AMERICAN BANK NOTE HOLOGRAPHICS INC
FORM OF INDEMNIFICATION AGREEMENT
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<TYPE>EX-10.1
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<FILENAME>y89160exv10w1.htm
<DESCRIPTION>FORM OF INDEMNIFICATION AGREEMENT
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<TITLE>FORM OS INDEMNIFICATION AGREEMENT</TITLE>
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<P align="right"><FONT size="2"><B>Exhibit&nbsp;10.1</B>
</FONT>


<P align="center"><FONT size="2"><B>AMERICAN BANK NOTE HOLOGRAPHICS, INC.</B>
</FONT>


<P align="center"><FONT size="2"><B>INDEMNIFICATION AGREEMENT</B>
</FONT>

<P align="left"><FONT size="2">This Indemnification Agreement (&#147;<B>Agreement</B>&#148;), is entered into as of the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;day
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by and between American Bank Note Holographics, Inc., a
Delaware corporation (the &#147;<B>Company</B>&#148;) and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;who is currently serving
as an officer and/or director of the Company (the &#147;<B>Indemnitee</B>&#148;).
</FONT>

<P align="center"><FONT size="2">RECITALS
</FONT>


<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS the Indemnitee is currently serving in the capacity or capacities
described above;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company has determined that it is in the best interest of the
Company to enter into indemnification agreements with its current officer
and/or directors of the Company;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company wishes the Indemnitee to continue to serve in such
capacity or capacities and the Indemnitee is willing, under the current
circumstances, to continue in such capacity or capacities;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Indemnitee is currently entitled to indemnification under the
General Corporation Law of the State of Delaware, the Amended and Restated
By-laws and the Amended and Restated Certificate of Incorporation of the
Company, which the Indemnitee does not regard to be adequate protection against
the risks associated with his service to or at the request of the Company;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company has concluded that additional protection is
appropriate for its directors and officers; and
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, in view of the considerations set forth above, the Company
desires that Indemnitee be indemnified by the Company as set forth herein.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW, THEREFORE, </B>the Company and Indemnitee hereby agree as follows:
</FONT>

<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indemnification of Expenses. The Company shall indemnify Indemnitee to
the fullest extent permitted by Delaware law if Indemnitee is or becomes a
party to or witness or other participant in, or is threatened to be made a
party to or witness or other participant in, any threatened, pending or
completed action, suit (derivative or otherwise), proceeding or alternative
dispute resolution mechanism, or any hearing, inquiry or investigation that
Indemnitee, in good faith believes might lead to the institution of any such
action, suit (derivative or otherwise), proceeding or alternative dispute
resolution mechanism, whether civil, criminal, administrative, investigative or
other (hereinafter a <B>&#147;Claim&#148;</B>) by reason of (or arising in part out of) any
event or occurrence related to the fact that Indemnitee is or was a director,
officer, employee, consultant, agent or fiduciary of the Company, or any
subsidiary of the Company, or is or was serving at the request of the Company
as a director, officer, employee, consultant, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise, or by
reason of any action or inaction on the part of Indemnitee while serving in
such capacity (hereinafter an <B>&#147;Indemnifiable Event&#148;</B>) against any and all
expenses (including attorneys&#146; fees and all other costs, expenses and
obligations incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to defend,
be a witness in or participate in, any such action, suit (derivative or
otherwise), proceeding, alternative dispute resolution mechanism hearing,
inquiry or investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of such Claim and any federal,
state, local or foreign taxes imposed on Indemnitee as a result of the actual
or deemed receipt of any payments under this Agreement (collectively,
hereinafter <B>&#147;Expenses&#148;</B>), including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reviewing Party. Notwithstanding the foregoing, (i)&nbsp;the obligations
of the Company under Section&nbsp;1(a) shall be subject to the condition that the
Reviewing Party (as described in Section&nbsp;10(c) hereof) shall not have
determined that Indemnitee would not be permitted to be indemnified under
applicable law, and (ii)&nbsp;the
</FONT>
<P align="center"><FONT size="2">1</FONT>

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<P align="left"><FONT size="2"> obligation of the Company to make an advance payment of Expenses to
Indemnitee pursuant to Section&nbsp;2(a) (an <B>&#147;Expense Advance&#148;</B>) shall be subject to
the condition that, if, when and to the extent that the Reviewing Party
determines that Indemnitee would not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by Indemnitee
(who hereby agrees to execute an undertaking to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse the Company
for any Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed). Indemnitees&#146; obligation to reimburse the Company for any Expense
Advance shall be unsecured and no interest shall be charged thereon.
Indemnitee shall have the right, within 60&nbsp;days of a determination by the
Reviewing Party that Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, or within 30&nbsp;days or
Indemnitee&#146;s request for payment if there has been no determination by the
Reviewing Party, to commence litigation in any court of competent jurisdiction,
or seek an award in arbitration to be conducted by a single arbitrator pursuant
to the rules of the American Arbitration Association, which award shall be
deemed final, unappealable and binding, to determine whether Indemnitee should
be indemnified under applicable law, or to challenge any such determination by
the Reviewing Party or any aspect thereof, including the legal or factual bases
therefor. Any such court or arbitrator, as the case may be, shall thereupon
have the exclusive authority to make such determination unless and until such
court or arbitrator dismisses or otherwise terminates such action without
having made a determination. The Company hereby consents to service of process
and to appear in any such proceeding. In any such action before the court or
arbitrator, Indemnitee shall be presumed to be entitled to indemnification and
the Company shall have the burden of proving that indemnification is not
required under this Agreement. All fees and expenses of any arbitrator
pursuant to this provision and all reasonable fees and expenses of counsel
retained by Indemnitee in connection with any court or arbitration finding an
obligation greater than that assumed by the Company prior to commencement of
such court action or arbitration shall be paid by the Company. Any
determination by the Reviewing party otherwise shall be conclusive and binding
on the Company and Indemnitee.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mandatory Payment of Expenses. Notwithstanding any other provision of
this Agreement other than Section&nbsp;9 hereof, to the extent that Indemnitee has
been successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit
(derivative or otherwise), proceeding, inquiry or investigation referred to in
Section (l)(a) hereof or in the defense of any claim, issue or matter therein,
Indemnitee shall be indemnified against all Expenses incurred by Indemnitee in
connection therewith.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses; Indemnification Procedure.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advancement of Expenses. The Company shall advance all Expenses
incurred by Indemnitee. The advances to be made hereunder shall be paid by the
Company to Indemnitee as soon as practicable but in any event no later than
five days after written demand by Indemnitee therefor to the Company which
shall be accompanied by an undertaking to repay such Expenses, as required by
the General Corporation Law of the State of Delaware (&#147;<B>DGCL</B>&#148;), in the event
that it is determined by the Reviewing Party (subject to the Indemnitee&#146;s right
to litigate or compel arbitration with respect to such determination described
in Section&nbsp;1(b) hereof) that pursuant to the DGCL, the Indemnitee is not
entitled to be indemnified by the Company.
</FONT>

<P align="center"><FONT size="2">2</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to Indemnitee&#146;s right to be indemnified under this Agreement, give
the Company notice in writing as soon as practicable of any Claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address shown on the signature page of this
Agreement (or such other address as the Company shall designate in writing to
Indemnitee). In addition, Indemnitee shall give the Company such information
and cooperation as it may reasonably require and as shall be within
Indemnitee&#146;s power. Failure on the part of the Indemnitee to give such notice
shall not constitute a waiver of the Indemnitee&#146;s rights under this Agreement
nor shall it constitute a breach of this Agreement, provided that such failure
to notify the Company as provided for in this Section&nbsp;2(b) does not unduly
burden or prejudice the rights of the Company under this Agreement.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Presumptions; Burden of Proof. For purposes of this Agreement, the
termination of any Claim by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court
has determined that indemnification is not permitted by applicable law. In
addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law, shall be a defense to indemnitee&#146;s claim or create a
presumption that Indemnitee has not met any particular standard of conduct or
did not have any particular belief. In connection with any determination by
the Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice to Insurers. At the time of the receipt by the Company of a
notice of a Claim pursuant to Section&nbsp;2(b) hereof, the Company shall give
prompt notice of the commencement of such Claim to its insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to
pay, on behalf of Indemnitee, all amounts payable as a result of such action,
suit (derivative or otherwise), proceeding, inquiry or investigation in
accordance with the terms of such policies.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selection of Counsel. In the event the Company shall be obligated
hereunder to pay the Expenses of any Claim, the Company shall be entitled to
assume the defense of such Claim with counsel approved by Indemnitee, which
approval shall not be unreasonably withheld, upon the delivery to Indemnitee of
written notice of its election so to do. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with respect to the
same Claim; provided that, (i)&nbsp;Indemnitee shall have the right to employ
Indemnitee&#146;s counsel in any such claim at Indemnitee expense and (ii)&nbsp;if (A)
the employment of counsel by Indemnitee has been previously authorized by the
Company, (B)&nbsp;Indemnitee shall have reasonably concluded that there is a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense, or (c)&nbsp;the Company shall not continue to retain such counsel to
defend such Claim, then the fees and expenses of Indemnitee counsel shall be at
the expense of the Company. The Company shall have the right to conduct such
defense as it sees fit in its sole discretion, including the right to settle
any Claim against Indemnitee without the consent of the Indemnitee provided (i)
the Company holds the Indemnitee harmless in connection with any such
settlement, (ii)&nbsp;the Indemnitee receives a full release from liability under
the Claim settled and (iii)&nbsp;there are no non-monetary penalties or obligations
of the Indemnitee required by such settlement agreement.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional Indemnification Rights: Nonexclusivity.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Scope. The Company hereby agrees to indemnify Indemnitee to the
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by the other provisions of this Agreement, the
Company&#146;s Amended and Restated Certificate of Incorporation, the Company&#146;s
Amended and Restated Bylaws or by statute. In the event of any change after
the date of this Agreement in any applicable law, statute or rule which expands
the right of a Delaware corporation to indemnify a member of its Board of
Directors or an officer, employee, consultant, agent or fiduciary, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits afforded by such change. In the event of any change in any
applicable law,
</FONT>
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<P align="left"><FONT size="2">statute or rule which narrows the right of a Delaware corporation to
indemnify a member of its Board of Directors or an officer, employee,
consultant, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties&#146; rights and obligations
hereunder except as set forth in Section&nbsp;8(a) hereof.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment to Indemnification Rights. The Company shall not adopt any
amendment to its Amended and Restated Certificate of Incorporation (the
&#147;<b>Certificate</b>&#148;) or Amended and Restated By-Laws (the &#147;<b>By-Laws</b>&#148;) the effect of
which would be to deny, diminish or encumber Indemnitee&#146;s rights to indemnity
pursuant to the Certificate, By-Laws, the DGCL or any other applicable law as
applied to any act or failure to act occurring in whole or in part prior to the
date (the &#147;<b>Effective Date</b>&#148;) upon which the amendment was approved by the
Company&#146;s Board of Directors or stockholders, as the case may be. In the event
that the Company shall adopt any amendment to its Certificate or By-Laws the
effect of which is to change Indemnitee&#146;s rights to indemnity under such
instruments, such amendment shall apply only to acts or failures to act
occurring entirely after the Effective Date thereof. The Company shall give
written notice to Indemnitee of any proposal which respect to any such
amendment no later than the date such amendment is first presented to the Board
of Directors (or any committee thereof) for consideration, and shall provide a
copy of any such amendment to Indemnitee promptly after its
adoption.</font>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nonexclusivity. The indemnification provided by this Agreement shall
be in addition to any rights to which Indemnitee may be entitled under the
Company&#146;s Certificate, its Bylaws, any agreement, any vote of stockholders or
disinterested directors, the DGCL, or otherwise. The indemnification provided
under this Agreement shall continue as to Indemnitee for any action Indemnitee
took or did not take while serving in an indemnified capacity even though
Indemnitee may have ceased to serve in such capacity.
</FONT>

<P align="left"><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Duplication of Payments.&nbsp;The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Certificate of Incorporation, Bylaw or otherwise)
of the amounts otherwise indemnifiable hereunder.
</FONT>

<P align="left"><FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Partial Indemnification.&nbsp;If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of
Expenses incurred in connection with any Claim, but not, however, for all of
the total amount thereof, the Company shall nevertheless indemnify Indemnitee
for the portion of such expenses to which Indemnitee are entitled.
</FONT>

<P align="left"><FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mutual Acknowledgement.&nbsp;Both the Company and Indemnitee acknowledge that in
certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying its directors, officers, employees, consultants,
agents or fiduciaries under this Agreement or otherwise. Indemnitee
understands and acknowledges that the Company has undertaken or may be required
in the future to undertake with the Securities and Exchange Commission to
submit the question of indemnification to a court in certain circumstances for
a determination of the Company&#146;s right under public policy to indemnify
Indemnitee.
</FONT>

<P align="left"><FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liability Insurance.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as provided in (b)&nbsp;below, the Company hereby agrees to use its
best efforts to maintain directors and officers liability insurance in the
amount provided for in its current policy for Indemnitee so long as Indemnitee
shall continue to serve as a director, officer or key employee of the Company,
and thereafter, so long as Indemnitee shall be subject to any possible claim or
threatened, pending or completed action, suit (derivative or otherwise) or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that Indemnitee was a director, officer or key employee of the
Company.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall have no obligation hereunder to obtain or maintain
directors and officers liability insurance if, in the reasonable business
judgment of the Board of Directors of the Company, such insurance is not
reasonably available, the premium costs for such insurance are disproportionate
to the amount of coverage provided, or the coverage provided by such insurance
is limited, by exclusions or otherwise, so as to provide insufficient benefit.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that the Company maintains liability insurance
applicable to directors, officers, employees, agents or fiduciaries, Indemnitee
shall be covered by such policies in such a manner as to provide
</FONT>

<P align="center"><FONT size="2">4</FONT>

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<P align="left"><FONT size="2">Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company&#146;s directors, officers, key employees, agents or
fiduciaries.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall give prompt written notice to Indemnitee of any
amendment or other change or modification, or any proposed amendment change or
modification, to any policy of directors and officers liability insurance
maintained by the Company and covering indemnitee.
</FONT>

<P align="left"><FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exceptions. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Excluded Action or Omissions. To indemnify indemnitee for
Indemnitee&#146;s acts, omissions or transactions from which the Indemnitee may not
be relieved of liability under applicable law;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Claims Initiated by Indemnitee. To indemnify or advance expenses to
Indemnitee with respect to Claims initiated or brought voluntarily by
Indemnitee and not by way of defense, except (i)&nbsp;with respect to actions or
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the
Company&#146;s Certificate or Bylaws now or hereafter in effect relating to Claims
for Indemnifiable Events, (ii)&nbsp;in specific cases if the Board of Directors has
approved the initiation or bringing of such Claim, or (iii)&nbsp;as otherwise
required under Section&nbsp;145 of the DGCL, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advance
expense payment or insurance recovery, as the case may be;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lack of Good Faith. To indemnify Indemnitee for any expenses incurred
by Indemnitee with respect to any proceeding instituted by Indemnitee to
enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by Indemnitee in such
proceeding was not made in good faith or was frivolous; or
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Claims Under Section&nbsp;16(b). To indemnify Indemnitee for expenses and
the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section&nbsp;16(b) of the Securities Exchange Act of
1934, as amended, or any similar successor statute.
</FONT>

<P align="left"><FONT size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company against Indemnitee,
Indemnitee&#146;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 Company 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.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="2%" align="left" nowrap><FONT size="2">10.</FONT></TD>
    <TD width="98%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction of Certain Phrases.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement, references to the &#147;Company&#148; shall
include any constituent corporation (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, employees, consultants, agents or fiduciaries, so that if
Indemnitee is or was a director, officer, employee, consultant, agent or
fiduciary of such constituent corporation, or is or was servicing at the
request of such constituent corporation as a director, officer, employee,
consultant, agent or fiduciary of another corporation, partnership, joint
venture, employee benefit plan, trust or other enterprise, Indemnitee shall
stand in the same position under the provisions of this Agreement with respect
to the resulting or surviving corporation as Indemnitee would have with respect
to such constituent corporation if its separate existence had continued.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement, references to &#147;other enterprises&#148;
shall include employee benefit plans; references to &#147;fines&#148; shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and references to &#147;serving at the request of the Company&#148; shall include any
service as a director, officer, employee, consultant, agent or fiduciary of the
Company which imposes duties on, or involves services by, such director,
officer, employee, consultant, agent or fiduciary with respect to an employee
benefit plan, its participants or its beneficiaries; and if Indemnitee acted in
good faith and in a manner Indemnitee reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan, Indemnitee
shall be
</FONT>
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<P align="left"><FONT size="2">deemed to have acted in a manner &#147;not opposed to the best interests of the
Company&#148; as referred to in this Agreement.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement a &#147;Reviewing Party&#148; shall mean a person
or group of persons, mutually agreed upon by the Board and the Indemnitee,
consisting of a majority of the independent directors of the Company&#146;s Board of
Directors, provided that in the event that the Board and the Indemnitee cannot
mutually agree upon a person or group of persons, the Reviewing Party shall be
legal counsel reasonably acceptable to the Board (provided that such counsel
has not otherwise performed services for the Company or Indemnitee within the
last three (3)&nbsp;years (other than with respect to matters concerning the rights
of Indemnitee under this Agreement)), which shall provide a written report of
its findings to the Board and the Indemnitee. &#147;Independent directors,&#148; for the
purposes of this Section&nbsp;10(c), shall mean those members of the Board of
Directors who are not a party to the particular Claim for which indemnitee is
seeking indemnification.
</FONT>

<P align="left"><FONT size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original.
</FONT>

<P align="left"><FONT size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Binding Effect; Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors, assigns, including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause
any successor (whether direct or indirect by purchases merger, consolidation or
otherwise) to all, substantially all, or substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement
shall continue in effect with respect to Claims relating to Indemnifiable
Events regardless of whether Indemnitee continues to serve as director,
officer, employee, consultant, agent or fiduciary of the Company or of any
other enterprise at the Company&#146;s request.
</FONT>

<P align="left"><FONT size="2">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attorneys&#146; Fees. In the event that any action is instituted by Indemnitee
under this Agreement or under any liability insurance policies maintained by
the Company to enforce or interpret any of the terms hereof or thereof,
Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee
with respect to such action, regardless of whether Indemnitee is ultimately
successful in such action, and shall be entitled to the advancement of Expenses
with respect to such action, unless, as a part of such action, a court of
competent jurisdiction over such action determines that each of the material
assertions made by Indemnitee as a basis for such action was not made in good
faith or was frivolous. In the event of an action instituted by or in the name
of the Company under this Agreement to enforce or interpret any of the terms of
this Agreement, Indemnitee shall be entitled to be paid all Expenses incurred
by Indemnitee in defense of such action (including costs and expenses incurred
with respect to Indemnitee counterclaims and cross-claims made in such action),
and shall be entitled to the advancement of Expenses with respect to such
action, unless as a part of such action, a court having jurisdiction over such
action determines that each of Indemnitee material defenses to such action was
made in bad faith or was frivolous.
</FONT>

<P align="left"><FONT size="2">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any
event be deemed to be given (a)&nbsp;five (5)&nbsp;days after deposit with the U.S.
Postal Service or other applicable postal service, if delivered by first class
mail, postage prepaid, (b)&nbsp;upon delivery, if delivered by hand, (c)&nbsp;one
business day after the business day of deposit with Federal Express or similar
overnight courier, freight prepaid, or (d)&nbsp;one day after the business day of
delivery by facsimile transmission, if delivered by facsimile transmission, and
shall be addressed if to Indemnitee, at the Indemnitee address as set forth
beneath Indemnitee signatures to this Agreement and if to the Company at the
address of its principal corporate offices (Attention: Chief Executive
Officer).
</FONT>

<P align="left"><FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out
of or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the court of
chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.
</FONT>

<P align="left"><FONT size="2">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severability. The provisions of this Agreement shall be severable in the
event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain
</FONT>
<P align="center"><FONT size="2">6</FONT>

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<P align="left"><FONT size="2">enforceable to the fullest extent permitted by law. Furthermore, to the
fullest extent possible, the provisions of this Agreement (including. without
limitations, each portion of this Agreement containing any provision held to be
invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
</FONT>

<P align="left"><FONT size="2">17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Choice of Law. This Agreement shall be governed by and its provisions
construed and enforced in accordance with the laws of the State of Delaware, as
applied to contracts between Delaware residents, entered into and to be
performed entirely within the State of Delaware, without regard to the conflict
of laws principles thereof.
</FONT>

<P align="left"><FONT size="2">18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee who shall execute all documents required and shall
required and shall do all acts that may be necessary to secure such rights and
to enable the Company effectively to bring suit to enforce such rights.
</FONT>

<P align="left"><FONT size="2">19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing
signed by both the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.
</FONT>

<P align="left"><FONT size="2">20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Integration and Entire Agreement. This Agreement sets forth the entire
understanding between the parties hereto and supersedes and merges all previous
written and oral negotiations, commitments, understandings and agreements
relating to the subject matter hereof between the parties hereto.
</FONT>

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</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the date first above written.
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="50%"><FONT size="2">AMERICAN BANK NOTE HOLOGRAPHICS, INC.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="50%"><FONT size="2"><HR align="left" size="1" noshade>
Name: <BR>
Title: <BR>
Address: </FONT></TD>
</TR>
</TABLE>
<P>
<DIV>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="2" valign="top" align="left"><FONT size="2">AGREED TO AND ACCEPTED BY:</FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
    <TD colspan="2" valign="top" align="left"><HR align="left" size="1" noshade width="70%"></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Name:</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Address:</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
<HR align="left" size="1" noshade width="65%"></FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
<HR align="left" size="1" noshade width="65%"></FONT></TD>
</TR>
</TABLE>
</DIV>


<P align="center"><FONT size="2">8</FONT>



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