Exhibit 10.1
SCOLR PHARMA, INC.

DIRECTOR INDEMNIFICATION AGREEMENT

THIS AGREEMENT is made as of May 26, 2009, by and between SCOLR Pharma, Inc., a
Delaware corporation (the "Corporation"), and ________________ ("Director"), a
member of the Corporation's Board of Directors (the “Board”).

WHEREAS, it is essential to the Corporation to retain and attract directors who
have significant experience in business, corporate and financial matters; and

WHEREAS, the Director possesses the knowledge and experience desired by the
Corporation and the Corporation desires the Director to serve as a director of
the Corporation; and

WHEREAS, the Certificate of Incorporation and the Bylaws of the Corporation
require indemnification of the directors of the Corporation to the fullest
extent permitted by the Delaware General Corporation Law (the "DGCL"), and the
DGCL expressly provides that the indemnification provisions set forth therein
are not exclusive; and

WHEREAS, the Corporation and the Director desire to enter into a contract that
sets forth their respective rights and obligations with regard to claims for
loss, liability, expense or damage which, directly or indirectly, may arise out
of or relate to service as a member of the Board;

NOW THEREFORE, in consideration of the premises and the covenants contained
herein and Director's agreement to continue to serve the Corporation after the
date hereof, the sufficiency of which is hereby acknowledged, the Corporation
and Director do hereby covenant and agree as follows:

1.
Agreement to Serve.   The Director shall serve as a director of the Corporation
for so long as the Director is duly elected or until the Director tenders a
resignation in writing. This Agreement creates no obligation on either party to
continue the service of the Director for a particular term or any term.

 
2.
Definitions.   As used in this Agreement:

 
 
(a)
The term "Proceeding" shall include any threatened, pending or completed action,
suit or proceeding, whether brought in the right of the Corporation or
otherwise, and whether of a civil, criminal, administrative or investigative
nature, whether formal or informal, in which the Director may be or may have
been involved as a party, witness or otherwise, by reason of the fact that the
Director is or was a director of the Corporation, or is or was serving at the
request of the Corporation (or is deemed to be serving or have served) as a
director, officer, partner, trustee, manager, employee or agent of another
corporation, limited liability company, partnership, joint venture, trust or
other enterprise, whether or not serving in such capacity at the time any
liability or expense is incurred for

 
 
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which exculpation, indemnification or reimbursement can be provided under this
Agreement.  The term "Proceeding" shall also include a situation that the
Director in good faith believes may lead to the institution of an action, suit
or proceeding.

 
 
(b)
The term "Expenses" shall mean any expense, liability or loss, including
attorneys' fees, judgments, fines, ERISA excise taxes and penalties, amounts
paid or to be paid in settlement, any interest, assessments or other charges
imposed thereon, any federal, state, local or foreign taxes imposed as a result
of the actual or deemed receipt of any payments under this Agreement, and shall
include, without limitation thereto, expenses of investigations, judicial or
administrative proceedings or appeals, attorney, accountant and other
professional fees and disbursements and any expenses of establishing a right to
indemnification under Section 12 of this Agreement, but shall not include
amounts paid in settlement by the Director or the amount of judgments or fines
against the Director.

 
(c)
References to "other enterprise" include, without limitation, employee benefit
plans; references to "fines" include, without limitation, any excise taxes
assessed on a person with respect to any employee benefit plan; references to
"serving at the request of the Corporation" include, without limitation, any
service as a director, officer, partner, trustee, manager, employee or agent
which imposes duties on, or involves services by, such director, officer,
partner, trustee, manager, employee or agent with respect to an employee benefit
plan, its participants, or its beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the Corporation"
as referred to in this Agreement.

 
(d)
References to "the Corporation" shall include, in addition to the resulting
entity, any constituent corporation or other entity (including any constituent
of a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, partners, trustees, managers, employees or agents, so that
any person who is or was a director, officer, partner, trustee, manager,
employee or agent of such constituent entity, or is or was serving at the
request of such constituent entity as a director, officer, partner, trustee,
manager, employee or agent of another corporation, limited liability company,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this Agreement with respect to the resulting or surviving entity
as such person would have with respect to such constituent entity if  its
separate existence had continued.

 
(e)
For purposes of this Agreement, the meaning of the phrase "to the fullest extent
permitted by law" shall include, but not be limited to:

 
 
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(i)
to the fullest extent authorized or permitted by any amendments to or
replacements of the DGCL adopted after the date of this Agreement that increase
the extent to which a corporation may indemnify or exculpate its directors; and

 
(ii)
to the fullest extent permitted by any provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL.

 
(f)
A "Change in Control" shall be deemed to occur upon the earlier the earliest to
occur after the date of this Agreement of any of the following events:

 
(i)
Acquisition of Stock by Third Party.   Any Person (as defined below) is or
becomes the Beneficial Owner, directly or indirectly, of securities of the
Corporation representing fifty percent (50%) or more of the combined voting
power of the Corporation's then outstanding securities entitled to vote
generally in the election of directors, unless (a) the change in the relative
Beneficial Ownership of the Corporation's securities by any Person results
solely from a reduction in the aggregate number of outstanding shares
of  securities entitled to vote generally in the election of directors, or (b)
such acquisition was approved in advance by the Continuing Directors (as defined
below) and such acquisition would not constitute a Change in Control under part
(iii) of this definition;

 
 (ii)
Change in Board of Directors.   Individuals who, as of the date hereof,
constitute the Board, and any new director whose election by the Board or
nomination for election by the Corporation's stockholders was approved by a vote
of at least two thirds of the Directors then still in office who were Directors
on the date hereof or whose election for nomination for election was previously
so approved (collectively, the "Continuing Directors"), cease for any reason to
constitute at least a majority of the members of the Board;

 
(iii)
Corporation Transactions.  The effective date of a reorganization, merger or
consolidation of the Corporation (a "Business Combination"), in each case,
unless, immediately following such Business Combination: (a) all or
substantially all of the Persons who were the Beneficial Owners of securities
entitled to vote generally in the election of Directors immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
51% of the combined voting power of the then outstanding securities of the
Corporation entitled to vote generally in the election of Directors resulting
from such Business Combination (including, without limitation, a corporation
which was a result of such transaction owns the Corporation or all or
substantially all of the Corporation's assets either directly or through one or
more Subsidiaries) in

 
 
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substantially the same proportions as their ownership, immediately prior to such
Business Combination, of the securities entitled to vote generally in the
election of Directors; (b) no Person (excluding any corporation resulting from
such Business Combination) is the Beneficial Owner, directly or indirectly, of
15% or more of the combined voting power of the then outstanding securities
entitled to vote generally in the election of Directors of such corporation
except to the extent that such ownership existed prior to such Business
Combination; and (c) at least a majority of the board of directors of the
corporation resulting from such Business Combination were Continuing Directors
at the time of the execution of the initial agreement, or of the action of the
board of directors, providing for such Business Combination;

 
 
(iv)
Liquidation.   The approval by the stockholders of the Corporation of a complete
liquidation of the Corporation or an agreement or series of agreements for the
sale or disposition by the Corporation of all or substantially all of the
Corporation's assets, other than factoring the Corporation's current receivables
or escrows due (or, if such approval is not required, the decision by the Board
to proceed with such a liquidation, sale, or disposition in one transaction or a
series of related transactions); or

 
(v)
Other Events.   There occurs any other event of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a
response to any similar item on any similar schedule or form) promulgated under
the Exchange Act, whether or not the Corporation is then subject to such
reporting requirement.

 
(g)
Beneficial Owner; Beneficial Ownership.   The terms "Beneficial Owner" and
"Beneficial Ownership" shall have the meanings set forth in Rule 13d-3
promulgated under the  Securities Exchange Act  of 1934, as amended, as in
effect on the date hereof  (the "Exchange Act") .

 
 
(h)
The term "Person" shall have the meaning as set forth in Sections 13(d) and
14(d) of the Exchange Act as in effect on the date hereof; provided, however,
that "Person" shall exclude: (a) the Corporation; (b) any subsidiary of the
Corporation; (c) any employment benefit plan of the Corporation or of a
subsidiary of the Corporation or of any corporation owned, directly or
indirectly, by the stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation; and (d) any trustee
or other fiduciary holding securities under an employee benefit plan of the
Corporation or of a subsidiary of the Corporation or of a corporation owned
directly or indirectly by the stockholders of the Corporation in substantially
the same proportions as their ownership of stock of the Corporation.

 
 
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3.
Limitation of Liability.

 
(a)
To the fullest extent permitted by law, the Director shall have no monetary
liability of any kind or nature whatsoever in respect of the Director's errors
or omissions (or alleged errors or omissions) in serving the Corporation or any
of its subsidiaries, their respective shareholders or any other enterprise at
the request of the Corporation, so long as such errors or omissions (or alleged
errors or omissions), if any, are not shown by clear and convincing evidence to
have involved:

 
(i)
any breach of the Director's duty of loyalty to such entities, shareholders or
enterprises;

 
(ii)
any act or omission not in good faith or which involved intentional misconduct
or a knowing violation of law;

 
(iii)
any transaction from which the Director derived an improper personal benefit; or

 
(iv)
profits made from the purchase and sale by the Director of securities of the
Corporation within the meaning of Section 16(b) of the Securities Exchange Act
of 1934, as amended, or similar provision of any state statutory law or common
law.

 
(b)
Without limiting the generality of subparagraph (a) above and to the fullest
extent permitted by law, the Director shall have no personal liability to the
Corporation or any of its subsidiaries, their respective shareholders or any
other person claiming derivatively through the Corporation, regardless of the
theory or principle under which such liability may be asserted, for:

 
(i)
punitive, exemplary or consequential damages;

 
(ii)
treble or other damages computed based upon any multiple of damages actually and
directly proved to have been sustained;

 
(iii)
fees of attorneys, accountants, expert witnesses or professional consultants; or

 
(iv)
civil fines or penalties of any kind or nature whatsoever.

 
4.
Indemnity in Third Party Proceedings.   The Corporation shall indemnify the
Director in accordance with the provisions of this Section 4 if the Director was
or is a party to, or is threatened to be made a party to, any Proceeding (other
than a Proceeding by or in the right of the Corporation to procure a judgment in
its favor), against all Expenses, judgments, fines and amounts paid in
settlement, actually and reasonably incurred by the by the Director in
connection with such Proceeding if the Director acted in good faith and 

 
 
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in a manner the Director reasonably believed was in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, the Director, in addition, had no reasonable cause to believe that
the Director's conduct was unlawful.

 
 
The Director shall not be entitled to indemnification under this Section 4 in
connection with any Proceeding charging improper personal benefit to the
Director in which the Director is finally adjudged liable without further rights
of appeal on the basis that personal benefit was improperly received by the
Director unless and only to the extent that the court conducting such
Proceeding, or any other court of competent jurisdiction, determines upon
application that, despite the adjudication of liability, the Director is fairly
and reasonably entitled to indemnification in view of all the relevant
circumstances.

5.
Indemnity in Proceedings by or in the Right of the Corporation.   The
Corporation shall indemnify the Director in accordance with the provisions of
this Section 5 if the Director was or is a party to, or is threatened to be made
a party to, any Proceeding by or in the right of the Corporation to procure a
judgment in its favor, against all Expenses actually and reasonably incurred by
the Director in connection with the defense or settlement of such Proceeding if
the Director acted in good faith and in a manner the Director reasonably
believed was in or not opposed to the best interests of the Corporation. The
Director shall not be entitled to indemnification under this Section 5 in
connection with any Proceeding in which the Director has been finally adjudged
liable without further rights of appeal to the Corporation unless and only to
the extent that the court conducting such Proceeding, or any other court of
competent jurisdiction, determines upon application that, despite the
adjudication of liability, the Director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances.

6.
Indemnification of Expenses of Successful Party.   Notwithstanding any other
provisions of this Agreement other than Section 8, to the extent that the
Director has been successful, on the merits or otherwise, in defense of any
Proceeding or in defense of any claim, issue or matter therein, including the
dismissal of an action without prejudice, the Corporation shall indemnify the
Director against all Expenses actually and reasonably incurred in connection
therewith.  If any Proceeding is disposed of on the merits or otherwise
(including a disposition without prejudice), without (i) the disposition being
adverse to the Director, (ii) an adjudication that the Director was liable to
the Corporation, (iii) a plea of guilty by the Director, (iv) an adjudication
that the Director did not act in good faith, and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation, and
(v) with respect to any criminal proceeding, an adjudication that the Director
had reasonable cause to believe his conduct was unlawful, the Director shall be
considered for the purposes hereof to have been successful with respect thereto.

7.
Additional Indemnification.   Notwithstanding any limitation in Sections 4, 5 or
6, the Corporation shall indemnify the Director to the fullest extent permitted
by law with respect to any Proceeding (including a Proceeding by or in the right
of the Corporation to procure a judgment in its favor), against all Expenses,
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by the Director in connection with such

 
 
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Proceeding.

 
8.
Exclusions.   Notwithstanding any provision in this Agreement, the Corporation
shall not be obligated under this Agreement to make any indemnification in
connection with any claim made against the Director:

 
(a)
for which payment has actually been made to or on behalf of the Director under
any insurance policy, except with respect to any excess amount to which the
Director is entitled under this Agreement beyond the amount of payment under
such insurance policy;

 
(b)
if a court having jurisdiction in the matter finally determines that such
indemnification is not lawful under any applicable statute or public policy;

 
(c)
in connection with any Proceeding (or part of any Proceeding) initiated by the
Director, or any Proceeding by the Director against the Corporation or its
directors, officers, employees or other persons entitled to be indemnified by
the Corporation, unless:

 
(i)
the Corporation is expressly required by law to make the indemnification;

 
(ii)
the Proceeding was authorized by the Board of Directors of the Corporation; or

 
(iii)
the Director initiated the Proceeding pursuant to Section 12 of this Agreement
and the Director is successful in whole or in part in such Proceeding; or

 
(d)
on account of any Proceeding with respect to which final judgment without
further right of appeal is rendered against the Director for payment or an
accounting of profits made from the purchase or sale by the Director of
securities of the Corporation within the meaning of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or similar provision of any state
statutory law or common law.

9.
Advances of Expenses.   The Corporation shall pay the Expenses incurred by the
Director in any Proceeding (other than a Proceeding brought for an accounting of
profits made from the purchase and sale by the Director of securities of the
Corporation within the meaning of Section 16(b) of the Securities Exchange Act
of 1934, as amended, or similar provision of any state statutory law or common
law) in advance of the final disposition of the Proceeding at the written
request of the Director, if the Director:

 
(a)
furnishes the Corporation a written affirmation of the Director's good faith
belief that the Director is entitled to be indemnified under this Agreement; and

 
(b)
furnishes the Corporation a written undertaking in the form attached hereto as

 
 
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(b)
Exhibit A. Such undertaking shall be an unlimited general obligation of the
Director but need not be secured.

 
Advances pursuant to this Section 9 shall be made no later than 10 days after
receipt by the Corporation of the affirmation and undertaking described in
Sections 9(a) and 9(b) above, and shall be made without regard to the Director's
ability to repay the amount advanced and without regard to the Director's
ultimate entitlement to indemnification under this Agreement. Advances shall be
unsecured and interest free.  The Corporation may establish a trust, escrow
account or other secured funding source for the payment of advances made and to
be made pursuant to this Section 9 or of other liability incurred by the
Director in connection with any Proceeding.

10.
Nonexclusivity, Effectiveness and Continuity of Rights.   The indemnification,
advancement of Expenses, and exculpation from liability provided by this
Agreement (i) shall not be deemed exclusive of any other rights to which the
Director may be entitled under any other agreement, any certificate of
incorporation, bylaws, or vote of shareholders or directors, the DGCL, or
otherwise, both as to action in the Director's official capacity and as to
action in another capacity while holding such office or occupying such position,
(ii) shall apply without regard to whether the event giving rise to a claim for
indemnification, advancement, reimbursement or exculpation occurred prior to or
following the date of this Agreement, and (iii) shall continue as to the
Director even though the Director may have ceased to be a director of the
Corporation or a director, officer, partner, trustee, manager, employee or agent
of an enterprise related to the Corporation and shall inure to the benefit of
the heirs, executors, administrators and personal representatives of the
Director.

11.
Procedure Upon Application for Indemnification.   Any indemnification under
Sections 4, 5, 6 or 7 shall be made no later than 45 days after receipt of the
written request of the Director, and, if required by applicable law, only as
authorized in the specific case upon a determination that indemnification of the
Director is proper in the circumstances because the person has met the
applicable standard of conduct set forth in sections 145(a) and (b) of the DGCL.
Such determination shall be made, with respect to a person who is a director or
officer at the time of such determination:

 
(a)
by a majority vote of the directors who are not parties to such Proceeding, even
though less than a quorum; or

 
(b)
by a committee of such directors designated by majority vote of such directors,
even though less than a quorum; or

 
(c)
if there are no such directors, or if such directors so direct, by independent
legal counsel in a written opinion, which counsel shall be appointed (i) by a
majority vote of the Board of Directors or its committee in the manner
prescribed by paragraph (a) or paragraph (b) of this Section 11, or (ii) if a
quorum of the Board of Directors cannot be obtained under paragraph (a) of this
Section 11 or a committee cannot be designated under paragraph (b) of this
Section 11, then by a

 
 
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majority vote of the full Board of Directors, including directors who are
parties to the applicable Proceeding; or

 
 
(d)
by the shareholders of the Corporation; provided that following: a Change in
Control, all determinations concerning the rights of the Director to indemnity
payments and expense advances under this Agreement or any other agreement or
under applicable law or the Corporation’s Certificate of Incorporation or Bylaws
now or hereafter in effect relating to indemnification shall be made by
independent counsel selected by the Director and approved by the Corporation
(which approval shall not be unreasonably withheld or delayed), and who has not
otherwise performed services for the Corporation or the Director (other than in
connection with indemnification matters) within the last five years. The
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 Corporation or Director in an action to
determine Director’s rights under this Agreement. Such counsel, among other
things, shall render its written opinion to the Corporation and Director as to
whether and to what extent the Director should be permitted to be indemnified
under applicable law.

The Corporation agrees to pay the reasonable fees of any independent counsel
engaged hereunder and to advance expenses for and indemnify fully such counsel
against any and all expenses (including attorneys’ fees), claims, liabilities,
loss and damages arising out of or relating to this Agreement or the engagement
of independent counsel pursuant hereto.

If the person or persons so empowered to make a determination pursuant to this
Section 11 shall have failed to make the requested determination within ninety
(90) days after any judgment, order, settlement, dismissal, arbitration award,
conviction, acceptance of a plea of nolo contendre or its equivalent, or other
disposition or partial disposition of any Proceeding or any other event that
could enable the Corporation to determine the Director's entitlement to
indemnification, the requisite determination that the Director is entitled to
indemnification shall be deemed to have been made.

12.
Enforcement.  The Director may enforce any right to indemnification, advances or
exculpation provided by this Agreement in any court of competent jurisdiction
if:

 
(a)
the Corporation denies the claim for indemnification, advances or exculpation,
in whole or in part; or

 
(b)
the Corporation does not dispose of such claim within the time period required
by this Agreement.

It shall be a defense to any such enforcement action (other than an action
brought to enforce a claim for advancement of Expenses pursuant to, and in
compliance with, Section 9 of this Agreement) that the Director is not entitled
to indemnification or
 
 
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exculpation under this Agreement. However, except as provided in Section 13 of
this Agreement, the Corporation shall not assert any defense to an action
brought to enforce a claim for advancement of Expenses pursuant to Section 9 of
this Agreement if the Director has tendered to the Corporation the affirmation
and undertaking required thereunder. In making any determination concerning
Director's right to indemnification, there shall be a presumption that Director
has satisfied the applicable standard of conduct, and the Corporation may
overcome such presumption only by its presenting clear and convincing evidence
to the contrary. The burden of proving by clear and convincing evidence that
indemnification or exculpation is not appropriate shall be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors, a
committee thereof, or independent legal counsel) to have made a determination
prior to the commencement of such action that indemnification or exculpation is
proper in the circumstances because the Director has met the applicable standard
of conduct nor an actual determination by the Corporation (including its Board
of Directors, a committee thereof, or independent legal counsel) that
indemnification or exculpation is improper because the Director has not met such
applicable standard of conduct, shall be asserted as a defense to the action or
create a presumption that the Director is not entitled to indemnification or
exculpation under this Agreement or otherwise. The knowledge and/or actions, or
failure to act, of any director, officer, agent or employee of the Corporation
or the Corporation itself shall not be imputed to Director for purposes of
determining any rights under this Agreement. The Director's Expenses incurred in
connection with successfully establishing the Director's right to
indemnification, advances or exculpation, in whole or in part, in any Proceeding
shall also be paid or reimbursed by the Corporation.

The termination of any Proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere, or its equivalent, shall not, of itself, create
a presumption that:

 
(i)
the Director is not entitled to indemnification under Sections 4, 5 or 7 of this
Agreement because the Director did not act in good faith and in a manner which
the Director reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the Director's conduct was unlawful; or

 
(ii)
the Director is not entitled to exculpation under Section 3 of this Agreement.

The Corporation and Director agree that a monetary remedy for breach of this
Agreement may be inadequate, impracticable and difficult of proof, and further
agree that such breach may cause Director irreparable harm.  Accordingly, the
parties hereto agree that Director may enforce this Agreement by seeking
injunctive relief and/or specific performance hereof, without any necessity of
showing actual damage or irreparable harm and that by seeking injunctive relief
and/or specific performance, Director shall not be precluded from seeking or
obtaining any other relief to which he may be entitled.  The Corporation and
Director further agree that Director shall be entitled to such specific
 
 
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performance and injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions, without the necessity of
posting bonds or other undertaking in connection therewith.  The Corporation
acknowledges that in the absence of a waiver, a bond or undertaking may be
required of Director by the Court, and the Corporation hereby waives any such
requirement of a bond or undertaking.

13.
Notification and Defense of Claim.  Promptly after receipt by Director of notice
of the commencement of any Proceeding, Director shall, if a claim in respect of
the Proceeding is to be made against the Corporation hereunder, notify the
Corporation of the commencement thereof.  The failure to promptly notify the
Corporation of the commencement of the Proceeding, or Director's request for
indemnification, will not relieve the Corporation from any liability that it may
have to Director hereunder, except to the extent the Corporation is prejudiced
in its defense of such Proceeding as a result of such failure.  With respect to
any Proceeding as to which the Director so notifies the Corporation of the
commencement:

 
(a)
The Corporation shall be entitled to participate in the Proceeding at its own
expense.

 
(b)
Except as otherwise provided in this Section 14, the Corporation may, at its
option and jointly with any other indemnifying party similarly notified and
electing to assume such defense, assume the defense of the Proceeding, with
legal counsel reasonably satisfactory to the Director. The Director shall have
the right to use separate legal counsel in the Proceeding, but the Corporation
shall not be liable to the Director under this Agreement, including Section 9
above, for the fees and Expenses of separate legal counsel incurred after notice
from the Corporation of its assumption of the defense, unless (i) the Director
reasonably concludes that there may be a conflict of interest between the
Corporation and the Director in the conduct of the defense of the Proceeding, or
(ii) the Corporation does not use legal counsel to assume the defense of such
Proceeding. The Corporation shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of the Corporation or as to which the
Director has made the conclusion provided for in (i) above.

 
(c)
If two or more persons who may be entitled to indemnification from the
Corporation, including the Director, are parties to any Proceeding, the
Corporation may require the Director to use the same legal counsel as the other
parties. The Director shall have the right to use separate legal counsel in the
Proceeding, but the Corporation shall not be liable to the Director under this
Agreement, including Section 9 above, for the fees and Expenses of separate
legal counsel incurred after notice from the Corporation of the requirement to
use the same legal counsel as the other parties, unless the Director reasonably
concludes that there may be a conflict of interest between the Director and any
of the other parties required by the Corporation to be represented by the same
legal counsel.

 
 
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(d)
The Corporation shall not be liable to indemnify the Director under this
Agreement for any amounts paid in settlement of any Proceeding effected without
its written consent, which shall not be unreasonably withheld. The Corporation
shall not be required to obtain the consent of the Director for the settlement
of any Proceeding the Corporation has undertaken to defend if the Corporation
assumes full and sole responsibility for each such settlement; provided,
however, that the Corporation shall be required to obtain Director’s prior
written approval, which may be granted or withheld in Director’s sole,
reasonable discretion, before entering into any settlement which (i) does not
grant Director a complete and unqualified release of liability; (ii) would
impose any penalty or limitation on Director, or (b) would admit any liability
or misconduct by Director.

14.
Partial Indemnification.   If the Director is entitled under any provision of
this Agreement to indemnification by the Corporation for some or a portion of
the Expenses, judgments, fines or amounts paid in settlement, actually and
reasonably incurred by the Director in connection with such Proceeding, but not,
however, for the total amount thereof, the Corporation shall nevertheless
indemnify the Director for the portion of such Expenses, judgments, fines or
amounts paid in settlement to which the Director is entitled.

15.
Contribution.   In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for herein is held by a
court of competent jurisdiction to be unavailable to the Director in whole or in
part, it is agreed that, in such event, the Corporation shall, to the fullest
extent permitted by law, contribute the payment of the Director's costs, charges
and Expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any Proceeding, whether civil, criminal,
administrative or investigative, in an amount that is just and equitable in the
circumstances, taking into account, among other things, contributions by other
directors and officers of the Corporation or others pursuant to indemnification
agreements or otherwise; provided, that, without limiting the generality of the
foregoing, such contribution shall not be required where such holding by the
court is due to (i) the failure of the Director to meet the standard of conduct
set forth in Section 4 hereof, or (ii) any limitation on indemnification set
forth in Sections 4, 5 or 8 hereof.

16.           D&O Liability Insurance.

 
(a)
Maintenance of Insurance.   The Corporation hereby covenants and agrees that, so
long as the Director shall continue to serve the Corporation in any of the
capacities set forth in the definition of "Proceeding" above, and thereafter so
long as the Director shall be subject to any possible Proceeding by reason of
the fact that the Director was serving in any such capacity, the Corporation
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.

 
 
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(b)
Annual Review.   At the Director’s request, the Corporation shall arrange an
annual review of the Corporation's D&O Insurance by an independent insurance
adviser, all fees and charges arising from such review to be met by the
Corporation.

 
(c)
Tail Coverage.   In the event of a Change in Control, the Corporation shall
maintain in force any and all insurance policies then maintained by the
Corporation providing insurance in respect of Director, including without
limitation D&O Insurance, for a period of six years thereafter.  The policies
for such continued coverage shall be placed by a broker engaged by the
Corporation prior to such Change in Control.

 
(d)
Pursuit of the Insurance Company.   The Corporation shall indemnify Director for
Expenses incurred by Director in connection with action brought by Director for
recovery under any insurance policy referred to in this Section 16, and shall
advance to Director the Expenses of such action; provided, however, that by
executing this Agreement Director hereby undertakes to promptly re-pay the
Corporation for any such advanced Expenses if a court of competent jurisdiction
finds that all of the claims brought by the Director were frivolous and not in
good faith.

17.
Interpretation and Scope of Agreement.   Nothing in this Agreement shall be
interpreted to constitute a contract of service for any particular period or
pursuant to any particular terms or conditions. The Corporation retains the
right, in its discretion, to terminate the service relationship of the Director,
with or without cause, or to alter the terms and conditions of the Director's
service all without prejudice to any rights of the Director which may have
accrued or vested prior to such action by the Corporation.  The Corporation
shall be precluded from asserting in any such proceeding 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 and is precluded from making any assertion to the
contrary.

18.
Severability.   If this Agreement or any portion thereof shall be invalidated on
any ground by any court of competent jurisdiction, the remainder of this
Agreement shall continue to be valid and the Corporation shall nevertheless
indemnify the Director as to Expenses, judgments, fines and amounts paid in
settlement with respect to any Proceeding to the fullest extent permitted by any
applicable portion of this Agreement that shall not have been invalidated.

19.
Subrogation.   In the event of payment under this Agreement, the Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Director with respect to any insurance policy or otherwise. The
Director shall execute all documents required and shall do all acts that may be
necessary to secure such rights and to enable the Corporation effectively to
bring suit to enforce such rights.  The Corporation shall pay or reimburse all
Expenses actually and reasonably incurred by Director in connection with such
subrogation.

 
 
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20.
Notices.   All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given upon
delivery by hand to the party to whom the notice or other communication shall
have been directed, or on the third business day after the date on which it is
mailed by United States mail with first-class postage prepaid, addressed as
follows:

 
If to Director:
_____________________
_____________________
Attn:_________________
Facsimile: _____________
E-mail:________________
 
If to Corporation:
SCOLR Pharma, Inc.
19204 North Creek Parkway
Suite 100
Bothell, Washington 98011
Attn: Alan Mitchel
Fascimile: (425) 368-1051
E-mail: amitchel@scolr.com

With a copy to:
Garvey Schubert Barer
Eighteenth Floor
1191 Second Avenue
Seattle, Washington 98101-2939
Attne: Bruce A. Robertson, Esquire
Facsimile: (206) 464-0125
E-mail: brobertson@gsblaw.com

 
or to any other address as either party may designate to the other in writing.

21.
Counterparts.   This Agreement may be executed in any number of counterparts,
each of which shall constitute the original.

22.
Successors and Assigns.   All of the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the parties hereto and their respective successors, assigns, heirs, executors,
administrators and legal representatives.  The Corporation shall require and
cause any direct or indirect successor (whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Corporation, by written agreement in form and substance reasonably
satisfactory to Director, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Corporation would
be required to perform if no such succession had taken place.

23.
Applicable Law.   This Agreement shall be governed by and construed in
accordance with the internal laws of the state of Delaware without regard to the
principles of conflict of laws.

 
 
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24.
Attorney Fees.   If any suit or action (including, without limitation, any
bankruptcy proceeding) is instituted to enforce or interpret any provision of
this Agreement, the prevailing party shall be entitled to recover from the party
not prevailing, in addition to other relief that may be provided by law, an
amount determined reasonable as attorney fees at trial and on any appeal of such
suit or action.

 
25.
Modification and Waiver.   No supplement, modification 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 provision hereof (whether or not similar)
nor shall such waiver constitute a continuing waiver.

 
26.
Jurisdiction and Venue.   Each party hereto expressly and irrevocably consents
and submits to the jurisdiction and venue of any state or federal court sitting
in King County, Washington, in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect of the action
or proceeding may be heard and determined in such court and to the appellate
courts in connection with any appeal. The parties expressly waive all defenses
of lack of personal jurisdiction, improper venue and forum non-conveniens with
respect to such federal and state courts sitting within King County, Washington.
The parties expressly consent to (i) service of process being effected upon them
by certified mail sent to the addresses set forth in this Agreement and (ii) any
final judgment rendered against a party in any action or proceeding being
enforceable in other jurisdictions in any manner provided by law.

27.
Period of Limitations.   No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Corporation against Director,
Director’s estate, spouse, heirs, executors or personal or legal representatives
after the expiration of two years from the date of accrual of such cause of
action, and any claim or cause of action of the Corporation shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first written above.
 
 
DIRECTOR:
 
_____________________________
Signature
Print Name: ____________________
 
 
CORPORATION:
 
SCOLR PHARMA, INC.
 
 
By:
 
 
 
______________________________
Signature
Print Name: _____________________
Title: President & CEO_____________

 
 
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EXHIBIT A

FORM OF UNDERTAKING

The undersigned is the Director as defined in that certain Director
Indemnification Agreement dated May 26, 2009 between the undersigned and SCOLR
Pharma, Inc. (the "Indemnification Agreement").  Capitalized terms not otherwise
defined herein shall have the meanings given in such agreement.

As a condition to receiving advances of Expenses as provided in Section 9 of the
Indemnification Agreement, Director agrees that, if, when and to the extent that
a final judicial determination is made that Director would not be permitted to
be so indemnified under applicable law, the Director shall reimburse the
Corporation for all amounts theretofore paid by the Corporation to Director
pursuant to the Indemnification Agreement within 60 days of the Corporation’s
demand, but only to the extent that Director is ultimately found not to be
entitled to be indemnified by the Corporation under the terms of the
Indemnification Agreement, the charter documents of the Corporation (including
its certificate of incorporation and bylaws), and applicable state law.

This Agreement shall not affect in any manner rights which Director may have
against the Corporation, any insurer or any other person to seek indemnification
for or reimbursement of any expenses referred to herein or any judgment which
may be rendered in any litigation or proceeding.
 

 
FOR EXHIBIT PURPOSES ONLY,
NO SIGNATURE REQUIRED
 
__________________________
Director

 
Exhibit A

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