INDEMNIFICATION AGREEMENT
THIS
AGREEMENT (the “Agreement”) is made and entered
into as of September 1, 2007 between Auriga Laboratories,
Inc., a Delaware corporation (“the Company”), and
Frank Greico, its affiliates, directors, officers, employees,
members or agents (collectively the
“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 has purchased and maintains 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:
1.
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:
(a)
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.
(b)
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
the Court of Chancery of the State of Delaware shall determine that
such indemnification may be made.
(c)
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.
2.
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.
3.
Contribution in the Event of Joint Liability
.
(a)
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.
(b)
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.
(c)
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.
4.
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.
5.
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).
6.
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:
(a)
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.
(b)
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.
(c)
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 the Court of
Chancery of the State of Delaware 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
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