Exhibit
10.15


 


INDEMNIFICATION AGREEMENT


 


THIS AGREEMENT is made on               ,
2007, by and between MonoSol Rx, Inc., a Delaware corporation (the “Company”),
and                            
(“Indemnitee”), an officer, director or consultant of the Company.


 


RECITALS


 


WHEREAS, the Board of
Directors of the Company (the “Board”) seeks to attract and retain highly
qualified individuals to serve as officers, directors and consultants of the
Company;


 


WHEREAS, directors,
officers, consultants and other persons in service to corporations or business
enterprises are being increasingly subjected to expensive and time-consuming
litigation relating to, among other things, matters that traditionally would
have been brought only against the Company or business enterprise itself, and
highly qualified individuals may be more reluctant to serve publicly held
corporations as directors, officers or consultants or in other capacities unless
they are provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of
their service to and activities on behalf of the Company;


 


WHEREAS, the Board has determined
that the Company will attempt to maintain on an ongoing basis, at its sole
expense, liability insurance to protect persons serving the Company and its subsidiaries
from certain liabilities, but while the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that such insurance may be
available to it in the future with more exclusions;


 


WHEREAS, the Bylaws of the
Company require indemnification of the officers and directors of the Company,
and Indemnitee may also be entitled to indemnification pursuant to the Delaware
General Corporation Law (“DGCL”);


 


WHEREAS, the Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein
are not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the Board, officers and consultants with
respect to indemnification of directors, officers and consultants;


 


WHEREAS, the Board has
determined that it is in the best interests of the Company’s stockholders that
the Company facilitate its ability to attract and retain highly qualified
individuals to serve as directors, officers and consultants by contractually
obligating itself to indemnify, and to advance expenses on behalf of, such
persons to the fullest extent possible so that they will serve or continue to
serve the Company free from undue concern that they will not be indemnified;


 


WHEREAS, this Agreement is a
supplement to and in furtherance of the Bylaws of the Company and any
resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and


 


 

















 


WHEREAS, Indemnitee does not
regard the protection available under the Company’s Bylaws and insurance
adequate in the present circumstances, and may not be willing to serve or
continue to serve as an officer, director or consultant without adequate
protection, but is willing to serve and continue to serve on the condition that
he or she be so indemnified, and the Company desires Indemnitee to serve or
continue to serve in such capacity.


 


NOW, THEREFORE, in
consideration of the premises and the covenants contained herein, the Company
and Indemnitee do hereby covenant and agree as follows:


 


1.             SERVICES TO THE COMPANY. Indemnitee
will serve or continue to serve as a director, officer or consultant, as
applicable, of the Company for so long as Indemnitee is duly elected or until
Indemnitee tenders his or her resignation in writing, if Indemnitee is an
officer or director, or for so long as Indemnitee is a party to a consulting
agreement with the Company or any of its subsidiaries, if Indemnitee is a
consultant.


 


2.             DEFINITIONS. As used in this
Agreement:


 


(a)           “Change in Control” shall be deemed to occur upon the earliest to occur after
the date of this Agreement of any of the following events:


 


(i)            Acquisition of Stock by
Third Party.  Any Person (as defined
below), is or becomes the Beneficial Owner (as defined below), directly or
indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company’s then outstanding securities,
provided, that this section 2(a)(i)
shall not apply to any Person who is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing thirty percent (30%)
or more of the combined voting power of the Company’s then outstanding
securities as a result of the merger of Monosol Rx LLC, a Delaware limited
liability company (the “Predecessor Company”), with and into the Company;


 


(ii)           Change in Board of Directors.
 During any period of two (2) consecutive
years (not including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board, and any
new director (other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in Sections 2(a)(i),
2(a)(iii) or 2(a)(iv)) 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 for election was previously so
approved, cease for any reason to constitute at least a majority of the members
of the Board;


 


(iii)          Corporate Transactions.  The effective date of a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to


 


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represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than thirty percent (30%) of
the combined voting power of the voting securities of the surviving entity
outstanding immediately after such merger or consolidation and having the power
to elect at least a majority of the board of directors or other governing body
of such surviving entity;


 


(iv)          Liquidation.  The approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement for the sale
or disposition by the Company of all or substantially all of the Company’s assets;
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 (as defined below), whether or not the
Company is then subject to such reporting requirement;


 


(vi)          Certain Definitions.  For purposes of this Section 2(a), the
following terms shall have the following meanings:


 


(A)          “Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended.


 


(B)           “Person” shall have the
meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act;
provided, however, that Person shall exclude (i) the Company, (ii) any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of
stock of the Company.


 


(C)           “Beneficial Owner” shall
have the meaning given to such term in Rule 13d-3 under the Exchange Act;
provided, however, that Beneficial Owner shall exclude any Person otherwise
becoming a Beneficial Owner by reason of the stockholders of the Company
approving a merger of the Company with another entity.


 


(b)           “Corporate Status” describes
the status of a person who is or was a director, officer, employee, consultant
or agent of the Company or of any other corporation, partnership or joint
venture, trust, employee benefit plan or other enterprise in which capacity such
person is or was serving at the request of the Company.


 


(c)           “Disinterested Director”
means a director of the Company who is not and was not a party to the
Proceeding (as defined below) in respect of which indemnification is sought by
Indemnitee.


 


(d)           “Enterprise” shall mean the
Company or the Predecessor Company and any other corporation, partnership,
joint venture, trust, employee benefit plan or other 


 


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enterprise of which Indemnitee is or was serving at the request of the
Company of the Predecessor Company as a director, officer, employee, consultant,
agent or fiduciary.


 


(e)           “Expenses” shall include all
reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of
experts, witness fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the amount
of judgments or fines against Indemnitee.


 


(f)            As to the Indemnitee, “Good Faith”
shall mean Indemnitee having acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company or the Predecessor Company, as applicable, and, with respect to any
criminal Proceeding, having had no reasonable cause to believe Indemnitee’s
conduct was unlawful.


 


(g)           Reference to “other
enterprise” shall include employee benefit plans; references to “fines” shall
include any excise tax assessed with respect to any employee benefit plan;
references to “serving at the request of the Company” shall include any service
as a director, officer, employee, consultant or agent of the Company which
imposes duties on, or involves services by, such director, officer, employee,
consultant or agent with respect to an employee benefit plan, its participants
or beneficiaries; and a person who acted in good faith and in a manner he or she
reasonably believed to be in the best interests 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 Company” as referred to in
this Agreement.


 


(h)           The term “Proceeding” shall
include any threatened, pending or completed action, suit, arbitration, alternate
dispute resolution mechanism, investigation, inquiry, administrative hearing or
any other actual, threatened or completed proceeding, whether brought in the
right of the Company or otherwise and whether of a civil, criminal,
administrative or investigative nature, in which Indemnitee was, is or will be
involved as a party or otherwise by reason of the fact that Indemnitee is or
was a director, officer or consultant of the Company or the Predecessor Company,
by reason of any action taken by him or her or of any action on his or her part
while acting as director, officer or consultant of the Company or the
Predecessor Company, or by reason of the fact that he or she is or was serving
at the request of the Company or the Predecessor Company as a director,
officer, employee, consultant, agent or fiduciary of another Enterprise, in
each case whether or not serving in such capacity at the time any liability or
expense is incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.


 


(i)            “Independent Counsel” means
a law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company or Indemnitee in any matter 


 


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material to either such party (other than with respect to matters
concerning the Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements), or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who,
under the 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. The Company
agrees to pay the reasonable fees and expenses of the Independent Counsel
referred to above and to fully indemnify such counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.


 


(j)            The use of the term “including” and
similar derivatives shall mean “including without limitation” and analogous
derivatives, as applicable, unless the context clearly indicates otherwise.


 


3.             INDEMNITY IN THIRD-PARTY
PROCEEDINGS.  The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee
was, is, or is threatened to be made, a party to or a participant in any Proceeding,
other than a Proceeding by or in the right of the Company to procure a judgment
in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified against
all Expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee or on his or her behalf in connection with
such Proceeding or any claim, issue or matter therein, if Indemnitee acted in Good
Faith.


 


4.             INDEMNITY IN PROCEEDINGS BY
OR IN THE RIGHT OF THE COMPANY.  The
Company shall indemnify Indemnitee in accordance with the provisions of this Section 4
if Indemnitee was, is, or is threatened to be made, a party to or a participant
in any Proceeding by or in the right of the Company or the Predecessor Company to
procure a judgment in its favor. Pursuant to this Section 4, Indemnitee
shall be indemnified against all Expenses actually and reasonably incurred by
him or her or on his or her behalf in connection with the defense or settlement
of such Proceeding or any claim, issue or matter therein, if Indemnitee acted
in Good Faith. No indemnification for Expenses shall be made under this Section 4
in respect of any claim, issue or matter as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company or the Predecessor
Company, unless and only to the extent that any court in which the 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 indemnification.


 


5.             INDEMNIFICATION FOR EXPENSES
OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL.  Notwithstanding any other provisions of this
Agreement, to the extent that Indemnitee is a party to (or a participant in)
and is successful, on the merits or otherwise, in any Proceeding or in defense
of any claim, issue or matter therein, in whole or in part, the Company shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by
him or her in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection 


 


5

















 


with each successfully
resolved claim, issue or matter. If the Indemnitee is not wholly successful in
such Proceeding, the Company also shall indemnify Indemnitee against all
Expenses reasonably incurred in connection with a claim, issue or matter on
which the Indemnitee was unsuccessful, provided, that
Indemnitee acted in Good Faith. 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.


 


6.             INDEMNIFICATION FOR EXPENSES
OF A WITNESS.  Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
or her Corporate Status, a witness in any Proceeding to which Indemnitee is not
a party, he or she shall be indemnified against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection therewith.


 


7.             ADDITIONAL INDEMNIFICATION.


 


(a)           Notwithstanding any
limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to
the fullest extent permitted by law if Indemnitee was, is a party to or
threatened to be made a party to any Proceeding (including a Proceeding by or
in the right of the Company or the Predecessor Company, as applicable, to
procure a judgment in its favor) against all Expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with the Proceeding. No indemnity shall be made under this Section 7(a)
on account of Indemnitee’s conduct which constitutes a breach of Indemnitee’s
duty of loyalty to the Company or its stockholders or the Predecessor Company
or its equity owners, as applicable, or is an act or omission not in Good Faith
or which involves intentional misconduct or a knowing violation of the law.


 


(b)           Notwithstanding any
limitation in Sections 3, 4, 5 or 7(a), the Company shall indemnify
Indemnitee to the fullest extent permitted by law if Indemnitee was, is a party
to or threatened to be made a party to any Proceeding (including a Proceeding
by or in the right of the Company or the Predecessor Company, as applicable, to
procure a judgment in its favor) against all Expenses incurred by Indemnitee in
connection with the Proceeding.


 


(c)           For purposes of Sections 7(a)
and 7(b), the meaning of the phrase “to the fullest extent permitted by law”
shall include, but not be limited to:


 


(i)            to the fullest extent
permitted by the 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, and


 


(ii)           to the fullest extent
authorized or permitted by any amendments to or replacements of the DGCL
adopted after the date of this Agreement that increases the extent to which a corporation
may indemnify its officers and directors.


 


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8.             EXCLUSIONS.  Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against Indemnitee:


 


(a)           for which payment has
actually been made to or on behalf of Indemnitee under any insurance policy or
other indemnity provision, except with respect to any excess beyond the amount
paid under any insurance policy or other indemnity provision;


 


(b)           for an accounting 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; or


 


(c)           in connection with any
Proceeding (or part of any Proceeding) initiated by Indemnitee prior to a
Change in Control, unless (i) the Company is expressly required by law to make the
indemnification, (ii) the Company provides the indemnification, in its sole discretion,
pursuant to the powers vested in the Company under applicable law, (iii)
Indemnitee initiated the Proceeding pursuant to Section 13 of this Agreement
and Indemnitee is successful in whole or in part in the Proceeding, or (iv) the
Proceeding was authorized by the Board of Directors of the Company.


 


9.             ADVANCES OF EXPENSES.  Notwithstanding any provision of this Agreement
to the contrary, the Company shall advance the Expenses incurred by Indemnitee
in connection with any Proceeding within thirty (30) days after the receipt by the
Company of a statement or statements requesting such advances from time to time,
whether prior to or after final disposition of any Proceeding. Advances shall
be unsecured and interest free. Advances shall be made without regard to Indemnitee’s
ability to repay the expenses and without regard to the Company’s perception of
Indemnitee’s ultimate entitlement to indemnification under the other provisions
of this Agreement. Advances shall include any and all reasonable Expenses
incurred pursuing an action to enforce this right of advancement, including
Expenses incurred preparing and forwarding statements to the Company to support
the advances claimed. The Indemnitee shall qualify for advances solely upon the
execution and delivery to the Company of an undertaking providing that the Indemnitee
undertakes to repay the advance to the extent that it is ultimately determined
that Indemnitee is not entitled to be indemnified by the Company.


 


10.           PROCEDURE FOR NOTIFICATION
AND DEFENSE OF CLAIM.


 


(a)           To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification, not later
than thirty (30) days after receipt by Indemnitee of notice of the commencement
of any Proceeding. The omission to notify the Company will not relieve the
Company from any liability which it may have to Indemnitee otherwise under this
Agreement (unless the omission harms or prejudices the defense). The Secretary
of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that Indemnitee has requested
indemnification.


 


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(b)           The Company will be entitled
to participate in the Proceeding at its own expense.


 


11.           PROCEDURE UPON APPLICATION
FOR INDEMNIFICATION.


 


(a)           Upon written request by
Indemnitee for indemnification pursuant to the first sentence of Section 10(a),
a determination with respect to Indemnitee’s entitlement thereto shall be made
in the specific case: (i) if a Change in Control shall have occurred, by
Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee; or (ii) if a Change in Control shall not have
occurred, (A) by a majority vote of the Disinterested Directors, even though
less than a quorum of the Board, or (B) if there are no such Disinterested
Directors or, if such Disinterested Directors so direct, by Independent Counsel
in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee or (C) if so directed by the Board, by the stockholders of the
Company; and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days
after such determination. Indemnitee shall cooperate with the person, persons
or entity making such determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys’ fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee’s entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.


 


(b)           In the event the
determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 11(a) hereof, the Independent Counsel shall be
selected as provided in this Section 11(b). If a Change in Control shall
not have occurred, the Independent Counsel shall be selected by the Board, and
the Company shall give written notice to Indemnitee advising him or her of the
identity of the Independent Counsel so selected. If a Change in Control shall
have occurred, the Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board, in which
event the preceding sentence shall apply), and Indemnitee shall give written
notice to the Company advising it of the identity of the Independent Counsel so
selected. In either event, Indemnitee or the Company, as the case may be, may,
within ten (10) days after such written notice of selection shall have been
given, deliver to the Company or to Indemnitee, as the case may be, a written
objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in Section 2 of
this Agreement, and the objection shall set forth with particularity the
factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If such written objection
is so made and substantiated, the Independent Counsel so selected may not serve
as Independent Counsel unless and until such objection is withdrawn or a court
has determined that such objection is without merit. If, within twenty (20) days
after 


 


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submission by Indemnitee of a written request for indemnification
pursuant to Section 10(a) hereof, no Independent Counsel shall have been
selected and not objected to, either the Company or Indemnitee may petition a
court of competent jurisdiction for resolution of any objection which shall
have been made by the Company or Indemnitee to the other’s selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Court or by such other person as the Court shall
designate, and the person with respect to whom all objections are so resolved
or the person so appointed shall act as Independent Counsel under Section 11(a)
hereof. Upon the due commencement of any judicial proceeding or arbitration
pursuant to Section 13(a) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity (subject
to the applicable standards of professional conduct then prevailing).


 


12.           PRESUMPTIONS AND EFFECT OF
CERTAIN PROCEEDINGS.


 


(a)           In making a determination
with respect to entitlement to indemnification hereunder, the person, persons
or entity making such determination shall presume that Indemnitee is entitled
to indemnification under this Agreement if Indemnitee has submitted a request
for indemnification in accordance with Section 10(a) of this Agreement,
and the Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any
determination contrary to that presumption. Neither the failure of the Company
(including by its directors or Independent Counsel) to have made a
determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual determination
by the Company (including by its directors or Independent Counsel) that
Indemnitee has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct.


 


(b)           If the person, persons or
entity empowered or selected under Section 11 of this Agreement to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within sixty (60) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee’s statement not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law, excluding the
application of Section 145 of the DGCL; provided, however, that such 60-day
period may be extended for a reasonable time, not to exceed an additional
thirty (30) days, if the person, persons or entity making the determination
with respect to entitlement to indemnification in good faith requires such
additional time for the obtaining or evaluating of documentation and/or
information relating thereto; and provided, further, that the foregoing
provisions of this Section 12(b) shall not apply (i) if the determination
of entitlement to indemnification is to be made by the stockholders pursuant to
Section 11(a) of this Agreement and if (A) within fifteen (15) days after
receipt by the Company of the request for such determination the Board has
resolved to 


 


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submit such determination to the stockholders for their consideration
at an annual meeting thereof to be held within seventy-five (75) days after
such receipt and such determination is made thereat, or (B) a special meeting
of stockholders is called within fifteen (15) days after such receipt for the
purpose of making such determination, such meeting is held for such purpose
within sixty (60) days after having been so called and such determination is
made thereat, or (ii) if the determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Section 11(a) of this
Agreement.


 


(c)           The termination of any
Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in Good Faith.


 


(d)           For purposes of any
determination of Good Faith, Indemnitee shall be deemed to have acted in good
faith if Indemnitee’s action is based on the records or books of account of the
applicable Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the course of their
duties, or on the advice of legal counsel for the applicable Enterprise or on
information or records given or reports made to the applicable Enterprise by an
independent certified public accountant or by an appraiser or other expert
selected with the reasonable care by the applicable Enterprise. The provisions of
this Section 12(d) shall not be deemed to be exclusive or to limit in any
way the other circumstances in which the Indemnitee may be deemed to have met
the applicable standard of conduct set forth in this Agreement.


 


(e)           The knowledge and/or
actions, or failure to act, of any director, officer, consultant, agent or
employee of the applicable Enterprise (other than Indemnitee) shall not be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.


 


(f)            The Company acknowledges
that a settlement or other disposition short of final judgment may be
successful if it permits a party to avoid expense, delay, distraction,
disruption and uncertainty. In the event that any action, claim or proceeding
to which Indemnitee is a party is resolved in any manner other than by adverse
judgment against Indemnitee (including settlement of such action, claim or
proceeding with or without payment of money or other consideration) it shall be
presumed that Indemnitee has been successful on the merits or otherwise in such
action, suit or proceeding. Anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion by clear and convincing
evidence.


 


13.           REMEDIES OF INDEMNITEE.


 


(a)           In the event that (i) a
determination is made pursuant to Section 11 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 9 of this Agreement,
(iii) no determination of entitlement to indemnification shall have been
made pursuant to 


 


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Section 11(a) of this Agreement within ninety (90) days after
receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 5, 6, 7(b) or the last
sentence of Section 11(a) of this Agreement within ten (10) days after
receipt by the Company of a written request therefor, or (v) payment of
indemnification pursuant to Section 3, 4 or 7(a) of this Agreement is not
made within ten (10) days after a determination has been made that Indemnitee
is entitled to indemnification, Indemnitee shall be entitled to an adjudication
by a court of his or her entitlement to such indemnification or advancement of
Expenses. Alternatively, Indemnitee, at his or her option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association. The Company shall
not oppose Indemnitee’s right to seek any such adjudication or award in
arbitration.


 


(b)           In the event that a
determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Section 13 shall be
conducted in all respects as a de novo trial, or arbitration, on the merits and
Indemnitee shall not be prejudiced by reason of that adverse determination. In
any judicial proceeding or arbitration commenced pursuant to this Section 13
the Company shall have the burden of proving Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.


 


(c)           If a determination shall
have been made pursuant to Section 11(a) of this Agreement that Indemnitee
is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant to
this Section 13, absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law.


 


(d)           In the event that
Indemnitee, pursuant to this Section 13, seeks a judicial adjudication of
or an award in arbitration to enforce his or her rights under, or to recover
damages for breach of, this Agreement, and Indemnitee is successful, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all Expenses actually and reasonably incurred by him or
her in such judicial adjudication or arbitration. If it shall be determined in
said judicial adjudication or arbitration that Indemnitee is entitled to
receive part but not all of the indemnification or advancement of Expenses
sought, the Indemnitee shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any and all Expenses reasonably incurred
by Indemnitee in connection with such judicial adjudication or arbitration; provided that Indemnitee acted in Good Faith.


 


(e)           The Company shall be
precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Section 13 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any
such court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement. The Company shall indemnify Indemnitee against
any and 


 


11

















 


all Expenses and, if requested by Indemnitee, shall (within ten (10)
days after receipt by the Company of a written request therefore) advance such
expenses to Indemnitee, which are incurred by Indemnitee in connection with any
action brought by Indemnitee for indemnification or advance of Expenses from
the Company under this Agreement or under any directors’ and officers’
liability insurance policies maintained by the Company, regardless of whether the
Company believes that Indemnitee ultimately will be determined to be entitled
to such indemnification, advancement of Expenses or insurance recovery, as the
case may be. The Indemnitee shall qualify for such advances solely upon the
execution and delivery to the Company of an undertaking providing that the
Indemnitee undertakes to repay the advance to the extent that it is ultimately
determined that Indemnitee is not entitled to be indemnified by the Company.


 


(f)            Notwithstanding anything in
this Agreement to the contrary no determination as to entitlement to
indemnification under this Agreement shall be required to be made prior to the
final disposition of the Proceeding.


 


14.           NON-EXCLUSIVITY; SURVIVAL OF
RIGHTS; INSURANCE; SUBROGATION.


 


(a)           The rights of
indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Company’s Certificate of
Incorporation, the Company’s Bylaws, any agreement, a vote of stockholders or a
resolution of directors, or otherwise. No amendment, alteration or repeal of
this Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by such
Indemnitee in his or her Corporate Status prior to such amendment, alteration
or repeal. To the extent that a change in Delaware law, whether by statute or
judicial decision, permits greater indemnification or advancement of Expenses
than would be afforded currently under the Company’s Bylaws and this Agreement,
it is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change. No right or remedy
herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.


 


(b)           To the extent that the
Company maintains an insurance policy or policies providing liability insurance
for directors, officers, employees, consultants or agents of any Enterprise, Indemnitee
shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any such director,
officer, employee or agent under such policy or policies. If, at the time of
the receipt of a notice of a claim pursuant to the terms hereof, the Company
has director and officer liability insurance in effect, the Company shall give
prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The
Company shall thereafter take all necessary or desirable action 


 


12

















 


to cause such insurers to pay, on behalf of the Indemnitee, all amounts
payable as a result of such proceeding in accordance with the terms of such
policies. Notwithstanding any other provisions of this Agreement, if a Change
in Control shall have occurred, the Company shall furnish Indemnitee with
directors’ and officers’ liability insurance for a period of six (6) years
insuring Indemnitee against insurable events which occur or have occurred while
Indemnitee was a director or officer of the Company, such insurance to have
policy limits aggregating not less than the amount in effect immediately prior
to the Change in Control and otherwise to be in substantially the same form and
to contain substantially the same terms, conditions and exceptions as the
liability insurance policies provided for officers and directors of the Company
in force from time to time, provided, however, that (i) such terms, conditions
and exceptions shall not be, in the aggregate, materially less favorable to Indemnitee
than those in effect on the date hereof and (ii) if the aggregate annual
premiums for such insurance at any time during such period exceed two hundred
percent (200%) of the per annum rate of premium currently paid by the Company
for such insurance, then the Company shall provide the maximum coverage that
will then be available at an annual premium equal to two hundred percent (200%)
of such rate.


 


(c)           In the event of any payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall execute all
papers required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.


 


(d)           The Company shall not be
liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder (or for which advancement is provided hereunder) if and
to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.


 


(e)           The Company’s obligation to
indemnify or advance Expenses hereunder to an Indemnitee shall be reduced by
any amount Indemnitee has actually received as indemnification or advancement
of expenses from any other Enterprise.


 


15.           DURATION OF AGREEMENT.  This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have
ceased to serve as a director, officer or consultant of the Company or as a
director, officer, employee, consultant or agent of any other Enterprise; or
(b) one (1) year after the final termination of any Proceeding then pending in
respect of which Indemnitee is granted rights of indemnification or advancement
of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 13 of this Agreement relating thereto. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to the
benefit of Indemnitee and his or her heirs, executors and administrators.


 


16.           SEVERABILITY.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever:  (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including
each portion of any Section of this Agreement containing any such provision
held to be invalid, illegal or 


 


13

















 


unenforceable, that is not
itself invalid, illegal or unenforceable) shall not in any way be affected or
impaired thereby and shall remain enforceable to the fullest extent permitted
by law; (b) such provision or provisions shall be deemed reformed to the extent
necessary to conform to applicable law and to give the maximum effect to the
intent of the parties hereto; and (c) to the fullest extent possible, the
provisions of this Agreement (including each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed
so as to give effect to the intent manifested thereby.


 


17.           ENFORCEMENT.


 


(a)           The Company expressly
confirms and agrees that it has entered into this Agreement and assumed the
obligations imposed on it hereby in order to induce Indemnitee to serve or
continue to serve as a director, officer or consultant of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving or
continuing to serve as a director, officer or consultant of the Company.


 


(b)           This Agreement constitutes
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings, oral,
written and implied, between the parties hereto with respect to the subject
matter hereof.


 


18.           MODIFICATION AND WAIVER.  No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by the parties
thereto. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions of this Agreement nor
shall any waiver constitute a continuing waiver.


 


19.           NOTICE BY INDEMNITEE.  Indemnitee agrees promptly to notify the Company
in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
which may be subject to indemnification or advancement of Expenses covered
hereunder. The failure of Indemnitee to so notify the Company shall not relieve
the Company of any obligation which it may have to the Indemnitee under this
Agreement or otherwise (unless the omission harms or prejudices the Company).


 


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 (a) if delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (b) mailed by
certified or registered mail with postage prepaid, on the third business day after
the date on which it is so mailed:


 


(a)           If to Indemnitee, at the
address indicated on the signature page of this Agreement, or such other
address as Indemnitee shall provide in writing to the Company.


 


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(b)           If to the Company to:


 


MonoSol Rx, Inc.

30 Technology Drive

Warren, New Jersey 07059

Attention:  Chief Financial Officer


 


or to any other address as
may have been furnished to Indemnitee by the Company.


 


21.           CONTRIBUTION.  To the fullest extent permissible under applicable
law, if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such Proceeding in order
to reflect (i) the relative benefits received by the Company or the Predecessor
Company, as applicable, and Indemnitee as a result of the event(s) and/or
transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault
of the Company or Predecessor Company, as applicable (and the applicable directors,
officers, employees, consultants and agents) and Indemnitee in connection with such
event(s) and/or transaction(s).


 


22.           APPLICABLE LAW.  This Agreement and the legal relations among the
parties shall be governed by, and construed and enforced in accordance with, the
laws of the State of Delaware, without regard to its conflict of laws rules. The
Company and Indemnitee hereby irrevocably and unconditionally (i) agree that
any action or proceeding arising out of or in connection with this Agreement
shall be brought only in the Chancery Court of the State of Delaware (the “Delaware
Court”), and not in any other state or federal court in the United States of
America or any court in any other country, (ii) consent to submit to the
exclusive jurisdiction of the Delaware Court for purposes of any action or
proceeding arising out of or in connection with this Agreement, (iii) appoint,
to the extent such party is not a resident of the State of Delaware,
irrevocably The Corporation Trust Company as its agent in the State of Delaware
as such party’s agent for acceptance of legal process in connection with any
such action or proceeding against such party with the same legal force and
validity as if served upon such party personally within the State of Delaware,
(iv) waive any objection to the laying of venue of any such action or
proceeding in the Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware
Court has been brought in an improper or inconvenient forum.


 


23.           IDENTICAL 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 enforceability is sought
needs to be produced to evidence the existence of this Agreement.


 


24.           MISCELLANEOUS.  Use of the masculine pronoun shall be deemed
to include usage of the feminine pronoun where appropriate. The headings of the
paragraphs of this 


 


15

















 


Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement
or to affect the construction thereof.


 


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IN WITNESS WHEREOF, the
parties have caused this Agreement to be signed as of the day and year first
above written.


 


	
  MONOSOL RX, INC.

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  of Indemnitee:  

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
										



 


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