INDEMNIFICATION AGREEMENT
EXHIBIT 10.1
This Indemnification Agreement (“Agreement”) is entered into as of by
and between Xcorporeal, Inc. (“Company”), and (“Indemnitee”).
RECITALS
A. It is important to the Company to attract and retain as directors the most capable persons
reasonably available.
B. Indemnitee is becoming a director of the Company.
C. Both the Company and Indemnitee recognize the increased risk of litigation and other claims
being asserted against directors of companies in today’s environment.
D. The Company’s Certificate of Incorporation and By-laws (the “Constituent
Documents”) provide that the Company will indemnify its directors and the Company’s By-laws
provide that the Company will advance expenses in connection therewith, and Indemnitee’s
willingness to serve as a director of the Company is based in part on Indemnitee’s reliance on such
provisions.
E. In recognition of Indemnitee’s need for substantial protection against personal liability
in order to enhance Indemnitee’s continued service to the Company in an effective manner, and
Indemnitee’s reliance on the aforesaid provisions of the Constituent Documents, and to provide
Indemnitee with express contractual indemnification (regardless of, among other things, any
amendment to or revocation of such provisions or any change in the composition of the Company’s
Board of Directors (the “Board”) or any acquisition or business combination transaction
relating to the Company), the Company wishes to provide in this Agreement for the indemnification
of and the advancement of Expenses to Indemnitee as set forth in this Agreement and, to the extent
insurance is maintained, for the continued coverage of Indemnitee under the Company’s directors’
and officers’ liability insurance policies.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. In addition to terms defined elsewhere herein, the following terms have the
following meanings when used in this Agreement with initial capital letters:
(a) “Affiliate” has the meaning given to that term in Rule 405 under the Securities
Act of 1933, provided, however, that for purposes of this Agreement the Company and its
subsidiaries will not be deemed to constitute Affiliates of Indemnitee or the Indemnitee.
(b) “Claim” means any threatened, pending or completed action, suit or proceeding, or
any inquiry or investigation, whether instituted, made or conducted by the Company or any other
party, including without limitation any governmental entity, that Indemnitee determines might lead
to the institution of any such action, suit or proceeding, whether civil, criminal, administrative,
arbitrative, investigative or other.
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(c) “Expenses” includes attorneys’ and experts’ fees, expenses and charges and all
other costs, expenses and obligations paid or 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 Claim.
(d) “Indemnifiable Losses” means any and all Expenses, damages, losses, liabilities,
judgments, fines, penalties and amounts paid in settlement (including without limitation all
interest, assessments and other charges paid or payable in connection with or in respect of any of
the foregoing) (collectively, “Losses”) relating to, resulting from or arising out of any
act or failure to act by the Indemnitee, or his or her status as any person referred to in clause
(i) of this sentence, (i) in his or her capacity as a director, officer, employee or agent of the
Company, any of its Affiliates or any other entity as to which the indemnitee is or was serving at
the request of the Company as a director, officer, employee, member, manager, trustee or agent of
another corporation, limited liability company, partnership, joint venture, trust or other entity
or enterprise, whether or not for profit and (ii) in respect of any business, transaction or other
activity of any entity referred to in clause (i) of this sentence.
2. Indemnification. The Company will indemnify and hold harmless Indemnitee, to the
fullest extent permitted by the laws of the State of Delaware in effect on the date hereof or as
such laws may from time to time hereafter be amended to increase the scope of such permitted
indemnification, against all Indemnifiable Losses relating to, resulting from or arising out of any
Claim. The failure by Indemnitee to notify the Company of such Claim will not relieve the Company
from any liability hereunder unless, and only to the extent that, the Company did not otherwise
learn of the Claim and such failure results in forfeiture by the Company of substantial defenses,
rights or insurance coverage. Except as provided in Section 16, however, Indemnitee will
not be entitled to indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such Claim. If so requested by Indemnitee,
the Company will advance within two business days of such request any and all Expenses to
Indemnitee which Indemnitee determines reasonably likely to be payable, provided, however, that
Indemnitee will return, without interest, any such advance which remains unspent at the final
conclusion of the Claim to which the advance related.
3. Additional Expenses. Without limiting the generality or effect of the foregoing,
the Company will indemnify Indemnitee against and, if requested by Indemnitee, will within two
business days of such request advance to Indemnitee, any and all attorneys’ fees and other Expenses
paid or incurred by Indemnitee in connection with any Claim asserted or brought by Indemnitee for
(i) indemnification or advance payment of Expenses by the Company under this Agreement or any other
agreement or under any provision of the Company’s Constituent Documents now or hereafter in effect
relating to Claims for Indemnifiable Losses and/or (ii) recovery under any directors’ and officers’
liability insurance policies maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advance expense payment or
insurance recovery, as the case may be.
4. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement
to indemnification by the Company for some or a portion of any Indemnifiable Loss but not for all
of the total amount thereof, the Company will nevertheless indemnify Indemnitee
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for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Loss or
in defense of any issue or matter therein, including without limitation dismissal without
prejudice, Indemnitee will be indemnified against all Expenses incurred in connection therewith.
In connection with any determination as to whether Indemnitee is entitled to be indemnified
hereunder, there will be a presumption that Indemnitee is so entitled, which presumption the
Company may overcome only by its adducing clear and convincing evidence to the contrary.
5. No Other Presumption. 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, will 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.
6. Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any
other rights Indemnitee may have under the Constituent Documents, or the substantive laws of the
Company’s jurisdiction of incorporation, any other contract or otherwise (collectively, “Other
Indemnity Provisions”); provided, however, that (i) to the extent that Indemnitee otherwise
would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee
will be deemed to have such greater right hereunder and (ii) to the extent that any change is made
to any Other Indemnity Provision which permits any greater right to indemnification than that
provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater
right hereunder. The Company will not adopt any amendment to any of the Constituent Documents the
effect of which would be to deny, diminish or encumber Indemnitee’s right to indemnification under
this Agreement or any Other Indemnity Provision.
7. Liability Insurance. To the extent the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, Indemnitee will be covered by such
policy or policies, in accordance with its or their terms, to the maximum extent of the coverage
available for any director of the Company. The Company will not be required to create a trust
fund, grant a security interest, obtain a letter of credit, or use other means to ensure the
payment of such amounts as may be necessary to satisfy its obligations to indemnify and advance
expenses pursuant to this Agreement.
8. Subrogation. In the event of payment under this Agreement, the Company will be
subrogated to the extent of such payment to all of the related rights of recovery of Indemnitee
against other persons or entities (other than Indemnitee’s successors). The Indemnitee will
execute all papers reasonably required to evidence such rights of recovery (all of Indemnitee’s
reasonable Expenses, including attorneys’ fees and charges, related thereto to be reimbursed by or,
at the option of Indemnitee, advanced by the Company).
9. No Duplication of Payments. The Company will not be liable under this Agreement to
make any payment in connection with any Indemnifiable Loss made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (net of Expenses incurred in connection
therewith) under any insurance policy, the Constituent Documents and Other Indemnity Provisions or
otherwise of the amounts otherwise indemnifiable hereunder.
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10. Defense of Claims. The Company will be entitled to participate in the defense of
any Claim or to assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee,
provided that in the event that (i) the use of counsel chosen by the Company to represent
Indemnitee would present such counsel with an actual or potential conflict, (ii) the named parties
in any such Claim (including any impleaded parties) include both the Company and Indemnitee and
Indemnitee shall conclude that there may be one or more legal defenses available to him or her that
are different from or in addition to those available to the Company, or (iii) any such
representation by the Company would be precluded under the applicable standards of professional
conduct then prevailing, then Indemnitee will be entitled to retain separate counsel (but not more
than one law firm in respect of any particular Claim) at the Company’s expense. The Company will
not, without the prior written consent of the Indemnitee, effect any settlement of any threatened
or pending Claim which the Indemnitee is or could have been a party unless such settlement solely
involves the payment of money and includes an unconditional release of the Indemnitee from all
liability on any claims that are the subject matter of such Claim.
11. Successors and Binding Agreement.
(a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or assets
of the Company, by agreement in form and substance satisfactory to Indemnitee and his or her
counsel, expressly to assume and agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no such succession had taken place. This
Agreement will be binding upon and inure to the benefit of the Company and any successor to the
Company, including without limitation any person acquiring directly or indirectly all or
substantially all of the business or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor will thereafter be deemed the
“Company” for purposes of this Agreement), but will not otherwise be assignable or
delegatable by the Company.
(b) This Agreement will inure to the benefit of and be enforceable by the Indemnitee’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
legatees and other successors.
(c) This Agreement is personal in nature and neither of the parties hereto will, without the
consent of the other, assign or delegate this Agreement or any rights or obligations hereunder
except as expressly provided in Sections 11(a) and 11(b). Without limiting the generality
or effect of the foregoing, Indemnitee’s right to receive payments hereunder will not be
assignable, whether by pledge, creation of a security interest or otherwise, other than by a
transfer by the Indemnitee’s will or by the laws of descent and distribution, and, in the event of
any attempted assignment or transfer contrary to this Section 11(c), the Company will have
no liability to pay any amount so attempted to be assigned or transferred.
12. Notices. For all purposes of this Agreement, all communications, including
without limitation notices, consents, requests or approvals, required or permitted to be given
hereunder will be in writing and will be deemed to have been duly given when hand delivered or
dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five
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business days after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid or one business day after having been sent for next-day delivery
by a nationally recognized overnight courier service, addressed to the Company (to the attention of
the Secretary of the Company) and to the Indemnitee at the addresses shown on the signature page
hereto, or to such other address as any party may have furnished to the other in writing and in
accordance herewith, except that notices of changes of address will be effective only upon
receipt.
13. Governing Law. The validity, interpretation, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such State. Each party
consents to non-exclusive jurisdiction of any Delaware state or federal court or any court in any
other jurisdiction in which a Claim is commenced by a third person for purposes of any action, suit
or proceeding hereunder, waives any objection to venue therein or any defense based on forum non
conveniens or similar theories and agrees that service of process may be effected in any such
action, suit or proceeding by notice given in accordance with Section 12.
14. Validity. If any provision of this Agreement or the application of any provision
hereof to any person or circumstance is held invalid, unenforceable or otherwise illegal, the
remainder of this Agreement and the application of such provision to any other person or
circumstance will not be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal will be reformed to the extent, and only to the extent, necessary to make it
enforceable, valid or legal.
15. Miscellaneous. No provision of this Agreement may be waived, modified or
discharged unless such waiver, modification or discharge is agreed to in writing signed by
Indemnitee and the Company. No waiver by either party hereto at any time of any breach by the
other party hereto or compliance with any condition or provision of this Agreement to be performed
by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made by either party that
are not set forth expressly in this Agreement. References to Sections are to references to
Sections of this Agreement.
16. Legal Fees. It is the intent of the Company that the Indemnitee not be required
to incur legal fees and or other Expenses associated with the interpretation, enforcement or
defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and
expense thereof would substantially detract from the benefits intended to be extended to the
Indemnitee hereunder. Accordingly, without limiting the generality or effect of any other
provision hereof, if it should appear to the Indemnitee that the Company has failed to comply with
any of its obligations under this Agreement or in the event that the Company or any other person
takes or threatens to take any action to declare this Agreement void or unenforceable, or
institutes any litigation or other action or proceeding designed to deny, or to recover from, the
Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, the
Company irrevocably authorizes the Indemnitee from time to time to retain counsel of Indemnitee’s
choice, at the expense of the Company as hereafter provided, to advise and represent the Indemnitee
in connection with any such interpretation, enforcement or defense,
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including without limitation the initiation or defense of any litigation or other legal
action, whether by or against the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company irrevocably consents
to the Indemnitee’s entering into an attorney-client relationship with such counsel, and in that
connection the Company and the Indemnitee agree that a confidential relationship shall exist
between the Indemnitee and such counsel. Without respect to whether the Indemnitee prevails, in
whole or in part, in connection with any of the foregoing, the Company will pay and be solely
financially responsible for any and all attorneys’ and related fees and expenses incurred by the
Indemnitee in connection with any of the foregoing.
17. Interpretation. No provision of this Agreement will be interpreted in favor of,
or against, either of the parties hereto by reason of the extent to which any such party or its
counsel participated in the drafting thereof or by reason of the extent to which any such provision
is inconsistent with any prior draft hereof or thereof.
18. Counterparts. This Agreement may be executed by facsimile and in one or more
counterparts, each of which will be deemed to be an original but all of which together will
constitute one and the same agreement.
IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized
representative to execute this Agreement as of the date first above written.
INDEMNITEE:
Name:
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