Document:

Unassociated Document

     

    Exhibit
10.1

     

     

     

    THIS
AMENDMENT NO. 1 (THIS "AMENDMENT") TO THE
AMENDED AND RESTATED RESEARCH, DEVELOPMENT AND SUPPLY AGREEMENT (THE "AGREEMENT") IS
ENTERED INTO, AS OF THIS 15th DAY OF
APRIL, 2009, BY AND BETWEEN:

    

    EPIR
Technologies, Inc., a corporation incorporated under the laws of the State of
Illinois and having its main place of business at 590 Territorial Drive, Unit
B,

    Bolingbrook,
IL 60440 (hereafter referred to as "EPIR"), as the first
party,

    

    AND

    

    Sunovia
Energy Technologies, Inc., a company incorporated under the laws of the state of
Nevada and having its main place of business at: 6408 Parkland
Drive

    Suite
104, Sarasota, Florida 34243 (hereafter referred to as "SETI"), as the second
party.  EPIR and SETI are jointly referred to hereafter as the "Parties" and
individually referred to as a "Party".  Capitalized
terms used but not defined herein shall have the meanings ascribed to such terms
in the Agreement.

    

    PREAMBLE

    

    Whereas,
EPIR and SETI are parties to the Agreement pursuant to which (i) EPIR is
required to develop New Technologies and EPIR Products, develop the necessary
manufacturing processes for the EPIR Products and manufacture and supply EPIR
Independent Products to SETI, and (ii) SETI is required to develop products that
will require the use of EPIR Products or EPIR Independent Products as critical
elements thereof and develop distribution channels for such
products;

    

    Whereas,
as of the date hereof, SETI has made all Scheduled Payments to EPIR pursuant to
the terms and conditions of the Agreement, including Section 6.1 of the
Agreement, in the aggregate amount of approximately (six million, seven hundred
thousand dollars) $6,700,000.00;

    

    Whereas,
all payments received from SETI by EPIR are to be used to cover the operating
expenses of EPIR towards the research, development and creation of the mass
manufacturing processes for the solar technologies;

    

    Whereas,
SETI desires to amend the Agreement and, in consideration thereof, (i)
accelerate its payment of the June 1, 2009 Scheduled Payment and (ii) issue and
deliver to EPIR warrants for the purchase of SETI common stock, as more
specifically described in the Warrant attached hereto as Exhibit A (the “Warrant”);
and

    

    Whereas,
EPIR desires to amend the Agreement and, in consideration thereof, accept (i)
the accelerated payment of the June 1, 2009 Scheduled Payment and (ii) warrants
for the purchase of SETI common stock, as further described below.

    

    NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and other
valuable consideration, the receipt and sufficiency of which is acknowledged,
the Parties hereby agree as follows:

    

    
      	
              1.  

            	
              SETI
      Obligations.  In exchange for, and as an integral part
      of, EPIR's entering into this Amendment, SETI shall deliver (or caused to
      be delivered) to EPIR, for no cash or other consideration (except as set
      forth herein):

            

    

     

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
 

    
      	
              a.  

            	
              the
      June 1, 2009 Scheduled Payment (as set forth in Schedule A-1 of the
      Agreement) within seventy-two (72) hours of the Parties' execution of this
      Amendment, one million dollars ($1,000,000.00) (the "Accelerated
      Payment") by wire transfer of immediately available funds to a bank
      account designated by EPIR; and

            
	      
              b.
       

            	the
      executed Warrant, and the Warrant shall be in full force and
      effect.

    

    
      
      

    

    

    
      	
              2.  

            	
              Amendment to Section
      6.1 of the Agreement.  Pursuant to Section 21.1 of the
      Agreement, immediately upon the date in which EPIR receives the
      Accelerated Payment pursuant to Section 1(a)
      hereof, and without any further action by the Parties, Section 6.1 of the
      Agreement shall be amended by adding the following new paragraph of text
      after the second paragraph of text:

            

    

    

    "Notwithstanding
anything to the contrary set forth in this Agreement, SETI, in its sole
discretion, shall, without limitation and subject to the applicability of all of
the forgoing provisions of this Section 6.1 (i.e., accrual of interest for late
payments), satisfy any or all of the August 1, 2009, October 1, 2009, December
1, 2009 and/or March 1, 2010, one million dollars ($1,000,000.00) Scheduled
Payments set forth in Exhibit A-1 by delivering to EPIR one (1) of the
following: (y) one million dollars ($1,000,000.00) cash by wire transfer of
immediately available funds, or (z) a number of shares of restricted common
stock of SETI (the "Scheduled Payment
Shares") equal to the quotient of one million dollars ($1,000,000.00),
divided by the Conversion
Price; provided
that SETI's forgoing optional cash/stock payment rights shall only apply to the
August 1, 2009, October 1, 2009, December 1, 2009 and March 1, 2010 Scheduled
Payments and that SETI shall not have such optional cash/ stock payment rights
with respect to any of the other Scheduled Payments; provided further that to the
extent any Scheduled Payment Shares are to be issued to EPIR pursuant to and in
connection with this paragraph, SETI and EPIR acknowledge and agree to provide
representations and warranties to the other party that are customary in similar
transactions, and that (1) such Scheduled Payment Shares shall be, upon
issuance, duly and validly issued, fully paid and nonassessable, free and clear
of all taxes, liens and charges with respect to the issuance thereof, and (2)
EPIR shall have rights, and SETI shall have obligations, over and in respect of
such Scheduled Payment Shares that are substantially similar to EPIR's rights,
and SETI's obligations, respectively, over and in respect of the SETI
Shares.  For purposes of this paragraph, the "Conversion Price"
shall be an amount equal to the product of seventy-five percent (.75), multiplied by the
average closing price on the NASDAQ Over-The-Counter Bulletin Board for shares
of common stock of SETI during the previous twenty (20) trading days prior to
such Scheduled Payment Date.  By way of example only, assuming that
the average closing price on the NASDAQ Over-The-Counter Bulletin Board for
shares of common stock of SETI during the previous twenty (20) trading days
prior to a Scheduled Payment Date is ten cents ($0.10), then the number of
Scheduled Payment Shares shall be calculated as follows:

    

    $1,000,000.00
÷ ($0.10 x .75) = 13,333,333 million shares of common stock of
SETI"

    

    Notwithstanding
anything to the contrary set forth in this Amendment, including this Section 2, if the
Accelerated Payment has not been received by EPIR prior to EPIR's receipt of the
Warrants, the Agreement shall not be amended and this Section 2 shall have
no force and effect.

     

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
 

    
      	
              3.  

            	
              No Other
      Changes.  Except as specifically amended by this
      Amendment, the Agreement and the Exhibits and Schedules attached thereto
      shall remain in full force and effect.  Terms not defined herein
      shall have the meaning as defined in the
  Agreement.

            

    

    

    
      	
              4.  

            	
              No
      Waiver.  The execution and delivery of this Amendment
      shall not, except as expressly provided herein, constitute a waiver of any
      provision of, or operate as a waiver of any right, power or remedy of
      either Party under the Agreement.

            

    

    

    
      	
              5.  

            	
              Headings.  The
      section headings contained in this Amendment are inserted for convenience
      only and shall not affect in any way the meaning or interpretation of this
      Amendment.

            

    

    

    
      	
              6.  

            	
              Severability.  If any
      provision of this Amendment is deemed to be invalid, such provision shall
      be deemed to be invalid only to extent of such invalidity, without
      invalidating the remainder of the
Amendment.

            

    

    

    
      	
              7.  

            	
              Counterparts.  This
      Amendment may be executed in one or more counterparts each of which shall
      be deemed an original but all of which together shall constitute one and
      the same instrument.

            

    

    

    
      	
              8.  

            	
              Representations.  Each
      Party warrants and represents to the other Party, as of the date hereof and as of
      the date the Warrants are issued, that: (i) such Party has all necessary corporate power
      and authority to execute and deliver this Amendment, to perform its
      obligations hereunder and under the Agreement (as amended) and to
      consummate the transactions contemplated hereby and thereby, and (ii) the
      execution and delivery of this Amendment by such Party and the
      consummation by such Party transactions contemplated hereby and under the
      Agreement (as amended) (a) have been duly and validly authorized by all
      necessary corporate action, and no other corporate proceedings or actions
      are necessary to authorize this Amendment or to consummate the
      transactions contemplated hereby or under the Agreement (as amended)and
      (b) do not and will not, with or without the giving of notice or lapse of
      time, or both (1) violate any provision of law, statute, rule or
      regulation to which such Party is subject, (2) violate any order, judgment
      or decree applicable such Party, or (c) conflict with, or result in a
      breach of default under, any term or condition of any agreement or other
      instrument to which such Party is a party or by which such Party is
      bound.

            

    

    

    

    [Signature page to
follow]

     

     

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

     

     

    IN WITNESS WHEREOF, the Parties have
executed this Amendment as of the date first set forth
above.

    

    
      
        
          
            
              
                	SUNOVIA
      ENERGY TECHNOLOGIES, INC. 	 	 	EPIR
      TECHNOLOGIES, INC:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                        SIGNATURE:
      /s/ CARL SMITH  

                      	 	 	
                        SIGNATURE:
      /s/ SIVALINGAM
      SIVANANTHAN

                      	 
	
                        NAME: CARL
      SMITH   

                      	 	 	
                        NAME:
      SIVALINGAM SIVANANTHAN

                      	 
	
                        TITLE:

                      	 	 	
                        TITLE: 

                      	 
	DATE:   	 	 	DATE:	 

              

            

          

        

      

       

      WITNESS
SIGNATURES:
                                                                                                       

    
      
        	 	 	 	 	 
	
                /s/

              	 	 	
                /s/
      

              	 
	
                SIGNATURE
      OF SETI WITNESS  

              	 	 	
                SIGNATURE
      OF EPIR WITNESS

              	 
	
                      
                  PRINTED
      NAME OF WITNESS 

                

              	 	 	
                PRINTED
      NAME OF WITNESS

              	 

      

    

      

    

                                                                                        

    
 

     

     

    4<PAGE>

EXHIBIT 10.13

                            INDEMNIFICATION AGREEMENT

         This INDEMNIFICATION AGREEMENT (this "Agreement") is made and executed
as of April 13, 2009, by and between AMERICAN ENVIRONMENTAL ENERGY, INC., a
Nevada corporation (the "Corporation"), and Walter O'Brien, an individual
residing at _____________________________________ (the "Indemnitee").

                                    PREAMBLE

         The Corporation is aware that, in order to induce highly competent
persons to serve the Corporation as Directors or in other capacities, the
Corporation must provide such persons with adequate protection through insurance
and indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the Corporation. The
difficulty of obtaining adequate Directors' and officers' liability insurance in
the current market has increased the difficulty of attracting and retaining such
persons. The Board of Directors of the Corporation has determined that (1) it is
essential to the best interests of the Corporation's stockholders that the
Corporation act to assure such persons that there will be increased certainty of
such protection in the future, and that (2) it is reasonable, prudent and
necessary for the Corporation contractually to obligate itself to indemnify such
persons to the fullest extent permitted by applicable law so that they will
continue to serve the Corporation free from undue concern that they will not be
so indemnified. The Indemnitee is willing to serve, continue to serve, and take
on additional service for or on behalf of the Corporation on the condition that
he or she be so indemnified.

         NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Corporation and the Indemnitee do hereby agree as follows:

1.       SERVICE BY THE INDEMNITEE

         The Indemnitee will continue to serve as a Director of the Corporation
faithfully and will discharge his duties and responsibilities to the best of his
ability so long as he is duly elected or qualified in accordance with the
provisions of the Articles of Incorporation and Bylaws of the Corporation and
the Nevada Revised Statutes, as may be amended from time to time, or until his
earlier death, resignation or removal. The Indemnitee may at any time and for
any reason resign from such position (subject to any other contractual
obligation or other obligation imposed by operation of law), in which event the
Corporation shall have no obligation under this Agreement to continue the
Indemnitee in any such position. Nothing in this Agreement shall confer upon the
Indemnitee the right to continue in the employ of the Corporation or as a
Director of the Corporation or affect the right of the Corporation to terminate
the Indemnitee's employment at any time in the sole discretion of the
Corporation, with or without cause, subject to any contract rights of the
Indemnitee created or existing otherwise than under this Agreement.

                                       1

<PAGE>

2.       INDEMNIFICATION

         The Corporation shall indemnify the Indemnitee to the fullest extent
permitted by the Nevada Revised Statutes or other applicable law, as in effect
from time to time. Without diminishing the scope of the indemnification provided
by this Section, the rights of indemnification of the Indemnitee provided
hereunder shall include, but shall not be limited to, those rights hereinafter
set forth, except that no indemnification shall be paid to the Indemnitee:

(i) on account of any suit in which judgment is rendered against the Indemnitee
for disgorgement of profits made from the purchase or sale by the Indemnitee of
securities of the Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or similar provisions of any
federal, state or local statutory law;

(ii) on account of conduct of the Indemnitee which is finally adjudged by a
court of competent jurisdiction to have been knowingly fraudulent or to
constitute willful misconduct;

(iii) in any circumstance where such indemnification is expressly prohibited by
applicable law;

(iv) with respect to liability for which payment is actually made to the
Indemnitee under a valid and collectible insurance policy or under a valid and
enforceable indemnity clause, bylaw or agreement (other than this Agreement),
except in respect of any liability in excess of payment under such insurance,
clause, bylaw or agreement;

(v) if a final decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful (and, in this respect, both
the Corporation and the Indemnitee have been advised that it is the position of
the Securities and Exchange Commission that indemnification for liabilities
arising under the federal securities laws is against public policy and is,
therefore, unenforceable, and that claims for indemnification should be
submitted to the appropriate court for adjudication); or

(vi) in connection with any proceeding (or part thereof) initiated by the
Indemnitee, or any proceeding by the Indemnitee against the Corporation or its
Directors, officers, employees or other Indemnitees, unless (i) such
indemnification is expressly required to be made by law, (ii) the proceeding was
authorized by the Board of Directors of the Corporation, (iii) such
indemnification is provided by the Corporation in its sole discretion, pursuant
to the powers vested in the Corporation under applicable law, or (iv) except as
provided in Sections 10 and 13 hereof.

3.       ACTIONS OR PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE
         CORPORATION

         The Indemnitee shall be entitled to the indemnification rights provided
in this Section if he is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative in nature, other than an action by or
in the right of the Corporation, by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent or
fiduciary of any other entity, including, but not limited to, another
corporation, partnership, joint venture or trust, or by reason of any act or
omission by him in any such capacity. Pursuant to this Section, the Indemnitee
shall be indemnified against all expenses (including attorneys' fees), costs,
judgments, penalties, fines and amounts paid in settlement which were actually
and reasonably incurred by him in connection with such action, suit or
proceeding (including, but not limited to, the investigation, defense or appeal
thereof), if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, if he had no reasonable cause to believe his
conduct was unlawful.

                                       2

<PAGE>

4.       ACTIONS BY OR IN THE RIGHT OF THE CORPORATION

         The Indemnitee shall be entitled to the indemnification rights provided
in this Section if he is a person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
brought by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
or fiduciary of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee, agent or fiduciary of another
entity, including, but not limited to, another corporation, partnership, joint
venture or trust, or by reason of any act or omission by him in any such
capacity. Pursuant to this Section, the Indemnitee shall be indemnified against
all expenses (including attorneys' fees), costs and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding (including, but not limited to, the investigation, defense or appeal
thereof), if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to be the best interests of the Corporation; provided,
however, that no such indemnification shall be made in respect of any claim,
issue, or matter as to which applicable law expressly prohibits such
indemnification by reason of any adjudication of liability of the Indemnitee to
the Corporation, unless and only to the extent that the Courts of the State of
Nevada or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, the Indemnitee is fairly and reasonably entitled
to indemnity for such expenses and costs which such court shall deem proper.

5.       INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF SUCCESSFUL PARTY

         Notwithstanding the other provisions of this Agreement, to the extent
that the Indemnitee has served on behalf of the Corporation as a witness or
other participant in any claim, action or proceeding, or has been successful, on
the merits or otherwise, in defense of any action, suit or proceeding referred
to in Sections 3 and 4 hereof, or in defense of any claim, issue or matter
therein, including, but not limited to, the dismissal of any action without
prejudice, he shall be indemnified against all costs, charges and expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.

6.       PARTIAL INDEMNIFICATION

         If the Indemnitee is entitled under any provision of this Agreement to
indemnification by the Corporation for some or a portion of the expenses
(including attorneys' fees), costs, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with the
investigation, defense, appeal or settlement of such suit, action, investigation
or proceeding described in Section 3 or 4 hereof, but is not entitled to
indemnification for the total amount thereof, the Corporation shall nevertheless
indemnify the Indemnitee for the portion of such expenses (including reasonable
attorneys' fees), costs, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him to which the Indemnitee is
entitled. Without limiting the generality of the foregoing, if the action suit,
and so forth, is brought against the Indemnitee in his capacity as a director,
officer, or employee and a stockholder, the presumption shall be that recovery
is sought by reason of the Indemnitee's status as a director, officer or
employee.

                                       3

<PAGE>

7.       DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION

         Upon written request by the Indemnitee for indemnification pursuant to
Section 3 or 4 hereof, the entitlement of the Indemnitee to indemnification
pursuant to the terms of this Agreement shall be determined by the following
person or persons, who shall be empowered to make such determination: (a) the
Board of Directors of the Corporation, by a majority vote of a quorum consisting
of Disinterested Directors (as hereinafter defined); or (b) if such a quorum is
not obtainable or, even if obtainable, if the Board of Directors, by the
majority vote of Disinterested Directors, so directs, by Independent Counsel (as
hereinafter defined) in a written opinion to the Board of Directors, a copy of
which shall be delivered to the Indemnitee. Such Independent Counsel shall be
selected by the Board of Directors and approved by the Indemnitee. Upon failure
of the Board to so select, or upon failure of the Indemnitee to so approve such
Independent Counsel, such Independent Counsel shall be selected by the
appropriate authority of the State of Nevada or such other person as the such
authority shall designate to make such selection. Such determination of
entitlement to indemnification shall be made not later than 45 days after
receipt by the Corporation of a written request for indemnification. Such
request shall include documentation or information which is necessary for such
determination and which is reasonably available to the Indemnitee. Any costs or
expenses (including attorneys' fees) incurred by the Indemnitee in connection
with his request for indemnification hereunder shall be borne by the
Corporation. The Corporation hereby indemnifies and agrees to hold the
Indemnitee harmless therefrom irrespective of the outcome of the determination
of the Indemnitee's entitlement to indemnification. If the person making such
determination shall determine that the Indemnitee is entitled to indemnification
as part (but not all) of the application for indemnification, such person shall
reasonably prorate such partial indemnification among such claims, issues or
matters.

8.       PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS

         The Secretary of the Corporation shall, promptly upon receipt of the
Indemnitee's request for indemnification, advise in writing the Board of
Directors, or such other person or persons as are empowered to make the
determination pursuant to Section 7, that the Indemnitee has made such request
for determination. Upon making such request for indemnification, the Indemnitee
shall be presumed to be entitled to indemnification hereunder and the
Corporation shall have the burden of proof in the making of any determination
contrary to such presumption. If the person or persons so empowered to make such
determination shall have failed to make the requested indemnification within 45
days after receipt by the Corporation of such request, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and the Indemnitee shall be absolutely entitled to such indemnification,
absent actual and material fraud in the request for indemnification. The
termination of any action, suit, investigation or proceeding described in
Section 3 or 4 hereof by judgment, order, settlement or conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself: (a) create a
presumption that the Indemnitee did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, that the
Indemnitee had reasonable cause to believe that his conduct was unlawful; or (b)
otherwise adversely affect the rights of the Indemnitee to indemnification,
except as may be provided herein.

9.       ADVANCEMENT OF EXPENSES AND COSTS

         All reasonable expenses and costs actually incurred by the Indemnitee
(including attorneys' fees, retainers and advances of disbursements required of
the Indemnitee) shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding, if so requested by the

                                       4

<PAGE>

Indemnitee, within 20 days after the receipt by the Corporation of a statement
or statements from the Indemnitee requesting such advance or advances. The
Indemnitee may submit such statements from time to time. The Indemnitee's
entitlement to such expenses shall include those incurred in connection with any
proceeding by the Indemnitee seeking an adjudication or award in arbitration
pursuant to this Agreement. Such statement or statements shall reasonably
evidence the expenses and costs incurred by him in connection therewith and
shall include or be accompanied by an undertaking by or on behalf of the
Indemnitee to repay such amount if it is ultimately determined that the
Indemnitee is not entitled to be indemnified against such expenses and costs by
the Corporation pursuant to this Agreement or otherwise.

10.      REMEDIES OF THE INDEMNITEE IN CASES OF DETERMINATION NOT TO INDEMNIFY
         OR TO ADVANCE EXPENSES

         In the event that a determination is made that the Indemnitee is not
entitled to indemnification hereunder or if payment has not been timely made
following a determination of entitlement to indemnification pursuant to Sections
7 and 8, or if expenses are not advanced pursuant to Section 9, the Indemnitee
shall be entitled to a final adjudication in an appropriate court of the State
of Nevada or any other court of competent jurisdiction of his entitlement to
such indemnification or advance. Alternatively, the Indemnitee may, at his
option, seek an award in arbitration to be conducted by a single arbitrator
pursuant to the rules of the American Arbitration Association, such award to be
made within 60 days following the filing of the demand for arbitration. The
Corporation shall not oppose the Indemnitee's right to seek any such
adjudication or award in arbitration or any other claim. Such judicial
proceeding or arbitration shall be made de novo and the Indemnitee shall not be
prejudiced by reason of a determination (if so made) that he is not entitled to
indemnification. If a determination is made or deemed to have been made pursuant
to the terms of Section 7 or Section 8 hereof that the Indemnitee is entitled to
indemnification, the Corporation shall be bound by such determination and shall
be precluded from asserting that such determination has not been made or that
the procedure by which such determination was made is not valid, binding and
enforceable. The Corporation further agrees to stipulate in any such court or
before any such arbitrator that the Corporation is bound by all the provisions
of this Agreement and is precluded from making any assertions to the contrary.
If the court or arbitrator shall determine that the Indemnitee is entitled to
any indemnification hereunder, the Corporation shall pay all reasonable expenses
(including attorneys' fees) and costs actually incurred by the Indemnitee in
connection with such adjudication or award in arbitration (including, but not
limited to, any appellate proceedings).

11.      NOTIFICATION AND DEFENSE OF CLAIM

         Promptly after receipt by the Indemnitee of notice of the commencement
of any action, suit or proceeding, the Indemnitee will, if a claim in respect
thereof is to be made against the Corporation under this Agreement, notify the
Corporation in writing of the commencement thereof, but the omission to so
notify the Corporation will not relieve the Corporation from any liability that
it may have to the Indemnitee otherwise than under this Agreement.
Notwithstanding any other provision of this Agreement, with respect to any such
action, suit or proceeding as to which the Indemnitee gives notice to the
Corporation of the commencement thereof:

(i) The Corporation will be entitled to participate therein at its own expense;
and

                                       5

<PAGE>

(ii) Except as otherwise provided in this Section 11(b), to the extent that it
may wish, the Corporation, jointly with any other indemnifying party similarly
notified, shall be entitled to assume the defense thereof, with counsel
satisfactory to the Indemnitee. After notice from the Corporation to the
Indemnitee of its election to so assume the defense thereof, the Corporation
shall not be liable to the Indemnitee under this Agreement for any legal or
other expenses subsequently incurred by the Indemnitee in connection with the
defense thereof other than reasonable costs of investigation or as otherwise
provided below. The Indemnitee shall have the right to employ his own counsel in
such action, suit or proceeding, but the fees and expenses of such counsel
incurred after notice from the Corporation of its assumption of the defense
thereof shall be at the expense of the Indemnitee unless (i) the employment of
counsel by the Indemnitee has been authorized by the Corporation, (ii) the
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Corporation and the Indemnitee in the conduct of the
defense of such action, or (iii) the Corporation shall not in fact have employed
counsel to assume the defense of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the Corporation. The Corporation
shall not be entitled to assume the defense of any action, suit or proceeding
brought by or on behalf of the Corporation or as to which the Indemnitee shall
have reached the conclusion provided for in clause (ii) above.

(iii) The Corporation shall not be liable to indemnify the Indemnitee under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. The Corporation shall not settle any action or
claim in any manner that would impose any penalty or limitation on the
Indemnitee without the Indemnitee's written consent. Neither the Corporation nor
the Indemnitee will unreasonably withhold their consent to any proposed
settlement.

12.      OTHER RIGHTS TO INDEMNIFICATION

         The indemnification and advancement of expenses (including attorneys'
fees) and costs provided by this Agreement shall not be deemed exclusive of any
other rights to which the Indemnitee may now or in the future be entitled under
any provision of the Bylaws of the Corporation, any provision of the Certificate
of Incorporation of the Corporation, any vote of stockholders or Disinterested
Directors, any provision of law or otherwise.

13.      ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT

         In the event that the Indemnitee is subject to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication or award in arbitration to enforce his rights under, or
to recover damages for breach of, this Agreement, the Indemnitee, if he prevails
in whole or in part in such action, shall be entitled to recover from the
Corporation and shall be indemnified by the Corporation against any actual
expenses for attorneys' fees and disbursements reasonably incurred by him.

14.      DURATION OF AGREEMENT

         This Agreement shall continue until and terminate upon the later of:
(a) five years after the Indemnitee has ceased to occupy any of the positions or
have any relationship described in Sections 3 and 4 of this Agreement, and (b)
the final termination of all pending or threatened actions, suits, proceedings
or investigations to which the Indemnitee may be subject by reason of the fact
that he is or was a director, officer, employee, agent or fiduciary of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, agent or fiduciary of any other entity, including,
but not limited to, another corporation, partnership, joint venture or trust, or
by reason of any act or omission by him in any such capacity. The
indemnification provided under this Agreement shall continue as to the
Indemnitee even though he may have ceased to be a director or officer of the
Corporation. This Agreement shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of the Indemnitee and his
spouse, successors, assigns, heirs, devisees, executors, administrators or other
legal representatives.

                                       6

<PAGE>

15.      SEVERABILITY

         If any provision or provisions of this Agreement shall be held invalid,
illegal or unenforceable for any reason whatsoever, (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including, but
not limited to, all portions of any Sections of this Agreement containing any
such provision held to be invalid, illegal, or unenforceable) shall not in any
way be affected or impaired thereby, and (b) to the fullest extent possible, the
provisions of this Agreement (including, but not limited to, all portions of any
paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifest by
the provision held invalid, illegal or unenforceable.

16.      COUNTERPARTS

         This Agreement may be executed in counterparts, each of which shall for
all purposes be deemed to be an original but all of which together shall
constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought shall be required to be produced to
evidence the existence of this Agreement.

17.      CAPTIONS

         The captions and headings used in this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.

18.      DEFINITIONS

         For purposes of this Agreement: "Disinterested Director" shall mean a
Director of the Corporation who is not or was not a party to the action, suit,
investigation or proceeding in respect of which indemnification is being sought
by the Indemnitee. "Independent Counsel" shall mean a law firm or a member of a
law firm that neither is presently nor in the past five years has been retained
to represent: (i) the Corporation or the Indemnitee in any matter material to
either such party, or (ii) any other party to the action, suit, investigation or
proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term "Independent 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 Corporation or the
Indemnitee in an action to determine the Indemnitee's right to indemnification
under this Agreement.

                                       7

<PAGE>

19.      MODIFICATION AND WAIVER

         No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

20.      NOTICES

         All notices, requests, demands or other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by
hand with receipt acknowledged by the party to whom said notice or other
communication shall have been directed or if (ii) mailed by certified or
registered mail, return receipt requested, with postage prepaid, on the date
shown on the return receipt:

         If to the Indemnitee, to:          Walter O'Brien

         If to the Corporation, to:         American Environmental Energy, Inc.
                                            Attention:  Secretary

or to such other address as may be furnished to the Indemnitee by the
Corporation or to the Corporation by the Indemnitee, as the case may be.

21.      GOVERNING LAW

         The parties hereto agree that this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Nevada,
applied without giving effect to any conflicts-of-law principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.

AMERICAN ENVIRONMENTAL ENERGY, INC.

By:      /s/ BRENT A. BREWER
    -------------------------------------------------
         Brent A. Brewer, CEO and President

INDEMNITEE

By:      /s/ WALTER O'BRIEN
    -------------------------------------------------
         Walter O'Brien

                                        8

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