
dated
effective as of October 16, 2006, is made by and between Ignis Petroleum
Group,
Inc., a Nevada corporation (the "Corporation"),
and
Xxxx X. Xxxxx ("Indemnitee").
RECITALS
A. Indemnitee
is an officer of the Corporation and in such capacity is performing a valuable
service to the Corporation.
B. The
Corporation’s Articles of Incorporation, as amended (the “Articles”)
provide for limitation of liability for directors and officers of the
Corporation.
C. The
Corporation’s bylaws, as amended (the “Bylaws”),
provide that the Corporation shall indemnify to all directors of the Corporation
and may indemnify all officers, employees and agents of the Corporation for
their service in such capacities.
D. The
Nevada Revised Statutes, as amended (the "NRS")
specifically provides that indemnification and advancement of expenses provided
in such statute shall not be exclusive of any other rights under any agreement,
and thereby contemplates that agreements may be entered into between the
Corporation and directors, officers, employees and agents of the Corporation
with respect to the indemnification of such persons.
E. The
general availability of directors' and officers' liability insurance
("Insurance")
covering certain liabilities which may be incurred by the Corporation's
directors and officers in the performance of their services to the Corporation
and the applicability, amendment and enforcement of statutory and bylaw
provisions have raised questions concerning the adequacy and reliability
of the
protection afforded to directors, officers, employees and agents.
F. In
order
to induce Indemnitee to continue to serve as an officer, employee and/or
agent
of the Corporation for the current term and for any subsequent term to which
he
or she is appointed or engaged by the board of directors, the Corporation
has
deemed it to be in its best interest to enter into this Agreement with
Indemnitee.
The
parties agree as follows:
1. Definitions.
As used
in this Agreement, the following terms shall have the following
meanings:
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(a) Change
in Control.
A
"Change
in Control"
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 (the “34
Act”)
is or
becomes the "beneficial
owner"
(as
such term is defined in Rule l3d-3 under the 34 Act), directly or indirectly,
of
securities of the Corporation representing 25% or more of the combined voting
power of the outstanding securities of the Corporation (other than (A) a
person
owning 25% or more as of the date of this Agreement, (B) a person who becomes
the owner of 25% or more by reason of the Corporation's acquisition of
outstanding shares of the Corporation's stock, or (C) a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation),
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 (2/3) 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 either: (x) a merger
or
consolidation of the Corporation with any other entity (other than a merger
or
consolidation which would result in the voting securities of the Corporation
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 combined voting power of the voting
securities of the Corporation or such surviving entity outstanding immediately
after such merger or consolidation), (y) a plan of complete liquidation of
the
Corporation or (z) an agreement or agreements for the sale or disposition,
in a
single transaction or series of related transactions, by the Corporation
of all
or substantially all of the property and assets of the Corporation.
Notwithstanding the foregoing, events otherwise constituting a Change in
Control
in accordance with the foregoing shall not constitute a Change in Control
if
such events are solicited by the Corporation and are approved, recommended
or
supported by the board of directors of the Corporation in actions taken prior
to, and with respect to, such events.
(b) Reviewing
Party.
A
"Reviewing
Party"
means
(i) the board of directors or a committee of directors of the Corporation,
who
are not officers, appointed by the board of directors, provided that a majority
of such directors are not parties to the claim in question, or (ii) special,
independent counsel selected and appointed by the board of directors or by
a
committee of directors of the Corporation who are not officers.
2. Indemnification
of Indemnitee.
The
Corporation hereby agrees that it shall hold harmless, indemnify and defend
Indemnitee to the fullest extent authorized and permitted by (i) the provisions
of the Articles and Bylaws and the provisions of the NRS, or by any amendment
thereof, but in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than
the Articles, Bylaws or NRS permitted the Corporation to provide prior to
such
amendment or (ii) any other statutory provisions authorizing or permitting
such
indemnification which are adopted after the date hereof.
3. Insurance.
(a) Insurance
Policies.
So long
as Indemnitee may be subject to any possible claim or threatened, pending
or
completed action, suit or proceeding, whether civil, criminal, administrative
or
investigative, by reason of the fact that Indemnitee is or was a director,
officer, employee or agent to the extent that the Corporation maintains one
or
more insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies in accordance
with its or their terms, to the maximum extent of the coverage applicable
to any
director or officer then serving the Corporation.
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(b) Maintenance
of Insurance.
The
Corporation shall not be required to maintain the Insurance on any policy
or
policies of comparable insurance, as the case may be, if such insurance is
not
reasonably available or if, in the reasonable business judgment of the board
of
directors of the Corporation which shall be conclusively established by such
determination by the board of directors, or any appropriate committee thereof,
either (i) the premium cost for such insurance is substantially disproportionate
to the amount of coverage thereunder or (ii) the coverage provided by such
insurance is so limited by exclusions that there is insufficient benefit
from
such insurance.
4. Additional
Indemnification.
Subject
only to the exclusions set forth in Section 5 hereof, the Corporation hereby
agrees that it shall hold harmless, indemnify and defend
Indemnitee:
(a) against
any and all expenses, including reasonable attorneys' fees, judgments, fines
and
amounts paid in settlement actually and reasonably incurred by Indemnitee
in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, including an action
by
or on behalf of stockholders of the Corporation or by or in the right of
the
Corporation, to which Indemnitee is, was or at any time becomes a party,
or is
threatened to be made a party, by reason of the fact that Indemnitee is,
was or
at any time becomes a director, officer, employee or agent of the Corporation,
or is or was serving or at any time serves at the request of the Corporation
as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise; and
(b) otherwise
to the fullest extent as may be provided to Indemnitee by the Corporation
under
the NRS.
5. Limitations
on Additional Indemnification.
No
indemnification pursuant to this Agreement shall be paid by the
Corporation:
(a) in
respect to any transaction if it shall be determined by the Reviewing Party,
or
by final judgment or other final adjudication, that Indemnitee derived an
improper personal benefit;
(b) in
respect to the return by Indemnitee of any remuneration paid to Indemnitee
if it
shall be determined by the Reviewing Party, or by final judgment or other
final
adjudication, that such remuneration was not approved by the stockholders
of the
Corporation and was thereby in violation of law;
(c) on
account of Indemnitee's conduct which is determined by the Reviewing Party,
or
by final judgment or other final adjudication, to have involved acts or
omissions not in good faith or which Indemnitee did not reasonably believe
to be
in or not opposed to the best interests of the Corporation, intentional or
willful misconduct, fraud or a knowing violation of law; or
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(d) if
the
Reviewing Party or a court having jurisdiction in the matter shall determine
that such indemnification is in violation of the Articles, the Bylaws or
law.
6. Advancement
of Expenses.
In the
event of any threatened or pending action, suit or proceeding in which
Indemnitee is a party or is involved and which may give rise to a right of
indemnification under this Agreement, following written request to the
Corporation by Indemnitee, the Corporation shall promptly pay to Indemnitee
amounts to cover expenses incurred by Indemnitee in such proceeding in advance
of its final disposition upon the receipt by the Corporation of (i) a written
undertaking executed by or on behalf of Indemnitee to repay the advance if
it
shall ultimately be determined that Indemnitee is not entitled to be indemnified
by the Corporation as provided in this Agreement and (ii) satisfactory evidence
as to the amount of such expenses.
7. Repayment
of Expenses.
Indemnitee agrees that Indemnitee shall reimburse the Corporation for all
reasonable expenses paid by the Corporation in defending any civil, criminal,
administrative or investigative action, suit or proceeding against Indemnitee
in
the event and only to the extent that it shall be determined by final judgment
or other final adjudication that Indemnitee is not entitled to be indemnified
by
the Corporation for such expenses under the provisions of the NRS or any
applicable law.
8. Determination
of Indemnification; Burden of Proof.
With
respect to all matters concerning the rights of Indemnitee to indemnification
and payment of expenses under this Agreement or under the provisions of the
Articles and Bylaws now or hereafter in effect, the Corporation shall appoint
a
Reviewing Party and any determination by the Reviewing Party shall be conclusive
and binding on the Corporation and Indemnitee. If under applicable law the
entitlement of Indemnitee to be indemnified under this Agreement depends
on
whether a standard of conduct has been met, the burden of proof of establishing
that Indemnitee did not act in accordance with such standard of conduct shall
rest with the Corporation. Indemnitee shall be presumed to have acted in
accordance with such standard and entitled to indemnification or advancement
of
expenses hereunder, as the case may be, unless, based upon a preponderance
of
the evidence, it shall be determined by the Reviewing Party that Indemnitee
did
not meet such standard. For purposes of this Agreement, unless otherwise
expressly stated herein, the termination of any 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.
9. Effect
of Change in Control.
If
there has not been a Change in Control after the date of this Agreement,
the
determination of (i) the rights of Indemnitee to indemnification and payment
of
expenses under this Agreement or under the provisions of the Articles and
the
Bylaws, (ii) standard of conduct and (iii) evaluation of the reasonableness
of
amounts claimed by Indemnitee shall be made by the Reviewing Party or such
other
body or persons as may be permitted by the NRS. If there has been a Change
in
Control after the date of this Agreement, such determination and evaluation
shall be made by a special, independent counsel who is selected by Indemnitee
and approved by the Corporation, which approval shall not be unreasonably
withheld, and who has not otherwise performed services for Indemnitee or
the
Corporation.
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10. Continuation
of Indemnification.
All
agreements and obligations of the Corporation contained herein shall continue
during the period that Indemnitee is a director, officer, employee or agent
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 at the request of the Corporation, and
shall
continue thereafter so long as Indemnitee shall be subject to any possible
claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that Indemnitee
was a director and/or officer of the Corporation or serving in any other
capacity referred to herein.
11. Notification
and Defense of Claim.
Promptly after receipt by Indemnitee of notice of the commencement of any
action, suit or proceeding, Indemnitee shall, if a claim in respect hereof
is to
be made against the Corporation under this Agreement, notify the Corporation
of
the commencement thereof; provided, however, that delay in so notifying the
Corporation in writing shall not constitute a waiver or release by Indemnitee
of
rights hereunder and that omission by Indemnitee to so notify the Corporation
shall not relieve the Corporation from any liability which it may have to
Indemnitee otherwise than under this Agreement. With respect to any such
action,
suit or proceeding as to which Indemnitee notifies the Corporation of the
commencement thereof:
(a) The
Corporation shall be entitled to participate therein at its own expense;
and
(b) Except
as
otherwise provided below, to the extent that it may wish, the Corporation,
jointly with any other indemnifying party similarly notified, shall be entitled
to assume the defense thereof and to employ counsel reasonably satisfactory
to
Indemnitee. After notice from the Corporation to Indemnitee of its election
to
so assume the defense thereof, the Corporation shall not be liable to Indemnitee
under this Agreement for any legal or other expenses subsequently incurred
by
Indemnitee in connection with the defense thereof other than reasonable costs
of
investigation or as otherwise provided below. Indemnitee shall have the right
to
employ counsel of his own choosing in such action, suit or proceeding but
the
fees and expenses of such counsel incurred after notice from the Corporation
of
assumption by the Corporation of the defense thereof shall be at the expense
of
Indemnitee unless (i) the employment of counsel by Indemnitee has been
specifically authorized by the Corporation, such authorization to be
conclusively established by action by disinterested members of the board
of
directors though less than a quorum; (ii) representation by the same counsel
of
both Indemnitee and the Corporation would, in the reasonable judgment of
Indemnitee and the Corporation, be inappropriate due to an actual or potential
conflict of interest between the Corporation and Indemnitee in the conduct
of
the defense of such action, such conflict of interest to be conclusively
established by an opinion of counsel to the Corporation to such effect; (iii)
the counsel employed by the Corporation and reasonably satisfactory to
Indemnitee has advised Indemnitee in writing that such counsel's representation
of Indemnitee would likely involve such counsel in representing differing
interests which could adversely affect the judgment or loyalty of such counsel
to Indemnitee, whether it be a conflicting, inconsistent, diverse or other
interest; or (iv) the Corporation shall not in fact have employed counsel
to
assume the defense of such action, in each of which cases the fees and expenses
of counsel shall be paid by the Corporation. The Corporation shall not be
entitled to assume the defense of any action, suit or proceeding brought
by or
on behalf of the Corporation or as to which a conflict of interest has been
established as provided in (ii) hereof. Notwithstanding the foregoing, if
an
insurance Corporation has supplied directors' and officers' liability insurance
covering an action, suit or proceeding, then such insurance Corporation shall
employ counsel to conduct the defense of such action, suit or proceeding
unless
Indemnitee and the Corporation reasonably concur in writing that such counsel
is
unacceptable.
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(c) The
Corporation shall not be liable to indemnify Indemnitee under this Agreement
for
any amounts paid in settlement of any action or claim effected without its
written consent. The Corporation shall not settle any action or claim in
any
manner which would impose any liability or penalty on Indemnitee without
Indemnitee's written consent. Neither the Corporation nor Indemnitee shall
unreasonably withhold consent to any proposed settlement.
12. Enforcement.
(a) The
Corporation expressly confirms and agrees that it entered into this Agreement
and assumed the obligations imposed on the Corporation hereby in order to
induce
Indemnitee to serve or continue to serve as a director, officer, employee
and/or
agent of the Corporation, and acknowledges that Indemnitee is relying upon
this
Agreement in continuing in such capacity.
(b) If
a
claim for indemnification or advancement of expenses is not paid in full
by the
Corporation within 30 days after a written claim by Indemnitee has been received
by the Corporation, Indemnitee may at any time assert the claim and bring
suit
against the Corporation to recover the unpaid amount of the claim. In the
event
Indemnitee is required to bring any action to enforce rights or to collect
moneys due under this Agreement and is successful in such action, the
Corporation shall reimburse Indemnitee for all of Indemnitee's reasonable
attorneys' fees and expenses in bringing and pursuing such action.
13. Proceedings
by Indemnitee.
The
Corporation shall not be liable to make any payment under this Agreement
in
connection with any action, suit or proceeding, or any part thereof, initiated
by Indemnitee unless such action, suit or proceeding, or part thereof, was
authorized by the Corporation, such authorization to be conclusively established
by action by disinterested members of the board of directors though less
than a
quorum.
14. Effectiveness.
This
Agreement is effective for, and shall apply to (i) any claim which is asserted
or threatened before, on or after the date of this Agreement but for which
no
action, suit or proceeding has been brought prior to the date hereof, and
(ii)
any action, suit or proceeding which is threatened before, on or after the
date
of this Agreement but which is not pending prior to the date hereof. This
Agreement shall not apply to any action, suit or proceeding which was brought
before the date of this Agreement. So long as the foregoing is satisfied,
this
Agreement shall be effective for, and be applicable to, acts or omissions
occurring prior to, on or after the date hereof.
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15. Non-exclusivity.
The
rights of Indemnitee under this Agreement shall not be deemed exclusive,
or in
limitation of, any rights to which Indemnitee may be entitled under any
applicable common or statutory law, or pursuant to the Articles, the Bylaws,
vote of stockholders or otherwise.
16. Other
Payments.
The
Corporation shall not be liable to make any payment under this Agreement
in
connection with any action, suit or proceeding against Indemnitee to the
extent
Indemnitee has otherwise received payment of the amounts otherwise payable
by
the Corporation hereunder.
17. Subrogation.
In the
event the Corporation makes any payment under this Agreement, the Corporation
shall be subrogated, to the extent of such payment, to all rights of recovery
of
Indemnitee with respect thereto, and Indemnitee shall execute all agreements,
instruments, certificates or other documents and do or cause to be done all
things necessary or appropriate to secure such recovery rights to the
Corporation including, without limitation, executing such documents as shall
enable the Corporation to bring an action or suit to enforce such recovery
rights.
18. Survival;
Continuation.
The
rights of Indemnitee under this Agreement shall inure to the benefit of
Indemnitee, his heirs, executors, administrators, personal representatives
and
assigns, and this Agreement shall be binding upon the Corporation, its
successors and assigns. The rights of Indemnitee under this Agreement shall
continue so long as Indemnitee may be subject to any action, suit or proceeding
because of the fact that Indemnitee is or was a director, officer, employee
or
agent 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. If the Corporation, in a single
transaction or series of related transactions, sells, leases, exchanges,
or
otherwise disposes of all or substantially all of its property and assets,
the
Corporation shall, as a condition precedent to any such transaction, cause
effective provision to be made so that the persons or entities acquiring
such
property and assets shall become bound by and replace the Corporation under
this
Agreement.
19. Amendment
and Termination.
No
amendment, modification, termination or cancellation of this Agreement shall
be
effective unless made in writing signed by both parties hereto.
20. Headings.
Section
headings of the sections and paragraphs of this Agreement have been inserted
for
convenience of reference only and do not constitute a part of this
Agreement.
21. Notices.
All
notices, demands or other communications to be given or delivered under or
by
reason of the provisions of this Agreement will be in writing and will be
deemed
to have been given when delivered personally or by telex, facsimile
transmission, telegram or overnight delivery service, or 72 hours after having
been mailed by certified or registered mail, return receipt requested, and
postage prepaid, to the recipient. Such notices, demands and other
communications will be sent to each party at the address indicated
below:
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|
(a)
|
if
to the Corporation:
|
000
Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx,
Xxxxx 00000
Attn:
Chairman of the Board of Directors
with
a
copy to:
Xxxxxx
& Hanger, L.L.P.
0000
Xxxxxxx Xxxxx
000
Xxxxxx Xxxxxx
Xxxx
Xxxxx, Xxxxx 00000
Attn:
Xxxxxxx X. Xxxxxxx, Esq.
|
(b)
|
if
to the Indemnitee:
|
Xxxx
X.
Xxxxx
6648
Winged Xxxx Xxx
Xxxxx,
Xxxxx 00000
or
to
such other address or to the attention of such other person as the recipient
party has specified by prior written notice to the sending party.
22. Severability.
If any
provision of this Agreement shall be held to be illegal, invalid or
unenforceable under any applicable law, then such contravention or invalidity
shall not invalidate the entire Agreement. Such provision shall be deemed
to be
modified to the extent necessary to render it legal, valid and enforceable,
and
if no such modification shall render it legal, valid and enforceable, then
this
Agreement shall be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties shall be construed
and
enforced accordingly.
23. Complete
Agreement.
This
Agreement and those documents expressly referred to herein embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any
way.
24. Counterparts.
This
Agreement may be executed in any number of counterparts and by different
parties
hereto in separate counterparts, with the same effect as if all parties had
signed the same document. All such counterparts shall be deemed an original,
shall be construed together and shall constitute one and the same
instrument.
25. Choice
of Law.
THIS
AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
[Signature
page follows.]
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IN
WITNESS WHEREOF, the parties hereto have caused this Indemnification Agreement
to be executed on the day and year first above written.
|
By:
/s/
Xxxxxxx X. Xxxxxx
|
|
|
Name:Xxxxxxx
X. Xxxxxx
|
|
|
Title:
President & CEO
|
|
|
INDEMNITEE
|
|
|
By:
/s/
Xxxx X. Xxxxx
|
|
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Xxxx X. Xxxxx
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