exhibit_10-1.htm


    
      
        Exhibit
10.1

        
          SCOLR
PHARMA, INC.

          


          DIRECTOR
INDEMNIFICATION AGREEMENT

          


          


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

          


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

          


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

          


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

          


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

          


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

          


          
            	
                    1.

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

                  


          

           

          
            
              	
                      2.

                    	
                      Definitions.   As
      used in this Agreement:

                    


            

             

          

          
            	
                     
      

                  	
                    (a)

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

                  


          

           

          
            
               

            

            
              1

              
                

              

            

            
               

            

          

          
             

            
              	
                       
      

                    	
                       

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

                    


            

             

          

          
            	
                     
      

                  	
                    (b)

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

                  


          

          


          
            	
                     
      

                  	
                    (c)

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

                  


          

          


          
            	
                     
      

                  	
                    (d)

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

                  


          

          


          
            	
                     
      

                  	
                    (e)

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

                  


          

           

          
            
               

            

            
              2

              
                

              

            

            
               

            

          

           

          
            	
                     
      

                  	
                    (i)

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

                  


          

          


          
            	
                     
      

                  	
                    (ii)

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

                  


          

          


          
            	
                     
      

                  	
                    (f)

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

                  


          

          


          
            	
                     
      

                  	
                    (i)

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

                  


          

          


          
            	
                     
      

                  	
                     (ii)

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

                  


          

          


          
            	
                     
      

                  	
                    (iii)

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

                  


          

           

          
            
               

            

            
              3

              
                

              

            

            
               

            

          

          
            


            
              	
                       
      

                    	
                       

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

                    


            

             

          

          
            	
                     
      

                  	
                    (iv)

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

                  


          

          


          
            	
                     
      

                  	
                    (v)

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

                  


          

          


          
            	
                     
      

                  	
                    (g)

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

                  


          

          
            
            

          

          
            
            

          

           

          
            
              
              

            

            
              
              

            

            
              	
                       
      

                    	
                      (h)

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

                    


            

          

           

          
            
               

            

            
              4

              
                

              

            

            
               

            

          

           

          
            	
                    3.

                  	
                    Limitation
      of Liability.

                  


          

          


          
            	
                     
      

                  	
                    (a)

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

                  


          

          


          
            	
                     
      

                  	
                    (i)

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

                  


          

          


          
            	
                     
      

                  	
                    (ii)

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

                  


          

          


          
            	
                     
      

                  	
                    (iii)

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

                  


          

          


          
            	
                     
      

                  	
                    (iv)

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

                  


          

          


          
            	
                     
      

                  	
                    (b)

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

                  


          

          


          
            	
                     
      

                  	
                    (i)

                  	
                    punitive,
      exemplary or consequential damages;

                  


          

          


          
            	
                     
      

                  	
                    (ii)

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

                  


          

          


          
            	
                     
      

                  	
                    (iii)

                  	
                    fees
      of attorneys, accountants, expert witnesses or professional consultants;
      or

                  


          

          


          
            	
                     
      

                  	
                    (iv)

                  	
                    civil
      fines or penalties of any kind or nature
  whatsoever.

                  


          

          
 

          
            	
                    4.

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

                  


          

           

          
            
              
                 

              

              
                5

                
                  

                

              

              
                 

              

            

             

            
              	
                       

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

                    


            

             

          

          
            	
                     
      

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

                  


          

          


          
            	
                    5.

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

                  


          

          


          
            	
                    6.

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

                  


          

          


          
            	
                    7.

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

                  


          

           

          
            
               

            

            
              6

              
                

              

            

            
               

            

          

           

          
            
              	
                       

                    	
                      Proceeding.

                    


            

             

          

          
            	
                    8.

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

                  


          

          


          
            	
                     
      

                  	
                    (a)

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

                  


          

          


          
            	
                     
      

                  	
                    (b)

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

                  


          

          


          
            	
                     
      

                  	
                    (c)

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

                  


          

          


          
            	
                     
      

                  	
                    (i)

                  	
                    the
      Corporation is expressly required by law to make the
      indemnification;

                  


          

          


          
            	
                     
      

                  	
                    (ii)

                  	
                    the
      Proceeding was authorized by the Board of Directors of the Corporation;
      or

                  


          

          


          
            	
                     
      

                  	
                    (iii)

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

                  


          

          


          
            	
                     
      

                  	
                    (d)

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

                  


          

          


          
            	
                    9.

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

                  


          

          


          
            	
                     
      

                  	
                    (a)

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

                  


          

          


          
            	
                     
      

                  	
                    (b)

                  	
                    furnishes
      the Corporation a written undertaking in the form attached hereto
      as

                  


          

           

          
            
               

            

            
              7

              
                

              

            

            
               

            

          

           

          
            
              	
                       
      

                    	
                      (b)

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

                    


            

             

          

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

          


          
            	
                    10.

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

                  


          

          


          
            	
                    11.

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

                  


          

          


          
            	
                     
      

                  	
                    (a)

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

                  


          

          


          
            	
                     
      

                  	
                    (b)

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

                  


          

          


          
            	
                     
      

                  	
                    (c)

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

                  


          

           

          
            
               

            

            
              8

              
                

              

            

            
               

            

          

          
            


            
              	
                       
      

                    	
                       

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

                    


            

             

          

          
            	
                     
      

                  	
                    (d)

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

                  


          

          


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

          


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

          


          
            	
                    12.

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

                  


          

          


          
            	
                     
      

                  	
                    (a)

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

                  


          

          


          
            	
                     
      

                  	
                    (b)

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

                  


          

          


          It shall
be a defense to any such enforcement action (other than an action brought to
enforce a claim for advancement of Expenses pursuant to, and in compliance with,
Section 9 of this Agreement) that the Director is not entitled to
indemnification or 

           

          
            
               

            

            
              9

              
                

              

            

            
               

            

          

           

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

          


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

          


          
            	
                     
      

                  	
                    (i)

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

                  


          

          


          
            	
                     
      

                  	
                    (ii)

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

                  


          

          


          The
Corporation and Director agree that a monetary remedy for breach of this
Agreement may be inadequate, impracticable and difficult of proof, and further
agree that such breach may cause Director irreparable
harm.  Accordingly, the parties hereto agree that Director may enforce
this Agreement by seeking injunctive relief and/or specific performance hereof,
without any necessity of showing actual damage or irreparable harm and that by
seeking injunctive relief and/or specific performance, Director shall not be
precluded from seeking or obtaining any other relief to which he may be
entitled.  The Corporation and Director further agree that Director
shall be entitled to such specific 

           

          
            
               

            

            
              10

              
                

              

            

            
               

            

          

           

          performance
and injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, without the necessity of posting bonds or
other undertaking in connection therewith.  The Corporation
acknowledges that in the absence of a waiver, a bond or undertaking may be
required of Director by the Court, and the Corporation hereby waives any such
requirement of a bond or undertaking.

          


          
            	
                    13.

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

                  


          

          


          
            	
                     
      

                  	
                    (a)

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

                  


          

          


          
            	
                     
      

                  	
                    (b)

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

                  


          

          


          
            	
                     
      

                  	
                    (c)

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

                  


          

           

          
            
               

            

            
              11

              
                

              

            

            
               

            

          

           

          
            	
                     
      

                  	
                    (d)

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

                  


          

          


          
            	
                    14.

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

                  


          

          


          
            	
                    15.

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

                  


          

          


          16.           D&O Liability
Insurance.

          


          
            	
                     
      

                  	
                    (a)

                  	
                    Maintenance of
      Insurance.   The Corporation
      hereby covenants and agrees that, so long as the Director shall continue
      to serve the Corporation in any of the capacities set forth in the
      definition of "Proceeding" above, and
      thereafter so long as the Director shall be subject to any possible
      Proceeding by reason of the fact that the Director was serving in any such
      capacity, the Corporation shall promptly obtain and maintain in full force
      and effect directors’ and officers’ liability insurance ("D&O
      Insurance") in reasonable amounts from established and reputable
      insurers.

                  


          

           

          
            
               

            

            
              12

              
                

              

            

            
               

            

          

           

          
            	
                     
      

                  	
                    (b)

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

                  


          

          


          
            	
                     
      

                  	
                    (c)

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

                  


          

          


          
            	
                     
      

                  	
                    (d)

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

                  


          

          


          
            	
                    17.

                  	
                    Interpretation and Scope of
      Agreement.   Nothing in this Agreement shall be
      interpreted to constitute a contract of service for any particular period
      or pursuant to any particular terms or conditions. The Corporation retains
      the right, in its discretion, to terminate the service relationship of the
      Director, with or without cause, or to alter the terms and conditions of
      the Director's service all without prejudice to any rights of the Director
      which may have accrued or vested prior to such action by the
      Corporation.  The Corporation shall be precluded from asserting
      in any such proceeding that the procedures and presumptions of this
      Agreement are not valid, binding and enforceable and
      shall  stipulate in any such court that the Corporation is bound
      by all the provisions of this Agreement and is precluded from making any
      assertion to the contrary.

                  


          

          


          
            	
                    18.

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

                  


          

          


          
            	
                    19.

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

                  


          

          
            
            

          

           

          
            
               

            

            
              13

              
                

              

            

            
               

            

          

          
            


            
              
              

            

            
              	
                      20.

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

                    


            

             

          

          
            
              	
                      If
      to Director:
      

                    	
                      _____________________

                      _____________________

                      Attn:_________________

                      Facsimile:
      _____________

                      E-mail:________________

                       

                    
	
                      If
      to Corporation: 

                    	
                      SCOLR
      Pharma, Inc.

                      19204
      North Creek Parkway

                      Suite 100

                      Bothell, Washington 98011

                      Attn: Alan Mitchel

                      Fascimile: (425) 368-1051

                      E-mail:
  amitchel@scolr.com

                    


            

          

          
            
            

          

          
            
            

          

          
            
            

          

          
            
            

          

          
            
            

          

          


          
            	
                    With
      a copy to:

                  	
                    Garvey
      Schubert Barer

                    Eighteenth Floor

                    1191 Second Avenue

                    Seattle, Washington
98101-2939

                    Attne: Bruce A. Robertson,
      Esquire

                    Facsimile: (206) 464-0125

                    E-mail:
    brobertson@gsblaw.com

                  


          

           

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

          


          
            	
                    21.

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

                  


          

          


          
            	
                    22.

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

                  


          

          


          
            	
                    23.

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

                  


          

          
            
            

          

           

          
            
               

            

            
              14

              
                

              

            

            
               

            

          

           

          
            
              
              

            

            
              	
                      24.

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

                    


               

              
                
                  
                  

                

                
                  	
                          25.

                        	
                                
                            Modification and
      Waiver.   No
      supplement, modification or amendment of this Agreement shall be binding
      unless executed in writing by both of the parties hereto.  No
      waiver of any of the provisions of this Agreement shall be deemed or shall
      constitute a waiver of any other provision hereof (whether or not similar)
      nor shall such waiver constitute a continuing
      waiver.

                          

                        


                

              

            

          

           

          
            	
                    26.

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

                  


          

          


          
            	
                    27.

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

                  


          

          


          


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of this page intentionally left blank.]

           

          
            
               

            

            
              15

              
                

              

            

            
               

            

          

           

          IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as
of the date first written above.

           

          
            
              	
                       

                    	
                      DIRECTOR:

                       

                      _____________________________

                      Signature

                      Print Name: ____________________

                       

                       

                      CORPORATION:

                       

                      SCOLR
      PHARMA, INC.

                       

                       

                    
	
                      By:

                       

                       

                       

                    	
                      ______________________________

                      Signature

                      Print Name: _____________________

                      Title: President &
      CEO_____________

                    


            

             

          

          
            
               

            

            
              16

              
                

              

            

            
               

            

          

           

          EXHIBIT
A

          


          


          FORM
OF UNDERTAKING

          


          


          


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

          


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

          


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

          
             

            
              	 	
                      FOR
      EXHIBIT PURPOSES ONLY,
NO SIGNATURE REQUIRED

                       

                      __________________________

                      Director

                    


               

              Exhibit A