EX-10.2 INDEMNIFICATION AGREEMENT

 

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                                                                    EXHIBIT 10.2

 

                    INDEMNIFICATION AND ADVANCEMENT AGREEMENT

 

      THIS INDEMNIFICATION AND ADVANCEMENT AGREEMENT is made as of September 23,

2005 by and between EMISPHERE TECHNOLOGIES, INC., a Delaware corporation (the

"Company"), and Robert J. Levenson ("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, 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 Indemnitee is considering resigning from the Board of

Directors and seeks a clearer statement as to his rights to indemnity; and

 

      WHEREAS, it is in the best interests of 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; 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

 

      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:

 

      "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

 

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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 14.

 

      "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 10(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,

 

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liabilities and damages arising out of or relating to this Agreement or its

engagement pursuant hereto.

 

      "Person", for purposes of the Change of Control provisions of Section 14

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 by reason of any of the following: (i) the fact that Indemnitee is

or was a director or officer of the Company, (ii) any action taken, approved or

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

cooperate with the Company, at the Company's expense, in connection with its

defense or prosecution of any proceeding, 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 any 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 Indemnitee's resignation 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

 

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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.

 

      SECTION 5. 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 6. INTENDED SCOPE OF INDEMNIFICATION.

 

            (a) Notwithstanding any limitation in Sections 3 or 4, 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 or 4, references to "fines"

shall include any excise tax assessed with respect to any employee benefit plan.

 

      SECTION 7. 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

 

            (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

 

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             (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 8. 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 9. PROCEDURE FOR NOTIFICATION AND DEFENSE OF CLAIM.

 

            (a) 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 60 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.

 

            (b) Indemnitee shall have the right to select counsel of his choice,

and the Company waives any right to object to that selection on any grounds.

 

      SECTION 10. PROCEDURE UPON APPLICATION FOR INDEMNIFICATION.

 

            (a) Upon written request by Indemnitee for indemnification pursuant

to the first sentence of Section 9(a), a determination, if required by

applicable law, with respect to Indemnitee's entitlement thereto shall be made

in the specific case: (i) if a Change in Control shall have occurred, by

Independent Counsel in a written opinion to the Board of Directors, a copy of

which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not

have occurred, (A) by a majority vote of the Disinterested Directors, even

though less than a quorum of the Board, or (B) by a committee of Disinterested

Directors designated by the Disinterested Directors, even though less than a

quorum, (C) if there are no such Disinterested Directors or, if such

Disinterested Directors so direct, by Independent Counsel in a written opinion

to the Board, a copy of which shall be delivered to Indemnitee or (D) if so

directed by the Board, by the stockholders of the Company; and, if it is so

determined that Indemnitee is entitled to indemnification, payment to Indemnitee

shall be made within 10 days after such determination. Indemnitee shall

cooperate with the person making such determination with respect to

 

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Indemnitee's entitlement to indemnification, including providing to such person

upon reasonable advance request any documentation or information wh