EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
ADEONA PHARMACEUTICALS, INC.
     THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into
as of December 30, 2008, between ADEONA PHARMACEUTICALS, INC., a Delaware
corporation (the “Corporation”), and the undersigned director and/or officer of
the Corporation (“Indemnitee”). Defined terms shall have the meaning ascribed to
them in Section 0 below.
Background
     Indemnitee is a member of the Board of Directors and/or an officer of the
Corporation and as such performs a valuable service for the Corporation. To
induce Indemnitee to continue to serve on the Board of Directors and/or as an
officer, the Corporation has agreed to provide to Indemnitee the
indemnifications and other rights described herein. The Corporation enters this
Agreement pursuant to the authority contained in its Certificate of
Incorporation and Bylaws and the provisions of the General Corporation Law of
the State of Delaware (the “DGCL”). Specifically, with respect to the DGCL, the
Corporation enters this Agreement relying on the provision stating that
indemnification authorized by the DGCL is not exclusive.
     The Corporation’s Certificate of Incorporation includes a provision
eliminating or limiting the personal liability of a director to the Corporation
pursuant to paragraph (7) of subsection (b) of Section 102 of the DGCL and, as a
result, the DGCL permits the Corporation to indemnify and advance expenses to
the Indemnitee so long as the Indemnitee has not breached his or her duty of
loyalty to the Corporation or its stockholders, committed acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, violated Section 174 of the DGCL or entered into transactions from which
the Indemnitee derived an improper personal benefit. The Corporation desires to
provide to Indemnitee the additional indemnification rights set forth in this
Agreement, and Indemnitee desires to obtain such rights, all upon the terms and
subject to the conditions set forth in this Agreement.
     The Board of Directors of the Corporation (the “Board”) has determined that
the increased difficulty in attracting and retaining such persons is detrimental
to the best interests of the Corporation’s stockholders and that the Corporation
should act to assure such persons that there will be increased certainty of such
protection in the future. The Board has also determined that it is reasonable,
prudent and necessary for the Corporation contractually to obligate itself to
indemnify, and to advance expenses on behalf of, such persons to the fullest
extent permitted by applicable law so that they will serve or continue to serve
the Corporation free from undue concern that they will not be so indemnified.
     This Agreement is intended as a supplement to and in furtherance of the
By-laws of the Corporation and any resolutions adopted pursuant thereto, and
shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder, and Indemnitee does not regard the protection
available under the Corporation’s By-laws and insurance as adequate in the
present circumstances, and may not be willing to serve as an officer or a
director without adequate protection, and the Corporation desires Indemnitee to
serve in such capacity. Indemnitee is willing to serve, continue to serve and to
take on additional service for or on behalf of the Corporation on the condition
that he or she be so indemnified.
     NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a
director and/or officer of the Corporation as of and after the date hereof, the
parties hereto agree as follows:

 

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TERMS OF AGREEMENT
     1. Indemnity of Indemnitee. The Corporation 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
Corporation. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 1(a) if, by reason of his or her Corporate Status, the
Indemnitee is, or is threatened to be made, a party to or participant in any
Proceeding other than a Proceeding by or in the right of the Corporation.
Pursuant to this Section 1(a), Indemnitee shall be indemnified against all
Expenses, judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by him or her, or on his or her 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 Corporation, 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 Corporation. Indemnitee
shall be entitled to the rights of indemnification provided in this Section 1(b)
if, by reason of his or her 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 Corporation. 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 Corporation;
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
Corporation unless and to the extent that a court of competent jurisdiction
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 or her Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he or she 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
her or on his or her 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 Corporation shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or her or on his or her 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 Corporation 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 her or on his or her behalf if, by
reason of his Corporate Status, he or she 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 Corporation), 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 Corporation’s obligations pursuant to this
Agreement shall be that the Corporation 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 hereto) to be
unlawful.

 

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     3. Contribution.
          (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 Corporation is jointly liable with Indemnitee
(or would be if joined in such action, suit or proceeding), the Corporation
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 Corporation hereby waives and relinquishes
any right of contribution it may have against Indemnitee. The Corporation shall
not enter into any settlement of any action, suit or proceeding in which the
Corporation 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
Corporation 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 Corporation is jointly liable with Indemnitee (or would be if
joined in such action, suit or proceeding), the Corporation 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 Corporation
and all directors of the Corporation, 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 Corporation and all directors of the Corporation 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 applicable law may require to be considered. The relative fault of the
Corporation and all directors of the Corporation, 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 Corporation hereby agrees to fully indemnify and hold
Indemnitee harmless from any claims of contribution which may be brought by
directors of the Corporation, 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 Corporation, 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 Corporation 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 Corporation (and its directors, officers, employees and
agents) and Indemnitee in connection with such event(s) and/or transaction(s).
     4. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
or her Corporate Status, a witness in any

 

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Proceeding to which Indemnitee is not a party, he or she shall be indemnified
against all Expenses actually and reasonably incurred by him or her or on his or
her behalf in connection therewith.
     5. Limitations. The Corporation 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 0 and 0 hereof) to be unlawful.
Additionally, the Corporation shall not be obligated to indemnify the Indemnitee
for expenses or liabilities of any type whatsoever (including, but not limited
to, judgments, fines, ERISA excise taxes and penalties, and amounts paid in
settlement) for which payment is actually made to or on behalf of Indemnitee
under a valid and collectible insurance policy of D&O Insurance of the
Corporation, or under a valid and enforceable indemnity clause, by-law or
agreement of the Corporation.
     6. Advancement of Expenses. Notwithstanding any other provision of this
Agreement, the Corporation 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 Corporation 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 0 shall be unsecured and interest free. Indemnitee hereby undertakes to
repay amounts advanced only if, and to the extent that, it shall be determined
ultimately that the Indemnitee is not entitled to indemnification or
contribution by the Corporation as authorized hereby.
     7. 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 DGCL and
public policy of the state of the Corporation’s incorporation. 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 Corporation 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 Corporation 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 7(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, except as
provided in the sentence below, shall be at the election of the Board: (1) by a
majority vote of the disinterested directors, even though less than a quorum, by
a committee of disinterested directors designated by a majority vote of the
disinterested directors, even though less than a quorum, (2) if there are no
disinterested directors or if the disinterested directors so direct, by
independent legal counsel in a written opinion to the Board, a copy of which
shall be delivered to the Indemnitee, or (3) if so directed by the Board, by the
stockholders of the Corporation. Notwithstanding the above sentence, and to the
extent allowed by applicable law, in the event of a Change of Control, the
determination with respect to an Indemnitee’s entitlement to indemnification
shall be made by independent legal counsel in a written opinion to the Board, a
copy of which shall be delivered to the Indemnitee. For purposes hereof,
disinterested directors are those members of the Board who are not parties to
the action, suit or proceeding in respect of which indemnification is sought by
Indemnitee.

 

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          (c) If the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 7(b) hereof, the Independent
Counsel shall be selected as provided in this Section 7(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
Corporation, 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 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 7(a) hereof, no Independent
Counsel shall have been selected and not objected to, either the Corporation or
Indemnitee may petition a court of competent jurisdiction for resolution of any
objection which shall have been made by the Indemnitee to the Corporation’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 7(b) hereof. The Corporation shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 7(b) hereof, and, unless a court of
competent jurisdiction finds that each of the claims and/or defenses of the
Indemnitee in any such proceeding was frivolous or made in bad faith, the
Corporation shall pay all reasonable fees and expenses incident to the
procedures of this Section7(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 Corporation (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 Corporation (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.
          (e) 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 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 forgoing provisions of this Section 7(e) are
satisfied, it shall in any event be presumed that Indemnitee has at all times
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Corporation. Anyone seeking to overcome
this presumption shall have the burden of proof and the burden of persuasion by
clear and convincing evidence.
          (f) If the person, persons or entity empowered or selected under
Section 7 to determine whether Indemnitee is entitled to indemnification shall
not have made a determination within sixty (60) days after receipt by the
Corporation of the request therefor, the requisite determination of entitlement
to

 

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indemnification shall be deemed to have been made and Indemnitee shall be
entitled to such indemnification absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional thirty (30) days, if the person, persons or
entity making such determination with respect to entitlement to indemnification
in good faith requires such additional time to obtain or evaluate documentation
and/or information relating thereto; and provided, further, that the foregoing
provisions of this Section 7(f) shall not apply if the determination of
entitlement to indemnification is to be made by the stockholders pursuant to
Section 7(b) of this Agreement and if (A) within fifteen (15) days after receipt
by the Corporation of the request for such determination, the Board or the
Disinterested Directors, if appropriate, resolve to submit such determination to
the stockholders for their consideration at an annual meeting thereof to be held
within seventy-five (75) days after such receipt and such determination is made
thereat, or (B) a special meeting of stockholders is called within fifteen
(15) days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so
called and such determination is made thereat.
          (g) Indemnitee shall cooperate with the person, persons or entity
making such determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
Independent Counsel, member of the Board or stockholder of the Corporation shall
act reasonably and in good faith in making a determination regarding the
Indemnitee’s entitlement to indemnification under this Agreement. Any costs or
expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in
so cooperating with the person, persons or entity making such determination
shall be borne by the Corporation (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Corporation hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
          (h) The Corporation acknowledges that a settlement or other
disposition short of final judgment may be successful if it permits a party to
avoid expense, delay, distraction, disruption and uncertainty. In the event that
any action, claim or proceeding to which Indemnitee is a party is resolved in
any manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or proceeding with or without
payment of money or other consideration) it shall be presumed that Indemnitee
has been successful on the merits or otherwise in such action, suit or
proceeding. Anyone seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion by clear and convincing evidence.
          (i) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Corporation or, with respect to any
criminal Proceeding, that Indemnitee had reasonable cause to believe that his or
her conduct was unlawful.
     8. Remedies of Indemnitee.
          (a) In the event that (i) a determination is made pursuant to
Section 7 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant
to Section 6 of this Agreement, (iii) no determination of entitlement to
indemnification is made pursuant to Section 7(b) of this Agreement within thirty
(30) days after receipt by the Corporation of the request for indemnification,
(iv) payment of indemnification is not made pursuant to this Agreement within
ten (10) days after receipt by the Corporation of a written request therefor or
(v) payment of indemnification is not made

 

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within ten (10) days after a determination has been made that Indemnitee is
entitled to indemnification or such determination is deemed to have been made
pursuant to Section 7 of this Agreement, Indemnitee shall be entitled to an
adjudication in an appropriate court of competent jurisdiction of Indemnitee’s
entitlement to such indemnification. Indemnitee shall commence such proceeding
seeking an adjudication within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 8.
Alternatively, with respect to the matter described in clause (ii) in the
previous sentence, Indemnitee at his or her option may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association, such award to be made within sixty (60) days
following the filing of the demand for arbitration, to which selection of
arbitration at Indemnitee’s option the Corporation hereby agrees. The
Corporation shall not oppose Indemnitee’s right to seek any such adjudication or
arbitration.
          (b) In the event that a determination shall have been made pursuant to
Section 7(b) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 8 shall be conducted in all respects as a de novo trial on the
merits, and Indemnitee shall not be prejudiced by reason of the adverse
determination under Section 7(b).
          (c) If a determination shall have been made pursuant to Section 7(b)
of this Agreement that Indemnitee is entitled to indemnification, the
Corporation shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 8, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee’s misstatement not materially misleading in connection with the
application for indemnification, or (ii) a prohibition of such indemnification
under applicable law.
          (d) In the event that Indemnitee, pursuant to this Section 8, seeks a
judicial adjudication or arbitration of his or her rights under, or to recover
damages for breach of, this Agreement, or to recover under any directors’ and
officers’ liability insurance policies maintained by the Corporation, the
Corporation shall pay on his or her behalf, in advance, any and all expenses (of
the types described in the definition of Expenses in Section 14 of this
Agreement) actually and reasonably incurred by him or her in such judicial
adjudication or arbitration, as well as reasonable compensation for Indemnitee’s
time actually spent with respect to such action or proceeding, unless the
Indemnitee ultimately is determined to not be entitled to such indemnification,
advancement of expenses or insurance recovery.
          (e) The Corporation shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 8 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Corporation is bound
by all the provisions of this Agreement. The Corporation shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after receipt by the Corporation of a written request
therefore) advance, to the extent not prohibited by law, such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for indemnification or advance of Expenses from the
Corporation under this Agreement or under any directors’ and officers’ liability
insurance policies maintained by the Corporation, unless the Indemnitee
ultimately is determined to not be entitled to such indemnification, advancement
of Expenses or insurance recovery, as the case may be.
          (f) Notwithstanding anything in this Agreement to the contrary, no
determination as to entitlement to indemnification under this Agreement shall be
required to be made prior to the final disposition of the Proceeding.

 

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     9. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
          (a) The rights of indemnification as provided by this Agreement shall
not be deemed exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the certificate of incorporation of the
Corporation, the Bylaws, any agreement, a vote of stockholders, a resolution of
directors or otherwise. No amendment, alteration or repeal of this Agreement or
of any provision hereof shall limit or restrict any right of Indemnitee under
this Agreement in respect of any action taken or omitted by such Indemnitee in
his or her Corporate Status prior to such amendment, alteration or repeal. To
the extent that a change in the DGCL, whether by statute or judicial or
arbitration decision, permits greater indemnification than would be afforded
currently under the Bylaws and this Agreement, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change. No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, and every other right and remedy shall
be cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other right or remedy.
          (b) To the extent that the Corporation maintains an insurance policy
or policies providing liability insurance for directors, officers, employees, or
agents or fiduciaries of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
that such person serves at the request of the Corporation, Indemnitee shall be
covered by such policy or policies in accordance with its or their terms to the
maximum extent of the coverage available for any director, officer, employee,
agent or fiduciary under such policy or policies. If, at the time of the receipt
of a notice of a claim pursuant to the terms hereof, the Corporation has
director and officer liability insurance in effect, the Corporation shall give
prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The
Corporation shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Indemnitee, all amounts payable as a
result of such proceeding in accordance with the terms of such policies.
          (c) In the event of any payment under this Agreement, the Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Corporation to bring suit to enforce such rights.
          (d) The Corporation shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
          (e) The Corporation’s obligation to indemnify or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the Corporation
as a director, officer, employee or agent of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise shall be reduced
by any amount Indemnitee has actually received as indemnification or advancement
of expenses from such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise.
     10. Exception to Right of Indemnification. Notwithstanding any provision in
this Agreement, the Corporation shall not be obligated under this Agreement to:
          (a) make any indemnity in connection with any claim made against
Indemnitee:
               (i) for which payment has actually been made to or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount paid under any insurance policy or other
indemnity provision; or

 

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               (ii) for an accounting of profits made from the purchase and sale
(or sale and purchase) by Indemnitee of securities of the Corporation within the
meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or
similar provisions of state statutory law or common law; or
               (iii) in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Corporation or its
directors, officers, employees or other indemnitees, unless (i) the Board
authorized the Proceeding (or any part of any Proceeding) prior to its
initiation or (ii) the Corporation provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Corporation under applicable
law;
          (b) indemnify the Indemnitee for any expenses incurred by the
Indemnitee with respect to any proceeding instituted by the Indemnitee to
enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by the Indemnitee in such
proceeding was not made in good faith or was frivolous; or
          (c) indemnify the Indemnitee under this Agreement for any amounts paid
in settlement of a proceeding unless the Corporation consents to such
settlement, which consent shall not be unreasonably withheld.
     11. Duration of Agreement. All agreements and obligations of the
Corporation contained herein shall continue during the period Indemnitee is an
officer or director of the Corporation (or is or was serving at the request of
the Corporation as an officer, director, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) for a period
of not less than three years thereafter, and in any case, shall continue
thereafter so long as Indemnitee shall be subject to any Proceeding (or any
proceeding commenced under Section 8 hereof) by reason of his or her Corporate
Status, whether or not he or she is acting or serving in any such capacity at
the time any liability or expense is incurred for which indemnification can be
provided under this Agreement. This Agreement shall, without any further action
required by any party, be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors (including any
direct or indirect successor by purchase, merger, consolidation or otherwise to
all or substantially all of the business or assets of the Corporation), assigns,
spouses, heirs, executors and personal and legal representatives.
     12. Security. To the extent requested by Indemnitee and approved by the
Board, the Corporation may at any time and from time to time provide security to
Indemnitee for the Corporation’s obligations hereunder through an irrevocable
bank line of credit, funded trust or other collateral. Any such security, once
provided to Indemnitee, may not be revoked or released without the prior written
consent of the Indemnitee.
     13. Enforcement.
          (a) The Corporation expressly confirms and agrees that it has entered
into this Agreement and assumes the obligations imposed on it hereby in order to
induce Indemnitee to serve as an officer or director of the Corporation, and the
Corporation acknowledges that Indemnitee is relying upon this Agreement in
serving as an officer or director of the Corporation.
          (b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.

 

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     14. Definitions. For purposes of this Agreement:
          (a) “Change in Control” shall be deemed to occur upon the earliest to
occur after the date of this Agreement of any of the following events:
               (i) Change in Board.  During any period of two (2) consecutive
years (not including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board cease for
any reason to constitute a least a majority of the members of the Board;
               (ii) Corporate Transactions.  The effective date of a merger or
consolidation of the Corporation with any other entity, other than a merger or
consolidation which would result in the voting securities of the Corporation
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 51% of the combined voting power
of the voting securities of the surviving entity outstanding immediately after
such merger or consolidation and with the power to elect at least a majority of
the board of directors or other governing body of such surviving entity; and
               (iii) Liquidation.  The approval by the stockholders of the
Corporation of a complete liquidation of the Corporation or an agreement for the
sale or disposition by the Corporation of all or substantially all of the
Corporation’s assets.
          (b) “Corporate Status” describes the status of a person who is or was
a director, officer, employee, agent or fiduciary of the Corporation or of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise that such person is or was serving at the express written
request of the Corporation.
          (c) “Disinterested Director” means a director of the Corporation who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
          (d) “Enterprise” shall mean the Corporation and any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
that Indemnitee is or was serving at the express written request of the
Corporation as a director, officer, employee, agent or fiduciary.
          (e) “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended.
          (f) “Expenses” shall include all reasonable attorneys’ fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, participating, or being or preparing to
be a witness in a Proceeding. Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs relating to any cost bond,
supersede as bond, or other appeal bond or its equivalent. Expenses, however,
shall not include amounts paid in settlement by Indemnitee or the amount of
judgments, fines, ERISA excise taxes or penalties, or amounts paid in settlement
of a proceeding against Indemnitee.
          (g) “Independent Counsel” means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Corporation or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning Indemnitee under this Agreement, or of other indemnitees
under similar indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term “Independent Counsel” shall not include any person who,
under the

 

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applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Corporation or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement. The Corporation
agrees to pay the reasonable fees of the Independent Counsel referred to above
and to fully indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
          (h) “Proceeding” includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought by or in the right of the Corporation or otherwise
and whether civil, criminal, administrative or investigative, in which
Indemnitee was, is or will be involved as a party or otherwise, by reason of the
fact that Indemnitee is or was a director or officer of the Corporation, by
reason of any action taken by him or her or of any inaction on his or her part
while acting as a director or officer of the Corporation, or by reason of the
fact that he or she is or was serving at the request of the Corporation as a
director, officer, agent or fiduciary of another corporation, partnership, joint
venture, trust or other Enterprise; in each case whether or not he or she is
acting or serving in any such capacity at the time any liability or expense is
incurred for which indemnification can be provided under this Agreement;
including one pending on or before the date of this Agreement, but excluding one
initiated by an Indemnitee pursuant to Section 0 of this Agreement to enforce
his or her rights under this Agreement.
     15. Severability. The invalidity of unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision. Without limiting the generality of the foregoing, this Agreement is
intended to confer upon Indemnitee indemnification rights to the fullest extent
permitted by applicable laws. In the event any provision hereof conflicts with
any applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such conflict.
     16. Modification and Waiver. No supplement, modification, termination or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
     17. Notice By Indemnitee. Indemnitee agrees promptly to notify the
Corporation in writing upon being served with or otherwise receiving any
summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter which may be subject to
indemnification covered hereunder. The failure to so notify the Corporation
shall not relieve the Corporation of any obligation which it may have to
Indemnitee under this Agreement or otherwise unless and only to the extent that
such failure or delay materially prejudices the Corporation.
     18. Notices. All notices and other communications given or made pursuant to
this Agreement shall be in writing and shall be deemed effectively given:
(a) upon personal delivery to the party to be notified, (b) when sent by
confirmed electronic mail or facsimile if sent during normal business hours of
the recipient, and if not so confirmed, then on the next business day, (c) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent:
          To Indemnitee at the address set forth below his or her signature
hereto.

 

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          To the Corporation at:
          Adeona Pharmaceuticals, Inc.
          3930 Varsity Drive
          Ann Arbor MI, 48108
          Facsimile: (734) 332-7878
          Attention: Chief Executive Officer
or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.
     19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement. This Agreement may also be
executed and delivered by facsimile signature and in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
     20. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
     21. Governing Law. This Agreement and the legal relations among the parties
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware, without regard to its conflict of laws rules; provided,
however, that in the event that the Corporation’s successor in interest pursuant
to a merger, consolidation or similar transaction is incorporated in a state
other than Delaware, then this Agreement and the legal relations among the
parties shall, from the effective time of such transaction forward, be governed
by, construed and enforced in accordance with the laws of the state of
incorporation of such Corporation’s successor, without giving effect to
principles of conflicts of law.
[Signatures on following page]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement on and as of the day and year first above written.

            ADEONA PHARMACEUTICALS, INC.
a Delaware corporation
      By:         Print Name:         Title:           INDEMNITEE
      By:         Print Name:         Address: