INDEMNIFICATION AGREEMENT
Exhibit
10.3
THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of the day of
[Month] 2007, by and between Universal Biosensors, Inc., a Delaware corporation (the
“Corporation”), and [Executive name] (“Indemnitee”), an officer of the Corporation.
RECITALS
A. It is essential to the Corporation to retain and attract as directors and officers of the
Corporation the most capable persons available.
B. The substantial increase in corporate litigation subjects directors and officers to
expensive litigation risks at the same time that the availability of directors’ and officers’
liability insurance has been severely limited.
C. Indemnitee does not regard the protection available under the Delaware Corporation Law, the
Charter or the Bylaws of the Corporation as adequate in the present circumstances, and may not be
willing to serve as a director or officer without adequate protection, and the Corporation desires
Indemnitee to serve in such capacity.
AGREEMENTS
NOW, THEREFORE, the Corporation and Indemnitee do hereby agree as follows:
1. Agreement to Serve. Indemnitee agrees to serve or continue to serve as a director
and/or an officer of the Corporation for so long as he is duly elected or appointed or until such
time as he tenders his or her resignation in writing.
2. Definitions. As used in this Agreement:
(a) The term “Proceeding” shall include any threatened, pending or completed action, suit,
investigation or proceeding, and any appeal thereof, whether brought by or in the right of the
Corporation or otherwise and whether civil, criminal, administrative or investigative, and/or any
inquiry or investigation, in which Indemnitee may be or may have been 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 such a director or officer, or by reason of the fact that he is or was serving at
the request of the Corporation as a director, officer, employee or agent 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 or reimbursement can be provided under this Agreement.
(b) The term “Expenses” shall include, without limitation, expenses, costs and obligations,
paid or incurred, of investigations, judicial or administrative proceedings or appeals, amounts
paid in settlement by or on behalf of Indemnitee, attorneys’ fees and disbursements and any
expenses reasonably and actually incurred in establishing a right to indemnification under Section
8 of this Agreement including, without limitation, those incurred in investigating, defending,
being a witness in or participating in (including on appeal), or preparing to defend with respect
to any claim, issue or matter relating thereto or in connection therewith, but shall not include,
in the case of indemnification sought under Section 4, the amount of judgments, fines or penalties
against Indemnitee.
(c) References to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the Corporation” shall include any service as a director, officer,
employee or agent of the Corporation or its subsidiaries which imposes duties on, or involves
services by, such director, officer, employee, or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interests of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the
Corporation” as referred to in this Agreement.
3. Indemnity in Third-Party Proceedings. The Corporation shall indemnify Indemnitee
in accordance with the provisions of this Section 3 if Indemnitee is a party to or threatened to be
made a party to any Proceeding (other than a Proceeding by or in the right of the Corporation to
procure a judgment in its favour) by reason of the fact that Indemnitee is or was a director or
officer of the Corporation, or is or was serving at the request of the Corporation as a director,
officer, employee, or agent of another corporation, partnership, joint venture, trust or other
enterprise, against all Expenses, judgments, fines and penalties actually and reasonably incurred
by Indemnitee in connection with the defence or settlement of such Proceeding, but only if he acted
in good faith and in a manner which he reasonably believed to be in the best interests of the
Corporation, or, in the case of a criminal action or proceeding, in addition, had no reasonable
cause to believe that his or her conduct was unlawful. The termination of any such Proceeding by
judgment, order of court, settlement, conviction, or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, 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 Corporation (or that Indemnitee did not meet any other particular
standard of conduct or have any other particular belief or that a court has determined that
indemnification is not permitted by applicable law), and with respect to any criminal proceeding,
that such person had reasonable cause to believe that his or her conduct was unlawful.
4. Indemnitee in Proceedings by or in the Right of the Corporation. The Corporation
shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is a
party to or threatened to be made a party to any Proceeding by or in the right of the Corporation
to procure a judgment in its favour by reason of the fact that Indemnitee is or was a director or
officer of the Corporation, or is or was serving at the request of the Corporation as a director,
officer, employee, or agent of another corporation, partnership, joint venture, trust or other
enterprise, against all Expenses actually and reasonably incurred by Indemnitee in connection with
the defence or settlement of such Proceeding, but only if he acted in good faith and in a manner
which he reasonably believed to be in the best interests of the Corporation, except that no
indemnification for Expenses shall be made under this Section 4, in respect of any Proceeding as to
which Indemnitee shall have been adjudged to be liable to the Corporation, unless and only to the
extent that any court in which such Proceeding was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee
is fairly and reasonably entitled to indemnity for such expenses as such court shall deem proper.
Notwithstanding the foregoing, Indemnitee shall have no right to indemnification for Expenses and
the payment of profits arising from the purchase and sale by Indemnitee of securities in violation
of Section 16(b) of the Securities Exchange Act of 1934, as amended.
5. Indemnification Prohibited. Notwithstanding the provisions of Sections 3 and 4, no
indemnification shall be made in connection with any Proceeding charging improper personal benefit
to the Indemnitee, whether or not involving action in his or her official capacity, in which he was
adjudged liable on the basis that personal benefit was improperly received by him or her.
6. Indemnification of Expenses of Successful Party. Notwithstanding any other
provision of this Agreement whatsoever, to the extent that Indemnitee has been successful on the
merits or otherwise (including a settlement) in defence of any Proceeding or in defence of any
claim, issue or matter therein, including dismissal without prejudice, Indemnitee shall be
indemnified against all Expenses reasonably and actually incurred in connection therewith.
7. Advances of Expenses. Expenses incurred by the Indemnitee pursuant to Sections 3
and 4 in any Proceeding shall be paid by the Corporation in advance as soon as practicable but not
later than seven business days after receipt of the written request of the Indemnitee provided that
Indemnitee shall (i) affirm in such written request that he acted in good faith and in a manner
which he reasonably believed to be (in the case of conduct in his or her official capacity) in the
best interests of the Corporation and (ii) undertake to repay such amount to the extent that it is
ultimately determined that Indemnitee is not entitled to indemnification, and further provided that
a determination has been made that the facts then known would not preclude indemnification pursuant
to the terms of this Agreement.
8. Right of Indemnitee to Indemnification Upon Application; Procedure Upon
Application.
(a) Any indemnification under Sections 3 and 4 shall be made as soon as practicable but in any
event no later than 30 days after receipt by the Corporation of the written request of Indemnitee.
(b) The right to indemnification or advances as provided for in this Agreement shall be
enforceable by Indemnitee in any court of competent jurisdiction. Indemnitee’s expenses reasonably
incurred in connection with successfully establishing Indemnitee’s right to indemnification or
advances, in whole or in part, in any such Proceeding shall also be indemnified by the Corporation.
(c) The Corporation shall not be liable under this Agreement to make any payment in connection
with any claim made against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, Bylaw or otherwise) of the amounts otherwise indemnifiable.
9. Indemnification Hereunder Not Exclusive.
(a) Notwithstanding any other provision of this Agreement, the Corporation hereby agrees to
indemnify the Indemnitee to the full extent permitted by law, whether or not such indemnification
is specifically authorized by the other provisions of this Agreement, the Corporation’s Certificate
of Incorporation, the Bylaws, or by statute. In the event of any changes, after the date of this
Agreement, in any applicable law, statute, or rule which expand the right of a Delaware corporation
to indemnify a member of its board of directors or any officer, such changes shall be, ipso
facto, within the purview of Indemnitee’s rights, and Corporation’s obligations, under this
Agreement. In the event of any changes in any applicable law, statute, or rule which narrow the
right of a Delaware corporation to indemnify a member of its board of directors or any officer,
such changes, to the extent not otherwise required by such law, statute or rule to be applied to
this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations
hereunder.
(b) The indemnification provided by this Agreement shall not be deemed exclusive of any other
rights to which Indemnitee may be entitled under the Certificate of Incorporation, the Bylaws, any
agreement, any vote of shareholders or disinterested directors, the laws of the State of Delaware,
or otherwise, both as to action in his or her official capacity and as to action in another
capacity while holding such office.
10. Partial Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Corporation for some or a portion of the Expenses, judgments,
fines or penalties actually and reasonably incurred by him or her in the investigation,
defence, appeal or settlement of any Proceeding but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of such Expenses,
judgments, fines or penalties to which Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defence of any or all claims, issues or matters relating in whole or in part to an
indemnifiable event, occurrence or matter hereunder, including dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in connection with such defences.
11. Effect of Federal Law. Both the Company and the Indemnitee acknowledge that in
certain instances, federal law will override Delaware law and prohibit the Corporation from
indemnifying its offices and directors. For example, the Corporation and Indemnitee acknowledge
that the Securities and Exchange Commission has taken the position that indemnification is not
permissible for liabilities arising under certain federal securities law, and federal law prohibits
indemnification for certain violations of the Employee Retirement Income Security Act.
12. Liability Insurance.
(a) The Corporation shall from time to time make the good faith determination whether or not
it is practicable for the Corporation to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors with coverage for losses from
wrongful acts, or to ensure the Corporation’s performance of its indemnification obligations under
this Agreement. Among other considerations, the Corporation will weigh the costs of obtaining such
insurance against the protection afforded by such coverage.
(b) Indemnitee hereby releases the Corporation and its respective authorized representatives
from any claims for indemnification hereunder if and to the extent that Indemnitee receives
proceeds from any liability insurance policy or other third-party source in payment or
reimbursement for such claims. Indemnitee hereby agrees to assign all proceeds Indemnitee receives
under any such insurance policy or third-party agreement to the extent of the amount of
indemnification made to Indemnitee under the terms of this Agreement. Finally, Indemnitee shall
cause each insurance policy or other third-party agreement by which the Indemnitee may be entitled
to payment or reimbursement to provide that the insurance company or the third-party agreement by
which the Indemnitee may be entitled to payment or reimbursement to provide that the insurance
company or the third party waives all right of recovery by way of subrogation against the
Corporation in connection with any claim for indemnification under this Agreement. If such waiver
of subrogation cannot be obtained except with the payment of additional sums in premiums or
otherwise, the Indemnitee shall notify the Corporation of this fact. The Corporation shall then
have ten (10) days after receiving such notice to agree to pay such additional sums. If a waiver
of subrogation rights is not obtainable at any price or if the Corporation shall fail to agree to
pay such additional sums, Indemnitee shall be relieved of the obligation to obtain the waiver of
subrogation rights with respect to any particular insurance policy or third-party agreement.
13. Saving Clause. Nothing in this Agreement is intended to require or shall be
construed as requiring the Corporation to do or fail to do any act in violation of applicable law.
The provisions of this Agreement (including any provision within a single section, paragraph or
sentence) shall be severable in accordance with this Section 13. If this Agreement or any portion
thereof shall be invalidated on any ground by any court of competent jurisdiction, the Corporation
shall nevertheless indemnify Indemnitee as to Expenses, judgments, fines and penalties with respect
to any Proceeding to the full extent permitted by any applicable portion of this agreement that
shall not have been invalidated or by any other applicable law, and this Agreement shall remain
enforceable to the fullest extent permitted by law.
14. Notice. Indemnitee shall, as a condition precedent to his or her right to be
indemnified under this Agreement, give to the Corporation notice in writing as soon as practicable
of any claim made against him or her for which indemnity will or could be sought under this
Agreement. Notice to the Corporation shall be directed to 000 Xxxxxxxx Xxxx, Xxxxx Xxxxxxxx,
Xxxxxxxx 0000, Xxxxxxxxx Attention: Chairman (or such other address as the Corporation shall
designate in writing to Indemnitee), together with a copy thereof to PFM Legal, XX Xxx X00, XXX
Xxxx, Xxxxxx XXX 0000, Xxxxxxxxx. All notices, requests, demands and other communications shall be
deemed received three days after the date postmarked if (i) delivered by hand and receipted for by
the party to whom such notice or other communication shall have been directed, or (ii) sent by
prepaid mail, properly addressed. In addition, Indemnitee shall give the Corporation such
information and cooperation as it may reasonably require and shall be within Indemnitee’s power.
15. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall constitute the original.
16. Applicable Law. This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Delaware without giving effect to its rules of conflicts
of laws.
17. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties and their respective successors and assigns (including
any direct or indirect successors by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Corporation), spouses, heirs, and personal
and legal representatives. The Corporation shall require and cause any successor (whether direct
or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a
substantial part, of the business and/or assets of the Corporation, by written agreement in form
and substance satisfactory to the Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Corporation would be required to
perform if no such succession had taken place. This Agreement shall continue in effect regardless
of whether Indemnitee continues to serve as a director and/or officer of the Corporation or of any
other enterprise at the Corporation’s request.
18. Attorneys’ Fees. In the event of an action instituted by or in the name of the
Corporation under this Agreement to enforce or interpret any of the terms of this Agreement,
Indemnitee shall be entitled to be paid all court costs and expenses, including attorneys’ fees and
disbursements, incurred by Indemnitee in defence of such action (including with respect to
Indemnitee’s counterclaims and cross claims made in such action), unless as a part of such action
the court determines that each of Indemnitee’s material defences to such action were made in bad
faith or were frivolous..
19. Whole Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes, as of the date of this Agreement, all prior negotiations, representations
or agreements, either written or oral, including, without limitation, any previous deeds of
indemnity with the Corporation or its subsidiaries, with respect to the subject matter hereof
20. Subsequent Instruments and Acts. The parties hereto agree that they will execute
any further instrument and perform any acts that may become necessary from time to time to carry
out the terms of this Agreement.
21. Limitations Period. No legal action shall be brought and no cause of action shall
be asserted by or in the right of the Corporation or any affiliate of the Corporation against
Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of action, and any claim or cause of
action of the Corporation or its affiliates shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such two-year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any such cause of action such
shorter period shall govern.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be duly executed and
signed as of the day and year first above written.
| Universal Biosensors, Inc. | ||||
| a Delaware corporation | ||||
| By: | ||||
| Authorized Officer: | ||||
| INDEMNITEE: | ||
| Printed Name: [Executive name] |
