EX-10.1 FORM OF INDEMNIFICATION AGREEMENT

 

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                                                                    EXHIBIT 10.1

 

                    INDEMNIFICATION AND ADVANCEMENT AGREEMENT

 

      THIS INDEMNIFICATION AGREEMENT is made as of September __, 2005 by and

between Emisphere Technologies, Inc., a Delaware corporation (the "Company"),

and ____________ ("Indemnitee").

 

                                    RECITALS:

 

      WHEREAS, directors, officers, and other persons in service to corporations

or business enterprises are being increasingly subjected to expensive and

time-consuming litigation relating to claims that traditionally would have been

brought only against the business enterprise itself; and

 

      WHEREAS, highly competent persons have become more reluctant to serve as

directors or in other capacities unless they are provided with adequate

protection through insurance or adequate indemnification against inordinate

risks of claims against them arising out of their service; and

 

      WHEREAS, the Certificate of Incorporation and Bylaws of the Company

provide rights of advancement and indemnification of the officers and directors

of the Company and Indemnitee may also be entitled to advancement and

indemnification pursuant to the Delaware General Corporation Law ("DGCL"), but

the Bylaws and the DGCL expressly provide that the advancement and

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 and officers with respect to advancement and

indemnification of directors and officers; 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 indemnification

protection; and

 

      WHEREAS, it is in the best interests 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; and

 

      WHEREAS, it is in the best interests of the Company to obtain Indemnitee's

agreement to cooperate in any future litigation, investigation or proceedings;

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 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 the premises and the covenants

contained herein, and for good and valuable consideration, the receipt and

sufficiency of which is acknowledged, the Company and Indemnitee do hereby

covenant and agree as follows:

 

      SECTION 1. DEFINITIONS. As used in this Agreement:

 

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      "Beneficial Owner" shall have the meaning given to such term in Rule 13d-3

under the Exchange Act; provided, however, that Beneficial Owner shall exclude

any Person otherwise becoming a Beneficial Owner by reason of the shareholders

of the Company approving a merger of the Company with another entity.

 

      "Board" means the Board of Directors of the Company.

 

      "Change of Control" has the meaning specified in Section 15.

 

      "Covered Enterprise" means the Company and any other corporation,

partnership, limited liability company, joint venture, trust, employee benefit

plan or other enterprise of which Indemnitee is or was serving at the request of

the Company as a director, officer, manager, employee, agent or fiduciary.

 

      "Corporate Status" describes the status of a person who is or was a

director, officer, manager, employee, agent or fiduciary of the Company or of

any other Covered Enterprise.

 

      "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.

 

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

 

      "Expenses" shall include all reasonable attorneys' fees, retainers, court

costs, transcript costs, fees of experts, witness fees, travel expenses,

duplicating costs, printing and binding costs, telephone charges, postage,

delivery service fees, and all other disbursements or expenses of the types

customarily incurred in connection with prosecuting, defending, preparing to

prosecute or defend, investigating, being or preparing to be a witness in, or

otherwise participating in, a Proceeding. However, Expenses shall not include

amounts paid in settlement by Indemnitee or the amount of judgments or fines

against Indemnitee.

 

      "Good Faith" means as to the Indemnitee, Indemnitee having acted in good

faith and in a manner Indemnitee reasonably believed to be in or not opposed to

the best interests of the Company, and with respect to any criminal Proceeding,

having had no reasonable cause to believe Indemnitee's conduct was unlawful.

With respect to actions related to an employee benefit plan, a person who acted

in good faith and in a manner he reasonably believed to be in the best interests

of the participants and beneficiaries of an employee benefit plan shall be

deemed to have acted in manner "not opposed to the best interests of the

Company" as referred to in this Agreement.

 

      "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 to make the

determination of entitlement under Section 11(a) or a similar determination as

to 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 and expenses

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.

 

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      "Person", for purposes of the Change of Control provisions of Section 15

hereof, shall have the meaning as set forth in Sections 13(d) and 14(d) of the

Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii)

any trustee or other fiduciary holding securities under an employee benefit plan

of the Company, and (iii) any corporation owned, directly or indirectly, by the

shareholders of the Company in substantially the same proportions as their

ownership of stock of the Company.

 

      "Proceeding" includes any threatened, pending or completed action, suit,

arbitration, alternate dispute resolution process, investigation, inquiry,

administrative hearing or other proceeding, whether brought in the right of the

Company or otherwise and whether of a civil, criminal, administrative or

investigative nature, in which Indemnitee was, is or will be involved as a party

or otherwise (i) by reason of the fact that Indemnitee is or was a director or

officer of the Company, (ii) by reason of any action taken, approved or

permitted by him while acting as director or officer of the Company, (iii) by

reason of the fact that he is or was serving at the request of the Company as a

director, officer, manager, employee, agent or fiduciary of another Covered

Enterprise, or (iv) by reason of any action taken, approved or permitted by him

while acting as a director, officer, manager, employee, agent or fiduciary of

another Covered Enterprise, in each case whether or not serving in such capacity

at the time any liability or expense is incurred for which indemnification,

reimbursement, or advancement of expenses can be provided under this Agreement.

 

      SECTION 2. SERVICES TO THE COMPANY. Indemnitee will serve as a director or

officer of the Company for so long as Indemnitee is duly elected or appointed or

until Indemnitee earlier submits his resignation or is removed from office in

accordance with the Bylaws. In addition, following the termination of

Indemnitee's service as a director, Indemnitee agrees to reasonably cooperate

with the Company, at the Company's expense, in connection with its defense or

prosecution of any proceedings, including submitting affidavits, meeting with

Company counsel, or appearing as a testifying witness, at such times, and at

such places, that are reasonably convenient to the Indemnitee. Indemnitee

further agrees to not cooperate with, or providing assistance to, any third

party in an proceeding against the Company, its officers and directors involving

any past, present or future claims that such third party may have against the

Company, its officers or directors relating to any matter involving the Company

occurring prior to or in connection with the termination of Indemnitee's service

as a director, other than to comply with a court order, a subpoena or other

legal or regulatory obligation.

 

      SECTION 3. INDEMNITY IN THIRD-PARTY PROCEEDINGS. The Company shall

indemnify Indemnitee if Indemnitee is, or is threatened to be made, a party to

or a participant in any Proceeding, other than a Proceeding by or in the right

of the Company to procure a judgment in its favor. Pursuant to this Section,

Indemnitee shall be indemnified against all Expenses, judgments, fines and

amounts paid in settlement actually and reasonably incurred by Indemnitee or on

his behalf in connection with such Proceeding, or any claim, issue or matter

therein, if Indemnitee acted in Good Faith.

 

      SECTION 4. INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The

Company shall indemnify Indemnitee in accordance with the provisions of this

Section if Indemnitee is, or is threatened to be made, a party to or a

participant in any Proceeding by or in the right of the Company to procure a

judgment in its favor. Pursuant to this Section, Indemnitee shall be indemnified

against all Expenses actually and reasonably incurred by him or on his behalf in

connection with such Proceeding, or any claim, issue or matter therein, if

Indemnitee acted in Good Faith. No indemnification for Expenses shall be made

under this Section in respect of any claim, issue or matter as to which

Indemnitee shall have been finally adjudged by a court to be liable to the

Company, unless and only to the extent that any court in which the Proceeding

was brought or the Court of Chancery of the State of Delaware (the "Delaware

Court") 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 indemnification.

 

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      SECTION 5. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY

SUCCESSFUL. Notwithstanding any other provisions of this Agreement, to the

extent that Indemnitee is a party to (or a participant in) and is successful, on

the merits or otherwise, in any Proceeding or in defense of any claim, issue or

matter therein, in whole or in part, the Company shall indemnify Indemnitee

against all Expenses actually and reasonably incurred by him 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.

If the Indemnitee is not wholly successful in such Proceeding, the Company also

shall indemnify Indemnitee against all Expenses reasonably incurred in

connection with a claim, issue or matter related to any claim, issue, or matter

on which the Indemnitee was successful. 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.

 

      SECTION 6. 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.

 

      SECTION 7. INTENDED SCOPE OF INDEMNIFICATION.

 

            (a) Notwithstanding any limitation in Sections 3, 4, or 5, the

Company shall indemnify Indemnitee to the fullest extent permitted by law if

Indemnitee is a party to or threatened to be made a party to any Proceeding

(including a Proceeding by or in the right of the Company to procure a judgment

in its favor) against all Expenses, judgments, fines and amounts paid in

settlement actually and reasonably incurred by Indemnitee in connection with the

Proceeding. For purposes of the foregoing, the meaning of the phrase "to the

fullest extent permitted by law" shall include, but not be limited to:

 

            (i) to the fullest extent permitted by the provision of the DGCL

      that authorizes or contemplates additional indemnification by agreement,

      or the corresponding provision of any amendment to or replacement of the

      DGCL; and

 

            (ii) to the fullest extent authorized or permitted by any amendments

      to or replacements of the DGCL adopted after the date of this Agreement

      that increase the extent to which a corporation may indemnify its officers

      and directors.

 

            (b) In the interpretation of Sections 3, 4 and 5, references to

"fines" shall include any excise tax assessed with respect to any employee

benefit plan.

 

      SECTION 8. EXCLUSIONS. 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 (including

any provision of the Company's charter or Bylaws), except with respect to any

excess beyond the amount paid under any such insurance policy or other indemnity

provision; or

 

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            (b) for the amount of any 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) for the amount of any bonus or other incentive-based or

equity-based compensation or for any profits from the sale of securities which

Indemnitee is required to disgorge pursuant to Section 304 of the Sarbanes-Oxley

Act of 2002.

 

      SECTION 9. ADVANCES OF EXPENSES. Notwithstanding any provision of this

Agreement to the contrary, the Company shall advance the Expenses incurred by

Indemnitee in connection with any Proceeding within 30 days after the receipt by

the Company of a statement or statements requesting such advances from time to

time, whether prior to or after final disposition of any Proceeding. Advances

shall be unsecured and interest free. Advances shall be made without regard to

Indemnitee's ability to repay the Expenses. Advances shall include any and all

reasonable Expenses incurred by or on behalf of Indemnitee pursuing an action to

enforce this right of advancement, including Expenses incurred preparing and

forwarding statements to the Company to support the advances claimed. The

Indemnitee shall be entitled to advances solely upon the execution and delivery

to the Company of an undertaking providing that the Indemnitee undertakes to

repay the advance to the extent that it is ultimately determined that Indemnitee

is not entitled to be indemnified by the Company.

 

      SECTION 10. PROCEDURE FOR NOTIFICATION AND DEFENSE OF CLAIM. To obtain

advancement or indemnification under this Agreement, Indemnitee shall submit to

the Company a written request, including 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 advancement or

indemnification, not later than 30 days after receipt by Indemnitee of notice of

the commencement of any Proceeding. The omission to notify the Company will not

relieve the Company from any liability which it may have to Indemnitee otherwise

than under this Agreement. 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.

 

      SECTION 11. PROCEDURE UPON APPLICATION FOR INDEM