INDEMNIFICATION AGREEMENT
This
INDEMNIFICATION
AGREEMENT ("Agreement"), dated as of
February 1, 2006, between Dynasil Corporation of America,
a New
Jersey
corporation (the
"Company"),
and Cecil Ursprung
("Indemnitee"), is made with reference to the following facts:
A.
It is essential that the Company and its
subsidiaries
recruit and
retain as directors the most capable persons
available;
B.
Indemnitee is
currently or is contemplating becoming a
director of the Company or a subsidiary of the Company;
C.
Both the Company and Indemnitee
recognize the increased
risk of litigation and other claims being asserted against
directors of publicly traded companies;
D.
In furtherance of the foregoing, Article 12 of the
Company's Restated
Certificate of Incorporation (the "Charter")
provides as follows:
12.
A director or officer
of the Corporation shall not
be
personally
liable to the Corporation or its
shareholders for damages for breach of any duty owed to
the
Corporation or its
shareholders, except that this
Article 12 shall not relieve a director or officer from
liability for any breach of duty based upon an act or
omission (i) in breach of such person's duty of loyalty
to
the Corporation or its
shareholders, or (ii) not in
good
faith or involving a knowing violation of law, or
(iii) resulting
in receipt by such person of an
improper personal
benefit. If the New Jersey Business
Corporation Act
is amended after approval by the
shareholders of this Article 12 to authorize corporate
action further
eliminating or
limiting the
personal
liability of directors
or officers, then the liability
of a
director and/or officer of the Corporation, as the
case
may be, shall, without
further corporate
action,
be
eliminated
or limited to the fullest extent
permitted by the New Jersey Business Corporation Act as
so
amended. Any repeal or modification of the foregoing
paragraph by
the shareholders of
the Corporation
or
otherwise shall
not adversely affect any right or
protection of a
director or officer of the Corporation
existing at the time of such repeal or modification.
E.
Notwithstanding
Article 12 of the Company's Charter, in
recognition of
Indemnitee's legitimate desire that all possible
protection against
personal liability resulting from or in
connection with
Indemnitee's
performance of
service for the
Company as
a director be available for and provided to
Indemnitee (regardless
of, among other things, any amendment to
or revocation of the
Charter or any change in the composition of
the Company's
board of directors
(the "Board of Directors") or
any acquisition transaction relating to the Company), the
Company
wishes to provide in this Agreement for the
indemnification of
and the advancement of expenses to
Indemnitee to
the fullest
extent 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 Company's directors' and officers'
liability insurance policies.
NOW, THEREFORE, the parties
hereto agree as follows:
1.
Certain Definitions.
1.1
"Change in Control" shall be deemed to have occurred if,
(i) any "person" (as such term is used in Section 13(d) and
14(d)
of the Securities Exchange Act of 1934, as amended), other than
a
trustee or other
fiduciary holding securities under an employee
benefit plan of the
Company or 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,
becomes the
"beneficial owner" (as
defined in Rule 13d-3
under
said Act), directly or
indirectly, of securities of the Company
representing 15% or more of the total voting power represented
by
the Company's then
outstanding Voting Securities, or (ii) during
any period
of two consecutive years, individuals
who at the
beginning of such period constitute the Board of Directors of
the
Company and
any new director whose election by
the Board of
Directors 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 stockholders
of the
Company approve a merger or consolidation of the Company with
any
other corporation,
other than a merger or
consolidation
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 80% 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 the stockholders of the Company
approve a plan of complete liquidation of the
Company or an
agreement for the sale or disposition by the Company of
(in one
transaction or a series of transactions) all or substantially
all
of the Company's assets.
1.2
"Claim" means any claim or prayer for
relief in any
threatened, pending
or completed action, suit or proceeding
(whether civil,
criminal, administrative or investigative,
whether instituted
by or in the right of the Company, any
subsidiary of the Company or any other party) in which
Indemnitee
in good
faith
reasonably
believes he is a participant,
respondent,
party or otherwise involved as a result of
Indemnitee's, or
a person for whom Indemnitee is the legal
representative, past
or present service as
a director
of the
Company or any subsidiary of the Company, or is or was serving
at
the request of the Company or any subsidiary of the Company as
a
director, officer, employee or agent of another corporation or
of
a partnership,
joint venture, trust, enterprise
or nonprofit
entity, including service with respect to employee benefit
plans.
1.3
"Expenses" include
reasonable attorney's fees and all
other costs,
expenses and
obligations actually
and reasonably
incurred by
the Indemnitee in connection
with investigating,
defending or preparing to defend any Claim.
1.4
"Independent Legal Counsel" means an attorney or firm of
attorneys, selected in accordance with the provisions of
Section
3, who shall not have otherwise performed
services for the
Company, any
subsidiary of the Company or Indemnitee within the
last five years (other than with respect to
matters concerning
the rights
of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).
1.5
"Reviewing Party"
means (i) a majority of directors who
are not parties to the action, even though
less than a
quorum,
(ii) a Committee of such directors designated by majority vote
of
such directors, even
though less than a quorum, (iii) if there
are no
such
directors,
or if such directors so direct,
Independent Legal
Counsel, or if the
directors are
unable to
appoint Independent Legal Counsel, the stockholders.
1.6
"Voting Securities" means any securities which vote
generally in the election of directors.
2.
Indemnification.
2.1
In General. In connection with any Claim that relates to
events occurring
after the date hereof, the Company shall
indemnify and advance Expenses to Indemnitee as provided in
this
Agreement and to the fullest extent permitted or contemplated
by
N.J.S.14A:3-5(8);
provided, however,
that no indemnification
shall be made to or on behalf of Indemnitee if a
judgment or
other final
adjudication adverse to Indemnitee establishes that
his acts or omissions
(a) were in breach of his duty of loyalty
to the corporation or
its shareholders, as defined in subsection
(3) of N.J.S.14A:2-7, (b) were not in
good faith or involved
a
knowing violation of law or (c) resulted in receipt by
Indemnitee
of an improper personal benefit..
2.2
Claims Other Than Claims by or in the
Right of the
Company or Any Subsidiary of the Company. In the event
Indemnitee
was, is or becomes a party to or witness or other participant
in,
or is threatened to be made a party to or witness or other
participant in
any action, suit or
proceeding pursuant to
any
Claim, other than a
Claim by or in the right of the Company or
any subsidiary
of the Company, the Company shall,
subject to
Sections 2.5 and 2.6,
indemnify Indemnitee against any and all
Expenses, judgments,
fines, penalties and amounts paid in
settlement (including all interest, assessments and other
charges
paid or payable in connection with or in respect of such
Expenses, judgments,
fines, penalties or amounts paid in
settlement) of such Claim.
2.3
Proceedings by or in
the right of the
Company or
Any
Subsidiary of the
Company. In the event Indemnitee was, is or
becomes a party to or witness or other
participant in,
or is
threatened to be made
a party to or witness or other participant
in any proceeding pursuant to an
