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MEDICAL DEVICE ALLIANCE INC.
EXHIBIT 10.06
FORM
OF
INDEMNIFICATION AGREEMENT
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FORM OF
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement) is entered into as of
the date hereinafter set forth between MEDICAL DEVICE ALLIANCE, INC., a Nevada
corporation and ____________________ ("Indemnitee").
RECITALS
A. The Indemnitee is currently serving or has agreed to serve as a
director, officer, employee or consultant of Medical Device Alliance, Inc.,
and/or a subsidiary of Medical Device Alliance, Inc. (collectively, the
"Company"), and in such capacity has rendered or will render valuable services
to the Company. Only those consultants or employees approved by the Board of
Directors of the Company will be offered an Indemnification Agreement; and
B. The Company has investigated the availability and sufficiency of
liability insurance and Nevada statutory indemnification provisions to provide
its directors, officers and certain consultants and employees with adequate
protection against various legal risks and potential liabilities to which such
individuals are subject due to their positions with the Company and has
concluded that such insurance and statutory provisions may provide inadequate
and unacceptable protection to certain individuals requested to serve as its
directors, officers and certain consultants and employees; and
C. In order to induce and encourage highly experienced and capable
persons such as the Indemnitee to continue to serve as a director, officer,
employee or consultant of the Company, the Board of Directors has determined,
after due consideration and investigation of the terms and provisions of this
Agreement and the various other options available to the Company and the
Indemnitee in lieu hereof, that this Agreement is not only reasonable and
prudent, but necessary to promote and ensure the best interests of the Company
and its shareholders.
AGREEMENT
NOW, THEREFORE, in consideration of the services of the Indemnitee and
in order to induce the Indemnitee to serve as a director, officer, consultant or
employee, the Company and Indemnitee hereby agree as follows:
1. DEFINITIONS. As used in this Agreement:
1.1 "Proceeding" means any threatened, pending or completed
action, suit or proceeding, formal or informal, whether brought in the name of
the Company or otherwise and whether of a civil, criminal, administrative or
investigative nature, in which Indemnitee may be or may have been involved as a
party or otherwise, by reason of the fact that Indemnitee is or was a director,
officer, consultant or employee of the Company, or is or was serving at the
request of the Company as a director, officer, consultant or employee of another
corporation, partnership, joint venture, trust or other enterprise, whether or
not he or she is serving in such capacity at the time any liability or expense
is incurred for which indemnification or reimbursement can be provided under
this Agreement.
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1.2 "Expenses" includes, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, expenses of investigations, judicial or administrative Proceedings and
appeals, amounts paid in settlement by or on behalf of Indemnitee, and any
expenses of establishing a right to indemnification, pursuant to this Agreement
or otherwise, including reasonable compensation for time spent by Indemnitee in
connection with the investigation, defense or appeal of a Proceeding or action
for indemnification for which he or she is not otherwise compensated by the
Company or any third party. The term "Expenses" does not include the amount of
judgments, fines, penalties or ERISA excise taxes actually levied against
Indemnitee.
1.3 "Other enterprise" shall include employee benefit plans;
"Fines" shall include any excise tax assessed with respect to any employee
benefit plan; and "Serving at the request of the Company" shall include any
service as a director, officer, consultant or employee of the Company which
imposes duties on, or involves services by, such director, officer, consultant
or employee with respect to an employee benefit plan, its participants, or
beneficiaries.
1.4 "Independent Legal Counsel" means an attorney mutually
agreeable to the Company and Indemnitee, with such attorney to be designation
within ten (10) days after notice by one party to the other. If the Company and
Indemnitee cannot agree upon the selection of such attorney within such ten (10)
days period, an attorney shall be selected by the Company from among five (5)
attorneys designated in writing by the Indemnitee and delivered to the Company
within five (5) days after the end of such ten (10) day period; provided,
however, that the attorneys so designated have a minimum of ten (10) years' of
experience in corporate law. If the Company and Indemnitee cannot agree upon the
selection of such attorney, and if Indemnitee fails to designate said five (5)
attorneys in writing to the Company within the period described above, the
Company alone shall choose the Independent Legal Counsel.
2. AGREEMENT TO SERVE. The Indemnitee agrees to continue to serve as a
director, officer, consultant or employee of the Company at the will of the
Company under the terms of his or her agreement with the Company, if any, for so
long as he or she is duly elected or appointed or until such time as he or she
tenders his or her resignation in writing or is removed as a director, officer,
consultant or employee.
3. INDEMNIFICATION IN THIRD PARTY ACTION. The Company shall indemnify
Indemnitee if Indemnitee is a party to or threatened to be made a party to or is
otherwise involved in any Proceeding (other than a Proceeding by or in the name
of the Company to procure a judgment in its favor) by reason of the fact that
Indemnitee is or was a director, officer, consultant or employee of the Company
or is or was serving at the request of the Company as a director, officer,
consultant or employee of another corporation, partnership, joint venture, trust
or other enterprise, against all Expenses, judgments, fines, penalties and ERISA
excise taxes actually and reasonably incurred by Indemnitee in connection with
the defense or settlement of such Proceeding, to the fullest extent permitted by
Nevada law and the Company's Articles of Incorporation; provided that any
settlement of a Proceeding is approved in writing by the Company prior to
settlement.
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4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE NAME OF THE COMPANY. The
Company shall indemnify Indemnitee if Indemnitee is a party to or threatened to
be made a party to or is otherwise involved in any Proceeding by or in the name
of the Company to procure a judgment in its favor by reason of the fact that
Indemnitee is or was a director, officer, consultant or employee of the Company
or is or was serving at the request of the Company as a director, officer,
consultant or employee of another corporation, partnership, joint venture, trust
or other enterprise, against all Expenses, judgments, fines, penalties and ERISA
excise taxes actually and reasonably incurred by Indemnitee in connection with
the defense or settlement of such Proceeding, to the fullest extent permitted by
Nevada law and the Company's Articles of Incorporation.
5. CONCLUSIVE PRESUMPTION REGARDING STANDARDS OF CONDUCT. Indemnitee
shall be conclusively presumed to have met the relevant standards of conduct, if
any, as defined by Nevada law, for indemnification pursuant to this Agreement,
unless a determination that Indemnitee has not met such standards is made by:
(i) the Board of Directors with a majority vote of a quorum thereof consisting
of directors who are not parties to any Proceeding under which a claim is made;
(ii) the shareholders of the Company with a majority vote of a quorum thereof
consisting of shareholders who are not parties to any Proceeding under which a
claim is made; (iii) a written opinion of the Independent Legal Counsel; or (iv)
a ruling by a court of competent jurisdiction.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee has been
successful in defense of any Proceeding or in defense of any claim, issue or
matter therein, or the merits or otherwise, including the dismissal of a
Proceeding without prejudice or the settlement of a Proceeding without an
admission of liability, Indemnitee shall be indemnified against all Expenses
incurred in connection therewith to the fullest extent permitted by Nevada law.
7. ADVANCES OF EXPENSES. The Expenses incurred by Indemnitee in any
Proceeding shall be promptly paid by the Company in advance of the final
disposition of the Proceeding at the written request of Indemnitee to the
fullest extent permitted by Nevada law; provided that Indemnitee shall state in
writing that he or she will repay any advances if it is ultimately determined
that Indemnitee is not entitled to indemnification.
8. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties or ERISA excise taxes actually and
reasonably incurred by him or her in the investigation, defense, appeal or
settlement of any Proceeding but not, however, for the total amount of his or
her Expenses, judgments, fines, penalties or ERISA excise taxes, the Company
shall nevertheless indemnify Indemnitee for the portion of Expenses, judgments,
fines, penalties or ERISA excise taxes to which Indemnitee is entitled.
9. DETERMINATION OF RIGHT TO INDEMNIFICATION.
9.1 NOTICE. Promptly after receipt by Indemnitee of notice of
the commencement of any Proceeding, the Indemnitee shall, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company in writing of the commencement thereof. The omission to so notify the
Company will not relieve the Company from any liability which it may have to the
Indemnitee other than under this Agreement.
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9.2 ENFORCEMENT. If a claim for indemnification or advances
under this Agreement is not paid by the Company within thirty (30) days of
receipt of written notice by Indemnitee, the rights provided by this Agreement
shall be enforceable by Indemnitee in any court of competent jurisdiction. The
burden of proving by clear and convincing evidence that indemnification or
advances are not appropriate shall be on the Company. Neither the failure of the
directors or shareholders of the Company or the Independent Legal Counsel to
have made a determination prior to the commencement of such action that
indemnification or advances are proper in the circumstances because Indemnitee
has met the applicable standard of conduct, if any, nor an actual determination
by the directors or shareholder of the Company or Independent Legal Counsel that
Indemnitee has not met the applicable standard of conduct, shall be a defense to
the action or create a presumption for the purpose of an action that Indemnitee
has not met the applicable standard of conduct.
9.3 EXPENSES. Indemnitee's expenses incurred in connection with
any proceeding concerning his or her right to indemnification or advances in
whole or in part pursuant to this Agreement shall also be indemnified by the
Company regardless of the outcome of such proceeding.
9.4 PARTICIPATION. With respect to any Proceeding for which
indemnification is requested, the Company will be entitled to participate
therein at its own expenses and, except as otherwise provided below, the Company
may assume the defense thereof to the extent that it may wish, with counsel
satisfactory to Indemnitee. After notice from the Company to Indemnitee of its
election to assume the defense of a Proceeding, the Company will not be liable
to Indemnitee under this Agreement for any Expenses subsequently incurred by
Indemnitee in connection with the defense thereof, other than as provided below.
The Company shall not settle any Proceeding in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee's written consent.
Indemnitee shall have the right to employ his or her own counsel in any
Proceeding, but the fees and expenses of such counsel incurred after notice from
the Company of its assumption of the defense of the Proceeding shall be at the
expenses of Indemnitee, unless: (i) the employment of counsel by Indemnitee has
been authorized in writing by the Company; (ii) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of the defense of a Proceeding; or (iii) the Company
shall not, in fact, have employed counsel to assume the defense of a Proceeding,
in each of which cases the fees and expenses Indemnitee's counsel shall be
advanced by the Company. The Company shall not be entitled to assume the defense
of any Proceeding brought by or on behalf of the Company or as to which
Indemnitee has concluded that there may be a conflict of interest between the
Company and Indemnitee.
10. LIMITATIONS ON INDEMNIFICATION. No payments pursuant to this
Agreement shall be made by the Company:
10.1 VOLUNTARY ACTIONS. To indemnify or advance funds to
Indemnitee for Expenses with respect to Proceedings initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
Proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under Nevada
law, but such indemnification or advancement of expenses may be provided in the
Company in specific cases if the Board of Directors finds it to be appropriate;
10.2 INSURANCE PROCEEDS. To indemnify Indemnitee for any
Expenses, judgments, fines, penalties or ERISA excise taxes sustained in any
Proceeding for which payment is actually made
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to Indemnitee under a valid and collectible insurance policy, except in respect
of any excess beyond the amount of payment under such insurance;
10.3 SECURITIES LAWS. To indemnify Indemnitee for any Expenses,
judgments, fines or penalties sustained in any Proceeding for an accounting of
profits made from the purchase or sale by Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the Securities Exchange
Act of 1934, the rules and regulations promulgated thereunder and amendments
thereto or similar provisions of any federal, state or local statutory law; and
10.4 UNLAWFUL. If a court of competent jurisdiction finally
determines that any indemnification hereunder is unlawful.
11. MAINTENANCE OF LIABILITY INSURANCE.
11.1 PURCHASE. Subject to Section 11.3 hereof, the Company
hereby covenants and agrees that, as long as Indemnitee continues to serve as a
director, officer, consultant or employee of the Company and thereafter as long
as Indemnitee may be subject to any possible Proceeding, the Company, subject to
Section 11.3, shall promptly obtain and maintain in full force and effect
directors' and officers' liability insurance ("D&O Insurance") in reasonable
amounts issued by established and reputable insurers.
11.2 INSURED. In all D&O Insurance policies, Indemnitee shall be
named as an insured in such a manner as to provide Indemnitee the same rights
and benefits as are accorded to the most favorably insured of the Company's
directors, officers, consultants or employees.
11.3 NO OBLIGATION. Notwithstanding the foregoing, the Company
shall have no obligation to obtain or maintain D&O Insurance if the Company
determines, in its sole and absolute discretion, that such insurance is not
reasonably available, the premium costs for such insurance are disproportionate
to the amount of coverage provided, the coverage provided by such insurance is
so limited by exclusions that it provides an insufficient benefit, or Indemnitee
is covered by similar insurance maintained by a subsidiary of the Company.
12. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to
which Indemnitee may be entitled under the Articles of Incorporation, By-Laws,
any agreement, any vote of shareholders or disinterested directors, provision of
Nevada law, or otherwise, both as to action in his or her official capacity and
as to action in another capacity on behalf of the Company while holding such
office.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and
shall inure to the benefit of, Indemnitee and his or her heirs, executors,
administrators and assigns, whether or not Indemnitee has ceased to be a
director, officer, consultant or employee, and the Company and its successors
and assigns.
14. SEPARABILITY. Each and every paragraph, sentence, term and provision
of this Agreement is separate and distinct so that if any paragraph, sentence,
term or provision hereof shall be held to be invalid or unenforceable for any
reason, such invalidity or unenforceability shall not affect the validity or
enforceability of any other paragraph, sentence, term and provision hereof. To
the extent required, any paragraph, sentence, term or provision of this
Agreement may be modified by a
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court of competent jurisdiction to preserve its validity and to provide
Indemnitee with the broadest possible indemnification permitted under Nevada
law.
15. SAVINGS CLAUSE. If this Agreement or any paragraph, sentence, term
or provision hereof shall be invalidated on any ground by any court of competent
jurisdiction, the Company shall nevertheless indemnify Indemnitee as to any
Expenses, judgments, fines, penalties or ERISA excise taxes incurred with
respect to any Proceeding to the full extent permitted by any applicable
paragraph, sentence, term or provision of this Agreement that has not been
invalidated or by any other applicable Nevada law.
16. INTERPRETATION; GOVERNING LAW. This Agreement shall be construed as
a whole and in accordance with its fair meaning. Headings are for convenience
only and shall not be used in construing meaning. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of Nevada.
17. AMENDMENTS. No amendment, waiver, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
the party against whom enforcement is sought. The indemnification rights
afforded to Indemnitee hereby are contract rights and may not be diminished,
eliminated or otherwise affected by amendments to the Articles of Incorporation,
By-Laws or by other agreements, including D&O Insurance policies.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other.
19. NOTICES. Any notice required to be given under this Agreement shall
be directed to the Company at the address set forth below and to Indemnitee at
the address set forth after Indemnitee's signature below, or to such other
address as either shall designate in writing.
IN WITNESS WHEREOF, The parties have executed this Indemnification
Agreement to be effective as of the ____ day of ____, 1998.
"COMPANY" "INDEMNITEE"
MEDICAL DEVICE ALLIANCE, INC.
a Nevada Corporation
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By: Address:
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Its: Chairman of the Board ---------------------------------
Address: 0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 0000 ---------------------------------
Xxx Xxxxx, XX. 00000
