INDEMNIFICATION
AGREEMENT
THIS
AGREEMENT (the “Agreement”) is made and entered into as
of ____________ by and between MiddleBrook Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), and ____________
(“Indemnitee”). This Agreement shall be effective as of
the date the Indemnitee became a member of the Board of Directors
of the Company or an employee of the Company, as applicable (the
“Effective Date”).
WHEREAS,
Indemnitee performs a valuable service for the Company;
and
WHEREAS,
the Board of Directors of the Company has adopted a Certificate of
Incorporation and Bylaws (the “Bylaws”) which provide
that the Company shall indemnify directors and officers of the
Company and that the Company shall have the power to indemnify
employees and agents of the Company, in each case to the fullest
extent permitted by the Delaware General Corporation Law, as
amended (“Delaware Law”); and
WHEREAS,
in recognition of Indemnitee’s need for protection against
personal liability in order to enhance Indemnitee’s continued
service to the Company in an effective manner, and in part to
provide Indemnitee with specific contractual assurance that the
indemnification protection provided by the Certificate of
Incorporation and By-laws of the Company will be available to
Indemnitee (regardless of, among other things, any amendment to or
revocation of such Certificate of Incorporation and By-laws or any
change in the composition of the Board of Directors of the Company
or acquisition transaction relating to the Company), and in order
to induce Indemnitee to continue to provide services to the Company
as a member of the Board of Directors or as an employee thereof (as
applicable), the Company wishes to provide in this Agreement for
the indemnification of and the advancing of expenses 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 Company’s liability insurance policies;
and
WHEREAS,
in order to induce Indemnitee to provide or continue to provide
services to the Company, the Company has determined and agreed to
enter into this Agreement with Indemnitee, which shall be effective
as of the Effective Date;
NOW,
THEREFORE, in view of the considerations set forth above the
Company and Indemnitee hereby agree as follows:
1.
Indemnity of Indemnitee . The Company hereby agrees to hold
harmless and indemnify Indemnitee to the fullest extent authorized
or permitted by the provisions of the Delaware Law, as such may be
amended from time to time, and Article IX of the Certificate
of Incorporation and Article 5 of the Bylaws, as such
Certificate of Incorporation and Bylaws are in effect on the date
hereof and as such may be amended from time to time to enhance the
rights of Indemnitee. 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 1(a) if, by reason of
Indemnitee’s Corporate Status (as hereinafter defined), the
Indemnitee 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 Indemnitee,
or on Indemnitee’s behalf, in connection with such Proceeding
or any claim, issue or matter therein, if Indemnitee 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, had no reasonable cause to believe
Indemnitee’s 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 Indemnitee’s Corporate Status,
Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding brought by or in the right of the
Company to procure a judgment in its favor. Pursuant to this
Section 1(b), Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by Indemnitee, or on
Indemnitee’s behalf, in connection with such Proceeding if
Indemnitee acted in good faith and in a manner Indemnitee
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
Indemnitee’s Corporate Status, a party to and is successful,
on the merits or otherwise, in any Proceeding, Indemnitee shall be
indemnified to the maximum extent permitted by law against all
Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee’s 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
Indemnitee or on Indemnitee’s 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.
Contribution in the Event of Joint Liability .
(a) Whether
or not the indemnification provided in Section 1 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 contribute to the amount of expenses
(including attorneys’ fees), judgments, fines and amounts
paid in settlement of such action, suit or proceeding actually and
reasonably incurred and paid or payable by Indemnitee in proportion
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 Delaware
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.
(b) 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.
3.
Indemnification for Expenses of a Witness . Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status, a
witness in any Proceeding to which Indemnitee is not a party,
Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection therewith.
4.
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
twenty (20) 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 4 shall be unsecured and interest
free. Notwithstanding the foregoing, the obligation of the Company
to advance Expenses pursuant to this Section 4 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 twenty (20) 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).
5.
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 Delaware 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) In
the event the Company shall be obligated hereunder to pay the
Expenses of any Proceeding, the Company shall be entitled to assume
the defense of such Proceeding with counsel approved by Indemnitee,
which approval shall not be unreasonably withheld, upon the
delivery to Indemnitee of written notice of its election so to do.
After delivery of such notice, approval of such counsel by
Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with
respect to the same Proceeding; provided that, (i) Indemnitee
shall have the right to employ Indemnitee’s counsel in any
such Proceeding at Indemnitee’s expense and (ii) if
(A) the employment of counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall
have reasonably concluded that there is a conflict of interest
between the Company and Indemnitee in the conduct of any such
defense, or (C) the Company shall not continue to retain such
counsel to defend such Proceeding, then the fees and expenses of
Indemnitee counsel shall be at the expense of the Company. The
Company shall have the right to conduct such defense as it sees fit
in its sole discretion; provided, however, the Company shall not,
without the prior written consent of Indemnitee, consent to the
entry of any judgment against Indemnitee or enter into any
settlement or compromise which (i) includes an admission of
fault of Indemnitee or (ii) does not include, as an
unconditional term thereof, the full release of Indemnitee from all
liability in respect of such Proceeding, which release shall be in
form and substance reasonably satisfactory to
Indemnitee.
(c) Upon
written request by Indemnitee for indemnification pursuant to the
first sentence of Section 5(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.
(d) If
the determination of entitlement to indemnification is to be made
by Independent Counsel pursuant to Section 5(c) hereof, the
Independent Counsel shall be selected as provided in this Section
5(d). The Independent Counsel shall be selected by the Board of
Directors and approved by Indemnitee. Indemnitee may, within
10 days after such
written notice
of selection shall have been given, deliver to the Company 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 14 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 5(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 Indemnitee to the
Company’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 Counsel under Section
5(c) hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent
Counsel in connection with acting pursuant to Section 5(c) hereof,
and the Company shall pay all reasonable fees and expenses incident
to the procedures of this Section 5(d), regardless of the manner in
which such Independent Counsel was selected or
appointed.
(e) In
making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement. Anyone seeking to overcome
this presumption shall have the burden of proof and the burden of
persuasion by clear and convincing evidence.
(f) Indemnitee
shall be deemed to have acted in good faith if Indemnitee’s
action is based on the records or books of account of the
Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise (as
hereinafter defined) in the course of their duties, or on the
advice of legal counsel for the Enterprise or on information or
records given or reports made to the Enterprise by an independent
certified public accountant or by an appraiser or other expert
selected with reasonable care by the Enterprise. In addition, the
knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Enterprise shall not be imputed
to Indemnitee for purposes of determining the right to
indemnification under this Agreement. Whether or not the foregoing
provisions of this Section 5(f) are satisfied, it shall in any
event be presumed that Indemnitee
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