EXHIBIT 10.5


    
      

    

    EXHIBIT
      10.5


    INDEMNITY
      POLICY 

     

    Effective
      December 29, 2006, Hydrogen Power, Inc., a Delaware
      corporation (the “Company”) has adopted the following Indemnity Policy (the
“Policy”) with respect to its existing and future members of its Board of
      Directors (collectively, the “Directors”).

     

    W
      I T N E S S E T H:

     

    WHEREAS,
      the Company does not have in place director and officer insurance with respect
      to its Directors; and

     

    WHEREAS,
      in an effort to induce qualified persons to serve on Company’s Board of
      Directors (the “Board”), and in consideration of the services provided or to be
      provided by the Directors to the Company, the Company believes it in the best
      interests to adopt the following Policy to provide the Directors the
      indemnification rights set forth herein: 

     

    1.  Indemnification.
      Subject
      to the limitations set forth herein and in Section 5 hereof, the Company hereby
      agrees to indemnify the Directors as follows: 

     

    The
      Company shall, with respect to any Proceeding (as hereinafter defined)
      associated with a Director acting in his or her official capacity, indemnify
      the
      Director to the fullest extent permitted by applicable law, including without
      limitation Section 145 of the Delaware General Corporation Law (“DGCL”), and the
      Certificate of Incorporation of the Company in effect on the date hereof or
      as
      such law or Certificate of Incorporation may from time to time be amended (but,
      in the case of any such amendment, only to the extent such amendment permits
      the
      Company to provide broader indemnification rights than the law or Certificate
      of
      Incorporation permitted the Company to provide before such amendment). The
      right
      to indemnification conferred herein and in the Certificate of Incorporation
      shall be presumed to have been relied upon by each of the Directors in serving
      or continuing to serve the Company and shall be enforceable as a contract right.
      Without in any way diminishing the scope of the indemnification provided by
      this
      Section 1,
      the
      Company will indemnify each Director to the full extent permitted by law for
      anything done or not done by such Director in such capacity against Expenses
      (as
      hereinafter defined) and Liabilities (as hereinafter defined) actually and
      reasonably incurred by the Director or on his or behalf in connection with
      the
      investigation, defense, settlement or appeal of such Proceeding. In addition
      to,
      and not as a limitation of, the foregoing, the rights of indemnification of
      the
      Directors provided herein shall include those rights set forth in Section 7
      below. Notwithstanding the foregoing, the Company shall be required to indemnify
      each Director in connection with a Proceeding commenced by such Director (other
      than a Proceeding commenced by such Director to enforce such Director’s rights
      under this Policy) only if the commencement of such Proceeding was authorized
      by
      the Board. Notwithstanding anything to the contrary contained herein, the
      Company shall have no obligation to indemnify the Directors to the extent such
      indemnification would not be permitted under Section 145 of the
      DGCL.

     

    2.  Presumptions
      and Effect of Certain Proceedings.
      Upon
      making a request for indemnification, a Director shall be presumed to be
      entitled to indemnification under this Policy and the Company shall have the
      burden of proof to overcome that presumption in reaching any contrary
      determination. The termination of any Proceeding by judgment, order, settlement,
      arbitration award or conviction, or upon a plea of nolo contendere or its
      equivalent shall not affect this presumption or, except as determined by a
      judgment or other final adjudication adverse to a Director, establish a
      presumption with regard to any factual matter relevant to determining such
      Director’s rights to indemnification hereunder. If the person or persons so
      empowered to make a determination pursuant to Section 3
      hereof
      shall have failed to make the requested determination within sixty (60) days
      after any judgment, order, settlement, dismissal, arbitration award, conviction,
      acceptance of a plea of nolo contendere or its equivalent, or other disposition
      or partial disposition of any Proceeding or any other event that could enable
      the Company to determine the Director’s entitlement to indemnification, the
      requisite determination that Director is entitled to indemnification shall
      be
      deemed to have been made. 

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    3.  Procedure
      for Determination of Entitlement to Indemnification.
      

     

    (a)  Whenever
      a Director believes that he or she is entitled to indemnification pursuant
      to
      this Policy, such Director shall submit a written request for indemnification
      to
      the Company. Any request for indemnification shall include sufficient
      documentation or information reasonably available to such Director for the
      determination of entitlement to indemnification. In any event, the Director
      shall submit his or her claim for indemnification within a reasonable time,
      not
      to exceed one hundred eighty (180) days after any judgment, order, settlement,
      dismissal, arbitration award, conviction, acceptance of a plea of nolo
      contendere or its equivalent, or final termination, whichever is the later
      date
      for which Indemnitee requests indemnification. 

     

    (b)  Independent
      Legal Counsel (as hereinafter defined) shall determine whether such Director
      is
      entitled to indemnification. Determination of such Director’s entitlement to
      indemnification shall be made not later than ninety (90) days after the
      Company’s receipt of written request for such indemnification, provided that any
      request for indemnification for Liabilities, other than amounts paid in
      settlement, shall have been made after a determination thereof in a Proceeding.
      

     

    4.  Expense
      Advance.
      Notwithstanding anything in this Policy to the contrary, if requested by a
      Director in writing, the Company shall advance (within two (2) business days
      of
      such written request) any and all Expenses incurred by such Director (an
“Advance”). In the event a determination pursuant to Section 3
      hereof
      is subsequently made that a Director is not entitled to indemnification after
      an
      Advance is made, the Company shall be entitled to be reimbursed by such Director
      for all such amounts theretofore paid; subject to such Director’s rights
      hereunder, including without limitation pursuant to Section 7(a), to obtain
      a
      final adjudication of the Company’s indemnification obligations. A Director’s
      obligation to reimburse the Company pursuant to this Section shall be unsecured
      and shall not bear interest on the amount advanced.

     

    5.  Specific
      Limitations on Indemnification.
      Notwithstanding anything in this Policy to the contrary, the Company shall
      not
      be obligated hereunder to make any payment to a Director with respect to any
      Proceeding: 

     

    (a)  To
      the
      extent that payment is actually made to such Director under any insurance
      policy, or is made to such Director by either the Company or its affiliates
      otherwise than pursuant to this Policy. Notwithstanding the availability of
      such
      insurance, such Director also may claim indemnification from the Company
      hereunder by assigning to the Company any claims under such insurance to the
      extent such Director is paid by the Company; 

     

    (b)  For
      Liabilities in connection with Proceedings settled without the Company’s
      consent, which consent, however, shall not be unreasonably withheld;


     

    (c)  To
      the
      extent it would be otherwise prohibited by law, if so established by a judgment
      or other final adjudication adverse to such Director. 

     

    6.  Fees
      and Expenses of Independent Legal Counsel.
      The
      Company agrees to pay the reasonable fees and expenses of Independent Legal
      Counsel and to fully indemnify such Independent Legal Counsel against any and
      all expenses and losses incurred by any of them arising out of or relating
      to
      this Policy or their engagement pursuant hereto. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    7.  Remedies
      of Directors.
      

     

    (a)  In
      the
      event that (i)
      a
      determination pursuant to Section 3
      hereof
      is made that a Director is not entitled to indemnification, (ii)
      payment
      has not been timely made following a determination of entitlement to
      indemnification hereunder, or (iii)
      a
      Director otherwise seeks enforcement of this Policy, such Director shall be
      entitled to a final adjudication in the Court of Chancery of the State of
      Delaware of the remedy sought.

     

    (b)  If
      a
      determination that a Director is entitled to indemnification has been made
      pursuant to Section 3
      hereof,
      or is deemed to have been made pursuant to Section 3
      hereof
      or otherwise pursuant to the terms of this Policy, the Company shall be bound
      by
      such determination in the absence of a misrepresentation or omission of a
      material fact by such Director in connection with such determination.


     

    (c)  The
      Company shall be precluded from asserting that the procedures and presumptions
      of this Policy are not valid, binding and enforceable. The Company shall
      stipulate in any such court or before any such arbitrator that the Company
      is
      bound by all the provisions of this Agreement and is precluded from making
      any
      assertion to the contrary. 

     

    (d)  Expenses
      reasonably incurred by a Director in connection with such Director’s request for
      indemnification under, seeking enforcement of or to recover damages for
      violation of this Policy shall be borne by the Company when and as incurred
      by
      such Director.

     

    8.  Contribution.
      To the
      fullest extent permissible under applicable law, if the indemnification provided
      for hereunder is unavailable to a Director for any reason whatsoever, the
      Company, in lieu of indemnifying such Director, shall contribute to the amount
      incurred by such Director, 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, 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 such Director 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 such Director in connection with such event(s) and/or
      transaction(s). 

     

    9.  Modification,
      Waiver, Termination and Cancellation.
      The
      Board may modify, terminate, cancel or amend this Policy at any time and from
      time to time; provided, that the form of this Policy in place at the time any
      event which arises and results in a Proceeding shall be the form applicable
      to
      such Proceeding. No such supplement, modification, termination, cancellation
      or
      amendment of this Policy shall be effective as to any Proceeding. 

     

    10.  Subrogation.
      In the
      event of payment hereunder, the Company shall be subrogated to the extent of
      such payment to all of the rights of recovery of a Director, who shall execute
      all papers required and shall do everything that may be necessary to secure
      such
      rights, including the execution of such documents necessary to enable the
      Company effectively to bring suit to enforce such rights. 

     

    11.  Notice
      by Directors and Defense of Claim.
      A
      director shall promptly notify the Company in writing upon being served with
      any
      summons, citation, subpoena, complaint, indictment, information or other
      document relating to any matter, whether civil, criminal, administrative or
      investigative, but the omission so to notify the Company will not relieve it
      from any liability that it may have to a Director if such omission does not
      prejudice the Company’s rights. If such omission does prejudice the Company’s
      rights, the Company will be relieved from liability only to the extent of such
      prejudice; nor will such omission relieve the Company from any liability that
      it
      may have to a Director otherwise than under this Policy. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    12.  Notices.
      All
      notices, requests, demands and other communications hereunder shall be in
      writing and shall be deemed to have been duly given if (i)
      delivered by hand and receipted for by the party to whom said notice or other
      communication shall have been directed, or (ii)
      mailed
      by certified or registered mail with postage prepaid, on the third business
      day
      after the date on which it is so mailed, if to the Company, at its principal
      place of business, and if to a Director, to the last address of such Director
      on
      the books and records of the Company: 

     

    13.  Nonexclusivity.
      The
      rights of Directors hereunder shall not be deemed exclusive of any other rights
      to which Directors may be entitled under applicable law, the Company’s
      Certificate of Incorporation or bylaws, or any agreements, vote of stockholders,
      resolution of the Board or otherwise. 

     

    14.  Certain
      Definitions.
      

     

    (a)  “Expenses”
      shall include all direct and indirect costs (including, without limitation,
      attorneys’ fees, retainers, court costs, transcripts, fees of experts, witness
      fees, travel expenses, duplicating costs, printing and binding costs, telephone
      charges, postage, delivery service fees, all other disbursements or
      out-of-pocket expenses and reasonable compensation for time spent by a Director
      for which such Director is otherwise not compensated by the Company or any
      third
      party) actually and reasonably incurred in connection with either the
      investigation, defense, settlement or appeal of a Proceeding or establishing
      or
      enforcing a right to indemnification hereunder, applicable law or otherwise;
      provided, however, that “Expenses” shall not include any Liabilities.


     

    (b)  “Independent
      Legal Counsel” shall mean a law firm or a member of a firm selected by the
      Company and approved by a Director (which approval shall not be unreasonably
      withheld). Notwithstanding the foregoing, the term “Independent Legal Counsel”
shall not include any person who, under the applicable standards of professional
      conduct then prevailing, would have a conflict of interest in representing
      either the Company or a Director in an action to determine such Director’s right
      to indemnification hereunder. 

     

    (c)  “Liabilities”
      shall mean liabilities of any type whatsoever including, but not limited to,
      any
      judgments, fines, ERISA excise taxes and penalties, penalties and amounts paid
      in settlement (including all interest assessments and other charges paid or
      payable in connection with or in respect of such judgments, fines, penalties
      or
      amounts paid in settlement) of any Proceeding. 

     

    (d)  “Proceeding”
      shall mean any threatened, pending or completed action, claim, suit,
      arbitration, alternate dispute resolution mechanism, investigation,
      administrative hearing or any other proceeding whether civil, criminal,
      administrative or investigative, that is associated with Indemnitees’ actions on
      behalf of the Company. 

     

    15.  Binding
      Effect; Duration and Scope of Policy.
      This
      Policy shall be binding upon and inure to the benefit of and be enforceable
      by
      the parties hereto and their respective successors and assigns (including any
      direct or indirect successor by purchase, merger, consolidation or otherwise
      to
      all or substantially all of the business or assets of the Company), spouses,
      heirs and personal and legal representatives. This Policy shall continue in
      effect indefinitely from the date hereof, regardless of whether a Director
      continues to serve as a director of the Company. 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    16.  
      Intended Third-Party Beneficiaries.
      Each of
      the Directors, and his or her respective successors and assigns, is expressly
      intended to be a third-party beneficiary to this Policy, and all provisions
      of
      this Policy are intended to inure to the direct or indirect benefit of each
      Director. Each Director is entitled to any rights, interest or claims arising
      hereunder. If a Director is required to enforce or otherwise litigate any
      provision under this Agreement arising on account of any breach in the
      performance of any obligation of a party hereunder, then such Director shall
      be
      entitled to receive from the Company all costs incurred by him or her in
      enforcing his or her rights, including without limitation, his or her reasonable
      attorneys’ fees.

     

    Adopted
      by the Board effective December 29, 2006

     

     

    5