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Exhibit 10.3
INDEMNIFICATION AGREEMENT
THIS AGREEMENT
(the “Agreement”) is made effective as of March 5,
2007, between Auriga Laboratories, Inc., a Delaware corporation
(“the Company”), and Alan Roberts
(“Indemnitee”).
WITNESSETH
THAT:
WHEREAS,
Indemnitee performs a valuable service for the Company;
and
WHEREAS, the
Board of Directors of the Company has adopted Bylaws (the
“Bylaws”) providing for the indemnification of the
officers and directors of the Company to the maximum extent
authorized by law (“Law”); and
WHEREAS, the
Bylaws and the Law, by their nonexclusive nature, permit contracts
between the Company and the officers or directors of the Company
with respect to indemnification of such officers or directors;
and
WHEREAS, in
accordance with the authorization as provided by the Law, the
Company may purchase and maintain a policy or policies of
directors’ and officers’ liability insurance
(“D & O Insurance”), covering certain
liabilities which may be incurred by its officers or directors in
the performance of their obligations to the Company;
NOW, THEREFORE,
in consideration of Indemnitee’s service as an officer or
director after the date hereof, the parties hereto agree as
follows:
A.
Indemnity of Indemnitee . The Company hereby agrees to hold
harmless and indemnify Indemnitee to the full extent authorized or
permitted by the provisions of the Law, as such may be amended from
time to time, and the Company’s Bylaws, as such may be
amended. In furtherance of the foregoing indemnification, and
without limiting the generality thereof:
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1.
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 l(a) if, by reason of
his Corporate Status (as hereinafter defined), he 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 he
acted in good faith and in a manner he 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 his conduct was unlawful.
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2.
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, he 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 him, or on his behalf, in connection
with such Proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best 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 a state court shall determine that
such indemnification may be made.
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3.
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 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.
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B.
Additional Indemnity . In addition to, and without regard to
any limitations on, the indemnification provided for in Section 1
of this Agreement, the Company shall and hereby does indemnify and
hold harmless Indemnitee against all Expenses, judgments,
penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf if, by reason of his
Corporate Status, he is, or is threatened to be made, a party to or
participant in any Proceeding (including a Proceeding by or in the
right of the Company), including, without limitation, all liability
arising out of the negligence or active or passive wrongdoing of
Indemnitee. The only limitation that shall exist upon the
Company’s obligations pursuant to this Agreement shall be
that the Company shall not be obligated to make any payment to
Indemnitee that is finally determined (under the procedures, and
subject to the presumptions, set forth in Sections 6 and 7 hereof)
to be unlawful under Delaware law.
C.
Contribution in the Event of Joint Liability .
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1.
Whether or not the indemnification provided in Sections 1 and 2
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 pay, in the first
instance, the entire amount of any judgment or settlement of such
action, suit or proceeding without requiring Indemnitee to
contribute to such payment and the Company hereby waives and
relinquishes any right of contribution it may have against
Indemnitee. The Company shall not enter into any settlement of any
action, suit or proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such action, suit or
proceeding) unless such settlement provides for a full and final
release of all claims asserted against Indemnitee.
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2.
Without diminishing or impairing the obligations of the Company set
forth in the preceding subparagraph, if, for any reason, Indemnitee
shall elect or be required to pay all or any portion of any
judgment or settlement in 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 the 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.
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3.
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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D.
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.
E.
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
ten (10) 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 5 shall be unsecured and interest free.
Notwithstanding the foregoing, the obligation of the Company to
advance Expenses pursuant to this Section 5 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).
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F.
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 Law 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:
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1.
To obtain indemnification (including, but not limited to, the
advancement of Expenses and contribution by the Company) 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 of Directors in writing that
Indemnitee has requested indemnification.
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2.
Upon written request by Indemnitee for indemnification pursuant to
the first sentence of Section 6(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 three methods, which shall be at the election of
Indemnitee: (1) by a majority vote of the disinterested directors,
even though less than a quorum, (2) by independent legal counsel in
a written opinion or (3) by the stockholders.
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3.
If the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 6(b) hereof, the
Independent Counsel shall be selected as provided in this Section
6(c). The Independent Counsel shall be selected by Indemnitee
(unless Indemnitee requests that such selection be made by the
Board of Directors). Indemnitee or the Company, as the case may be,
may, within 10 days after such written notice of selection shall
have been given, deliver to the Company or to Indemnitee, 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 13 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 20 days after submission by Indemnitee of a written request
for indemnification pursuant to Section 6(a) hereof, no Independent
Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition a Delaware state court or other
court of competent jurisdiction for resolution of any objection
which shall have been made by the Company or Indemnitee to the
other’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 Cou
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