**ExhibitNo. 10.31**

 

**INDEMNIFICATION AGREEMENT**

 

THIS INDEMNIFICATIONAGREEMENT is made effective as of the 24th day of January, 2003 (the“Agreement”), by and between NANOGEN, INC., a Delaware corporation (the“Company”) and GRAHAM LIDGARD (the “Indemnitee”) with reference to thefollowing facts:

 

WHEREAS, the Companydesires the benefits of having Indemnitee serve as an officer and/or directorsecure in the knowledge that any expenses, liability and/or losses incurred byhim in his good faith service to the Company will be borne by the Company orits successors and assigns; and

 

WHEREAS, Indemnitee iswilling to serve in his position with the Company only on the condition that hebe indemnified for such expenses, liability and/or losses; and

 

WHEREAS, the Company andIndemnitee recognize the increasing difficulty in obtaining liability insurancefor directors, officers and agents of a corporation at reasonable cost; and

 

WHEREAS, the Company andIndemnitee recognize that there has been an increase in litigation againstcorporate directors, officers and agents; and

 

WHEREAS, the Company’sRestated Certificate of Incorporation allows and requires the Company toindemnify its directors, officers and agents to the maximum extent permittedunder Delaware law:

 

NOW, THEREFORE, theparties hereby agree as follows:

 

1.             Definitions.  For purposes of this Agreement:

 

1.1           “Agent” shall mean any person who(a) is or was a director, officer, employee or agent of the Company or asubsidiary of the Company whether serving in such capacity or as a director,officer, employee, agent, fiduciary or other official of another corporation,joint venture, trust or other enterprise at the request of, for the convenienceof, or to represent the interests of the Company or a subsidiary of the Companyor (b) was a director, officer, employee or agent of Nanogen, Inc., aCalifornia corporation and the predecessor by merger to the Company (the“Predecessor Corporation”), whether serving in such capacity or as a director,officer, employee, agent, fiduciary or other official of another corporation,joint venture, trust or other enterprise at the request of, for the convenienceof, or to represent the interests of such Predecessor Corporation.

 

1.2           “Change of Control” shall mean theoccurrence of any of the following events after the date of this Agreement:

 

----

 

(a)           A change in the composition of theboard of directors of the Company (the “Board”), as a result of which fewerthan two-thirds of the incumbent directors are directors who either (a) hadbeen directors of the Company 24 months prior to such change or (b) wereelected, or nominated for election, to the Board with the affirmative votes ofat least a majority of the directors who had been directors of the Company 24months prior to such change and who were still in office at the time of theelection or nomination; or

 

(b)           Any “person” (as such term is used insections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “ExchangeAct”), as amended) through the acquisition or aggregation of securities is orbecomes the beneficial owner, directly or indirectly, of securities of theCompany representing 20 percent or more of the combined voting power of theCompany’s then outstanding securities ordinarily (and apart from rights accruingunder special circumstances) having the right to vote at elections of directors(the “Capital Stock”); provided, however, that any change in ownershipof the Company’s securities by any person resulting solely from a reduction inthe aggregate number of outstanding shares of Capital Stock, and any decreasethereafter in such person’s ownership of securities, shall be disregarded untilsuch person increases in any manner, directly or indirectly, such person’sbeneficial ownership of any securities of the Company.

 

1.3           “Disinterested Director” shall mean adirector of the Company who is not and was not a party to the Proceeding inrespect of which indemnification is being sought by Indemnitee.

 

1.4           “Expenses” shall be broadly construedand shall include, without limi­ta­tion, (a) all direct and indirect costsincurred, paid or accrued, (b) all attorneys’ fees, retainers, courtcosts, transcripts, fees of experts, witness fees, travel expenses, food andlodging expenses while traveling, duplicating costs, printing and bindingcosts, telephone charges, postage, delivery service, freight or othertransportation fees and expenses, (c) all other disbursements and out-of-pocketexpenses, (d) amounts paid in settlement, to the extent not prohibited byDelaware Law, and (e) reasonable compensation for time spent by Indemniteefor which he is otherwise not compensated by the Company or any third party,actually and reasonably incurred in connection with or arising out of aProceeding, including a Proceeding by Indemnitee to establish or enforce aright to indemnification under this Agreement, applicable law or otherwise.

 

1.5           “Independent Counsel” shall mean alaw firm or a member of a law firm that neither is presently nor in the pastfive years has been retained to represent: (a) the Company, an affiliate of the Company or Indemnitee in anymatter material to either party or (b) any other party to the Proceedinggiving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel”shall not include any person who, under the applicable standards ofprofessional conduct then prevailing, would have a conflict of interest inrepresenting either the Company or Indemnitee in an action to determineIndemnitee’s right to indemnification under this Agreement.

 

1.6           “Liabilities” shall mean liabilitiesof any type whatsoever, including, but not limited to, judgments or fines,ERISA or other excise taxes and penalties, and amounts paid in settlement(including all interest, assessments or other charges paid or payable inconnection with

 

2

----

 

any of the foregoing) actually and reasonably incurred by Indemnitee inconnection with a Proceeding.

 

1.7           “Delaware Law” means the DelawareGeneral Corporation Law, as amended and in effect from time to time, or anysuccessor or other statutes of Delaware having similar import and effect.

 

1.8           “Proceeding” shall mean any pending,threatened or completed action, hearing, suit or any other proceeding, whethercivil, criminal, arbitrative, admini­strative, investigative or any alternativedispute resolution mechanism, including without limitation any such Proceedingbrought by or in the right of the Company.

 

2.             Employment Rights and Duties.   Subject to any other obligations imposed oneither of the parties by contract or by law, and with the understanding thatthis Agreement is not intended to confer employment rights on either partywhich they did not possess on the date of its execution, Indemnitee agrees toserve as a director or officer so long as he is duly appointed or elected andqualified in accordance with the applicable provisions of the RestatedCertificate of Incorporation (the “Certificate”) and Bylaws (the “Bylaws”) ofthe Company or any subsidiary of the Company and until such time as he resignsor fails to stand for election or until his employment terminates.  Indemnitee may from time to time alsoperform other services at the request, or for the convenience of, or otherwisebenefiting the Company.  Indemnitee mayat any time and for any reason resign or be removed from such position (subjectto any other contractual obligation or other obligation imposed by operation oflaw), in which event the Company shall have no obligation under this Agreementto continue Indemnitee in any such position.

 

2.1           Directors’ and Officers’ Insurance.

 

(a)           The Company hereby covenants andagrees that, so long as Indemnitee shall continue to serve as a director orofficer of the Company and thereafter so long as Indemnitee shall be subject toany possible Proceeding, the Company, subject to Section 2.1(c), shall maintaindirectors’ and officers’ insurance in full force and effect.

 

(b)           In all policies of directors’ andofficers’ insurance, Indemnitee shall be named as an insured in such a manneras to provide Indemnitee the same rights and benefits, subject to the samelimitations, as are accorded to the Company’s directors or officers mostfavorably insured by such policy.

 

(c)           The Company shall have no obligationto maintain directors’ and officers’ insurance if the Company determines ingood faith that such insurance is not reasonably available, the premium costsfor such insurance are disproportionate to the amount of coverage provided, orthe coverage provided by such insurance is limited by exclusions so as toprovide an insufficient benefit.

 

3.             Indemnification. The Company shall indemnify Indemnitee to the fullest extent authorizedor permitted by Delaware Law and the provisions of the Certificate and Bylawsof the Company in effect on the date hereof, and as Delaware Law, theCertificate and Bylaws may

 

3

----

 

from time to time be amended (but, in the case of any such amendment,only to the extent such amendment permits the Company to provide broaderindemnification rights than Delaware Law, the Certificate and/or Bylawspermitted the Company to provide before such amend­ment).  The right to indemnification conferred inthe Certificate shall be presumed to have been relied upon by Indemnitee inserving or continuing to serve the Company as a director or officer and shallbe enforceable as a contract right. Without in any way diminishing the scope of the indemnification providedby the Certificate and this Section 3, the Company shall indemnifyIndemnitee if and whenever he is or was a witness, party or is threatened to bemade a witness or a party to any Proceeding, by reason of the fact that he isor was an Agent or by reason of anything done or not done, or alleged to havebeen done or not done, by him in such capacity, against all Expenses andLiabilities actually and reasonably incurred by Indemnitee or on his behalf inconnection with the investigation, defense, settlement or appeal of suchProceeding.  In addition to, and not asa limitation of, the foregoing, the rights of indemnification of Indemniteeprovided under this Agreement shall include those rights set forth inSections 4, 5 and 6 below.

 

4.             Payment of Expenses.

 

4.1           All Expenses incurred by or on behalfof Indemnitee shall be advanced by the Company to Indemnitee within 20 daysafter the receipt by the Company of a written request for such advance whichmay be made from time to time, whether prior to or after final disposition of aProceeding (unless there has been a final determination by a court of competentjurisdiction that Indemnitee is not entitled to be indemnified for suchExpenses).  Indemnitee’s entitlement toadvancement of Expenses shall include those incurred in connection with anyProceeding by Indemnitee seeking a determination, an adjudication or an awardin arbitration pursuant to this Agreement. The requests shall reasonablyevidence the Expenses incurred by Indemnitee in connection therewith.  Indemnitee hereby undertakes to repay theamounts advanced if it shall ultimately be determined that Indemnitee is notentitled to be indemnified pursuant to the terms of this Agreement.

 

4.2           Notwithstanding any other provisionin this Agreement, to the extent that Indemnitee has been successful on themerits or otherwise in defense of any Proceeding, Indemnitee shall beindemnified against all Expenses actually and reasonably incurred by Indemniteein connection therewith.

 

5.             Procedure for Determination of Entitlement toIndemnification.

 

5.1           Whenever Indemnitee believes that heis entitled to indemnification pursuant to this Agreement, Indemnitee shallsubmit a written request for indemni­fi­cation (the “Indemnification Request”)to the Company to the attention of the President with a copy to theSecretary.  This request shall includedocumentation or information which is necessary for the determination ofentitlement to indemni­fi­cation and which is reasonably available toIndemnitee. Determination of Indemnitee’s entitlement to indemnification shallbe made no later than 60 days after receipt of the IndemnificationRequest.  The President or the Secretaryshall, promptly upon receipt of Indemnitee’s request for indemnification,advise the Board in writing that Indemnitee has made such request forindemnification.

 

4

----

 

5.2           The Indemnification Request shall setforth Indemnitee’s selection of which of the following forums shall determinewhether Indemnitee is entitled to indemnification:

 

(1)           A majority vote of Directors who arenot parties to the action with respect to which indemnification is sought, eventhough less than a quorum.

 

(2)           A written opinion of an IndependentCounsel (provided there are no such Directors as set forth in (1) above or ifsuch Directors as set forth in (1) above so direct).

 

(3)           A majority vote of the stockholdersat a meeting at which a quorum is present, with the shares owned by the personto be indemnified not being entitled to vote thereon.

 

(4)           The court in which the Proceeding isor was pending upon application by Indemnitee.

 

The Company agrees tobear any and all costs and expenses incurred by Indemnitee or the Company inconnection with the determination of Indemnitee’s entitlement toindemnification by any of the above forums.

 

6.             Presumptions and Effect of Certain Proceedings.  No initial finding by the Board, itscounsel, Independent Counsel, arbitrators or the stockholders shall beeffective to deprive Indemnitee of the protection of this indemnity, nor shall acourt or other forum to which Indemnitee may apply for enforcement of thisindemnity give any weight to any such adverse finding in deciding any issuebefore it.  Upon making a request forindemnification, Indemnitee shall be presumed to be entitled to indemnificationunder this Agreement and the Company shall have the burden of proof to overcomethat presumption in reaching any contrary determination.  The termination of any Proceeding byjudgment, order, settlement, arbitration award or conviction, or upon a plea of*nolocontendere* or its equivalent, shall not, of itself,(a) adversely affect the rights of Indemnitee to indemnification except asindemnifi­cation may be expressly prohibited under this Agreement,(b) create a presumption that Indemnitee did not act in good faith and ina manner which he reasonably believed to be in or not opposed to the bestinterests of the Company or (c) with respect to any criminal action orproceeding, create a presumption that Indemnitee had reasonable cause to believethat his conduct was unlawful.

 

7.             Remedies of Indemnitee in Cases of Determination Notto Indemnify or to Advance Expenses.

 

7.1           In the event that (a) an initialdetermination is made that Indemnitee is not entitled to indemnification,(b) advances for Expenses are not made when and as required by thisAgreement, (c) payment has not been timely made following a determinationof entitlement to indemnification pursuant to this Agreement or(d) Indemnitee otherwise seeks enforcement of this Agreement, Indemniteeshall be entitled to a final adjudication in an appropriate court of the Stateof Delaware of his entitlement to such indemnification or advance.  Alternatively, Indemnitee at his option mayseek an award in arbitration.  If theparties are unable to agree on an arbitrator, the parties shall provide JAMSEndispute (“JAMS”) with a statement of the nature of the dispute and thedesired qualifications of the arbitrator. JAMS will then provide a list of three

 

5

----

 

available arbitrators.  Eachparty may strike one of the names on the list, and the remaining person willserve as the arbitrator.  If bothparties strike the same person, JAMS will select the arbitrator from the othertwo names.  The arbitration award shallbe made within 90 days following the demand for arbitration.  Except as set forth herein, the provisionsof Delaware law shall apply to any such arbitration.  The Company shall not oppose Indemnitee’s right to seek any suchadjudication or arbitration award. In any such proceeding or arbitrationIndemnitee shall be presumed to be entitled to indemnification under thisAgreement and the Company shall have the burden of proof to overcome thatpresumption.

 

7.2           An initial determination, in whole orin part, that Indemnitee is not entitled to indemnification shall create nopresumption in any judicial proceeding or arbitration that Indemnitee has notmet the applicable standard of conduct for, or is otherwise not entitled to,indemnification.

 

7.3           If an initial determination is madeor deemed to have been made pursuant to the terms of this Agreement thatIndemnitee is entitled to indemnifi­cation, the Company shall be bound by suchdetermination in the absence of (a) a misrepre­sentation of a material factby Indemnitee in the request for indemnification or (b) a specific finding(which has become final) by a court of competent jurisdiction that all or anypart of such indemnification is expressly prohibited by law.

 

7.4           The Company and Indemnitee agree hereinthat a monetary remedy for breach of this Agreement, at some later date, willbe inadequate, impracticable and difficult of proof, and further agree thatsuch breach would cause Indemnitee irreparable harm.  Accordingly, the Company and Indemnitee agree that Indemniteeshall be entitled to temporary and permanent injunctive relief to enforce thisAgree­ment without the necessity of proving actual damages or irreparableharm.  The Company and Indemniteefurther agree that Indemnitee shall be entitled to such injunctive relief,including temporary restraining orders, preliminary injunctions and permanentinjunctions, without the necessity of posting bond or other undertaking inconnection therewith.  Any such requirementof bond or undertaking is hereby waived by the Company, and the Companyacknowledges that in the absence of such a waiver, a bond or undertaking may berequired by the court.

 

7.5           The Company shall be precluded fromasserting that the procedures and presumptions of this Agreement are not valid,binding and enforceable.  The Companyshall stipulate in any such court or before any such arbitrator that theCompany is bound by all the provisions of this Agreement and is precluded frommaking any assertion to the contrary.

 

7.6           Expenses incurred by Indemnitee inconnection with his request for indemnification under, seeking enforcement ofor to recover damages for breach of this Agreement shall be borne and advancedby the Company.

 

8.             Other Rights to Indemnification.  Indemnitee’s rights of indemnifi­cation andadvancement of expenses provided by this Agreement shall not be deemedexclusive of any other rights to which Indemnitee may now or in the future beentitled under applicable law, the

 

6

----

 

Certificate, the Bylaws, an employment agree­ment, a vote ofstockholders or Disinterested Directors, insurance or other financialarrangements or otherwise.

 

9.             Limitations on Indemnification.  No indemnification pursuant toSection 3 shall be paid by the Company nor shall Expenses be advancedpursuant to Section 3:

 

9.1           Insurance.  To the extent that Indemnitee is reimbursedpursuant to such insurance as may exist for Indemnitee’s benefit.  Notwithstanding the avail­ability of suchinsurance, Indemnitee also may claim indemnification from the Company pursuantto this Agreement by assigning to the Company any claims under such insuranceto the extent Indemnitee is paid by the Company.  Indemnitee shall reimburse the Company for any sums he receivesas indemnification from other sources to the extent of any amount paid to himfor that purpose by the Company;

 

9.2           Section 16(b).  On account and to the extent of any whollyor partially successful claim against Indemnitee for an accounting of profitsmade from the purchase or sale by Indemnitee of securities of the Companypursuant to the provisions of Section 16(b) or the Securities Exchange Act of1934, as amended, and amendments thereto or similar provisions of any federal,state or local statutory law; or

 

9.3           Indemnitee’s Proceedings.  Except as otherwise provided in thisAgreement, in connection with all or any part of a Proceeding which isinitiated or maintained by or on behalf of Indemnitee, or any Proceeding byIndemnitee against the Company or its directors, officers, employees or otheragents, unless (a) such indemnification is expressly required to be madeby Delaware Law, (b) the Proceeding was authorized by a majority of theDisinterested Directors, (c) there has been a Change of Control or(d) such indemnification is provided by the Company, in its solediscretion, pursuant to the powers vested in the Company under Delaware Law.

 

10.           Duration and Scope of Agreement;Binding Effect.  This Agreementshall continue so long as Indemnitee shall be subject to any possibleProceeding subject to indemnification by reason of the fact that he is or wasan Agent and shall be applicable to Proceedings commenced or continued afterexecution of this Agreement, whether arising from acts or omissions occurringbefore or after such execution.  ThisAgreement shall be binding upon the Company and its successors and assigns(including any direct or indirect successor by purchase, merger, consolidationor otherwise to all or substantially all of the business or assets of theCompany) and shall inure to the benefit of Indemnitee and his spouse, assigns,heirs, devisees, executors, administrators and other legal representatives.

 

11.           Notice by Indemnitee and Defenseof Claims.  Indemnitee agreespromptly to notify the Company in writing upon being served with any summons,citation, subpoena, complaint, indictment, information or other documentrelating to any matter which may be subject to indemnification hereunder,  whether civil,  criminal, arbitrative,  administrative or investigative;

 

7

----

 

but the omission so tonotify the Company will not relieve it from any liability which it may have toIndemnitee if such omission does not actually prejudice the Company’s rightsand, if such omission does prejudice the Company’s rights, it will relieve theCompany from liability only to the extent of such prejudice; nor will suchomission relieve the Company from any liability which it may have to Indemniteeotherwise than under this Agreement. With respect to any Proceeding:

 

(a)           The Company will be entitled toparticipate therein at its own expense;

 

(b)           Except as otherwise provided below,to the extent that it may wish, the Company jointly with any other indemnifyingparty similarly notified will be entitled to assume the defense thereof, withcounsel reasonably satisfactory to Indemnitee. After notice from the Company toIndemnitee of its election so to assume the defense thereof and the assumptionof such defense, the Company will not be liable to Indemnitee under thisAgreement for any attorney fees or costs subsequently incurred by Indemnitee inconnection with Indemnitee’s defense except as otherwise provided below.  Indemnitee shall have the right to employhis counsel in such Proceeding but the fees and expenses of such counselincurred after notice from the Company of its assumption of the defense thereofand the assumption of such defense shall be at the expense of Indemnitee unless(i) the employment of counsel by Indemnitee has been authorized by theCompany, (ii) Indemnitee shall have reasonably concluded that there may bea conflict of interest between the Company and Indemnitee in the conduct of thedefense of such action or that the Company’s counsel may not be adequately representingIndemnitee or (iii) the Company shall not in fact have employed counsel toassume the defense of such action, in each of which cases the fees and expensesof counsel shall be at the expense of the Company; and

 

(c)           The Company shall not be liable toindemnify Indemnitee under this Agreement for any amounts paid in settlement ofany action or claim effected without its written consent.  The Company shall not settle any action orclaim which would impose any limitation or penalty on Indemnitee withoutIndemnitee’s written consent.  Neitherthe Company nor Indemnitee will unreasonably withhold its or his consent to anyproposed settlement.

 

11.1         Contribution.  In order to provide for just and equitablecontribution in circumstances in which the indemnification provided for in thisAgreement is held by a court of competent jurisdiction to be unavailable toIndemnitee in whole or part, the Company shall, in such an event, after takinginto account, among other things, contributions by other directors and officersof the Company pursuant to indemnification agreements or otherwise, and, in theabsence of personal enrichment, acts of intentional fraud or dishonesty orcriminal conduct on the part of Indemnitee, contribute to the payment ofIndemnitee’s losses to the extent that, after other contributions are takeninto account, such losses exceed: (i) in the case of a director of the Company or any of itssubsidiaries who is not an officer of the Company or any of such subsidiaries,the amount of fees paid to the director for serving as a director during the 12months preceding the commencement of the Proceeding; or (ii) in the caseof a director of the Company or any of its subsidiaries who is also an officerof the Company or any of such subsidiaries, the amount set forth in clause (i)plus 5% of the aggregate cash compensation paid to said director for service insuch office(s) during the 12 months preceding the commencement of theProceeding; or (iii) in the case of an officer of the Corporation or anyof its subsidiaries, 5% of

 

8

----

 

the aggregate cash compensation paid to such officer for service insuch office(s) during the 12 months preceding the commencement of suchProceeding.

 

12.           Establishment of Trust.  In order to secure the obligations of theCompany to indemnify and to advance Expenses to Indemnitee pursuant to thisAgreement, upon a Change of Control of the Company, the Company or itssuccessor or assign shall establish a Trust (the “Trust”) for the benefit ofthe Indemnitee, the trustee (the “Trustee”) of which shall be chosen by theCompany and which is reasonably acceptable to the Indemnitee.  Thereafter, from time to time, upon receiptof a written request from Indemnitee, the Company shall fund the Trust inamounts sufficient to satisfy any and all Liabilities and Expenses reasonablyanticipated at the time of such request for which the Company may indemnifyIndemnitee hereunder.  The amount oramounts to be deposited in the Trust pursuant to the foregoing fundingobligation shall be determined by mutual agreement of the Indemnitee and theCompany or, if the Company and the Indemnitee are unable to reach such anagreement, by Independent Counsel selected jointly by the Company and theIndemnitee.  The terms of the Trustshall provide that except upon the consent of the Indemnitee and the Company,(i) the Trust shall not be revoked or the principal thereof invaded,without the written consent of the Indemnitee, (ii) the Trustee shalladvance to the Indemnitee, within 20 days of a request by the Indemnitee, anyand all Expenses, the Indemnitee hereby agreeing to reimburse the Trustee ofthe Trust for all Expenses so advanced if a final determi­nation is made by acourt in a final adjudication from which there is no further right of appealthat the Indemnitee is not entitled to be indemnified under this Agreement,(iii) the Trust shall continue to be funded by the Company in accordancewith the funding obligations set forth in this Section, (iv) the Trusteeshall promptly pay to the Indemnitee any amounts to which the Indemnitee shallbe entitled pursuant to this Agreement, and (v) all unexpended funds inthe Trust shall revert to the Company upon a final determination by IndependentCounsel selected by Indemnitee or a court of competent jurisdiction thatIndemnitee has been fully indemnified with respect to the Proceeding givingrise to the funding of the Trust under the terms of this Agreement.  The establishment of the Trust shall not, inany way, diminish the Company’s obligation to indemnify Indemnitee againstExpenses and Liabilities to the full extent required by this Agreement.

 

13.           Miscellaneous Provisions.

 

13.1         Severability; Partial Indemnity.  If any provision or provisions of thisAgreement (or any portion thereof) shall be held by a court of competent juris­dictionto be invalid, illegal or unenforceable for any reason whatever:  (a) such provision shall be limited ormodified in its application to the minimum extent necessary to avoid the invalidity,illegality or unenforceability of such provision; (b) the validity,legality and enforceability of the remaining provisions of this Agreement shallnot in any way be affected or impaired thereby; and (c) to the fullestextent possible, the provisions of this Agreement shall be construed so as togive effect to the intent manifested by the provision (or portion thereof) heldinvalid, illegal or unenforceable.  IfIndemnitee is entitled under any provision of this Agreement to indemnificationby the Company for some or a portion of any Expenses or Liabilities of any typewhatsoever incurred by him in the investigation, defense, settlement or appealof a Proceeding but not entitled to all of the total amount thereof, theCompany shall nevertheless indemnify Indemnitee for such total amount

 

9

----

 

except as to the portion thereof for which it has been determinedpursuant to Section 5 hereof that Indemnitee is not entitled.

 

13.2         Identical Counterparts.  This Agreement may be executed in one ormore counterparts, each of which shall for all purposes be deemed to be anoriginal but all of which together shall constitute one and the sameAgreement.  Only one such counterpartsigned by the party against whom enforceability is sought needs to be producedto evidence the existence of this Agreement.

 

13.3         Interpretation of Agreement.  It is understood that the parties heretointend this Agreement to be interpreted and enforced so as to provide indemnifi­cationto Indemnitee to the fullest extent not now or hereafter prohibited by law.

 

13.4         Headings.  The headings of the Sections and paragraphsof this Agreement are inserted for convenience only and shall not be deemed toconstitute part of this Agreement or to affect the construction thereof.

 

13.5         Pronouns.  Use of the masculine pronoun shall be deemedto include use of the feminine pronoun where appropriate.

 

13.6         Modification and Waiver.  No supplement, modification or amendment ofthis Agreement shall be binding unless executed in writing by both of theparties to this Agreement.  No waiver ofany provision of this Agreement shall be deemed to constitute a waiver of anyof the provisions hereof (whether or not similar) nor shall such waiverconstitute a continuing waiver.  Nowaiver of any provision of this Agreement shall be effective unless executed inwriting.

 

13.7         Notices.  All notices, requests, demands and othercommunications hereunder shall be in writing and shall be deemed to have beenduly given if (i) delivered by hand and receipted for by the party to whomsaid notice or other communication shall have been directed or (ii) mailedby certified or registered mail with postage prepaid, on the third business dayafter the date on which it is so mailed:

 

(a)           If to Indemnitee, to:

 

Graham Lidgard

Nanogen, Inc.

10398 Pacific CenterCourt

San Diego,California  92121

Telephone:  (858)410-4600

Telefax:       (858)410-4949

 

10

----

 

(b)           If to the Company to:

 

Nanogen, Inc.

10398 Pacific Center Court

San Diego, California  92121

Telephone:  (858) 410-4600

Telefax:       (889) 410-4949

Attention:    Chief Executive Officer

 

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

 

13.8         Governing Law.  The parties agree that this Agreement shallbe governed by, and construed and enforced in accordance with, the laws of theState of Delaware, as applied to contracts between Delaware residents enteredinto and to be performed entirely within Delaware.

 

13.9         Consent to Jurisdiction.  The Company and Indemnitee each herebyirrevocably consent to the jurisdiction of the courts of the State of Delawarefor all purposes in connection with any action or proceeding which arises outof or relates to this agreement and agree that any action instituted under thisagreement shall be brought only in the state courts of the State of Delaware.

 

13.10       Entire Agreement.  This Agreement represents the entireagreement between the parties hereto, and there are no other agreements,contracts or understanding between the parties hereto with respect to thesubject matter of this Agreement, except as specifically referred to herein oras provided in Sections 8 and 2.1 hereof.

 

IN WITNESS WHEREOF, theparties hereto have executed this Agreement on the day and year first abovewritten.

 
|   |   |   |   |   | NANOGEN, INC.      |
|--------|--------|--------|--------|--------|--------------------|
|   |   |   |   |   |               |
|   |   |   |   |   |               |
|   |   |   |   |   | By:                | /s/ HOWARD C. BIRNDORF |
|   |   |   |   |   |               | Howard C. Birndorf |
|   |   |   |   |   |               | Chief Executive Officer |
|   |   |   |   |   |               |
|   |   |   |   |   |               |
|   |   |   |   |   | INDEMNITEE         |
|   |   |   |   |   |               |
|   |   |   |   |   | /s/ GRAHAM LIDGARD |
|   |   |   |   |   |               | Graham Lidgard |
|   |   |   |   |   |               | Senior VP, Research and  Development |
|        |        |        |        |        |                    |  |  |

 

11

----