EXHIBIT 99.1
INDEMNIFICATION AGREEMENT
THIS
INDEMNIFICATION
AGREEMENT (the
"Agreement") is made and entered into
as of [________], 2006 between Blue Dolphin Energy Company, a Delaware
corporation (the "Company"), and __________ ("Indemnitee").
WITNESSETH:
WHEREAS, it is
essential to the Company to retain and attract as directors
and officers the most capable persons available;
WHEREAS, Indemnitee is a director and/or officer of the
Company;
WHEREAS, both the
Company and Indemnitee
recognize the
increased risk of
litigation and other
claims currently
being asserted against directors and
officers of corporations; and
WHEREAS, the Certificate of Incorporation and Bylaws of the Company
require
the Company to indemnify and advance expenses to its directors and
officers to
the fullest extent
permitted under Delaware law, and the Indemnitee
has been
serving and continues
to serve as a director
and/or officer of the
Company in
part in reliance on the availability of this indemnification in the Company's
Certificate of Incorporation and Bylaws.
NOW,
THEREFORE,
in consideration of
the above premises and for other good
and valuable
consideration, and
intending to be legally bound hereby, the
parties agree as follows:
Indemnity of
Indemnitee. The
Company hereby
agrees to hold
harmless and
indemnify Indemnitee
to the fullest
extent permitted by law, as such may be
amended from time to time. In furtherance of the foregoing
indemnification,
and
without limiting the generality thereof:
(a)
Proceedings Other Than
Proceedings by or in
the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 1(a) if, by reason of his Corporate Status (as defined in Section 12
of
this Agreement),
the Indemnitee is, or
is threatened to be made, a party to or
participant in any Proceeding (as defined in Section 12 of this
Agreement) other
than a Proceeding by
or in the right of the
Company. Pursuant to
this Section
1(a), Indemnitee
shall be indemnified against all Expenses (as hereinafter
defined), judgments,
penalties,
fines and amounts paid
in settlement actually
and reasonably
incurred by him, or on his behalf, in connection with such
Proceeding or any claim, issue or matter therein, if the Indemnitee acted in
good faith and in a manner the Indemnitee reasonably believed to be in or not
opposed to the best
interests of the Company, and with respect to any
criminal
Proceeding, had no
reasonable
cause to believe the
Indemnitee's
conduct was
unlawful.
(b)
Proceedings
by or in the Right of
the Company.
Indemnitee
shall be
entitled to the rights of indemnification provided in this Section 1(b) if,
by
reason of his Corporate Status, the Indemnitee is, or is
threatened to be made,
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a party to or participant in any Proceeding brought by or in the right of
the
Company. Pursuant to
this Section 1(b), Indemnitee shall be indemnified against
all Expenses
actually and
reasonably
incurred by the
Indemnitee,
or on the
Indemnitee's behalf,
in connection with such Proceeding if the Indemnitee acted
in good faith and in a manner the Indemnitee reasonably believed to
be in or not
opposed to the best interests of the Company; provided, however, if applicable
law so provides,
no indemnification against such Expenses shall be made in
respect of any claim,
issue or matter in such Proceeding as to which Indemnitee
shall have been
adjudged to be liable to the Company unless and to the extent
that the Court of Chancery of the State of Delaware shall determine that such
indemnification may be made.
(c)
Indemnification
for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement,
to the extent
that Indemnitee
is, by reason of his Corporate Status, a party to and is
successful, on
the merits or otherwise, in any Proceeding, he shall be
indemnified to the maximum extent permitted by law, as such may be
amended from
time to time, against all Expenses actually and reasonably incurred
by him or on
his behalf in connection therewith. If Indemnitee is not wholly
successful in
such Proceeding but is successful, on the merits or otherwise, as
to one or more
but less than all
claims, issues or
matters in such
Proceeding, the
Company
shall indemnify Indemnitee against all Expenses actually and
reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter. For
purposes of this Section and without limitation, the
termination of any
claim, issue or matter
in such a Proceeding
by dismissal,
with or without prejudice, shall be deemed to be a successful
result as to such
claim, issue or matter.
Additional Indemnity.
---------------------
(d)
In addition
to, and without regard to any limitations on, the
indemnification
provided for in Section 1 of this Agreement, the Company shall
indemnify Indemnitee
to the fullest extent
permitted by law if Indemnitee is a
party to or
threatened
to be made a party to any Proceeding (including a
Proceeding by or in the right of the Company to procure a judgment
in its favor)
against all Expenses, judgments, penalties, fines and amounts paid
in settlement
actually and reasonably incurred by Indemnitee or on his behalf if,
by reason of
his Corporate Status,
Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding (including a Proceeding by or in
the right of the
Company). No
indemnity shall be made under this Section 2 on account of
Indemnitee's conduct
which constitutes a breach of Indemnitee's duty of loyalty
to the Company or its stockholders or is an act or omission not in
good faith or
which involves intentional misconduct or a knowing violation of the
law.
(e)
For purposes
of Section 2, the
meaning of the phrase
"TO THE FULLEST
EXTENT PERMITTED BY LAW" shall include, but not be limited to:
The fullest
extent permitted by the provision of the DGCL that
authorizes or contemplates additional indemnification by agreement or
the
corresponding provision of any amendment to or replacement of the
DGCL; and
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the fullest extent
authorized
or permitted by any
amendments to or
replacements of the
DGCL, adopted after
the date of this
Agreement that
increase the extent to which a corporation may indemnify its officers and
directors.
Contribution.
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(f)
Whether or not the indemnification provided in Sections 1 and 2
hereof
is available, in respect of any threatened, pending or completed
action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall pay, in the
first instance, the
entire amount of any judgment or settlement of such action,
suit or proceeding
without requiring
Indemnitee to
contribute to such payment
and the Company hereby waives and relinquishes any right of
contribution it may
have against Indemnitee. The Company shall not enter into
any settlement of any
action, suit or
proceeding
in which the Company is jointly liable with
Indemnitee (or would
be if joined in such action, suit or proceeding) unless
such settlement
provides for a full
and final release of
all claims
asserted
against Indemnitee.
(g)
Without diminishing
or impairing the
obligations
of the Company set
forth in the preceding subparagraph, if, for any reason, Indemnitee
shall elect
or be required to pay all or any portion of any judgment or settlement in any
threatened, pending or completed action, suit or proceeding in
which the Company
is jointly liable with Indemnitee (or would be if joined in such
action, suit or
proceeding), the Company shall contribute to the amount of
Expenses,
judgments,
fines and amounts paid in settlement actually and reasonably
incurred and paid
or payable by Indemnitee in proportion to the relative benefits received by the
Company and all
officers, directors or
employees of the Company, other than
Indemnitee, who are
jointly liable with
Indemnitee
(or would be if joined
in
such action, suit or proceeding), on the one hand, and Indemnitee,
on the other
hand, from the
transaction from which
such action, suit or
proceeding arose;
provided, however,
that the proportion determined on the basis of relative
benefit may, to the extent necessary to conform to law, be
further adjusted
by
reference to the relative fault of the Company and all
officers, directors or
employees of the
Company other than
Indemnitee
who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, in connection
with the events that
resulted in such expenses, judgments, fines or settlement amounts, as well as
any other equitable
considerations which
the Law may require to be considered.
The relative fault of
the Company and all
officers, directors or
employees of
the Company, other
than Indemnitee, who
are jointly liable with Indemnitee (or
would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the
other hand, shall be determined by reference to, among other
things, the degree to
which their
actions were motivated by intent to gain
personal profit or advantage, the degree to which their
liability is primary or
secondary and the degree to which their conduct is active or
passive.
(h)
The Company
hereby agrees to fully indemnify and hold Indemnitee
harmless from any
claims of contribution
which may be
brought by officers,
directors or employees of the Company, other than Indemnitee, who
may be jointly
liable with Indemnitee.
(i)
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
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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 Proceeding 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 Proceeding; 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).
Indemnification for
Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is,
by reason of his
Corporate Status,
a witness in any
Proceeding
to which Indemnitee is not a
party, he shall be
indemnified
against all Expenses
actually and
reasonably
incurred by him or on his behalf in connection therewith.
Advancement of
Expenses. Notwithstanding any other provision of this
Agreement, the Company
shall advance all
Expenses incurred by
or on behalf of
Indemnitee in connection with any Proceeding by reason of
Indemnitee's Corporate
Status within
thirty (30) days after
the receipt by the Company of a statement
or statements from
Indemnitee requesting
such advance or advances from time to
time, whether
prior to or after
final disposition
of such Proceeding. Such
statement or
statements shall
reasonably
evidence the Expenses incurred by
Indemnitee and shall
include or be preceded or accompanied by an undertaking by
or on behalf of Indemnitee to repay any Expenses advanced if it
shall ultimately
be determined that
Indemnitee is not
entitled to be
indemnified against
such
Expenses. Any advances
and undertakings to repay pursuant to this Section 5
shall be unsecured and interest free.
Procedures and
Presumptions
for Determination of Entitlement to
Indemnification. It is
the intent of this
Agreement to secure
for Indemnitee
rights of indemnity that are as favorable as may be permitted under
the DGCL and
public policy of the State of Delaware. Accordingly, the parties agree
that the
following procedures
and presumptions shall
apply in the event of any question
as to whether Indemnitee is entitled to indemnification under this
Agreement:
(j) To obtain
indemnification under this Agreement, Indemnitee shall submit
to the Company a written request, including therein or therewith such
documentation and
information as is
reasonably available
to Indemnitee and is
reasonably necessary
to determine whether and to what extent
Indemnitee
is
entitled to indemnification. The Secretary of the Company
shall, promptly
upon
receipt of such a request for indemnification, advise the Board in writing
that
Indemnitee has requested indemnification.
(k)
If there has been no Change in Control (as defined in Section 12 of
this Agreement), upon written request by Indemnitee for
indemnification pursuant
to the first sentence of Section 6(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto shall be made
in the specific case by one of the following three methods, which shall be at
the election of the board: (1) by a majority vote of the
Disinterested Directors
(as defined in Section 12 of this Agreement), even though less than
a quorum, or
by a committee of Disinterested Directors designated by a majority vote of
the
Disinterested
Directors, even though
less than a quorum,
(2) if there are
no
Disinterested
Directors or
if the Disinterested Directors so direct, by
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Independent Counsel in
a written opinion to the Board, a copy of which shall be
delivered to the
Indemnitee,
or (3) if so directed by the Board, by the
stockholders of the
Company. If there has
been a Change in Control at the time
the request for
indemnification
is submitted, Indemnitee's entitlement to
indemnification shall
be determined in a written opinion by Independent Counsel
selected by Indemnitee pursuant to Section 6(c) below.
(l)
If there has been a Change in Control and the determination of
entitlement to indemnification is to be made by Independent
Counsel pursuant
to
Section 6(b)
hereof, the Independent Counsel shall be selected by the
Indemnitee. Indemnitee
shall give the Company
written notice
advising of the
identity and address of the Independent Counsel so selected. The Company may,
within 10 days after receipt of such written notice of selection,
deliver to the
Indemnitee a written objection to such selection; provided, however, that such
objection may be
asserted only on the
ground that the
Independent Counsel
so
selected does not meet the requirements of "Independent
Counsel" as defined
in
Section 12
of this Agreement, and the objection shall set forth with
particularity the
factual basis of such
assertion. Absent a
proper and timely
objection, the person so selected shall act as Independent Counsel.
If a written
objection is made and
substantiated, the
Independent Counsel
selected may not
serve as Independent
Counsel unless and
until such objection is withdrawn or a
court has determined
that such objection is
without merit. If,
within 20 days
after submission by Indemnitee of a written request for
indemnification pursuant
to Section 6(a) hereof, no Independent Counsel shall have been selected
and not
objected to, either the Company or Indemnitee may petition the
Court of Chancery
of the State of Delaware or other court of competent jurisdiction
for resolution
of any objection which
shall have been made by the Indemnitee to the Company's
selection of
Independent Counsel
and/or for the
appointment
as Independent
Counsel of a person
selected by the court or by such other person as the court
shall designate,
and the person
with respect to whom all objections are so
resolved or the person
so appointed
shall act as
Independent
Counsel under
Section 6(b)
hereof. The Company shall pay any and all reasonable fees and
expenses of
Independent
Counsel incurred by such Independent Counsel in
connection with acting
pursuant to Section
6(b) hereof, and the
Company shall
pay all reasonable fees and expenses incident to the procedures of this
Section
6(c), regardless of the manner in which such Independent Counsel
was selected or
appointed.
(m)
In making a determination with respect to entitlement to
indemnification
hereunder, the
person or persons or entity making such
determination shall presume that Indemnitee is entitled to
indemnification under
this Agreement.
Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and
convincing
evidence.
Neither the failure of the Company (including by its directors or independent
legal counsel) to have made a determination prior to the commencement of any
action pursuant
to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of
conduct, nor
an actual determination by the Company (including by its directors or
independent legal counsel) that Indemnitee has not met such
applicable
standard
of conduct,
shall be a defense
to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
(n)
Indemnitee shall be
deemed to have acted in good faith if Indemnitee's
action is based on the records or books of account of the
Enterprise (as defined
in Section
12 of this Agreement), including financial statements, or on
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information supplied
to Indemnitee
by the officers of the
Enterprise
in the
course of their duties, or on the advice of legal counsel
for the Enterprise or
on information
or records given or reports made to the Enterprise by an
independent certified
public accountant or by an appraiser or other expert
selected with
reasonable care by the
Enterprise.
In addition,
the knowledge
and/or actions, or failure to act, of any director, officer, agent or employee
of the Enterprise shall not be imputed to Indemnitee for purposes
of determining
the right to indemnification under this Agreement. Whether or not the foregoing
provisions of this Section 6(e) are satisfied, it shall in any
event be presumed
that Indemnitee
has at all
times acted in good faith and in a manner he
reasonably believed
to be in, or not
opposed to, the best interests of the
Company. Anyone
seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion by cl
