Exhibit 10.1

 

 

INDEMNIFICATION AGREEMENT

This Indemnification Agreement, dated _________, 20__, is made between Biota
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and
________________ (the “Indemnitee”).

RECITALS

A.     The Company desires to attract and retain the services of talented and
experienced individuals, such as Indemnitee, to serve as directors and officers
of the Company and its subsidiaries and wishes to indemnify such directors and
officers to the maximum extent permitted by law;

B.     The Company and Indemnitee recognize that corporate litigation in general
has subjected directors and officers to expensive litigation risks;

C.     Section 145 of the General Corporation Law of Delaware, under which the
Company is organized (“Section 145”), empowers the Company to indemnify its
directors and officers by agreement and to indemnify persons who serve, at the
request of the Company, as the directors and officers of other corporations or
enterprises, and expressly provides that the indemnification provided by
Section 145 is not exclusive;

D.     Section 145(g) allows for the purchase of management liability (“D&O”)
insurance by the Company, which in theory can cover asserted liabilities without
regard to whether they are indemnifiable or not;

E.     Individuals considering service or presently serving as a director or
officer of the Company expect to be extended market terms of indemnification
commensurate with their role or position, and that the Company will endeavor to
maintain appropriate D&O insurance; and

F.     In order to induce Indemnitee to serve or continue to serve as a director
or officer of the Company and/or one or more its subsidiaries, the Company and
Indemnitee enter into this Agreement.

AGREEMENT

NOW, THEREFORE, Indemnitee and the Company hereby agree as follows:

1.     Definitions. As used in this Agreement:

(a)     “Agent” means any person who is or was a director, officer, employee or
other agent of the Company or a subsidiary of the Company; or is or was serving
at the request of, for the convenience of, or to represent the interests of the
Company or a subsidiary of the Company as a director, officer, employee or agent
of another foreign or domestic corporation, limited liability company, employee
benefit plan, nonprofit entity, partnership, joint venture, trust or other
enterprise; or was a director, officer, employee or agent of a foreign or
domestic corporation which was a predecessor corporation of the Company or a
subsidiary of the Company, or was a director, officer, employee or agent of
another enterprise at the request of, for the convenience of, or to represent
the interests of such predecessor corporation.

 

 
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(b)     “Board” means the Board of Directors of the Company.

(c)     A “Change in Control” shall be deemed to have occurred if (i) any
“person,” as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), other than a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or a corporation owned directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing a majority of the total voting power represented by the Company’s
then outstanding voting securities, (ii) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board,
together with any new directors whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination was previously so
approved, cease for any reason to constitute a majority of the Board, (iii) the
stockholders of the Company approve a merger or consolidation or a sale of all
or substantially all of the Company’s assets with or to another entity, other
than a merger, consolidation or asset sale that would result in the holders of
the Company’s outstanding voting securities immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least a majority of the total voting
power represented by the voting securities of the Company or such surviving or
successor entity outstanding immediately thereafter, or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company.

 

(d)     “Expenses” shall include all out-of-pocket costs of any type or nature
whatsoever (including, without limitation, all attorneys’ fees and related
disbursements), actually and reasonably incurred by Indemnitee in connection
with either the investigation, defense or appeal of a Proceeding or establishing
or enforcing a right to indemnification under this Agreement, or Section 145 or
otherwise; provided, however, that “Expenses” shall not include any judgments,
fines, ERISA excise taxes or penalties, or amounts paid in settlement of a
Proceeding.

(e)     “Independent Counsel” means a law firm, or a partner (or, if applicable,
member) of such a law firm, that is experienced in relevant matters of
corporation law and neither currently is, nor in the past five years has been,
retained to represent: (i) the Company or Indemnitee in any matter material to
either such party or (ii) any other party to or witness in 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
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement.

(f)     “Proceeding” means any threatened, pending, or completed action, claim,
suit, arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding whether formal or informal,
civil, criminal, administrative, or investigative, including any such
investigation or proceeding instituted by or on behalf of the Corporation or its
Board of Directors, in which Indemnitee is or reasonably may be involved as a
party or target, that is associated with Indemnitee’s being an Agent of the
Corporation.

 

 
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(g)     “Subsidiary” means any corporation of which more than 50% of the
outstanding voting securities is owned directly or indirectly by the Company, by
the Company and one or more other subsidiaries, or by one or more other
subsidiaries.

2.     Agreement to Serve. Indemnitee agrees to serve and/or continue to serve
as an Agent of the Company, at its will (or under separate agreement, if such
agreement exists), in the capacity Indemnitee currently serves as an Agent of
the Company, so long as Indemnitee is duly appointed or elected and qualified in
accordance with the applicable provisions of the Bylaws of the Company or any
subsidiary of the Company or until such time as Indemnitee tenders his or her
resignation in writing; provided, however, that nothing contained in this
Agreement is intended to create any right to continued employment or other
service by Indemnitee.

3.     Liability Insurance.

(a)     Maintenance of D&O Insurance. The Company hereby covenants and agrees
that, so long as Indemnitee shall continue to serve as an Agent of the Company
and thereafter so long as Indemnitee shall be subject to any possible Proceeding
by reason of the fact that Indemnitee was an Agent of the Company, the Company,
subject to Section 3(c), shall promptly obtain and maintain in full force and
effect directors’ and officers’ liability insurance (“D&O Insurance”) in
reasonable amounts from established and reputable insurers, as more fully
described below. In the event of a Change in Control, the Company shall, as set
forth in Section (c) below, either: i) maintain such D&O Insurance for six
years; or ii) purchase a six year tail for such D&O Insurance.

(b)     Rights and Benefits. For all D&O Insurance, Indemnitee shall qualify as
an insured in such a manner as to provide Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company’s
independent directors (as defined by the insurer) if Indemnitee is such an
independent director; of the Company’s non-independent directors if Indemnitee
is not an independent director; of the Company’s officers if Indemnitee is an
officer of the Company; or of the Company’s key employees, if Indemnitee is not
a director or officer but is a key employee.

(c)     Limitation on Required Maintenance of D&O Insurance. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain D&O
Insurance at all, or of any type, terms, or amount, if the Company determines in
good faith that: such insurance is not readily available on commercially
reasonable terms or the premium costs for such insurance are materially
disproportionate to the amount of coverage provided or available. In the event
that the Company is acquired by merger or otherwise, the Company shall purchase
a tail of six years duration effective upon closing and covering Indemnitee.

 

 
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4.     Mandatory Indemnification. Subject to the terms of this Agreement:

(a)     Third Party Actions. If Indemnitee is a person who was or is a party or
is threatened to be made a party to any Proceeding (other than an action by or
in the right of the Company) by reason of the fact that Indemnitee is or was an
Agent of the Company, or by reason of anything done or not done by Indemnitee in
any such capacity, the Company shall indemnify Indemnitee against all Expenses
and liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes and penalties, and amounts paid in
settlement) actually and reasonably incurred by Indemnitee in connection with
the investigation, defense, settlement or appeal of such Proceeding, provided
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or Proceeding, had no reasonable cause to believe his or her
conduct was unlawful.

(b)     Derivative Actions. If Indemnitee is a person who was or is a party or
is threatened to be made a party to any Proceeding by or in the right of the
Company by reason of the fact that Indemnitee is or was an Agent of the Company,
or by reason of anything done or not done by Indemnitee in any such capacity,
the Company shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by Indemnitee in connection with the investigation, defense,
settlement or appeal of such Proceeding, provided Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company; except that no indemnification under this
Section 4(b) shall be made in respect to any claim, issue or matter as to which
Indemnitee shall have been finally adjudged to be liable to the Company by a
court of competent jurisdiction unless and only to the extent that the Delaware
Court of Chancery or the court in which such Proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such amounts which the Delaware Court of Chancery or
such other court shall deem proper.

(c)     Actions where Indemnitee is Deceased. If Indemnitee is a person who was
or is a party or is threatened to be made a party to any Proceeding by reason of
the fact that Indemnitee is or was an Agent of the Company, or by reason of
anything done or not done by Indemnitee in any such capacity, and if, prior to,
during the pendency of or after completion of such Proceeding Indemnitee is
deceased, the Company shall indemnify Indemnitee’s heirs, executors and
administrators against all Expenses and liabilities of any type whatsoever to
the extent Indemnitee would have been entitled to indemnification pursuant to
this Agreement were Indemnitee still alive.

(d)     Certain Terminations. 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 create a presumption that
Indemnitee did not act in good faith and in a manner which 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, that Indemnitee had reasonable
cause to believe that Indemnitee’s conduct was unlawful.

 

 
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(e)     Limitations. Notwithstanding the foregoing provisions of Sections 4(a),
4(b), 4(c) and 4(d) hereof, but subject to the exception set forth in Section 14
which shall control, the Company shall not be obligated to indemnify the
Indemnitee for Expenses or liabilities of any type whatsoever for which payment
(and the Company’s indemnification obligations under this Agreement shall be
reduced by such payment) is actually made to or on behalf of Indemnitee, by the
Company or otherwise, under a corporate insurance policy, or under a valid and
enforceable indemnity clause, right, by-law, or agreement; and, in the event the
Company has previously made a payment to Indemnitee for an Expense or liability
of any type whatsoever for which payment is actually made to or on behalf of the
Indemnitee under an insurance policy, or under a valid and enforceable indemnity
clause, by-law or agreement, Indemnitee shall return to the Company the amounts
subsequently received by the Indemnitee from such other source of
indemnification.

(f)     Witness. In the event that Indemnitee is not a party or has not been
threatened to be made a party to a Proceeding, but is subpoenaed (or given a
written request to be interviewed by a government authority) in such a
Proceeding by reason of the fact that the Indemnitee is or was an Agent of the
Company, or by reason of anything witnessed or allegedly witnessed by the
Indemnitee in that capacity, the Company shall indemnify the Indemnitee against
all actually and reasonably incurred out of pocket costs of any type or nature
whatsoever (including, without limitation, all attorneys’ fees and related
disbursements), actually and reasonably incurred by Indemnitee in responding to
such subpoena or written request for an interview. As a condition to this right,
Indemnitee must provide notice of such subpoena or request to the Company within
14 days of Indemnitee’s receipt thereof (this notice condition shall control
over Section 7(a), which shall not apply to this section 4(f)).

5.     Indemnification for Expenses in a Proceeding in Which Indemnitee is
Wholly or Partly Successful.

(a)     Successful Defense. Notwithstanding any other provisions of this
Agreement, to the extent Indemnitee has been successful, on the merits or
otherwise, in defense of any Proceeding (including, without limitation, an
action by or in the right of the Company) in which Indemnitee was a party by
reason of the fact that Indemnitee is or was an Agent of the Company at any
time, the Company shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by or on behalf of Indemnitee in connection with the
investigation, defense or appeal of such Proceeding.

(b)     Partially Successful Defense. Notwithstanding any other provisions of
this Agreement, to the extent that Indemnitee is a party to any Proceeding
(including, without limitation, an action by or in the right of the Company) in
which Indemnitee was a party by reason of the fact that Indemnitee is or was an
Agent of the Company at any time and 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 or on behalf of Indemnitee in connection with each
successfully resolved claim, issue or matter.

 

 
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(c)     Dismissal. 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.

(d)     Contribution. If the indemnification provided in this Agreement is
unavailable and may not be paid to Indemnitee for any reason other than
statutory limitations, then in respect of any threatened, pending or completed
action, suit or proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), the
Company shall contribute to the amount of expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
and paid or payable by Indemnitee in such proportion as is appropriate to
reflect (i) the relative benefits received by the Company on the one hand and
Indemnitee on the other hand from the transaction from which such action, suit
or proceeding arose, and (ii) the relative fault of Company on the one hand and
of Indemnitee on the other in connection with the events which resulted in such
expenses, judgments, fines or settlement amounts, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of Indemnitee on the other shall be determined by reference to, among other
things, the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent the circumstances resulting in such expenses,
judgments, fines or settlement amounts. The Company agrees that it would not be
just and equitable if contribution pursuant to this section were determined by
pro rata allocation or any other method of allocation which does not take
account of the foregoing equitable considerations.

6.     Mandatory Advancement of Expenses.

(a) Subject to the terms of this Agreement and following notice pursuant to
Section 7(a) below, the Company shall advance all Expenses reasonably incurred
by Indemnitee in connection with the investigation, defense, settlement or
appeal of any Proceeding to which Indemnitee is a party or is threatened to be
made a party by reason of the fact that Indemnitee is or was an Agent of the
Company (unless there has been a final determination that Indemnitee is not
entitled to indemnification for such Expenses) upon receipt satisfactory
documentation supporting such Expenses.  By execution of this Agreement,
Indemnitee agrees to repay the amount advanced only in the event and to the
extent that it shall ultimately be determined that Indemnitee is not entitled to
indemnification by the Company to the extent set forth in this agreement and
under Delaware law. Such advances are intended to be an obligation of the
Company to Indemnitee hereunder and shall in no event be deemed to be a personal
loan. Such advancement of Expenses shall otherwise be unsecured and without
regard to Indemnitee’s ability to repay. The advances to be made hereunder shall
be paid by the Company to Indemnitee within 30 days following delivery of a
written request therefore by Indemnitee to the Company, along with such
documentation and information as is reasonably available to the claimant and is
reasonably necessary to determine whether and to what extent the claimant is
entitled to advancement (which shall include without limitation detailed
invoices for legal services). The Company shall discharge its advancement duty
by, at its option, (a) paying such Expenses on behalf of Indemnitee, (b)
advancing to Indemnitee funds in an amount sufficient to pay such Expenses, or
(c) reimbursing Indemnitee for Expenses already paid by Indemnitee. In the event
that the Company fails to pay Expenses as incurred by Indemnitee as required by
this paragraph, Indemnitee may seek mandatory injunctive relief (including
without limitation specific performance) from any court having jurisdiction to
require the Company to pay Expenses as set forth in this paragraph. If
Indemnitee seeks mandatory injunctive relief pursuant to this paragraph, it
shall not be a defense to enforcement of the Company’s obligations set forth in
this paragraph that Indemnitee has an adequate remedy at law for damages.

 

 
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(b) Undertakings. Indemnitee shall qualify for advances upon the execution and
delivery to the Company of this Agreement, which constitutes an undertaking
whereby Indemnitee promises to repay any amounts advances in the event there
shall be a final determination that Indemnitee is not entitled to
indemnification by the Company.

7.     Notice and Other Indemnification Procedures.

(a)     Notice by Indemnitee. Promptly after receipt by Indemnitee of notice of
the commencement of or the threat of commencement of any Proceeding, Indemnitee
shall, if Indemnitee believes that indemnification with respect thereto may be
sought from the Company under this Agreement, notify the Company in writing of
the commencement or threat of commencement thereof.

(b)     Insurance. If the Company receives notice pursuant to Section 7(a)
hereof of the commencement of a Proceeding that may be covered under D&O
Insurance then 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.

(c)     Defense. In the event the Company shall be obligated to pay the Expenses
of any Proceeding against Indemnitee, the Company shall be entitled to assume
the defense of such Proceeding, with counsel selected by the Company and
approved by Indemnitee (which approval shall not be unreasonably withheld), upon
the delivery to Indemnitee of written notice of the Company’s election so to do.
After delivery of such notice, and the retention of such counsel by the Company,
the Company will not be liable to Indemnitee under this Agreement for any fees
of counsel subsequently incurred by Indemnitee with respect to the same
Proceeding, provided that (i) Indemnitee shall have the right to employ his or
her own counsel in any such Proceeding at Indemnitee’s expense; and
(ii) Indemnitee shall have the right to employ his or her own counsel in any
such Proceeding at the Company’s expense if (A) the Company has authorized the
employment of counsel by Indemnitee at the expense of the Company;
(B) Indemnitee shall have reasonably concluded based on the written advice of
Indemnitee’s legal counsel that there may be a conflict of interest between the
Company and Indemnitee in the conduct of any such defense; or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such
Proceeding. In addition to all the requirements above, if the Company has D&O
Insurance, or other insurance, with a panel counsel requirement that may cover
the matter for which indemnity is claimed by Indemnitee, then Indemnitee shall
use such panel counsel or other counsel approved by the insurers, unless there
is an actual conflict of interest posed by representation by all such counsel,
or unless and to the extent Company waives such requirement in writing.
Indemnitee and its counsel shall provide reasonable cooperation with such
insurer on request of the Company.

 

 
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8.     Right to Indemnification.

(a)     Right to Indemnification. In the event that Section 5(a) is
inapplicable, the Company shall indemnify Indemnitee pursuant to this Agreement
unless, and except to the extent that, it shall have been determined by one of
the methods listed in Section 8(b) that Indemnitee has not met the applicable
standard of conduct required to entitle Indemnitee to such indemnification.

(b)     Determination of Right to Indemnification. A determination of
Indemnitee’s right to indemnification under this Section 8 shall be made at the
election of the Board by (i) a majority vote of directors who are not parties to
the Proceeding for which indemnification is being sought, even though less than
a quorum, or by a committee consisting of directors who are not parties to the
Proceeding for which indemnification is being sought, who, even though less than
a quorum, have been designated by a majority vote of the disinterested
directors, or (ii) if there are no such disinterested directors or if the
disinterested directors so direct, by Independent Counsel in a written opinion
to the Board, a copy of which shall be delivered to Indemnitee. However, in the
event there has been a Change in Control, then the determination shall, at
Indemnitee’s sole option, be made by Independent Counsel as in (b)(ii), above,
with Indemnitee choosing the Independent Counsel subject to Company’s consent,
such consent not to be unreasonably withheld.

(c)     Submission for Decision. As soon as practicable, and in no event later
than 30 days after Indemnitee’s written request for indemnification, the Board
shall select the method for determining Indemnitee’s right to indemnification.
Indemnitee shall cooperate with the person or persons or entity making such
determination with respect to Indemnitee’s right 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 or member of the Board
shall act reasonably and in good faith in making a determination regarding
Indemnitee’s entitlement to indemnification under this Agreement.

(d)     Application to Court. If (i) a claim for indemnification or advancement
of Expenses is denied, in whole or in part, (ii) no disposition of such claim is
made by the Company within 60 days after the request therefore, (iii) the
advancement of Expenses is not timely made pursuant to Section 6 of this
Agreement or (iv) payment of indemnification is not made pursuant to Section 5
of this Agreement, Indemnitee shall have the right to apply to the Delaware
Court of Chancery, the court in which the Proceeding is or was pending, or any
other court of competent jurisdiction, for the purpose of enforcing Indemnitee’s
right to indemnification (including the advancement of Expenses) pursuant to
this Agreement.

(e)     Expenses Related to the Enforcement or Interpretation of this Agreement.
The Company shall indemnify Indemnitee against all reasonable Expenses incurred
by Indemnitee in connection with any hearing or proceeding under this Section 8
involving Indemnitee, and against all reasonable Expenses incurred by Indemnitee
in connection with any other proceeding between the Company and Indemnitee
involving the interpretation or enforcement of the rights of Indemnitee under
this Agreement, if and to the extent Indemnitee is successful.

 

 
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(f)     In no event shall Indemnitee’s right to indemnification (apart from
advancement of Expenses) be determined prior to a final adjudication in the
Proceeding at issue if the Proceeding is both ongoing, and of the nature to have
a final adjudication.

(g)     In any proceeding to determine Indemnitee’s right to indemnification or
advancement, Indemnitee shall be presumed to be entitled to indemnification or
advancement, with the burden of proof on the Company to prove, by a
preponderance of the evidence (or higher standard if required by relevant law)
that Indemnitee is not so entitled.

(h)     Indemnitee shall be fully indemnified for those matters where, in the
performance of his duties for the Company, he relied in good faith upon the
records of the Company and upon such information, opinions, reports or
statements presented to the Company by any of the Company’s officers or
employees, or committees of the board of directors, or by any other person as to
matters Indemnitee reasonably believed were within such other person's
professional or expert competence and who was selected with reasonable care by
or on behalf of the Company.

(i)     The knowledge or actions, or failure to act, of any director, officer,
agent, or employee of the Company, or the Company itself, shall not be imputed
to Indemnitee for purposes of determining any rights hereunder.

9.     Exceptions. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated:

(a)     Claims Initiated by Indemnitee. To indemnify or advance Expenses to
Indemnitee with respect to Proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, with a reasonable
allocation where appropriate, unless (i) such indemnification is expressly
required to be made by law, (ii) the Proceeding was authorized by the Board,
(iii) such indemnification is provided by the Company, in its sole discretion,
pursuant to the powers vested in the Company under the General Corporation Law
of Delaware or (iv) the Proceeding is brought pursuant to Section 8 specifically
to establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Section 145 in advance of a
final determination, in which case 8(e)’s fees-on-fees provision shall control;

(b)     Fees on Fees. To indemnify Indemnitee for any Expenses incurred by
Indemnitee with respect to any Proceeding instituted by Indemnitee to enforce or
interpret this Agreement, to the extent Indemnitee is not successful in such a
Proceeding;

(c)     Unauthorized Settlements. To indemnify Indemnitee under this Agreement
for any amounts paid in settlement of a Proceeding unless the Company consents
to such settlement, which consent shall not be unreasonably withheld;

(d)     Claims Under Section 16(b). To indemnify Indemnitee for Expenses
associated with any Proceeding related to, or the payment of profits made from
the purchase and sale (or sale and purchase) by Indemnitee of securities of the
Company 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
(provided, however, that the Company must advance Expenses for such matters as
otherwise permissible under this Agreement); or

 

 
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(e)     Payments Contrary to Law. To indemnify or advance Expenses to Indemnitee
for which payment is prohibited by applicable law.

10.     Non-Exclusivity. The provisions for indemnification and advancement of
Expenses set forth in this Agreement shall not be deemed exclusive of any other
rights which Indemnitee may have under any provision of law, the Company’s
Certificate of Incorporation or Bylaws, the vote of the Company’s stockholders
or disinterested directors, other agreements, or otherwise, both as to action in
Indemnitee’s official capacity and as to action in another capacity while
occupying Indemnitee’s position as an Agent of the Company. Indemnitee’s rights
hereunder shall continue after Indemnitee has ceased acting as an Agent of the
Company and shall inure to the benefit of the heirs, executors and
administrators of Indemnitee.

11.     Permitted Defenses. It shall be a defense to any action for which a
claim for indemnification is made under this Agreement (other than an action
brought to enforce a claim for Expenses pursuant to Section 6 hereof, provided
that the required documents have been tendered to the Company) that Indemnitee
is not entitled to indemnification because of the limitations set forth in
Sections 4 and 9 hereof. Neither the failure of the Company (including its Board
of Directors) or an Independent Counsel to have made a determination prior to
the commencement of such enforcement action that indemnification of Indemnitee
is proper in the circumstances, nor an actual determination by the Company
(including its Board of Directors) or an Independent Counsel that such
indemnification is improper, shall be a defense to the action or create a
presumption that Indemnitee is not entitled to indemnification under this
Agreement or otherwise.

12.     Subrogation. In the event the Company is obligated to make a payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery under any corporate insurance policy or
any other indemnity agreement covering Indemnitee, who shall execute all
documents reasonably required and take all action that may be necessary to
secure such rights and to enable the Company effectively to bring suit to
enforce such rights (provided that the Company pays Indemnitee’s costs and
expenses of doing so), including without limitation by assigning all such rights
to the Company or its designee to the extent of such indemnification or
advancement of Expenses. The Company’s obligation to indemnify or advance
expenses under this Agreement shall be reduced by any amount Indemnitee has
collected from such other source, and in the event that Company has fully paid
such indemnity or expenses, Indemnitee shall return to the Company any amounts
subsequently received from such other source of indemnification. With regard to
Fund Indemnitors, however, Section 14 shall control over this section.

13.     Information Sharing. If Indemnitee is the subject of or is implicated in
any investigation, whether formal or informal, by a government or regulatory
entity or agency, the Company shall provide to Indemnitee any information
provided to the investigating entity concerning the investigation; provided,
that by executing this Agreement, Indemnitee agrees to use such information
solely in connection with the defense of such investigation and if Indemnitee is
no longer serving as a Director or employed by the Company, Indemnitee shall at
the Company’s request execute a confidentiality agreement substantially in the
form of the confidentiality agreement in effect while such Indemnitee was a
director or employed by the Company.

 

 
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14.     Primacy of Indemnification. The Company hereby acknowledges that
Indemnitee may have certain rights to indemnification, advancement of expenses
or liability insurance provided by a third-party investor and certain of its
affiliates (collectively, the “Fund Indemnitors”). The Company hereby agrees
that (i) it is the indemnitor of first resort, i.e., its obligations to
Indemnitee under this Agreement and any indemnity provisions set forth in its
Certificate of Incorporation, Bylaws or elsewhere (collectively, “Indemnity
Arrangements”) are primary, and any obligation of the Fund Indemnitors to
advance expenses or to provide indemnification for the same expenses or
liabilities incurred by Indemnitee is secondary and excess, (ii) it shall
advance the full amount of expenses incurred by Indemnitee and shall be liable
for the full amount of all expenses, judgments, penalties, fines and amounts
paid in settlement by or on behalf of Indemnitee, to the extent legally
permitted and as required by any Indemnity Arrangement, without regard to any
rights Indemnitee may have against the Fund Indemnitors, and (iii) it
irrevocably waives, relinquishes and releases the Fund Indemnitors from any
claims against the Fund Indemnitors for contribution, subrogation or any other
recovery of any kind arising out of or relating to any Indemnity Arrangement.
The Company further agrees that no advancement or indemnification payment by any
Fund Indemnitor on behalf of Indemnitee shall affect the foregoing, and the Fund
Indemnitors shall be subrogated to the extent of such advancement or payment to
all of the rights of recovery of Indemnitee against the Company. The Company and
Indemnitee agree that the Fund Indemnitors are express third party beneficiaries
of the terms of this Section 14. The Company, on its own behalf and on behalf of
its insurers to the extent allowed by the policies, waives subrogation rights
against Indemnitee.

15.     Survival of Rights.

(a)     All agreements and obligations of the Company contained herein shall
continue during the period Indemnitee is an Agent of the Company and shall
continue thereafter so long as Indemnitee shall be subject to any possible claim
or threatened, pending or completed Proceeding by reason of the fact that
Indemnitee was serving in the capacity referred to herein.

(b)     The Company shall require any successor to the Company (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, 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 had taken
place.

16.     Interpretation of Agreement. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide
indemnification to Indemnitee to the fullest extent permitted by law, including
those circumstances in which indemnification would otherwise be discretionary.

 

 
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17.     Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the
validity, legality and enforceability of the remaining provisions of the
Agreement (including, without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 14 hereof.

18.     Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless it is in a writing signed 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.

19.     Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
(a) upon delivery if delivered by hand to the party to whom such notice or other
communication shall have been directed, (b) if mailed by certified or registered
mail with postage prepaid, return receipt requested, on the third business day
after the date on which it is so mailed, (c) one business day after the business
day of deposit with a nationally recognized overnight delivery service,
specifying next day delivery, with written verification of receipt, or (d) on
the same day as delivered by confirmed facsimile transmission if delivered
during business hours or on the next successive business day if delivered by
confirmed facsimile transmission after business hours. Addresses for notice to
either party shall be as shown on the signature page of this Agreement, or to
such other address as may have been furnished by either party in the manner set
forth above.

20.     Governing Law. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware as applied to contracts
between Delaware residents entered into and to be performed entirely within
Delaware. This Agreement is intended to be an agreement of the type contemplated
by Section 145(f) of the General Corporation Law of Delaware.

21.     Counterparts. This Agreement may be executed in 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 enforcement is sought needs to
be produced to evidence the existence of this Agreement.

The parties hereto have entered into this Indemnification Agreement, including
the undertaking contained herein, effective as of the date first above written.

 

 
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Indemnitee:

 

 

                                                                                                  

 

 

Address:                                                                                  

                 ___________________________________

The Company:

 

BIOTA PHARMACEUTICALS, INC.

 

 

By: ___________________________________

 

Name: _________________________________

 

Title: __________________________________

 

 

 

 

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