INDEMNIFICATION
AGREEMENT
THIS
INDEMNIFICATION AGREEMENT (the “ Agreement ”) is
made and entered into as of August 13, 2009 between
(i) PetDRx Corporation, a Delaware corporation (the “
Company ”); (ii)
(“ Indemnitee ”) and (iii) [ If
Applicable ] (together with its affiliates, the “
Investors ”).
WHEREAS, highly
competent persons have become more reluctant to serve corporations
as directors 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
corporation; and
WHEREAS, the Board
of Directors of the Company (the “ Board ”) has
determined that the increased difficulty in attracting and/or
retaining such persons is detrimental to the best interests of the
Company’s stockholders and that the Company should act to
assure such persons that there will be increased certainty of such
protection in the future; and
WHEREAS, the
Investors have designated Indemnitee as a member of the Board in
connection with Investor’s investment in the
Company.
NOW, THEREFORE, in
consideration of Indemnitee’s agreement to serve as a
director or officer from and after the date hereof, the parties
hereto agree as follows:
1.
Indemnification of Indemnitee . The Company hereby agrees to
hold harmless and indemnify Indemnitee to the fullest extent
permitted by law, as such may be amended from time to time. 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), 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
him, or on his behalf, in connection with such Proceeding or any
claim, issue or matter therein, if the Indemnitee acted in good
faith and in a manner the 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 the 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 his Corporate Status, the
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. Pursuant to this Section 1(b) , Indemnitee
shall be indemnified against all Expenses actually and reasonably
incurred by the Indemnitee, or on the Indemnitee’s behalf, in
connection with such Proceeding if the Indemnitee acted in
good
faith and in a
manner the 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 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, as such may be amended from time
to time, 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.
Contribution; Investor Indemnity .
(a) Whether
or not the indemnification provided in Section 1 hereof
is available, in respect of any Proceeding in which the Company is
jointly liable with Indemnitee (or would be if joined in such
Proceeding), the Company shall pay, in the first instance, the
entire amount of any judgment or settlement of such 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 Proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such 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 Proceeding in which the Company is
jointly liable with Indemnitee (or would be if joined in such
Proceeding), the Company shall contribute to the amount of
Expenses, 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 Proceeding), on the one hand, and Indemnitee, on the
other hand, from the transaction from which such 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 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
2
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 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.
(d) To
the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by
Indemnitee, whether for judgments, fines, penalties, excise taxes,
amounts paid or to be paid in settlement and/or for Expenses, in
connection with any claim relating to an indemnifiable event under
this Agreement, in such proportion as is deemed fair and reasonable
in light of all of the circumstances of such Proceeding in order to
reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding; and/or (ii) the relative fault of
the Company (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or
transaction(s).
(e) If
applicable, the Company acknowledges and agrees that as between the
Company and the Investors, the Company shall be primarily liable to
Indemnitee as set forth in this Agreement for any indemnification
claim (including, without limitation, any claim for advancement of
Expenses) by Indemnitee in respect of any Proceeding. In the event
the Investors are liable to any extent to Indemnitee for any
indemnification claim (including, without limitation, any claim for
advancement of Expenses) as a result of any Proceeding (for
example, by virtue of indemnification rights provided by the
Investors to Indemnitee in respect of Indemnitee’s service on
the Board at the request of the Investors), the Company shall pay,
in the first instance, the entire amount of any such
indemnification claim (including, without limitation, any claim for
advancement of Expenses) without requiring the Investors to
contribute to such payment and the Company hereby waives and
relinquishes any right of contribution, subrogation or any other
right of recovery of any kind it may have against the Investors in
respect thereof. In addition, if, for any reason, the Investors
shall elect or be required to pay all or any portion of any such
indemnification claim (including, without limitation, any claim for
advancement of Expenses), the Company agrees to indemnify and hold
harmless the Investors for all such amounts paid by
Investors.
3.
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, or is
made (or asked to) respond to discovery requests, 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. Notwithstanding the foregoing, any
failure of Indemnitee to provide such a request to the Company, or
to provide such a request in a timely fashion, shall not relieve
the Company of any liability that it may have to
Indemnitee
3
unless, and to
the extent that, such failure actually and materially prejudices
the interests of the Company.
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
thirty (30) 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.
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 General Corporation 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 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 General Counsel of the Company shall, promptly
upon receipt of such a request for indemnification, advise the
Board in writing that Indemnitee has requested
indemnification.
(b) 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 four methods, which shall be at the election of the
Board: (1) by a majority vote of the Disinterested Directors,
even though less than a quorum, (2) by a committee of
Disinterested Directors designated by a majority vote of the
Disinterested Directors, even though less than a quorum,
(3) if there are no Disinterested Directors or if the
Disinterested Directors so direct, by Independent Counsel (as
hereinafter defined) in a written opinion to the Board, a copy of
which shall be delivered to the Indemnitee, or (4) if so
directed by the Board, by the stockholders of the Company holding a
majority of the outstanding voting stock of the Company.
(c)
If the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 5(b)
hereof, the Independent Counsel shall be selected as provided in
this Section 5(c) . The Independent Counsel shall be
selected by the Board. Indemnitee may, within 10 days after
such written notice of selection shall have been given, deliver to
the Company, 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 12 of this Agreement, and
the objection shall set forth with particularity the factual
basis
4
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 the 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(b) 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(b) hereof, and the Company shall pay all
reasonable fees and expenses incident to the procedures of this
Section 5(c) , regardless of the manner in which such
Independent Counsel was selected or appointed.
(d) 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. Neither the failure of
the Company (including by its directors or independent legal
counsel) to have made a determination prior to the commencement of
any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor an actual determination by the
Company (including by its directors or independent legal counsel)
that Indemnitee has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of
conduct.
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