INDEMNIFICATION AGREEMENT ADEONA PHARMACEUTICALS, INC.
EXHIBIT 10.1
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of
December 30, 2008, between ADEONA PHARMACEUTICALS, INC., a Delaware corporation (the
“Corporation”), and the undersigned director and/or officer of the Corporation
(“Indemnitee”). Defined terms shall have the meaning ascribed to them in Section 0
below.
Background
Indemnitee is a member of the Board of Directors and/or an officer of the Corporation and as
such performs a valuable service for the Corporation. To induce Indemnitee to continue to serve on
the Board of Directors and/or as an officer, the Corporation has agreed to provide to Indemnitee
the indemnifications and other rights described herein. The Corporation enters this Agreement
pursuant to the authority contained in its Certificate of Incorporation and Bylaws and the
provisions of the General Corporation Law of the State of Delaware (the “DGCL”).
Specifically, with respect to the DGCL, the Corporation enters this Agreement relying on the
provision stating that indemnification authorized by the DGCL is not exclusive.
The Corporation’s Certificate of Incorporation includes a provision eliminating or limiting
the personal liability of a director to the Corporation pursuant to paragraph (7) of subsection (b)
of Section 102 of the DGCL and, as a result, the DGCL permits the Corporation to indemnify and
advance expenses to the Indemnitee so long as the Indemnitee has not breached his or her duty of
loyalty to the Corporation or its stockholders, committed acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, violated Section 174 of the
DGCL or entered into transactions from which the Indemnitee derived an improper personal benefit.
The Corporation desires to provide to Indemnitee the additional indemnification rights set forth in
this Agreement, and Indemnitee desires to obtain such rights, all upon the terms and subject to the
conditions set forth in this Agreement.
The Board of Directors of the Corporation (the “Board”) has determined that the
increased difficulty in attracting and retaining such persons is detrimental to the best interests
of the Corporation’s stockholders and that the Corporation should act to assure such persons that
there will be increased certainty of such protection in the future. The Board has also determined
that it is reasonable, prudent and necessary for the Corporation contractually to obligate itself
to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Corporation free from undue concern
that they will not be so indemnified.
This Agreement is intended as a supplement to and in furtherance of the By-laws of the
Corporation and any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder, and Indemnitee does not
regard the protection available under the Corporation’s By-laws and insurance as adequate in the
present circumstances, and may not be willing to serve as an officer or a director without adequate
protection, and the Corporation desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to 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 Indemnitee’s agreement to serve as a director and/or
officer of the Corporation as of and after the date hereof, the parties hereto agree as follows:
TERMS OF AGREEMENT
1. Indemnity of Indemnitee. The Corporation hereby agrees to hold harmless and
indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to
time. In furtherance of the foregoing indemnification, and without limiting the generality
thereof:
(a) Proceedings Other Than Proceedings by or in the Right of the Corporation.
Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(a)
if, by reason of his or her Corporate Status, the Indemnitee is, or is threatened to be made, a
party to or participant in any Proceeding other than a Proceeding by or in the right of the
Corporation. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all
Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably
incurred by him or her, or on his or her behalf, in connection with such Proceeding or any claim,
issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests of the Corporation, and with
respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was
unlawful.
(b) Proceedings by or in the Right of the Corporation. Indemnitee shall be entitled
to the rights of indemnification provided in this Section 1(b) if, by reason of his or her
Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any
Proceeding brought by or in the right of the Corporation. Pursuant to this Section 1(b),
Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the
Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to
the best interests of the Corporation; provided, however, if applicable law so provides, no
indemnification against such Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Corporation
unless and to the extent that a court of competent jurisdiction shall determine that such
indemnification may be made.
(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason
of his or her Corporate Status, a party to and is successful, on the merits or otherwise, in any
Proceeding, he or she shall be indemnified to the maximum extent permitted by law, as such may be
amended from time to time, against all Expenses actually and reasonably incurred by him or her or
on his or her behalf in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Corporation shall indemnify Indemnitee against
all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection
with each successfully resolved claim, issue or matter. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with
or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
2. Additional Indemnity. In addition to, and without regard to any limitations on,
the indemnification provided for in Section 1 of this Agreement, the Corporation shall and
hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or
her behalf if, by reason of his Corporate Status, he or she is, or is threatened to be made, a
party to or participant in any Proceeding (including a Proceeding by or in the right of the
Corporation), including, without limitation, all liability arising out of the negligence or active
or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Corporation’s
obligations pursuant to this Agreement shall be that the Corporation shall not be obligated to make
any payment to Indemnitee that is finally determined (under the procedures, and subject to the
presumptions, set forth in Sections 6 and 7 hereto) to be unlawful.
3. Contribution.
(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is
available, in respect of any threatened, pending or completed action, suit or proceeding in which
the Corporation is jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), the Corporation shall pay, in the first instance, the entire amount of any judgment or
settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such
payment and the Corporation hereby waives and relinquishes any right of contribution it may have
against Indemnitee. The Corporation shall not enter into any settlement of any action, suit or
proceeding in which the Corporation is jointly liable with Indemnitee (or would be if joined in
such action, suit or proceeding) unless such settlement provides for a full and final release of
all claims asserted against Indemnitee.
(b) Without diminishing or impairing the obligations of the Corporation set forth in the
preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any
portion of any judgment or settlement in any threatened, pending or completed action, suit or
proceeding in which the Corporation is jointly liable with Indemnitee (or would be if joined in
such action, suit or proceeding), the Corporation shall contribute to the amount of expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits
received by the Corporation and all directors of the Corporation, other than Indemnitee, who are
jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or
proceeding arose; provided, however, that the proportion determined on the basis of relative
benefit may, to the extent necessary to conform to law, be further adjusted by reference to the
relative fault of the Corporation and all directors of the Corporation other than Indemnitee who
are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on
the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in
such expenses, judgments, fines or settlement amounts, as well as any other equitable
considerations which the applicable law may require to be considered. The relative fault of the
Corporation and all directors of the Corporation, other than Indemnitee, who are jointly liable
with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree
to which their actions were motivated by intent to gain personal profit or advantage, the degree to
which their liability is primary or secondary and the degree to which their conduct is active or
passive.
(c) The Corporation hereby agrees to fully indemnify and hold Indemnitee harmless from any
claims of contribution which may be brought by directors of the Corporation, other than Indemnitee,
who may be jointly liable with Indemnitee.
(d) To the fullest extent permissible under applicable law, if the indemnification provided
for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Corporation, in
lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, 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 under this Agreement, 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 Corporation and Indemnitee
as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the
relative fault of the Corporation (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).
4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a
witness in any
Proceeding to which Indemnitee is not a party, he or she shall be indemnified against all
Expenses actually and reasonably incurred by him or her or on his or her behalf in connection
therewith.
5. Limitations. The Corporation shall not be obligated to make any payment to
Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set
forth in Sections 0 and 0 hereof) to be unlawful. Additionally, the Corporation
shall not be obligated to indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes and penalties, and
amounts paid in settlement) for which payment is actually made to or on behalf of Indemnitee under
a valid and collectible insurance policy of D&O Insurance of the Corporation, or under a valid and
enforceable indemnity clause, by-law or agreement of the Corporation.
6. Advancement of Expenses. Notwithstanding any other provision of this Agreement,
the Corporation shall advance all Expenses incurred by or on behalf of Indemnitee in connection
with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the
receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or
advances from time to time, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall
include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be
indemnified against such Expenses. Any advances and undertakings to repay pursuant to this
Section 0 shall be unsecured and interest free. Indemnitee hereby undertakes to repay
amounts advanced only if, and to the extent that, it shall be determined ultimately that the
Indemnitee is not entitled to indemnification or contribution by the Corporation as authorized
hereby.
7. Procedures and Presumptions for Determination of Entitlement to Indemnification.
It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as
favorable as may be permitted under the DGCL and public policy of the state of the Corporation’s
incorporation. Accordingly, the parties agree that the following procedures and presumptions shall
apply in the event of any question as to whether Indemnitee is entitled to indemnification under
this Agreement:
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Corporation
a written request, including therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine whether and to what
extent Indemnitee is entitled to indemnification. The Secretary of the Corporation shall, promptly
upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has
requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 7(a) hereof, a determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall be made in the specific case by one of the following three
methods, which, except as provided in the sentence below, shall be at the election of the Board:
(1) by a majority vote of the disinterested directors, even though less than a quorum, by a
committee of disinterested directors designated by a majority vote of the disinterested directors,
even though less than a quorum, (2) if there are no disinterested directors or if the disinterested
directors so direct, by independent legal counsel in a written opinion to the Board, a copy of
which shall be delivered to the Indemnitee, or (3) if so directed by the Board, by the stockholders
of the Corporation. Notwithstanding the above sentence, and to the extent allowed by applicable
law, in the event of a Change of Control, the determination with respect to an Indemnitee’s
entitlement to indemnification shall be made by independent legal counsel in a written opinion to
the Board, a copy of which shall be delivered to the Indemnitee. For purposes hereof,
disinterested directors are those members of the Board who are not parties to the action, suit or
proceeding in respect of which indemnification is sought by Indemnitee.
(c) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) hereof, the Independent Counsel shall be selected as
provided in this Section 7(c). The Independent Counsel shall be selected by the Board.
Indemnitee may, within 10 days after such written notice of selection shall have been given,
deliver to the Corporation, as the case may be, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in Section
14 of this Agreement, and the objection shall set forth with particularity the factual basis of
such assertion. Absent a proper and timely objection, the person so selected shall act as
Independent Counsel. If a written objection is made and substantiated, the Independent Counsel
selected may not serve as Independent Counsel unless and until such objection is withdrawn or a
court has determined that such objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 7(a) hereof, no
Independent Counsel shall have been selected and not objected to, either the Corporation or
Indemnitee may petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Indemnitee to the Corporation’s selection of Independent Counsel and/or
for the appointment as Independent Counsel of a person selected by the court or by such other
person as the court shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under Section 7(b)
hereof. The Corporation shall pay any and all reasonable fees and expenses of Independent Counsel
incurred by such Independent Counsel in connection with acting pursuant to Section 7(b)
hereof, and, unless a court of competent jurisdiction finds that each of the claims and/or defenses
of the Indemnitee in any such proceeding was frivolous or made in bad faith, the Corporation shall
pay all reasonable fees and expenses incident to the procedures of this Section7(c),
regardless of the manner in which such Independent Counsel was selected or appointed.
(d) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure
of the Corporation (including by its directors or independent legal counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement that
indemnification is proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Corporation (including by its directors or
independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct.
(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on
the records or books of account of the Enterprise, including financial statements, or on
information supplied to Indemnitee by the officers of the Enterprise in the course of their duties,
or on the advice of legal counsel for the Enterprise or on information or records given or reports
made to the Enterprise by an independent certified public accountant or by an appraiser or other
expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions,
or failure to act, of any director, officer, agent or employee of the Enterprise shall not be
imputed to Indemnitee for purposes of determining the right to indemnification under this
Agreement. Whether or not the forgoing provisions of this Section 7(e) are satisfied, it
shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of the Corporation.
Anyone seeking to overcome this presumption shall have the burden of proof and the burden of
persuasion by clear and convincing evidence.
(f) If the person, persons or entity empowered or selected under Section 7 to
determine whether Indemnitee is entitled to indemnification shall not have made a determination
within sixty (60) days after receipt by the Corporation of the request therefor, the requisite
determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially misleading, in connection
with the request for indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended for a reasonable time,
not to exceed an additional thirty (30) days, if the person, persons or entity making such
determination with respect to entitlement to indemnification in good faith requires such additional
time to obtain or evaluate documentation and/or information relating thereto; and provided,
further, that the foregoing provisions of this Section 7(f) shall not apply if the
determination of entitlement to indemnification is to be made by the stockholders pursuant to
Section 7(b) of this Agreement and if (A) within fifteen (15) days after receipt by the
Corporation of the request for such determination, the Board or the Disinterested Directors, if
appropriate, resolve to submit such determination to the stockholders for their consideration at an
annual meeting thereof to be held within seventy-five (75) days after such receipt and such
determination is made thereat, or (B) a special meeting of stockholders is called within fifteen
(15) days after such receipt for the purpose of making such determination, such meeting is held for
such purpose within sixty (60) days after having been so called and such determination is made
thereat.
(g) Indemnitee shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such person,
persons or entity upon reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee
and reasonably necessary to such determination. Any Independent Counsel, member of the Board or
stockholder of the Corporation shall act reasonably and in good faith in making a determination
regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or
expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by the Corporation
(irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the
Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(h) The Corporation acknowledges that a settlement or other disposition short of final
judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption
and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party
is resolved in any manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or proceeding with or without payment of money or
other consideration) it shall be presumed that Indemnitee has been successful on the merits or
otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion by clear and convincing evidence.
(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and
in a manner which he or she reasonably believed to be in or not opposed to the best interests of
the Corporation or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause
to believe that his or her conduct was unlawful.
8. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 7 of this
Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 6 of this Agreement, (iii) no
determination of entitlement to indemnification is made pursuant to Section 7(b) of this
Agreement within thirty (30) days after receipt by the Corporation of the request for
indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten
(10) days after receipt by the Corporation of a written request therefor or (v) payment of
indemnification is not made
within ten (10) days after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to Section 7 of
this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of
competent jurisdiction of Indemnitee’s entitlement to such indemnification. Indemnitee shall
commence such proceeding seeking an adjudication within 180 days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to this Section 8.
Alternatively, with respect to the matter described in clause (ii) in the previous sentence,
Indemnitee at his or her option may 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 sixty (60) days following the filing of the demand for arbitration, to which selection of
arbitration at Indemnitee’s option the Corporation hereby agrees. The Corporation shall not oppose
Indemnitee’s right to seek any such adjudication or arbitration.
(b) In the event that a determination shall have been made pursuant to Section 7(b) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 8 shall be conducted in all respects as a de
novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse
determination under Section 7(b).
(c) If a determination shall have been made pursuant to Section 7(b) of this Agreement
that Indemnitee is entitled to indemnification, the Corporation shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant to this Section
8, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material
fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the
application for indemnification, or (ii) a prohibition of such indemnification under applicable
law.
(d) In the event that Indemnitee, pursuant to this Section 8, seeks a judicial
adjudication or arbitration of his or her rights under, or to recover damages for breach of, this
Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained
by the Corporation, the Corporation shall pay on his or her behalf, in advance, any and all
expenses (of the types described in the definition of Expenses in Section 14 of this
Agreement) actually and reasonably incurred by him or her in such judicial adjudication or
arbitration, as well as reasonable compensation for Indemnitee’s time actually spent with respect
to such action or proceeding, unless the Indemnitee ultimately is determined to not be entitled to
such indemnification, advancement of expenses or insurance recovery.
(e) The Corporation shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 8 that the procedures and presumptions of
this Agreement are not valid, binding and enforceable and shall stipulate in any such court that
the Corporation is bound by all the provisions of this Agreement. The Corporation shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10)
days after receipt by the Corporation of a written request therefore) advance, to the extent not
prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with
any action brought by Indemnitee for indemnification or advance of Expenses from the Corporation
under this Agreement or under any directors’ and officers’ liability insurance policies maintained
by the Corporation, unless the Indemnitee ultimately is determined to not be entitled to such
indemnification, advancement of Expenses or insurance recovery, as the case may be.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding.
9. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable law, the
certificate of incorporation of the Corporation, the Bylaws, any agreement, a vote of stockholders,
a resolution of directors or otherwise. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in
respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to
such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute
or judicial or arbitration decision, permits greater indemnification than would be afforded
currently under the Bylaws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right
or remedy herein conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.
(b) To the extent that the Corporation maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents or fiduciaries of the Corporation
or of any other corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person serves at the request of the Corporation, Indemnitee shall be covered
by such policy or policies in accordance with its or their terms to the maximum extent of the
coverage available for any director, officer, employee, agent or fiduciary under such policy or
policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the
Corporation has director and officer liability insurance in effect, the Corporation shall give
prompt notice of the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Corporation shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of such policies.
(c) In the event of any payment under this Agreement, the Corporation shall be subrogated to
the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all
papers required and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce such rights.
(d) The Corporation shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or otherwise.
(e) The Corporation’s obligation to indemnify or advance Expenses hereunder to Indemnitee who
is or was serving at the request of the Corporation as a director, officer, employee or agent of
any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise
shall be reduced by any amount Indemnitee has actually received as indemnification or advancement
of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise.
10. Exception to Right of Indemnification. Notwithstanding any provision in this
Agreement, the Corporation shall not be obligated under this Agreement to:
(a) make any indemnity in connection with any claim made against Indemnitee:
(i) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision; or
(ii) for an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Corporation within the meaning of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or
(iii) in connection with any Proceeding (or any part of any Proceeding) initiated by
Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee
against the Corporation or its directors, officers, employees or other indemnitees, unless (i) the
Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the
Corporation provides the indemnification, in its sole discretion, pursuant to the powers vested in
the Corporation under applicable law;
(b) indemnify the Indemnitee for any expenses incurred by the Indemnitee with respect to any
proceeding instituted by the Indemnitee to enforce or interpret this Agreement, if a court of
competent jurisdiction determines that each of the material assertions made by the Indemnitee in
such proceeding was not made in good faith or was frivolous; or
(c) indemnify the Indemnitee under this Agreement for any amounts paid in settlement of a
proceeding unless the Corporation consents to such settlement, which consent shall not be
unreasonably withheld.
11. Duration of Agreement. All agreements and obligations of the Corporation
contained herein shall continue during the period Indemnitee is an officer or director of the
Corporation (or is or was serving at the request of the Corporation as an officer, director,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise)
for a period of not less than three years thereafter, and in any case, shall continue thereafter so
long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under
Section 8 hereof) by reason of his or her Corporate Status, whether or not he or she is
acting or serving in any such capacity at the time any liability or expense is incurred for which
indemnification can be provided under this Agreement. This Agreement shall, without any further
action required by any party, be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors (including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the business or assets
of the Corporation), assigns, spouses, heirs, executors and personal and legal representatives.
12. Security. To the extent requested by Indemnitee and approved by the Board, the
Corporation may at any time and from time to time provide security to Indemnitee for the
Corporation’s obligations hereunder through an irrevocable bank line of credit, funded trust or
other collateral. Any such security, once provided to Indemnitee, may not be revoked or released
without the prior written consent of the Indemnitee.
13. Enforcement.
(a) The Corporation expressly confirms and agrees that it has entered into this Agreement and
assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer
or director of the Corporation, and the Corporation acknowledges that Indemnitee is relying upon
this Agreement in serving as an officer or director of the Corporation.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.
14. Definitions. For purposes of this Agreement:
(a) “Change in Control” shall be deemed to occur upon the earliest to occur after the
date of this Agreement of any of the following events:
(i) Change in Board. During any period of two (2) consecutive years (not including
any period prior to the execution of this Agreement), individuals who at the beginning of such
period constitute the Board cease for any reason to constitute a least a majority of the members of
the Board;
(ii) Corporate Transactions. The effective date of a merger or consolidation of the
Corporation with any other entity, other than a merger or consolidation which would result in the
voting securities of the Corporation outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 51% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger or consolidation and
with the power to elect at least a majority of the board of directors or other governing body of
such surviving entity; and
(iii) Liquidation. The approval by the stockholders of the Corporation of a complete
liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of
all or substantially all of the Corporation’s assets.
(b) “Corporate Status” describes the status of a person who is or was a director,
officer, employee, agent or fiduciary of the Corporation or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise that such person is or was serving
at the express written request of the Corporation.
(c) “Disinterested Director” means a director of the Corporation who is not and was
not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(d) “Enterprise” shall mean the Corporation and any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving
at the express written request of the Corporation as a director, officer, employee, agent or
fiduciary.
(e) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.
(f) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, participating, or being or preparing to be a witness in a
Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting
from any Proceeding, including without limitation the premium, security for, and other costs
relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments,
fines, ERISA excise taxes or penalties, or amounts paid in settlement of a proceeding against
Indemnitee.
(g) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the past five years has
been, retained to represent: (i) the Corporation or Indemnitee in any matter material to either
such party (other than with respect to matters concerning Indemnitee under this Agreement, or of
other indemnitees under similar indemnification agreements), or (ii) any other party to the
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 Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Corporation agrees to pay the reasonable fees of the
Independent Counsel referred to above and to fully indemnify such counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
(h) “Proceeding” includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing
or any other actual, threatened or completed proceeding, whether brought by or in the right of the
Corporation or otherwise and whether civil, criminal, administrative or investigative, in which
Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, by reason of any action taken by him
or her or of any inaction on his or her part while acting as a director or officer of the
Corporation, or by reason of the fact that he or she is or was serving at the request of the
Corporation as a director, officer, agent or fiduciary of another corporation, partnership, joint
venture, trust or other Enterprise; in each case whether or not he or she is acting or serving in
any such capacity at the time any liability or expense is incurred for which indemnification can be
provided under this Agreement; including one pending on or before the date of this Agreement, but
excluding one initiated by an Indemnitee pursuant to Section 0 of this Agreement to enforce
his or her rights under this Agreement.
15. Severability. The invalidity of unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision. Without limiting the
generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification
rights to the fullest extent permitted by applicable laws. In the event any provision hereof
conflicts with any applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such conflict.
16. Modification and Waiver. No supplement, modification, termination or amendment of
this Agreement shall be binding unless executed in writing by both of the 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.
17. Notice By Indemnitee. Indemnitee agrees promptly to notify the Corporation in
writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter which may be subject
to indemnification covered hereunder. The failure to so notify the Corporation shall not relieve
the Corporation of any obligation which it may have to Indemnitee under this Agreement or otherwise
unless and only to the extent that such failure or delay materially prejudices the Corporation.
18. Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the next business day, (c)
five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be
sent:
To Indemnitee at the address set forth below his or her signature hereto.
To the Corporation at:
0000 Xxxxxxx Xxxxx
Xxx Xxxxx XX, 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
or to such other address as may have been furnished to Indemnitee by the Corporation or to the
Corporation by Indemnitee, as the case may be.
19. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or
more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
20. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
21. Governing Law. This Agreement and the legal relations among the parties shall be
governed by, and construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules; provided, however, that in the event
that the Corporation’s successor in interest pursuant to a merger, consolidation or similar
transaction is incorporated in a state other than Delaware, then this Agreement and the legal
relations among the parties shall, from the effective time of such transaction forward, be governed
by, construed and enforced in accordance with the laws of the state of incorporation of such
Corporation’s successor, without giving effect to principles of conflicts of law.
[Signatures on following page]
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of
the day and year first above written.
| ADEONA PHARMACEUTICALS, INC. a Delaware corporation |
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| By: | ||||
| Print Name: | ||||
| Title: | ||||
| INDEMNITEE |
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| By: | ||||
| Print Name: | ||||
| Address: | ||||
