Exhibit 10.4
INDEMNIFICATION AGREEMENT THIS AGREEMENT is entered into,
effective as of December 15, 2008 by and between Sino-Clean Energy,
Inc., a Nevada corporation (the “Company”), and Bennet
P. Tchaikovsky (“Indemnitee”).
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 of the Company; and
WHEREAS, in recognition of Indemnitee’s need for substantial
protection against personal liability in order to enhance
Indemnitee’s continued and effective service to the Company,
and in order to induce Indemnitee to provide services to the
Company as a director, the Company wishes to provide in this
Agreement for the indemnification of and the advancing of expenses
to Indemnitee to the fullest extent (whether partial or complete)
permitted by the laws of the Company’s state of incorporation
and as set forth in this Agreement, and, to the extent insurance is
maintained, for the coverage of Indemnitee under the
Company’s directors’ and officers’ liability
insurance policies.
NOW, THEREFORE, in consideration of the above premises and of
Indemnitee’s continuing to serve the Company directly or, at
its request, with another enterprise, and intending to be legally
bound hereby, the parties agree as follows:
1.
Certain Definitions.
(a) “Board”
means the Board of Directors of the Company.
(b) “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
“Act”)), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their
ownership of stock of the Company (collectively “excluded
persons”), is or becomes the “Beneficial Owner”
(as defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing 30% or more of the total
voting power represented by the Company’s then outstanding
Voting Securities, or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute
the Board and any new director whose election by the Board or
nomination for election by the Company’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 of the Board, or (iii) the stockholders of the Company
approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result
in the Voting Securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the
surviving entity) at least 50% of the total voting power
represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (iv) the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company (in one transaction or a series
of transactions) of all or substantially all of the Company’s
assets.
(c) “Expenses”
means any expense, liability, or loss, including attorneys’
fees, judgments, fines, amounts paid or to be paid in settlement,
any interest, assessments, or other charges imposed thereon, and
any federal, state, local, or foreign taxes imposes as a result of
the actual or deemed receipt of any payments under this Agreement,
paid or incurred in connection with investigating, defending, being
a witness in, or participating in (including on appeal), or
preparing for any of the foregoing in, any Proceeding relating to
any Indemnifiable Event.
(d) “Indemnifiable
Event” means any event or occurrence that takes place either
prior to or after the effective date of this Agreement, related to
the fact that Indemnitee is or was a director or an officer (if the
Indemnitee should be appointed as an officer) of the Company, or
while a director or officer is or was serving at the request of the
Company as a director, officer, employee, trustee, agent, or
fiduciary of another foreign or domestic corporation, partnership,
joint venture, employee benefit plan, trust, or other enterprise,
or was a director, officer, employee, or agent of a foreign or
domestic corporation that was a predecessor corporation of the
Company or of another enterprise at the request of such predecessor
corporation, or related to anything done or not done by Indemnitee
in any such capacity.
(e) “Independent
Counsel” means the person or body appointed in connection
with Section 3.
(f) “Potential
Change in Control” shall be deemed to have occurred if (i)
the Company enters into an agreement or arrangement, the
consummation of which would result in the occurrence of a Change in
Control, (ii) any person (including the Company) publicly announces
an intention to take or to consider taking actions that, if
consummated, would constitute a Change in Control, (iii) any person
(other than an excluded Person) who is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the
Company’s then outstanding Voting Securities, increases his
beneficial ownership of such securities by 5% or more over the
percentage so owned by such person on the date hereof, or (iv) the
Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.
(g) “Proceeding”
means (i) any threatened, pending, or complete action, suit, or
proceeding, whether civil, criminal, administrative, investigative,
or other, or (ii) any inquiry, hearing, or investigation, whether
conducted by the Company or any other party, that Indemnitee in
good faith believes might lead to the institution of any such
action, or proceeding.
(h) “Reviewing
Party” means the person or body appointed in accordance with
Section 3 of this Agreement.
(i) “Voting
Securities” any securities of the Company that vote generally
in the election of directors.
2.
Agreement to Indemnify.
(a) General
Agreement. In the event Indemnitee was, is, or become 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 Proceeding by reason
of (or arising in part out of) an Indemnifiable Event, the Company
shall indemnify Indemnitee from and against any and all Expenses to
the fullest extent permitted by law, as the same exists or may
hereafter be amended or interpreted (but in the case of any such
amendment or interpretation, only to the extent that such amendment
or interpretation permits the Company to provide broader
indemnification rights than were permitted prior thereto). The
parties hereto intend that this Agreement shall provide for
indemnification in excess of that expressly permitted by statute,
including, without limitation, any indemnification provided by the
Company’s Articles of Incorporation as amended, its bylaws as
amended, vote of its stockholders or disinterested directors, or
applicable law.
(b) Initiation
of Proceeding. Notwithstanding anything in this Agreement to the
contrary, Indemnitee shall not be entitled to indemnification
pursuant to this Agreement in connection with any Proceeding
initiated by Indemnitee against the Company or any director or
officer of the Company unless (i) the Company has joined in or the
Board has consented to the initiation of such Proceeding, (ii) the
Proceeding is one to enforce indemnification rights under Section
5, or (iii) the Proceeding is instituted after a Change in Control
and Independent Counsel has approved its initiation.
(c) Expense
Advances. If so requested by Indemnitee, the Company shall advance
(within ten business days of such request) any and all Expenses to
Indemnitee (an “Expense Advance”); provided that such
request shall be accompanied by reasonable evidence of the expenses
incurred by Indemnitee and that, if and to the extent that the
Reviewing Party determines that Indemnitee would not be permitted
to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid. If
Indemnitee has commenced legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, as provided in Section 4, any
determination made by the Reviewing Party that Indemnitee would not
be permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial
determination is made with respect thereto (as to which all rights
of appeal therefrom have been exhausted or have lapsed).
(d) Mandatory
Indemnification. Notwithstanding any other provision of this
Agreement (other than Section 2(f) below), to the extent that
Indemnitee has been successful on the merits in defense of any
Proceeding relating in whole or in part to an Indemnifiable Event
or in defense of any issue or matter therein, Indemnitee shall be
indemnified against all Expenses incurred in connection
therewith.
(e) &n
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