EXHIBIT 10.48
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INDEMNIFICATION AGREEMENT
Dated as of April 9, 2007 between Nexen Inc. ("NEXEN") and Xxxxxxx X.
Xxxxxx (together with his or her estate, heirs, executors and legal
representatives the "INDEMNIFIED PARTY")
BACKGROUND
(a) The Indemnified Party:
(i) is or has been a director or officer of Nexen;
(ii) is or has been, at the request of Nexen, a director or
officer of a body corporate ("BODY CORPORATE"); or
(iii) is or has been, at the request of Nexen, a director or
officer of or is acting or has acted in a similar
capacity (and the Indemnified Party shall for purposes
hereof be referred to as a director or officer in so
acting or having acted) for a body corporate,
partnership, unincorporated association, unincorporated
syndicate, unincorporated organization, joint venture
or trust ("ENTITY");
(Nexen, any Body Corporate and any Entity being collectively the
"CORPORATIONS" and any one of them being a "CORPORATION");
(b) Nexen acknowledges that the Indemnified Party, acting in the
capacity of director or officer, is required to make decisions
and take actions in furtherance of the business and affairs of
any Corporation which might have the result of attracting
personal liability; and
(c) It is in the best interests of Nexen to agree to indemnify the
Indemnified Party from any and all liabilities, losses, costs,
charges, expenses or damages sustained or incurred by the
Indemnified Party acting in the capacity of director or officer
of any Corporation;
AGREEMENT
In consideration of the Indemnified Party having acted and continuing to act as
a director or officer, the parties agree as follows:
1. DUTY OF CARE
(a) In accordance with the provisions of the CANADA BUSINESS
CORPORATIONS ACT (the "ACT"), the Indemnified Party, in
exercising his or her powers and discharging his or her duties
as a director or officer of any Corporation, shall:
(i) act honestly and in good faith with a view to the best
interests of the Corporation; and
(ii) exercise the care, diligence and skill that a
reasonably prudent person would exercise in comparable
circumstances.
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(b) Each Corporation acknowledges that the Indemnified Party has
complied with his or her duties under subsection 1(a) hereof if
the Indemnified Party relied in good faith on:
(i) financial statements of the Corporation represented to
the Indemnified Party by an officer of the Corporation
or in a written report of the auditor of the
Corporation fairly to reflect the financial condition
of the Corporation; or
(ii) a report of a person whose profession lends credibility
to a statement made by the professional person.
2. DUTY TO COMPLY
(a) The Indemnified Party shall comply with the Act, the regulations
made in the Act, the articles of the Corporation, the by-laws of
the Corporation and any unanimous shareholder agreement or
partnership agreement respecting the Corporation.
(b) Each Corporation acknowledges that the Indemnified Party has
complied with his or her duties under subsection 2(a) hereof, if
the Indemnified Party exercised the care, diligence and skill
that a reasonably prudent person would have exercised in
comparable circumstances, including reliance in good faith on:
(i) financial statements of the Corporation represented to
the Indemnified Party by an officer of the Corporation
or in a written report of the auditor of the
Corporation fairly to reflect the financial condition
of the Corporation; or
(ii) a report of a person whose profession lends credibility
to a statement made by the professional person.
3. DISCLAIMER OF LIABILITY
The Indemnified Party shall not be liable for the acts, receipts,
neglects, omissions or defaults of any other director or officer or any
employee or agent of any Corporation or for any liabilities, damages,
costs, charges or expenses sustained or incurred by any Corporation in
the execution of the duties of his or her office, provided that nothing
herein contained shall relieve the Indemnified Party of any liability for
liabilities, damages, costs, charges or expenses suffered or incurred as
a direct result of any acts, receipts, neglects, omissions or defaults of
the Indemnified Party which are in contravention of the Act or any other
applicable law.
4. INDEMNITY
(a) Except in respect of an action by or on behalf of a Corporation
to procure a judgment in its favour, Nexen shall indemnify and
save harmless the Indemnified Party from and against all
liabilities, damages, costs, charges and expenses (including,
without limitation, court fees, legal expenses and witness
fees), including an amount paid to settle an action or satisfy a
judgment or any fine or penalty levied, reasonably incurred by
him or her in respect of any civil, criminal,
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administrative, investigative or other action, proceeding or
inquiry of any nature, to which he or she is, directly or
indirectly, a party by reason of being or having been a director
or officer of any Corporation if:
(i) the Indemnified Party acted honestly and in good faith
with a view to the best interests of the Corporation;
and
(ii) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, the
Indemnified Party had reasonable grounds for believing
that his or her conduct was lawful.
(b) For all purposes of this Agreement, a director or officer shall
be conclusively deemed to have acted honestly and in good faith
with a view to the best interests of the Corporation and to have
had reasonable grounds for believing that his or her conduct was
lawful, unless and until the applicable court hearing the action
in which indemnity is sought determines in a final judgment that
is non-appealable that the director or officer in question did
not act honestly and in good faith with a view to the best
interests of the Corporation or did not have reasonable grounds
for believing that his or her conduct was lawful, as applicable.
(c) In respect of an action by or on behalf of a Corporation to
procure a judgment in its favour, to which the Indemnified Party
is, directly or indirectly, a party by reason of being or having
been a director or an officer of the Corporation, Nexen shall
make an application at its expense for, and use its best efforts
to obtain, approval of the Court of Queen's Bench of Alberta to
indemnify and save harmless the Indemnified Party from and
against all liabilities, damages, costs, charges and expenses
(including, without limitation, court fees, legal expenses and
witness fees) reasonably incurred by him or her in connection
with such action, if the Indemnified Party fulfills the
conditions set out in clauses 4(a)(i) and 4(a)(ii).
(d) Notwithstanding the foregoing, Nexen shall indemnify and save
harmless the Indemnified Party from and against any and all
liabilities, damages, costs, charges and expenses (including,
without limitation, court fees, legal expenses and witness fees)
reasonably incurred by him or her in connection with any action
or proceeding to which the Indemnified Party is, directly or
indirectly, a party by reason of being or having been a director
or officer of a Corporation (including, without limitation, an
action or proceeding to enforce or interpret this Agreement), if
the Indemnified Party was not judged by the court or other
competent authority to have committed any fault or omitted to do
anything that the Indemnified Party ought to have done and the
Indemnified Party fulfills the conditions set out in clauses
4(a)(i) and 4(a)(ii).
(e) For the purposes of this Agreement, the termination of any
civil, criminal or administrative action or proceeding by
judgment, order, settlement or conviction shall not, of itself,
create a presumption either that the Indemnified Party did not
act honestly and in good faith with a view to the best interests
of the Corporation or that, in the case of a criminal or
administrative action or proceeding that is enforced by a
monetary penalty, the Indemnified Party did not have reasonable
grounds for believing that his or her conduct was lawful.
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(f) Upon the Indemnified Party becoming, directly or indirectly, a
party to any action, proceeding or inquiry of any nature
referred to in paragraph 4(a), Nexen shall forthwith assume and
pay, or reimburse the Indemnified Party for and indemnify and
save harmless the Indemnified Party from and against, any and
all costs, charges and expenses (including, without limitation,
court fees, legal expenses and witness fees) referred to in
paragraph 4(a). Such assumption, payment or reimbursement shall
be made continuously and promptly after the Indemnified Party
has advised Nexen of such costs, charges and expenses. If the
outcome of such action, proceeding or inquiry establishes that
the Indemnified Party were not entitled to indemnification of
such costs, charges and expenses, then the Indemnified Party
shall repay to Nexen all amounts paid by it to or for the
benefit of such Indemnified Party under this paragraph 4(f) for
which there was no entitlement to indemnification.
5. INSURANCE
(a) Unless otherwise agreed between the Parties hereto, Nexen shall
purchase and maintain, or cause to be purchased and maintained,
while the Indemnified Party remains a director or officer of a
Corporation and for a period of six years thereafter, directors'
and officers' errors and omissions insurance for the benefit of
the Indemnified Party on terms no less favourable in terms of
coverage and amounts, to the extent permitted by law and
available on reasonable commercial terms, than such insurance
maintained in effect by Nexen on the date hereof, provided that
such insurance shall not apply to any liability incurred by the
Indemnified Party relating to any failure by the Indemnified
Party to act honestly and in good faith with a view to the best
interests of the Corporation. Nexen shall provide the
Indemnified Party with a copy of the insurance policies, if
requested, and shall provide the Indemnified Party with prompt
written notice if such insurance is not maintained for any
reason.
(b) The indemnification provided pursuant to this Agreement is
intended to be available in all circumstances permitted under
the Act and, without limitation, is intended to be available in
circumstances where any insurance coverage maintained by Nexen
is not available, either because the insurer is denying
coverage, the actions are not covered due to an exemption or
exclusion from the terms of the insurance policy or otherwise,
or where Nexen determined for whatever reason not to obtain or
maintain insurance coverage.
6. INCOME TAX
Should any payment made pursuant to this Agreement be deemed by any
taxing authority to constitute a taxable benefit or otherwise be or
become subject to any tax or levy, then Nexen shall pay such greater
amount as may be necessary to ensure that the amount received by or on
behalf of the Indemnified Party after the payment of or withholding for
such tax, is equal to the amount of the costs, charges, expenses or
liability actually incurred by or on behalf of the Indemnified Party such
that the Indemnified Party shall be indemnified for any and all such
taxes.
7. ASSIGNMENT
The duties and obligations of Nexen under this Agreement shall be binding
upon, and
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enforceable by the Indemnified Party, against Nexen and its successors
and assigns, including any corporation with which Nexen is merged or
amalgamated. Nexen covenants and agrees that it shall not, without the
consent of the Indemnified Party, transfer of dispose of all or
substantially all of its assets or business to any entity that does not
agree to assume all of the obligations of Nexen under this Agreement.
8. EFFECTIVE DATE
Notwithstanding the date of execution of this Agreement, the terms and
provisions hereof shall be effective, binding upon, and enforceable by
the parties as of and from the date on which the Indemnified Party was
first appointed or elected a director or officer of a Corporation.
9. INDEMNIFICATION NOT EXCLUSIVE
The indemnification provided by this Agreement is in addition to the
indemnification provided by by-laws of any Corporation or those provided
under the legislation governing any Corporation. In addition, the
indemnification provided by this Agreement shall be in addition to any
right of indemnification, contribution or reimbursement that a director
or officer has under applicable law, the constating documents of any
Corporation or any other agreement between the director or officer and
any Corporation and shall continue for the benefit of the Indemnified
Party notwithstanding that he or she may have ceased to be a director or
officer of one or more Corporations.
10. DEFENCE OF CLAIMS
The Indemnified Party covenants and agrees that, upon becoming aware of
any facts or circumstances which may give rise to the Indemnified Party
becoming a party, directly or indirectly, to any action, proceeding or
inquiry referred to in paragraph 4(a) (a "CLAIM"), the Indemnified Party
shall provide written notice to Nexen setting out in reasonable detail
the nature of the facts relating to such Claim. Upon receipt of the
notice of the Claim, Nexen shall, at its expense and in a timely manner,
contest and defend against the Claim or cause the relevant Corporation to
contest and defend against the Claim and take all such steps as may be
necessary or proper to prevent the resolution thereof in a manner adverse
to the Indemnified Party. The Indemnified Party shall fully cooperate
with Nexen in taking all such steps. If Nexen does not in a timely manner
undertake or cause the contestation or defence of the Claims, the
Indemnified Party may do so and such contestation or defence shall be at
the expense and risk of Nexen provided that if the outcome of such
action, proceeding or inquiry establishes that the Indemnified Party was
not entitled to contest or defend the Claim at the risk and expense of
Nexen, then the Indemnified Party shall repay to Nexen all amounts paid
by Nexen in connection with such contestation or defence pursuant to this
section 10 and paragraph 4(f) for which there was no entitlement to
indemnification.
11. OBLIGATIONS OF NEXEN ABSOLUTE
The obligations of Nexen under this Agreement are absolute and
unconditional and shall not be released, discharged or reduced, and the
rights of the Indemnified Party hereunder shall not be prejudiced or
impaired, by any neglect, delay or forbearance in demanding, requiring or
enforcing payment or performance by Nexen of any of its obligations
hereunder or by granting any extensions of time for such performance or
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by waiving any performance (except as to any particular performance which
has been waived), or by permitting or consenting to any assignment in
bankruptcy, receivership, insolvency or any other creditor's proceedings
of or against Nexen or by the winding-up or dissolution of Nexen or any
other event or occurrence which would or might otherwise have the effect
at law of terminating the obligations of Nexen under this Agreement.
12. INTERPRETATION
This Agreement is not intended to, and shall not be interpreted to,
authorize a payment of an indemnity contrary to section 124 of the Act.
13. SEVERABILITY
If any part of this Agreement or the application of such part to any
person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement, or the application of such part to any
other person or circumstance, shall not be affected thereby and each
provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
14. CHOICE OF LAW
This Agreement shall be governed and construed in accordance with the
laws of Alberta and the laws of Canada applicable therein.
IN WITNESS WHEREOF the parties have executed this agreement on the date first
above mentioned.
SIGNED by the Indemnified Party in the presence of:
/s/ Xxx Xxxxxxxx /s/ Xxxxxxx X. Xxxxxx
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Witness Signature Xxxxxxx X. Xxxxxx
Xxx Xxxxxxxx
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Witness Name
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Witness Address
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Witness Address
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Witness Occupation
NEXEN INC.
/s/ Xxxx X. XxXxxxxxxx, Q.C.
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Xxxx X. XxXxxxxxxx, Q.C.
