EXHIBIT 10.3
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT
(“ Agreement ”) is made as of the date set forth
on the signature page to this Agreement, by and between Balqon
Corporation, a Nevada corporation (“ Company ”),
and the individual named on the signature page to this Agreement
(“ Indemnitee ”), an officer and/or a director
of the Company.
R E C I T A L
S
A. The
Company desires to attract and retain the services of highly
qualified individuals as directors and officers.
B.
Indemnitee does not regard the protection currently
provided by applicable law, the Company’s governing documents
and available insurance as adequate under the present
circumstances, and the Company has determined that Indemnitee and
other directors and officers of the Company may not be willing to
serve or continue to serve in such capacities without additional
protection.
C.
In order to induce and encourage highly experienced and
capable persons such as the Indemnitee to serve, or to continue to
serve, as an officer and/or a director, the Board of Directors of
the Company has determined, after due consideration, that this
Agreement is not only reasonable and prudent, but necessary to
promote and ensure the best interests of the Company and its
stockholders.
D.
The Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to the Indemnitee
to the fullest extent permitted by law and as provided for in this
Agreement.
E.
The Company’s execution of this Agreement has been
approved by the Board of Directors of the Company.
F.
Indemnitee has indicated to the Company that but for the
Company’s agreement to enter into this Agreement, Indemnitee
would decline to serve, or to continue to serve, as an officer
and/or a director of the Company.
NOW, THEREFORE, in consideration of
the recitals set forth above and the continued services of the
Indemnitee, and as an inducement to the Indemnitee to serve, or to
continue to serve, as an officer and/or a director of the Company,
the Company and the Indemnitee do hereby agree as
follows:
1.
Definitions . As used in this Agreement, the
following terms shall have the meanings set forth below:
(a) “
Proceeding ” shall mean any threatened, pending or
completed action, suit or proceeding, whether brought in the name
of the Company or otherwise and whether of a civil, criminal,
administrative or investigative nature, by reason of the fact that
the Indemnitee is or was an officer and/or a director of the
Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another enterprise, whether
or not he is serving in such capacity at the time any liability,
Expense (as defined in subparagraph (b) below) or Loss (as defined
in subparagraph (c) below) is incurred for which indemnification or
advancement of Expenses or Losses is to be provided under this
Agreement.
(b) “
Expenses ” means all costs, charges and expenses
incurred in connection with a Proceeding, including, without
limitation, attorneys’ fees, disbursements and retainers,
accounting and witness fees, travel and deposition costs, expenses
of investigations, judicial or administrative proceedings or
appeals, and any expenses of establishing a right to
indemnification pursuant to this Agreement or otherwise, including
reasonable compensation for time spent by the Indemnitee in
connection with the investigation, defense or appeal of a
Proceeding or action for indemnification for which he is not
otherwise compensated by the Company or any third party;
provided , however , that the term “
Expenses ” does not include Losses.
(c) “
Losses ” means any amount which Indemnitee pays or is
obligated to pay in connection with a Proceeding, including,
without limitation, (i) the amount of damages, judgments, amounts
paid in settlement, fines or penalties relating to any Proceeding,
(ii) sums paid in respect of any deductible under any applicable
D&O Insurance (as defined in Section 12(a) ) or
(iii) excise taxes under the Employee Retirement Income Security
Act of 1974 (“ ERISA ”), as amended, relating to
any Proceeding, either of which are actually levied against the
Indemnitee or paid by or on behalf of the Indemnitee;
provided , however , that the term “
Losses ” does not include Expenses.
2.
Agreement to Serve . The Indemnitee agrees to
continue to serve as an officer and/or a director of the Company at
the will of the Company for so long as Indemnitee is duly elected
or appointed or until such time as Indemnitee tenders a resignation
in writing or is terminated as an officer and/or removed as a
director by the Company. Nothing in this Agreement shall be
construed to create any right in Indemnitee to continued employment
with the Company or any subsidiary or affiliate of the Company.
Nothing in this Agreement shall affect or alter any of the terms of
any otherwise valid employment agreement or other agreement between
Indemnitee and the Company relating to Indemnitee’s
conditions and/or terms of employment or service.
3.
Indemnification in Third Party Actions . The
Company shall indemnify the Indemnitee in accordance with the
provisions of this Section 3 if the Indemnitee is a
party to or threatened to be made a party to or is otherwise
involved in any Proceeding (other than a Proceeding by or in the
right of the Company to procure a judgment in its favor), by reason
of the fact that the Indemnitee is or was an officer and/or a
director of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another
enterprise, or by reason of anything done or not done by Indemnitee
in any such capacity, against all Expenses and Losses actually and
reasonably incurred by the Indemnitee in connection with the
defense or settlement of such Proceeding, to the fullest extent
permitted by the Nevada Revised Statutes (the “ Law
”), whether or not the Indemnitee was the successful party in
any such Proceeding; provided , however , that any
settlement shall be approved in writing by the Company.
4.
Indemnification In Proceedings By or In the Right of the
Company . The Company shall indemnify the Indemnitee in
accordance with the provisions of this Section 4 if the
Indemnitee is a party to or threatened to be made a party to or is
otherwise involved in any Proceeding by or in the right of the
Company to procure a judgment in its favor by reason of the fact
that the Indemnitee is or was an officer and/or a director of the
Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another enterprise, or by
reason of anything done or not done by Indemnitee in any such
capacity, against all Expenses actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such
Proceeding, to the fullest extent permitted by the Law, whether or
not the Indemnitee is the successful party in any such Proceeding.
The Company shall further indemnify the Indemnitee for any Losses
actually and reasonably incurred by the Indemnitee in any such
Proceeding described in the immediately preceding sentence,
provided that either (i) the Proceeding is settled with the
approval of a court of competent jurisdiction, or (ii)
indemnification of such amounts is otherwise ordered by a court of
competent jurisdiction in connection with such
Proceeding.
5.
Conclusive Presumption Regarding Standard of
Conduct . The Indemnitee shall be conclusively presumed to
have met the relevant standards of conduct required by the Law for
indemnification pursuant to this Agreement, unless a determination
is made that the Indemnitee has not met such standards (i) by the
Board of Directors of the Company by a majority vote of a quorum
thereof consisting of directors who were not parties to such
Proceeding, (ii) by the stockholders of the Company by a majority
vote, or (iii) in a written opinion of the Company’s
independent legal counsel. Further, the termination of any
Proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
rebut such presumption that the Indemnitee met the relevant
standards of conduct required for indemnification pursuant to this
Agreement.
6.
Indemnification of Expenses of Successful
Party . Notwithstanding any other provision of this
Agreement, to the extent that the Indemnitee has been successful on
the merits or otherwise in defense of any Proceeding or in defense
of any claim, issue or matter therein, the Indemnitee shall be
indemnified against all Expenses incurred in connection therewith
to the fullest extent permitted by the Law. For purposes of this
Section 6 , the Indemnitee will be deemed to have been
successful on the merits if the Proceeding is terminated by
settlement or is dismissed with prejudice.
7.
Advances of Expenses . The Expenses incurred by the
Indemnitee in connection with any Proceeding shall be paid by the
Company in advance of the final disposition of the Proceeding at
the written request of the Indemnitee, and within ten (10) business
days of such request, to the fullest extent permitted by the Law;
provided , however , that the Indemnitee shall
undertake in writing to repay such amount to the extent that it is
ultimately determined that the Indemnitee is not entitled to
indemnification by the Company.
8.
Partial Indemnification . If the Indemnitee is
entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of the Expenses or Losses
actually and reasonably incurred by Indemnitee in the
investigation, defense, appeal or settlement of any Proceeding but
not, however, for the total amount thereof, the Company shall
nevertheless indemnify the Indemnitee for the portion of such
Expenses and Losses to which the Indemnitee is entitled.
9.
Indemnification Procedure; Determination of Right to
Indemnification .
(a) Promptly
after receipt by the Indemnite
