EXHIBIT (10.42)
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made this 15th day of May, 2003 between Akorn, Inc., a
Louisiana corporation (the "Company"), and Xxxxxx X. Xxxxxxx ("Indemnitee").
Recitals.
A. Indemnitee is an executive officer of the Company and in such capacity
is performing valuable services for the Company.
B. The Bylaws of the Company provide for the indemnification of its
officers and directors as permitted by the General Corporation Law of the State
of Louisiana (the "State Law"). Such Bylaws and the State Law specifically
provide that they are not exclusive, and thereby contemplate that contracts may
be entered into between the Company and members of its Board of Directors and
its executive officers with respect to indemnification of such directors and
officers.
To induce Indemnitee to continue to serve as an executive officer of the
Company, the parties hererto hereby agree as follows:
1. Intentionally Omitted.
2. Additional Indemnity. Subject to Section 3 below, the Company further
agrees to hold harmless and indemnify the Indemnitee against any and all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action brought in the
right of the Company) to which Indemnitee is, was or at any time becomes a
party, or is threatened to be made a party, by reason of the fact that
Indemnitee executes, submits to or files with the U.S. Securities and Exchange
Commission any certifications pursuant to Section 906 of the Xxxxxxxx-Xxxxx Act
of 2002 or Rule 13(a)-14 promulgated under the Securities Exchange Act of 1934.
3. Limitations on Additional Indemnity. No indemnity pursuant to Section 2
of this Agreement shall be paid by the Company (a) to the extent Indemnitee is
indemnified pursuant to any policy of directors and officers liability insurance
purchased and maintained by the Company or (b) on account of Indemnitee's
conduct which is finally adjudged by a Court having jurisdiction in the matter
to have been knowingly fraudulent, deliberately dishonest, willful or
intentional misconduct; or (c) if a final decision by a Court having
jurisdiction in the matter shall determine that such indemnification is
unlawful. In no event shall the additional indemnity provided herein apply to
any certifications executed, submitted to or filed with the U.S. Securities and
Exchange Commission pursuant to Section 906 of the Xxxxxxxx-Xxxxx Act of 2002 or
Rule 13(a)-14 promulgated under the Securities Exchange Act of 1934 covering
periodic reports for any period throughout which the Chief Financial Officer of
the Company reports on financial and accounting matters directly to Indemnitee
(each, an "Excluded Period").
4. Contribution. If for any reason the indemnification provided for in
this Agreement is unavailable to the Indemnitee or is insufficient to hold
Indemnitee harmless as contemplated by this Agreement, then the Company shall
contribute to the amount paid or payable by the Company to any Indemnitee as a
result of such loss, claims, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the Company
and the Indemnitee, but also the relative fault of the past or present
employees, officers, directors and agents and contractors of the Company and the
Indemnitee, as well as any other relevant equitable considerations. Absent a
final decision by a Court having jurisdiction in the matter to the contrary, the
applicable contributions shall be 99% by the Company and 1% by the Indemnitee.
5. Continuation of Indemnity. All agreements and obligations of the
Company contained herein shall continue during the period Indemnitee is a
director, officer, employee or agent of the Company and shall continue
thereafter so long as Indemnitee shall be subject to any possible claim or
threatened, pending or completed action, suit, proceeding, whether civil,
criminal, administrative, or investigative, by reason of the fact that
Indemnitee executed, submitted to, or filed a certification with the U.S.
Securities and Exchange Commission pursuant to Section 906 of the Xxxxxxxx-Xxxxx
Act of 2002 or Rule 13(a)-14 promulgated under the Securities Exchange Act of
1934 other than for an Excluded Period.
6. Notification and Defense of Claim. Promptly after receipt by
Indemnitee of notice of the commencement of any action, suit or proceeding,
Indemnitee shall, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement thereof;
but the omission so to notify the Company will not relieve it from any liability
which it may have to Indemnitee otherwise than under this Agreement. With
respect to any such action, suit or proceeding as to which Indemnitee notifies
the Company of the commencement thereof:
(a) The Company shall be entitled to participate therein at its own
expense;
(b) Except as otherwise provided below, to the extent that it may
wish, the Company jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
reasonably acceptable to Indemnitee. After notice from the Company to
Indemnitee of its election so to assume the defense thereof, the Company
will not be liable to Indemnitee under this Agreement for any legal or
other expense subsequently incurred by Indemnitee in connection with the
defense thereof other than reasonable costs of investigation or as
otherwise provided below. Indemnitee shall have the right to employ
counsel of his own choice in such action, suit or proceeding, provided that
the fees and expenses of any such counsel incurred after notice from the
Company of its assumption of the defense thereof shall be the sole
obligation of Indemnitee unless (i) the employment of such counsel by
Indemnitee has been authorized by the Company, (ii) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of the defense of such action, or
(iii) the Company shall not have employed counsel to assume the defense of
such action, in each of which cases the fees and expenses of such counsel
shall be at the expense of the Company. The Company shall not be entitled
to assume the defense
of any action, suit or proceeding brought by or on behalf of the Company or
as to which Indemnitee shall have made the conclusion provided for in (ii)
above; and
(c) The Company shall not be liable to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any
action or claim in any manner which would impose any penalty or limitation
on Indemnitee without Indemnitee's written consent. Neither the Company nor
Indemnitee will unreasonably withhold, delay or condition their consent to
any proposed settlement.
7. Advancement and Repayment of Expenses. Expenses incurred by Indemnitee
in defending any action, suit or proceeding referred to in Section 2 of this
Agreement shall be paid by the Company in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of the Indemnitee to repay such amount if it shall ultimately be determined in a
final decision by a Court having jurisdiction in the matter that the Indemnitee
is not entitled to indemnification by the Company for such expenses. Indemnitee
agrees to reimburse the Company in accordance with any such undertaking.
8. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on the Company hereby in
order to induce Indemnitee to continue as an officer of the Company, and
acknowledges that Indemnitee is relying upon this Agreement in continuing
in such capacity.
(b) In the event Indemnitee is required to bring any action to enforce
rights or to collect monies due under this Agreement and is successful in
such action, the Company shall reimburse Indemnitee for all of Indemnitee's
reasonable fees and expenses in bringing and pursuing such action
(including attorneys' fees at any stage including on appeal).
9. Severability. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others. If any provisions hereof
shall be held to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof.
10. Governing Law; Binding Effect; Amendment.
(a) This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Louisiana.
(b) This Agreement shall be binding upon Indemnitee and upon the
Company and its successors and assigns including any purchaser of all or
substantially all of the assets of the Company, and shall inure to the
benefit of Indemnitee, his heirs, personal representatives and assigns and
to the benefit of the Company and its successors and assigns including any
purchaser of all or substantially all of the assets of the Company.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
AKORN, INC. INDEMNITEE:
By: /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxx
--------------------------- ------------------------------
Xxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
Chief Financial Officer
