1.2. To pay any and all expenses reasonably incurred by Indemnitee in defending any Claimor Claims (including reasonable attorneys’ fees and other reasonable costs of investigation anddefense), as the same are incurred and in advance of the final disposition of any such Claim orClaims, upon receipt of an undertaking by or on behalf of Indemnitee to reimburse such amounts ifit shall be ultimately determined that Indemnitee: (i) is not entitled to be indemnified by theCompany under this Agreement, and (ii) is not entitled to be indemnified by the Company under theCertificate or the Bylaws.The termination of any action or proceeding by judgment, order, settlement, conviction, orupon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that:(i) Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to bein the best interests of the Company, or (ii) with respect to any criminal action or proceeding,Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.2. Limitations on Contractual Indemnity. Indemnitee shall not be entitled toindemnification or advancement of expenses under Section 1:2.1. if a court of competent jurisdiction, by final judgment or decree, shall determine that (i)the Claim or Claims in respect of which indemnity is sought arise from Indemnitee’s fraudulent,dishonest or willful misconduct, or (ii) such indemnity is not permitted under applicable law; or2.2. on account of any suit in which judgment is rendered for an accounting of profits made fromthe purchase or sale by Indemnitee of securities of the Company in violation of the provisions ofSection 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisionsof any federal, state or local statutory law; or2.3. for any acts or omissions or transactions from which an Office Holder may not be indemnifiedunder the Delaware General Corporation Law; or2.4. with respect to proceedings or claims initiated or brought voluntarily by Indemnitee and notby way of defense, except (i) with respect to proceedings brought in good faith to establish orenforce a right to indemnification under this Agreement or any other statute or law, or (ii) at theCompany’s discretion, in specific cases if the Board of Directors of the Company has approved theinitiation or bringing of such suit; or2.5. for expenses or liabilities of any type whatsoever (including, but not limited to, judgments,fines, ERISA excise taxes or penalties, and amounts paid in settlement) which have been paiddirectly to Indemnitee by an insurance carrier under a policy of directors’ and officers’ liabilityinsurance maintained by the Company; or2.6. on account of any suit brought against Indemnitee for misuse or misappropriation of non publicinformation, or otherwise involving Indemnitee’s status as an “insider” of the Company, inconnection with any purchase or sale by Indemnitee of securities of the Company.3. Continuation of Contractual Indemnity. Subject to the termination provisions of Section11, all agreements and obligations of the Company contained herein shall continue for so long asIndemnitee shall be subject to any possible action, suit, proceeding or other assertion of a Claimor Claims.4. Expenses; Indemnification Procedure. The Company shall advance all expenses incurred byIndemnitee in connection with the investigation, defense, settlement or appeal of any civil orcriminal action or proceeding referenced in Section 1 hereof (but not amounts actually paid insettlement of any such action or proceeding). Indemnitee hereby undertakes to repay such amountsadvanced if, and to the extent that, it shall ultimately be determined that Indemnitee is notentitled to be indemnified by the Company as authorized hereby. The advances to be made hereundershall be paid by the Company to Indemnitee within twenty (20) days following delivery of a writtenrequest therefor by Indemnitee to the Company.
 
 

 
5. Notification and Defense of Claim. If any action, suit, proceeding or other Claim isbroughtagainst Indemnitee in respect of which indemnity may be sought under this Agreement:5.1. Indemnitee will promptly notify the Company in writing of the commencement thereof, and theCompany and any other indemnifying party similarly notified will be entitled to participate thereinat its own expense or to assume the defense thereof and to employ counsel reasonably satisfactoryto Indemnitee. Notice to the Company shall be directed to the Chief Executive Officer of theCompany at the address shown on the signature page of this Agreement (or such other address as theCompany shall designate in writing to Indemnitee). Notice shall be deemed received three (3)business days after the date postmarked if sent by domestic certified or registered mail, properlyaddressed; otherwise notice shall be deemed received when such notice shall actually be received bythe Company. Indemnitee shall have the right to employ its own counsel in connection with any suchClaim and to participate in the defense thereof, but the fees and expenses of such counsel shall beat the expense of Indemnitee unless (i) the Company shall not have assumed the defense of the Claimand employed counsel for such defense, or (ii) the named parties to any such action (including anyimpleaded parties) include both Indemnitee and the Company, and Indemnitee shall have reasonablyconcluded that joint representation is inappropriate under applicable standards of professionalconduct due to a material conflict of interest between Indemnitee and the Company, in either ofwhich events the reasonable fees and expenses of such counsel to the Indemnitee shall be borne bythe Company upon delivery to the Company of the undertaking referred to in Section 1.2. However,in no event will the Company be obligated to pay the fees or expenses of more than one firm ofattorneys representing Indemnitee and any other Office Holders of the Company in connection withany one Claim or separate but substantially similar or related Claims in the same jurisdictionarising out of the same general allegations or circumstances.5.2. The Company shall not be liable to indemnify Indemnitee for any amounts paid in settlement ofany Claim effected without the Company’s written consent, and the Company shall not settle anyClaim in a manner which would impose any penalty or limitation on Indemnitee without Indemnitee’swritten consent; provided, however, that neither the Company nor Indemnitee will unreasonablywithhold its consent to any proposed settlement and, provided further, that if a Claim is settledby the Indemnitee with the Company’s written consent, or if there be a final judgment or decree forthe plaintiff in connection with the Claim by a court of competent jurisdiction, the Company shallindemnify and hold harmless Indemnitee from and against any and all losses, costs, expenses andliabilities incurred by reason of such settlement or judgment.5.3. Indemnitee shall give the Company such information and cooperation as it may reasonablyrequire and as shall be within Indemnitee’s power.5.4. Any indemnification provided for in Section 1 shall be made no later than forty-five (45) daysafter receipt of the written request of Indemnitee. If a Claim under this Agreement, under anystatute, or under any provision of the Certificate or Bylaws providing for indemnification, is notpaid in full by the Company within forty-five (45) days after a written request for payment thereofhas first been received by the Company, Indemnitee may, but need not, at any time thereafter bringan action against the Company to recover the unpaid amount of the claim and, subject to Section 13of this Agreement, Indemnitee shall also be entitled to be reimbursed for the expenses (includingattorneys’ fees) of bringing such action. It shall be a defense to any such action (other than anaction brought to enforce a claim for expenses incurred in connection with any action or proceedingin advance of its final disposition) that Indemnitee has not met the standards of conduct whichmake it permissible under applicable law for the Company to indemnify Indemnitee for the amountclaimed but the burden of proving such defense shall be on the Company, and Indemnitee shall beentitled to receive interim payments of expenses pursuant to Section 4 unless and until suchdefense may be finally adjudicated by court order or judgment from which no further right of appealexists. It is the parties’ intention that if the Company contests Indemnitee’s right toindemnification, the question of Indemnitee’s right to indemnification shall be for the court todecide, and neither the failure of the Company (including its Board of Directors, any committee orsubgroup of the Board of Directors, independent legal counsel, or its stockholders) to have made adetermination that indemnification of Indemnitee is proper in the circumstances because Indemniteehasmet the applicable standard of conduct required by applicable law, nor an actual determination bythe Company (including its Board of Directors, any committee or subgroup of the Board of Directors,independent legal counsel, or its stockholders) that Indemnitee has not met such applicablestandard of conduct, shall create a presumption that Indemnitee has or has not met the applicablestandard of conduct.
 
 

 
5.5. If, at the time of the receipt of a notice of a Claim, the Company has director and officerliability insurance in effect, the Company shall give prompt notice of the commencement of suchproceeding 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 withthe terms of such policies.6. Scope. Notwithstanding any other provision of this Agreement, the Company hereby agreesto indemnify the Indemnitee against any Claim to the fullest extent permitted by law,notwithstanding that such indemnification is not specifically authorized by the other provisions ofthis Agreement, the Certificate, the Bylaws or by statute. In the event of any change, after thedate of this Agreement, in any applicable law, statute or rule which expands the right of aDelaware corporation to indemnify its Office Holders, such changes shall be, ipso facto, within thepurview of Indemnitee’s rights and Company’s obligations, under this Agreement. In the event ofany change in any applicable law, statute, or rule which narrows the right of a Delawarecorporation to indemnify its Office Holders, such changes, to the extent not otherwise required byapplicable law to be applied to this Agreement, shall have no effect on this Agreement or theparties’ rights and obligations hereunder.7. Partial Indemnification. If Indemnitee is entitled under any provision of thisAgreement to indemnification by the Company for some or a portion of the expenses, judgments, finesor penalties actually or reasonably incurred by him in the investigation, defense, appeal orsettlement of any civil or criminal action or proceeding, but not, however, for the total amountthereof, the Company shall nevertheless indemnify Indemnitee for the portion of such expenses,judgments, fines or penalties to which Indemnitee is entitled.8. Public Policy. Both the Company and Indemnitee acknowledge that in certain instances,Federal law or applicable public policy may prohibit the Company from indemnifying its OfficeHolders under this Agreement or otherwise. Indemnitee understands and acknowledges that theCompany has undertaken or may be required in the future to undertake with the Securities andExchange Commission to submit the question of indemnification to a court in certain circumstancesfor a determination of the Company’s right under public policy to indemnify Indemnitee.9. Insurance. Although the Company may from time to time maintain insurance for thepurpose of indemnifying Indemnitee and other Office Holders of the Company against personalliability, including costs of legal defense, nothing in this Agreement shall obligate the Companyto do so.10. No Restrictions. The rights and remedies of Indemnitee under this Agreement shall notbe deemed to exclude or impair any other rights or remedies to which Indemnitee may be entitledunder the Certificate or Bylaws, or under any other agreement, provision of law or otherwise, norshall anything contained herein restrict the right of the Company to indemnify Indemnitee in anyproper case even though not specifically provided for in this Agreement, nor shall anythingcontained herein restrict Indemnitee’s right to contribution as may be available under applicablelaw.11. Termination. The Company may terminate this Agreement at any time upon 90 days writtennotice, but any such termination will not affect Claims relating to events occurring prior to theeffective date of termination.
 
 

 
12. Severability. Each of the provisions of this Agreement is a separate and distinctagreement andindependent of the others, so that if any provision hereof shall be held to be invalid orunenforceable for any reason, such invalidity or unenforceability shall not affect the validity orenforceability of the other provisions hereof.13. Attorneys’ Fees. In the event of any litigation or other action or proceeding toenforce or interpret this Agreement, the prevailing party as determined by the court shall beentitled to an award of its reasonable attorneys’ fees and other costs, in addition to such reliefas may be awarded by a court or other tribunal.14. Further Assurances. The parties will do, execute and deliver, or will cause to bedone, executed and delivered, all such further acts, documents and things as may be reasonablyrequired for the purpose of giving effect to this Agreement and the transactions contemplatedhereby.15. Acknowledgment. The Company expressly acknowledges that it has entered into thisAgreement and assumed the obligations imposed on the Company hereunder in order to induceIndemnitee to serve or to continue to serve as an Office Holder of the Company, and acknowledgesthat Indemnitee is relying on this Agreement in serving or continuing to serve in such capacity.16. Construction of Certain Phrases.16.1. “Company”: For purposes of this Agreement, references to the “Company” shall also include,in addition to the resulting corporation in any consolidation or merger to which TopSpin Medical,Inc. is a party, any constituent corporation (including any constituent of a constituent) absorbedin consolidation or merger which, if its separate existence had continued, would have had power andauthority to indemnify its Office Holders, so that if Indemnitee is or was an Office Holder of suchconstituent corporation, or is or was serving at the request of such constituent corporation as anOffice Holder of another corporation, partnership, joint venture, trust or other enterprise,Indemnitee shall stand in the same position under the provisions of this Agreement with respect tothe resulting or surviving corporation as Indemnitee would have with respect to such constituentcorporation if its separate existence had continued.16.2. Benefit Plans: References to “fines” contained in this Agreement shall include any excisetaxes assessed on Indemnitee with respect to an employee benefit plan; and references to “servingat the request of the Company” shall include any service as an Office Holder of the Company whichimposes duties on, or involves services by, such Office Holder with respect to an employee benefitplan, its participants, or beneficiaries.17. Notice. All notices, requests, demands and other communications under this Agreementshall be in writing and shall be deemed duly given (i) if delivered by hand and receipted for bythe party addressee, on the date of such receipt, or (ii) if mailed by domestic certified orregistered mail with postage prepaid, on the third business day after the date postmarked.Addresses for notice to either party are as shown on the signature page of this Agreement, or assubsequently modified by written notice.18. Governing Law; Binding Effect; Amendment.18.1. This Agreement shall be interpreted and enforced in accordance with the laws of the State ofDelaware applicable to contracts entered into in Delaware and any dispute arising from or inconnection with this Agreement shall be submitted to the sole and exclusive jurisdiction of thecompetent court in the State of New York.18.2. This Agreement shall be binding upon Indemnitee and the Company, their successors andassigns, and shall inure to the benefit of Indemnitee, his heirs, personal representatives andassigns and to the benefit of the Company, its successors and assigns.18.3. No amendment, modification, termination or cancellation of this Agreement shall be effectiveunless in writing signed by both parties hereto.
 
 

 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year firstabove written.“Company”TopSpin Medical, Inc.