INDEMNIFICATION AGREEMENT
This
INDEMNIFICATION AGREEMENT (the “Agreement”)
is made
and entered into as of _______ between ISORAY,
INC.,
a
Minnesota corporation (“IsoRay”
and the
“Company”),
and
________ (“Indemnitee”).
WITNESSETH
THAT:
1.
Highly
competent persons have become more reluctant to serve corporations as directors
and officers or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate
risks of claims and actions against them arising out of their service to and
activities on behalf of the corporation;
2.
The
Board of Directors of the Company (the “Board”)
has
determined that, in order to attract and retain qualified individuals, the
Company will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its subsidiaries
from certain liabilities. Although the furnishing of such insurance has been
a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future
only
at higher premiums and with more exclusions. At the same time, directors,
officers, and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would have been
brought only against the Company or business enterprise itself. Indemnitee
may
also be entitled to indemnification pursuant to the Minnesota Business
Corporations Act (“MBCA”).
The
By-laws and the MBCA expressly provide that the indemnification provisions
set
forth therein are not exclusive, and thereby contemplate that contracts may
be
entered into between the Company and members of the board of directors, officers
and other persons with respect to indemnification;
3.
The
uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;
4.
The
Board has determined that the increased difficulty in attracting and retaining
such persons is detrimental to the best interests of the Company’s
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future;
5.
It is
reasonable, prudent and necessary for the Company 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 Company free from undue concern that they will not be so
indemnified;
6.
This
Agreement is a supplement to and in furtherance of the By-laws of the Company
and any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefore, nor to diminish or abrogate any rights of Indemnitee
thereunder; and
7.
Indemnitee does not regard the protection available under the
Company’s
insurance as adequate in the present circumstances, and may not be willing
to
serve as an officer or director without adequate protection, and the Company
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
Company on the condition that he be so indemnified.
NOW,
THEREFORE, in consideration of Indemnitee’s
agreement to serve as an officer and director after the date hereof, the parties
hereto agree as follows:
1. Indemnity
of Indemnitee.
The
Company will (and will cause its subsidiaries, affiliates and acquisitions
for
which Indemnitee provides services 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 Company.
Indemnitee shall be entitled to the rights of indemnification provided in this
Section
1(a)
if, by
reason of his Corporate Status (as defined below), the Indemnitee is, or is
threatened to be made, a party to or participant in any Proceeding (as defined
below) other than a Proceeding by or in the right of the Company. Pursuant
to
this
Section 1(a),
Indemnitee must be indemnified against all Expenses (as defined below),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him, or on his behalf, in connection with such Proceeding
or any claim, issue or matter relating to the 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 Company, 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 Company.
Indemnitee will be entitled to the rights of indemnification provided in this
Section
1(b)
if, by
reason of his 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
Company. Pursuant to this Section
1(b),
Indemnitee must 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 Company; 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 Company unless and to the extent that the Superior
Court of the State of Minnesota 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 Corporate Status, a party to and is successful,
on the merits or otherwise, in any Proceeding, he must 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 on his behalf
in
connection with the Proceeding. 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 the Proceeding, the Company must
indemnify Indemnitee against all Expenses actually and reasonably incurred
by
him or on his behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Section 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
2. Additional
Indemnity.
In
addition to, and without regard to any limitations on, the indemnification
provided for in Section
1
of this
Agreement, the Company must and does indemnify and hold harmless Indemnitee
against all Expenses, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf if, by reason of his
Corporate Status, he 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 Company),
including, without limitation, all liability arising out of the negligence
or
active or passive wrongdoing of Imdemnitee. The only limitation that will exist
upon the Company’s
obligations pursuant to this Agreement will be that the Company will 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
hereof)
to be unlawful.
| 3. |
Contribution.
|
(a) Whether
or not the indemnification provided in Sections 1 and 2 is available, in respect
of any threatened, pending or completed action, suit or proceeding in which
the
Company is jointly liable with Indemnitee (or would be if joined in such action,
suit or proceeding), the Company must pay, in the first instance, the entire
amount of any judgment or settlement of that action, suit or proceeding without
requiring Indemnitee to contribute to that payment and the Company waives and
relinquishes any right of contribution it may have against Indemnitee. The
Company must not enter into any settlement of any action, suit or proceeding
in
which the Company is jointly liable with Indemnitee (or would be if joined
in
such action, suit or proceeding) unless that settlement provides for a full
and
final release of all claims asserted against Indemnitee.
(b) Without
diminishing or impairing the obligations of the Company set forth in the
preceding subparagraph, if, for any reason, Indemnitee elects or is 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 Company is jointly liable
with Indemnitee (or would be if joined in such action, suit or proceeding),
the
Company must 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 Company and all officers, directors or employees of the Company,
other than Indemnitee, who are jointly liable with Indemnitee (or would be
if
joined in that action, suit or proceeding), on the one hand, and Indemnitee,
on
the other hand, from the transaction from which that 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 Company and all officers,
directors or employees of the Company other than Indemnitee who are jointly
liable with Indemnitee (or would be if joined in that action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand, in connection
with the events that resulted in the expenses, judgments, fines or settlement
amounts, as well as any other equitable considerations which the Law may require
to be considered. The relative fault of the Company and all officers, directors
or employees of the Company, 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, will 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.
3
(c) The
Company hereby agrees to fully indemnify and hold Indemnitee harmless from
any
claims of contribution which may be brought by officers, directors or employees
of the Company, 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 Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnittee, 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
Company 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 Company (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 Corporate Status, a witness in any Proceeding
to
which Indemnitee is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith.
5. Advancement
of Expenses.
Notwithstanding any other provision of this Agreement, the Company must 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 Company 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.
This statement or statements must reasonably evidence the Expenses incurred
by
Indemnitee and must include or be preceded or accompanied by an undertaking
by
or on behalf of Indemnitee to repay any Expenses advanced if it is ultimately
determined that Indemnitee is not entitled to be indemnified against the
Expenses. Any advances and undertakings to repay pursuant to this Section
5
will be
unsecured and interest free.
6. 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 MBCA and public policy of the
State of Minnesota. 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 must submit to the Company
a
written request, including with that request any documentation and information
that 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 Company will, promptly upon receiving a request for
indemnification from Indemnitee, advise the Board of Directors in writing that
Indemnitee has requested indemnification.
4
(b) Upon
written request by Indemnitee for indemnification pursuant to the first sentence
of Section
6(a)
hereof,
a determination, if required by applicable law, with respect to
Indemnitee’s
entitlement to indemnification will be made in the specific case by one of
the
following four methods: (1) by a majority vote of the disinterested directors,
if at least a quorum, (2) by a committee of at least two disinterested directors
designated by a majority vote of the entire board, even though less than a
quorum, (3) if a determination is not made under clause (1) or (2), by
independent legal counsel selected by a majority of the board or a committee
by
a vote pursuant to clause (1) or (2) or if the requisite quorum of the full
Board cannot be obtained and the committee cannot be established, by a majority
of the entire Board, in a written opinion to the Board of Directors, a copy
of
which shall be delivered to the Indemnitee, or (4) if a determination is not
made under clauses (1) to (3), by the stockholders of the Company. For purposes
of this section, disinterested directors are those members of the board of
directors of the Company 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 6(b), the Independent Counsel must be selected
by
the Board of Directors or committee of the board as provided in Section
6(b).
Indemnitee may, within 10 days after such written notice of selection is given,
deliver to the Company, as the case may be, a written objection to the
selection; provided, however, that the 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
13
of this
Agreement, and the objection must set forth with particularity the factual
basis
of this 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 the objection is withdrawn or a court has determined
that the objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section
6(a),
no
Independent Counsel has been selected and not objected to, either the Company
or
Indemnitee may petition the Superior Court of the State of Minnesota or other
court of competent jurisdiction for resolution of any objection that will have
been made by the Indemnitee to the Company’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
designates, and the person with respect to whom all objections are so resolved
or the person so appointed shall act as Independent Counsel under Section
6(b).
The
Company shall pay all reasonable fees and expenses of Independent Counsel
incurred by the Independent Counsel in connection with acting pursuant to
Section
6(b),
and the
Company must pay all reasonable fees and expenses incident to the procedures
of
this Section
6(c),
regardless of the manner in which the Independent Counsel was selected or
appointed.
(d) In
making
a determination with respect to entitlement to indemnification under this
Agreement, the person or persons or entity making the determination must presume
that Indemnitee is entitled to indemnification under this Agreement. Anyone
seeking to overcome this presumption will have the burden of proof and the
burden of persuasion by clear and convincing evidence. Neither the failure
of
the Company (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
Company (including by its directors or independent legal counsel) that
Indemnitee has not met such applicable standard of conduct, will be a defense
to
the action or create a presumption that Indemnitee has not met the applicable
standard of conduct.
5
(e) Indemnitee
will 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 (as defined below) 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 will not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Whether or not the foregoing provisions of this Section
6(e)
are
satisfied, it will in any event be presumed Indemnitee has at all time acted
in
good faith and in a manner he reasonably believed to be in or not opposed to
the
best interests of the Company. Anyone seeking to overcome this presumption
will
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
6
to
determine whether Indemnitee is entitled to indemnification shall not have
made
a determination within sixty (60) days after receipt by the Company of the
request for indemnification, the requisite determination of entitlement to
indemnification will be deemed to have been made and Indemnitee will be entitled
to 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 this 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 the determination with respect to the entitlement to
indemnification in good faith requires additional time to obtain or evaluate
documentation and/or related information. But the foregoing provisions of this
Section
6(g)
will not
apply if the determination of entitlement to indemnification is to be made
by
the stockholders pursuant to Section
6(b)
of this
Agreement and if (A) within (15) days after receipt by the Company of the
request for such determination, the Board of Directors or the Disinterested
Directors, if appropriate, resolve to submit the determination to the
stockholders for their consideration at an annual meeting of the stockholders
to
be held within seventy-five (75) days after such receipt and such determination
is made at the meeting, or (B) a special meeting of stockholders is called
within fifteen (15) days after such receipt for the purpose of making this
determination, such meeting is held for such purpose within sixty (60) days
after having been so called and such determination is made at the
meeting.
(g) Indemnitee
must cooperate with the person, persons or entity making the determination
with
respect to Indemnitee’s
entitlement to indemnification, including providing to that 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 of Directors or stockholder of the
Company must 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 must be borne by the Company (irrespective
of the determination as to Indemnitee’s
entitlement to indemnification) and the Company indemnifies and agrees to hold
Indemnitee harmless from those costs and expenses.
(h) The
Company 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 must be presumed that Indemnitee has been successful
on the merits or otherwise in that action, suit or proceeding. Anyone seeking
to
overcome this presumption will have the burden of proof and the burden of
persuasion by clear and convincing evidence.
6
(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 reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
| 7. |
Remedies
of Indemnitee.
|
(a) In
the
event that (i) a determination is made pursuant to Section
6
of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section
5
of this
Agreement, (iii) no determination of entitlement to indemnification is made
pursuant to Section
6(b)
of this
Agreement within 90 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to this
Agreement within ten (10) days after receipt by the Company of a written request
for indemnification 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
6
of this
Agreement, Indemnitee will be entitled to an adjudication in an appropriate
court of the State of Minnesota, or in any other court of competent
jurisdiction, of Indemnitee’s
entitlement to indemnification. Indemnitee must commence such proceeding seeking
an adjudication within 180 days following the date on which Indemnitee first
has
the right to commence proceeding pursuant to this Section
7(a).
The
Company will not oppose Indemnitee’s
right
to seek any such adjudication.
(b) In
the
event that a determination will have been made pursuant to Section
6(b)
of this
Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding commenced pursuant to this Section
7
will be
conducted in all respects as a de novo trial on the merits, and Indemnitee
will
not be prejudiced by reason of the adverse determination under Section
6(b).
(c) If
a
determination is made pursuant to Section
6(b)
of this
Agreement that Indemnitee is entitled to indemnification, the Company shall
be
bound by that determination in any judicial proceeding commenced pursuant to
this Section
7,
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 indemnification under applicable
law.
(d) If
that
Indemnitee, pursuant to this Section
7,
seeks a
judicial adjudication of his 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 Company, the Company must pay
on
his behalf, in advance, all expenses (of the types described in the definition
of Expenses in Section
13
of this
Agreement) actually and reasonably incurred by him in that judicial
adjudication, regardless of whether Indemnitee ultimately is determined to
be
entitled to indemnification, advancement of expenses or insurance
recovery.
7
(e) The
Company will be precluded from asserting in any judicial proceeding commenced
pursuant to this Section
7
that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and must stipulate in any such court that the Company is bound
by
all the provisions of this Agreement. The Company must indemnify Indemnitee
against all Expenses and, if requested by Indemnitee, must (within ten (10)
days
after receipt by the Company of a written request for indemnification) advance,
to the extent not prohibited by law, those expenses to Indemnitee, which are
incurred by Indemnitee in connection with any action brought by Indemnitee
for
indemnification or advance of Expenses from the Company under this Agreement
or
under any directors’
and
officers’
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to 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 will be required to be made prior to
the
final disposition of the Proceeding.
| 8. |
Non-Exclusivity;
Survival of Rights; Insurance;
Subrogation.
|
(a) The
rights of indemnification as provided by this Agreement will not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the articles of incorporation of the Company, 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 Corporate Status prior
to that amendment, alteration or repeal. To the extent that a change in the
MBCA, whether by statute or judicial decision, permits greater indemnification
that would be afforded currently under the Bylaws and this Agreement, it is
the
intent of the parties that Indemnitee will enjoy by this Agreement the greater
benefits so afforded by that change. No right or remedy conferred under this
Agreement is intended to be exclusive of any other right or remedy, and every
other right and remedy will be cumulative and in addition to every o other
right
and remedy given under this Agreement or now or subsequently existing at law
or
in equity or otherwise. The assertion or employment of any right or remedy
under
this Agreement, or otherwise, will not prevent the concurrent assertion or
employment of any other right or remedy.
(b) The
Company must maintain an insurance policy or policies providing liability
insurance for directors, officers, employees, or agents or fiduciaries of the
Company or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise that such person serves at the request of
the
Company. Indemnitee must be covered by this 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 the policy or policies.
If, at the time of the receipt of a notice of a claim pursuant to the terms
of
this Agreement, the Company must give prompt notice of the commencement of
these
proceedings to the insurers in accordance with the procedures set forth in
the
respective policies. The Company must also take all necessary or desirable
action to cause the 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 Company will be subrogated to
the
extent of that payment to all of the rights of recovery of Indemnitee, who
will
execute all papers required and take all action necessary to secure such rights,
including execution of any documents as are necessary to enable the Company
to
bring suit to enforce these rights.
8
(d) The
Company will not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable under this Agreement if and to the extent that
Indemnitee has otherwise actually received that payment under any insurance
policy, contract, agreement or otherwise.
(e) The
Company’s
obligation to indemnify or advance Expenses under this Agreement to Indemnitee
who is or was serving at the request of the Company as a director, officer,
employee or agent of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise will be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from that other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise.
9. Exception
to Right of Indemnification.
Notwithstanding any provision in this Agreement, the Company will not be
obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) 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
(b) for
an
accounting of profits made from the purchase and sale (or sale and purchase)
by
Indemnitee of securities of the Company 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
(c) 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 Company or its directors, officers, employees or
other
indemnitees, unless (i) the Board of Directors of the Company authorized the
Proceeding (or any part of any Proceeding) prior to its initiation or (ii)
the
Company provides the indemnification, in its sole discretion, pursuant to the
powers vested in the Company under applicable law.
10. Duration
of Agreement.
All
agreements and obligations of the Company contained in this Agreement will
continue during the period Indemnitee is an officer or director of the Company
(or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or
other enterprise) for 15 years after term of service, even if claim has not
yet
been paid will continue so long as Indemnitee will be subject to any Proceeding
(or any proceeding commenced under Section
7)
by
reason of his Corporate Status, whether or not he 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 will be
binding upon and inure to the benefit of and be enforceable by the parties
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 Company), assigns, spouses, heirs, executors and
personal and legal representatives.
11. Security.
To the
extent requested by Indemnitee and approved by the Board of Directors of the
Company, the Company may at any time and from time to time provide security
to
Indemnitee for the Company’s
obligations under this Agreement 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.
9
| 12. |
Enforcement.
|
(a) The
Company 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 Company, and the Company acknowledges
that Indemnitee is relying upon this Agreement in serving as an officer or
director of the Company.
(b) This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, oral, written and implied, between the parties
hereto with respect to the subject matter of this Agreement.
| 13. |
Definitions.
For purposes of this Agreement:
|
(a) “Company”
will
mean IsoRay and all of the subsidiaries, affiliates and acquisitions of IsoRay
for which Indemnitee has served, serves or may serve as a director, officer,
employee, agent or fiduciary, notwithstanding the definition provided in the
introductory paragraph. For purposes of this agreement all references to
“Company”
will
include equally each of the subsidiaries, affiliates and acquisitions of
IsoRay.
(b) “Corporate
Status”
describes the status of a person who is or was a director, officer, employee,
agent or fiduciary of the Company 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 Company.
(c) “Disinterested
Director”
means a
director of the Company 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 Company 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 Company as director, officer, employee,
agent
or fiduciary.
(e) “Expenses”
will
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 or fines against Indemnitee.
10
(f) “Independent
Counsel”
means a
law firm, or a member of a law firm, that is experienced in matter of
corporation law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company 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. Notwithstanding the foregoing, the term “Independent
Counsel”
will not
include any person, under the applicable standards of professional conduct
then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee’s
rights
under this Agreement. The Company 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 to this
Agreement.
(g) “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 Company 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 an
officer or director of the Company, by reason of any action taken by him or
of
any inaction on his part while acting as an officer or director of the Company,
or by reason of the fact that he is or was serving at the request of the Company
as a director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other Enterprise; in each case whether
or
not he 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
7
of this
Agreement to enforce his rights under this Agreement.
14. Severability.
The
invalidity of unenforceability of any provision of this Agreement 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 of this Agreement conflicts with
any
applicable law, that provision will be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve the
conflict.
15. Modification
and Waiver.
No
supplement, modification, termination or amendment of this Agreement shall
be
binding unless executed in writing by both of the parties to this Agreement.
No
waiver of any of the provisions of this Agreement will be deemed or will
constitute a waiver of any other provisions of this Agreement (whether or not
similar) nor shall that waiver constitute a continuing waiver.
16. Notice
by Indemnitee.
Indemnitee agrees promptly to notify the Company 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 under this Agreement. The
failure to so notify the Company will not relieve the Company of any obligation
that it may have to Indemnitee under this Agreement or otherwise unless and
only
to the extent that such failure or delay materially prejudices the
Company.
17. Notices.
All
notices and other communications given or made pursuant to this Agreement must
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:
11
| (a) |
To
Indemnitee at the address set forth below Indemnitee's signature
hereto.
|
| (b) | To the Company at: |
| IsoRay, Inc. |
| 000 Xxxxx Xxxxxx, Xxxxx 000 |
| Xxxxxxxx, XX 00000 |
| Attention: CEO |
or
to
such other address as may have been furnished to Indemnitee by the Company
or to
the Company by Indemnitee, as the case may be.
18. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together will 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.
19. 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.
20. Governing
Law and Consent to Jurisdiction.
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 Minnesota,
without regard to its conflict of laws rules. The Company and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or proceeding arising
out of or in connection with this Agreement shall be brought only in the
Superior Court of the State of Minnesota (the “Minnesota
Court”),
and
not in any other state or federal court in the United States of America or
any
court in any other country, (ii) consent to submit to the exclusive jurisdiction
of the Minnesota Court for purposes of any action or proceeding arising out
of
or in connection with this Agreement, (iii) appoint, to the extent such party
is
not otherwise subject to service of process in the State of Minnesota,
irrevocably [name] [address] as its agent in the State of Minnesota as such
party’s
agent
for acceptance of legal process in connection with any such action or proceeding
against such party with the same legal force and validity as if served upon
such
party personally within the State of Minnesota, (iv) waive any objection to
the
laying of venue of any such action or proceeding in the Minnesota Court, and
(v)
waive, and agree not to plead or to make, any claim that any such action or
proceeding brought in the Minnesota Court has been brought in an improper or
inconvenient forum.
12
IN
WITNESS WHEREOF, the parties have executed this Agreement on and as of the
day
and year first above written.
| COMPANY | ||
| By: ___________________________________ | ||
| Name: _________________________________ | ||
| Title: __________________________________ | ||
| INDEMNITEE | ||
| _______________________________________ | ||
| Name:_________________________________ | ||
| Address: | ||
| _______________________________________ | ||
| _______________________________________ | ||
| _______________________________________ | ||
| _______________________________________ |
13
