Exhibit 10.1
FORM OF INDEMNIFICATION AGREEMENT
This
Indemnification Agreement (this “Agreement”) is made as
of ________ __, 2009 by and between Endo Pharmaceuticals Holdings
Inc., a Delaware corporation (the “Company”), and
______________ (“Indemnitee”). This
Agreement supersedes and replaces any and all previous agreements
between the Company and Indemnitee covering the subject matter of
this Agreement.
RECITALS
WHEREAS, it is
essential to the Company to retain and attract as directors and
officers the most capable persons available;
WHEREAS, capable
persons have become more reluctant to serve publicly-held
corporations as directors, officers or in other capacities unless
they are provided with adequate protection through insurance or
adequate indemnification against inordinate risks of claims and
actions against them arising out of their service to and activities
on behalf of the Company;
WHEREAS, Indemnitee
is a director of the Company’s Board of Directors (the
“Board”) and/or an officer of the Company;
WHEREAS, both the
Company and Indemnitee recognize the increased risk of litigation
and other claims being asserted against directors and officers of
publicly-held corporations in today’s environment and the
need for substantial protection against personal liability in order
to enhance Indemnitee’s continued service to the Company in
an effective manner;
WHEREAS, the
Company has determined that its inability to retain and attract as
directors and officers the most capable persons would be
detrimental to the interests of the Company, and that the Company
therefore should seek to assure such persons that indemnification
and insurance coverage will be available in the future;
WHEREAS, the
Company’s Amended and Restated Certificate of Incorporation
and Amended and Restated By-Laws (collectively, the “Charter
Documents”) require the Company to indemnify and advance
Expenses (as defined below) to its directors and officers to the
extent provided therein, and Indemnitee serves as a director and/or
officer of the Company, in part, in reliance on such provisions in
the Charter Documents; and
WHEREAS, in
recognition of Indemnitee’s need for substantial protection
against personal liability in order to enhance Indemnitee’s
continued service to the Company in an effective manner and
Indemnitee’s reliance on the Charter Documents, and in part
to provide Indemnitee with specific contractual assurance that the
protection promised by the Charter Documents will be available to
Indemnitee (regardless of, among other things, any amendment to or
revocation of the applicable provisions of the Charter Documents or
any change in the composition of the governing bodies of the
Company or any acquisition transaction relating to the Company),
the Company wishes to provide in this Agreement for the
indemnification of and the advancing of Expenses (as defined below)
to Indemnitee to the fullest extent (whether partial or complete)
permitted by law and as set forth in this Agreement, and, to the
extent insurance is
maintained, for the continued coverage of
Indemnitee under the directors’ and officers’ liability
insurance policy of the Company.
NOW, THEREFORE, in
consideration of the premises and the covenants contained herein,
and of Indemnitee continuing to serve the Company, the Company and
Indemnitee do hereby covenant and agree as follows:
Section 1.
Definitions . As used in this
Agreement:
(a)
“Corporate Status” shall mean the status
of a person who is or was a director, officer, employee, trustee,
agent or fiduciary of the Company or of any other corporation,
limited liability company, partnership or joint venture, trust,
employee benefit plan or other enterprise which such person is or
was serving at the request of the Company.
(b)
“Change in Control” shall be deemed to
occur if and when: (i) any person (including
as such term is used in Sections 13(d) and 14(d)(2) of the 1934 Act
(as defined below)) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act (as
defined below)), directly or indirectly, of securities representing
25% or more of the combined voting power of the Company’s
then outstanding securities (not including in the securities
beneficially owned by such person any securities acquired directly
from the Company), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, a
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company, or any Person who becomes such a
beneficial owner in connection with a transaction described in
clause (A) of paragraph (iii) below; or (ii) during any period of
two consecutive years, individuals who at the beginning of such
period constitute the Board and any new director whose election by
the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof; or (iii) the Company’s
shareholders approve a merger, or consolidation other than a merger
or consolidation, (A) which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 50% of the
total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation, or (B) effected to implement a
recapitalization of the Company (or similar transaction) in which
no person is or becomes the “beneficial owner,”
directly or indirectly, of securities representing 25% or more of
the combined voting power of the Company’s then outstanding
securities (not including in the securities beneficially owned by
such person any securities acquired directly from the Company); or
(iv) the Company’s shareholders approve a sale or disposition
of all or substantially all of the Company’s assets (in one
transaction or a series of transactions) or a plan or partial or
complete liquidation, other than a sale or
disposition by the Company of all or substantially all of the
Company’s assets to an entity at least 75% of the combined
voting power of the voting securities of which are owned by persons
in substantially the same proportions as their ownership of the
Company immediately prior to such sale or
disposition. “1934 Act” means the Securities
and Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder.
(c)
“Disinterested Director” shall mean a
director of the Company who is not and was not a party to the
Proceeding (as defined below) in respect of which indemnification
is sought by Indemnitee.
(d)
“Enterprise” shall mean the Company and
any other corporation, limited liability company, partnership,
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, employee, trustee, agent or
fiduciary.
(e)
“Expenses” shall mean all expenses and
liabilities, including judgments, fines, penalties, interest,
amounts paid in settlement with the approval of the Company,
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, any federal, state, local, foreign
or other taxes imposed on Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement, penalties
arising from breaches of Part 4 of Title I of ERISA and related
taxes under the United States Internal Revenue Code of 1986, as
amended, 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. Expenses also shall include (i) 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, supersedeas bond, or
other appeal bond or its equivalent, and (ii) Expenses incurred by
Indemnitee in connection with the interpretation, enforcement
or defense of Indemnitee’s rights under this Agreement, by
litigation or otherwise. The parties agree that for the
purposes of any advancement of Expenses for which Indemnitee has
made written demand to the Company in accordance with this
Agreement, all Expenses included in such demand that are certified
by affidavit of Indemnitee’s counsel as being reasonable
shall be presumed conclusively to be reasonable.
(f)
“Independent Counsel” shall mean 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 three (3)
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 and expenses of the
Independent Counsel 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.
(g)
“Proceeding” shall mean any threatened,
asserted, pending or completed action, suit, arbitration, alternate
dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed
proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal,
administrative
legislative, or
investigative (formal or informal) nature, including any appeal
therefrom, in which Indemnitee was, is or will be involved as a
party, potential party, non-party witness or otherwise by reason of
the fact that Indemnitee is or was a director, officer, employee,
trustee, agent or fiduciary of an Enterprise, or by reason of
anything done or not done by Indemnitee in any such capacity, by
reason of any action taken by him/her or of any action on his/her
part while acting pursuant to his/her Corporate Status, 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. If Indemnitee reasonably believes in
good faith that a given situation may lead to or culminate in the
institution of a Proceeding, such situation shall be considered a
Proceeding under this paragraph.
(h)
“Reviewing Party” shall mean any
appropriate person or body consisting of a member or members of the
Board or any other person or body appointed by the Board who is not
a party to the particular Proceeding for which Indemnitee is
seeking indemnification, or Independent Counsel.
Section 2.
Indemnity in
Third-Party Proceedings . The Company shall
indemnify Indemnitee in accordance with the provisions of this
Section 2 if Indemnitee was, is, or is threatened to be made, a
party to, a witness or other 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 2,
Indemnitee shall be indemnified to the fullest extent permitted by
applicable law, as soon as practicable but in any event no later
than thirty (30) days after written demand is presented to the
Company, against all Expenses (including all interest, assessments
and other charges paid or payable in connection with or in respect
of such Expenses) actually and reasonably incurred by Indemnitee or
on his/her behalf in connection with such Proceeding or any claim,
issue or matter therein, if Indemnitee acted in good faith and in a
manner he/she reasonably believed to be in or not opposed to the
best interests of the Company and, in the case of a criminal
proceeding had no reasonable cause to believe that his/her conduct
was unlawful. No change in applicable law shall have the
effect of reducing the benefits available to Indemnitee
hereunder.
Section 3.
Indemnity in
Proceedings by or in the Right of the Company . The
Company shall indemnify Indemnitee in accordance with the
provisions of this Section 3 if Indemnitee was, is, or is
threatened to be made, a party to, a witness or other participant
in any Proceeding by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 3,
Indemnitee shall be indemnified to the fullest extent permitted by
applicable law, as soon as practicable but in any event no later
than thirty (30) days after written demand is presented to the
Company, against all Expenses actually and reasonably incurred by
him/her or on his/her behalf in connection with such Proceeding or
any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner he/she reasonably believed to be in or not
opposed to the best interests of the Company. No
indemnification for Expenses shall be made under this Section 3 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 the Delaware Court of Chancery
or any court in which the 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 entitled
to indemnification. No change in applicable law shall
have the effect of reducing the benefits available to Indemnitee
hereunder.
Section 4.
Indemnification for
Expenses of a Party Who is Wholly or Partly Successful
. Notwithstanding any other provisions of this
Agreement, to the fullest extent permitted by applicable law and 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/her in connection
therewith. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a
portion of the Expenses, the Company shall indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled. For
purposes of this Section 4 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 5.
Indemnification For
Expenses of a Witness . Notwithstanding any other
provision of this Agreement, to the fullest extent permitted by
applicable law and to the extent that Indemnitee is, by reason of
his/her Corporate Status, a witness or otherwise asked to
participate in any Proceeding to which Indemnitee is not a party,
he/she shall be indemnified against all Expenses actually and
reasonably incurred by him/her or on his/her behalf in connection
therewith.
Section 6.
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 in the Charter Documents, except with respect to any
excess beyond the amount paid under any insurance policy or other
indemnity provision. In the event that such actual
payment is made under any insurance policy or indemnity provision
after the Company has made an indemnity payment under this
Agreement, Indemnitee shall promptly reimburse the Company for such
indemnity in the amount of such payment; or
(b)
for (i) 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 1934 Act or similar provisions of state statutory law or common
la
