Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT, made and executed this        day
of                                 , 2008, by and between Northern Technologies
International Corporation, a Delaware corporation (the “Company”),
and                                                             , an individual
resident of the State of                                        (the
“Indemnitee”).

 

WHEREAS, the Company is aware that, in order to induce highly competent persons
to serve the Company as directors or officers or in other capacities, the
Company must provide such persons with adequate protection through insurance and
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the Company;

 

WHEREAS, the Company recognizes that the increasing difficulty in obtaining
directors’ and officers’ liability insurance, the increases in the cost of such
insurance and the general reductions in the coverage of such insurance have
increased the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board of Directors of the Company has determined that it is
essential to the best interests of the Company’s stockholders that the Company
act to assure such persons that there will be increased certainty of such
protection in the future;

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will continue to serve the Company free from undue
concern that they will not be so indemnified; and

 

WHEREAS, the Indemnitee is willing to serve, continue to serve, and take on
additional service for or on behalf of the Company or any of its direct or
indirect subsidiaries on the condition that he/she be so indemnified.

 

NOW, THEREFORE, in consideration of the premises and the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Indemnitee do hereby agree as follows:

 

1.             SERVICE BY THE INDEMNITEE.  THE INDEMNITEE AGREES TO SERVE AND/OR
CONTINUE TO SERVE AS A DIRECTOR, OFFICER, EMPLOYEE OR OTHER AGENT OF THE COMPANY
FAITHFULLY AND WILL DISCHARGE HIS/HER DUTIES AND RESPONSIBILITIES TO THE BEST OF
HIS/HER ABILITY SO LONG AS THE INDEMNITEE IS DULY ELECTED OR QUALIFIED IN
ACCORDANCE WITH THE PROVISIONS OF THE COMPANY’S CERTIFICATE OF INCORPORATION, AS
AMENDED OR RESTATED FROM TIME TO TIME (THE “CERTIFICATE”) OR THE COMPANY’S
BYLAWS, AS AMENDED OR RESTATED FROM TIME TO TIME (THE “BYLAWS”) AND THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE, AS AMENDED FROM TIME TO TIME (THE
“DGCL”), OR UNTIL HIS/HER EARLIER DEATH, RESIGNATION OR REMOVAL. THE INDEMNITEE
MAY AT ANY TIME AND FOR ANY REASON RESIGN FROM SUCH POSITION (SUBJECT TO ANY
OTHER CONTRACTUAL OBLIGATION OR OTHER OBLIGATION IMPOSED BY OPERATION BY LAW),
IN WHICH EVENT THE COMPANY SHALL HAVE NO OBLIGATION UNDER THIS AGREEMENT TO

 

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CONTINUE TO RETAIN THE INDEMNITEE IN ANY SUCH POSITION. NOTHING IN THIS
AGREEMENT SHALL CONFER UPON THE INDEMNITEE THE RIGHT TO CONTINUE IN THE EMPLOY
OF THE COMPANY OR AS A DIRECTOR OF THE COMPANY OR AFFECT THE RIGHT OF THE
COMPANY TO TERMINATE THE INDEMNITEE’S EMPLOYMENT OR SERVICE AT ANY TIME IN THE
SOLE DISCRETION OF THE COMPANY, WITH OR WITHOUT CAUSE, SUBJECT TO ANY CONTRACT
RIGHTS OF THE INDEMNITEE CREATED OR EXISTING OTHERWISE THAN UNDER THIS
AGREEMENT.

 

2.             INDEMNIFICATION.  THE COMPANY SHALL INDEMNIFY THE INDEMNITEE
AGAINST ALL EXPENSES (AS DEFINED BELOW), JUDGMENTS, FINES AND AMOUNTS PAID IN
SETTLEMENT ACTUALLY AND REASONABLY INCURRED BY THE INDEMNITEE AS PROVIDED IN
THIS AGREEMENT TO THE FULLEST EXTENT PERMITTED BY THE CERTIFICATE, BYLAWS AND
DGCL OR OTHER APPLICABLE LAW IN EFFECT ON THE DATE OF THIS AGREEMENT AND TO ANY
GREATER EXTENT THAT APPLICABLE LAW MAY IN THE FUTURE FROM TIME TO TIME PERMIT.
WITHOUT DIMINISHING THE SCOPE OF THE INDEMNIFICATION PROVIDED BY THIS SECTION 2,
THE RIGHTS OF INDEMNIFICATION OF THE INDEMNITEE PROVIDED HEREUNDER SHALL
INCLUDE, BUT SHALL NOT BE LIMITED TO, THOSE RIGHTS HEREINAFTER SET FORTH, EXCEPT
THAT NO INDEMNIFICATION SHALL BE PAID TO THE INDEMNITEE:

 

(A)           ON ACCOUNT OF ANY ACTION, SUIT OR PROCEEDING IN WHICH JUDGMENT IS
RENDERED AGAINST THE INDEMNITEE FOR DISGORGEMENT OF PROFITS MADE FROM THE
PURCHASE OR SALE BY THE INDEMNITEE OF SECURITIES OF THE COMPANY PURSUANT TO THE
PROVISIONS OF SECTION 16(B) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
(THE “EXCHANGE ACT”), OR SIMILAR PROVISIONS OF ANY FEDERAL, STATE OR LOCAL
STATUTORY LAW;

 

(B)           ON ACCOUNT OF CONDUCT OF THE INDEMNITEE WHICH IS FINALLY ADJUDGED
BY A COURT OF COMPETENT JURISDICTION TO HAVE BEEN KNOWINGLY FRAUDULENT OR TO
CONSTITUTE WILLFUL MISCONDUCT;

 

(C)           IN ANY CIRCUMSTANCE WHERE SUCH INDEMNIFICATION IS EXPRESSLY
PROHIBITED BY APPLICABLE LAW;

 

(D)           WITH RESPECT TO LIABILITY FOR WHICH PAYMENT IS ACTUALLY MADE TO
THE INDEMNITEE UNDER A VALID AND COLLECTIBLE INSURANCE POLICY OF THE COMPANY OR
UNDER A VALID AND ENFORCEABLE INDEMNITY CLAUSE, BYLAW OR AGREEMENT (OTHER THAN
THIS AGREEMENT) OF THE COMPANY, EXCEPT IN RESPECT OF ANY LIABILITY IN EXCESS OF
PAYMENT UNDER SUCH INSURANCE, CLAUSE, BYLAW OR AGREEMENT;

 

(E)           IF A FINAL DECISION BY A COURT HAVING JURISDICTION IN THE MATTER
SHALL DETERMINE THAT SUCH INDEMNIFICATION IS NOT LAWFUL (AND, IN THIS RESPECT,
BOTH THE COMPANY AND THE INDEMNITEE HAVE BEEN ADVISED THAT IT IS THE POSITION OF
THE SECURITIES AND EXCHANGE COMMISSION THAT INDEMNIFICATION FOR LIABILITIES
ARISING UNDER THE FEDERAL SECURITIES LAWS IS AGAINST PUBLIC POLICY AND IS,
THEREFORE, UNENFORCEABLE, AND THAT CLAIMS FOR INDEMNIFICATION SHOULD BE
SUBMITTED TO THE APPROPRIATE COURT FOR ADJUDICATION); OR

 

(F)            IN CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING BY THE
INDEMNITEE AGAINST THE COMPANY OR ANY OF ITS DIRECT OR INDIRECT SUBSIDIARIES OR
THE DIRECTORS, OFFICERS, EMPLOYEES OR OTHER INDEMNITEES OF THE COMPANY OR ANY OF
ITS DIRECT OR INDIRECT SUBSIDIARIES, (I) UNLESS SUCH INDEMNIFICATION IS
EXPRESSLY REQUIRED TO BE MADE BY LAW, (II) UNLESS THE PROCEEDING WAS AUTHORIZED
BY THE BOARD OF DIRECTORS OF THE COMPANY,

 

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(III) UNLESS SUCH INDEMNIFICATION IS PROVIDED BY THE COMPANY, IN ITS SOLE
DISCRETION, PURSUANT TO THE POWERS VESTED IN THE COMPANY UNDER APPLICABLE LAW,
OR (IV) EXCEPT AS PROVIDED IN SECTIONS 11 AND 13 HEREOF.

 

3.             ACTIONS OR PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT OF
THE COMPANY.  THE INDEMNITEE SHALL BE ENTITLED TO THE INDEMNIFICATION RIGHTS
PROVIDED IN THIS SECTION 3 IF THE INDEMNITEE WAS OR IS A PARTY OR WITNESS OR IS
THREATENED TO BE A PARTY OR WITNESS TO ANY THREATENED, PENDING OR COMPLETED
ACTION, SUIT OR PROCEEDING, WHETHER CIVIL, CRIMINAL, ADMINISTRATIVE OR
INVESTIGATIVE IN NATURE, OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE COMPANY,
BY REASON OF THE FACT THAT THE INDEMNITEE IS OR WAS A DIRECTOR, OFFICER,
EMPLOYEE, AGENT OR FIDUCIARY OF THE COMPANY, OR ANY OF ITS DIRECT OR INDIRECT
SUBSIDIARIES, OR IS OR WAS SERVING AT THE REQUEST OF THE COMPANY, OR ANY OF ITS
DIRECT OR INDIRECT SUBSIDIARIES, AS A DIRECTOR, OFFICER, EMPLOYEE, AGENT OR
FIDUCIARY OF ANY OTHER ENTITY, INCLUDING, BUT NOT LIMITED TO, ANOTHER
CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY, EMPLOYEE BENEFIT PLAN,
JOINT VENTURE, TRUST OR OTHER ENTERPRISE, OR BY REASON OF ANY ACT OR OMISSION BY
HIM/HER IN SUCH CAPACITY. PURSUANT TO THIS SECTION 3, THE INDEMNITEE SHALL
BE INDEMNIFIED AGAINST ALL EXPENSES, JUDGMENTS, PENALTIES (INCLUDING EXCISE AND
SIMILAR TAXES), FINES AND AMOUNTS PAID IN SETTLEMENT WHICH WERE ACTUALLY AND
REASONABLY INCURRED BY THE INDEMNITEE IN CONNECTION WITH SUCH ACTION, SUIT OR
PROCEEDING (INCLUDING, BUT NOT LIMITED TO, THE INVESTIGATION, DEFENSE OR APPEAL
THEREOF), 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 ACTION OR PROCEEDING, HAD NO
REASONABLE CAUSE TO BELIEVE HIS/HER CONDUCT WAS UNLAWFUL.

 

4.             ACTIONS BY OR IN THE RIGHT OF THE COMPANY.  THE INDEMNITEE SHALL
BE ENTITLED TO THE INDEMNIFICATION RIGHTS PROVIDED IN THIS SECTION 4 IF THE
INDEMNITEE WAS OR IS A PARTY OR WITNESS OR IS THREATENED TO BE MADE A PARTY OR
WITNESS TO ANY THREATENED, PENDING OR COMPLETED ACTION, SUIT OR PROCEEDING
BROUGHT BY OR IN THE RIGHT OF THE COMPANY TO PROCURE A JUDGMENT IN ITS FAVOR BY
REASON OF THE FACT THAT THE INDEMNITEE IS OR WAS A DIRECTOR, OFFICER, EMPLOYEE,
AGENT OR FIDUCIARY OF THE COMPANY, OR ANY OF ITS DIRECT OR INDIRECT
SUBSIDIARIES, OR IS OR WAS SERVING AT THE REQUEST OF THE COMPANY, OR ANY OF ITS
DIRECT OR INDIRECT SUBSIDIARIES, AS A DIRECTOR, OFFICER, EMPLOYEE, AGENT OR
FIDUCIARY OF ANOTHER ENTITY, INCLUDING, BUT NOT LIMITED TO, ANOTHER CORPORATION,
PARTNERSHIP, LIMITED LIABILITY COMPANY, EMPLOYEE BENEFIT PLAN, JOINT VENTURE,
TRUST OR OTHER ENTERPRISE, OR BY REASON OF ANY ACT OR OMISSION BY HIM/HER IN ANY
SUCH CAPACITY. PURSUANT TO THIS SECTION 4, THE INDEMNITEE SHALL BE INDEMNIFIED
AGAINST ALL EXPENSES ACTUALLY AND REASONABLY INCURRED BY HIM/HER IN CONNECTION
WITH THE DEFENSE OR SETTLEMENT OF SUCH ACTION, SUIT OR PROCEEDING (INCLUDING,
BUT NOT LIMITED TO THE INVESTIGATION, DEFENSE OR APPEAL THEREOF), 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, THAT NO SUCH INDEMNIFICATION SHALL BE MADE IN RESPECT OF ANY CLAIM,
ISSUE, OR MATTER AS TO WHICH THE INDEMNITEE SHALL HAVE BEEN ADJUDGED TO BE
LIABLE TO THE COMPANY, UNLESS AND ONLY TO THE EXTENT THAT THE COURT OF CHANCERY
OF THE STATE OF DELAWARE OR THE COURT IN WHICH SUCH ACTION, SUIT OR PROCEEDING
WAS BROUGHT SHALL DETERMINE UPON APPLICATION THAT, DESPITE THE ADJUDICATION OF
LIABILITY BUT IN VIEW OF ALL THE CIRCUMSTANCES OF THE CASE, THE INDEMNITEE IS
FAIRLY AND REASONABLY ENTITLED TO BE INDEMNIFIED AGAINST SUCH EXPENSES ACTUALLY
AND REASONABLY INCURRED BY HIM/HER WHICH SUCH COURT SHALL DEEM PROPER.

 

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5.             GOOD FAITH DEFINITION.  FOR PURPOSES OF THIS AGREEMENT, THE
INDEMNITEE SHALL BE DEEMED TO HAVE 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, OR, WITH RESPECT TO ANY CRIMINAL ACTION OR PROCEEDING TO HAVE HAD
NO REASONABLE CAUSE TO BELIEVE THE INDEMNITEE’S CONDUCT WAS UNLAWFUL, IF SUCH
ACTION WAS BASED ON (I) THE RECORDS OR BOOKS OF THE ACCOUNT OF THE COMPANY OR
OTHER ENTERPRISE, INCLUDING FINANCIAL STATEMENTS; (II) INFORMATION SUPPLIED TO
THE INDEMNITEE BY THE OFFICERS OF THE COMPANY OR OTHER ENTERPRISE IN THE COURSE
OF THEIR DUTIES; (III) THE ADVICE OF LEGAL COUNSEL FOR THE COMPANY OR OTHER
ENTERPRISE; OR (IV) INFORMATION OR RECORDS GIVEN IN REPORTS MADE TO THE COMPANY
OR OTHER ENTERPRISE BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT OR BY AN
APPRAISER OR OTHER EXPERT SELECTED WITH REASONABLE CARE BY THE COMPANY OR OTHER
ENTERPRISE.

 

6.             INDEMNIFICATION FOR EXPENSES OF SUCCESSFUL PARTY. 
NOTWITHSTANDING THE OTHER PROVISIONS OF THIS AGREEMENT, TO THE EXTENT THAT THE
INDEMNITEE HAS SERVED ON BEHALF OF THE COMPANY, OR ANY OF ITS DIRECT OR INDIRECT
SUBSIDIARIES, AS A WITNESS OR OTHER PARTICIPANT IN ANY CLASS ACTION OR
PROCEEDING, OR HAS BEEN SUCCESSFUL, ON THE MERITS OR OTHERWISE, IN DEFENSE OF
ANY ACTION, SUIT OR PROCEEDING REFERRED TO IN SECTION 3 AND 4 HEREOF, OR IN
DEFENSE OF ANY CLAIM, ISSUE OR MATTER THEREIN, INCLUDING, BUT NOT LIMITED TO,
THE DISMISSAL OF ANY ACTION WITHOUT PREJUDICE, THE INDEMNITEE SHALL BE
INDEMNIFIED AGAINST ALL EXPENSES ACTUALLY AND REASONABLY INCURRED BY THE
INDEMNITEE IN CONNECTION THEREWITH, REGARDLESS OF WHETHER OR NOT THE INDEMNITEE
HAS MET THE APPLICABLE STANDARDS OF SECTION 3 OR 4 AND WITHOUT ANY DETERMINATION
PURSUANT TO SECTION 8.

 

7.             PARTIAL INDEMNIFICATION.  IF THE INDEMNITEE IS ENTITLED UNDER ANY
PROVISION OF THIS AGREEMENT TO INDEMNIFICATION BY THE COMPANY FOR SOME OR A
PORTION OF THE EXPENSES, JUDGMENTS, FINES AND AMOUNTS PAID IN SETTLEMENT
ACTUALLY AND REASONABLY INCURRED BY THE INDEMNITEE IN CONNECTION WITH THE
INVESTIGATION, DEFENSE, APPEAL OR SETTLEMENT OF SUCH SUIT, ACTION, INVESTIGATION
OR PROCEEDING DESCRIBED IN SECTION 3 OR 4 HEREOF, BUT IS NOT ENTITLED TO
INDEMNIFICATION FOR THE TOTAL AMOUNT THEREOF, THE COMPANY SHALL NEVERTHELESS
INDEMNIFY THE INDEMNITEE FOR THE PORTION OF SUCH EXPENSES, JUDGMENTS, PENALTIES,
FINES AND AMOUNTS PAID IN SETTLEMENT ACTUALLY AND REASONABLY INCURRED BY THE
INDEMNITEE TO WHICH THE INDEMNITEE IS ENTITLED.

 

8.             PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.

 

(A)           TO OBTAIN INDEMNIFICATION UNDER THIS AGREEMENT, THE INDEMNITEE
SHALL SUBMIT TO THE COMPANY A WRITTEN REQUEST, INCLUDING DOCUMENTATION AND
INFORMATION WHICH IS REASONABLY AVAILABLE TO THE INDEMNITEE AND IS REASONABLY
NECESSARY TO DETERMINE WHETHER AND TO WHAT EXTENT THE INDEMNITEE IS ENTITLED TO
INDEMNIFICATION. THE SECRETARY OF THE COMPANY SHALL, PROMPTLY UPON RECEIPT OF A
REQUEST FOR INDEMNIFICATION, ADVISE THE BOARD OF DIRECTORS IN WRITING THAT THE
INDEMNITEE HAS REQUESTED INDEMNIFICATION. ANY EXPENSES INCURRED BY THE
INDEMNITEE IN CONNECTION WITH THE INDEMNITEE’S REQUEST FOR INDEMNIFICATION
HEREUNDER SHALL BE BORNE BY THE COMPANY. THE COMPANY HEREBY INDEMNIFIES AND
AGREES TO HOLD THE INDEMNITEE HARMLESS FOR ANY EXPENSES INCURRED BY THE
INDEMNITEE UNDER THE IMMEDIATELY PRECEDING SENTENCE IRRESPECTIVE OF THE OUTCOME
OF THE DETERMINATION OF THE INDEMNITEE’S ENTITLEMENT TO INDEMNIFICATION.

 

(B)           UPON WRITTEN REQUEST BY THE INDEMNITEE FOR INDEMNIFICATION
PURSUANT TO SECTION 3 OR 4 HEREOF, THE ENTITLEMENT OF THE INDEMNITEE TO
INDEMNIFICATION PURSUANT TO THE

 

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TERMS OF THIS AGREEMENT SHALL BE DETERMINED BY THE FOLLOWING PERSON OR PERSONS,
WHO SHALL BE EMPOWERED TO MAKE SUCH DETERMINATION: (I) IF A CHANGE IN CONTROL
(AS HEREINAFTER DEFINED) SHALL HAVE OCCURRED, BY INDEPENDENT COUNSEL (AS
HEREINAFTER DEFINED) (UNLESS THE INDEMNITEE SHALL REQUEST IN WRITING THAT SUCH
DETERMINATION BE MADE BY THE BOARD OF DIRECTORS (OR A COMMITTEE THEREOF) IN THE
MANNER PROVIDED FOR IN CLAUSE (II) OF THIS SECTION 8(B)) IN A WRITTEN OPINION TO
THE BOARD OF DIRECTORS, A COPY OF WHICH SHALL BE DELIVERED TO THE INDEMNITEE; OR
(II) IF A CHANGE IN CONTROL SHALL NOT HAVE OCCURRED, (A)(1) BY THE BOARD OF
DIRECTORS OF THE COMPANY, BY A MAJORITY VOTE OF DISINTERESTED DIRECTORS (AS
HEREINAFTER DEFINED) EVEN THOUGH LESS THAN A QUORUM, OR (2) BY A COMMITTEE OF
DISINTERESTED DIRECTORS DESIGNATED BY MAJORITY VOTE OF DISINTERESTED DIRECTORS,
EVEN THOUGH LESS THAN A QUORUM, OR (B) IF THERE ARE NO SUCH DISINTERESTED
DIRECTORS OR, EVEN IF THERE ARE SUCH DISINTERESTED DIRECTORS, IF THE BOARD OF
DIRECTORS, BY THE MAJORITY VOTE OF DISINTERESTED DIRECTORS, SO DIRECTS, BY
INDEPENDENT COUNSEL IN A WRITTEN OPINION TO THE BOARD OF DIRECTORS, A COPY OF
WHICH SHALL BE DELIVERED TO THE INDEMNITEE. SUCH INDEPENDENT COUNSEL SHALL BE
SELECTED BY THE BOARD OF DIRECTORS AND APPROVED BY THE INDEMNITEE. UPON FAILURE
OF THE BOARD OF DIRECTORS TO SO SELECT, OR UPON FAILURE OF THE INDEMNITEE TO SO
APPROVE, SUCH INDEPENDENT COUNSEL SHALL BE SELECTED BY THE CHANCELLOR OF THE
STATE OF DELAWARE OR SUCH OTHER PERSON AS THE CHANCELLOR SHALL DESIGNATE TO MAKE
SUCH SELECTION. SUCH DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION SHALL BE
MADE NOT LATER THAN 45 DAYS AFTER RECEIPT BY THE COMPANY OF A WRITTEN REQUEST
FOR INDEMNIFICATION. IF THE PERSON MAKING SUCH DETERMINATION SHALL DETERMINE
THAT THE INDEMNITEE IS ENTITLED TO INDEMNIFICATION AS TO PART (BUT NOT ALL) OF
THE APPLICATION FOR INDEMNIFICATION, SUCH PERSON SHALL REASONABLY PRORATE SUCH
PART OF INDEMNIFICATION AMONG SUCH CLAIMS, ISSUES OR MATTERS. IF IT IS SO
DETERMINED THAT THE INDEMNITEE IS ENTITLED TO INDEMNIFICATION, PAYMENT TO THE
INDEMNITEE SHALL BE MADE WITHIN TEN DAYS AFTER SUCH DETERMINATION.

 

9.             PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.

 

(A)           IN MAKING A DETERMINATION WITH RESPECT TO ENTITLEMENT TO
INDEMNIFICATION, THE INDEMNITEE SHALL BE PRESUMED TO BE ENTITLED TO
INDEMNIFICATION HEREUNDER AND THE COMPANY SHALL HAVE THE BURDEN OF PROOF IN THE
MAKING OF ANY DETERMINATION CONTRARY TO SUCH PRESUMPTION.

 

(B)           IF THE BOARD OF DIRECTORS, OR SUCH OTHER PERSON OR PERSONS
EMPOWERED PURSUANT TO SECTION 8 TO MAKE THE DETERMINATION OF WHETHER THE
INDEMNITEE IS ENTITLED TO INDEMNIFICATION, SHALL HAVE FAILED TO MAKE A
DETERMINATION AS TO ENTITLEMENT TO INDEMNIFICATION WITHIN 45 DAYS AFTER RECEIPT
BY THE COMPANY OF SUCH REQUEST, THE REQUISITE DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION SHALL BE DEEMED TO HAVE BEEN MADE AND THE INDEMNITEE SHALL BE
ABSOLUTELY ENTITLED TO SUCH INDEMNIFICATION, ABSENT ACTUAL AND MATERIAL FRAUD IN
THE REQUEST FOR INDEMNIFICATION OR A PROHIBITION OF INDEMNIFICATION UNDER
APPLICABLE LAW. THE TERMINATION OF ANY ACTION, SUIT, INVESTIGATION OR PROCEEDING
DESCRIBED IN SECTION 3 OR 4 HEREOF BY JUDGMENT, ORDER, SETTLEMENT OR CONVICTION,
OR UPON A PLEA OF NOLO CONTENDERE OR ITS EQUIVALENT, SHALL NOT, OF ITSELF:
(I) CREATE A PRESUMPTION THAT THE INDEMNITEE DID NOT ACT IN GOOD FAITH AND IN A
MANNER WHICH HE/SHE REASONABLY BELIEVED TO BE IN OR NOT OPPOSED TO THE BEST
INTERESTS OF THE COMPANY, AND, WITH RESPECT TO ANY CRIMINAL ACTION OR
PROCEEDING, THAT THE INDEMNITEE HAS REASONABLE CAUSE TO BELIEVE THAT THE
INDEMNITEE’S CONDUCT WAS UNLAWFUL; OR (II) OTHERWISE

 

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ADVERSELY AFFECT THE RIGHTS OF THE INDEMNITEE TO INDEMNIFICATION, EXCEPT AS MAY
BE PROVIDED HEREIN.

 

10.           ADVANCEMENT OF EXPENSES.  ALL REASONABLE EXPENSES ACTUALLY
INCURRED BY THE INDEMNITEE IN CONNECTION WITH ANY THREATENED OR PENDING ACTION,
SUIT OR PROCEEDING SHALL BE PAID BY THE COMPANY IN ADVANCE OF THE FINAL
DISPOSITION OF SUCH ACTION, SUIT OR PROCEEDING, IF SO REQUESTED BY THE
INDEMNITEE, WITHIN 20 DAYS AFTER THE RECEIPT BY THE COMPANY OF A STATEMENT OR
STATEMENTS FROM THE INDEMNITEE REQUESTING SUCH ADVANCE OR ADVANCES. THE
INDEMNITEE MAY SUBMIT SUCH STATEMENTS FROM TIME TO TIME. THE INDEMNITEE’S
ENTITLEMENT TO SUCH EXPENSES SHALL INCLUDE THOSE INCURRED IN CONNECTION WITH ANY
PROCEEDING BY THE INDEMNITEE SEEKING AN ADJUDICATION OR AWARD IN ARBITRATION
PURSUANT TO THIS AGREEMENT. SUCH STATEMENT OR STATEMENTS SHALL REASONABLY
EVIDENCE THE EXPENSES INCURRED BY THE INDEMNITEE IN CONNECTION THEREWITH AND
SHALL INCLUDE OR BE ACCOMPANIED BY A WRITTEN AFFIRMATION BY THE INDEMNITEE OF
THE INDEMNITEE’S GOOD FAITH BELIEF THAT THE INDEMNITEE HAS MET THE STANDARD OF
CONDUCT NECESSARY FOR INDEMNIFICATION UNDER THIS AGREEMENT AND AN UNDERTAKING BY
OR ON BEHALF OF THE INDEMNITEE TO REPAY SUCH AMOUNT IF IT IS ULTIMATELY
DETERMINED THAT THE INDEMNITEE IS NOT ENTITLED TO BE INDEMNIFIED AGAINST SUCH
EXPENSES BY THE COMPANY PURSUANT TO THIS AGREEMENT OR OTHERWISE. EACH WRITTEN
UNDERTAKING TO PAY AMOUNTS ADVANCED MUST BE AN UNLIMITED GENERAL OBLIGATION BUT
NEED NOT BE SECURED, AND SHALL BE ACCEPTED WITHOUT REFERENCE TO FINANCIAL
ABILITY TO MAKE REPAYMENT.

 

11.           REMEDIES OF THE INDEMNITEE IN CASES OF DETERMINATION NOT TO
INDEMNIFY OR TO ADVANCE EXPENSES.  IN THE EVENT THAT A DETERMINATION IS MADE
THAT THE INDEMNITEE IS NOT ENTITLED TO INDEMNIFICATION HEREUNDER OR IF THE
PAYMENT HAS NOT BEEN TIMELY MADE FOLLOWING A DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION PURSUANT TO SECTIONS 8 AND 9, OR IF EXPENSES ARE NOT ADVANCED
PURSUANT TO SECTION 10, THE INDEMNITEE SHALL BE ENTITLED TO A FINAL ADJUDICATION
IN AN APPROPRIATE COURT OF THE STATE OF DELAWARE OR ANY OTHER COURT OF COMPETENT
JURISDICTION OF THE INDEMNITEE’S ENTITLEMENT TO SUCH INDEMNIFICATION OR ADVANCE.
ALTERNATIVELY, THE INDEMNITEE MAY, AT THE INDEMNITEE’S OPTION, 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 60 DAYS FOLLOWING
THE FILING OF THE DEMAND FOR ARBITRATION. THE COMPANY SHALL NOT OPPOSE THE
INDEMNITEE’S RIGHT TO SEEK ANY SUCH ADJUDICATION OR AWARD IN ARBITRATION OR ANY
OTHER CLAIM. SUCH JUDICIAL PROCEEDING OR ARBITRATION SHALL BE MADE DE NOVO, AND
THE INDEMNITEE SHALL NOT BE PREJUDICED BY REASON OF A DETERMINATION (IF SO MADE)
THAT THE INDEMNITEE IS NOT ENTITLED TO INDEMNIFICATION. IF A DETERMINATION IS
MADE OR DEEMED TO HAVE BEEN MADE PURSUANT TO THE TERMS OF SECTION 8 OR SECTION 9
HEREOF THAT THE INDEMNITEE IS ENTITLED TO INDEMNIFICATION, THE COMPANY SHALL BE
BOUND BY SUCH DETERMINATION AND SHALL BE PRECLUDED FROM ASSERTING THAT SUCH
DETERMINATION HAS NOT BEEN MADE OR THAT THE PROCEDURE BY WHICH SUCH
DETERMINATION WAS MADE IS NOT VALID, BINDING AND ENFORCEABLE. THE COMPANY
FURTHER AGREES TO STIPULATE IN ANY SUCH COURT OR BEFORE ANY SUCH ARBITRATOR THAT
THE COMPANY IS BOUND BY ALL THE PROVISIONS OF THIS AGREEMENT AND IS PRECLUDED
FROM MAKING ANY ASSERTIONS TO THE CONTRARY. IF THE COURT OR ARBITRATOR SHALL
DETERMINE THAT THE INDEMNITEE IS ENTITLED TO ANY INDEMNIFICATION HEREUNDER, THE
COMPANY SHALL PAY ALL REASONABLE EXPENSES ACTUALLY INCURRED BY THE INDEMNITEE IN
CONNECTION WITH SUCH ADJUDICATION OR AWARD IN ARBITRATION (INCLUDING, BUT NOT
LIMITED TO, ANY APPELLATE PROCEEDINGS).

 

12.           NOTIFICATION AND DEFENSE OF CLAIM.  PROMPTLY AFTER RECEIPT BY THE
INDEMNITEE OF NOTICE OF THE COMMENCEMENT OF ANY ACTION, SUIT OR PROCEEDING, THE
INDEMNITEE WILL, IF A CLAIM IN

 

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RESPECT THEREOF IS TO BE MADE AGAINST THE COMPANY UNDER THIS AGREEMENT, NOTIFY
THE COMPANY IN WRITING OF THE COMMENCEMENT THEREOF; BUT THE OMISSION TO SO
NOTIFY THE COMPANY WILL NOT RELIEVE THE COMPANY FROM ANY LIABILITY THAT IT MAY
HAVE TO THE INDEMNITEE OTHERWISE THAN UNDER THIS AGREEMENT OR OTHERWISE, EXCEPT
TO THE EXTENT THAT THE COMPANY MAY SUFFER MATERIAL PREJUDICE BY REASON OF SUCH
FAILURE. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, WITH RESPECT TO
ANY SUCH ACTION, SUIT OR PROCEEDING AS TO WHICH THE INDEMNITEE GIVES NOTICE TO
THE COMPANY OF THE COMMENCEMENT THEREOF:

 

(A)           THE COMPANY WILL BE ENTITLED TO PARTICIPATE THEREIN AT ITS OWN
EXPENSE.

 

(B)           EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 12(B), TO THE EXTENT
THAT IT MAY WISH, THE COMPANY, JOINTLY WITH ANY OTHER INDEMNIFYING PARTY
SIMILARLY NOTIFIED, SHALL BE ENTITLED TO ASSUME THE DEFENSE THEREOF WITH COUNSEL
REASONABLY SATISFACTORY TO THE INDEMNITEE. AFTER NOTICE FROM THE COMPANY TO THE
INDEMNITEE OF ITS ELECTION TO SO ASSUME THE DEFENSE THEREOF, THE COMPANY SHALL
NOT BE LIABLE TO THE INDEMNITEE UNDER THIS AGREEMENT FOR ANY LEGAL OR OTHER
EXPENSES SUBSEQUENTLY INCURRED BY THE INDEMNITEE IN CONNECTION WITH THE DEFENSE
THEREOF OTHER THAN REASONABLE COSTS OF INVESTIGATION OR AS OTHERWISE PROVIDED
BELOW. THE INDEMNITEE SHALL HAVE THE RIGHT TO EMPLOY THE INDEMNITEE’S OWN
COUNSEL IN SUCH ACTION OR LAWSUIT, BUT THE FEES AND EXPENSES OF SUCH COUNSEL
INCURRED AFTER NOTICE FROM THE COMPANY OF ITS ASSUMPTION OF THE DEFENSE THEREOF
SHALL BE AT THE EXPENSE OF THE INDEMNITEE UNLESS (I) THE EMPLOYMENT OF COUNSEL
BY THE INDEMNITEE HAS BEEN AUTHORIZED BY THE COMPANY, (II) THE INDEMNITEE SHALL
HAVE REASONABLY CONCLUDED THAT THERE MAY BE A CONFLICT OF INTEREST BETWEEN THE
COMPANY AND THE INDEMNITEE IN THE CONDUCT OF THE DEFENSE OF SUCH ACTION AND SUCH
DETERMINATION BY THE INDEMNITEE SHALL BE SUPPORTED BY AN OPINION OF COUNSEL,
WHICH OPINION SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY, OR (III) THE
COMPANY SHALL NOT IN FACT HAVE EMPLOYED COUNSEL TO ASSUME THE DEFENSE OF THE
ACTION, IN EACH OF WHICH CASES THE FEES AND EXPENSES OF COUNSEL SHALL BE AT THE
EXPENSE OF THE COMPANY. THE COMPANY SHALL NOT BE ENTITLED TO ASSUME THE DEFENSE
OF ANY ACTION, SUIT OR PROCEEDING BROUGHT BY OR ON BEHALF OF THE COMPANY OR AS
TO WHICH THE INDEMNITEE SHALL HAVE REACHED THE CONCLUSION PROVIDED FOR IN
CLAUSE (II) ABOVE.

 

(C)           THE COMPANY SHALL NOT BE LIABLE TO INDEMNIFY THE INDEMNITEE UNDER
THIS AGREEMENT FOR ANY AMOUNTS PAID IN SETTLEMENT OF ANY ACTION, SUIT OR
PROCEEDING EFFECTED WITHOUT ITS WRITTEN CONSENT, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD. THE COMPANY SHALL NOT BE REQUIRED TO OBTAIN THE CONSENT
OF THE INDEMNITEE TO SETTLE ANY ACTION, SUIT OR PROCEEDING WHICH THE COMPANY HAS
UNDERTAKEN TO DEFEND IF THE COMPANY ASSUMES FULL AND SOLE RESPONSIBILITY FOR
SUCH SETTLEMENT AND SUCH SETTLEMENT GRANTS THE INDEMNITEE A COMPLETE AND
UNQUALIFIED RELEASE IN RESPECT OF ANY POTENTIAL LIABILITY.

 

(D)           IF, AT THE TIME OF THE RECEIPT OF A NOTICE OF A CLAIM PURSUANT TO
THIS SECTION 12, THE COMPANY HAS DIRECTOR AND OFFICER LIABILITY INSURANCE IN
EFFECT, THE COMPANY 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 COMPANY 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
THE POLICIES.

 

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13.           OTHER RIGHT TO INDEMNIFICATION.  THE INDEMNIFICATION AND
ADVANCEMENT OF EXPENSES PROVIDED BY THIS AGREEMENT ARE CUMULATIVE, AND NOT
EXCLUSIVE, AND ARE IN ADDITION TO ANY OTHER RIGHTS TO WHICH THE INDEMNITEE MAY
NOW OR IN THE FUTURE BE ENTITLED UNDER ANY PROVISION OF THE BYLAWS OR
CERTIFICATE OF THE COMPANY, ANY VOTE OF STOCKHOLDERS OR DISINTERESTED DIRECTORS,
ANY PROVISION OF LAW OR OTHERWISE. EXCEPT AS REQUIRED BY APPLICABLE LAW, THE
COMPANY SHALL NOT ADOPT ANY AMENDMENT TO ITS BYLAWS OR CERTIFICATE THE EFFECT OF
WHICH WOULD BE TO DENY, DIMINISH OR ENCUMBER THE INDEMNITEE’S RIGHT TO
INDEMNIFICATION UNDER THIS AGREEMENT.

 

14.           DIRECTOR AND OFFICER LIABILITY INSURANCE.  THE COMPANY SHALL
MAINTAIN DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE FOR SO LONG AS THE
INDEMNITEE’S SERVICES ARE COVERED HEREUNDER, PROVIDED AND TO THE EXTENT THAT
SUCH INSURANCE IS AVAILABLE ON A COMMERCIALLY REASONABLE BASIS. IN THE EVENT THE
COMPANY MAINTAINS DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE, THE INDEMNITEE
SHALL BE NAMED AS AN INSURED IN SUCH MANNER AS TO PROVIDE THE INDEMNITEE THE
SAME RIGHTS AND BENEFITS AS ARE ACCORDED TO THE MOST FAVORABLY INSURED OF THE
COMPANY’S OFFICERS OR DIRECTORS. HOWEVER, THE COMPANY AGREES THAT THE PROVISIONS
HEREOF SHALL REMAIN IN EFFECT REGARDLESS OF WHETHER LIABILITY OR OTHER INSURANCE
COVERAGE IS AT ANY TIME OBTAINED OR RETAINED BY THE COMPANY, EXCEPT THAT ANY
PAYMENTS MADE TO, OR ON BEHALF OF, THE INDEMNITEE UNDER AN INSURANCE POLICY
SHALL REDUCE THE OBLIGATIONS OF THE COMPANY HEREUNDER.

 

15.           SPOUSAL INDEMNIFICATION.  THE COMPANY WILL INDEMNIFY THE
INDEMNITEE’S SPOUSE TO WHOM THE INDEMNITEE IS LEGALLY MARRIED AT ANY TIME THE
INDEMNITEE IS COVERED UNDER THE INDEMNIFICATION PROVIDED IN THIS AGREEMENT (EVEN
IF THE INDEMNITEE DID NOT REMAIN MARRIED TO HIM OR HER DURING THE ENTIRE PERIOD
OF COVERAGE) AGAINST ANY PENDING OR THREATENED ACTION, SUIT, PROCEEDING OR
INVESTIGATION FOR THE SAME PERIOD, TO THE SAME EXTENT AND SUBJECT TO THE SAME
STANDARDS, LIMITATIONS, OBLIGATIONS AND CONDITIONS UNDER WHICH THE INDEMNITEE IS
PROVIDED INDEMNIFICATION HEREIN, IF THE INDEMNITEE’S SPOUSE (OR FORMER SPOUSE)
BECOMES INVOLVED IN A PENDING OR THREATENED ACTION, SUIT, PROCEEDING OR
INVESTIGATION SOLELY BY REASON OF HIS OR HER STATUS AS THE INDEMNITEE’S SPOUSE,
INCLUDING, WITHOUT LIMITATION, ANY PENDING OR THREATENED ACTION, SUIT,
PROCEEDING OR INVESTIGATION THAT SEEKS DAMAGES RECOVERABLE FROM MARITAL
COMMUNITY PROPERTY, JOINTLY-OWNED PROPERTY OR PROPERTY PURPORTED TO HAVE BEEN
TRANSFERRED FROM THE INDEMNITEE TO HIS/HER SPOUSE (OR FORMER SPOUSE). THE
INDEMNITEE’S SPOUSE OR FORMER SPOUSE ALSO MAY BE ENTITLED TO ADVANCEMENT OF
EXPENSES TO THE SAME EXTENT THAT THE INDEMNITEE IS ENTITLED TO ADVANCEMENT OF
EXPENSES HEREIN. THE COMPANY MAY MAINTAIN INSURANCE TO COVER ITS OBLIGATION
HEREUNDER WITH RESPECT TO THE INDEMNITEE’S SPOUSE (OR FORMER SPOUSE) OR SET
ASIDE ASSETS IN A TRUST OR ESCROW FUND FOR THAT PURPOSE.

 

16.           INTENT.  THIS AGREEMENT IS INTENDED TO BE BROADER THAN ANY
STATUTORY INDEMNIFICATION RIGHTS APPLICABLE IN THE STATE OF DELAWARE AND SHALL
BE IN ADDITION TO ANY OTHER RIGHTS THE INDEMNITEE MAY HAVE UNDER THE COMPANY’S
CERTIFICATE, BYLAWS, APPLICABLE LAW OR OTHERWISE. TO THE EXTENT THAT A CHANGE IN
APPLICABLE LAW (WHETHER BY STATUTE OR JUDICIAL DECISION) PERMITS GREATER
INDEMNIFICATION BY AGREEMENT THAN WOULD BE AFFORDED CURRENTLY UNDER THE
COMPANY’S CERTIFICATE, BYLAWS, APPLICABLE LAW OR THIS AGREEMENT, IT IS THE
INTENT OF THE PARTIES THAT THE INDEMNITEE ENJOY BY THIS AGREEMENT THE GREATER
BENEFITS SO AFFORDED BY SUCH CHANGE. IN THE EVENT OF ANY CHANGE IN APPLICABLE
LAW, STATUTE OR RULE WHICH NARROWS THE RIGHT OF A DELAWARE CORPORATION TO
INDEMNIFY A MEMBER OF ITS BOARD OF DIRECTORS OR AN OFFICER, EMPLOYEE, AGENT OR
FIDUCIARY, SUCH CHANGE, TO THE EXTENT NOT OTHERWISE REQUIRED BY SUCH LAW,
STATUTE OR RULE TO BE

 

8

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APPLIED TO THIS AGREEMENT, SHALL HAVE NO EFFECT ON THIS AGREEMENT OR THE
PARTIES’ RIGHTS AND OBLIGATIONS HEREUNDER.

 

17.           ATTORNEY’S FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT.  IN THE
EVENT THAT THE INDEMNITEE IS SUBJECT TO OR INTERVENES IN ANY ACTION, SUIT OR
PROCEEDING IN WHICH THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT IS AT ISSUE
OR SEEKS AN ADJUDICATION OR AWARD IN ARBITRATION TO ENFORCE THE INDEMNITEE’S
RIGHTS UNDER, OR TO RECOVER DAMAGES FOR BREACH OF, THIS AGREEMENT
THE INDEMNITEE, IF HE/SHE PREVAILS IN WHOLE OR IN PART IN SUCH ACTION, SHALL BE
ENTITLED TO RECOVER FROM THE COMPANY AND SHALL BE INDEMNIFIED BY THE COMPANY
AGAINST ANY ACTUAL EXPENSES FOR ATTORNEYS’ FEES AND DISBURSEMENTS REASONABLY
INCURRED BY THE INDEMNITEE.

 

18.           EFFECTIVE DATE.  THE PROVISIONS OF THIS AGREEMENT SHALL COVER
CLAIMS, ACTIONS, SUITS OR PROCEEDINGS WHETHER NOW PENDING OR HEREAFTER COMMENCED
AND SHALL BE RETROACTIVE TO COVER ACTS OR OMISSIONS OR ALLEGED ACTS OR OMISSIONS
WHICH HERETOFORE HAVE TAKEN PLACE. THE COMPANY SHALL BE LIABLE UNDER THIS
AGREEMENT, PURSUANT TO SECTIONS 3 AND 4 HEREOF, FOR ALL ACTS OF THE INDEMNITEE
WHILE SERVING AS A DIRECTOR AND/OR OFFICER, NOTWITHSTANDING THE TERMINATION OF
THE INDEMNITEE’S SERVICE, IF SUCH ACT WAS PERFORMED OR OMITTED TO BE PERFORMED
DURING THE TERM OF THE INDEMNITEE’S SERVICE TO THE COMPANY.

 

19.           DURATION OF AGREEMENT.  THIS AGREEMENT SHALL SURVIVE AND CONTINUE
EVEN THOUGH THE INDEMNITEE MAY HAVE TERMINATED HIS/HER SERVICE AS A DIRECTOR,
OFFICER, EMPLOYEE, AGENT OR FIDUCIARY OF THE COMPANY OR AS A DIRECTOR, OFFICER,
EMPLOYEE, AGENT OR FIDUCIARY OF ANY OTHER ENTITY, INCLUDING, BUT NOT LIMITED TO
ANOTHER CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY, EMPLOYEE BENEFIT
PLAN, JOINT VENTURE, TRUST OR OTHER ENTERPRISE OR BY REASON OF ANY ACT OR
OMISSION BY THE INDEMNITEE IN ANY SUCH CAPACITY. THIS AGREEMENT SHALL BE BINDING
UPON THE COMPANY AND ITS SUCCESSORS AND ASSIGNS, INCLUDING, WITHOUT LIMITATION,
ANY CORPORATION OR OTHER ENTITY WHICH MAY HAVE ACQUIRED ALL OR SUBSTANTIALLY ALL
OF THE COMPANY’S ASSETS OR BUSINESS OR INTO WHICH THE COMPANY MAY BE
CONSOLIDATED OR MERGED, AND SHALL INURE TO THE BENEFIT OF THE INDEMNITEE AND
HIS/HER SPOUSE, SUCCESSORS, ASSIGNS, HEIRS, DEVISEES, EXECUTORS, ADMINISTRATORS
OR OTHER LEGAL REPRESENTATIONS. THE COMPANY SHALL REQUIRE ANY SUCCESSOR OR
ASSIGNEE (WHETHER DIRECT OR INDIRECT, BY PURCHASE, MERGER, CONSOLIDATION OR
OTHERWISE) TO ALL OR SUBSTANTIALLY ALL OF THE BUSINESS AND/OR ASSETS OF THE
COMPANY, BY WRITTEN AGREEMENT IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE COMPANY AND THE INDEMNITEE, EXPRESSLY TO ASSUME AND AGREE TO PERFORM THIS
AGREEMENT IN THE SAME MANNER AND TO THE SAME EXTENT THAT THE COMPANY WOULD BE
REQUIRED TO PERFORM IF NO SUCH SUCCESSION OR ASSIGNMENT HAD TAKEN PLACE.

 

20.           DISCLOSURE OF PAYMENTS.  EXCEPT AS EXPRESSLY REQUIRED BY ANY
FEDERAL OR STATE SECURITIES LAWS OR OTHER FEDERAL OR STATE LAW, NEITHER PARTY
SHALL DISCLOSE ANY PAYMENTS UNDER THIS AGREEMENT UNLESS PRIOR APPROVAL OF THE
OTHER PARTY IS OBTAINED.

 

21.           SEVERABILITY.  IF ANY PROVISION OR PROVISIONS OF THIS AGREEMENT
SHALL BE HELD INVALID, ILLEGAL OR UNENFORCEABLE FOR ANY REASON WHATSOEVER,
(A) THE VALIDITY, LEGALITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS OF
THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, ALL PORTIONS OF ANY SECTIONS OF
THIS AGREEMENT CONTAINING ANY SUCH PROVISION HELD TO BE INVALID, ILLEGAL OR
UNENFORCEABLE) SHALL NOT IN ANY WAY BE AFFECTED OR IMPAIRED THEREBY AND (B) TO
THE FULLEST EXTENT POSSIBLE, THE PROVISIONS OF THIS AGREEMENT (INCLUDING, BUT
NOT LIMITED TO, ALL PORTIONS OF ANY PARAGRAPH OF THIS AGREEMENT CONTAINING ANY
SUCH PROVISION HELD TO BE INVALID, ILLEGAL OR UNENFORCEABLE, THAT ARE NOT
THEMSELVES INVALID,

 

9

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ILLEGAL OR UNENFORCEABLE) SHALL BE CONSTRUED SO AS TO GIVE EFFECT TO THE INTENT
MANIFEST BY THE PROVISION HELD INVALID, ILLEGAL OR UNENFORCEABLE.

 

22.           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED BY ONE OR MORE
COUNTERPARTS, EACH OF WHICH SHALL FOR ALL PURPOSES BE DEEMED TO BE AN ORIGINAL
BUT ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME AGREEMENT. ONLY ONE
SUCH COUNTERPART SIGNED BY THE PARTY AGAINST WHOM ENFORCEABILITY IS SOUGHT SHALL
BE REQUIRED TO BE PRODUCED TO EVIDENCE THE EXISTENCE OF THIS AGREEMENT.

 

23.           CAPTIONS.  THE CAPTIONS AND HEADINGS USED IN THIS AGREEMENT ARE
INSERTED FOR CONVENIENCE ONLY AND SHALL NOT BE DEEMED TO CONSTITUTE PART OF THIS
AGREEMENT OR TO AFFECT THE CONSTRUCTION THEREOF.

 

24.           DEFINITIONS.  FOR PURPOSES OF THIS AGREEMENT:

 

(A)           “CHANGE IN CONTROL” SHALL MEAN THE OCCURRENCE OF ANY ONE OF THE
FOLLOWING:

 

(I)            THE SALE, LEASE, EXCHANGE OR OTHER TRANSFER, DIRECTLY OR
INDIRECTLY, OF SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY (IN ONE
TRANSACTION OR IN A SERIES OF RELATED TRANSACTIONS) TO A PERSON OR ENTITY THAT
IS NOT CONTROLLED DIRECTLY OR INDIRECTLY BY THE COMPANY;

 

(II)           THE APPROVAL BY THE STOCKHOLDERS OF THE COMPANY OF ANY PLAN OR
PROPOSAL FOR THE LIQUIDATION OR DISSOLUTION OF THE COMPANY;

 

(III)          ANY PERSON BECOMES AFTER THE EFFECTIVE DATE OF THIS AGREEMENT THE
“BENEFICIAL OWNER” (AS DEFINED IN RULE 13D-3 UNDER THE EXCHANGE ACT), DIRECTLY
OR INDIRECTLY, OF (A) 20% OR MORE, BUT NOT 50% OR MORE, OF THE COMBINED VOTING
POWER OF THE COMPANY’S OUTSTANDING SECURITIES ORDINARILY HAVING THE RIGHT TO
VOTE AT ELECTIONS OF DIRECTORS, UNLESS THE TRANSACTION RESULTING IN SUCH
OWNERSHIP HAS BEEN APPROVED IN ADVANCE BY THE CONTINUITY DIRECTORS, OR (B) 50%
OR MORE OF THE COMBINED VOTING POWER OF THE COMPANY’S OUTSTANDING SECURITIES
ORDINARILY HAVING THE RIGHT TO VOTE AT ELECTIONS OF DIRECTORS (REGARDLESS OF ANY
APPROVAL BY THE CONTINUITY DIRECTORS);

 

(IV)          A MERGER OR CONSOLIDATION TO WHICH THE COMPANY IS A PARTY IF THE
STOCKHOLDERS OF THE COMPANY IMMEDIATELY PRIOR TO EFFECTIVE DATE OF SUCH MERGER
OR CONSOLIDATION HAVE “BENEFICIAL OWNERSHIP” (AS DEFINED IN RULE 13D-3 UNDER THE
EXCHANGE ACT), IMMEDIATELY FOLLOWING THE EFFECTIVE DATE OF SUCH MERGER OR
CONSOLIDATION, OF SECURITIES OF THE SURVIVING CORPORATION REPRESENTING (A) MORE
THAN 50%, BUT LESS THAN 80%, OF THE COMBINED VOTING POWER OF THE SURVIVING
CORPORATION’S THEN OUTSTANDING SECURITIES ORDINARILY HAVING THE RIGHT TO VOTE AT
ELECTIONS OF DIRECTORS, UNLESS SUCH MERGER OR CONSOLIDATION HAS BEEN APPROVED IN
ADVANCE BY THE CONTINUITY DIRECTORS, OR (B) 50% OR LESS OF THE COMBINED VOTING
POWER OF THE SURVIVING CORPORATION’S THEN OUTSTANDING SECURITIES ORDINARILY
HAVING

 

10

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THE RIGHT TO VOTE AT ELECTIONS OF DIRECTORS (REGARDLESS OF ANY APPROVAL BY THE
CONTINUITY DIRECTORS);

 

(V)           THE CONTINUITY DIRECTORS CEASE FOR ANY REASON TO CONSTITUTE AT
LEAST A MAJORITY OF THE BOARD; OR

 

(VI)          ANY OTHER CHANGE IN CONTROL OF THE COMPANY OF A NATURE THAT WOULD
BE REQUIRED TO BE REPORTED PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT,
WHETHER OR NOT THE COMPANY IS THEN SUBJECT TO SUCH REPORTING REQUIREMENT.

 

(B)           “CONTINUITY DIRECTORS” SHALL MEAN ANY INDIVIDUALS WHO ARE MEMBERS
OF THE BOARD ON THE EFFECTIVE DATE OF THIS AGREEMENT AND ANY INDIVIDUAL WHO
SUBSEQUENTLY BECOMES A MEMBER OF THE BOARD WHOSE ELECTION, OR NOMINATION FOR
ELECTION BY THE COMPANY’S STOCKHOLDERS, WAS APPROVED BY A VOTE OF AT LEAST A
MAJORITY OF THE CONTINUITY DIRECTORS (EITHER BY SPECIFIC VOTE OR BY APPROVAL OF
THE COMPANY’S PROXY STATEMENT IN WHICH SUCH INDIVIDUAL IS NAMED AS A NOMINEE FOR
DIRECTOR WITHOUT OBJECTION TO SUCH NOMINATION).

 

(C)           “DISINTERESTED DIRECTOR” SHALL MEAN A DIRECTOR OF THE COMPANY WHO
IS NOT OR WAS NOT A PARTY TO THE ACTION, SUIT, INVESTIGATION OR PROCEEDING IN
RESPECT OF WHICH INDEMNIFICATION IS BEING SOUGHT BY THE INDEMNITEE.

 

(D)           “EXPENSES” SHALL INCLUDE ALL 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 INCURRED IN
CONNECTION WITH PROSECUTING, DEFENDING, PREPARING TO PROSECUTE OR DEFEND,
INVESTIGATING OR BEING OR PREPARING TO BE A WITNESS IN ANY THREATENED, PENDING
OR COMPLETED ACTION, SUIT OR PROCEEDING, WHETHER CIVIL, CRIMINAL, ADMINISTRATIVE
OR INVESTIGATIVE IN NATURE.

 

(E)           “INDEPENDENT COUNSEL” SHALL MEAN A LAW FIRM OR A MEMBER OF A LAW
FIRM THAT NEITHER IS PRESENTLY NOR IN THE PAST FIVE YEARS HAS BEEN RETAINED TO
REPRESENT (I) THE COMPANY OR THE INDEMNITEE IN ANY MATTER MATERIAL TO EITHER
SUCH PARTY OR (II) ANY OTHER PARTY TO THE ACTION, SUIT, INVESTIGATION OR
PROCEEDING GIVING RISE TO A CLAIM FOR INDEMNIFICATION HEREUNDER. NOTWITHSTANDING
THE FOREGOING, THE TERM “INDEPENDENT COUNSEL” SHALL NOT INCLUDE ANY PERSON WHO,
UNDER THE APPLICABLE STANDARDS OF PROFESSIONAL CONDUCT THEN PREVAILING, WOULD
HAVE A CONFLICT OF INTEREST IN REPRESENTING EITHER THE COMPANY OR THE INDEMNITEE
IN AN ACTION TO DETERMINE THE INDEMNITEE’S RIGHT TO INDEMNIFICATION UNDER THIS
AGREEMENT.

 

25.           ENTIRE AGREEMENT, MODIFICATION AND WAIVER.  THIS AGREEMENT
CONSTITUTES THE ENTIRE AGREEMENT AND UNDERSTANDING OF THE PARTIES HERETO
REGARDING THE SUBJECT MATTER HEREOF, AND NO SUPPLEMENT, MODIFICATION OR
AMENDMENT OF THIS AGREEMENT SHALL BE BINDING UNLESS EXECUTED IN WRITING BY BOTH
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. NO
SUPPLEMENT, MODIFICATION OR AMENDMENT OF THIS AGREEMENT SHALL LIMIT OR RESTRICT
ANY RIGHT OF THE INDEMNITEE UNDER THIS AGREEMENT IN RESPECT

 

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OF ANY ACT OR OMISSION OF THE INDEMNITEE PRIOR TO THE EFFECTIVE DATE OF SUCH
SUPPLEMENT, MODIFICATION OR AMENDMENT UNLESS EXPRESSLY PROVIDED THEREIN.

 

26.           NOTICES.  ALL NOTICES, REQUESTS, DEMANDS OR OTHER COMMUNICATIONS
HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN DULY GIVEN IF
(A) DELIVERED BY HAND WITH RECEIPT ACKNOWLEDGED BY THE PARTY TO WHOM SAID NOTICE
OR OTHER COMMUNICATION SHALL HAVE BEEN DIRECTED, (B) MAILED BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED WITH POSTAGE PREPAID, ON THE DATE
SHOWN ON THE RETURN RECEIPT, (C) SENT BY A RECOGNIZED NEXT-DAY COURIER SERVICE
ON THE FIRST BUSINESS DAY FOLLOWING THE DATE OF DISPATCH OR (D) DELIVERED BY
FACSIMILE TRANSMISSION ON THE DATE SHOWN ON THE FACSIMILE MACHINE REPORT:

 

(I)             IF TO THE INDEMNITEE TO:

 

 

 

 

(II)            IF TO THE COMPANY, TO:

 

Northern Technologies International Corporation

4201 Woodland Road

Circle Pines, Minnesota 55014

Attn: Chief Executive Officer

Fax:  (763) 225-6645

 

with a copy to:

 

Oppenheimer Wolff & Donnelly LLP

3300 Plaza VII

45 South Seventh Street

Minneapolis, Minnesota 55402

Attn:       Amy E. Culbert, Esq.

Fax:         (612) 607-7100

 

or to such other address as may be furnished to the Indemnitee by the Company or
to the Company by the Indemnitee, as the case may be.

 

27.           GOVERNING LAW.  THE PARTIES HERETO AGREE THAT THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF DELAWARE, APPLIED WITHOUT GIVING EFFECT TO ANY CONFLICTS-OF-LAW
PRINCIPLES.

 

[Signature Page Follows]

 

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

 

 

NORTHERN TECHNOLOGIES
INTERNATIONAL CORPORATION

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

INDEMNITEE:

 

 

 

By:

 

 

Name:

 

 

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