EXHIBIT 10.6
Form of Indemnity Agreement with Directors
INDEMNITY AGREEMENT
This Indemnity Agreement, dated as of May 4, 1990,
by and between Matritech, Inc., a Delaware
corporation (the "Company"), and ________, a director
of the Company (the "Indemnitee").
RECITALS
A. The Company is aware that competent and experienced persons
are increasingly reluctant to serve as directors or officers of corporations
unless they are protected by comprehensive liability insurance or
indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that the
exposure frequently bears no reasonable relationship to the compensation of such
directors and officers;
B. The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors and officers with adequate,
reliable knowledge or legal risks to which they are exposed or information
regarding the proper course of action to take;
C. Plaintiffs often seek damages in such large amounts and the
costs of litigation may be so enormous (whether or not the case is meritorious),
that the defense/and or settlement of such litigation is often beyond the
personal resources of officers and directors;
D. The Company believes that it is unfair for its directors and
officers and the directors and officers of its subsidiaries to assume the risk
of huge judgments and other expenses which may occur in cases in which the
director or officer received no personal profit and in cases where the director
or officer was not culpable;
E. Based upon their experience as business managers, the Board of
Directors of the Company (the "Board") has concluded that, to retain and attract
talented and experienced individuals to serve as officers and directors of the
Company and its subsidiaries and to encourage such individuals to take the
business risks necessary for the success of the Company and its subsidiaries, it
is necessary for the Company to contractually indemnify its officers and
directors and the officers and directors of its subsidiaries, and to assume for
itself maximum liability for expenses and damages in connection with claims
against such officers and directors in connection with their service to the
Company and its subsidiaries, and has further concluded that the failure to
provide such contractual indemnification could result in great harm to the
Company and its subsidiaries and the Company and its subsidiaries and the
Company's shareholders;
F. Section 145 of the General Corporation Law of Delaware, under
which the Company is organized ("Section 145"), empowers the Company to
indemnify its officers, directors,
employees and agents by agreement and to indemnify persons who serve, at the
request of the Company, as the directors, officers, employees or agents of other
corporations or enterprises, and expressly provides that the indemnification
provided by Section 145 is not exclusive;
G. The Company, after reasonable investigation prior to the date
hereof, has determined that the liability insurance coverage available to the
Company and its subsidiaries as of the date hereof in inadequate and/or
unreasonably expensive. The Company believes, therefore, that the interests of
the Company's shareholders would best be served by a combination of such
insurance as the Company may obtain pursuant to the Company's obligations
hereunder and the indemnification by the Company of the directors and officers
of the Company and its subsidiaries;
H. The Company desires and has requested the Indemnitee to serve
or continue to serve as a director or officer of the Company and/or one more
subsidiaries of the Company free from undue concern for claims for damages
arising out of or related to such services to the Company and/or one or more
subsidiaries of the Company; and
I. The Indemnitee is willing to serve, or to continue to serve,
the Company and/or one or more subsidiaries of the Company, provided that he is
furnished the indemnity provided for herein.
AGREEMENT
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. DEFINITIONS.
(a) AGENT. For the purposes of this Agreement, "Agent" of the
Company means any person who is or was a director, officer, employee or other
agent of the Company or a subsidiary of the Company; or is or was serving at the
request of, for the convenience of, or to represent the interests of the Company
or a Subsidiary of the Company as a director, officer, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise; or was a director, officer, employee or agent for a foreign or
domestic corporation which was a predecessor corporation of the Company or a
Subsidiary of the Company, or was a director, officer, employee or agent of
another enterprise at the request of such predecessor corporation. The use of
the term "Agent" shall not be construed to alter the legal relationship between
an Agent, as defined herein, and the Company.
(b) EXPENSES. For purposes of this Agreement, "Expenses"
includes all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys' fees and related disbursements
and other out-of-pocket costs) actually and reasonably incurred by the
Indemnitee in connection with either the investigation, defense or appeal of a
Proceeding or establishing or enforcing a right to indemnification under this
Agreement, Section 145 or otherwise; provided, however, that unless otherwise
expressly provided below, expenses shall
not include any judgments, fines, ERISA excise taxes or penalties or amounts
paid in settlement of a proceeding.
(c) PROCEEDING. For the purposes of this Agreement,
"Proceeding" means any threatened, pending, or completed action, suit or other
proceeding, whether civil, criminal, administrative, investigative or any other
type whatsoever.
(d) SUBSIDIARY. For purposes of this Agreement, "Subsidiary"
means any corporation of which more than 50% of the outstanding voting
securities is owned directly or indirectly by the Company, by the Company and
one or more other Subsidiaries, or by one or more other Subsidiaries.
2. AGREEMENT TO SERVE. The Indemnitee agrees to serve and/or
continue to serve as an Agent of the Company, at its will (or under separate
agreement, if such agreement exists), in the capacity Indemnitee currently
serves as an Agent of the Company, so long as he is duly appointed or elected
and qualified in accordance with the applicable provisions of the Certificate of
Incorporation and By-Laws of the Company or any Subsidiary of the Company or
until such time as he tenders his resignation in writing, provided, however,
that nothing contained in this Agreement is intended to create any right to
continued service by Indemnitee.
3. MAINTENANCE OF LIABILITY INSURANCE.
(a) The Company hereby covenants and agrees that, so long as
the Indemnitee shall continue to serve as an Agent of the Company and thereafter
so long as the Indemnitee shall be subject to any possible proceeding by reason
of the fact that the Indemnitee was an Agent of the Company, subject to Section
7, the Company 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.
(b) In all policies of D&O Insurance, the Indemnitee shall be
named as an insured in such a manner as to provide the Indemnitee the same
rights and benefits as are accorded to the most favorably insured of the
Company's directors, if the Indemnitee is a director; or of the Company's
officers, if the Indemnitee is not a director of the Company but is an officer;
or of the Company's key employees, if the Indemnitee is not an officer or
director but is a key employee.
(c) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines in good
faith 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 limited by exclusions so as to provide an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary of the Company.
4. MANDATORY INDEMNIFICATION. The Company shall indemnify the
Indemnitee:
(a) ACTIONS OTHER THAN BY OR IN THE RIGHT OF THE COMPANY. If
the Indemnitee is a person who was or is a party or is threatened to be made a
party to any threatened, pending or
completed Proceeding (other than an action by or in the right of the Company) by
reason of the fact that he is or was an Agent of the Company against Expenses,
any liability (including without limitation judgments, fines, ERISA excise taxes
and penalties, and amounts paid in settlement) actually and reasonably incurred
by him in connection with such Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal Proceedings, had no reasonable
cause to believe his conduct was unlawful. 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 the Indemnitee
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(b) ACTIONS BY OR IN THE RIGHT OF THE COMPANY. If the
Indemnitee is a person who was or is a party or is threatened to be made a party
to any Proceeding by or in the right of the Company to procure a judgment in its
favor by reason of the fact that he is or was an Agent of the Company or by
reason of any action done or not done by him in any such capacity, against
Expenses actually and reasonably incurred by him in connection with the
investigation, defense, settlement or appeal of such Proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
finally adjudged to be liable due to his willful failure to act in good faith or
in a manner which he reasonably believed to be in, or not opposed to the best
interests of the Company, unless and only to the extent that the Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability for such reason(s), but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery of the State of Delaware or such other court shall
deem proper.
(c) Notwithstanding the foregoing, the Company shall not be
obligated to indemnify the Indemnitee pursuant to this Agreement:
(i) on account of any claim against Indemnitee 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, as amended, or similar provisions of any federal, state or
local statute or regulation;
(ii) for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
or penalties, and amounts paid in settlement) which have been paid directly to
Indemnitee by D&O Insurance; or
(iii) if indemnification is not lawful.
5. SUCCESS ON THE MERITS. To the extent that any Indemnitee
described in Section 4 of this Agreement has been successful on the merits or
otherwise in defense of any Proceeding referred to in said Section 4, or in
defense of any claim, issue or matter therein, he shall be indemnified against
Expenses actually and reasonably incurred by him in connection therewith.
6. ADVANCE PAYMENT. Expenses incurred in defending a Proceeding
may be paid by the Company in advance of the final disposition of such
Proceeding upon receipt of an undertaking by or on behalf of any Indemnitee to
repay such amount if it shall ultimately be determined that he is not entitled
to indemnification by the Company as authorized in this Agreement.
7. NON-EXCLUSIVITY. The indemnification and advancement of
expenses provided by, or granted pursuant to, the other Sections of this
Agreement shall not be deemed exclusive of any other rights to which those
provided indemnification or advancement of expenses may be entitled under any
by-law, vote of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office.
8. CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
The indemnification and advancement of expenses provided by, or granted pursuant
to, this Agreement shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
9. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company for some or a
portion of any Expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts
paid in settlement) incurred by him in the investigation, defense, settlement or
appeal of a proceeding but not entitled, however, to indemnification for all of
the total amount thereof, the Company shall nevertheless indemnify the
Indemnitee for such total amount except as to the portion thereof to which the
Indemnitee is not entitled under this Agreement or applicable law.
10. NOTICE AND OTHER INDEMNIFICATION PROCEDURES.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the Indemnitee
shall, if the Indemnitee believes that indemnification with respect thereto may
be sought from the Company under this Agreement, notify the Company of the
commencement or threat of commencement thereof.
(b) If, at the time of the receipt of a notice of the
commencement of a proceeding pursuant to Section 9(a) hereof, the Company has
D&O Insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(c) In the event the Company shall be obligated to pay the
Expenses of any Proceeding against the Indemnitee, the Company shall be entitled
to assume the defense of such Proceeding, with counsel approved by the
Indemnitee, upon the delivery to the Indemnitee of written notice of its
election so to do. After delivery of such notice, approval of such counsel by
the Indemnitee and the retention of such counsel by the Company, the Company
will not be liable to the Indemnitee under this Agreement for any fees of
counsel subsequently incurred by
the Indemnitee with respect to the same proceeding, provided that (i) the
Indemnitee shall have the right to employ his counsel in any such proceeding at
the Indemnitee's expense; and (ii) if (A) the employment of counsel by the
Indemnitee has been previously authorized by the Company, (B) the Indemnitee
shall have reasonably concluded that there may be a conflict of interest between
the Company and the Indemnitee in the conduct of any such defense or (C) the
Company shall not, in fact, have employed counsel to assume the defense of such
proceeding, the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company.
11. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) Any indemnification under Section 4 of this Agreement
(unless ordered by a court) shall be made by the Company only as authorized in
the specific case unless a determination shall be made that indemnification of
the Indemnitee is not proper in the circumstances because he has not met the
applicable standard of conduct set forth in said Section 4.
(b) The Indemnitee shall be entitled to select the forum in
which the validity of the Company's claim that he is not entitled to
indemnification will be heard from among the following, which forums shall
determine that the Indemnitee is entitled to such indemnification unless the
Company shall prove by clear and convincing evidence that: (i) the Indemnitee
has not met the applicable standard of conduct required to entitle the
Indemnitee to such Indemnification or that Indemnification is otherwise not
required pursuant to Section 11 hereof, and (ii) the requirements of Section 5
have not been met:
(1) A majority vote of a quorum of the Company's Board of
Directors consisting of directors who are not parties to the Proceeding for
which indemnification is being sought;
(2) By independent legal counsel in a written opinion;
(3) The stockholders of the Company; or
(4) A panel of three arbritators, one of whom is selected
by the Company, another of whom is selected by the Indemnitee and the last of
whom is selected by the first two arbitrators so selected.
(c) As soon as practicable, and in no event later than 30 days
after written notice of the Indemnitee's choice of forum pursuant to Section
10(b) above, the Company shall, at its own expense, submit to the selected forum
in such manner as the Indemnitee or the Indemnitee's counsel may reasonably
request, any claim that the Indemnitee is not entitled to indemnification, and
the Company shall act in the utmost good faith to assure the Indemnitee a
complete opportunity to defend against such claim.
(d) Notwithstanding a determination by any forum listed in
Section 10(b) hereof that Indemnitee is not entitled to indemnification with
respect to a specific proceeding, the Indemnitee shall have the right to apply
to the Court of Chancery of Delaware, the court in which that proceeding is or
was pending, or any other court of competent jurisdiction, for the purpose
of enforcing the Indemnitee's right to indemnification pursuant to this
Agreement. Such court shall find that the Indemnitee is entitled to
indemnification unless the Company shall prove by clear and convincing evidence
that (i) the Indemnitee has not met the applicable standard of conduct required
to entitle the Indemnitee to such indemnification or that indemnification is
otherwise not required pursuant to Section 11 hereof, and (ii) the requirements
of Section 10(a) have not been met.
(e) Notwithstanding any other provision in this Agreement to
the contrary, the Company shall indemnify the Indemnitee against all expenses
incurred by the Indemnitee in connection with any hearing or proceeding under
this Section 11 involving the Indemnitee and against all expenses incurred by
the Indemnitee in connection with any other proceeding between the Company and
the Indemnitee involving the interpretation or enforcement of the rights of the
Indemnitee under this Agreement unless a court of competent jurisdiction finds
that each of the claims and/or defenses of the Indemnitee in any such proceeding
was frivolous or made in bad faith.
12. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to the Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by the 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 Section 145, but such indemnification or advancement of expenses
may be provided by the Company in specific cases if a majority of the
disinterested members of the Board of Directors finds it to be appropriate; or
(b) ADVERSE JUDGMENT REGARDING THIS AGREEMENT. To indemnify
the Indemnitee for any expenses incurred by the Indemnitee with respect to any
proceeding instituted by the Indemnitee to enforce or interpret this Agreement,
if a court of competent jurisdiction finds that the Indemnitee is not entitled
to indemnification pursuant to this Agreement; or
(c) UNAUTHORIZED SETTLEMENTS. To indemnify the Indemnitee
under this Agreement for any amounts paid in settlement of a proceeding unless
the Company consents to such settlement, which consent shall not be unreasonably
withheld.
13. NON-EXCLUSIVITY. The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any provision
of law, the Company's Certificate of Incorporation or By-Laws, the vote of the
Company's shareholders or disinterested directors, other agreements, or
otherwise, both as to action in his official capacity and to action in another
capacity while occupying his position as an agent of the Company, and the
Indemnitee's rights hereunder shall continue after the Indemnitee has ceased
acting as an agent of the Company and shall inure to the benefit of the heirs,
executors and administrators of the Indemnitee.
14. INTERPRETATION OF AGREEMENT. It is understood that the parties
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent now or hereafter
permitted by law, including those circumstances set forth in this Agreement in
which indemnification would otherwise be discretionary.
15. SEVERABILITY. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
(i) the validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 14 hereof.
16. 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.
17. SUCCESSORS AND ASSIGNS. The terms of this Agreement shall
bind, and shall inure to the benefit of, the successors and assigns of the
parties hereto.
18. NOTICE. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed duly
given (i) if delivered by hand and receipted for by the party addressee or (ii)
if mailed by certified or registered mail with postage prepaid, on the third
business day after the mailing date. Addresses for notice to either party are as
shown on the signature page of this Agreement, or as subsequently modified by
written notice.
19. GOVERNING LAW. This Agreement shall be governed by and
construed according to the internal laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely
within Delaware.
20. CONSENT TO JURISDICTION. The Company and the 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, unless waived by both parties in
writing, agree that any action instituted under this Agreement shall be brought
only in the state courts of the State of Delaware.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
The parties hereto have entered into this Indemnity Agreement effective as
of the date first above written.
THE COMPANY:
Matritech, Inc.
000 Xxxxxxx Xxx.
Xxxxxxxxx, XX 00000
By: _______________________________
INDEMNITEE:
____________________________________
Address:
____________________________________
____________________________________
____________________________________
