INDEMNIFICATION AGREEMENT
Exhibit 10.36
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of ,
200___ between Cornerstone BioPharma Holdings, Inc., a Delaware corporation (the “Company”), and
(“Indemnitee”).
RECITALS
WHEREAS, the Company desires to attract and retain highly qualified individuals, such as
Indemnitee, to serve the Company; and
WHEREAS, highly competent persons have become more reluctant to serve corporations as
directors 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; and
WHEREAS, the Company and Indemnitee recognize the significant risk of claims and actions
against a director that may arise from such director’s services to and activities on behalf of the
Company; and
WHEREAS, the Company and Indemnitee recognize that 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; and
WHEREAS, the Company and Indemnitee further recognize that although the Company may also
maintain liability insurance for the Company’s officers and directors, such insurance often
provides for coverage of limited scope, and that competent and experienced persons are often unable
or unwilling to serve as officers or directors unless they are protected by comprehensive liability
insurance or indemnification; and
WHEREAS, the Company and Indemnitee recognize that Indemnitee may be entitled to
indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”) which
expressly provides that the indemnification provisions set forth therein are not exclusive, and
thereby contemplates that contracts may be entered into between the Company and members of the
board of directors of the Company (the “Board”), officers and other persons with respect to
indemnification; and
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons; and
WHEREAS, 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; and
WHEREAS, 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; and
WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws of the Company 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
WHEREAS, Indemnitee does not regard the protection available under the Company’s Bylaws and
insurance as adequate in the present circumstances, and may not be willing to serve as a director
without adequate protection, and the Company desires Indemnitee to serve in such capacity; and
WHEREAS, 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.
AGREEMENT
NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve or continue to serve as an
officer or director of the Company after the date hereof, the parties hereto agree as follows.
1. Indemnity of Indemnitee. The Company 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, the
Company agrees as follows.
(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 hereinafter defined), the Indemnitee is, or is threatened to be
made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding
by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be
indemnified against all Expenses (as hereinafter defined), 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 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
Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the
Indemnitee’s conduct was unlawful. Indemnitee shall not enter into any settlement in connection
with a Proceeding without ten (10) days prior notice to the Company.
(b) Proceedings by or in the Right of the Company. Indemnitee shall 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 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
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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 Court of Chancery of the State of Delaware 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 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 on his 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 Company shall 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 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. Contribution.
(a) Whether or not the indemnification provided in Section 1 hereof 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 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 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, 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 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, in connection with the events that resulted in such expenses,
judgments, fines or settlement amounts, as well as any other equitable considerations which
applicable 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, 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.
(b) 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.
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3. 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.
4. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the
Company 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 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. 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 4
shall be unsecured and interest free. Notwithstanding the foregoing, the obligation of the Company
to advance Expenses pursuant to this Section 4 shall be subject to the condition that, if,
when and to the extent that the Company determines that Indemnitee would not be permitted to be
indemnified under applicable law, the Company shall be entitled to be reimbursed, within thirty
(30) days of such determination, by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any determination made by the Company that
Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any advance of Expenses until a final
judicial determination is made with respect thereto (and as to which all rights of appeal therefrom
have been exhausted or lapsed). If it is finally judicially determined that Indemnitee is not
entitled to be indemnified, then the amount required to repay Expenses shall bear interest at the
prime rate of interest of Bank of America, N.A. as of the date of such final judicial determination
plus three percent (3.0%) from the date such Expenses were advanced until paid.
5. 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 Delaware. 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 Company 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 Company shall, promptly upon
receipt of such a request for indemnification, advise the Board in writing that Indemnitee has
requested indemnification. Any failure of Indemnitee to provide such notice to the Company shall
not, however, relieve the Company of any liability or obligation which it may have to Indemnitee
under this Agreement or otherwise unless and only to the extent such failure actually causes an
adverse impact on the Company.
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(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 5(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 four
methods, which shall be at the election of the Board of the Company: (i) by a majority vote of the
Disinterested Directors (as defined in Section 12 below), even though less than a quorum;
(ii) by a committee of Disinterested Directors designated by a majority vote of the Disinterested
Directors, even though less than a quorum; (iii) by Independent Counsel (as defined in Section
12 below) in a written opinion to the Board, a copy of which shall be delivered to the
Indemnitee, if (A) there are no Disinterested Directors or if the Disinterested Directors so
direct, or (B) a Change of Control (as hereinafter defined) shall have occurred and Indemnitee so
requests; or (iv) if so directed by the Board, by the stockholders of the Company.
(c) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 5(b) hereof, the Independent Counsel shall be selected as
provided in this Section 5(c). The Independent Counsel shall be selected by the Board, but
only an Independent Counsel to which Indemnitee does not reasonably object. Within ten (10) days
after such written notice of selection shall have been given, the Indemnitee shall deliver to the
Company, 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 12 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 twenty (20) days after submission by Indemnitee of a written request
for indemnification pursuant to Section 5(a) hereof, no Independent Counsel shall have been
selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery
of the State of Delaware or other court of competent jurisdiction for resolution of any objection
which shall 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 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 5(b)
hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel
incurred by such Independent Counsel in connection with acting pursuant to Section 5(b)
hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of
this Section 5(c), regardless of the manner in which such Independent Counsel was selected
or appointed.
(d) For purposes of this Section 5, “Change in Control” means a change in control of
the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), whether or not the corporation is then subject to such reporting requirement;
provided that, without limitation, such a Change in Control shall be deemed to have occurred if (i)
any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 25% or more of the combined voting power of the Company’s
then outstanding securities without the prior approval of at least
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a majority of the members of the Board in office immediately prior to such acquisition; (ii)
the Company is a party to a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board in office immediately prior to such
transaction or event constitute less than a majority of the Board thereafter; or (iii) during any
period of two consecutive years, individuals who at the beginning of such period constituted the
Board (including for this purpose any new director whose election or nomination for election by the
Company’s stockholders was approved by a vote of at least a majority of the directors then still in
office who were directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board.
(e) 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 Company (including by its directors or Independent 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 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.
(f) 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 (as defined in Section 12 below),
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.
(g) If the person, persons or entity empowered or selected under Section 5 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 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 5(g) shall
not apply if the determination of entitlement to indemnification is to be made by the stockholders
pursuant to Section 5(b) of this Agreement and if (A) within fifteen (15) days after
receipt by the Company of the request for such determination, the Board or the Disinterested
Directors, if
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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.
(h) 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 of
Directors or stockholder of the Company 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
Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and
the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(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.
6. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 5 of this
Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 4 of this Agreement, (iii) no
determination of entitlement to indemnification is made pursuant to Section 5(b) of this
Agreement within ninety (90) days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to this Agreement within twenty (20) days
after receipt by the Company of a written request therefor or (v) payment of indemnification is not
made within twenty (20) 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 5 of
this Agreement, Indemnitee shall be entitled to an adjudication of Indemnitee’s entitlement to such
indemnification either in an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction. 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 6(a). The Company shall not oppose Indemnitee’s right to seek any
such adjudication.
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(b) In the event that a determination shall have been made pursuant to Section 5(b) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding
commenced pursuant to this Section 6 shall be conducted in all respects as a de novo trial
on the merits Indemnitee shall not be prejudiced by reason of the adverse determination under
Section 5(b).
(c) If a determination shall have been made pursuant to Section 5(b) of this Agreement
that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in
any judicial proceeding commenced pursuant to this Section 6, 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 6, 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 shall pay on his behalf, in advance, any and all expenses (of the types described in
the definition of Expenses in Section 12 of this Agreement) actually and reasonably
incurred by him in such judicial adjudication if Indemnitee ultimately is determined to be entitled
to such indemnification, advancement of expenses or insurance recovery.
(e) The Company and the Indemnitee shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 6 that the procedures and presumptions of
this Agreement are not valid, binding and enforceable and shall stipulate in any such court that
the Company and the Indemnitee are bound by all the provisions of this Agreement.
(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.
7. 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 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 such
amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or
judicial 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.
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(b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or
of any other Enterprise that such person serves at the request of the Company, 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
Company has director and officer liability insurance in effect, the Company 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 Company shall thereafter take all commercially reasonable
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 Company 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 Company to bring suit to enforce such rights.
(d) The Company 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 Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company as a director, officer, employee or agent of any other
Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or
advancement of expenses from such other Enterprise.
8. Exception to Right of Indemnification. Notwithstanding any provision in this
Agreement, the Company shall 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;
(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 Exchange Act, 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 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.
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9. Duration of Agreement. All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is a director of the Company (or is or was
serving at the request of the Company as a director, officer, employee or agent of another
Enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding
(or any proceeding commenced under Section 6 hereof) 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 shall 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 Company),
assigns, spouses, heirs, executors and personal and legal representatives.
10. Security. To the extent requested by Indemnitee and approved by the Board of the
Company, the Company may at any time and from time to time provide security to Indemnitee for the
Company’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 Indemnitee.
11. 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 or continue to
serve as a director of the Company, and the Company acknowledges that Indemnitee is relying upon
this Agreement in serving as a director of the Company.
(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.
12. Definitions. The following terms have the following definitions for purposes of
this Agreement.
(a) “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 Enterprise that such person is or was
serving at the express written request of the Company.
(b) “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.
(c) “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 a director, officer, employee, agent or fiduciary.
(d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing
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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.
(e) “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 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 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 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 hereto.
(f) “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 a
director of the Company, by reason of any action taken by him or of any inaction on his part while
acting a 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 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 6 of this Agreement to enforce his rights under this Agreement.
13. 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.
14. 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
11
a waiver of any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
15. 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 hereunder. The failure to so notify the Company shall not relieve the
Company 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 actually causes an adverse impact on the Company.
16. Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (1) upon personal delivery to
the party to be notified, (2) 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, (3)
five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (4) 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:
(a) to Indemnitee at the address set forth below Indemnitee signature hereto; or
(b) to the Company at:
Cornerstone BioPharma, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxx, XX 00000
Attention: Chief Executive Officer
0000 Xxxxxxx Xxxxxxx
Xxxx, XX 00000
Attention: Chief Executive Officer
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.
17. 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.
18. 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.
19. 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 Delaware, without regard to its conflict of laws rules. The Company and Indemnitee
hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in
connection with this Agreement shall be brought only in the Chancery Court
12
of the State of Delaware (the “Delaware Court”), and not in any other state or federal court
in the United States of America or any court in any other country, (b) consent to submit to the
exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out
of or in connection with this Agreement, (c) waive any objection to the laying of venue of any such
action or proceeding in the Delaware Court, and (d) waive, and agree not to plead or to make, any
claim that any such action or proceeding brought in the Delaware Court has been brought in an
improper or inconvenient forum.
[The next page is the signature page.]
13
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as
of the day and year first above written.
| COMPANY: | Cornerstone BioPharma, Inc. | |||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
INDEMNITEE: |
||||||
| (Printed or Typed Name) | ||||||
| (Signature) | ||||||
| Address: | ||||||
